Small Business Innovation Research Program and Small Business Technology Transfer Program Policy Directive
| Published date | 02 April 2019 |
| Citation | 84 FR 12794 |
| Record Number | 2019-06129 |
| Section | Notices |
| Court | Small Business Administration |
Federal Register, Volume 84 Issue 63 (Tuesday, April 2, 2019)
[Federal Register Volume 84, Number 63 (Tuesday, April 2, 2019)]
[Notices]
[Pages 12794-12849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06129]
[[Page 12793]]
Vol. 84
Tuesday,
No. 63
April 2, 2019
Part IVSmall Business Administration-----------------------------------------------------------------------Small Business Innovation Research Program and Small Business
Technology Transfer Program Policy Directive; Notice
Federal Register / Vol. 84 , No. 63 / Tuesday, April 2, 2019 /
Notices
[[Page 12794]]
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SMALL BUSINESS ADMINISTRATION
RIN 3245-AG64
Small Business Innovation Research Program and Small Business
Technology Transfer Program Policy Directive
AGENCY: Small Business Administration.
ACTION: Final SBIR and STTR Policy Directives.
-----------------------------------------------------------------------
SUMMARY: This document revises the Small Business Innovation Research
(SBIR) and Small Business Technology Transfer (STTR) program Policy
Directives. Specifically, the Small Business Administration combines
the two directives into one document, clarifies the data rights and
Phase III preference afforded to SBIR and STTR small business awardees,
adds definitions relating to data rights, and clarifies the benchmarks
for progress towards commercialization.
DATES: These revisions to the SBIR/STTR Policy Directive are effective
on May 2, 2019.
FOR FURTHER INFORMATION CONTACT: Edsel Brown, Assistant Director,
Office of Innovation, at (202) 401-6365 or [email protected].
SUPPLEMENTARY INFORMATION:
I. Executive Summary
The purpose of the Small Business Innovation Research (SBIR)
program is to stimulate innovation in the US economy by engaging
innovative small business concerns (SBCs) in Federally-funded research
and research and development (R/R&D). Similarly, the purpose of the
Small Business Technology Transfer (STTR) program is to foster
partnerships of ideas and technologies between innovative SBCs and
research institutions through Federally-funded R/R&D. Federal agency
awards to SBCs pursuant to the SBIR program and awards to SBCs for
cooperative R/R&D efforts with research institutions pursuant to the
STTR program assist the small business and research communities by
commercializing innovative technologies.
Both programs use a phased process, uniform throughout the Federal
Government, to solicit proposals and award funding agreements for R/R&D
to meet stated agency needs or missions. To stimulate and foster
scientific and technological innovation, including increasing
commercialization of Federal R/R&D, the program follows a three phase
process: Phase I, Phase II, and Phase III.
The Small Business Act (the Act) requires that the Small Business
Administration (SBA) issue a policy directive setting forth guidance to
the Federal Agencies participating in the SBIR and STTR programs
(Participating Agencies). The Act provides SBA with broad authority to
direct Participating Agencies in the administration of the programs.
The SBIR and STTR (SBIR/STTR) Policy Directives outline how agencies
must generally conduct their programs. Each agency, however, can tailor
its program to meet the needs of the individual agency, as long as the
general principles of the program set forth in the Act and directive
are followed. Therefore, when incorporating SBIR/STTR policy into
agency-specific regulations and procedures, Participating Agencies may
develop and apply processes needed to implement the policy effectively;
however, no Participating Agency may develop and apply policies,
directives, or clauses, that contradict, weaken, or conflict with the
policy as stated in the directive.
SBA reviews its policy directives regularly to determine areas that
need updating and further clarification. On November 7, 2014, SBA
issued an advance notice of policy directive amendments and request for
comments at 77 FR 66342. In this notice, SBA explained that it intended
to update the directives on a regular basis and to restructure and
reorganize the directives, as well as address certain policy issues
related to SBIR/STTR data rights and issues related to SBIR/STTR Phase
III work. SBA outlined what it believed were the issues concerning data
rights and Phase III awards and requested feedback on several questions
posed. SBA received over thirty comments offering recommendations and
providing examples of how these issues affect SBIR/STTR companies.
While the comments varied on the recommendations for specific changes
they were generally in agreement that the sections of the directives
relating to data rights and Phase III awards needed further
clarification.
On April 7, 2016, SBA issued a notice of proposed policy directive
amendments and request for comments at 81 FR 20484. In the notice, SBA
proposed combining the SBIR/STTR directives into one document and
revising sections of the directive to clarify SBIR/STTR data rights,
issues related to SBIR/STTR Phase III work, and benchmarks toward
commercialization. SBA specifically requested feedback on several of
the proposed amendments, including its clarification of the Federal
Government's SBIR/STTR data rights in SBIR/STTR Data, as that term is
defined in the final SBIR/STTR Policy Directive, during an SBIR/STTR
protection period. More specifically, SBA requested feedback on the
proposed 12-year length of the protection period, the Federal
Government's Unlimited Rights in SBIR/STTR Data after the protection
period, the elimination of the extension of the protection period when
a subsequent, related SBIR/STTR award is made, the language added to
Sec. 8 regarding prototypes, and its proposed establishment of a time
limit of 6 months for SBIR/STTR awardees to correct or add omitted
markings on SBIR/STTR Data it has delivered. The notice called for a
60-day comment period, with June 6, 2016, as the deadline for comments.
In response to a formal request to extend the comment period, SBA
issued a notice at 81 FR 34426, extending the comment period an
additional 30 days to July 6, 2016. SBA received a total of 42 comments
in response to the proposed policy directive amendments, which are
viewable on Regulations.gov using docket number RIN 3245-AG64.
The comments supported combining the SBIR and STTR Policy
Directives and generally supported the proposed clarifications of SBIR/
STTR data rights during the protection period, the clarifications of
the Phase III preference requirement and process, and the majority of
other proposed changes. However, several commenters strongly objected
to the proposed removal of the ability to extend data rights through
subsequent awards, the proposed 12-year protection period, and to the
proposal that the Federal Government receives Unlimited Rights in SBIR/
STTR Data after the protection period expires. These objections came
primarily from the small business community. Commenters pointed out
that these changes would reduce the incentive for small businesses to
participate in the program and are antithetical to the small business
commercialization goals of the programs.
SBA recognizes that to be efficient and effective at stimulating
small business innovation, the SBIR/STTR programs must maintain the
features of the programs that create strong incentives for small
businesses to participate, and SBA must scrutinize whether changes to
the SBIR/STTR Policy Directive are consistent with the goals of the
programs. As a result, SBA is removing these specific proposed changes
from this amendment and will work closely with the Participating
Agencies to identify ways to address the related administrative
concerns discussed in the proposed policy directive in a way that does
not weaken
[[Page 12795]]
the data rights protection of appropriately marked SBIR/STTR Data.
Commenters also strongly objected to the inclusion of state program
funding in the definition of Essentially Equivalent Work, because it
would be more difficult to complement an SBIR/STTR award with
additional funds from state programs. SBA recognizes the importance and
advantage of leveraging SBIR/STTR awards with other sources of funds
and clarifies that awardees are prohibited from accepting funds from
multiple public funding sources for the same work; however, SBA
supports the use of appropriate complementary funding from public
funding sources for work that is not essentially equivalent.
In addition, several commenters expressed concern about the
retroactivity of any revisions to the policy directive, especially as
they pertain to the length of the protection period, the effective
extension of data rights through subsequent awards, and the
Government's rights in SBIR/STTR Data after the protection period. SBA
recognizes the importance of certainty in these aspects of the
programs, because they directly impact an awardee's ability to
commercialize innovations derived from federal R/R&D. As such, SBA does
not intend to alter the terms or rights associated with any funding
agreements that pre-date the effective date of this notice.
With this notice, SBA amends both SBIR/STTR Policy Directives. A
section-by-section outline of the proposed amendments, comments
received, and the final adopted approach is provided below.
II. Amendments
1. Section 1--Purpose
SBA proposed to issue one directive for both programs and that all
provisions in the directive apply to both the SBIR and STTR programs
unless specifically noted otherwise. SBA received three comments
supporting a combined policy directive for the SBIR and STTR programs
and did not receive any comments in opposition. SBA is adopting this
proposal and will issue one SBIR/STTR Policy Directive with provisions
that apply to both programs unless specifically noted otherwise in the
directive.
2. Section 2--Summary of Statutory Provisions
In this section, SBA proposed to delete references to prior fiscal
years that were no longer relevant to the operation of the programs. In
addition, SBA clarified that agencies must ``obligate'' a certain
minimum percentage of the agency's total extramural R/R&D obligations
each fiscal year on awards to small businesses under the programs. This
amendment responds to recommendations from the United States (U.S.)
Government Accountability Office (GAO) in a report titled ``Small
Business Research Programs: More Guidance and Oversight Needed to
Comply with Spending and Reporting Requirements'' (GAO-14-431,
available at http://www.gao.gov/assets/670/663909.pdf), that SBA should
amend its policy directives to clarify the programs' annual spending
requirements as written in the Act. SBA received one comment in
opposition to this amendment, explaining that requiring Participating
Agencies to obligate a certain amount per fiscal year does not
recognize that some Participating Agencies have authority to
appropriate funds across multiple fiscal years. In drafting this
amendment, SBA considered GAO's finding that:
[a]n agency can carry over funding from one year to the next and
comply with spending requirements if the agency spends the minimum
required amount during the fiscal year, regardless of the year the
funding was appropriated.
GAO-14-431 (Washington, DC 2014), 12. SBA believes the amendment
clarifies the programs' annual spending requirement for all
Participating Agencies, including those with appropriations spanning
multiple fiscal years. As such, SBA is adopting the amendment as
proposed.
3. Section 3--Definitions
SBA proposed to amend and add several terms and definitions that
relate to SBIR and STTR data rights. When drafting these provisions,
SBA considered the fact that the SBIR/STTR programs are unique within
the Federal Government. The broad intent of the programs is to
stimulate economic growth and development by supporting technological
innovation through small business. Because funding is allocated by
specifying a minimum spending requirement as a share of agency R/R&D,
it also has the goal of meeting the mission needs of the various
Participating Agencies.
The purpose of SBIR/STTR data rights is to provide an incentive for
small businesses to engage in Government-funded innovative research and
to support its potential commercialization. This incentive comes from
the prospects for successful commercialization by the innovating small
business through first-mover advantage, license or sale of the
Intellectual Property, sale of the business, or sale of its related
intangible assets (intellectual capital, knowledge, innovation
capacities). Legislative history of the Small Business Research and
Development Enhancement Act of 1992 stated:
Section 4(e) of the bill directs SBA to modify its policy
directives so as to protect small companies in three areas. The
first of these is data rights. The bill directs SBA to extend an
SBIR awardee's rights to data generated in the performance of its
project to 4 years (as opposed to 2 years in current law). This
provision grows out of the Committee's concern that small businesses
capable of producing top quality research might be reluctant to
participate in the program if they fear losing control over their
ideas.
H.R. Rep. No. 554(I), 102nd Cong., 2nd Sess. 1992, 24 (emphasis added).
Further, legislative history of the STTR program states the following
with respect to data rights:
Lastly, of the major provisions included in this legislation, S.
856 strengthens the data rights protection for companies and
research institutions that conduct STTR projects. The change in data
rights is important because it clarifies that STTR companies, like
SBIR companies, retain the data rights to their technology through
all phases of an STTR project. Some agencies have been interpreting
the law to mean that STTR companies only retain their data rights
through phases I and II. This clarification helps protect STTR
companies from losing control of their research so that they have a
greater chance of commercializing their technology themselves. This
clarification is important because the Committee has learned that
some agencies are providing the data to bigger contractors for
development, thereby cutting out the small business. This
unfortunate situation not only robs small businesses of revenues,
but it also results in expensive legal costs for small businesses to
protect their data rights.
S. Rep. No. 54, 107th Cong., 1st Sess. 2001 (emphasis added). Thus,
SBIR and STTR data rights give value to the work performed and thereby
form an essential element of the incentive to participate in the SBIR/
STTR programs and the impact of these programs.
The Act specifically directs SBA to issue directives to the
Participating Agencies that provide for the retention by the SBC of
rights in data generated in the performance of an SBIR or STTR award.
See 15 U.S.C. 638(j)(1)(v) (``retention of rights in data generated in
the performance of the contract by the small business concern;''). It
also states that these rights should be provided for a minimum of four
years. See 15 U.S.C. 638(j)(2)(A) and 638(p)(2)(B)(v) (``retention by a
small business concern of the rights to data generated by the concern
in the performance of an [SBIR or STTR] award for a period of not less
than 4 years;''). The purpose of these statutory provisions is to
ensure that the
[[Page 12796]]
SBC retains the rights to the data, and that the small business' data
rights apply to all phases of the program.
In accordance with the Act, the SBIR/STTR Policy Directives
currently explain that the SBC owns the data generated under the award,
and that the Government has an obligation to protect the data from
disclosure for at least four years. SBA recognizes that agencies with
procurement and acquisition programs may face an apparent conflict
between the longer term economic development goals of the programs,
which depend on the ability of the participating small business to
realize the commercial benefits from its new technology, and the
shorter term procurement interests of the agency that focus on
acquiring the technology from the SBC at a reasonable cost and
controlling its development and application. In light of this potential
conflict at the agency level, SBA must ensure that agency practices
related to their acquisition programs do not weaken or undermine the
effectiveness of the program at stimulating innovation and economic
development through small business. At the same time, SBA recognizes
the mutual benefits involved in administering the programs within the
existing structures of the procurement agencies and has incorporated
mechanisms to manage these conflicting interests. The Act requires that
SBA establish sufficient provisions in the SBIR/STTR Policy Directive
to ensure that SBCs retain rights in the data generated during an SBIR/
STTR award.
SBA's proposed amendments were based on a review of the statute,
legislative history and current directives, expertise and experience at
the funding agencies, and comments received from the public. SBA
proposed to update and define several new terms relating to data
rights, including the following: Computer Database, Computer Programs,
Computer Software, Computer Software Documentation, Data, Form Fit and
Function Data, Operations Maintenance Installation or Training (OMIT)
Data, Prototype, SBIR/STTR Computer Software Rights, SBIR/STTR Data,
SBIR/STTR Data Rights, SBIR/STTR Protection Period, SBIR/STTR Technical
Data Rights, Technical Data, and Unlimited Rights. SBA has based these
definitions, to the extent practicable, on definitions used in the
Federal Acquisition Regulations (FAR) and the Defense Federal
Acquisition Regulations Supplement (DFARS).
With respect to specific definitions, SBA proposed to clarify the
definition of the term SBIR/STTR Data by explaining that it includes
all data developed or generated in the performance of an SBIR/STTR
award, including Technical Data and Computer Software. SBA notes that
the definition of SBIR/STTR Data in the proposed policy directive
contained the term ``appropriately marked.'' This term was
inadvertently and mistakenly included in the definition. SBIR/STTR Data
is all data generated and developed in the performance of an SBIR/STTR
award. The appropriate marking of such data, when delivered to the
Government, provides the Government with SBIR/STTR Data Rights and
obligates the Government to protect the data as SBIR/STTR Data, but it
does not define the data as SBIR/STTR Data. SBA has corrected this
unintentional error by removing ``appropriately marked'' from the
definition of SBIR/STTR Data. SBA received one comment related to this
definition, which supported the inclusion of Technical Data and
Computer Software in the definition. As a result, SBA is adopting a
revised definition of SBIR/STTR Data, which removes ``appropriately
marked'' from the proposed definition.
SBA proposed a new definition for Intellectual Property that
removed references to ``ideas,'' ``know-how,'' ``business,''
``technical and research methods,'' ``other types of intangible
business assets,'' ``all types of intangible assets either proposed or
generated by an SBC as a result of its participation in the SBIR
program,'' ``designs,'' and ``SBIR technical data.'' Two commenters
objected to the proposed definition of this term, arguing that it
unnecessarily narrows the scope of an awardee's intellectual property.
The proposed definition contains a list of traditional intellectual
property: Patents, copyrights, trade secrets, and mask works. SBA notes
that this is not an exclusive list and although the current definition
contains concepts such as ``ideas'' and ``business,'' these are not
typically recognized as intellectual property. SBA is adopting its
proposed definition of Intellectual Property.
SBA proposed a definition of Unlimited Rights that included the
right to access data that is subject to Unlimited Rights. One commenter
objected to the inclusion of this right, as it is not included in the
current definition of Unlimited Rights as found in the SBIR clauses of
the FAR and DFARS. The commenter expressed concern that including a new
right to access was an unnecessary expansion of the current definition
and instead suggested that SBA adopt the current DFARS definition of
Unlimited Rights. SBA agrees that it is unnecessary to include access
at this time. The definition of Unlimited Rights is meant to reflect a
combination of the elements found in both the FAR and DFARS definition
of that term. As such, SBA is deleting reference to ``access'' in this
definition and adopting the rest of the definition as proposed.
With respect to prototypes, SBA proposed to amend the definition of
the term Prototype to include any model, in any type of form, which is
at any stage in development. SBA also proposed to clarify that the
release of a prototype, other than Computer Software, to another
concern, which may enable the that concern to disassemble the prototype
and glean the protected data, is contrary to the purpose and intent of
the Act, and the implementing SBIR/STTR Policy Directive. The release
of a prototype during the protection period may provide other concerns
with the Technical Data to enable them to commercialize the product and
harm the SBC's ability to benefit from the technology. To address this
concern, SBA proposed to add language to Sec. 8 of the SBIR/STTR
Policy Directive, notifying agencies of the potential impact of use or
release during the protection period of a prototype developed under an
SBIR/STTR award and requesting that agencies monitor the release and
use of such prototypes.
SBA received three comments related to the proposed definition of
Prototype and the clarifying language proposed for the protection of
Prototypes in Sec. 8 of the Policy Directive. Two commenters supported
the proposed definition and clarification, and one commenter opposed
the inclusion of ``computer program embedded in hardware'' in the
definition. The commenter that opposed the definition noted that
embedded software is already protected by SBIR/STTR Computer Software
Rights and thus specifying its inclusion in the definition of prototype
is confusing. Computer Software that is developed through an SBIR/STTR
award is protected data, even when embedded in a prototype. The
definition of prototype has historically caused confusion among small
businesses and agencies, and therefore SBA is adopting the definition
of Prototype, as proposed, because it clarifies that such data embedded
within a prototype may receive protection as SBIR/STTR Data.
SBA also received a question regarding the proper method for
marking a prototype so that it is subject to SBIR/STTR Data Rights. SBA
notes that the awardee is responsible for appropriately marking the
SBIR/STTR Data contained within the prototype in order to receive SBIR/
STTR data rights
[[Page 12797]]
protection in that data consistent with how it marks any other form of
SBIR/STTR Data that is not contained within a prototype.
In Sec. 3, SBA also proposed to clarify the data rights afforded
the SBC and the Federal Government in the revised definitions of SBIR/
STTR Technical Data Rights, SBIR/STTR Computer Software Rights,
Unlimited Rights, SBIR/STTR Protection Period, SBIR/STTR Data Rights,
and SBIR/STTR Data. The current directives state that the SBC retains
the rights in data for a minimum of 4 years from the date of the last
deliverable. This protection period (referred to as the ``SBIR/STTR
Protection Period'') is extended with each subsequent, related, SBIR or
STTR award. The current directives provide that the Government may not
use, modify, reproduce, release, perform, display, or disclose Data or
Computer Software for a minimum of 4 years. After expiration of the
SBIR/STTR Protection Period, the Government has a royalty-free license
to use, and to authorize others to use on its behalf, these data for
Government purposes, and is relieved of all disclosure prohibitions and
assumes no liability for unauthorized use of these data by third
parties.
As currently written, it would appear from the policy directives
that the Federal Government cannot use the data for any purpose during
the protection period and then, once the protection period expires, may
use the data for Government purposes. The SBA does not intend for the
Federal Government to have no use of this data during the protection
period; rather, it is intended that the Government have limited rights
to use the data so that agencies can effectively evaluate the
technology and administer their programs.
In clarifying the data rights protections, the SBA reviewed the FAR
and DFARS, which outline distinct rights the Government generally
receives when acquiring goods and services: Unlimited rights, limited
rights and specifically negotiated rights (FAR) or Government purpose
rights (DFARS). Pursuant to the FAR, with unlimited rights, the
Government receives rights as the name implies--unlimited use of the
data, whether for Government or commercial purposes. With respect to
limited rights for data other than computer software and restricted
rights for computer software, the FAR provides that the Government
receives the right to use the data or computer software for internal
purposes only and is limited as to when third parties, including
support service contractors, can access and use the data. With respect
to Government purpose rights, the DFARS provides that the Federal
Government receives the right to use the data for Government purposes,
such as for manufacturing for Government purposes. In such cases, the
Government can allow third parties to have access to the data to
manufacture for Government purposes; however, the third party must sign
a non-disclosure agreement and cannot use the data for its own
(commercial) purposes. SBA proposed that the Federal Government
receives what is referred to as SBIR/STTR Technical Data Rights to
Technical Data and other Data that are not Computer Software, and SBIR/
STTR Computer Software Rights to Computer Software during the SBIR/STTR
Protection Period. These limited rights are intended and designed to be
similar to the rights set forth in the FAR and DFARS for Data developed
exclusively at private expense. This approach is appropriate for SBIR/
STTR Data, as the goal of the program is to advance the
commercialization efforts of the awardees, and thus SBA sought to
provide rights in data that are comparable to the highest level of data
rights protection provided by the Government to contractors. There are
differences between how the FAR and DFARS define the Government's
rights in data developed exclusively at private expense. As a result,
the definitions of SBIR/STTR Computer Software Rights and SBIR/STTR
Technical Data are not exact copies of the Limited Rights Notice or
Restricted Rights Notice provided in FAR 52.227-14 or the Limited
Rights and Restricted Rights in DFARS 252.227-7013 and 7014. SBA uses
single definitions that will apply to both civilian and defense
agencies participating in the programs. The definitions are intended to
reflect the main elements of the FAR and DFARS definitions of the
Government's rights in data developed exclusively at private expense,
including restrictions on the rights to release and disclose that data,
with the aim to encourage the awardee's pursuit and achievement of
commercialization.
SBA worked closely with agency experts in developing terminology to
appropriately describe the limited rights assigned to Technical Data
and Computer Software. The section of the FAR related to SBIR data
rights (FAR 52.227-20) does not use specific terms to describe the
limited rights assigned to SBIR Data, while the DFARS (252.227-7018)
uses the terminology Limited Rights and Restricted Rights.
The SBA intends that the Government retain a right to use SBIR/STTR
Data during the protection period for non-commercial purposes and for
project evaluation and assessment. SBA does not intend for the
Government's internal use of SBIR/STTR Data to interfere with, weaken,
or undermine the rights or interests of the SBC in this data.
Consequently, the SBA proposed that during the SBIR/STTR Protection
Period, the Government is permitted some limited, or restricted, rights
to use the data.
SBA received three comments that opposed the proposed definitions
of SBIR/STTR Technical Data Rights and SBIR/STTR Computer Software
Rights and three commenters that supported these definitions. Those in
opposition expressed concerns that the proposed definitions of SBIR/
STTR Technical Data Rights and SBIR/STTR Computer Software Rights would
permit the Government to release SBIR/STTR technology or other
proprietary data to other concerns during the SBIR/STTR Protection
Period. According to the comments, this may harm the SBC's ability to
commercialize the technology and benefit from it. SBA intended and
designed these rights to be similar to the rights set forth in the FAR
and DFARS for data developed exclusively at private expense, with an
aim to encourage the awardee's pursuit and achievement of
commercialization.
Under the proposed definitions, the Government retains a right to
use SBIR/STTR Data during the protection period for non-commercial
purposes and for project evaluation and assessment. Because these
rights in data are comparable to the highest level of data rights
protection by the Government, SBA does not believe these rights
interfere with, weaken, or undermine the rights or interests of the SBC
in SBIR/STTR Data. Furthermore, and specifically in response to the
comments, these rights do not permit the Government to release
appropriately marked SBIR/STTR Data to another concern during the
protection period for purposes of a competitive Federal procurement or
to advance the other concern's commercialization goals.
One commenter expressed concern that the proposed definition of
SBIR/STTR Computer Software Rights provides SBCs with rights beyond
what is necessary to protect computer software developed under an SBIR/
STTR funding agreement. According to the commenter, the proposed
definition may inadvertently limit broad areas of technology
development, because there is no prescribed method for understanding
computer software as it relates to commercialization, manufacturing, or
procurement purposes. In addition, one commenter
[[Page 12798]]
believed that the proposed definition of SBIR/STTR Computer Software
Rights contradicts itself. Specifically, this commenter stated that the
Government's proposed right to modify, adapt, or combine Computer
Software is inconsistent with paragraph (2) of the proposed definition,
which provides that the Government shall not release, disclose, or
permit access to SBIR/STTR Data that is Computer Software for
commercial, manufacturing, or procurement purposes without the written
permission of the awardee. SBA believes that the proposed definition of
SBIR/STTR Computer Software Rights addresses these concerns. The
proposed definition of SBIR/STTR Computer Software Rights clarifies
that during the protection period, the Government is permitted some
limited, or restricted, rights to use the data for non-commercial
purposes and for project evaluation and assessment. As a result, SBA is
adopting its proposed definitions of SBIR/STTR Computer Software Rights
and SBIR/STTR Technical Data Rights.
SBA received a comment objecting to the proposed definition of
Form, Fit, and Function Data. The commenter noted that the proposed
definition of Form, Fit, and Function Data is broader than the current
definition in the DFARS, because it includes computer software, whereas
the current DFARS definition only applies to Technical Data. SBA notes
that the current FAR definition of Form, Fit, and Function Data
includes computer software and that the DFARS has proposed a similar
definition to apply to computer software, which has not yet been
adopted, at 81 FR 39481 (June 16, 2016). The commenter expressed
concern that SBA is expanding the Government's rights to data in which
it does not currently have Unlimited Rights. The proposed definition of
Form, Fit, and Function Data establishes a more predictable and
congruous approach for all Participating Agencies and SBIR/STTR
awardees that combines the key elements of Form, Fit, and Function Data
as defined in both the FAR and DFARS. In light of this goal, as well as
the pending proposed definition of Form, Fit, and Function Data in the
DFARS and the current FAR definition of this term, SBA is adopting the
proposed definition of Form, Fit, and Function Data.
SBA received one comment objecting to the proposed definition of
OMIT Data. The commenter explained that the proposed definition
broadens the current definition in the FAR, because it includes
computer software, whereas the current FAR definition excludes
restricted computer software. According to the commenter, SBA's
proposed definition notably expands the Government's rights to data in
which it does not currently have Unlimited Rights. In addition, the
commenter believes that the proposed definition will create uncertainty
because it does not specify which types of computer software qualify as
OMIT Data. The proposed definition of OMIT Data furthers the stated
goal of establishing a more predictable and congruous approach to data
rights across all Participating Agencies and SBIR/STTR awardees.
Currently, the DFARS versions of the SBIR data rights clause provides
the Government with Unlimited Rights in data generated under the award
that are necessary for the installation, operation, maintenance, or
training purposes (other than detailed manufacturing or process data).
In addition, SBA believes that the proposed definition of OMIT Data
sufficiently specifies which types of data, including computer software
data, qualify as OMIT Data. Thus, SBA is adopting the proposed
definition of OMIT Data.
SBA received two comments objecting to the exclusion of Form, Fit
and Function Data and OMIT Data from the definition of SBIR/STTR Data.
The commenters note that excluding these types of data from the
protection afforded SBIR/STTR Data is not consistent with SBA's concern
regarding the disclosure of technical information contained within an
SBIR/STTR developed prototype. Any appropriately marked data within a
prototype receives protection under the proposed definition of SBIR/
STTR Technical Data Rights or SBIR/STTR Computer Software Rights. SBA
proposed that the Government receives Unlimited Rights in Form, Fit,
and Function data, and OMIT data, consistent with how the FAR (52.227-
14(b)(1)) and DFARS (252.227-7013(b)(1) and 252.227-7014(b)(1))
currently treat these types of data when associated with data developed
exclusively at private expense. Additionally, the current FAR SBIR data
rights clause (52.227-20(b)(1)) and DFARS SBIR data rights clause
(252.227-7018(b)(1)) both provide the Government with unlimited rights
in Form, Fit, and Function data. As a result, SBA is adopting, as
proposed, the definition of SBIR/STTR Data.
The proposed definition of SBIR/STTR Data Rights contains three
principal policy approaches: (1) The elimination of the extension of
SBIR/STTR Data Rights for data referenced in subsequent awards; (2) a
finite protection period; and, (3) the Government receives Unlimited
Rights in SBIR/STTR Data after the end of the protection period. SBA
proposed to remove the provision in the directive that allows a
subsequent SBIR/STTR award to effectively extend the protection period
of a related, prior award, and replace it with a finite, but longer,
minimum protection period. SBA noted in the proposed policy directive
that the current policy of allowing extensions or resumption of data
rights protection under subsequent SBIR/STTR awards creates an
administrative challenge, because it is difficult for agencies to
determine, prior to the disclosure of SBIR/STTR Data, whether that data
is protected under a subsequent SBIR/STTR award. SBA had therefore
proposed to remove the ability to extend or resume data rights
protections for SBIR/STTR Data that is referenced in subsequent SBIR/
STTR awards. In conjunction with, and closely related to this proposed
change in policy, SBA proposed to lengthen the SBIR/STTR Protection
Period to a minimum of 12 years and provide the Government with
Unlimited Rights after the expiration of the protection period.
The comments received overwhelmingly opposed the proposed longer
minimum protection period, the proposed removal of the extension or
resumption of data rights protection, and the proposed provision of
Unlimited Rights after the expiration of the protection period.
Commenters noted that the current policies regarding the protection
period, continuous data rights protection for SBIR/STTR Data developed
under previous awards, and the Federal Government's right to use data
for Government purposes after the protection period, are a necessary
incentive for small business participation in the programs and are a
critical incentive for funding officers to make subsequent awards to
the small business that developed the technology. If SBIR/STTR Data
developed under a Phase I or Phase II award cannot be protected under a
subsequent Phase II or Phase III award executed after the proposed 12-
year protection period, a contracting officer could give that data to
another concern or large business for the non-Government entity's
commercialization, because SBA proposed that the Government receive
Unlimited Rights in the SBIR/STTR Data after the protection period. SBA
does not intend for small businesses to lose these primary incentives
for participation in the program nor to eliminate the incentives for
subsequent Phase II and Phase III awards to be made
[[Page 12799]]
to the small business that developed the technology.
