SBIR/STTR Introduction

A 1982 study found that small businesses had 2.5 times as many innovations per employee as large businesses, while large businesses were nearly three times as likely to receive government assistance.  As a result, the SBIR Program was established to provide funding to stimulate technological innovation in small businesses to meet federal agency research and development needs.  After more than a decade, the STTR program was launched.  The major difference is that STTR projects must involve substantial (at least 30%) cooperative research collaboration between the small business and a non-profit research institution.

What are SBIR and STTR?  Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) are U.S. Government programs in which federal agencies with large research and development (R&D) budgets set aside a small fraction of their funding for competitions among small businesses only.  Small businesses that win awards in these programs keep the rights to any technology developed and are encouraged to commercialize the technology.

How much money is set aside?  Each year, the federal agencies that participate in SBIR and STTR set aside 2.5% and 0.3%, respectively, of their extramural R&D budgets.  For the DOE in FY 2005, these set-asides correspond to $102 million and $12 million, respectively.

How do these programs work at DOE?  Each year (typically around the beginning of October), DOE issues a solicitation inviting small businesses to apply for SBIR/STTR Phase I grants.  It contains technical topics in such research areas as energy production (Fossil, Nuclear, Renewable, and Fusion Energy), Energy Use (in buildings, vehicles, and industry), fundamental energy sciences (materials, life, environmental, and computational sciences, and nuclear and high energy physics), Environmental Management, and Nuclear Nonproliferation.  Grant applications submitted by small businesses MUST respond to a specific topic and subtopic during an open solicitation.  

Phase I?  What phases are there and how do they work at DOE?  SBIR and STTR have three distinct phases.  Phase I explores the feasibility of innovative concepts with awards up to $100,000 for about 9 months.  Only Phase I award winners may compete for Phase II, the principal R&D effort, with awards up to $750,000 over a two-year period.  There is also a Phase III, in which non-Federal capital is used by the small business to pursue commercial applications of the R&D.  Also under Phase III, Federal agencies may award non-SBIR/STTR-funded, follow-on grants or contracts for products or processes that meet the mission needs of those agencies, or for further R&D.  

What are the chances of winning?  Proposal-to-award ratios are about 5-to-1 for Phase I and 2-to-1 for Phase II.  

Other questions?  Refer to www.science.doe.gov/sbir, telephone (301-903-1414) or e-mail (sbir-sttr@science.doe.gov).