By: Elizabeth Mordica on December 7th, 2022
The Small Business Innovation Research (SBIR) Program: Creating Opportunities for Contractors
Government Business Development | 4 Min Read
Navigating the government contracting world as a small business can be daunting. Thankfully, small businesses have access to several resources to tap into such as small business set-asides and certain funding programs to help them get their foot in the door, such as the Small Business Innovation Research Program (SBIR). In this blog, we’ll cover the SBIR program and how contractors can use this program to their advantage.
What is the Small Business Innovation Research Program?
The Small Business Innovation Research Program (SBIR) is a resource provided by the Small Business Administration (SBA) that provides equity free funding through federal agencies to American small businesses. The SBA calls this “America’s Seed Fund” and it encompasses the SBIR as well as Small Business Technology Transfer (STTR) programs.
America’s Seed Fund awards allow contractors to use non-dilutive funding to develop your technology and chart a path forward. It also provides technology-focused entrepreneurs, startups, and small businesses with funding to develop their ideas and a pathway to commercialization. The SBIR/STTR programs are an important source of early-stage technology funding for small businesses. Since 1982, SBIR funding has helped countless ideas grow and develop into transformative technology.
The SBIR/STTR programs were created to
- Stimulate technological innovation
- Meet federal research and development needs
- Foster and encourage participation in innovation and entrepreneurship by women and socially or economically disadvantaged persons.
- Increase private-sector commercialization of innovations derived from Federal research and development funding.
Why is the SBIR Useful for Contractors?
The U.S. federal government is the largest buyer of goods and services in the world and having a relationship with federal entities can be essential for business development. There are many ways to break into the world of federal acquisitions, one being the GSA Schedule. However, being a Schedule holder requires certain past experience to be proven (two years) and even with the Springboard Program, there are still extra hoops to jump through. That requirement limits participants, however, it does not exclude early stage technology from federal resources.
Unlike other federal vehicles, the SBIR/STTR programs seek out new and early-stage technology. The SBIR/STTR programs are specifically designed for American small businesses dedicated to the creation of innovative technology, even in the early stages. The mission of America's Seed Fund is to support scientific excellence and technological innovation through the investment of federal research funds in critical American priorities.
As well, for young technology companies that are still looking for more than just financial support, the STTR programs fosters technology transfer through cooperative Research & Development (R&D) between small businesses and research institutions.
How the SBIR Program Works
Before you can apply, you have to make sure your entity is eligible. Eligibility for the funding through America’s Seed fund is fairly straight forward.
Your company must be a for-profit entity located in the U.S., have fewer than 500 employees (though most applicants have fewer than 10), and be owned and controlled by U.S. citizens or permanent residents. Additional restrictions apply with venture capital ownership so make sure you read the full eligibility guidelines.
Once you have determined you are eligible, the process will look fairly similar to the federal procurement process.
First, an agency will post a solicitation, these can be found on SAM.gov. As per our usual solicitation guidelines, we recommend you read the entire solicitation in full and carefully to understand the entire scope of the proposal. There may be specific requirements and instructions on how to respond. Make sure you check to submission date but try to have your proposal completed 24 hours before it is due. You will then submit the proposal, following instructions in the proposal about how and where to submit it.
The reviewing agency, or agencies, will review the proposal. The proposal review process is rigorous and designed to provide critical feedback to help refine your concept. Due to the thoroughness of the review process and the variation between each project, review process times vary and patience is appreciated.
If you are awarded funding, the SBA recommends that your team have a plan for how to expect to use it. While you may be awarded funding, that funding is not guaranteed to cover all expenses for R&D. Once you received awarded funding, you may then apply for phase I funding for new innovations and phase II funding for continuing R&D. Phase III is when an agency decides to continue to fund the R&D for your company, as only phase I and II are funded by the SBIR program.
Why Should You Consider Applying for an SBIR Opportunity Now?
This program has been around since 1982, so why is it coming up now? Not only has there been an increase in opportunities and solicitations being posted, but there is also talk of a new contract vehicle related to the SBIR program. As of now, there has been no formal confirmation and market research is still being conducted under a sources sought. However, the goal in creating a new government wide contract vehicle would be to assist in Phase III, giving agencies easier access to the emerging technology.
The idea is that the contract would function similarly to a GSA Schedule but be specifically for companies in phase II of the SBIR program. It will be designed this way because many companies struggle to get to phase III as they do not have access to the proper agencies who would continue to fund their technology.
While the idea of this happening is very exciting and could open a whole new market, it’s still in very early stages. A draft solicitation is expected in the spring of 2023 but that is still only speculation. We are continuing to track this potential opportunity. If you want to learn more about upcoming contracting opportunities, check out our blog and monthly newsletter. And of course, we are always here to help if you have any questions related to your GSA Schedule.