SBA proposed to eliminate the extension of SBIR/STTR Data Rights
due to the administrative burden on agencies of identifying subsequent
SBIR/STTR awards. One commenter expressed concern that SBA's proposal
does not provide sufficient guidance as to whether SBIR/STTR Data
developed under prior funding agreements would continue to receive
protection beyond the proposed 12-year protection period if it had been
developed into a new form. Additionally, one commenter noted that the
related proposed change in the protection period would create a new
administrative burden on agencies by requiring them to keep track of
which SBIR/STTR Data were under the old policy and which were under the
proposed policy. Commenters also noted that the administrative burden
of tracking awards is an insufficient rationale to eliminate a policy
that has been fundamental to small business participation in the
programs. Furthermore, commenters suggested that the Government create
a database to track all awards so that funding agreement officers could
more easily determine which agencies have made SBIR/STTR awards and
whether the data created pursuant to those awards is still within the
protection period. Commenters noted that if agencies were unable to
determine this information they should simply ask the prospective
awardee whether it has received other SBIR/STTR awards or Phase III
work. The prospective awardee has no incentive to obscure or misguide
the agency regarding its award information, which may form the basis
for the SBC to receive continued data rights protection of earlier
developed and appropriately marked SBIR/STTR Data.
Similarly, commenters strongly objected to the proposed 12-year
protection period, which was proposed to compensate for the removal of
the ability to protect SBIR/STTR Data under subsequent awards.
Commenters noted that the proposed protection period was not long
enough if the provision that effectively extends protection through
subsequent awards is removed. Several commenters suggested that if SBA
adopted Unlimited Rights at the expiration of the protection period,
that such period be at least 20 years to cover the timeframe necessary
for many technologies to be commercialized and to mirror the length of
the patent protection period.
In response to these comments and after further careful
consideration of the issues, SBA has rejected two of these three
elements of the proposed SBIR/STTR Data Rights definition.
Specifically, SBA has rejected the proposed 12-year protection period
and the proposed Unlimited Rights at the expiration of the protection
period. SBA has decided, consistent with the proposed changes, to
eliminate data rights extensions for appropriately marked SBIR/STTR
Data referenced in subsequent awards. This decision was made based on
several factors: (1) SBA's adoption of a considerably longer protection
period than was proposed; (2) administrative ease for agencies and
small business concerns to track the protection period; and (3) a
greater alignment with the Government's protection period afforded to
other forms of intellectual property.
SBA notes that maintaining the ability to extend the data rights
and the minimum 4-year protection period are current policies that have
been in place for over a decade and that many commenters supported
maintaining these current policies. These commenters emphasized that
the continuous protection of an awardee's SBIR/STTR Data while actively
pursuing or commercializing its technology with the Federal Government,
provides a significant incentive for innovative small businesses to
participate in these programs. A set timeframe for data rights
protection, such as the proposed twelve years, creates a firm deadline
on when a technology must reach commercialization to ensure protection
of its data rights during that period. As such, SBA is challenged to
determine the appropriate timeframe to cover a reasonable
commercialization period for every type of technology developed in the
SBIR/STTR programs. The timeframe necessary for computer software
commercialization, for example, varies significantly from the timeframe
necessary for airline engine technology commercialization. It may be a
loss to the taxpayer if such technologies are protected longer than
necessary and a loss to the small business if such technologies are
protected for an insufficient period of time.
SBA is adopting a 20-year protection period for appropriately
marked SBIR/STTR Data and SBA intends that this much longer, finite
protection period, even with the elimination of extensions to such
period, will preserve the incentives for small business concerns to
participate in the SBIR/STTR programs. SBA considered the comments
submitted from small business concerns, advocacy groups, and
participating agencies. Most small business concerns and advocacy
groups commented that the proposed 12-year protection period was
insufficient to cover development for particular technologies,
especially given the proposed elimination of continuous data rights
extensions. Several of these commenters suggested a 20-year protection
period as an alternative to the proposed 12-year protection period. SBA
is confident that 20 years will be sufficient to provide data rights
protection during the entire development and commercialization process
for most technologies in most industries that participate in the SBIR/
STTR programs. Additionally, the adoption of a 20-year protection
period provides greater consistency with the 20-year protection period
that the Government provides for patents issued by the U.S. Patent and
Trademark Office. A 20-year protection period combined with the
elimination of future extensions to SBIR/STTR data rights protection
satisfies concerns raised by both small businesses and agencies
regarding the administration and effectiveness of the SBIR/STTR
program's data rights provisions. These changes are adopted: (1) In
response to the comments received; (2) to maintain the primary
incentives for small business participation in the programs; and, (3)
to be consistent with the programs' statutory purpose to ``assist
small-business concerns to obtain the benefits of research and
development performed under Government contracts or at Government
expense.'' 15 U.S.C. 638(b)(2).
SBA acknowledges that it is challenging for the Participating
Agencies to determine whether a Phase I or Phase II awardee has
received subsequent Phase III work that requires an extension of their
data rights protection. To remedy this challenge, SBA proposed the
elimination of perpetual extensions in SBIR/STTR data rights
protection. While many commenters opposed this change, given the
proposed 12-year protection period, SBA is confident that by extending
the protection period to 20 years, most small business concerns may
achieve commercialization in that timeframe without the threat of a
Government release or disclosure of SBIR/STTR Data to competitors. SBA
is also clarifying that the protection period starts from the date of
award, which has always been SBA's interpretation of its data rights
policy, however, this is unclear in the current PD, which states that
protection starts from the date of delivery of the last deliverable
under an SBIR/STTR Award. This clarification will allow agencies and
SBCs to know with
[[Page 12800]]
certainty, at the start of a Funding Agreement, the exact length of the
SBIR/STTR Protection Period and can mark such data accordingly.
SBA had also proposed to change the Government's rights in SBIR/
STTR Data after the SBIR/STTR Protection Period expires. Currently, the
data rights clause contained in the directive allows the Government to
use SBIR/STTR Data after the protection period ``for Government
purposes.'' SBA noted that the term ``Government purpose'' is not
defined in the policy directive or FAR and therefore proposed to grant
the Government Unlimited Rights in SBIR/STTR Data after the protection
period has expired. Many of the public comments strongly objected to
this change arguing that it could be damaging to the small business
awardees and possibly to the U.S. economy and U.S. competitiveness for
SBIR/STTR Data to be made globally available, with no restrictions,
after the protection period has ended. One commenter also noted the
concern that providing Unlimited Rights after the 12-year protection
period may eliminate an awardee's copyright protection in computer
software that would otherwise extend beyond the 12-year protection
period. According to the commenter, FAR Part 27 generally permits
awardees to claim copyright protection in computer software and gives
the Government broad rights in the software, except the right to
publicly distribute. If the Government receives Unlimited Rights in
computer software after the 12-year protection period, it would obtain
a right to sublicense software to the private sector that is otherwise
disallowed under the FAR.
SBA agrees with these comments and, in response to these concerns,
rejects this proposed change. We agree with the commenters that
restricting the Government to retaining Government purpose rights after
the protection period expires provides an important incentive for the
small businesses participating in the programs and furthers the program
purposes of increasing small business commercialization of innovative
technology. SBA agrees that providing the Government with Unlimited
Rights after the protection period would not prohibit the release of
such data to international concerns of an SBIR/STTR awardee for
commercialization purposes. SBA also understands the concern raised by
several commenters regarding the variation in the length of time
necessary to develop certain technologies. Commenters noted that
medical and pharmaceutical technologies can take well over 12 years to
develop and that it is critical to have a limitation on the
Government's ability to release or disclose its data during that
timeframe. In response, SBA is adopting a 20-year protection period,
and will restrict the Government's use of that data after the
protection period expires to Government purposes.
SBA noted in the proposed policy directive, the data rights clause,
as currently written, limits the Government's use and disclosure of
SBIR/STTR Data after the protection period to Government use. The terms
``Government use'' and ``Government purpose'' are not defined in the
directive or the FAR. While Government purpose is defined in the DFARS
as essentially a non-commercial use for a Government purpose, the DFARS
does not currently grant Government purpose rights in SBIR/STTR Data,
either during or after the protection period. Several commenters
recommended that SBA adopt the DFARS definition of Government purpose
instead of the proposed Unlimited Rights or the current undefined
``Government use.'' Commenters argued that this would provide clarity
on the scope of the Government's rights, which are currently lacking in
the policy directive, while appropriately limiting those rights to
Government purposes.
SBA agrees with the commenters that the DFARS definition provides a
limitation on the Government's use of SBIR/STTR Data after the
protection period has expired and that this limitation supports small
businesses' ability to continue commercialization efforts while
providing the Government with greater rights to use the data. SBA notes
that these rights include the ability of the Government to release the
data to third-parties, subject to a non-disclosure agreement, for
Federal Government manufacture or procurement. However, such releases
do not allow for commercial use by third-party recipients of such data.
SBA adopts the Government Purpose definition, as found at DFARS, to
define the Federal Government's rights in appropriately marked SBIR/
STTR Data after the protection period expires.
SBA notes that the U.S. Department of Energy (DOE) raised
significant concerns that Government purpose, as defined in the DFARS,
is too restrictive for DOE awards, given its unique statutory mandate
and mission. DOE currently interprets ``Government use'' and
``Government purpose'' as undefined in the SBIR/STTR Policy Directives,
to permit its open publication of SBIR/STTR Data once the protection
period expires. This interpretation of ``Government use'' and
``Government purpose'' is more analogous with Unlimited Rights, which
permits the open disclosure and publication of SBIR/STTR Data for any
purpose. DOE argues that this practice is appropriate and necessary due
to its statutory authority and mandate to disclose scientific and
technical information, and therefore its release and disclosure of
SBIR/STTR Data generated under SBIR/STTR awards issued by DOE are
subject to Unlimited Rights after the expiration of the protection
period. In support of this exception to the general rule regarding the
Government's rights in SBIR/STTR Data after the protection period, DOE
provided detailed information about the statutory authorities that are
the foundation of its research and development practices and policies.
DOE notes that the Atomic Energy Act of 1954, Public Law 83-703, 42
U.S.C. 2013(b), authorizes DOE to effectuate policies by providing ``a
program for the dissemination of unclassified scientific and technical
information and for the control, dissemination, and declassification of
Restricted Data, subject to appropriate safeguards, so as to encourage
scientific and industrial progress.''
DOE argues that this concept was reinforced by the Energy
Reorganization Act of 1974 (ERA), Public Law 93-438, which directed the
DOE to enter arrangements, including for the conduct of research and
development activities as long as such arrangements wouldn't prevent
the dissemination of scientific or technical information. The ERA at 42
U.S.C. 5813(7), states that DOE is responsible for ``creating and
encouraging the development of general information to the public on all
energy conservation technologies and energy sources as they become
available for general use, and the Administrator . . . shall, to the
extent practicable, disseminate such information through the use of
mass communications.'' The ERA also authorizes DOE to ``make
arrangements (including contracts, agreements, and loans) for the
conduct of research and development activities with private or public
institutions or persons, including participation in joint or
cooperative projects of a research, developmental, or experimental
nature . . .'', however, ``the Administrator shall disseminate
scientific, technical, and practical information acquired pursuant to
this title through information programs and other appropriate means,
and shall encourage the dissemination of scientific, technical, and
practical information relating to energy so as to enlarge the
[[Page 12801]]
fund of such information and to provide that free interchange of ideas
and criticism which is essential to scientific and industrial progress
and public understanding.'' 42 U.S.C. 5817(a) and (e).
DOE also points to the Department of Energy Organization Act of
1977 (DEOA), which states that DOE's mission is ``[t]o carry out the
planning, coordination, support, and management of a balanced and
comprehensive energy research and development program,'' including
``disseminating information resulting from such programs, including
disseminating information on the commercial feasibility and use of
energy from fossil, nuclear, solar, geothermal, and other energy
technologies'' (42 U.S.C. 7112(5)). DOE argues that under the DEOA it
became responsible for establishing and maintaining ``a central source
of information on all energy resources and technology in furtherance of
the research, development, and demonstration mission'' of DOE (42
U.S.C. 5916). This information maintained by DOE shall be made
available to the public, except for trade secrets or other proprietary
information of another. Id.
SBA notes that the Government purpose definition in the DFARS, as
adopted in the SBIR/STTR Policy Directive, does not permit an agency's
open publication of appropriately marked SBIR/STTR Data after the
protection period. SBA understands the concerns raised by DOE on this
point and provides an exception that exclusively applies to DOE, to
receive Unlimited Rights in SBIR/STTR Data upon expiration of the
protection period. This exception is consistent with its statutory
authority, which requires the open publication of scientific and
technical data. This means that once the protection period expires, DOE
claims the right to openly publish the awardee's SBIR/STTR Data to
include disclosure in compliance with its statutory authority. To be
clear, all other Participating Agencies must utilize the Government
Purpose definition found in Sec. 3 of the Policy Directive, which does
not permit open publication of an awardee's appropriately marked data
after the protection period.
The SBA clarifies that at any time during the SBIR/STTR Protection
Period, the SBIR/STTR awardee, or entity that holds the rights to the
data, can provide the Government with greater rights, such as Unlimited
Rights. However, the Government cannot negotiate these rights prior to
an SBIR/STTR award and cannot make issuance of an SBIR/STTR award
conditional upon the relinquishment of any data rights. This is not a
change from the current policy. Additionally, SBA clarifies that the
Government receives Unlimited Rights in any SBIR/STTR Data that is not
appropriately marked. SBA received a comment suggesting further
clarification that an awardee may mark such data to indicate that it
retains title to the data even though the Government receives a license
for Unlimited Rights in that data. SBA agrees with this point, and
notes that awardees may mark data that is subject to Unlimited Rights
to demonstrate that it retains title to such data.
In addition to the amendments made to the data rights related
definitions, SBA also considered whether to amend the definition of
Essentially Equivalent Work to include work funded by State programs
and requested public comment on whether this amendment would be
appropriate. Currently, SBIR/STTR awardees may not receive duplicate
funding from federal sources for Essentially Equivalent Work, but there
is no explicit restriction regarding the acceptance of State program
funding for work to be performed under an SBIR/STTR award. SBA proposed
to include State program funding in the definition of Essentially
Equivalent Work. Commenters overwhelmingly objected to the inclusion of
State program funding in this definition, arguing that such funding
provides important supplemental funding for SBIR/STTR-funded projects.
In response to these comments, SBA is not altering the definition of
Essentially Equivalent Work in these amendments. In addition, SBA added
clarification to the Funding Agreement Certification and Life Cycle
Certification language to specify that Essentially Equivalent Work
applies to work funded by the same or any other Federal Agency, which
conforms with the definition of Essentially Equivalent Work specified
at Sec. 3(m) of the SBIR/STTR Policy Directive. This amendment also
addresses a recommendation from GAO, included in a report titled
``Small Business Research Programs: Additional Actions Needed to
Implement Fraud, Waste, and Abuse Prevention Requirements'' (GAO-17-
337, available at https://www.gao.gov/products/GAO-17-337).
Finally, SBA proposed to delete several terms and definitions that
SBA believes are common and therefore do not need to be defined in a
Policy Directive. Specifically, SBA deleted the following terms:
Cooperative Agreement, Feasibility, Funding Agreement Officer, and
Grant. SBA did not receive comments on these deletions and has adopted
these proposed changes.
4. Section 4--Phased Structure of Programs
SBA proposed to move information concerning agency benchmarks
towards commercialization from Sec. 4 to Sec. 6 because these
benchmarks affect program eligibility. In addition, SBA proposed to
clarify the preferences agencies must afford SBIR/STTR awardees with
respect to federally-funded Phase III awards.
The Act states that a Phase III award is one that:
. . .derives from, extends, or completes efforts made under prior
funding agreements under the SBIR program--
(i) in which commercial applications of SBIR-funded research or
research and development are funded by non-Federal sources of
capital or, for products or services intended for use by the Federal
Government, by follow-on non-SBIR Federal funding awards; or
(ii) for which awards from non-SBIR Federal funding sources are
used for the continuation of research or research and development
that has been competitively selected using peer review or merit-
based selection procedures;
15 U.S.C. 638(e)(4)(C); see id. Sec. 638(e)(6)(C). The purpose of the
Phase III award is to provide the small business that developed the
technology in Phases I or II the opportunity to commercialize it,
whether through a Federal prime or subcontract or other type of
agreement.
With respect to Phase III, Congress had directed SBA to provide,
for the SBIR/STTR Participating Agencies:
procedures to ensure, to the extent practicable, that an agency
which intends to pursue research, development, or production of a
technology developed by a small business concern under an SBIR
program enters into follow-on, non-SBIR funding agreements with the
small business concern for such research, development, or
production;
15 U.S.C. 638(j)(2)(C) (emphasis added). Section 5001, Division E of
the National Defense Authorization Act for Fiscal Year 2012, Public Law
112-81, contained the SBIR/STTR Reauthorization Act of 2011
(Reauthorization Act) which set forth several provisions relating to
the SBIR and STTR programs, including a provision relating to Phase
III. The Reauthorization Act emphasized that agencies are to utilize
small business Phase I or II awardees for Phase III awards by adding a
provision in the Act that states:
(4) PHASE III AWARDS.--To the greatest extent practicable,
Federal agencies and
[[Page 12802]]
Federal prime contractors shall issue Phase III awards relating to
technology, including sole source awards, to the SBIR and STTR award
recipients that developed the technology.
15 U.S.C. 638(r)(4) (emphasis added). Section 1709, Division A of the
National Defense Authorization Act for Fiscal Year 2018, Public Law
115-91, further amended section 9(r)(4) of the Small Business Act (15
U.S.C. 638(r)(4)) to now state:
(4) Competitive procedures and justification for awards.--To the
greatest extent practicable, Federal agencies and Federal prime
contractors shall--
(A) consider an award under the SBIR program or the STTR program
to satisfy the requirements under section 2304 of title 10, United
States Code, and any other applicable competition requirements; and
(B) issue, without further justification, Phase III awards
relating to technology, including sole source awards, to the SBIR
and STTR award recipients that developed the technology.
This provision addresses the concern that, at times, agencies have
failed to use this authority, bypassed the small business that created
the technology, and pursued the Phase III work with another business
rather than actively supporting and encouraging the commercialization
or further development of SBIR/STTR technology by the innovative small
business that developed the technology. SBA is required by statute to
report to Congress cases where agencies fail to comply with the
reporting requirements and intent of the SBIR/STTR Phase III policy set
forth in statute. Id. 638 (j)(3)(C).
Therefore, if the Federal Government is interested in pursuing
further work that was performed under an SBIR or STTR award, the
Government must, to the greatest extent practicable, pursue that work
with the SBIR or STTR awardee that performed the earlier work.
Notwithstanding the strong congressional mandate codified in statute,
SBA continues to hear from small businesses, agencies, and trade groups
that SBIR/STTR awardees do not receive Phase III awards.
As a result, SBA proposed to clarify that agencies must, to the
greatest extent practicable, determine whether a requirement,
solicitation or intended work either is Phase III work or includes it.
If the requirement is or includes Phase III work, or if the agency is
later informed that it is or includes Phase III work, SBA has clarified
that the agency must document that the requirement is Phase III and
then evaluate the practicability (to the greatest extent) of pursuing
the required work with the SBIR/STTR awardee that conducted the prior
SBIR or STTR work. This means that the agency must first consider
whether it can issue a sole source award to the Phase I or Phase II
awardee. Awarding the Phase III work to the SBIR or STTR firm on a sole
source basis is not practicable if, for example, the firm is no longer
in business or cannot perform the work itself or with subcontractors.
SBA clarifies that the decision by the agency that it is not
practicable to issue a sole source award to the SBIR/STTR awardee must
be documented in the contract file and a copy of that decision,
including the rationale, must be provided to SBA.
SBA further proposed to clarify that if the agency determines that
it cannot issue a sole source award for Phase III, then it must
consider whether there are other ways to provide the preference to the
SBIR/STTR awardee. Unless the agency finds that it is not practicable
to pursue the Phase III work with the SBIR/STTR awardee, the agency
must provide a preference and must always consider issuing a sole
source award first and foremost when providing this preference.
In addition, SBA proposed to clarify the notice and appeal
procedures with respect to Phase III awards or non-awards. SBA proposed
that the agency must notify SBA when it does not intend to issue a
Phase III award and then SBA may file a notice of intent to appeal,
which may be followed by filing an appeal.
In light of the foregoing, SBA proposed to clarify Sec. 4(c)(3)
concerning the competition requirements for Phase III awards.
Specifically, a Justification and Approval is no longer required by the
procuring agency for a Phase III sole source award when a contracting
officer determines that a technology that meets current agency
requirements derives from, extends, or completes an effort made under a
prior SBIR/STTR funding agreement issued competitively, and sole source
awards are authorized pursuant to 15 U.S.C. 638(r)(4).
Five commenters supported the proposed changes to the Phase III
competition language. No commenters opposed the proposed changes;
however, SBA received two suggested changes to the proposed
clarification of the phrase ``to the greatest extent practicable.''
Specifically, one commenter recommended that Participating Agencies
consider their mission and optimal small business participation when
applying ``to the greatest extent practicable''. In addition, one
commenter recommended that SBA revise the proposed language to clarify
that Federal agencies and Federal prime contractors shall, to the
greatest extent practicable, issue Phase III awards to the SBIR and
STTR award recipients for all research and development or production
efforts that use SBIR/STTR technology, not only those which pursue
research and development or production of the technology. SBA believes
the proposed clarification sufficiently outlines the process under
which agencies and Federal prime contractors comply with the statutory
provision that, to the greatest extent practicable, they issue Phase
III awards relating to technology, including sole source awards, to the
SBIR and STTR award recipients that developed the technology.
Therefore, SBA is adopting the clarification as proposed.
SBA received three comments recommending changes to SBA's
characterization of a Phase III award in the competition language,
which provides that a Phase III award is an extension of prior Phase I
and/or Phase II awards. The commenters expressed concern that the
proposed reference to Phase III awards is incomplete and recommended
that SBA revise it to include work that derives from, or completes an
effort made under prior SBIR/STTR funding agreements, as provided in
Sec. 4(c) of the proposed policy directive. The language in Sec.
4(c)(3) is sufficient and addresses the concern outlined in this
comment. The Section in part states, ``. . . that the project is an
SBIR/STTR Phase III award that is derived from, extends or completes
efforts made under prior SBIR/STTR funding agreements and is authorized
pursuant to 15 U.S.C. 638(c)(4).''
In addition, one commenter suggested that SBA revise the policy
directive to include bonuses or incentives to contracting officers and
prime contractors that make Phase III awards. There were no suggestions
for how SBA should implement these incentives. SBA believes this
comment does not relate to SBA's proposed competition language and
therefore falls outside the scope of this rulemaking.
Lastly, SBA received one comment recommending that SBA not revise
the policy directive to eliminate a reference to Phase III sole source
authority under the FAR 6-302.5. According to the commenter, the FAR
reference properly directs agencies, including those which require a
Justification and Approval, to make Phase III sole source awards under
the proper authority. In drafting the proposed competition language,
SBA sought to establish a more uniform approach under which all
Participating Agencies issue Phase III sole source awards. SBA believes
the proposed language is sufficient for purposes of a
[[Page 12803]]
Justification and Approval, if one is deemed required by the procuring
agency. Thus, SBA is adopting this language as proposed.
SBA notes that it has updated the termination date for the phase
flexibility, also known as Direct to Phase II, program to September 30,
2022, or until expiration. Section 854 of the National Defense
Authorization Act (NDAA) for Fiscal Year 2019, Public Law 115-232,
August 13, 2018, extended the termination date for this program by
amending 15 U.S.C. 638(cc).
Section 860 of the NDAA for Fiscal Year 2019 also provided
authority for Participating Agencies to establish a Commercialization
Assistance Pilot Program for the SBIR Program. This pilot program
authorizes Participating Agencies to award a third Phase II Award to
certain eligible concerns. The funds are to be used by eligible
concerns for research and development activities that build an eligible
entity's Phase II program and to ensure the research funded under such
Phase II is rapidly progressing towards commercialization. The pilot is
set to terminate on September 30, 2022.
5. Section 5--Program Solicitation Process
No substantive changes were made to this section.
6. Section 6--Eligibility and Application (Proposal) Requirements
SBA proposed to delete the requirement that an SBC can partner with
only one research institution under the STTR program. SBA believes that
a small business can partner with more than one research institution
under the STTR program as long as at least 30% of the work under the
award is performed by a single partnering research institution. For
example, if the SBC is performing 40% of the work itself and
subcontracting 30% to the single research institution, the SBC may
subcontract the remaining 30% to one or more other research
institutions or to another entity. SBA clarifies that in this scenario,
even though an SBC may partner with research institutions that are
performing less than 30% of the work, the principal investigator must
be primarily employed by the SBC or the single research institution
performing at least 30% of the work.
SBA proposed to move the agency benchmark performance requirements
from Sec. 4 to this section of the directive. The benchmark
performance requirements, set forth in 15 U.S.C. 638(qq), are designed
to ensure a minimum degree of awardee progress towards
commercialization. Specifically, the Act requires that agencies
establish standards, or benchmarks, to measure: (1) The success of
Phase I awardees in receiving Phase II awards, and, (2) the success of
Phase I awardees in receiving Phase III awards. Agencies have
established these benchmarks, which were published in the Federal
Register and are available at www.SBIR.gov. Any subsequent changes in
the benchmarks must be approved by SBA.
SBA proposed to clarify that when SBA calculates awardee progress
towards meeting the benchmark rates that each agency determines whether
a Phase I applicant meets both of its benchmarks and that the details
regarding agency benchmark rates and the implementation of this
requirement are available to the public on www.SBIR.gov. SBA is
adopting this language as proposed. This clarification addresses a
recommendation from GAO in a report titled ``Small Business Research
Programs: Agencies Need to Take Steps to Assess Progress Toward
Commercializing Technologies'' (GAO-18-207, available at https://www.gao.gov/products/GAO-18-207).
SBA is also clarifying the paragraph that addresses the consequence
for failure to meet the benchmarks. The Small Business Act requires
that SBIR/STTR awardees are ineligible for one year from the date of
determination to participate in Phase I of the SBIR/STTR programs if
they fail to satisfy the commercialization rate or transition rate
benchmarks. 15 U.S.C. 638(qq)(1)(B) and (2)(B). SBA had interpreted the
statutory consequence to mean that an SBC would be ineligible to
receive an SBIR/STTR Phase I award for one year after the date of
determination. SBA has reconsidered this approach and clarifies that
the consequence is ineligibility to submit a proposal for a Phase I
award for one year from the determination date. This clarification is
consistent with the statutory consequence for failure to meet the
commercialization rate or transition rate benchmarks and is more
equitable for SBCs that have invested considerable time and money on
proposal preparation, and that may have submitted a proposal while the
SBC was compliant with the benchmarks. This clarification also
increases procurement efficiency at the participating agencies by
providing the ability to move forward with issuance of Phase I awards
to SBCs that may have been compliant with the benchmarks at the time of
proposal submission. Furthermore, this clarification addresses a
recommendation from GAO in a report titled ``Small Business Research
Programs: Agencies Need to Take Steps to Assess Progress Toward
Commercializing Technologies'' (GAO-18-207, available at https://www.gao.gov/products/GAO-18-207).
SBA has added language explicitly allowing participation by
Tribally-owned SBIR/STTR applicants and awardees. Sec. 9 of the Act
does not prohibit participation by SBCs that are owned and controlled
by Indian Tribes and it was never the intent of SBA to exclude
participation of these entities in these small business innovation
programs.
SBA received five comments related to the proposed changes in this
section of the SBIR/STTR Policy Directive. Three of the comments
supported SBA's proposed changes to this section. One comment suggested
that SBA centralize the process for submitting commercialization data
and should provide a way for firms to enter commercialization data. SBA
notes that awardees currently have the ability to document
commercialization data by updating their company profile in
www.SBIR.gov. Another commenter asked whether an SBC owned and
controlled by Indian Tribes can have more than 500 employees and
participate in the program. SBA believes this question is addressed in
Sec. 6(a) of the proposed policy directive and in the regulations
governing the size and affiliation eligibility standards for SBIR/STTR
participation. Pursuant to 13 CFR 121.702(c), an SBIR or STTR awardee,
together with its Affiliates, must not have more than 500 employees.
This provision governs all awardees, including those owned and
controlled by Indian Tribes. SBA is adopting all of the proposed
changes to Sec. 6.
7. Section 7--Program Funding Process
SBA proposed to modify the section on Dollar Value of Awards to
state that SBA will review the effects of inflation on the guideline
amounts annually to determine if program-wide changes in the amounts
are warranted and will post the inflation amounts and any adjustments
to the guideline amounts on www.SBIR.gov. SBA received six comments
related to Sec. 7 of the SBIR/STTR Policy Directive; however, these
comments did not relate to SBA's proposed change regarding inflation
adjustments for the Dollar Value of Awards and therefore are considered
outside the scope of this rulemaking. SBA is adopting the proposed
change to Sec. 7.
SBA is adding a new paragraph to Sec. 7 to address the Pilot
Program to Accelerate Department of Defense SBIR/STTR Awards. Section
854(b)(2) of the NDAA for Fiscal Year 2019 authorized
[[Page 12804]]
this pilot program to reduce the time between an SBIR/STTR solicitation
to award for SBIR/STTR Awardees that receive awards from DoD. The
statute directs DoD to create simplified and standardized procedures
for making Phase I, Phase II, and Phase III awards with the intent to
decrease the time between solicitation and award.
8. Section 8--Terms of Agreement Under SBIR/STTR Awards
SBA proposed amendments to this section to clarify the main
elements of SBIR/STTR Data Rights, the SBIR/STTR Protection Period, and
the terms and conditions that must be set forth in the SBIR/STTR
solicitation and award as it relates to data rights. The proposed
changes in this section relate to the proposed amendments to the data
rights definitions contained in Sec. 3. SBA proposed that while the
Government receives SBIR/STTR Technical Data Rights and SBIR/STTR
Computer Software Rights in marked SBIR/STTR Data, these rights are
intended to provide a level of protection similar to that which is
provided to data an agency receives and that was developed exclusively
at private expense. SBA also proposed to clarify in this section that
SBIR/STTR Data Rights may be negotiated; however, an agency must not
make issuance of an SBIR/STTR award conditional upon the small business
negotiating or consenting to negotiate modification or transfer of
these rights.
