15.  RESEARCH EFFORT.

For both SBIR and STTR, there are requirements on the amount of the funded research or analytical effort that must be performed by the small business.  The funded research or analytical effort is defined as the total requested funding minus the cost of any purchased or leased equipment, materials, or supplies (whether purchased by the grantee or a subcontractor).  These requirements are:

a.        SBIR: 

(1)     Phase I:  A minimum of two-thirds of the funded  research or analytical effort must be performed by the grantee; a maximum of one-third of the effort may be performed by consultants or subcontractors.

(2)     Phase II:  A minimum of one-half of the research and analytical effort of Phase II must be performed by the grantee; up to one-half of the research or analytical effort may be performed by consultants or subcontractors.

b.       STTR:

(1)      Phase I:  A minimum of 40% of the work must be performed by the small business and at least 30% of the work must be performed by the non-profit research institution partner.  Such institutions include Federally funded research and development centers, universities, teaching hospitals, and other non-profits.  A minimum of 40% of the funding, excluding any purchased or leased equipment, materials, and supplies, must be allocated to the small business; a minimum of 30% of the funding, excluding any purchased or leased equipment, materials, and supplies, must be allocated to the research institution.

(2)      Phase II:  The same as STTR Phase I.