Sec. 8 contains the proposed terms of the non-disclosure agreement
that must be entered into between the Federal Government and a non-
Governmental entity receiving SBIR/STTR Data in accordance with the
Government's limited rights in that data. The proposed requirements are
that the non-Governmental entity: (1) Understands and acknowledges the
limitations on the Government's access, use, modification,
reproduction, release, performance, transmission, display or disclosure
as set forth in the agreement; (2) is prohibited from further
releasing, disclosing, or using the data without the written permission
of the SBIR/STTR awardee; (3) agrees to destroy or return to the
Government all SBIR/STTR Data and all copies in its possession, at or
before the time specified in the agreement, and to notify the procuring
agency that all copies have been destroyed or returned; (4) is
prohibited from using the data for a commercial purpose; and, (5)
agrees that the SBIR/STTR Data will be accessed and used for the sole
purpose of providing impartial advice or technical assistance directly
to the Government. The current directives have not required that a
Federal Government contractor with access to SBIR/STTR Data enter a
non-disclosure agreement; however, SBA believes this is necessary to
ensure that any non-Governmental entity recipient of the data
understands the limitations on the use and disclosure of SBIR/STTR
Data. These requirements were based on the non-disclosure agreement
requirements contained in the DFARS and FAR for contractor access to
SBIR/STTR Data.
SBA received several comments urging that, prior to any release of
SBIR/STTR Data outside the Government during the protection period, the
entity receiving the data should be required to enter a non-disclosure
agreement not only with the Government but also with the SBC that owns
the data. SBA may limit the Government's rights in SBIR/STTR Data
during the protection period to protect the rights in data of the small
business concerns participating in the programs; however, SBA does not
have the authority to require two non-Government entities to enter a
non-disclosure agreement.
SBA proposed to limit the time period during which an SBIR/STTR
awardee may correct or add omitted markings of SBIR/STTR Data to six
months from the date the data was delivered. Currently, there is no
time limit on when an awardee may correct or add omitted markings to
its data. However, several of the funding agencies expressed concern
that having no time limit can create administrative burdens and noted
that there is a 6-month time limit to correct or add protective
markings on data delivered by awardees outside the SBIR/STTR program
and suggested that this requirement be imposed on SBIR/STTR awardees as
well. SBA specifically requested public comment on this proposed
change. Several commenters opposed the change pointing out that small
business SBIR/STTR awardees may inadvertently submit data without the
correct markings and that these firms should continue to be allowed to
correct such a mistake at any time. SBA understands that a possible
agency concern is that it may be difficult to protect SBIR/STTR data
that was not properly marked when delivered and may therefore have
already been released. Furthermore, SBA notes that several commenters
supported the 6-month limitation and that this limitation is consistent
with the timeframe that all other businesses, small and other than
small, are afforded under FAR 52.227-14(f)(2) to appropriately mark
their data to assert the Government's limited rights in that data.
Commenters did not explain why SBIR/STTR awardees should be provided
greater latitude in terms of the marking requirements as opposed to
other small businesses or other businesses regardless of size. As such,
SBA adopts the proposed 6-month limitation on marking SBIR/STTR Data.
SBA proposed to include language in Sec. 8 of the directive to
reflect its concern regarding the treatment of Prototypes, other than
Computer Software, that are developed under an SBIR/STTR award. SBA
states that agencies should handle such Prototypes with caution to
prevent the potential disclosure of the innovative technology or data
developed under an SBIR/STTR award. While a prototype may not itself be
considered SBIR/STTR Data because it is not ``recorded information,''
it may be possible under certain circumstances for an agency or non-
Government entity to glean protected aspects through observation or
reverse engineering. SBA received several comments regarding the
protection and treatment of Prototypes. Many of these comments were in
support of SBA's proposed changes to add language cautioning agencies
against release or disclosure of prototypes in a way that would harm
SBIR/STTR awardees. SBA has adopted the proposed changes.
9. Section 9--Responsibilities of SBIR/STTR Agencies and Departments
SBA proposed to move information in Appendix X relating to the
National Academy of Sciences study to this section. SBA received three
comments related to Sec. 9 of the proposed policy directive. One
commenter suggested that SBA include examples of actions that amount to
fraud, waste, and abuse. Another commenter stated that the reporting
and annual report paragraphs do not accommodate agencies with multi-
year funding, because they require that agencies report the amount of
dollars obligated per fiscal year for the program. This same commenter
also recommended that SBA change the term ``expend'' to ``obligate'' in
Sec. 9(e)(1). These comments do not relate to SBA's proposed
reorganization of the information in Appendix X related to the National
Academy of Sciences study to this section. SBA is adopting the proposed
reorganization of this information.
SBA is revising the termination date for the administrative funding
program to September 30, 2022, as this date was extended by section 854
of the NDAA for Fiscal Year 2019. Additionally, pursuant to changes
made in the NDAA 2019, SBA has modified the paragraphs within Sec. 9
of the Policy Directive that address technical and business assistance
awards for SBIR/STTR
[[Page 12805]]
Awardees. The NDAA 2019 increases the maximum amount of funding that
the Participating Agencies may use for such awards and expanded the
potential uses for such funds. The statute also directs SBA to
establish a maximum amount of assistance that may be received through
these technical and business assistance awards. SBA intends to solicit
input from the public as part of a published comment period prior to
establishing this amount. Once SBA determines the appropriate maximum
amount, such guidance will be provided on www.sbir.gov and in the
Policy Directive.
10. Section 10--Reporting Requirements for Agencies, Applicants and
Awardees
In this section, SBA proposed to amend the title to clarify that
the section relates to all reporting requirements required by statute.
SBA also proposed to delete references to reports that were due in 2012
and 2014 and therefore are no longer relevant. In addition, SBA
proposed to delete references to TechNet and replace them with
``www.SBIR.gov.'' Any system that SBA uses to report or collect
information will be on the www.SBIR.gov website, which is SBA's central
website for everything relating to the SBIR/STTR programs. SBA received
four comments in response to its proposed changes to Section 10. Two
commenters noted that there may be security risks associated with the
reporting requirements for agencies, applicants, and awardees. There
were no suggestions for how SBA should address these risks, and SBA did
not propose changes related to the security of agency reporting.
Another commenter stated that SBA should simplify and standardize all
duplicate reporting of commercial data, and recommended that the
National Science Foundation (NSF) be required to report on each
organization receiving a grant under the Phase 0 Proof of Concept Pilot
Program. Specifically, this commenter recommended that NSF report the
number and names of entities that received assistance from each grant
recipient, the number of SBIR proposals these entities submit, and the
cost of each award per entity, recipient, and project. SBA notes that
the National Institutes of Health (NIH) is the Participating Agency
with authority for the Phase 0 Proof of Concept Pilot Program. SBA
believes these comments fall outside the scope of the revisions and
request for comments in the proposed policy directive. SBA received one
comment in opposition to the proposed clarification, explaining that
requiring agencies to report SBIR/STTR obligations per fiscal year does
not recognize that some Participating Agencies have authority to
appropriate funds across multiple fiscal years. As stated above, SBA
believes proposed revisions respond to recommendations from the GAO,
directing SBA to amend its policy directives to clarify the programs'
annual spending requirements as written in the Act. Therefore, SBA is
adopting the proposed changes to this section.
11. Section 11--Responsibilities of SBA
SBA has made no changes to this section of the Policy Directive.
12. Section 12--Supporting Programs and Initiatives
Section 854 of the NDAA for Fiscal Year 2019, extended the
termination dates for the Commercialization Readiness Program for
civilian agencies and the Phase 0 Proof of Concept Pilot Program. Both
programs were extended through September 30, 2022.
13. Appendix I: Instructions for SBIR and STTR Program Solicitation
Preparation
SBA proposed to amend the certifications that small businesses must
submit prior to, upon, and after an SBIR/STTR award by combining the
SBIR and STTR certifications into one and noting on the document those
paragraphs that are applicable to STTR only. SBA proposed to clarify
the Instructions set forth in the SBIR/STTR Policy Directive adding a
specific model clause that must be reflected in all solicitations and
resulting funding agreements to ensure the SBIR/STTR awardee's data
rights are protected. This model clause is intended to ensure that data
rights are applied consistently throughout the Federal Government. The
proposed clause sets forth the pertinent terms and definitions relating
to data rights, which are also set forth and defined in Sec. 3 of the
directive and discussed in more detail in Sec. 8 of the directive. In
addition, the proposed clause in Appendix I states that the awardee
small business owns the data developed or generated during the award,
and clarifies that the Government has SBIR/STTR Technical Data Rights
and SBIR/STTR Computer Software Rights in the data during the
protection period. The clause requires the awardee to mark its
protected data, which is the current practice in the Federal
Government. SBA did not receive comments in response to these changes
outside of the comments relevant to Sec. s 3 and 8 of the proposed
policy directive. SBA is adopting the proposed changes to Appendix I.
13. Appendix II: SBIR/STTR Program Database. SBA proposed to remove
this appendix of database codes from the directive and will instead
maintain a current list of the database codes on www.SBIR.gov as a
ready reference for the Participating Agencies. SBA did not receive
comments related to this proposed deletion and is adopting this
proposed change.
14. Appendix III: Performance Areas and Metrics. SBA proposed to
remove this list of examples of performance metrics and instead will
maintain a current example list, in addition to the required metrics,
as a ready reference on www.SBIR.gov. SBA did not receive comments
related to this proposed deletion and is adopting this proposed change.
Notice of Final Policy Directive for the Small Business Innovation
Research (SBIR) and Small Business Technology Transfer Research (STTR)
Programs
To: The SBIR and STTR Program Managers
Subject: SBIR/STTR Policy Directive
1. Purpose. The purpose of this notice is to set forth a final
SBIR/STTR Policy Directive that combines the Small Business Innovation
Research (SBIR) and Small Business Technology Transfer Research (STTR)
program Policy Directives into one document, clarifies the data rights
afforded to SBIR and STTR small business awardees, adds definitions
relating to data rights, clarifies the Phase III preference to be
afforded to SBIR and STTR awardees, and clarifies the benchmarks for
progress towards commercialization.
2. Authority. The Small Business Act (15 U.S.C. 638(j) and (p))
requires the SBA Administrator to issue an SBIR and STTR program Policy
Directive for the general conduct of the programs.
3. Procurement Regulations. It is recognized that the Federal
Acquisition Regulations and agency supplemental regulations will need
to be modified to conform to the requirements of this final SBIR/STTR
Policy Directive. SBA's Administrator or designee has a role in
reviewing any regulatory provisions that pertain to programs authorized
by the Small Business Act.
4. Personnel Concerned. This SBIR/STTR Policy Directive serves as
guidance for all Federal Government personnel who are involved in the
administration of the SBIR and STTR programs, issuance and management
of funding agreements or contracts pursuant to the programs, and/or the
establishment of goals for small business concerns in research or
research and development acquisition or grants.
[[Page 12806]]
5. Originator. SBA's Office of Investment and Innovation.
Authorized By:
Dated: February 19, 2019.
A. Joseph Shepard,
Associate Administrator for the Office of Investment and Innovation.
Dated: March 22, 2019.
Linda E. McMahon,
Administrator.
Table of Contents
1. Purpose.
2. Summary of Statutory Provisions.
3. Definitions.
4. Phased Structure of Programs.
5. Program Solicitation Process.
6. Eligibility and Application (Proposal) Requirements.
7. Program Funding Process.
8. Terms of Agreement Under SBIR/STTR Awards.
9. Responsibilities of SBIR/STTR Agencies and Departments.
10. Reporting Requirements--for Participating Agencies,
Applicants, and Awardees.
11. Responsibilities of SBA.
12. Supporting Programs and Initiatives.
1. Purpose
(a) Sections 9(j) and 9(p) of the Small Business Act (the Act)
require that the Small Business Administration (SBA) issue Policy
Directives for the general conduct of the SBIR and STTR programs within
the Federal Government.
(b) This Policy Directive fulfills SBA's statutory obligation to
provide guidance to the participating Federal agencies for the general
operation of the SBIR and STTR programs. Because most of the policy for
the SBIR and STTR program is the same, SBA issues a single Policy
Directive for both programs. Unless one of the programs is specifically
mentioned, the term ``program'' or ``programs'' refers to both the SBIR
and STTR programs. In addition, ``SBIR/STTR'' is used throughout to
refer to both programs.
(1) The following sections pertain only to the STTR program: Sec.
3(cc)--Definition of ``Research Institution,'' Sec. 7(k)--Management
of the STTR Project, Sec. 8(c)--Allocation of Intellectual Property
Rights in STTR Award, and Sec. 12(e)--Phase 0 Proof of Concept
Partnership Pilot Program.
(2) The following sections pertain only to the SBIR program: Sec.
3(b)--Definition of ``Additionally Eligible State,'' Sec. 3(l)--
Definition of ``Covered Small Business,'' Sec. 4(b)(1)(ii)--Direct to
Phase II Awards, Sec. 6(a)(6)--Majority-Owned by Multiple VCOCs, Hedge
Funds or Private Equity Firms, Sec. 6(b)(1)(iii)--Registration and
Certifications for Proposal and Award for Majority-Owned by Multiple
VCOCs, Hedge Funds or Private Equity Firms, and Appendix I--
Certifications for Proposal and Award for Majority-Owned by Multiple
VCOCs, Hedge Funds or Private Equity Firms.
(3) Additional or modified instructions may be issued by SBA as a
result of public comment or experience. With this directive, SBA
fulfills the statutory requirement to simplify and standardize the
program proposal, selection, contracting, compliance, and audit
procedures for the programs to the extent practicable, while allowing
the Participating Agencies flexibility in the operation of their
individual programs. Wherever possible, SBA has attempted to reduce the
paperwork and regulatory compliance burden on small business concerns
(SBCs) applying to and participating in the SBIR/STTR programs, while
still meeting the statutory reporting and data collection requirements.
(c) The statutory purpose of the SBIR program is to strengthen the
role of innovative SBCs in Federally-funded research or research and
development (R/R&D). Specific program purposes are to: (1) Stimulate
technological innovation; (2) use small business to meet Federal R/R&D
needs; (3) foster and encourage participation by socially and
economically disadvantaged SBCs (SDBs), and by women-owned SBCs
(WOSBs), in technological innovation; and, (4) increase private sector
commercialization of innovations derived from Federal R/R&D, thereby
increasing competition, productivity and economic growth.
(d) In addition to the broad goals of the SBIR program, the
statutory purpose of the STTR program is to stimulate a partnership of
ideas and technologies between innovative SBCs and non-profit Research
Institutions. By providing awards to SBCs for cooperative R/R&D efforts
with Research Institutions, the STTR program assists the U.S. small
business and research communities by supporting the commercialization
of innovative technologies.
(e) Federal agencies participating in the programs (Participating
Agencies) are obligated to follow the guidance provided by this Policy
Directive. Each Participating Agency is required to review its rules,
policies, and guidance on the programs to ensure consistency with this
Policy Directive and to make any necessary changes in accordance with
each agency's normal procedures. This is consistent with the statutory
authority provided to SBA concerning the SBIR/STTR programs.
2. Summary of Statutory Provisions
(a) The SBIR program is codified at Sec. 9 of the Act, 15 U.S.C.
638. The SBIR program is authorized until September 30, 2022, or as
otherwise provided in law subsequent to that date.
(b) Each Federal agency with an extramural budget for R/R&D in
excess of $100,000,000 must participate in the SBIR program and spend
(obligate) a minimum percentage of their extramural R/R&D budgets
(obligations) of not less than 3.2% of such budget in fiscal year 2017
and for the percentage required by statute for each fiscal year after
for awards to SBCs for R/R&D under the SBIR program.
A Federal agency may exceed this minimum percentage.
(c) The STTR program is also codified at Sec. 9 of the Act, 15
U.S.C. 638. The STTR program is authorized until September 30, 2022, or
as otherwise provided in law subsequent to that date.
(d) Each Federal agency with an extramural budget for R/R&D in
excess of $1,000,000,000 must participate in the STTR program and spend
(obligate) a minimum percentage of their extramural R/R&D budgets
(obligations) of not less than 0.45% of such budget in fiscal year 2016
and for the percentage required by statute for each fiscal year after
on awards to SBCs under the STTR program.
A Federal agency may exceed this minimum percentage.
(e) In general, each Participating Agency must make SBIR/STTR
awards for R/R&D through the following uniform, three-phase process:
(1) Phase I awards to determine, insofar as possible, the
scientific and technical merit and feasibility of ideas that appear to
have commercial potential.
(2) Phase II awards to further develop work from Phase I that meets
particular program needs and exhibits potential for commercial
application.
(3) Phase III awards where commercial applications of SBIR/STTR
program-funded R/R&D are funded by non-Federal sources of capital; or
where products, services or further research intended for use by the
Federal Government are funded by non-SBIR/STTR sources of Federal
funding.
(f) Participating Agencies must report to SBA on the calculation of
the agency's extramural R/R&D budget, for the purpose of determining
SBIR/STTR program funding, within four months of enactment of each
agency's annual Appropriations Act.
(g) The Act explains that agencies are authorized and directed to
cooperate with SBA in order to carry out and
[[Page 12807]]
accomplish the purpose of the programs. As a result, each Participating
Agency shall provide information to SBA for SBA to monitor and analyze
each agency's SBIR/STTR program and to report annually to the Committee
on Small Business and Entrepreneurship of the Senate and to the
Committee on Small Business and the Committee on Science, Space, and
Technology of the House of Representatives. For more information on the
agency's reporting requirements, including the frequency for specific
reporting requirements, see Sec. 10 of the Policy Directive.
(h) SBA establishes databases and websites to collect and maintain,
in a common format, information that is necessary to assist SBCs and
assess the SBIR/STTR programs.
(i) SBA implements the Federal and State Technology (FAST)
Partnership Program to strengthen the technological competitiveness of
SBCs, to the extent that FAST is authorized by law.
(j) The competition requirements of the Armed Services Procurement
Act of 1947 (10 U.S.C. 2302, et seq.) and the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 3101, et seq.) must be
read in conjunction with the procurement notice publication
requirements of Sec. 8(e) of the Act (15 U.S.C. 637(e)). The following
notice publication requirements of Sec. 8(e) of the Act apply to SBIR/
STTR Participating Agencies using contracts as a SBIR or STTR Funding
Agreement.
(1) Any federal executive agency intending to solicit a proposal to
contract for property or services valued above the amounts set forth in
Federal Acquisition Regulations (FAR) Sec. 5.101, must transmit a
notice of the impending solicitation to the Government wide point of
entry (GPE) for access by interested sources. See FAR Sec. 5.201. The
GPE, located at www.fbo.gov, is the single point where Government
business opportunities, including synopses of proposed contract
actions, solicitations, and associated information, can be accessed
electronically by the public. In addition, an agency must not issue its
solicitation for at least 15 days from the date of the publication of
the GPE. The agency must establish a deadline for submission of
proposals in response to a solicitation in accordance with FAR Sec.
5.203.
(2) The contracting officer must generally make available through
the GPE those solicitations synopsized through the GPE, including
specifications and other pertinent information determined necessary by
the contracting officer. See FAR Sec. 5.102.
(3) Any executive agency awarding a contract for property or
services must synopsize the award through the GPE in accordance with
FAR subpart 5.3.
(4) The following are exemptions from the notice publication
requirements:
(i) In the case of agencies intending to solicit Phase I proposals
for contracts in excess of $25,000, the head of the agency may exempt a
particular solicitation from the notice publication requirements if
that official makes a written determination, after consulting with the
Administrator of the Office of Federal Procurement Policy (OFPP) and
the SBA Administrator, that it is inappropriate or unreasonable to
publish a notice before issuing a solicitation.
(ii) The SBIR/STTR Phase II award process.
(iii) The SBIR/STTR Phase III award process.
3. Definitions
(a) Act. The Small Business Act (15 U.S.C. 631, et seq.), as
amended.
(b) Additionally Eligible State. (SBIR only) A State in which the
total value of funding agreements awarded to SBCs under all agency SBIR
programs is less than the total value of funding agreements awarded to
SBCs in a majority of other States, as determined by SBA's
Administrator in biennial fiscal years and based on the most recent
statistics compiled by the Administrator.
(c) Affiliate. This term has the same meaning as set forth in 13
CFR part 121--Small Business Size Regulations, Sec. 121.103, ``How
Does SBA Determine Affiliation?''. Further information about SBA's
affiliation rules and a guide on affiliation is available at
www.SBIR.gov and www.SBA.gov/size.
(d) Applicant. The organizational entity that qualifies as an SBC
at all pertinent times and that submits a contract proposal or a grant
application for a funding agreement under the SBIR/STTR programs.
(e) Awardee. The organizational entity that receives an SBIR or
STTR Phase I, Phase II, or Phase III award. An ``SBIR/STTR Awardee.''
(f) Commercialization. The process of developing products,
processes, technologies, or services and the production and delivery
(whether by the originating party or others) of the products,
processes, technologies, or services for sale to or use by the Federal
Government or commercial markets.
(g) Computer Database. A collection of data recorded in a form
capable of being processed by a computer. The term does not include
Computer Software.
(h) Computer Programs. A set of instructions, rules, or routines
recorded in a form that is capable of causing a computer to perform a
specific operation or series of operations.
(i) Computer Software. Computer Programs, source code, source code
listings, object code listings, design details, algorithms, processes,
flow charts, formulae, and related material that would enable the
software to be reproduced, recreated, or recompiled. Computer Software
does not include Computer Databases or Computer Software Documentation.
(j) Computer Software Documentation. Owner's manuals, user's
manuals, installation instructions, operating instructions, and other
similar items, regardless of storage medium, that explain the
capabilities of the Computer Software or provide instructions for using
the software.
(k) Covered Small Business Concern. (SBIR only) A small business
concern that: (1) Was not majority-owned by multiple venture capital
operating companies (VCOCs), hedge funds, or private equity firms on
the date on which it submitted an application in response to a
solicitation under the SBIR program; and (2) is majority-owned by
multiple venture capital operating companies, hedge funds, or private
equity firms on the date of the SBIR award.
(l) Data. All recorded information, regardless of the form or
method of recording or the media on which it may be recorded. The term
does not include information incidental to contract or grant
administration, such as financial, administrative, cost or pricing or
management information.
(m) Essentially Equivalent Work. Work that is substantially the
same research, which is proposed for funding in more than one contract
proposal or grant application submitted to the same Federal Agency, or
submitted to two or more different Federal Agencies for review and
funding consideration; or work where a specific research objective and
the research design for accomplishing the objective are the same or
closely related to another proposal or award, regardless of the funding
source.
(n) Extramural R/R&D Budget/Obligations. The sum of the total
obligations for R/R&D minus amounts obligated during a given fiscal
year for R/R&D activities by employees of a Federal Agency in or
through Government-owned, Government-operated facilities. For the
Agency for International Development, the ``extramural budget'' does
not include amounts obligated solely for general
[[Page 12808]]
institutional support of international research centers or for grants
to foreign countries. For the Department of Energy, the ``extramural
budget'' does not include amounts obligated for atomic energy defense
programs solely for weapons activities or for naval reactor programs.
(See also Sec. 7(j) of this Policy Directive for additional exemptions
related to national security.)
(o) Federal Agency. An executive agency as defined in 5 U.S.C. 105,
and a military department as defined in 5 U.S.C. 102 (Department of the
Army, Department of the Navy, Department of the Air Force), except that
it does not include any agency within the Intelligence Community as
defined in Executive Order 12333, Sec. 3.4(f), or its successor
orders.
(p) Federal Laboratory. As defined in 15 U.S.C. 3703, means any
laboratory, any federally funded research and development center, or
any center established under 15 U.S.C. 3705 and 3707 that is owned,
leased, or otherwise used by a Federal Agency and funded by the Federal
Government, whether operated by the Government or by a contractor.
(q) Form, Fit, and Function Data. Data relating to items,
components, or processes that are sufficient to enable physical and
functional interchangeability, and data identifying source, size,
configuration, mating and attachment characteristics, functional
characteristics, and performance requirements. For Computer Software it
means data identifying source, functional characteristics, and
performance requirements, but specifically excludes the source code,
algorithms, processes, formulas, and flow charts of the software.
(r) Funding Agreement. Any contract, grant, or cooperative
agreement entered into between any Federal Agency and any SBC for the
performance of experimental, developmental, or research work, including
products or services, funded in whole or in part by the Federal
Government.
(s) Government Purpose. Any activity in which the United States
Government is a party, including cooperative agreements with
international or multi-national defense organizations or sales or
transfers by the United States Government to foreign governments or
international organizations. Government purposes include competitive
procurement, but do not include the rights to use, modify, reproduce,
release, perform, display, or disclose Technical Data or Computer
Software for commercial purposes or authorize others to do so.
(t) Innovation. Something new or improved, having marketable
potential, that includes the development of new technology, the
refinement of existing technology, or the development of new
applications for existing technology.
(u) Intellectual Property. The separate and distinct types of
intangible property that are referred to collectively as ``Intellectual
Property,'' including but not limited to: patents, trademarks,
copyrights, trade secrets, and mask works.
(v) Joint Venture. See 13 CFR 121.103(h).
(w) Key Individual. The Principal Investigator/Project Manager and
any other person named as a ``key'' employee in a proposal submitted in
response to a Program Solicitation.
(x) Operations, Maintenance, Installation, or Training Purposes
(OMIT) Data. Data that is necessary for operation, maintenance,
installation, or training purposes (but not including detailed
manufacturing or process data).
(y) Participating Agency(ies). A federal agency with an SBIR or
STTR program. An ``SBIR/STTR Agency.''
(z) Principal Investigator/Project Manager. The one individual
designated by the Applicant to provide the scientific and technical
direction to a project supported by the Funding Agreement.
(aa) Program Solicitation. A formal solicitation for proposals
issued by a Federal Agency that notifies the small business community
of its R/R&D needs and interests in broad and selected areas, as
appropriate to the agency, and requests for proposals from SBCs in
response to these needs and interests.
(bb) Prototype. A product, material, object, system, or process, or
a model thereof, that is in development, regardless of whether it is in
tangible, electronic, graphic or other form, at any stage of
development prior to its intended ultimate commercial production and
sale. The term ``Prototype'' includes Computer Programs embedded in
hardware or devices.
(cc) Research Institution. One that has a place of business located
in the United States, which operates primarily within the United States
or which makes a significant contribution to the U.S. economy through
payment of taxes or use of American products, materials or labor, and
is: (1) A non-profit institution as defined in section 4(3) of the
Stevenson-Wydler Technology Innovation Act of 1980 (that is, an
organization that is owned and operated exclusively for scientific or
educational purposes, no part of the net earnings of which inures to
the benefit of any private shareholder or individual); or (2) A
Federally-funded R/R&D center (FFRDC) as identified by the National
Science Foundation (NSF) in accordance with the Federal Acquisition
Regulation issued in accordance with section 35(c)(1) of the Office of
Federal Procurement Policy Act (or any successor regulation). A non-
profit institution can include hospitals and military educational
institutions, if they meet the definition above.
(dd) Research or Research and Development (R/R&D). Any activity
that is: (1) A systematic study directed toward greater knowledge or
understanding of the subject studied; (2) a systematic study directed
specifically toward applying knowledge and innovation to meet a
recognized but unmet need; or (3) a systematic application of knowledge
and innovation toward the production of useful materials, devices, and
systems or methods, including design, development, and improvement of
Prototypes and new processes to meet specific requirements.
(ee) SBIR/STTR Computer Software Rights. The Federal Government's
rights during the SBIR/STTR Protection Period in specific types of
SBIR/STTR Data that are Computer Software.
(1) The Federal Government may use, modify, reproduce, release,
perform, display, or disclose SBIR/STTR Data that are Computer Software
within the Federal Government. The Government may exercise SBIR/STTR
Computer Software Rights within the Government for:
(i) Use in Government computers;
(ii) Modification, adaptation, or combination with other Computer
Software, provided that the Data incorporated into any derivative
software are subject to the rights in paragraph (ee) and that the
derivative software is marked as containing SBIR/STTR Data;
(iii) Archive or backup; or
(iv) Distribution of a computer program to another Government
agency, without further permission of the Awardee, if the Awardee is
notified of the distribution and the identity of the recipient prior to
the distribution, and a copy of the SBIR/STTR Computer Software Rights
included in the Funding Agreement is provided to the recipient prior to
the distribution. The agency in receipt of the distributed SBIR/STTR
Data is subject to the data rights provisions in the SBIR/STTR Awardees
SBIR/STTR funding agreement.
(2) The Government shall not release, disclose, or permit access to
SBIR/STTR Data that is Computer Software for
[[Page 12809]]
commercial, manufacturing, or procurement purposes without the written
permission of the Awardee. The Government shall not release, disclose,
or permit access to SBIR/STTR Data outside the Government without the
written permission of the Awardee unless:
(i) The non-Governmental entity has entered into a non-disclosure
agreement with the Government that complies with the terms for such
agreements outlined in Sec. 8 of this Policy Directive; and
(ii) The release or disclosure is--
(A) To a Government support service contractor or their
subcontractor in the performance of a Government support services
contract for internal Government use or activities, including
evaluation, diagnosis and correction of deficiencies, and adaptation,
combination, or integration with other Computer Software, provided that
SBIR/STTR Data incorporated into any derivative software are subject to
the rights in paragraph (ee), and provided that the release is not for
commercial purposes or manufacture; or
(B) Necessary to support certain narrowly-tailored essential
Government activities for which law or regulation permits access of a
non-Government entity to a contractors' data developed exclusively at
private expense, non-SBIR/STTR Data, such as for emergency repair and
overhaul.
(ff) SBIR/STTR Data. All Data developed or generated in the
performance of an SBIR or STTR award, including Technical Data and
Computer Software developed or generated in the performance of an SBIR
or STTR award. The term does not include information incidental to
contract or grant administration, such as financial, administrative,
cost or pricing or management information.
(gg) SBIR/STTR Data Rights. The Government's license rights in
properly marked SBIR/STTR Data during the SBIR/STTR Protection Period
as follows: SBIR/STTR Technical Data Rights in SBIR/STTR Data that are
Technical Data or any other type of Data other than Computer Software
and SBIR/STTR Computer Software Rights in SBIR/STTR Data that is
Computer Software. Upon expiration of the protection period for SBIR/
STTR Data, the Government has a royalty-free license to use, and to
authorize others to use on its behalf, these Data for Government
Purposes, and is relieved of all disclosure prohibitions and assumes no
liability for unauthorized use of these Data by third parties. The
Government receives Unlimited Rights in all Form, Fit, and Function
Data, OMIT Data, and unmarked SBIR/STTR Data.
(hh) SBIR/STTR Protection Period. The period of time during which
the Government is obligated to protect SBIR/STTR Data against
unauthorized use and disclosure in accordance with SBIR/STTR Data
Rights. The SBIR/STTR Protection Period begins at award of an SBIR/STTR
Funding Agreement and ends not less than twenty years from that date.
(See Sec. 8(b)(4) of this Policy Directive).
(ii) SBIR/STTR Technical Data Rights. The Federal Government's
rights during the SBIR/STTR Protection Period in SBIR/STTR Data that
are Technical Data or any other type of Data other than Computer
Software.
(1) The Government may, use, modify, reproduce, perform, display,
release, or disclose SBIR/STTR Data that are Technical Data within the
Federal Government; however, the Federal Government shall not use,
release, or disclose the data for procurement, manufacture or
commercial purposes; or release or disclose the SBIR/STTR Data outside
the Government except as permitted by paragraph (2) below or by written
permission of the Awardee.
(2) SBIR/STTR Data that are Technical Data may be released outside
the Federal Government without any additional written permission of the
Awardee only if the non-Governmental entity or foreign government has
entered into a non-disclosure agreement with the Federal Government
that complies with the terms for such agreements outlined in Sec. 8 of
this Policy Directive and the release is:
(i) Necessary to support certain narrowly-tailored essential
Government activities for which law or regulation permits access of a
non-Government entity to a contractors' data developed exclusively at
private expense, non-SBIR/STTR Data, such as for emergency repair and
overhaul;
(ii) To a Government support services contractor in the performance
of a Government support services contract for internal Government use
or activities, including evaluation, diagnosis or modification provided
that SBIR/STTR Technical Data incorporated into any derivative Data are
subject to the rights in paragraph (ii), and the release is not for
commercial purposes or manufacture;
(iii) To a foreign government for purposes of information and
evaluation if required to serve the interests of the U.S. Government;
or
(iv) To non-Government entities or individuals for purposes of
evaluation.
(jj) Small Business Concern (SBC). A concern that meets the SBIR/
STTR program eligibility requirements set forth in 13 CFR 121.702,
``What size and eligibility standards are applicable to the SBIR and
STTR programs?''.
(kk) Socially and Economically Disadvantaged Individual. See 13 CFR
124.103 and 124.104.
(ll) Socially and Economically Disadvantaged SBC (SDB). See 13 CFR.
part 124, subpart B.
(mm) Student/Faculty-owned SBC. A small business that is majority-
owned by a faculty member or a student of an institution of higher
education as defined in 20 U.S.C. 1001.
(nn) Subcontract. Any agreement, other than one involving an
employer-employee relationship, entered into by an Awardee of a Funding
Agreement calling for supplies or services for the performance of the
original Funding Agreement.
(oo) Technology Development Program.
(1) the Established Program to Stimulate Competitive Research
(EPSCoR) of the National Science Foundation as established under 42
U.S.C. 1862g;
(2) the Defense Established Program to Stimulate Competitive
Research (DEPSCoR) of the Department of Defense;
(3) the Established Program to Stimulate Competitive Research
(EPSCoR) of the Department of Energy;
(4) the Established Program to Stimulate Competitive Research
(EPSCoR) of the Environmental Protection Agency;
(5) the Established Program to Stimulate Competitive Research
(EPSCoR) of the National Aeronautics and Space Administration;
(6) the Institutional Development Award (IDeA) Program of the
National Institutes of Health; and
(7) the Agriculture and Food Research Initiative (AFRI) of the
Department of Agriculture.
(pp) Technical Data. Recorded information, regardless of the form
or method of the recording, of a scientific or technical nature
(including Computer Software Documentation and Computer Databases). The
term does not include Computer Software or financial, administrative,
cost or pricing, or management information, or other data incidental to
contract or grant administration. The term includes recorded Data of a
scientific or technical nature that is included in Computer Databases.
(qq) United States. The 50 states, the territories and possessions
of the Federal Government, the Commonwealth of Puerto Rico, the
District of Columbia, the Republic of the
[[Page 12810]]
Marshall Islands, the Federated States of Micronesia, and the Republic
of Palau.
(rr) Unlimited Rights. The Federal Government's rights to use,
modify, prepare derivative works, reproduce, release, perform, display,
disclose, or distribute Data in whole or in part, in any manner and for
any purpose whatsoever, and to have or authorize others to do so.
(ss) Women-Owned SBC (WOSB). An SBC that is at least 51% owned by
one or more women, or in the case of any publicly owned business, at
least 51% of the stock is owned by women, and women control the
management and daily business operations.
4. Phased Structure of Programs
The SBIR/STTR programs employ a phased process, uniform throughout
the Federal Government, of soliciting proposals and awarding Funding
Agreements for R/R&D, production, services, or any combination, to meet
stated agency needs or missions. Agencies must issue SBIR/STTR awards
pursuant to competitive and merit-based selection procedures. Agencies
may not use investment of venture capital or investment from hedge
funds or private equity firms as a criterion for an SBIR/STTR award.
Although cost sharing or matching funds cannot be required for Phase I
or Phase II awards, agencies may require a small business to have
matching funds for certain special awards (e.g., to reduce the gap
between a Phase II and Phase III award). In order to stimulate and
foster scientific and technological innovation, including increasing
Commercialization of Federal R/R&D, the program must follow a uniform
competitive process of the following three phases, unless an exception
applies:
(a) Phase I. Phase I involves a solicitation of contract proposals
or grant applications to conduct feasibility-related experimental or
theoretical R/R&D related to described agency requirements. These
requirements, as defined by agency topics contained in a solicitation,
may be general or narrow in scope, depending on the needs of the
agency. The object of this phase is to determine the scientific and
technical merit and feasibility of the proposed effort and the quality
of performance of the SBC with a relatively small agency investment
before consideration of further Federal support in Phase II.
(1) Several different proposed solutions to a given problem may be
funded.
(2) Proposals will be evaluated on a competitive basis. Agency
criteria used to evaluate SBIR/STTR proposals must give consideration
to the scientific and technical merit and feasibility of the proposal
along with its potential for Commercialization. Considerations may also
include program balance with respect to market or technological risk or
critical agency requirements.
(3) Agency benchmarks for progress towards Commercialization must
be met to be eligible to participate in Phase I of the program. See
Sec. 6(a) of this Policy Directive for a description of this Phase I
eligibility requirement.
(4) Agencies may require the submission of a Phase II proposal as a
deliverable item under Phase I.
(b) Phase II.
(1) The object of Phase II is to continue the R/R&D effort from the
completed Phase I. Unless an exception set forth in paragraphs (i) or
(ii) below applies, only SBIR/STTR Phase I Awardees are eligible to
participate in Phase II.
(i) A Federal Agency may issue an SBIR Phase II award to an STTR
Phase I Awardee to further develop the work performed under the STTR
Phase I award. Similarly, an agency may issue an STTR Phase II award to
an SBIR Phase I Awardee to further develop the work performed under the
SBIR Phase I award. The agency must base its decision upon the results
of work performed under the Phase I award and the scientific and
technical merit and commercial potential of the Phase II proposal. The
Phase I Awardee must meet the eligibility and program requirements of
the Phase II program from which it will receive the award in order to
receive the Phase II award.
(ii) [SBIR only] The National Institutes of Health (NIH),
Department of Defense (DoD) and the Department of Education (DoEd) may
issue a Phase II SBIR award to an SBC that did not receive a Phase I
SBIR or STTR award for that R/R&D. Prior to such an award, the heads of
those agencies, or designees, must issue a written determination that
the small business has demonstrated the scientific and technical merit
and feasibility of the ideas that appear to have commercial potential.
The determination must be submitted to SBA prior to issuing the Phase
II award. This pilot program shall terminate on September 30, 2022,
unless otherwise extended.
(iii) [SBIR only] A Federal Agency must implement a
Commercialization Assistance Pilot Program, under which SBCs may apply
to receive a third Phase II award to carry out further
commercialization activities. Awards made under this pilot program may
not exceed the limitation on size of awards and shall be disbursed
during the performance of a Phase II award. The funds awarded may only
be used for research and development activities that build on the Phase
II work and ensure it is rapidly progressing towards commercialization.
The head of each Participating Agency may be allocated not more than 5
percent of the funds allocated to the SBIR program of that agency for
the purpose of making awards under this pilot program. SBA may
determine a covered agency has a sufficiently similar program, and thus
is not required to implement the pilot program.
(A) To be selected to receive an award under this pilot program, an
SBC shall submit to the Participating Agency implementing the program
an application at such time, in such manner, and containing such
information as the Participating Agency may require, including:
a. An updated Phase II commercialization plan; and
b. The source and amount of the required matching funding.
(B) Eligible SBCs has received:
a. A Phase II award under an SBIR program; and
b. A Sequential Phase II (``second Phase II'') from the covered
agency to which the SBC is apply for a third Phase II award under this
pilot program.
(C) Matching funding from an eligible third party is required. The
matching amount (excluding any fees collected by the SBC) must be equal
to the amount of the award. SBCs may not use funding from ineligible
sources to meet the matching requirement.
a. Eligible third-party investors include:
i. a SBC other than the eligible SBC;
ii. venture capital firms;
iii. individual investors;
iv. a non-SBIR federal, state, or local government;
v. or any combination thereof.
b. Ineligible sources include:
i. The eligible SBC's internal research and development funds;
ii. Funding in forms other than cash (such as in-kind or other
tangible assets);
iii. Funding from the owners of the eligible SBC, or the family
members or affiliates of such owners; or
iv. Funding attained through loans or other forms of debt
obligations.
(D) Agencies shall consider the following when making awards under
this pilot program:
a. The extent to which such award could aid the eligible entity in
commercializing the research funded under the eligible entity's Phase
II program;
b. Whether the updated Phase II commercialization plan provides a
[[Page 12811]]
sound approach for establishing technical feasibility that could lead
to commercialization of such research;
c. Whether the proposed activities to be conducted under such
updated Phase II commercialization plan further improve the likelihood
that such research will provide societal benefits;
d. Whether the small business concern has progressed satisfactorily
in Phase II to justify receipt of a subsequent Phase II SBIR award;
e. The expectations of the eligible third-party investor that
provides matching funding; and
f. The likelihood that the proposed activities to be conducted
under such updated Phase II commercialization plan using matching
funding provided by such eligible third-party investor will lead to
commercial and societal benefit.
(E) The pilot under this subsection shall terminate on September
30, 2022, unless otherwise extended.
(2) Funding must be based upon the results of work performed under
a Phase I award and the scientific and technical merit, feasibility and
commercial potential of the Phase II proposal. Phase II awards may not
necessarily complete the total research and development that may be
required to satisfy commercial or Federal needs beyond the SBIR/STTR
program. The Phase II Funding Agreement with the Awardee may, at the
discretion of the awarding agency, establish the procedures applicable
to Phase III agreements. The Government is not obligated to fund any
specific Phase II proposal.
(3) The SBIR/STTR Phase II award decision process requires, among
other things, consideration of a proposal's commercial potential.
Commercial potential includes the potential to transition the
technology to private sector applications, Government applications, or
Government contractor applications. Commercial potential in a Phase II
proposal may be evidenced by:
(i) the SBC's record of successfully commercializing SBIR/STTR or
other research;
(ii) the existence of Phase II funding commitments from private
sector or other non-SBIR/STTR funding sources;
(iii) the existence of Phase III, follow-on commitments for the
subject of the research; and
(iv) other indicators of commercial potential of the idea.
(4) Agencies may not use an invitation, pre-screening, or pre-
selection process for eligibility for Phase II. Agencies must note in
each solicitation that all Phase I Awardees may apply for a Phase II
award and provide guidance on the procedure for doing so.
(5) A Phase II Awardee may receive one additional, sequential Phase
II award to continue the work of an initial Phase II award. The
additional, sequential Phase II award has the same guideline amounts
and limits as an initial Phase II award.
(6) Agencies may offer special SBIR/STTR awards, such as Phase IIB
awards, that supplement or extend Phase II awards. For example, some
agencies administer Phase IIB awards that differ from the base Phase II
in that they require third party matching of the SBIR/STTR funds. Each
such supplemental award must be linked to a base Phase II award (the
initial Phase II, or the second sequential Phase II award). Any SBIR/
STTR funds used for such special or supplementary awards are aggregated
with the amount of the base Phase II to determine the size of that
Phase II award. Therefore, while there is no limit on the number of
such special/supplementary awards, there is a limit on the total amount
of SBIR/STTR funds that can be administered through them--the amounts
of these awards count towards the size of the initial Phase II or the
sequential Phase II, each of which has a guideline amount of $1 million
and a limit of $1.5 million. (Note that Phase IIB awards under the NIH
SBIR program are administered as second, sequential Phase II awards,
not supplemental awards. As such, they are base Phase II awards and
subject to the Phase II guideline amounts and limits of $1 million and
$1.5 million).
(7) A concern that has received a Phase I award from an agency may
receive a subsequent Phase II award from another agency if each agency
makes a written determination that the topics of the relevant awards
are the same and both agencies report the awards to the SBA including a
reference to the related Phase I award and initial Phase II award if
applicable.
(8) Agencies may issue Phase II awards for testing and evaluation
of products, services, or technologies for use in technical or weapons
systems.
(c) Phase III. Phase III refers to work that derives from, extends,
or completes an effort made under prior SBIR/STTR Funding Agreements,
but is funded by sources other than the SBIR/STTR programs. Phase III
work is typically oriented towards Commercialization of SBIR/STTR
research or technology, including through further R/R&D work.
(1) Phase III work: Each of the following types of activity
constitutes SBIR/STTR Phase III work:
(i) Commercial application (including R/R&D, testing and evaluation
of products, services or technologies for use in technical or weapons
systems) of SBIR/STTR-funded R/R&D that is financed by non-Federal
sources of capital. (Note: The guidance in this Policy Directive
regarding SBIR/STTR Phase III pertains to the non-SBIR/STTR federally-
funded work described in (ii) and (iii) below. It does not address
private agreements an SBIR/STTR firm may make in the Commercialization
of its technology, except for a subcontract to a Federal contract that
may be a Phase III.).
(ii) SBIR/STTR-derived products or services intended for use by the
Federal Government, funded by non-SBIR/STTR sources of Federal funding.
(iii) Continuation of SBIR/STTR work, funded by non-SBIR/STTR
sources of Federal funding including R/R&D.
(2) Data Rights. A Phase III award is, by its nature an SBIR/STTR
award, has SBIR/STTR status, and must include SBIR/STTR Data Rights
protection. If an SBIR/STTR Awardee receives a Funding Agreement
(whether competed, direct award, sole sourced or a subcontract) for
work that derives from, extends, or completes efforts made under prior
SBIR/STTR Funding Agreements, then the Funding Agreement for the new
work must have all SBIR/STTR Phase III status and SBIR/STTR Data
Rights.
(3) Competition Requirement. The competitions for SBIR/STTR Phase I
and Phase II awards satisfy any competition requirement of the Armed
Services Procurement Act, the Federal Property and Administrative
Services Act, and the Competition in Contracting Act. An agency that
wishes to fund an SBIR/STTR Phase III award, which is an extension of
prior Phase I and/or Phase II awards, is not required to conduct
another competition for the Phase III award in order to satisfy those
statutory provisions. As a result, in conducting actions relative to a
Phase III SBIR/STTR award, it is sufficient to state for purposes of a
Justification and Approval, if one is deemed required by the agency,
that the project is an SBIR/STTR Phase III award that is derived from,
extends, or completes efforts made under prior SBIR/STTR Funding
Agreements and is authorized pursuant to 15 U.S.C. 638(r)(4). Further
justification is not needed.
(4) Phase III work may be for products, production, services, R/
R&D, or any such combination.
(5) There is no limit on the number, duration, type, or dollar
value of Phase III awards made to a business concern. There is no limit
on the time that may elapse between a Phase I or Phase II award and
Phase III award, or between a Phase III award and any subsequent Phase
III award. A Federal Agency may enter into a Phase III SBIR/STTR
[[Page 12812]]
agreement at any time with a Phase II Awardee. Similarly, a Federal
Agency may enter into a Phase III SBIR/STTR agreement at any time with
a Phase I Awardee. A subcontract to a Federally-funded prime contract
may be a Phase III award.
(6) Size. The small business size limits for Phase I and Phase II
awards do not apply to Phase III awards.
(7) Special acquisition requirement. Agencies or their Government-
owned, contractor-operated (GOCO) facilities, Federally-funded research
and development centers (FFRDCs), or Government prime contractors that
pursue R/R&D or production of technology developed under the SBIR/STTR
program shall issue Phase III awards relating to the technology,
including sole source awards, to the Awardee that developed the
technology under an SBIR/STTR award, to the greatest extent
practicable, consistent with an Agency's mission and optimal small
business participation.
(i) Implementing the requirement. In recognition of the prior
merit-based competitive selection of, and subsequent commitment of
agency funds to SBIR/STTR Awardees and the broad intent of the program
to promote the commercial success of these small businesses, Agencies
must make a good faith effort to negotiate with such Awardees regarding
the performance of the new, related, work and to issue Phase III awards
for the work. When implementing this requirement, the agency will
evaluate the work for consistency with its documented mission
requirements and must consider the practicality of pursuing the work
with the Awardee through a direct follow-on award by performing market
research to determine whether the firm is available, capable, and
willing to perform the work. If an award is made, the Agency must
identify the funding agreement as an SBIR or STTR Phase III. The Agency
must act in ways consistent with the Congressional intent to support
the Commercialization of an SBIR/STTR-developed technology by the SBIR/
STTR Awardee, and all parties must proceed along these steps in good
faith.
(ii) Sole Source Awards. If pursuing the Phase III work with the
Awardee is found to be practicable, the agency must award a non-
competitive contract to the firm.
(iii) Other Preference. If pursuing Phase III work with the Awardee
on a sole source/non-competitive basis does not meet the requirements
set forth in the above sections regarding availability, practicality
and capability, the Agency must document the file and provide a copy of
the decision, including the rationale, to the SBA. The agency should
also use other means of affording preference for the Phase III work,
especially when the request is for a large acquisition program, which
may not be best suited for an SBIR/STTR Award. Examples include
reference to the SBIR/STTR Awardee's brand-name as a required
deliverable in the request for proposals, requiring the prime awardee
to use evaluation factors favoring subcontracting to SBIR/STTR
concerns, or providing other incentives to the prime contractor for
utilizing SBIR/STTR Awardees as subcontractors, as referenced in 15
U.S.C. 638(y).
(iv) Agency Notice of Intent to Award. An agency, or its GOCOs or
FFRDCs, that intends to pursue Phase III work (which includes R/R&D,
production, services, or any combination thereof of a technology
developed under an SBIR/STTR award), with an entity other than the
Phase I or Phase II SBIR/STTR Awardee, must notify SBA in writing prior
to such an award. This notification must include, at a minimum:
(A) The steps the agency has taken to fulfill the special
acquisition requirement (e.g., a good faith effort to make the award to
the SBIR/STTR Awardee).
(B) The reasons why a follow-on Funding Agreement with the SBIR/
STTR Awardee is not practicable (e.g., SBIR/STTR Awardee was not
willing or interested in the work, not capable of doing the work or
functioning as a prime and subcontracting the work, or no longer in
business).
(C) The identity of the entity with which the agency intends to
make an award to perform the research, development, or production; the
type of Funding Agreement to be used; and the amounts of the agreement.
(v) SBA Notice of Intent to Appeal. SBA may appeal a decision by an
agency (or its GOCOs or FFRDCs) to pursue Phase III work with a
business concern other than the SBIR/STTR Awardee that developed the
technology to the head of the contracting activity.
(A) If SBA receives an agency's notice of intent to make an award
under (iv) above, SBA may file a notice of intent to appeal with the
Funding Agreement officer no later than 5 business days after receiving
the agency's notice of intent to make award.
(B) If an agency is pursuing work that SBA has determined is Phase
III work and has not complied with either of the reporting requirements
above, SBA may notify the agency at any time of its intent to appeal
the decision to proceed with the work. SBA makes such determinations
based on all information it receives, including information presented
directly to SBA by an SBIR/STTR Awardee.
(vi) Suspension of Work. Upon receipt of SBA's notice of intent to
appeal, the Funding Agreement officer must suspend further action on
the funding agreement until the head of the contracting activity issues
a written decision on the appeal. The Funding Agreement officer may
proceed with award only if he or she determines in writing that the
award must be made to protect the public interest. The Funding
Agreement officer must include a statement of the facts justifying such
a determination and provide a copy of its determination to SBA.
(vii) SBA Appeal. Within 10 business days of SBA's notice of intent
to appeal, SBA may file a formal appeal with the head of the agency.
SBA's appeal will state with specificity SBA's conclusion that the
agency's obligation to make a Phase III award ``to the greatest extent
practicable'' has not been fulfilled.
(viii) Agency Decision. Within 30 business days of receiving SBA's
appeal, the head of the agency's contracting or grant-making activity
must render a written decision setting forth the basis of his or her
determination. During this period, the agency should consult with SBA
and review any case-specific information SBA believes to be pertinent.
(ix) SBA Case Report to Congress. SBA notifies Congress of all
instances in which an agency pursued Phase III R/R&D, or production of
a technology developed under an SBIR/STTR award, with a business or
entity other than the SBIR/STTR Awardee. SBA will notify Congress of
such instances, of any agency determination or decision justifying an
award to other than the Phase III SBIR/STTR Awardee, and of any SBA
appeals of agency decisions under this section.
5. Program Solicitation Process
(a) Topics/Subtopics. At least annually, each agency must issue a
Program Solicitation that sets forth a substantial number of R/R&D
topics and subtopic areas consistent with stated agency needs or
missions. Agencies may decide to issue joint solicitations. Both the
list of topics and the description of the topics and subtopics must be
sufficiently comprehensive to provide a wide range of opportunities for
SBCs to participate in the agency R/R&D programs. Topics and subtopics
must emphasize the need for proposals with advanced concepts to meet
specific agency R/R&D needs. Each topic and subtopic must describe the
needs in sufficient detail to assist in providing
[[Page 12813]]
on-target responses, but cannot involve detailed specifications to
prescribed solutions of the problems.
(b) Master Schedule. The Act requires issuance of SBIR/STTR Phase I
Program Solicitations in accordance with a Master Schedule coordinated
between SBA and the SBIR/STTR Participating Agency. The SBA office
responsible for coordination is: Office of Innovation, U.S. Small
Business Administration, 409 Third Street SW, Washington, DC 20416.
Phone: (202) 205-6450. Fax: (202) 205-7754. Email: [email protected].
Website: www.SBIR.gov.
(c) Coordination of Agency Schedules. For maximum participation by
interested SBCs, it is important that the planning, scheduling and
coordination of agency Program Solicitation release dates be completed
as early as practicable to coincide with the commencement of the fiscal
year on October 1. Bunching of agency Program Solicitation release and
closing dates may prohibit SBCs from preparation and timely submission
of proposals for more than one SBIR/STTR project. SBA's coordination of
agency schedules minimizes the bunching of proposed release and closing
dates. SBIR/STTR Agencies may elect to publish multiple Program
Solicitations within a given fiscal year to facilitate in-house agency
proposal review and evaluation scheduling.
(d) Posting of Master Schedule. SBA posts a Master Schedule of
release dates of Program Solicitations with links to the Participating
Agency websites. For more information see Sec. 10(c) of this Policy
Directive.
(e) Simplified, Standardized, and Timely SBIR/STTR Program
Solicitations
(1) The Act requires simplified, standardized and timely SBIR/STTR
solicitations and for agencies to use a ``uniform process'' minimizing
the regulatory burden for SBCs. Therefore, the instructions in Appendix
I to this Policy Directive purposely depart from normal Government
solicitation format and requirements. Furthermore, while all of
Appendix I is applicable for Phase I and Phase II procurements, only
Sec. 5(d) of Appendix I is applicable for Phase III procurements.
(2) Agencies must update www.SBIR.gov with information on each
solicitation and modification no later than 5 days after the date of
release of the solicitation or modification to the public. This must
include any update to the website link for the Program Solicitation.
(3) SBA does not intend that the SBIR/STTR Program Solicitation
replace or be used as a substitute for unsolicited proposals for R/R&D
awards to SBCs. In addition, the SBIR/STTR Program Solicitation
procedures do not prohibit other agency R/R&D actions with SBCs that
are carried on in accordance with applicable statutory or regulatory
authorizations.
6. Eligibility and Application (Proposal) Requirements
(a) Eligibility Requirements
(1) Certification. To receive SBIR/STTR funds, each Awardee of a
Phase I or Phase II award must qualify as an SBC at the time of award
and at any other time set forth in SBA's regulations at 13 CFR 121.701-
121.705. Each Phase I and Phase II Awardee must submit a certification
stating that it meets the size, ownership and other requirements of the
SBIR or STTR program at the time of award, and at any other time set
forth in SBA's regulations at 13 CFR 121.701-121.705. SBA's size
regulations for the SBIR/STTR program require that an Awardee be
directly owned and controlled by individuals or SBCs; however, SBA is
clarifying that an SBC directly owned and controlled by an Indian Tribe
or by another SBC that is directly owned and controlled by an Indian
Tribe may also be eligible to participate in the SBIR/STTR programs.
(2) Performance of Work Requirements. For SBIR Phase I, a minimum
of two-thirds of the research or analytical effort must be performed by
the Awardee. For SBIR Phase II, a minimum of one-half of the research
or analytical effort must be performed by the Awardee. Occasionally,
deviations from these SBIR requirements may occur, and must be approved
in writing by the Funding Agreement officer after consultation with the
agency SBIR/STTR program manager/coordinator. For STTR Phase I and
Phase II, not less than 40 percent of the R/R&D work must be performed
by the SBC, and not less than 30 percent of the R/R&D work must be
performed by a partnering Research Institution. Deviations from these
STTR requirements are not allowed, as the performance of work
requirements are specified in statute at 15 U.S.C. 638(e). An agency
can measure this research or analytical effort using the total award
dollars or labor hours, and must explain to the small business in the
solicitation how it will be measured.
(3) Employment of the Principal Investigator/Project Manager. For
both Phase I and Phase II, the primary employment of the Principal
Investigator/Project Manager must be with the SBC (or the Research
Institution--STTR only) at the time of award and during the conduct of
the proposed project. Primary employment means that more than one-half
of the Principal Investigator/Project Manager's employment time is
spent in the employ of the SBC (or Research Institution--STTR only).
This precludes full-time employment with another organization.
Occasionally, deviations from this requirement may occur, and must be
approved in writing by the Funding Agreement officer after consultation
with the agency SBIR/STTR program manager/coordinator. Further, an SBC
may replace the Principal Investigator/Project Manager on an SBIR/STTR
Phase I or Phase II award, subject to approval in writing by the
Funding Agreement officer. For purposes of the SBIR/STTR programs,
personnel obtained through a Professional Employer Organization or
other similar personnel leasing company may be considered employees of
the Awardee. This is consistent with SBA's size regulations, 13 CFR
121.106, ``How Does SBA Calculate Number of Employees?''.
(4) Location of the work. For both Phase I and Phase II, the R/R&D
work must be performed in the United States. However, based on a rare
and unique circumstance, agencies may approve a particular portion of
the R/R&D work to be performed or obtained in a country outside of the
United States, for example, if a supply or material or other item or
project requirement is not available in the United States. The Funding
Agreement officer must approve each such specific condition in writing.
(5) Novated/Successor in Interested/Revised Funding Agreements. An
SBIR/STTR Awardee may include, and SBIR/STTR work may be performed by,
those identified via a ``novated'' or ``successor in interest'' or
similarly-revised Funding Agreement. For example, in order to receive a
Phase III award, the Awardee must have either received a prior Phase I
or Phase II award or been novated a Phase I or Phase II award (or
received a revised Phase I or Phase II award if a grant or cooperative
grant). In addition, an SBIR/STTR Awardee may include those that have
merely reorganized with the same key staff (e.g., reorganized from a
partnership to an LLC), regardless of whether they have been assigned a
different tax identification number. In cases where there is a novation
or similarly revised Funding Agreement, agencies may require the
original Awardee to relinquish its rights and interests in an SBIR/STTR
project in favor of another Applicant as a condition for that
Applicant's eligibility to participate in the programs for that
project.
(6) Majority-Owned by Multiple VCOCs, Hedge Funds or Private Equity
[[Page 12814]]
Firms [SBIR Only]. NIH, Department of Energy (DOE), and NSF may each
award not more than 25% of the agency's SBIR funds to SBCs that are
owned in majority part by multiple venture capital operating companies,
hedge funds, or private equity firms through competitive, merit-based
procedures that are open to all eligible SBCs. Any other SBIR
Participating Agency may award not more than 15% of the agency's SBIR
funds to such SBCs. SBIR agencies may or may not choose to utilize this
funding option. A table listing the agencies that are currently using
this authority can be found at www.SBIR.gov. This authority is set
forth in 13 CFR 121.701-121.705.
(i) Before permitting participation in the SBIR program by SBCs
that are owned in majority part by multiple venture capital operating
companies, hedge funds, or private equity firms, the SBIR agency must
submit a written determination to SBA, the Senate Committee on Small
Business and Entrepreneurship, the House Committee on Small Business
and the House Committee on Science, Space, and Technology at least 30
calendar days before it begins making awards to such SBCs. The
determination must be made by the head of the Federal Agency or
designee and explain how awards to such SBCs in the SBIR program will:
(A) induce additional venture capital, hedge fund, or private
equity firm funding of small business innovations;
(B) substantially contribute to the mission of the Federal Agency;
(C) address a demonstrated need for public research; and
(D) otherwise fulfill the capital needs of SBCs for additional
financing for SBIR projects.
(ii) The SBC that is majority-owned by multiple venture capital
operating companies, hedge funds, or private equity firms must register
with SBA in the Company Registry Database, at www.SBIR.gov, prior to
the date it submits an application for an SBIR award.
(iii) The SBC that is majority-owned by multiple venture capital
operating companies, hedge funds, or private equity firms must submit a
certification with its proposal stating, among other things, that it
has registered with SBA.
(iv) Any agency that makes an award under this paragraph during a
fiscal year shall collect and submit to SBA data relating to the number
and dollar amount of Phase I awards, Phase II awards, and any other
category of awards by the Federal Agency under the SBIR program during
that fiscal year. See Sec. 10 of this Policy Directive for the
specific reporting requirements.
(v) If an agency awards more than the percentage of the funds
authorized under Sec. 6(a)(6) of this Policy Directive, the agency
shall transfer from its non-SBIR and non-STTR R/R&D funds to the
agency's SBIR funds any amount that is in excess of the authorized
amount. The agency must transfer the funds not later than 180 days
after the date on which the Federal Agency made the award that exceeded
the authorized amount.
(vi) If a Federal Agency makes an award under a solicitation more
than 9 months after the date on which the period for submitting
applications under the solicitation ends, a Covered Small Business
Concern is eligible to receive the award, without regard to whether it
meets the eligibility requirements of the program for a SBC that is
majority-owned by multiple venture capital operating companies, hedge
funds, or private equity firms, if the Covered Small Business Concern
meets all other requirements for such an award. In addition, the agency
must transfer from its non-SBIR and non-STTR R/R&D funds to the
agency's SBIR funds any amount that is so awarded to a Covered Small
Business Concern. The funds must be transferred not later than 90 days
after the date on which the Federal Agency makes the award.
(7) Agency Benchmarks for Progress Towards Commercialization.
(i) Before making a new Phase I award to an Awardee that has won
multiple prior SBIR/STTR awards, each agency must establish benchmarks
for progress towards Commercialization and determine whether an
Applicant meets those benchmarks. Agencies must apply two SBA-approved
performance standards (benchmarks) addressing an Awardee's progress
towards Commercialization: A Phase II Transition Rate that sets a
minimum required rate of progress from Phase I to Phase II over a
specified period, and a Commercialization Rate Benchmark that sets the
minimum Commercialization results an Awardee must have realized from
its prior SBIR/STTR awards over a specified period.
(ii) If an Awardee fails to meet either of the benchmarks, that
Awardee is not eligible to submit a proposal for a new Phase I award
(and any new Phase II award issued pursuant to paragraph 4(b)(1)(ii))
for a period of one year from the time of the determination.
(iii) For each benchmark, agencies establish a threshold number of
prior awards an Awardee must have won for the benchmark requirement to
be applied.
(iv) Using information received from the agencies and from SBIR/
STTR Awardees, SBA identifies the companies that have won more than the
threshold number of awards and calculates the Phase II Transition Rates
and Commercialization Rates for those companies. The results of this
assessment are used by each agency to determine if a company fails to
meet a benchmark rate and is therefore not eligible to submit a
proposal for a new Phase I award. Agencies must notify SBA of any
applications denied because of failure to meet the benchmarks. The
assessment results and eligibility determinations are not made public.
Participating Agencies and SBA officials view the results through
secure user accounts on www.SBIR.gov. Each participating company can
view the results of the last benchmark assessment once it has created a
Small Business User account on www.SBIR.gov. If an Awardee believes its
assessment was made in error, it may provide SBA with the pertinent
award information and request a reassessment.
(v) Current details of these requirements and the implementation
processes used by the agencies are posted on www.SBIR.gov under the
``Performance Benchmark Requirements'' tab. Changes to these benchmarks
requirements and procedures become effective when posted on
www.SBIR.gov. Agencies must submit any changes to the benchmarks to SBA
for prior approval. If approved, SBA will publish the benchmarks and
allow for public comment at least 60 days before becoming effective.
(b) Proposal (Application) Requirements.
(1) Registration and Certifications for Proposal and Award.
(i) Each Applicant must register in SBA's Company Registry Database
at www.SBIR.gov (see Appendix I) and submit a .pdf document of the
registration and any required certifications with its application if
the information cannot be transmitted automatically to the SBIR/STTR
Agencies from www.SBIR.gov. Applicants must have updated their
information on the Company Registry no more than 6 months prior to the
date of a proposal submission.
(ii) Agencies may request the SBIR/STTR Applicant to submit a
certification at the time of submission of the application, which
requires the Applicant to state that it intends to meet the size,
ownership and other requirements of the SBIR/STTR program at the time
of award of the Funding Agreement, if selected for award. See Appendix
I for the required text of the certification.
[[Page 12815]]
(iii) [SBIR Only] For those agencies using the authority under
Sec. 6(a)(6) of this Policy Directive, each Phase I and Phase II
Applicant that is majority-owned by multiple venture capital operating
companies, hedge funds, or private equity firms is required to submit a
specific certification with its SBIR application to the SBIR agency
(see Appendix I for the required text of the certification).
(2) Commercialization Plan. A succinct commercialization plan must
be included with each proposal for an SBIR/STTR Phase II award.
Elements of a commercialization plan will include the following, as
applicable:
(i) Company information. Focused objectives/core competencies;
specialization area(s); products with significant sales; and history of
previous Federal and non-Federal funding, regulatory experience, and
subsequent Commercialization.
(ii) Customer and Competition. Clear description of key technology
objectives, current competition, and advantages compared to competing
products or services; description of hurdles to acceptance of the
innovation.
(iii) Market. Milestones, target dates, analyses of market size,
and estimated market share after first year sales and after 5 years;
explanation of plan to obtain market share.
(iv) Intellectual Property. Patent status, technology lead, trade
secrets or other demonstration of a plan to achieve sufficient
protection to realize the commercialization stage and attain at least a
temporal competitive advantage.
(v) Financing. Plans for securing necessary funding in Phase III.
(vi) Assistance and mentoring. Plans for securing needed technical
or business assistance through mentoring, partnering, or through
arrangements with State assistance programs, SBDCs, Federally-funded
research laboratories, Manufacturing Extension Partnership centers, or
other assistance providers.
(3) Data Collection. Each Phase I and II Applicant is required to
provide information on www.SBIR.gov (see Appendix II as posted on
www.SBIR.gov). Each SBC applying for a Phase II award is required to
update its Commercialization information on www.SBIR.gov for all of its
prior Phase II awards (see Appendix II as posted on www.SBIR.gov).
7. Program Funding Process
Because the Act requires a ``simplified, standardized funding
process,'' specific attention must be given to the following areas of
SBIR/STTR program administration:
(a) Timely Receipt of Proposals. Program Solicitations must
establish proposal submission dates for Phase I and may establish
proposal submission dates for Phase II. However, agencies may also
negotiate mutually acceptable Phase II proposal submission dates with
individual Phase I Awardees.
(b) Review of Proposals. SBA encourages participating agencies to
use their routine review processes for SBIR/STTR proposals whether
internal or external evaluation is used. A more limited review process
may be used for Phase I due to the larger number of proposals
anticipated. Where appropriate, ``peer'' reviews external to the agency
are authorized by the Act. SBA cautions participating agencies that all
review procedures must be designed to minimize any possible conflict of
interest as it pertains to Applicant proprietary Data. The standardized
SBIR/STTR solicitation advises potential Applicants that proposals may
be subject to an established external review process and that the
Applicant may include company designated proprietary information in its
proposal.
(c) Selection of Awardees.
(1) Time Period for Decision on Proposals.
(i) NIH and NSF must issue a notice to an Applicant for each
proposal submitted stating whether it was recommended or not for award
no more than one year after the closing date of the solicitation. NIH
and NSF agencies should issue the award no more than 15 months after
the closing date of the solicitation. Pursuant to paragraph (iii)
below, NIH and NSF are encouraged to reduce these timeframes.
(ii) All other Participating Agencies must issue a notice to an
Applicant for each proposal submitted stating whether it was
recommended or not for award no more than 90 calendar days after the
closing date of the solicitation. Agencies should issue the award no
more than 180 calendar days after the closing date of the solicitation.
(iii) Agencies are encouraged to develop programs or measures to
reduce the time periods between the close of a Phase I solicitation/
receipt of a Phase II application and notification to the Applicant as
well as the time to the issuance of the Phase I and Phase II awards. As
appropriate, agencies should adopt accelerated proposal, evaluation,
and selection procedures designed to address the gap in funding these
competitive awards to meet or reduce the timeframes set forth above.
With respect to Phase II awards, SBA recognizes that Phase II
arrangements between the agency and Applicant may require more detailed
negotiation to establish terms acceptable to both parties; however,
agencies must not sacrifice the R/R&D momentum created under Phase I by
engaging in unnecessarily protracted Phase II proceedings.
(iv) Request for Waiver.
(A) If the agency determines that it requires additional time
between the solicitation closing date and the notification of
recommendation for award, it must submit a written request for an
extension to SBA. The written request must specify the number of
additional calendar days needed to issue the notice for a specific
Applicant and the reasons for the extension. If an agency believes it
will not meet the timeframes for an entire solicitation, the request
for an extension must state how many awards will not meet the statutory
timeframes, as well as the number of additional calendar days needed to
issue the notice and the reasons for the extension. The written request
must be submitted to SBA at least 10 business days prior to when the
agency must issue its notice to the Applicant. Agencies must send their
written request to: Office of Innovation, U.S. Small Business
Administration, 409 Third Street SW, Washington, DC 20416. Phone: (202)
205-6450. Fax: (202) 205-7754. Email: [email protected].
(B) SBA will respond to the request for an extension within 5
business days, as practicable. SBA may authorize an agency to issue the
notice up to 90 calendar days after the timeframes set forth in
paragraphs (c)(1)(i) and (ii).
(C) Even if SBA grants an extension of time, the SBIR/STTR
Participating Agency is required to develop programs or measures to
reduce the time periods between the close of a Phase I solicitation/
receipt of a Phase II application and notification to the Applicant as
well as the time to the issuance of the Phase I and Phase II awards as
set forth in paragraph (c)(1)(iii) above.
(D) If an SBIR/STTR Participating Agency does not receive an
extension of time, it may still proceed with the award to the small
business and must complete the requirements in (C) above.
(2) Standardized Solicitation.
(i) The standardized SBIR/STTR Program Solicitation must advise
Phase I Applicants that additional information may be requested by the
awarding agency to evidence Awardee responsibility for project
completion and advise Applicants of the proposal evaluation criteria
for Phase I and Phase II.
(ii) The SBIR/STTR Agency will provide information to each Phase I
[[Page 12816]]
Awardee considered for a Phase II award regarding Phase II proposal
submissions, reviews, and selections.
(d) Essentially Equivalent Work. SBIR/STTR Applicants often submit
duplicate or similar proposals to more than one soliciting agency when
the announcement or solicitation appears to involve similar topics or
requirements. However, Essentially Equivalent Work must not be funded
in the SBIR/STTR or other Federal Agency programs, unless an exception
to this rule applies. Agencies must verify with the Applicant that this
is the case by requiring them to certify at the time of award and
during the life cycle of the award that they do not have Essentially
Equivalent Work funded by the same or another Federal Agency.
(e) Cost Sharing. Cost sharing can serve the mutual interests of
the Participating Agencies and certain program Awardees by assuring the
efficient use of available resources. Cost sharing on SBIR/STTR
projects cannot be required of Applicants for Phase I and Phase II,
although it may be encouraged for any phase award. However, cost
sharing cannot be an evaluation factor in the review of Phase I
proposals. The standardized SBIR/STTR Program Solicitation (Appendix I)
will provide information to prospective program Applicants concerning
cost sharing.
(f) Payment Schedules and Cost Principles.
(1) SBIR/STTR Awardees may be paid under an applicable, authorized
progress payment procedure or in accordance with a negotiated/
definitized price and payment schedule. Advance payments are optional
and may be made under appropriate law. In all cases, agencies must make
payment to recipients under SBIR/STTR Funding Agreements in full,
subject to audit, on or before the last day of the 12-month period
beginning on the date of completion of the Funding Agreement
requirements.
(2) All SBIR/STTR Funding Agreements must use, as appropriate,
current cost principles and procedures authorized for use by the
Participating Agencies. By the time of award, agencies must have
informed each Awardee of the applicable Federal regulations and
procedures that refer to the costs that, generally, are allowable under
Funding Agreements.
(3) Agencies must, to the extent possible, shorten the amount of
time between the notice of an award under the SBIR/STTR program and the
subsequent release of funding with respect to the award.
(i) Pilot Program to Accelerate Department of Defense SBIR and STTR
Awards
(A) The Under Secretary of Defense for Research and Engineering,
acting through the Director of Defense Procurement and Acquisition
Policy of the Department of Defense, shall establish a pilot program to
reduce the time for awards under the SBIR and STTR programs of the
Department of Defense, under which the Department of Defense shall--
(i) develop simplified and standardized procedures and model
contracts throughout the Department of Defense for Phase I, Phase II,
and Phase III SBIR awards;
(ii) for Phase I SBIR and STTR awards, reduce the amount of time
between solicitation closure and award;
(iii) for Phase II SBIR and STTR awards, reduce the amount of time
between the end of a Phase I award and the start of the Phase II award;
(iv) for Phase II SBIR and STTR awards that skip Phase I, reduce
the amount of time between solicitation closure and award;
(v) for sequential Phase II SBIR and STTR awards, reduce the amount
of time between Phase II awards; and
(vi) reduce the award times described in clauses (ii), (iii), (iv),
and (v) to be as close to 90 days as possible.
(B) In carrying out the pilot program under subparagraph (A), the
Director of Defense Procurement and Acquisition Policy of the
Department of Defense shall consult with the Director of the Office of
Small Business Programs of the Department of Defense.
(C) The pilot program under subparagraph (A) shall terminate on
September 30, 2022.
(g) Funding Agreement Types and Fee or Profit. Statutory
requirements for uniformity and standardization require consistency in
application of SBIR/STTR program provisions among SBIR/STTR Agencies.
However, consistency must allow for flexibility by the various agencies
in their missions and needs as well as the wide variance in funds
required to be devoted to SBIR/STTR programs in the agencies. The
following instructions meet all of these requirements:
(1) Funding Agreement. The type of Funding Agreement (contract,
grant, or cooperative agreement) is determined by the awarding agency,
but must be consistent with 31 U.S.C. 6301-6308. Contracting agencies
may issue SBIR/STTR awards as fixed price contracts (including firm
fixed price, fixed price incentive or fixed price level of effort
contracts) or cost type contracts, consistent with the FAR and agency
supplemental acquisition regulations. In some cases, small businesses
seek progress payments, which may be appropriate under fixed-price R&D
contracts and are a form of contract financing for firm-fixed-price
contracts. However, for certain agencies, in order to qualify for
progress payments or an incentive type contract, the small business's
accounting system would have to be audited, which can delay award,
unless the contractor has an already approved accounting system.
Therefore, SBIR/STTR Agencies should consider using partial payments
methods or on a deliverable item basis or consider other available
options to work with the SBIR/STTR Awardee.
(2) Fee or Profit. Except as expressly excluded or limited by
statute, awarding agencies must provide for a reasonable fee or profit
on SBIR/STTR Funding Agreements, consistent with normal profit margins
provided to profit-making firms for R/R&D work.
(h) Periods of Performance and Extensions.
(1) In keeping with the legislative intent to make a large number
of relatively small awards, modification of Funding Agreements to
increase the dollar amount should be kept to a minimum, except for
options in original Phase I or II awards.
(2) Phase I. Period of performance normally should not exceed 6
months for SBIR or 1 year for STTR. However, agencies may provide a
longer performance period where appropriate for a particular project.
(3) Phase II. Period of performance under Phase II is a subject of
negotiation between the Awardee and the issuing Participating Agency.
The duration of Phase II normally should not exceed 2 years. However,
agencies may provide a longer performance period where appropriate for
a particular project.
(i) Dollar Value of Awards.
(1) Generally, a Phase I award (including modifications) may not
exceed $150,000 and a Phase II award (including modifications) may not
exceed $1,000,000. Agencies may issue an award that exceeds these award
guideline amounts by no more than 50%.
(2) SBA reviews these amounts every year for the effects of
inflation and posts these inflation effects and any resulting
adjustments on www.SBIR.gov. Adjusted guidelines are effective for all
solicitations issued on or after the date of the adjustment, and may be
used by agencies to amend the solicitation and other program
literature. Agencies have the discretion to issue awards for less than
the guidelines.
[[Page 12817]]
(3) There is no dollar limit associated with Phase III SBIR/STTR
awards.
(4) Agencies may request a waiver to exceed the award guideline
amounts established in paragraph (i)(1) by more than 50% for a specific
topic. Agencies must submit this request for a waiver to SBA prior to
release of the solicitation, contract award, or modification to the
award for the topic. The request for a waiver must explain and provide
evidence that the limitations on award size will interfere with the
ability of the agency to fulfill its research mission through the SBIR
or STTR program; that the agency will minimize, to the maximum extent
practicable, the number of awards that exceed the guideline amounts by
more than 50%; and that research costs for the topic area differ
significantly from those in other areas. After review of the agency's
justification, SBA may grant the waiver for the agency to exceed the
award guidelines by more than 50% for a specific topic. SBA will issue
a decision on the request within 10 business days. The waiver will be
in effect for one fiscal year.
(5) Agencies must maintain information on all awards exceeding the
guidelines set forth in paragraph (i)(1), including the amount of the
award, a justification for exceeding the guidelines for each award, the
identity and location of the Awardee, whether the Awardee has received
any venture capital, hedge fund, or private equity firm investment, and
whether the Awardee is majority-owned by multiple VCOCs, hedge funds,
or private equity firms.
(6) The award guidelines do not prevent an agency from funding
SBIR/STTR projects from other (non-SBIR/STTR) agency funds. Non-SBIR/
STTR funds used on SBIR/STTR efforts do not count toward the award
guidelines set forth in (i)(1).
(j) National Security Exemption. The Act provides for exemptions
related to the simplified standardized funding process ``if national
security or intelligence functions clearly would be jeopardized.'' This
exemption should not be interpreted as a blanket exemption or
prohibition of SBIR/STTR participation related to the acquisition of
effort on national security or intelligence functions except as
specifically defined under Sec. 9(e)(2) of the Act, 15 U.S.C.
638(e)(2). Agency technology managers directing R/R&D projects under
the SBIR and STTR programs, where the project subject matter may be
affected by this exemption, must first make a determination on which,
if any, of the standardized proceedings clearly place national security
and intelligence functions in jeopardy, and then proceed with an
acceptable modified process to complete the SBIR/STTR action. SBA's
SBIR/STTR program monitoring activities, except where prohibited by
security considerations, must include a review of nonconforming SBIR/
STTR actions justified under this public law provision.
(k) Management of the STTR Project [STTR only]. The SBC, and not
its partnering Research Institution(s), is to provide satisfactory
evidence that it will exercise management direction and control of the
performance of the STTR Funding Agreement. Regardless of the proportion
of the work or funding allocated to each of the performers under the
Funding Agreement, the SBC is to be the primary party with overall
responsibility for performance of the project. All agreements between
the SBC and the Research Institution cooperating in the STTR Funding
Agreement, or any business plans reflecting agreements and
responsibilities between the parties during performance of STTR Phase I
or Phase II Funding Agreement, or for the Commercialization of the
resulting technology, should reflect the controlling position of the
SBC.
8. Terms of Agreement Under SBIR/STTR Awards
(a) Proprietary Information Contained in Proposals. The
standardized SBIR/STTR Program Solicitation shall include provisions
requiring the confidential treatment of any proprietary information,
unless disclosure is otherwise required by law. The solicitation will
require that all proprietary information be identified clearly and
marked with a prescribed legend. Agencies may elect to require SBCs to
limit proprietary information to that essential to the proposal and to
have such information submitted on a separate page or pages keyed to
the text. The Government, except solely for proposal review purposes,
shall not use or disclose, or authorize any other person or entity to
use or disclose, all proprietary information, regardless of type,
submitted in a contract proposal or grant application for a Funding
Agreement under the SBIR/STTR programs.
(b) Rights in Data Developed under an SBIR/STTR Funding Agreement.
(1) General. The Act provides for retention by an SBC Awardee of
the rights to Data generated by the concern in the performance of an
SBIR/STTR award. These data rights provide an incentive for SBCs to
participate in Federally-funded research projects and contribute to the
ability of small business Awardees to commercialize the technology
developed under the program. The central purpose of SBIR/STTR Data
Rights is to provide the Federal Government with the degree of access
to an Awardee's SBIR/STTR Data needed to evaluate the work and
effectively utilize the results and at the same time ensure that the
Federal Government or other concerns cannot use SBIR/STTR Data in ways
(e.g., for commercial purposes or to produce future technical
procurement specifications) that would inappropriately diminish the
rights or associated economic opportunities of the small business that
developed the Data. The SBIR/STTR Data Rights provisions and
definitions provided in this Policy Directive are designed to ensure
that, for properly marked SBIR/STTR Data, during the SBIR/STTR
Protection Period, the Federal Government provides effective protection
of the Data that is comparable to and at least as strong as the
protection the Federal Government gives to delivered proprietary Data
that is developed exclusively at private expense.
(2) Application of SBIR/STTR Data Rights. SBIR/STTR Participating
Agencies must ensure that Awardees of an SBIR/STTR Funding Agreement
retain appropriate proprietary rights for all SBIR/STTR Data generated
in the performance of the award. In general, this results in the
Government receiving SBIR/STTR Data Rights in all SBIR/STTR Data during
the SBIR/STTR Protection Period, except for certain types of Data that
are not subject to such data rights restrictions due to the nature of
the data (e.g., Form, Fit, and Function Data or OMIT Data). SBIR/STTR
Data Rights apply to all SBIR/STTR awards, including subcontracts or
subgrants to such awards, that fall within the statutory definition of
Phase I, II, or III of the SBIR/STTR programs, as described in Sec. 4
of this Policy Directive. The scope and extent of the SBIR/STTR Data
Rights applicable to Federally-funded Phase III awards are identical to
the SBIR/STTR Data Rights applicable to Phases I and II SBIR/STTR
awards. SBIR/STTR Data Rights provide license rights to the Federal
Government. SBIR/STTR Data Rights restrict the Federal Government's use
and release of properly marked SBIR/STTR Data only during the SBIR/STTR
Protection Period; after the protection period, the Federal Government
has a royalty-free license to use, and to authorize others to use on
its behalf, these data for Government Purposes, and is relieved of
disclosure prohibitions related to such
[[Page 12818]]
Government Purposes, and assumes no liability for unauthorized use of
these data by third parties. There is one exception to the rule that
all Federal agencies receive Government Purpose rights in SBIR/STTR
Data after the protection period. This exception is limited to the U.S.
Department of Energy (DOE), whose statutory authorities, it has argued,
mandates that it release and disclose all Government funded SBIR/STTR
Data after the protection period. These authorities are the Atomic
Energy Act of 1954, Public Law 83-703, 42 U.S.C. 2013(b); Energy
Reorganization Act of 1974 (ERA), Public Law 93-438, 42 U.S.C. 5813(7);
and the Department of Energy Organization Act of 1977 (DEOA), 42 U.S.C.
7112(5). Based on these authorities, DOE receives Unlimited Rights in
SBIR/STTR Data upon expiration of the SBIR/STTR Protection Period, and
this exception is limited to DOE. The Federal Government receives
Unlimited Rights in Form, Fit, and Function Data, OMIT Data, and all
unmarked SBIR/STTR Data.
(3) SBIR/STTR Data Rights--Main Elements:
(i) An SBC retains title and ownership of all SBIR/STTR Data it
develops or generates in the performance of an SBIR/STTR award. The SBC
retains all rights in SBIR/STTR Data that are not granted to the
Government in accordance with this Policy Directive. These rights of
the SBC do not expire.
(ii) The Government receives SBIR/STTR Data Rights during the SBIR/
STTR Protection Period on all appropriately marked SBIR/STTR Data.
These rights enable the Federal Government to use SBIR/STTR Data in
limited ways within the Government, such as for project evaluation
purposes, but are intended to prohibit uses and disclosures of the
SBIR/STTR Data that may undermine the SBC's future Commercialization of
the associated technology. The Government receives Unlimited Rights in
Form, Fit, and Function Data, OMIT Data, and all unmarked SBIR/STTR
Data.
(iii) After the SBIR/STTR Protection Period has expired, the
Federal Government may use, and authorize others to use on its behalf,
for Government Purposes, SBIR/STTR Data that was subject to SBIR/STTR
Data Rights during the SBIR/STTR Protection Period. However, SBIR/STTR
Data developed under awards issued by DOE are subject to Unlimited
Rights after the SBIR/STTR Protection Period has expired.
(4) SBIR/STTR Protection Period. The SBIR/STTR Protection Period
begins with award of an SBIR/STTR Funding Agreement and ends twenty
years, or longer at the discretion of the Participating Agency, from
the date of award of an SBIR/STTR Funding Agreement (either Phase I,
Phase II, or Federally-funded SBIR/STTR Phase III) unless subsequent to
the award, the agency and the SBC negotiate for some other protection
period for the SBIR/STTR Data.
(5) Marking Requirements, and Requirements for Omitted or Incorrect
Markings. To receive the protections accorded to SBIR/STTR Data
pursuant to SBIR/STTR Data Rights, any SBIR/STTR Data that is delivered
must be marked with the appropriate SBIR/STTR Data Rights legend or
notice, in accordance with agency procedures. The Government assumes no
liability for the access, use, modification, reproduction, release,
performance, display, disclosure, or distribution of SBIR/STTR Data
without markings. If SBIR/STTR Data is delivered without the required
legend or notice, the SBIR/STTR Awardee may, within 6 months of such
delivery (or a longer period approved by the agency for good cause
shown), request to have an omitted SBIR/STTR Data legend or notice, as
applicable, placed on qualifying Data. If SBIR/STTR Data is delivered
with an incorrect or nonconforming legend or notice, the agency may
correct or permit correction at the Awardee's expense of such incorrect
or nonconforming notice(s).
(6) Negotiated Rights.
(i) Specially Negotiated Licenses Authorized Only After Award. An
agency must not, in any way, make issuance of an SBIR/STTR award
conditional upon the Awardee negotiating or consenting to negotiate a
specially negotiated license or other agreement regarding SBIR/STTR
Data. The negotiation of any such specially negotiated license
agreements shall be permitted only after award.
(ii) Following issuance of an SBIR/STTR award, the Awardee may
enter into a written agreement with the awarding agency to modify the
license rights that would otherwise be granted to the agency during the
SBIR/STTR Protection Period. However, any such agreement must be
entered into voluntarily and by mutual agreement of the SBIR/STTR
Awardee and agency, and not a condition for additional work under the
Funding Agreement or the exercise of options. Such a bilateral data
rights agreement must be entered into only after the subject SBIR/STTR
award (which award must include an appropriate SBIR/STTR Data Rights
clause) has been signed. Any such specially negotiated license must be
in writing under a separate agreement after the SBIR/STTR Funding
Agreement is signed. A decision by the Awardee to relinquish, transfer,
or modify in any way its rights in SBIR/STTR Data must be made without
pressure or coercion by the agency or any other party. Any provision in
a competitive non-SBIR or SBIR solicitation that would have the effect
of diminishing SBIR/STTR Data Rights shall have no effect on the
provision of SBIR/STTR Data Rights in a resulting Phase I, Phase II, or
Phase III award.
(7) SBIR/STTR Data Rights Clause. To ensure that SBIR/STTR Awardees
receive the applicable data rights, all SBIR and STTR solicitations and
resulting Funding Agreements must fully implement all of the policies,
procedures, and requirements set forth in this Policy Directive in
appropriate provisions and clauses incorporated into the SBIR/STTR
solicitations and awards. Paragraph (5)(d)(3) of Appendix I:
Instructions for Preparation of SBIR/STTR Program Solicitations
provides a sample SBIR/STTR Data Rights clause containing the key
elements that must be reflected in the clause used in Federal Agency
solicitations. SBA will report to the Congress any attempt or action by
an agency, that it is aware of, to condition an SBIR or STTR award on
the negotiation of lesser data rights or to exclude the appropriate
data rights clause from the award.
(c) Non-disclosure Agreement for Releases Outside the Government.
In accordance with the Government's SBIR/STTR Data Rights, the
Government must enter into an appropriate non-disclosure agreement
(NDA) with any non-Governmental entity that is authorized to receive
SBIR/STTR Data (that is subject to SBIR/STTR Data Rights) during the
SBIR/STTR Protection Period, except as otherwise permitted by the
Awardee asserting the SBIR/STTR Data Rights. The NDA must contain terms
and conditions to ensure that the non-governmental entity:
(1) Understands, acknowledges, and agrees that its use,
modification, reproduction, release, display, disclosure, and
distribution of the SBIR/STTR Data is permitted only for the specific
activities authorized by the NDA (which must be authorized by SBIR/STTR
Data Rights, or otherwise authorized by the SBIR/STTR Awardee);
(2) Is prohibited from further using, modifying, reproducing,
releasing, displaying, disclosing, or distributing the Data unless it
receives the written permission of the Federal Government (when
authorized by the SBIR/STTR Awardee) or the written permission of the
SBIR/STTR Awardee;
[[Page 12819]]
(3) Agrees to destroy (or return to the Federal Government at the
request of the Government), all SBIR/STTR Data, and all copies in its
possession, at or before the time specified in the agreement, and to
notify the procuring agency that all copies have been destroyed (or
returned as requested by the Government);
(4) Is prohibited from using the data for a commercial purpose
unless it receives the written permission of the Federal Government
(when authorized by the SBIR/STTR Awardee) or the written permission of
the SBIR/STTR Awardee itself; and
(5) Ensures that its employees, subcontractors, and other entities
that are authorized to receive SBIR/STTR Data are bound by use and non-
disclosure restrictions consistent with the NDA prior to being provided
access to such SBIR/STTR Data.
(d) [STTR only] Allocation of Intellectual Property Rights in STTR
Award.
(1) An SBC, before receiving an STTR award, must negotiate a
written agreement between the SBC and the partnering Research
Institution, allocating Intellectual Property rights and rights, if
any, to carry out follow-on research, development, or
Commercialization. The SBC must submit this agreement to the awarding
agency with the proposal. The SBC must certify in all proposals that
the agreement is satisfactory to the SBC.
(2) The awarding agency may accept an existing agreement between
the two parties if the SBC certifies its satisfaction with the
agreement, and such agreement does not conflict with the interests of
the Government. SBA will provide a model agreement to be adopted by the
agencies and used as guidance by the SBC in the development of an
agreement with the Research Institution. The model agreement will
direct the parties to, at a minimum:
(i) State specifically the degree of responsibility, and ownership
of any product, process, or other invention or Innovation resulting
from the cooperative research. The degree of responsibility shall
include responsibility for expenses and liability, and the degree of
ownership shall also include the specific rights to revenues and
profits.
(ii) State which party may obtain United States or foreign patents
or otherwise protect any inventions resulting from the cooperative
research.
(iii) State which party has the right to any continuation of
research, including non-STTR follow-on awards.
(3) The Government will not normally be a party to any agreement
between the SBC and the Research Institution. Nothing in the agreement
is to conflict with any provisions setting forth the respective rights
of the United States and the SBC with respect to Intellectual Property
rights and with respect to any right to carry out follow-on research.
(e) Title Transfer of Agency-Provided Property. Under the Act, the
Federal Government may transfer title to property provided by the SBIR/
STTR Participating Agency to the Awardee or acquired by the Awardee for
the purpose of fulfilling the contract where such transfer would be
more cost effective than recovery of the property.
(f) Continued Use of Government Equipment. Agencies must allow an
SBIR/STTR Awardee participating in an SBIR/STTR Phase III award
continued use, as a directed bailment, of any property transferred by
the agency to the Phase II Awardee or acquired by the Awardee for the
purpose of fulfilling the contract. The Phase II Awardee may use the
property for a period of not less than 2 years, beginning on the
initial date of the concern's participation in the third phase of the
SBIR/STTR program.
(g) Grant Authority. The Act does not, in and of itself, convey
grant authority. Each agency must secure grant authority in accordance
with its normal procedures.
(h) Conflicts of Interest. SBA cautions Participating Agencies that
awards made to SBCs owned by or employing current or previous Federal
Government employees may create conflicts of interest in violation of
FAR part 3 and the Ethics in Government Act of 1978, as amended. Each
Participating Agency should refer to the standards of conduct review
procedures currently in effect for its agency to ensure that such
conflicts of interest do not arise.
(i) American-Made Equipment and Products. Congress intends that the
Awardee of a Funding Agreement under the SBIR/STTR program should, when
purchasing any equipment or a product with funds provided through the
Funding Agreement, purchase only American-made equipment and products,
to the extent possible, in keeping with the overall purposes of this
program. Each SBIR/STTR Agency must provide to each Awardee a notice of
this requirement.
(j) Certifications After Award and During Funding Agreement Life
Cycle.
(1) A Phase I Funding Agreement must state that the Awardee shall
submit a new certification as to whether it is in compliance with
specific SBIR/STTR program requirements at the time of final payment or
disbursement.
(2) A Phase II Funding Agreement must state that the Awardee shall
submit a new certification as to whether it is in compliance with
specific SBIR/STTR program requirements prior to receiving more than
50% of the total award amount and prior to final payment or
disbursement.
(3) Agencies may also require additional certifications at other
points in time during the life cycle of the Funding Agreement, such as
at the time of each payment or disbursement.
(k) Updating www.SBIR.gov. Agencies must require each Phase II
Awardee to update the Commercialization information on the award
through the company's account on www.SBIR.gov upon completion of the
last deliverable under the Funding Agreement. In addition, the Awardee
is requested to voluntarily update the Commercialization information on
that award annually thereafter for a minimum period of 5 years.
(l) Prototypes. Participating Agencies must handle all Prototypes
developed under an SBIR/STTR award with caution during the SBIR/STTR
Protection Period to prevent any use or disclosure of these items that
has the potential to reveal the innovative aspects of the technology in
ways that may harm the Awardee's ability to commercialize the
technology. In particular, reverse engineering of Prototypes may
reveal, to a Government or non-Government entity, the SBIR/STTR Data
that is applied or embodied in the item. While a Prototype may not
itself be considered SBIR/STTR Data because it is not ``recorded
information,'' SBA cautions agencies that it is a violation of the
purpose and intent of the Act to release or use a Prototype during the
SBIR/STTR Protection Period in a way that harms the Awardee's ability
to take advantage of the economic opportunities of its SBIR/STTR Data.
SBA notes that the Defense Federal Acquisition Regulations Supplement
(DFARS) Restricted Rights license granted to the Government for
Computer Software prohibits non-Governmental entities from reverse-
engineering, disassembly, or decompiling Computer Software (including
computer software embedded within hardware), except in extremely
limited circumstances.
9. Responsibilities of SBIR/STTR Agencies and Departments
(a) General Responsibilities. Each agency participating in the
SBIR/STTR program must:
(1) Unilaterally determine the categories of projects to be
included in its SBIR/STTR program, giving
[[Page 12820]]
consideration to maintaining a portfolio balance between exploratory
projects of high technological risk and those with greater likelihood
of success. Further, to the extent permitted by the law, and in a
manner consistent with the mission of that agency and the purpose of
the SBIR/STTR program, each Federal agency must:
(i) Give priority in the SBIR/STTR program to manufacturing-related
research and development in accordance with Executive Order 13329. In
addition, agencies must develop an Action Plan for implementing
Executive Order 13329, which identifies activities used to give
priority in the SBIR/STTR program to manufacturing-related research and
development. These activities should include the provision of
information on the Executive Order on the agency's SBIR/STTR program
website.
(ii) give priority to SBCs that participate in or conduct energy
efficiency or renewable energy system research and development
projects.
(iii) give consideration to topics that further one or more
critical technologies as identified by the National Critical
Technologies panel (or its successor) in reports required under 42
U.S.C. 6683, or the Secretary of Defense in accordance with 10 U.S.C.
2522.
(2) Release SBIR/STTR solicitations in accordance with the SBA
master schedule.
(3) Unilaterally receive and evaluate proposals resulting from
Program Solicitations, select Awardees, issue Funding Agreements, and
inform each Awardee under such agreement, to the extent possible, of
the expenses of the Awardee that will be allowable under the Funding
Agreement.
(4) Require a succinct Commercialization plan with each proposal
submitted for a Phase II award.
(5) Collect and maintain information from Applicants and Awardees
and provide it to SBA to develop and maintain the database, as
identified in Sec. 11(c) of this Policy Directive.
(6) Administer its own SBIR/STTR Funding Agreements or delegate
such administration to another agency. Such administrative services
include the use of assisted acquisition service providers under the
terms and conditions of a properly executed Interagency Agreement.
(7) Include provisions in each SBIR/STTR Funding Agreement setting
forth the respective rights of the United States and the Awardee with
respect to Intellectual Property rights and with respect to any right
to carry out follow-on research.
(8) Ensure that the rights in Data developed under each Federally-
funded SBIR/STTR Phase I, Phase II, and Phase III award are protected
properly.
(9) Make payments to Awardees of SBIR/STTR Funding Agreements on
the basis of progress toward or completion of the Funding Agreement
requirements and in all cases make payment to Awardees under such
agreements in full, subject to audit, on or before the last day of the
12-month period beginning on the date of completion of such
requirements.
(10) Provide an annual report on the SBIR/STTR program to SBA, as
well as other information concerning the SBIR/STTR program. See Sec.
10 of this Policy Directive for further information on the agency's
reporting requirements, including the frequency for specific reporting
requirements.
(11) Include in its annual performance plan required by 31 U.S.C.
1115(a) and (b) a section on its SBIR/STTR program, and submit such
section to the Senate Committee on Small Business and Entrepreneurship
and to the House Committees on Science, Space and Technology and Small
Business.
(12) Establish the agency's benchmarks for progress towards
Commercialization and include the information necessary to implement
the benchmarks in each solicitation. See Sec. 6(a)(7) of the directive
for further information.
(b) Discretionary Technical and Business Assistance to SBIR/STTR
Awardees.
(1) Agencies may enter into agreements with 1 or more vendors to
provide technical and business assistance to SBIR/STTR Awardees, which
may include access to a network of scientists and engineers engaged in
a wide range of technologies, assistance with product sales,
intellectual property protections, market research, market validation,
and development of regulatory plans and manufacturing plans, or access
to technical and business literature available through on-line
databases. For a term not to exceed 5 years, each agency may select 1
or more vendors from which small business concerns may obtain
assistance. Such selection must be based on competitive and merit-based
criteria.
(i) The purpose of this technical and business assistance is to
assist SBIR/STTR Awardees in:
(A) making better technical decisions on SBIR/STTR projects;
(B) solving technical problems that arise during SBIR/STTR
projects;
(C) minimizing technical risks associated with SBIR/STTR projects;
and
(D) commercializing the SBIR/STTR product or process, including
intellectual property protections.
(ii) An agency may not enter into a contract with the vendor if the
contract amount provided for technical assistance is based upon the
total number of Phase I or Phase II awards, but may enter into a
contract with the vendor based upon the total amount of awards for
which assistance is provided.
(2) Each agency may provide up to $6,500 of SBIR/STTR funds for the
technical and business assistance described above in (b)(1) per year
for each Phase I award, which shall be in addition to the amount of the
award. Each agency may provide up to $50,000 of SBIR/STTR funds for
technical and business assistance described above in (b)(1) per project
for Phase II awards. The amount of technical and business assistance
for Phase II awards, as determined appropriate by the head of the
Federal agency, may be included as part of the recipient's award or be
in addition to the amount of the recipient's award. The agency may not
use SBIR/STTR funds for technical and business assistance unless a
vendor provides the services to the SBIR/STTR Awardee.
(3) A small business concern may, by contract or otherwise, select
1 or more vendors to assist the small business concern in meeting the
goals listed in paragraph (1). An SBIR/STTR Applicant may acquire the
technical assistance services set forth in (b)(1)(i) above itself
rather than through a vendor selected by the Federal Agency. The
Applicant must request the authority to select its own technical and
business assistance provider from the Federal Agency and demonstrate in
its SBIR/STTR application that the individual or entity selected can
provide the specific technical and business services needed. If the
Awardee demonstrates this requirement sufficiently, the agency shall
permit the Awardee to acquire such technical and business assistance
itself, in an amount up to $6,500 per year for Phase I awards and up to
$50,000 per award for Phase II awards, as an allowable cost of the
SBIR/STTR award. The amount of technical and business assistance for
Phase I awards shall be in addition to the amount of the award. Phase
II awards, as determined appropriate by the head of the Federal agency,
may be included as part of the recipient's award or be in addition to
the amount of the recipient's award. The applicant may also seek
business-related services aimed at improving the commercialization
success of a small business concern from an entity, such as a public or
private organization or an agency of or other entity established or
[[Page 12821]]
funded by a State that facilitates or accelerates the commercialization
of technologies or assists in the creation and growth of private
enterprises that are commercializing technology.
(4) SBA must establish a limit on the value of business and
technical assistance services received or purchased by SBCs awarded
multiple Phase II awards in a fiscal year. SBA will seek public comment
to gather input on the appropriate limit and will provide guidance on
www.SBIR.gov.
(5) A small business concern that receives technical or business
assistance from a vendor during a fiscal year shall submit to the
Federal agency contracting with the vendor a description of the
technical or business assistance provided and the benefits and results
of the technical or business assistance provided. The information
required shall be collected by a Federal agency as part of a report
required to be submitted by small business concerns engaged in SBIR or
STTR projects of the Federal agency for which the requirement was in
effect on August 13, 2018.
(6) Not later than the end of fiscal year 2019, the Administrator
of the Small Business Administration shall--
(A) Conduct a survey of vendors providing technical or business
assistance under section 9(q) of the Small Business Act (15 U.S.C.
638(q)), and small business concerns receiving the technical or
business assistance; and
(B) Submit to the Committee on Small Business and Entrepreneurship
of the Senate and the Committee on Small Business of the House of
Representatives a report reviewing the efficacy of the provision of the
technical or business assistance.
(c) Timelines for Awards. Agencies must publish the information
relating to timelines for awards of Phase I and Phase II Funding
Agreements and performance start dates of the Funding Agreements that
are reported to SBA in the agency's Annual Report (see Sec. 10(a) of
this Policy Directive). SBA will also publish this information on
www.SBIR.gov.
(d) Interagency actions.
(1) Joint funding. An SBIR/STTR project may be financed by more
than one Federal Agency. Joint funding is not required but can be an
effective arrangement for some projects.
(2) Phase II awards. An SBIR/STTR Phase II award may be issued by a
Federal Agency other than the one that made the Phase I award. Prior to
award, the head of the Federal Agency for the Phase I and Phase II
awards, or designee, must issue a written determination that the topics
of the awards are the same. Both agencies must submit the report to
SBA.
(3) Participation by WOSBs and SDBs in the SBIR/STTR Program. In
order to meet statutory requirements for greater inclusion, SBA and the
Participating Agencies must conduct outreach efforts to find and place
innovative WOSBs and SDBs in the SBIR/STTR program. These SBCs will be
required to compete for SBIR/STTR awards on the same basis as all other
SBCs. However, SBIR/STTR Agencies are encouraged to work independently
and cooperatively with SBA to develop methods to encourage qualified
WOSBs and SDBs to participate in the SBIR/STTR program.
(4) Interagency Assisted Acquisitions. A Participating Agency may
obtain assistance, as needed to meet its mission, by entering into a
properly executed Interagency Agreement with another Federal Agency for
the provision of acquisition services to award and administer funding
agreements.
(e) Limitation on use of funds.
(1) Each SBIR/STTR Agency must expend the required minimum percent
of its extramural budget on awards to SBCs. Agencies may not make
available for the purposes of meeting the minimum percent an amount of
its extramural budget for basic research that exceeds the minimum
percent required for that year. Funding Agreements with SBCs for R/R&D
that result from competitive or single source selections other than an
SBIR/STTR program must not be considered to meet any portion of the
required minimum percent.
(2) An agency must not use any of its SBIR/STTR budget for the
purpose of funding administrative costs of the program, including costs
associated with program operations, employee salaries, and other
associated expenses, unless the exception in paragraph (3) below or
Sec. 12(b)(4)(ii) of this Policy Directive applies.
(3) Funding of Administrative, Oversight, and Contract Processing
Costs. Upon establishment by SBA of the agency-specific performance
criteria, SBA shall allow an SBIR Participating Agency to use no more
than 3% of its SBIR budget for one or more specific activities, which
may be prioritized by the Federal SBIR/STTR Interagency Policy
Committee. The purpose of this program is to assist with the
substantial expansion in commercialization activities, prevention of
fraud/waste/abuse, expansion of reporting requirements by agencies and
other agency activities required for the SBIR program. Funding under
this program is not intended to and must not replace current agency
administrative funding in support of SBIR/STTR activities. Rather,
funding under this program is intended to supplement such funds. The
authority for this program shall terminate on September 30, 2022,
unless otherwise extended.
(i) A Federal Agency may use this money to fund the following
specific activities:
(A) SBIR and STTR program administration, which includes:
(I) Internal oversight and quality control, such as verification of
reports and invoices and cost reviews, and waste/fraud/abuse prevention
(including targeted reviews of SBIR/STTR Awardees that an agency
determines are at risk for waste/fraud/abuse);
(II) carrying out any activities associated with the participation
by small businesses that are majority-owned by multiple venture capital
operating companies, hedge funds or private equity firms;
(III) contract processing costs relating to the SBIR or STTR
program of that agency, which includes supplementing the current
workforce to assist solely with SBIR or STTR Funding Agreements;
(IV) funding of additional personnel to work solely on the SBIR/
STTR program of that agency, which includes assistance with application
reviews; and
(V) funding for simplified and standardized program proposal,
selection, contracting, compliance, and audit procedures for the SBIR/
STTR program, including the reduction of paperwork and data collection.
(VI) funding for improvements that increase commonality across data
systems, reduce redundancy, and improve data oversight and accuracy.
(B) SBIR or STTR program-related outreach and related technical
assistance initiatives not in effect prior to commencement of this
pilot, except significant expansion or improvement of these
initiatives, including:
(I) Technical assistance site visits;
(II) personnel interviews;
(III) national conferences;
(C) Commercialization initiatives not in effect prior to
commencement of this pilot, except significant expansion or improvement
of these initiatives.
(D) For DoD and the military departments, carrying out the
Commercialization Readiness Program set forth in Sec. 12(b) of this
Policy Directive, with emphasis on supporting new initiatives that
address barriers in bringing SBIR/STTR technologies to the marketplace,
including Intellectual Property issues, sales cycle access
[[Page 12822]]
issues, accelerated technology development issues, and other issues.
(ii) Agencies must use this money to attempt to increase
participation by SDBs and WOSBs in the SBIR/STTR program, and small
businesses in states with a historically low level of SBIR/STTR awards.
The agency may submit a written request to SBA to waive this
requirement. The request must explain why the waiver is necessary,
demonstrate a sufficient need for the waiver, and explain that the
outreach objectives of the agency are being met and that there has been
increased participation by small businesses in states with a
historically low level of SBIR/STTR awards.
(iii) SBA will establish performance criteria each fiscal year by
which use of these funds will be evaluated for that fiscal year. The
performance criteria will be metrics that measure the performance areas
required by statute against the goals set by the agencies in their work
plans. The performance criteria will be based upon the work plans
submitted by each agency for a given fiscal year and will be agency-
specific. SBA will work with the SBIR/STTR Agencies in creating a
simplified template for agencies to use when making their work plans.
(iv) Each agency must submit its work plan to SBA at least 30
calendar days prior to the start of each fiscal year for which the
pilot program is in operation. Agency work plans must include the
following: A prioritized list of initiatives to be supported; the
estimated percentage of administrative funds to be allocated to each
initiative or the estimated amounts to be spent on each initiative;
milestones for implementing the initiatives; the expected results to be
achieved; and the assessment metrics for each initiative. The work plan
must identify initiatives that are above and beyond current practice
and which enhance the agency's SBIR/STTR program.
(v) SBA will evaluate the work plan and provide initial comments
within 15 calendar days of receipt of the plan. SBA's objective in
evaluating the work plan is to ensure that, overall, it provides for
improvements to the SBIR/STTR program of that particular agency. If SBA
does not provide initial comments within 30 calendar days of receipt of
the plan, the work plan is deemed to be approved. If SBA does submit
initial comments within 30 calendar days, agencies must amend or
supplement their work plan and resubmit to SBA. Once SBA establishes
the agency-specific performance criteria to measure the benefits of the
use of these funds under the work plan, the agency may begin using the
SBIR funds for the purposes set forth in the work plan. Agencies can
adjust their work plans and spending throughout the fiscal year as
needed, but must notify SBA of material changes in the plan.
(vi) Agencies must coordinate any activities in the work plan that
relate to fraud, waste, and abuse prevention, targeted reviews of
Awardees, and implementation of oversight control and quality control
measures (including verification of reports and invoices and cost
reviews) with the agency's Office of Inspector General (OIG). If the
agency allocates more than $50,000,000 to its SBIR program for a fiscal
year, the agency may share this funding with its OIG when the OIG
performs the activities.
(vii) Agencies shall report to the Administrator of the SBA on use
of funds under this authority as part of the SBIR/STTR Annual Report.
See Sec. 10 generally and Sec. 10(i) of this Policy Directive.
(4) An agency must not issue an SBIR/STTR Funding Agreement that
includes a provision for subcontracting any portion of that agreement
back to the issuing agency, to any other Federal Government agency, or
to other units of the Federal Government, except as provided in
paragraph (e)(5) below. SBA may issue a case-by-case waiver to this
provision after review of an agency's written justification that
includes the following information:
(i) An explanation of why the SBIR/STTR research project requires
the use of the Federal facility or personnel, including data that
verifies the absence of non-Federal facilities or personnel capable of
supporting the research effort.
(ii) Why the Federal Agency will not and cannot fund the use of the
Federal facility or personnel for the SBIR/STTR project with non-SBIR/
STTR money.
(iii) The concurrence of the SBC's chief business official to use
the Federal facility or personnel.
(5) An agency may issue an SBIR/STTR Funding Agreement to an SBC
that intends to enter into an agreement with a Federal Laboratory to
perform portions of the award or has entered into a cooperative
research and development agreement (see 15 U.S.C. 3710a(d)) with a
Federal Laboratory, only if there is compliance with the following.
(i) The agency may not require that the SBC enter into an agreement
with any Federal Laboratory to perform any portion of an SBIR/STTR
award, as a condition for an SBIR/STTR award.
(ii) The agency may not issue an SBIR/STTR award or approve an
agreement between an SBIR/STTR Awardee and a Federal Laboratory if the
SBC will not meet the minimum performance of work requirements set
forth in Sec. 6(a)(4) of this Policy Directive.
(iii) The agency may not issue an SBIR/STTR award or approve an
agreement between an SBIR/STTR Awardee and a Federal Laboratory that
violates any SBIR/STTR requirement set forth in statute or this Policy
Directive, including any SBIR/STTR Data Rights protections.
(iv) The Federal Agency and Federal Laboratory may not require any
SBIR/STTR Awardee that has an agreement with the Federal Laboratory to
perform portions of the activities under the SBIR/STTR award to provide
advance payment to the Federal Laboratory in an amount greater than the
amount necessary to pay for 30 days of such activities.
(6) No agency, at its own discretion, may unilaterally cease
participation in the SBIR/STTR program. R/R&D agency budgets may cause
fluctuations and trends that must be reviewed in light of SBIR/STTR
program purposes. An agency may be considered by SBA for a phased
withdrawal from participation in the SBIR/STTR program over a period of
time sufficient in duration to minimize any adverse impact on SBCs.
However, the SBA decision concerning such a withdrawal will be made on
a case-by-case basis and will depend on significant changes to
extramural R/R&D 3-year forecasts as found in the annual Budget of the
United States Government and NSF National Center for Science
Engineering Statistics (NCSES) breakdowns of total R/R&D obligations as
published in the Survey of Federal Funds for Research and Development.
Any withdrawal of an SBIR/STTR agency from the SBIR/STTR program will
be accomplished in a standardized and orderly manner in compliance with
these statutorily mandated procedures.
(7) Any Federal agency which has an extramural R/R&D budget in
excess of $100,000,000 based on 3-year forecasts as found in the annual
Budget of the United States Government and NSF NCSES Survey of Federal
Funds for Research and Development should start participation in the
SBIR program. Any Federal agency which has an extramural R/R&D budget
in excess of $1,000,000,000 based on 3-year forecasts as found in the
annual Budget of the United States Government and NSF NCSES Survey of
Federal Funds for Research and Development should start participation
in the STTR program. SBA will monitor the NCSES Survey of Federal Funds
for Research and Development and notify a Federal
[[Page 12823]]
agency if it appears to be required to begin participation in the SBIR
and/or STTR program, but it is the responsibility of Federal agencies
to implement the institution of its agency's SBIR and/or STTR program.
Federal agencies not otherwise required to participate in the SBIR/STTR
program may participate on a voluntary basis. Federal agencies seeking
to participate in the SBIR/STTR program must first submit their written
requests to SBA. Voluntary participation requires the written approval
of SBA.
(f) Preventing Fraud, Waste, and Abuse.
(1) Agencies shall evaluate risks of fraud, waste, and abuse in
each application, monitor and administer SBIR/STTR awards, and create
and implement policies and procedures to prevent fraud, waste and abuse
in the SBIR/STTR program. To capitalize on OIG expertise in this area,
agencies must consult with their OIG when creating such policies and
procedures. Fraud includes any false representation about a material
fact or any intentional deception designed to deprive the United States
unlawfully of something of value or to secure from the United States a
benefit, privilege, allowance, or consideration to which an individual
or business is not entitled. Waste includes extravagant, careless, or
needless expenditure of Government funds, or the consumption of
Government property, that results from deficient practices, systems,
controls, or decisions. Abuse includes any intentional or improper use
of Government resources, such as misuse of rank, position, or authority
or resources. Examples of fraud, waste, and abuse relating to the SBIR/
STTR program include, but are not limited to:
(i) Misrepresentations or material, factual omissions to obtain, or
otherwise receive funding under, an SBIR/STTR award;
(ii) misrepresentations of the use of funds expended, work done,
results achieved, or compliance with program requirements under an
SBIR/STTR award;
(iii) misuse or conversion of SBIR/STTR award funds, including any
use of award funds while not in full compliance with SBIR/STTR program
requirements, or failure to pay taxes due on misused or converted SBIR/
STTR award funds;
(iv) fabrication, falsification, or plagiarism in applying for,
carrying out, or reporting results from an SBIR/STTR award;
(v) failure to comply with applicable federal costs principles
governing an award;
(vi) extravagant, careless, or needless spending;
(vii) self-dealing, such as making a sub-award to an entity in
which the PI has a financial interest;
(viii) acceptance by agency personnel of bribes or gifts in
exchange for grant or contract awards or other conflicts of interest
that prevent the Government from getting the best value; and
(ix) lack of monitoring, or follow-up if questions arise, by agency
personnel to ensure that Awardee meets all required eligibility
requirements, provides all required certifications, performs in
accordance with the terms and conditions of the award, and performs all
work proposed in the application.
(2) At a minimum, agencies must:
(i) Require certifications from the SBIR/STTR Awardee at the time
of award, as well as after award and during the Funding Agreement life
cycle (see Sec. 8(i) and Appendix I for more information);
(ii) Include on their respective SBIR/STTR web page and in each
solicitation, information explaining how an individual can report
fraud, waste and abuse as provided by the agency's OIG (e.g., include
the fraud hotline number or web-based reporting method for the agency's
OIG);
(iii) Designate at least one individual in the agency to, at a
minimum, serve as the liaison for the SBIR/STTR program, the OIG and
the agency's Suspension and Debarment Official (SDO) and ensure that
inquiries regarding fraud, waste and abuse are referred to the OIG and,
if applicable, the SDO.
(iv) Include on their respective SBIR/STTR web page information
concerning successful prosecutions of fraud, waste and abuse in the
SBIR or STTR programs.
(v) Establish a written policy requiring all personnel involved
with the SBIR/STTR program to notify the OIG if anyone suspects fraud,
waste, and/or abuse and ensure the policy is communicated to all SBIR/
STTR personnel.
(vi) Create or ensure there is an adequate system to enforce
accountability (through suspension and debarment, fraud referrals or
other efforts to deter wrongdoing and promote integrity) by developing
separate standardized templates for a referral made to the OIG for
fraud, waste and abuse or the SDO for other matters, and a process for
tracking such referrals.
(vii) Ensure compliance with the eligibility requirements of the
program and the terms of the SBIR/STTR Funding Agreement.
(viii) Work with the agency's OIG with regard to its efforts to
establish fraud detection indicators, coordinate the sharing of
information between Federal Agencies, and improve education and
training to SBIR/STTR program officials, Applicants and Awardees;
(ix) Develop policies and procedures to avoid funding Essentially
Equivalent Work already funded by the same or another agency, which
could include: Searching www.SBIR.gov prior to award for the Applicant
(if a Joint Venture, search for each party to the Joint Venture), Key
Individuals of the Applicant, and similar abstracts; using plagiarism
or other software; checking the SBC's certification prior to award and
funding and documenting the Funding Agreement file that such
certification evidenced the SBC has not already received funding for
Essentially Equivalent Work; reviewing other agencies' policies and
procedures for best practices; and reviewing other R&D programs for
policies and procedures and best practices related to this issue; and
(x) Consider enhanced reporting requirements during the Funding
Agreement.
(g) Interagency Policy Committee. The Director of the Office of
Science and Technology Policy (OSTP) will establish an Interagency
SBIR/STTR Policy Committee, which will include representatives from
Federal Agencies with an SBIR or an STTR program and SBA. The
Interagency SBIR/STTR Policy Committee shall review the following
issues (but may review additional issues) and make policy
recommendations on ways to improve program effectiveness and
efficiency:
(1) The www.SBIR.gov databases described in section 9(k) of the Act
(15 U.S.C. 638(k));
(2) Federal Agency flexibility in establishing Phase I and II award
sizes, including appropriate criteria for exercising such flexibility;
(3) Commercialization assistance best practices of Federal Agencies
with significant potential to be employed by other agencies and the
appropriate steps to achieve that leverage, as well as proposals for
new initiatives to address funding gaps that business concerns face
after Phase II but before Commercialization.
(4) The need for a standard evaluation framework to enable
systematic assessment of SBIR and STTR, including through improved
tracking of awards and outcomes and development of performance measures
for the SBIR program and STTR program of each Federal Agency.
[[Page 12824]]
(5) Identification and sharing of best practices and the leveraging
of resources in support of increasing the participation of small
businesses underrepresented in the SBIR and STTR programs, including
outreach and technical assistance activities for Applicants, Awardees,
and others.
(h) National Academy of Science Report. The National Academy of
Sciences (NAS) will conduct a study and issue reports on the SBIR and
STTR programs.
(1) Prior to and during the period of study, and to ensure that the
concerns of small business are appropriately considered, NAS shall
consult with and consider the views of SBA's Office of Investment and
Innovation and the Office of Advocacy and other interested parties,
including entities, organizations, and individuals actively engaged in
enhancing or developing the technological capabilities of SBCs.
(2) The head of each agency with a budget of more than $50,000,000
for its SBIR program for fiscal year 1999 shall, in consultation with
SBA, and not later than 6 months after December 31, 2011, cooperatively
enter into an agreement with NAS regarding the content and performance
of the study. SBA and the agencies will work with the Interagency
Policy Committee in determining the parameters of the study, including
the specific areas of focus and priorities for the broad topics
required by statute. The agreement with NAS must set forth these
parameters, specific areas of focus and priorities, and comprehensively
address the scope and content of the work to be performed. This
agreement must also require the NAS to ensure there is participation by
and consultation with, the small business community, the SBA, and other
interested parties as described in paragraph (h)(1).
(3) NAS shall transmit to SBA, heads of agencies entering into an
agreement under this section, the Committee on Science, Space and
Technology, the Committee on Small Business of the House of
Representatives, and to the Committee on Small Business of the Senate a
copy of the report, which includes the results and recommendations, not
later than 4 years after December 31, 2011, and every subsequent four
years.
10. Reporting Requirements--for Participating Agencies, Applicants, and
Awardees
(a) General. The Act requires agencies to collect meaningful
information from SBCs and ensure that reporting requirements are
streamlined to minimize the burden on small businesses.
(1) SBA is required to collect data from Participating Agencies and
report to the Congress information regarding applications by and awards
to SBCs by each Federal Agency participating in the SBIR/STTR program.
Participating Agencies report data using standardized templates that
are provided, maintained, and updated by SBA on www.SBIR.gov.
(2) The Act requires a ``simplified, standardized and timely annual
report'' from each Federal Agency participating in the SBIR/STTR
program (see Sec. 3 of the Policy Directive for the definition of
Federal Agency), which is submitted to SBA. In addition, agencies are
required to report certain items periodically throughout the year to
SBA. Agencies may identify certain information, such as award data
information, by the various components of each agency. SBA collects
agency reports through the www.SBIR.gov portal. If the www.SBIR.gov
databases are unavailable, then the report must be emailed to
[email protected].
(3) To meet these requirements, the SBIR/STTR program has the
following key principles:
(i) Make updating data available electronically;
(ii) Centralize and share certain data through secure interfaces to
which only authorized Government personnel have access;
(iii) Have small business enter the data only once, if possible;
and
(iv) Provide standardized procedures.
(b) Summary of SBIR/STTR Databases.
(1) The Act requires that SBA coordinate the implementation of
electronic databases at the SBIR/STTR Agencies, including the technical
ability of the agencies to share the data. In addition, the Act
requires the reporting of various data elements, which are clustered
together in the following subsections:
(i) Solicitations Database (to include the Master Schedule);
(ii) www.SBIR.gov, which includes the following databases:
(A) Company Registry Database;
(B) Application Information Database;
(C) Award Information Database;
(D) Commercialization Database;
(E) Annual Report Database; and
(F) Other Reporting Requirements Database.
(2) The subsections below describe the data reporting requirements,
including reporting mechanisms, the frequency of data collection and
reporting, and whether this information is shared publicly or is
protected and only available to authorized personnel. The table below
summarizes the data collection requirements for each database; however,
there may be some divergences at the individual data field level. Refer
to Appendix II (as posted on www.SBIR.gov) for the detailed reporting
requirements at the data field level. SBA notes that in fiscal year
2012, SBA began a phased implementation of this data collection.
----------------------------------------------------------------------------------------------------------------
Collection/reporting
Database Reporting mechanism frequency Public/government
----------------------------------------------------------------------------------------------------------------
Solicitations..................... Agency XML or manual Within 5 business Public.
upload to http:// days of solicitation
www.SBIR.gov. open date.
Company Registry.................. SBC reports data to Register or reconfirm Government only.
www.SBIR.gov; Agency at time of
receives .pdf from application.
company.
Application Information........... Agency provides XML or Quarterly............ Government only.
manual upload to
www.SBIR.gov.
Award Information................. Agency provides XML or Quarterly............ Public.
manual upload to
www.SBIR.gov.
Commercialization................. Agencies + companies Agencies update in Government only.
report to www.SBIR.gov. real time; SBC
updates prior to
subsequent award
application and
voluntarily
thereafter.
[[Page 12825]]
Annual Report..................... Agency XML or manual Annually............. Government only. Summary
upload to www.SBIR.gov. SBA Annual Report based
on Agency-submitted
Annual Report data is
Public.
Other Reports..................... As set forth in the As set forth in the Public.
directive. directive.
----------------------------------------------------------------------------------------------------------------
(3) SBIR/STTR Awardees will have user names and passwords assigned
in order to access their respective awards information in the system.
Award and Commercialization data maintained in the database can be
changed only by the Awardee, SBA, or the awarding SBIR/STTR
Participating Agency.
(c) Master Schedule and the Solicitations Database.
(1) SBA posts an electronic Master Schedule of release dates of
Program Solicitations with links to internet websites of agency
solicitations on www.SBIR.gov.
(i) On or before August 1, each agency representative must notify
SBA in writing or by email of its proposed Program Solicitation release
and proposal due dates for the next fiscal year. SBA and the agency
representatives will coordinate the resolution of any conflicting
agency solicitation dates by the second week of August. In all cases,
SBA will make final decisions. Agencies must notify SBA in writing of
any subsequent changes in the solicitation release and close dates.
(ii) For those agencies that use both general topic and more
specific subtopic designations in their SBIR/STTR solicitations, the
topic data should accurately describe the research solicited.
(iii) Agencies must post on their internet websites the following
information regarding each Program Solicitation:
(A) List of topics upon which R/R&D proposals will be sought;
(B) agency address, phone number, or email address from which SBIR/
STTR Program Solicitations can be requested or obtained, especially
through electronic means;
(C) names, addresses, and phone numbers of agency contact points
where SBIR/STTR-related inquiries may be directed;
(D) release date(s) of Program Solicitation(s);
(E) closing date(s) for receipt of proposals; and
(F) estimated number and average dollar amounts of Phase I awards
to be made under the solicitation.
(2) SBA will manage a searchable public database that contains all
solicitation and topic information from all SBIR/STTR Agencies.
Agencies are required to update the Solicitations Database, (available
at www.SBIR.gov), within 5 business days of a solicitation's open date
for applications and/or submissions for SBCs. Refer to Appendix II (as
posted on www.SBIR.gov) for detailed reporting requirements. The main
data requirements include:
(i) Type of solicitation--SBIR/STTR;
(ii) Phase--I or II;
(iii) topic description;
(iv) sub-topic description;
(v) website for further information; and
(vi) applicable contact information per topic or sub-topic, where
applicable and allowed by law.
(d) Company Registry Database.
(1) SBA maintains and manages a company registry to track ownership
and affiliation requirements for all companies applying to the SBIR/
STTR program, including those that are majority-owned by multiple
VCOCs, private equity firms, or hedge funds.
(2) Each SBC applying for a Phase I or Phase II award must register
on www.SBIR.gov prior to submitting an application. The SBC will report
and/or update ownership information to SBA prior to each SBIR/STTR
application submission. The SBC can view the ownership and affiliation
requirements of the program on the registry site.
(3) Data collected in the Company Registry Database will not be
shared publicly. Refer to Appendix II (as posted on www.SBIR.gov) for
details on specific fields shared publicly.
(4) The SBC will save its information from the registration in a
.pdf document and will append this document to the application
submitted to a given agency unless the information can be transmitted
automatically to SBIR/STTR Agencies.
(5) Refer to www.SBIR.gov for details on the required reporting
fields. The main data requirements include:
(i) Basic identifying information for the SBC;
(ii) the number of employees for the SBC;
(iii) whether the SBC has venture capital, hedge fund or private
equity firm investment and if so, include:
(A) The percentage of ownership of the Awardee held by the VCOC,
hedge fund or private equity firm;
(B) the registration by the SBC of whether or not it is majority-
owned by VCOCs, hedge funds, or private equity firms. Please note that
this may be auto-populated through the individual calculations of
investments in the SBC already submitted.
(iv) information on the Affiliates of the SBC, including:
(A) The names of all Affiliates of the SBC;
(B) the number of employees of the Affiliates;
(e) Application Information Database.
(1) SBA will manage an Application Information Database on
information on applications to the SBIR/STTR program across agencies.
(2) Each agency must upload application data to the Application
Information Database at www.SBIR.gov at least quarterly.
(3) The data in the Application Information Database is only
viewable to authorized Government officials and not shared publicly.
(4) Refer to www.SBIR.gov for detailed reporting requirements. The
main data requirements for each Phase I and Phase II application
include:
(i) Name, size, and location of the Applicant, and the identifying
number assigned;
(ii) an abstract and specific aims of the project;
(iii) name, title, contact information, and position in the small
business of each Key Individual that will carry out the project;
(iv) percentage of effort each Key Individual identified will
contribute to the project;
(v) Federal agency to which the application is made and contact
information for the person responsible for reviewing applications and
making awards under the program.
(5) The Application Information Database connects and cross-checks
information with the Company Registry and Government personnel can see
connected data.
(f) Award Information Database.
(1) SBA manages a database on awards made within the SBIR/STTR
program across agencies.
[[Page 12826]]
(2) Each agency must update the Award Information Database
quarterly, if not more frequently.
(3) Most of the data available on the Award Information Database is
viewable and searchable by the public on www.SBIR.gov.
(4) Refer to www.SBIR.gov for detailed reporting requirements. The
data requirements for each Phase I and Phase II award include:
(i) Information similar to the Application Information Database--if
not already collected;
(ii) the name, size, and location of, and the identifying number
assigned;
(iii) an abstract and specific aims of the project;
(iv) the name, title, contact information, and position in the
small business of each Key Individual that will carry out the project;
(v) the percentage of effort each identified Key Individual will
contribute to the project;
(vi) the Federal agency making the award;
(vii) award amount;
(viii) Principal Investigator/Project Manager identifying
information--including name, email address, and demographic
information;
(ix) detailed information on location of company;
(x) whether the Awardee:
(A) Has venture capital, hedge fund or private equity firm
investment and if so, the amount of such investment received by SBC as
of date of award and amount of additional capital Awardee has invested
in SBIR/STTR technology;
(B) is a WOSB or has a woman as a Principal Investigator/Project
Manager;
(C) is an SDB or has a Socially and Economically Disadvantaged
Individual as a Principal Investigator/Project Manager;
(D) is owned by a faculty member or a student of an institution of
higher education as defined in 20 U.S.C. 1001); and
(E) has received the award as a result of the Commercialization
Readiness Pilot Program for Civilian Agencies set forth in Sec. 12(c)
of this Policy Directive.
(xi) an identification of any business concern or subsidiary
established for the commercial application of a product or service for
which an SBIR or STTR award is made.
(5) The Award Information Database connects and cross-checks
information with the Company Registry and Application Information
Database, and Government personnel can see connected data.
(g) Commercialization Database.
(1) The Commercialization Database stores information reported by
Awardees on the commercial activity resulting from their past SBIR/STTR
awards.
(2) Commercialization data is inputted to this database in two
ways: Awardees enter their Commercialization data directly into the
Commercialization Database on www.SBIR.gov, and agencies can upload to
the database at www.SBIR.gov Commercialization data they have collected
from Awardees.
(3) The Commercialization Database is currently maintained by SBA.
(4) Awardees are required to update this information on their prior
Phase II awards in the Commercialization Database when submitting an
application for an SBIR/STTR Phase II award and upon completion of the
last deliverable for that award.
(5) Commercialization data at the company level will not be shared
publicly. Aggregated data that maintains the confidentiality of
companies may be reported in compliance with the statute.
(6) Refer to www.SBIR.gov for the specific Commercialization data
reporting fields. The main data requirements include for every Phase II
award:
(i) Any business concern or subsidiary established for the
commercial application of a product or service for which an SBIR/STTR
award is made;
(ii) total revenue resulting from the sale of new products or
services, or licensing agreements resulting from the research conducted
under each Phase II award;
(iii) additional investment received from any source, other than
Phase I or Phase II awards, to further the research and development
conducted under each Phase II award;
(iv) any contract with the Federal Government marked as an SBIR/
STTR Phase III award; and
(v) any narrative information that a Phase II Awardee voluntarily
submits to further describe the Commercialization efforts of its awards
and related research.
(7) The SBC may apportion sales or additional investment
information relating to more than one Phase II award among those
awards, if it notes the apportionment for each award. Companies are
requested to update their records in this database on a voluntary basis
for at least 5 years following the completion of award.
(8) Awardees will update their information and add project
Commercialization and sales data using their user names and passwords.
SBA and SBIR/STTR Participating Agencies will coordinate data
collection to ensure that small businesses will not need to report the
same data more than once.
(9) Note that the Award Information and Commercialization Databases
will contain the data necessary for agencies to determine whether an
Applicant meets the agency's benchmarks for progress towards
Commercialization.
(h) Participating Agency Annual Report to SBA.
(1) Participating Agencies must submit their report to SBA on an
annual basis and will report for the period ending September 30 of each
fiscal year. The report is due to SBA no later than March 15 of each
year. For example, the report for FY 2017 (October 1, 2016-September
30, 2017) must be submitted to SBA by March 15, 2018.
(2) SBA provides the Annual Report form to agencies through
www.SBIR.gov. SBA reserves the right to modify the fields of the Annual
Report data form beyond those identified in this directive.
(3) A number of the fields of the Annual Report template are pre-
populated by SBA with data from the SBIR/STTR program database. SBA
works with the agencies to resolve any data inconsistencies.
(4) The annual report includes the following:
(i) SBIR/STTR program dollars obligated through program Funding
Agreements for Phase I, Phase II, and other uses of program funds,
during the reporting fiscal year.
(ii) Number of topics and subtopics contained in each Program
Solicitation.
(iii) Number of proposals received by the agency for each topic and
subtopic in each Program Solicitation.
(iv) Agency total extramural R/R&D obligations for the reporting
fiscal year including an explanation of its calculation and how it
differs, if at all, from the amount reported to the NSF NCSES Survey of
Federal Funds for Research and Development pursuant to the annual
Budget of the United States Government.
(v) The minimum dollar amount the agency is required to obligate
per fiscal year for the SBIR and STTR programs. This amount is
calculated by applying the statutory per centum to the agency's total
extramural R/R&D obligations made during the fiscal year (adjusted for
the appropriate exclusions); and if the minimum amount was not met, the
agency must provide the reasons why and an explanation of how the
agency plans to meet the requirement in the future. Agencies may
provide an explanation of the specific budgeting process their agency
uses to allocate funds for the SBIR/STTR programs and describe any
issues they may see with the compliance determination procedure.
Agencies may also indicate
[[Page 12827]]
obligations made in the reporting year using prior fiscal years of
appropriation within available funding obligation periods.
(vi) For all Applicants and Awardees in the applicable fiscal
year--where applicable, the name and address, solicitation topic and
subtopic, solicitation number, project title, total dollar amount of
Funding Agreement, and applicable demographic information. The agency
is not required to re-submit Applicant and Awardee information in the
annual report that it has already reported to SBA through www.SBIR.gov
as required.
(vii) Justification for the award of any Funding Agreement
exceeding the award guidelines set forth in Sec. 7(i) of this Policy
Directive, the amount of each award exceeding the guidelines, the
identity and location of the Awardee, whether the Awardee has received
any venture capital, hedge fund, or private equity firm investment, and
whether the Awardee is majority-owned by a venture capital operating
company, hedge fund or private equity firm.
(viii) Justification for awards made under a topic or subtopic
where the agency received only one proposal. Agencies must also provide
the Awardee's name and address, the topic or subtopic, and the dollar
amount of award. Awardee information must be collected quarterly in any
case, but updated in the agency's annual reports.
(ix) All instances where the Phase II Awardee did not receive a
Phase I award.
(x) All instances in which an agency pursued R/R&D, services,
production, or any combination thereof of a technology developed under
an SBIR/STTR award with an entity other than that Awardee. See Sec.
10(i)(5) of this Policy Directive for minimum reporting requirements.
(xi) The number and dollar value of each SBIR/STTR and non-SBIR/
STTR award (includes grants, contracts and cooperative agreements as
well as any award issued under the Commercialization Programs) over
$10,000 and compare the number and amount of SBIR/STTR awards with
awards to other than SBCs.
(xii) Information relating to the pilot to allow for funding of
administrative, oversight, and contract processing costs, including the
money spent on each activity and any other information required in the
approved work plan to measure the benefits of using these funds for the
specific activities--especially, as it pertains to the goals outlined
in the work plan. See Sec. 9(e)(3) of this Policy Directive concerning
the Pilot to Allow for Funding of Administrative, Oversight, and
Contract Processing Costs.
(xiii) Outreach. A description and the extent to which the agency
is increasing outreach and awards to SDBs and WOSBs.
(xiv) VCOC-owned. General information about the implementation of
and compliance with the allocation of funds for Awardees that are
majority-owned by multiple VCOCs, hedge funds or private equity firms.
(xv) Phase III appeals. Descriptive information on any appeals
filed on Phase III awards pursuant to Sec. 4(c)(7) of this Policy
Directive and notices of noncompliance with the SBIR/STTR Policy
Directive filed by SBA.
(xvi) Phase III awards. Information relating to each Phase III
award made by that agency either as a prime or subcontract, including
the name of the business receiving the Phase III award, the dollar
amount, and the awarding agency or prime contractor.
(xvii) Commercialization Programs. An accounting of funds,
initiatives, and outcomes under the commercialization programs set
forth in Sec. 12(b) and (c) of this Policy Directive.
(xviii) Manufacturing. Information relating to the agency's
enhancement of manufacturing activities, if the agency awards more than
$50,000,000 under the SBIR and STTR programs combined in a fiscal year.
The report must include:
(A) A description of efforts undertaken by the agency to enhance
U.S. manufacturing activities;
(B) a comprehensive description of the actions undertaken each year
by the agency in carrying out the SBIR or STTR programs to support
Executive Order 13329 (relating to manufacturing);
(C) an assessment of the effectiveness of the actions taken at
enhancing the R/R&D of U.S. manufacturing technologies and processes;
(D) a description of efforts by vendors selected to provide
discretionary technical assistance to help SBIR and STTR business
concerns manufacture in the U.S.; and
(E) recommendations from the agency's SBIR/STTR program managers/
coordinators of additional actions to increase manufacturing activities
in the U.S.
(xix) Performance Areas and Metrics. As part of agency work plans
submitted pursuant to Sec. 9(e) of this Policy Directive, SBA works
with the agencies to establish the performance criteria and metrics
used to measure agency performance. The Act establishes broad
performance areas for the program, including Commercialization,
streamlining, outreach, etc. Agencies must report their progress, using
the SBA-approved performance criteria, at the end of each fiscal year
as part of the annual report. The metrics and performance areas will
evolve over time and can be found at www.SBIR.gov.
(i) Other Reporting Requirements.
(1) SBA will set forth a list of reports that agencies are required
by statute to submit, in a table format, which will be available at
www.SBIR.gov.
(2) SBA's SBIR/STTR program database will include a list of any
individual or SBC that has received an SBIR/STTR award and that has
been convicted of a fraud-related crime involving SBIR/STTR funds or
found civilly liable for a fraud-related violation involving SBIR/STTR
funds, of which SBA has been made aware.
(3) Program Funding Compliance. Agencies must submit to SBA's
Administrator, not later than 4 months after the date of enactment of
its annual Appropriations Act, a report on the agency's plan to meet
the program funding requirement for the current fiscal year. SBA
provides detailed guidance regarding this report on www.SBIR.gov.
The report must include the following main elements:
(A) An explanation of the calculation of total extramural R/R&D
including an itemization of each research program excluded from the
calculation including the dollar amount and a brief explanation of why
it is excluded,
(B) a review of the agency's compliance with the funding
requirement in the prior fiscal year to determine if the program
funding process enabled the agency to meet the requirement, and
(C) a funding plan showing how the agency is budgeting its funds
for the SBIR/STTR programs during the current fiscal year so as to meet
or exceed the year's expected minimum obligations requirement for the
program.
(4) Agencies must provide notice to SBA of any case or controversy
before any Federal judicial or administrative tribunal concerning the
SBIR/STTR program of the Federal agency. This does not include agency
level protests of awards unless and until the protest is before a
Federal court or administrative body. The agency must provide notice to
SBA within 15 business days of the agency's written notification of the
case or controversy.
(5) Agencies must provide notice of all instances in which an
agency pursued research, development, production, or any such
combination of a technology developed by an SBC using an award made
under the SBIR/STTR program of that agency, where the agency determined
that it was not
[[Page 12828]]
practicable to enter into a follow-on non-SBIR/STTR Funding Agreement
with that concern. The agency must provide notice to SBA within 15
business days of the agency's award. The report must include, at a
minimum:
(i) The reasons why the follow-on Funding Agreement with the
concern was not practicable;
(ii) the identity of the entity with which the agency contracted to
perform the research, development, or production; and
(iii) a description of the type of Funding Agreement under which
the research, development, or production was obtained.
(6) Participating Agencies must provide information supporting the
agency's achievement of the Interagency Policy Committee's policy
recommendations on ways to improve program effectiveness and
efficiency. This includes qualitative and quantitative data as
appropriate, which would measure the agency's progress. The agency must
provide this information to SBA at the end of each fiscal year.
(7) Participating Agencies must provide an annual report to SBA,
Senate Committee on Small Business and Entrepreneurship, House
Committee on Small Business, and the House Committee on Science, Space,
and Technology on SBIR and STTR programs and the benefits of these
programs to the United States. Prior to preparing the report, the
agency shall develop metrics to evaluate the effectiveness and benefit
to the United States of the SBIR and STTR programs. The metrics must be
science-based and statistically driven, reflect the mission of the
agency, and include factors relating to the economic impact of the
programs. The report must describe in detail the agency's annual
evaluation of the programs using these metrics. The final report must
be posted online so it can be made available to the public.
(8) NIH, DoD and the DoEd must provide the written determination to
SBA any time it issues a Phase II award to an SBC that did not receive
a Phase I award for that R/R&D. The determination must be submitted
prior to award.
(9) SBA will compile data and report to Congress on the Federal and
State Technology (FAST) Partnership Program, described in Sec. 12 of
this Policy Directive. If required by the FAST grant, the grantees will
report a comprehensive list of the companies that received assistance
under FAST, whether those companies received SBIR or STTR awards, and
any information regarding mentors and Mentoring Networks, as required
in the FAST Partnership Program.
(j) Further Clarification on Availability of SBC Information.
(1) Unless stated otherwise, the information contained in the
Company Registry Database, the Application Information Database, and
the Commercialization Database is solely available to authorized
Government officials, with the approval of SBA. This includes Congress,
the Government Accountability Office (GAO), the SBIR/STTR Participating
Agencies, Office of Management and Budget (OMB), OSTP, OFPP, and other
authorized persons who are subject to an NDA with the Federal
Government covering the use of the databases. These databases are used
for the purposes of evaluating and determining eligibility for the
SBIR/STTR program, in accordance with Policy Directives issued by SBA.
Pursuant to 15 U.S.C. 638(k)(4), certain information provided to those
databases is privileged and confidential and not subject to disclosure
pursuant to 5 U.S.C. 552 (Government Organization and Employees); nor
must it be considered to be publication for purposes of 35 U.S.C.
102(a) or (b).
(2) Most of the information in the Award Information and Annual
Reports Databases will be available to the public. Any information that
will identify the confidential business information of a given SBC will
not be disclosed to the public. Those databases are available at
www.SBIR.gov and offer a vast array of user-friendly capabilities that
are accessible by the public at no charge. The Award Information
Database allows for the online submission of SBIR/STTR awards data from
all SBIR/STTR Agencies. It also allows any end-user to perform keyword
searches and create formatted reports of SBIR/STTR awards information,
and for potential research partners to view research and development
efforts that are ongoing in the SBIR and the STTR programs, increasing
the investment opportunities of the SBIR/STTR SBCs in the high tech
arena.
(k) Waivers.
(1) Participating Agencies must request an extension for additional
time between the solicitation closing date and notification of
recommendation for award. SBA will respond to the request for an
extension within 5 business days, as practicable. See Sec. 7(c)(1) of
this Policy Directive for further information.
(2) Participating Agencies must request a waiver to exceed the
award guidelines for Phase I and Phase II awards by more than 50% for a
specific topic. See Sec. 7(i)(4) of this Policy Directive for further
information.
(3) Participating Agencies must request a waiver to not use their
SBIR funds, as part of the pilot allowing for the use of such funds for
certain SBIR-related costs, to increase participation by SDBs and WOSBs
in the SBIR/STTR program, and small businesses in states with a
historically low level of SBIR/STTR awards. See Sec. 9(e)(3)(ii) of
this Policy Directive for further information.
(4) Participating Agencies must request a waiver to issue a Funding
Agreement that includes a provision for subcontracting a portion of
that agreement back to the issuing agency if there is no exception to
this requirement in the directive. See Sec. 9(e)(4) of this Policy
Directive for further information.
11. Responsibilities of SBA
(a) Policy.
(1) SBA establishes policy and procedures for the program by
publishing and updating the SBIR/STTR Policy Directive and promulgating
regulations. Policy clarification of any part or provision of the
directive or regulations may be provided by SBA.
(2) It is essential that SBIR/STTR Agencies do not promulgate any
policy, rule, regulation, or interpretation that is inconsistent with
the Act, this Policy Directive, or SBA's regulations relating to the
SBIR/STTR program. SBA's monitoring activity will include review of
policies, rules, regulations, interpretations, and procedures generated
to facilitate intra- and interagency SBIR/STTR program implementation.
(3) Waivers providing limited exceptions to certain policies can be
found at Sec. 10(k) of this Policy Directive.
(b) Outreach. SBA conducts outreach to achieve a number of
objectives including:
(1) Educating the public about the SBIR/STTR programs via
conferences, seminars, and presentations;
(2) Highlighting the successes achieved in the program by
publishing (via press releases and www.SBIR.gov) success stories, as
well as hosting awards programs;
(3) Maintaining www.SBIR.gov, which is an online public information
resource that provides comprehensive information regarding the SBIR/
STTR programs. This information includes: a listing of solicitation
information on currently available SBIR/STTR opportunities, award
information on all Phase I and Phase II awards, summary annual award
information for the whole program, and contact information for SBA and
SBIR/STTR program managers/coordinators.
(c) Collection and publication of program-wide data. SBA collects
and
[[Page 12829]]
maintains program-wide data within the www.SBIR.gov data system. This
data includes information on all Phase I and II awards from across all
SBIR/STTR Agencies, as well as fiscal year Annual Report data. See
Sec. 10 of this Policy Directive for further information about
reporting and data collection requirements.
(d) Monitoring implementation of the program and annually reporting
to Congress. SBA is responsible for providing oversight and monitoring
the implementation of the SBIR/STTR programs at the agency level. This
monitoring includes:
(1) SBIR/STTR Funding Allocations. The Act establishes the source
of the funds for the SBIR/STTR programs (extramural R/R&D), the
percentage of such funds to be obligated through the SBIR and STTR
programs, and it requires that SBA monitor these annual allocations.
Participating Agencies may include in their annual report to SBA an
explanation of the specific budgeting process used to allocate funds to
the SBIR/STTR programs and describe any issues observed with the
compliance determination process.
(2) SBIR/STTR Program Solicitation and Award Status. The
accomplishment of scheduled SBIR/STTR events, such as SBIR/STTR Program
Solicitation releases and the issuance of Funding Agreements is
critical to meeting statutory mandates and to operating an effective,
useful program. SBA monitors these and other operational features of
the SBIR/STTR programs and publishes information relating to notice of
and application for awards under the SBIR/STTR programs for each SBIR/
STTR Participating Agency at www.SBIR.gov. SBA does not plan to monitor
administration of the awards except in instances where SBA assistance
is requested and is related to a specific SBIR/STTR project or Funding
Agreement.
(3) Follow-on Funding Commitments. SBA will monitor whether follow-
on non-Federal funding commitments obtained by Phase II Awardees for
Phase III were considered in the evaluation of Phase II proposals as
required by the Act.
(4) Fraud, Waste, and Abuse (FWA). SBA will ensure that each SBIR/
STTR Participating Agency has taken steps to maintain a FWA prevention
system to minimize its impact on the programs.
(5) Performance Areas, Metrics, and Goals. SBA is responsible for
defining performance areas consistent with statute (e.g., reducing
timelines for awards, simplification) against which agencies will set
goals. SBA will work with the Participating Agencies to set metrics, in
order to measure an agency's accomplishments of its goals against the
defined performance areas. The purpose of these metrics and goals is to
assist SBA in evaluating and reporting on the progress achieved by the
agencies in improving the SBIR/STTR programs. For further information
on Performance Areas, Metrics and Goals see Sec. 10(h) of this Policy
Directive.
(e) Additional efforts to improve the performance of the program.
SBA, in its continuing effort to improve the program, will make
recommendations for improvement within the framework of the SBIR/STTR
program managers/coordinators' meetings. This may include recommending
a ``best practice'' currently being utilized by an agency or business,
or open discussion and feedback on a potential ``best practice'' for
agency adoption. This may also involve program-wide initiatives.
(f) Federal and State Technology (FAST) Partnership Program. SBA
coordinates and administers the FAST program. SBA develops the
solicitation, reviews proposals, and oversees grant awards. FAST
provides grantees with funding to assist in outreach, proposal
preparation, and other technical assistance to developing innovation-
oriented SBCs.
12. Supporting Programs and Initiatives
(a) Federal and State Technology (FAST) Partnership Program. The
purpose of the FAST program is to strengthen the technological
competitiveness of SBCs in the United States. Congress found that
programs that foster economic development among small high-technology
firms vary widely among the states. Thus, the purpose of the FAST
program is to improve the participation of small technology firms in
the innovation and Commercialization of new technologies, thereby
ensuring that the United States remains on the cutting-edge of research
and development in the highly competitive arena of science and
technology. Additional and detailed information regarding this program
is available at www.SBIR.gov.
(b) Commercialization Readiness Program (CRP)--DDoD.
(1) General. The Secretary of Defense and the Secretary of each
military department is authorized to create and administer the
Commercialization Readiness Program (CRP) to accelerate the transition
of technologies, products, and services developed under the SBIR
program to Phase III, including the acquisition process. The authority
for CRP does not eliminate or replace any other SBIR or STTR program
that enhances the insertion or transition of SBIR or STTR technologies.
This includes any program in effect as of December 31, 2011.
(2) Identification of research programs for accelerated transition
to acquisition process. The Secretary of each military department must
identify research programs of the SBIR or STTR program that have the
potential for rapid transitioning to Phase III and into the acquisition
process and certify in writing that the successful transition of the
program to Phase III and into the acquisition process is expected to
meet high priority military requirements of such military department.
(3) Limitation. The Secretary of Defense shall identify research
programs of the SBIR or STTR program that have the potential for rapid
transitioning to Phase III and into the acquisition process after
receiving this certification from each military department.
(4) Funding.
(i) The Secretary of Defense and each Secretary of a military
department is authorized to use its SBIR funds for administration of
CRP in accordance with the procedures and policies set forth in Sec.
9(e)(3) of this Policy Directive.
(ii) In addition, the Secretary of Defense and Secretary of each
military department is authorized to use not more than an amount equal
to 1% of its SBIR funds available to DoD or the military departments
for payment of expenses incurred to administer the CRP. Such funds--
(A) shall not be subject to the limitations on the use of funds in
9(e)(2) or 9(e)(3) of this Policy Directive; and
(B) shall not be used to make Phase III awards.
(5) Contracts Valued at not less than $100,000,000. For any
contract awarded by DoD valued at not less than $100,000,000, the
Secretary of Defense may:
(i) Establish goals for the transition of Phase III technologies in
subcontracting plans; and
(ii) require a prime contractor on such a contract to report the
number and dollar amount of the contracts entered into by the prime
contractor for Phase III projects.
(6) The Secretary of Defense shall:
(i) Set a goal to increase the number of SBIR/STTR Phase II
contracts that lead to technology transition into programs of record of
fielded systems;
(ii) use incentives in effect as of December 31, 2011 or create new
incentives to encourage agency SBIR/STTR program managers/coordinators
and prime contractors to meet the goal set forth in paragraph (6)(i)
above; and
(iii) submit the following to SBA, as part of the annual report:
[[Page 12830]]
(A) The number and percentage of Phase II SBIR/STTR contracts
awarded by DoD that led to technology transition into programs of
record or fielded systems;
(B) information on the status of each project that received funding
through the CRP and the efforts to transition these projects into
programs of record or fielded systems; and
(C) a description of each incentive that has been used by DoD, the
effectiveness of the incentive with respect to meeting DoD's goal to
increase the number of SBIR/STTR Phase II contracts that lead to
technology transition into programs of record or fielded systems, and
measures taken to ensure that such incentives do not act to shift the
focus of Phase II awards away from relatively high-risk innovation
projects.
(c) Commercialization Readiness Pilot Program for Civilian
Agencies.
(1) General. The Commercialization Readiness Pilot Program permits
the head of any Federal Agency participating in the SBIR program
(except DoD) to allocate not more than 10% of its funds allocated to
the SBIR program--
(i) for follow-on awards to small businesses for technology
development, testing, evaluation, and Commercialization assistance for
SBIR or STTR Phase II technologies; or
(ii) for awards to small businesses to support the progress of
research, research and development, and Commercialization conducted
under the SBIR or STTR programs to Phase III.
(2) Application to SBA. Before establishing this pilot program, the
agency must submit a written application to SBA not later than 90 days
before the first day of the fiscal year in which the pilot program is
to be established. The written application must set forth a compelling
reason that additional investment in SBIR or STTR technologies is
necessary, including unusually high regulatory, systems integration, or
other costs relating to development or manufacturing of identifiable,
highly promising small business technologies or a class of such
technologies expected to substantially advance the mission of the
agency.
(3) SBA's Determination. SBA must make its determination regarding
an application submitted under paragraph (c)(2) above not later than 30
days before the first day of the fiscal year for which the application
is submitted. SBA must also publish its determination in the Federal
Register and make a copy of the determination and any related materials
available to the Committee on Small Business and Entrepreneurship of
the Senate and the Committee on Small Business and the Committee on
Science, Space, and Technology of the House of Representatives.
(4) Maximum Amount of Award. The SBIR agency may not make an award
to an SBC under this pilot program in excess of 3 times the dollar
amounts generally established for Phase II awards under Sec. 7(i)(1)
of this Policy Directive.
(5) Registration. Any SBC that receives an award under this pilot
program shall register with SBA in the Company Registry Database.
(6) Award Criteria or Consideration. When making an award under
this pilot program, the agency is required to consider whether the
technology to be supported by the award is likely to be manufactured in
the United States.
(7) Termination of Authority. The authority to establish a pilot
program under this section expires on September 30, 2022, unless
otherwise extended.
(d) Technology Development Program. The Act permits an agency that
has established a Technology Development Program to review for funding
under that program, in each fiscal year:
(1) any proposal to provide outreach and assistance to 1 or more
SBCs interested in participating in the SBIR program, including any
proposal to make a grant or loan to a company to pay a portion or all
of the cost of developing an SBIR proposal, from an entity,
organization, or individual located in--
(i) a State that is eligible to participate in that Technology
Development Program; or
(ii) an Additionally Eligible State.
(2) any meritorious proposal for an SBIR Phase I award that is not
funded through the SBIR program for that fiscal year due to funding
constraints, from an SBC located in a State identified in (i) or (ii)
immediately above.
(e) [STTR only] Phase 0 Proof of Concept Partnership Pilot Program.
(1) General. The Director of NIH may use $5,000,000 of the funds
allocated for the STTR program set forth in Sec. 2(b) of this Policy
Directive for a Proof of Concept Partnership Pilot Program to
accelerate the creation of small businesses and the Commercialization
of research innovations from qualifying institutions. A qualifying
institution is a university or other Research Institution that
participates in the NIH's STTR program. The Director shall award,
through a competitive, merit-based process, grants to qualifying
institutions in order to implement this program. These grants shall
only be used to administer Proof of Concept Partnership awards.
(2) Awards to Qualifying Institutions.
(i) The Director may make awards to a qualifying institution for up
to $1,000,000 per year for up to 4 years.
(ii) In determining which qualifying institutions will receive
pilot program grants, the Director of NIH shall consider, in addition
to any other criteria the Director determines necessary, the extent to
which qualifying institutions--
(A) have an established and proven technology transfer or
commercialization office and have a plan for engaging that office in
the program's implementation;
(B) have demonstrated a commitment to local and regional economic
development;
(C) are located in diverse geographies and are of diverse sizes;
(D) can assemble project management boards comprised of industry,
start-up, venture capital, technical, financial, and business experts;
(E) have an Intellectual Property rights strategy or office; and
(F) demonstrate a plan for sustainability beyond the duration of
the funding award.
(3) Proof of Concept Partnerships. A qualifying institution
selected by NIH shall establish a Proof of Concept Partnership with NIH
to award grants to individual researchers. These grants should provide
researchers with the initial investment and the resources to support
the proof of concept work and Commercialization mentoring needed to
translate promising research projects and technologies into a viable
company. This work may include technical validations, market research,
clarifying Intellectual Property rights position and strategy, and
investigating commercial or business opportunities.
(4) Award Guidelines. The administrator of a Proof of Concept
Partnership program shall award grants in accordance with the following
guidelines:
(i) The Proof of Concept Partnership shall use a market-focused
project management oversight process, including--
(A) a rigorous, diverse review board comprised of local experts in
translational and proof of concept research, including industry, start-
up, venture capital, technical, financial, and business experts and
university technology transfer officials;
(B) technology validation milestones focused on market feasibility;
(C) simple reporting effective at redirecting projects; and
(D) the willingness to reallocate funding from failing projects to
those with more potential.
[[Page 12831]]
(ii) The Proof of Concept Partnership shall not award more than
$100,000 towards an individual proposal.
(5) Educational Resources and Guidance. The administrator of a
Proof of Concept Partnership program shall make educational resources
and guidance available to researchers attempting to commercialize their
innovations.
(6) Limitations.
(i) The funds for the pilot program shall not be used for basic
research or to fund the acquisition of research equipment or supplies
unrelated to Commercialization activities.
(ii) The funds for the pilot program can be used to evaluate the
commercial potential of existing discoveries, including proof of
concept research or Prototype development; and activities that
contribute to determining a project's Commercialization path, to
include technical validations, market research, clarifying Intellectual
Property rights, and investigating commercial and business
opportunities.
(7) Termination of Authority. The pilot program under this
subsection shall terminate on September 30, 2022, unless otherwise
extended.
Appendix I: Instructions for SBIR and STTR Program Solicitation
Preparation
a. General. Subsections 9(j) and 9(p) of the Act (15 U.S.C. 638(j))
require simplified, standardized and timely SBIR/STTR solicitations and
for SBIR/STTR Participating Agencies to utilize a ``uniform process''
minimizing the regulatory burden of participation. Therefore, the
following instructions purposely depart from normal Government
solicitation formats and requirements. SBIR/STTR solicitations must be
prepared and issued as Program Solicitations in accordance with the
following instructions.
b. Limitation in Size of Solicitation. In the interest of meeting
the requirement for simplified and standardized solicitations, while
also recognizing that the internet has become the main vehicle for
distribution, each agency should structure its entire SBIR/STTR
solicitation to produce the least number of pages (electronic and
printed), consistent with the procurement/assistance standard operating
procedures and statutory requirements of the Participating Agencies.
c. Format. SBIR/STTR Program Solicitations must be prepared in a
simple, standardized, easy-to-read, and easy-to-understand format. It
must include a cover sheet, a table of contents, and the following
sections in the order listed.
1. Program Description
2. Certifications
3. Proposal Preparation Instructions and Requirements
4. Method of Selection and Evaluation Criteria
5. Considerations
6. Submission of Proposals
7. Scientific and Technical Information Sources
8. Submission Forms
9. Research Topics
d. Cover Sheet. The cover sheet of an SBIR/STTR Program
Solicitation must clearly identify the solicitation as an SBIR/STTR
solicitation, identify the agency releasing the solicitation, specify
date(s) on which contract proposals or grant applications are due under
the solicitation, and state the solicitation number or year.
e. Instructions for Preparation of SBIR or STTR Program
Solicitation--Sections 1-9.
Sec. 1. Program Description.
(a) Summarize in narrative form the request for proposals and the
objectives of the SBIR or STTR program.
(b) Describe in narrative form the agency's SBIR or STTR program
including a description of the three phases. Note in your description
whether the solicitation is for Phase I or Phase II proposals. Also
note in each solicitation for Phase I that all Awardees may apply for a
Phase II award and provide guidance on the procedure for doing so.
(c) Describe program eligibility.
(d) List the name, address and telephone number of agency contacts
for general information on the SBIR or STTR Program Solicitation.
(e) Whenever terms are used that are unique to the SBIR or STTR
program, a specific SBIR or STTR solicitation or a portion of a
solicitation, define them or refer potential offerors/Applicants to a
source for the definition. At a minimum, the definitions of ``Funding
Agreement,'' ``R/R&D,'' ``SBC,'' ``SBIR/STTR Data,'' and ``SBIR/STTR
Data Rights'' must be included.
(f) Include information explaining how an individual can report
fraud, waste and abuse (e.g. include the fraud hotline for the agency's
Office of Inspector General);
Sec. 2. Certifications.
(a) This section must include certifying forms required by
legislation, regulation or standard operating procedures, to be
submitted by the Applicant to the contracting or granting agency. This
would include certifying forms such as those for the protection of
human and animal subjects.
(b) This section must include any certifications required
concerning size, ownership and other SBIR or STTR program requirements.
(i) The agency may request the SBIR/STTR Applicant to submit a
certification at the time of submission of the application or offer.
The certification may require the Applicant to state that it intends to
meet the size, ownership and other requirements of the SBIR or STTR
program at the time of award of the Funding Agreement, if selected for
award.
(ii) The agency must request the Applicant to submit a
certification at the time of award and at any other time set forth in
SBA's regulations at 13 CFR 121.701-121.705. The certification will
require the Applicant to state that it meets the size, ownership and
other requirements of the SBIR or STTR program at the time of award of
the Funding Agreement.
(iii) The agency must request the Awardee to submit certifications
during the Funding Agreement life cycle. A Phase I Funding Agreement
must state that the Awardee shall submit a new certification that it is
in compliance with specific SBIR or STTR program requirements at the
time of final payment or disbursement. A Phase II Funding Agreement
must state that the Awardee shall submit a new certification that it is
in compliance with specific SBIR or STTR program requirements prior to
receiving more than 50% of the total award amount and prior to final
payment or disbursement.
(iv) Agencies may require additional certifications at other points
in time during the life cycle of the Funding Agreement, such as at the
time of each payment or disbursement.
(c) The agency must use the following certification at the time of
award and upon notification by SBA, must check www.SBIR.gov for updated
certifications prepared by SBA:
SBIR/STTR Funding Agreement Certification
All small businesses that are selected for award of an SBIR/STTR
Funding Agreement must complete this certification at the time of award
and any other time set forth in the Funding Agreement that is prior to
performance of work under this award. This includes checking all of the
boxes and having an authorized officer of the Awardee sign and date the
certification each time it is requested.
Please read carefully the following certification statements. The
Federal Government relies on the information to determine whether the
business is eligible for a Small Business Innovation Research (SBIR)
program or Small Business Technology Transfer (STTR)
[[Page 12832]]
program award. A similar certification will be used to ensure continued
compliance with specific program requirements during the life of the
Funding Agreement. The definitions for the terms used in this
certification are set forth in the Small Business Act, SBA regulations
(13 CFR part 121), the SBIR/STTR Policy Directive and also any
statutory and regulatory provisions referenced in those authorities.
If the Funding Agreement officer believes that the business may not
meet certain eligibility requirements at the time of award, they are
required to file a size protest with the U.S. Small Business
Administration (SBA), which will determine eligibility. At that time,
SBA will request further clarification and supporting documentation in
order to assist in the verification of any of the information provided
as part of a protest. If the Funding Agreement officer believes, after
award, that the business is not meeting certain Funding Agreement
requirements, the agency may request further clarification and
supporting documentation in order to assist in the verification of any
of the information provided.
Even if correct information has been included in other materials
submitted to the Federal Government, any action taken with respect to
this certification does not affect the Government's right to pursue
criminal, civil or administrative remedies for incorrect or incomplete
information given in the certification. Each person signing this
certification may be prosecuted if they have provided false
information.
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(d) The agency must use the following certification during the life
cycle of the Funding Agreement in accordance with subsection 8(j) of
the SBIR/STTR Policy Directive and paragraph 2(b)(iii) of this Appendix
and upon notification by SBA, must check www.SBIR.gov for updated
certifications prepared by SBA:
SBIR/STTR Funding Agreement Certification--Life Cycle Certification
All SBIR/STTR Phase I and Phase II Awardees must complete this
certification at all times set forth in the Funding Agreement (see
Sec. 8(j) of the SBIR/STTR Policy Directive). This includes checking
all of the boxes (unless otherwise directed) and having an authorized
officer of the Awardee sign and date the certification each time it is
requested.
Please read carefully the following certification statements. The
Federal Government relies on the information to ensure compliance with
specific program requirements during the life of the Funding Agreement.
The definitions for the terms used in this certification are set forth
in the Small Business Act, the SBIR/STTR Policy Directive, and also any
statutory and regulatory provisions referenced in those authorities.
If the Funding Agreement officer believes that the business is not
meeting certain Funding Agreement requirements, the agency may request
further clarification and supporting documentation in order to assist
in the verification of any of the information provided.
Even if correct information has been included in other materials
submitted to the Federal Government, any action taken with respect to
this certification does not affect the Government's right to pursue
criminal, civil or administrative remedies for incorrect or incomplete
information given in the certification. Each person signing this
certification may be prosecuted if they have provided false
information.
[[Page 12838]]
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[[Page 12839]]
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[[Page 12840]]
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(e) [SBIR only] The agency must require any SBC that is majority-
owned by multiple venture capital operating companies, hedge funds, or
private equity firms to submit the following certification with its
SBIR application:
Certification for SBIR Applicants That Are Majority-Owned by Multiple
Venture Capital Operating Companies, Hedge Fund or Private Equity Firms
Any small business that is majority-owned by multiple venture
operating companies (VCOCs), hedge funds, or private equity firms and
is submitting an application for an SBIR Funding Agreement must
complete this certification prior to submitting an application. This
includes checking all of the boxes and having an authorized officer of
the Applicant sign and date the certification each time it is
requested.
Please read carefully the following certification statements. The
Federal Government relies on the information to determine whether the
business is eligible for a Small Business Innovation Research (SBIR)
program award and meets the specific program requirements during the
life of the Funding Agreement. The definitions for the terms used in
this certification are set forth in the Small Business Act, SBA
regulations (13 CFR part 121), the SBIR/STTR Policy Directive and also
any statutory and regulatory provisions referenced in those
authorities.
If the Funding Agreement officer believes that the business may not
meet certain eligibility requirements at the time of award, he/she is
required to file
[[Page 12841]]
a size protest with the U.S. Small Business Administration (SBA), which
will determine eligibility. At that time, SBA will request further
clarification and supporting documentation in order to assist in the
verification of any of the information provided as part of a protest.
If the Funding Agreement officer believes, after award, that the
business is not meeting certain Funding Agreement requirements, the
agency may request further clarification and supporting documentation
in order to assist in the verification of any of the information
provided.
Even if correct information has been included in other materials
submitted to the Federal Government, any action taken with respect to
this certification does not affect the Government's right to pursue
criminal, civil or administrative remedies for incorrect or incomplete
information given in the certification. Each person signing this
certification may be prosecuted if they have provided false
information.
[[Page 12842]]
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[[Page 12843]]
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BILLING CODE 8025-01-C
Sec. 3. Proposal Preparation Instructions and Requirements. The
purpose of this section is to inform the Applicant on what to include
in the proposal and to set forth limits on what may be included. It
should also provide guidance to assist Applicants, particularly those
that may not have previous Government experience, in improving the
quality and acceptance of proposals.
(a) Limitations on Length of Proposal. Include at least the
following information:
(1) SBIR/STTR Phase I proposals must not exceed a total of 25
pages, including cover page, budget, and all enclosures or attachments,
unless stated otherwise in the agency solicitation. Pages should be of
standard size (8 1/2'' x 11''; 21.6 cm x 27.9 cm) and should conform to
the standard formatting instructions. Margins should be 2.5 cm and type
at least 10 point font.
(2) A notice that no additional attachments, appendices, or
references beyond the 25-page limitation shall be considered in
proposal evaluation (unless specifically solicited by an agency) and
that proposals in excess of
[[Page 12844]]
the page limitation shall not be considered for review or award.
(b) Proposal Cover Sheet. Every Applicant is required to provide a
copy of its registration information printed from the Company Registry
unless the information can be transmitted automatically to SBIR/STTR
Participating Agencies. Every Applicant must also include at least the
following information on the first page of proposals. Items 8 and 9 are
for statistical purposes only.
(1) Agency and Program Solicitation Number or Year.
(2) Topic Number or Letter.
(3) Subtopic Number or Letter.
(4) Topic Area.
(5) Project Title.
(6) Name and Complete Address of SBC.
(7) Disclosure permission (by statement or checkbox), such as
follows, must be included at the discretion of the funding agency:
``Will you permit the Federal Government to disclose the name,
address, and telephone number of the corporate official of your
concern, if your proposal does not result in an award, to appropriate
local and State-level economic development organizations that may be
interested in contacting you for further information? [ballot] Yes
[ballot] No''
(8) Signature of a company official of the proposing Small Business
Concern and that individual's typed name, title, address, telephone
number, and date of signature.
(9) Signature of Principal Investigator or Project Manager within
the proposing Small Business Concern and that individual's typed name,
title, address, telephone number, and date of signature.
(10) Legend for proprietary information as described in the
``Considerations'' section of this Program Solicitation if appropriate.
This may also be noted by asterisks in the margins on proposal pages.
(c) Data Collection Requirement.
(1) Each Phase I and Phase II Applicant is required to provide
information for SBA's database (www.SBIR.gov). The following are
examples of the data to be entered by Applicants into the database:
(i) Any business concern or subsidiary established for the
commercial application of a product or service for which an SBIR or
STTR award is made.
(ii) Revenue from the sale of new products or services resulting
from the research conducted under each Phase II award;
(iii) Additional investment from any source, other than Phase I or
Phase II awards, to further the research and development conducted
under each Phase II award.
(iv) Update the information in the database for any prior Phase II
award received by the SBC. The SBC may apportion sales or additional
investment information relating to more than one Phase II award among
those awards, if it notes the apportionment for each award.
(2) Each Phase II Awardee is required to update the appropriate
information on the award in the database upon completion of the last
deliverable under the Funding Agreement and is requested to voluntarily
update the information in the database annually thereafter for a
minimum period of 5 years.
(d) Abstract or Summary. Applicants will be required to include a
one-page project summary of the proposed R/R&D including at least the
following:
(1) Name and complete address of SBC.
(2) Name and title of Principal Investigator/Project Manager.
(3) Participating Agency name, Program Solicitation number, and
Program Solicitation topic and subtopic.
(4) Title of project.
(5) Technical abstract limited to two hundred words.
(6) Summary of the anticipated results and implications of the
approach (both Phases I and II) and the potential commercial
applications of the research.
(e) Technical Content. SBIR or STTR Program Solicitations must
require, as a minimum, the following to be included in proposals
submitted thereunder:
(1) Identification and Significance of the Problem or Opportunity.
A clear statement of the specific technical problem or opportunity
addressed.
(2) Phase I Technical Objectives. State the specific objectives of
the Phase I research and development effort, including the technical
questions it will try to answer to determine the feasibility of the
proposed approach.
(3) Phase I Work Plan. Include a detailed description of the Phase
I R/R&D plan. The plan should indicate what will be done, where it will
be done, and how the R/R&D will be carried out. Phase I R/R&D should
address the objectives and the questions cited in (e)(2) immediately
above. The methods planned to achieve each objective or task should be
discussed in detail.
(4) Related R/R&D. Describe significant R/R&D that is directly
related to the proposal, including any conducted by the Principal
Investigator/Project Manager or by the proposing SBC. Describe how it
relates to the proposed effort, and any planned coordination with
outside sources. The Applicant must persuade reviewers of his or her
awareness of key, recent R/R&D conducted by others in the specific
topic area.
(5) Key Individuals and Bibliography of Directly Related Work.
Identify Key Individuals involved in Phase I including their directly-
related education, experience, and bibliographic information. Where
vitae are extensive, summaries that focus on the most relevant
experience or publications are desired and may be necessary to meet
proposal size limitation.
(6) Relationship with Future R/R&D.
(i) State the anticipated results of the proposed approach if the
project is successful (Phase I and II).
(ii) Discuss the significance of the Phase I effort in providing a
foundation for the Phase II R/R&D effort.
(7) Facilities. A detailed description, availability and location
of instrumentation and physical facilities proposed for Phase I should
be provided.
(8) Consultants. Involvement of consultants in the planning and
research stages of the project is permitted. If such involvement is
intended, it should be described in detail.
(9) Potential Post Applications. Briefly describe:
(i) Whether and by what means the proposed project appears to have
potential commercial application.
(ii) Whether and by what means the proposed project appears to have
potential use by the Federal Government.
(10) Similar Proposals or Awards. WARNING--While it is permissible
with proposal notification to submit identical proposals or proposals
containing a significant amount of Essentially Equivalent Work for
consideration under numerous Federal Agency Program Solicitations, it
is unlawful to enter into Funding Agreements requiring Essentially
Equivalent Work. If there is any question concerning this, it must be
disclosed to the soliciting agency or agencies before award. If an
Applicant elects to submit identical proposals or proposals containing
a significant amount of Essentially Equivalent Work under other Federal
Agency Program Solicitations, a statement must be included in each such
proposal indicating:
(i) The name and address of the Federal Agencies to which proposals
were submitted or from which awards were received.
[[Page 12845]]
(ii) Date of proposal submission or date of award.
(iii) Title, number, and date of Program Solicitations under which
proposals were submitted or awards received.
(iv) The specific applicable research topics for each proposal
submitted or award received.
(v) Titles of research projects.
(vi) Name and title of Principal Investigator/Project Manager for
each proposal submitted or award received.
(11) Prior SBIR Phase II Awards. If the SBC has received more than
15 Phase II awards in the prior 5 fiscal years, the SBC must submit in
its Phase I proposal: Name of the awarding agency; date of award;
Funding Agreement number; amount of award; topic or subtopic title;
follow-on agreement amount; source and date of commitment; and current
Commercialization status for each Phase II award. (This required
proposal information will not be counted toward the proposal pages
limitation.)
(f) Cost Breakdown/Proposed Budget. The solicitation will require
the submission of simplified cost or budget data.
Sec. 4. Method of Selection and Evaluation Criteria.
(a) Standard Statement. Essentially, the following statement must
be included in all SBIR or STTR Program Solicitations:
All Phase I and II proposals will be evaluated and judged on a
competitive basis. Proposals will be initially screened to determine
responsiveness. Proposals passing this initial screening will be
technically evaluated by engineers or scientists to determine the
most promising technical and scientific approaches. Each proposal
will be judged on its own merit. The Federal Agency is under no
obligation to fund any proposal or any specific number of proposals
in a given topic. It also may elect to fund several or none of the
proposed approaches to the same topic or subtopic.
(b) Evaluation Criteria.
(1) The SBIR/STTR Participating Agency must develop a standardized
method in its evaluation process that will consider, at a minimum, the
following factors:
(i) The technical approach and the anticipated agency and
commercial benefits that may be derived from the research.
(ii) The adequacy of the proposed effort, and its relationship to
the fulfillment of requirements of the research topic or subtopics.
(iii) The soundness and technical merit of the proposed approach
and its incremental progress toward topic or subtopic solution.
(iv) Qualifications of the proposed Principal Investigators/Project
Managers, supporting staff, and consultants.
(v) Evaluations of proposals require, among other things,
consideration of a proposal's commercial potential as evidenced by:
(A) The SBC's record of commercializing SBIR or other research,
(B) the existence of Phase II funding commitments from private
sector or non-SBIR funding sources,
(C) the existence of Phase III follow-on commitments for the
subject of the research, and,
(D) the presence of other indicators of the commercial potential of
the idea.
(2) The factors in (b)(1) above and other appropriate evaluation
criteria, if any, must be specified in the ``Method of Selection''
section of SBIR Program Solicitations.
(c) Peer Review. The Program Solicitation must indicate if the
SBIR/STTR Participating Agency contemplates that as a part of the SBIR/
STTR proposal evaluation, it will use external peer review.
(d) Release of Proposal Review Information. After final award
decisions have been announced, the technical evaluations of the
Applicant's proposal may be provided to the Applicant. The identity of
the reviewer must not be disclosed.
Sec. 5. Considerations. This section must include, as a minimum,
the following information:
(a) Awards. Indicate the estimated number and type of awards
anticipated under the particular SBIR/STTR Program Solicitation in
question, including:
(1) Approximate number of Phase I awards expected to be made.
(2) Type of Funding Agreement, that is, contract, grant, or
cooperative agreement.
(3) Whether fee or profit will be allowed.
(4) Cost basis of Funding Agreement, for example, fixed-price, cost
reimbursement, or cost-plus-fixed fee.
(5) Information on the approximate average dollar value of awards
for Phase I and Phase II.
(b) Reports. Describe the frequency and nature of reports that will
be required under Phase I Funding Agreements. Interim reports should be
brief letter reports.
(c) Payment Schedule. Specify the method and frequency of progress
and final payment under Phase I and II Funding Agreements.
(d) Innovations, SBIR/STTR Data Rights, Inventions and Patents.
(1) Proprietary Information in Proposals. The following statement
must be included in all SBIR/STTR Program Solicitations:
``Information contained in unsuccessful proposals will remain the
property of the Applicant. The Federal Government may, however, retain
copies of all proposals. Public release of information in any proposal
submitted will be subject to existing statutory and regulatory
requirements. If proprietary information is provided by an Applicant in
a proposal, which constitutes a trade secret, commercial or financial
information, it will be treated in confidence, to the extent permitted
by law, provided that the proposal is clearly marked by the Applicant
as follows:
(A) The following legend must appear on the title page of the
proposal:
This proposal contains information that shall not be disclosed
outside the Federal Government and shall not be duplicated, used, or
disclosed in whole or in part for any purpose other than evaluation
of this proposal, unless authorized by law The Government shall have
the right to duplicate, use, or disclose the data to the extent
provided in the resulting contract if award is made as a result of
the submission of this proposal . . . The information subject to
these restrictions are contained on all pages of the proposal except
for pages [insert page numbers or other identification of pages that
contain no restricted information.]
(End of Legend); and
(B) The following legend must appear on each page of the proposal
that contains information the Applicant wishes to protect:
Use or disclosure of information contained on this sheet is subject
to the restriction on the title page of this proposal.
(2) Alternative To Minimize Proprietary Information. Agencies may
elect to instruct Applicants to limit proprietary information to only
that absolutely essential to their proposal.
(3) SBIR/STTR Data Rights Clause. Participating Agencies must
include a clause in their SBIR and STTR Program Solicitations and
resulting Funding Agreements that reflects the following necessary
elements:
SBIR/STTR Data Rights Clause
(a) Definitions.
(1) Computer Software. Computer programs, source code, source code
listings, object code listings, design details, algorithms, processes,
flow charts, formulae, and related material that would enable the
software to be reproduced, recreated, or recompiled. Computer Software
does not include Computer Databases or Computer Software Documentation.
(2) Data. All recorded information, regardless of the form or
method of recording or the media on which it may
[[Page 12846]]
be recorded. The term does not include information incidental to
contract or grant administration, such as financial, administrative,
cost or pricing or management information.
(3) Form, Fit, and Function Data. Data relating to items,
components, or processes that are sufficient to enable physical and
functional interchangeability, and data identifying source, size,
configuration, mating and attachment characteristics, functional
characteristics, and performance requirements. For Computer Software it
means data identifying source, functional characteristics, and
performance requirements, but specifically excludes the source code,
algorithms, processes, formulas, and flow charts of the software.
(4) Government Purpose. Any activity in which the United States
Government is a party, including cooperative agreements with
international or multi-national defense organizations or sales or
transfers by the United States Government to foreign governments or
international organizations. Government Purposes include competitive
procurement, but do not include the rights to use, modify, reproduce,
release, perform, display, or disclose Technical Data or Computer
Software for commercial purposes or authorize others to do so.
(5) Operations, Maintenance, Installation, or Training Purposes
(OMIT) Data. Data that is necessary for operation, maintenance,
installation, or training purposes (but not including detailed
manufacturing or process data).
(6) SBIR/STTR Computer Software Rights. The Federal Government's
rights during the SBIR/STTR Protection Period in specific types of
SBIR/STTR Data that are Computer Software.
(A) The Federal Government may use, modify, reproduce, release,
perform, display, or disclose SBIR/STTR Data that are Computer Software
within the Government. The Federal Government may exercise SBIR/STTR
Computer Software Rights within the Government for:
(1) Use in Federal Government computers;
(2) Modification, adaptation, or combination with other Computer
Software, provided that the Data incorporated into any derivative
software are subject to the rights in Sec. 3(ee) of the SBIR/STTR
Policy Directive and that the derivative software is marked as
containing SBIR/STTR Data;
(3) Archive or backup; or
(4) Distribution of a computer program to another Federal agency,
without further permission of the Awardee, if the Awardee is notified
of the distribution and the identity of the recipient prior to the
distribution, and a copy of the SBIR/STTR Computer Software Rights
included in the Funding Agreement is provided to the recipient.
(B) The Federal Government shall not release, disclose, or permit
access to SBIR/STTR Data that is Computer Software for commercial,
manufacturing, or procurement purposes without the written permission
of the Awardee. The Federal Government shall not release, disclose, or
permit access to SBIR/STTR Data outside the Government without the
written permission of the Awardee unless:
(i) The non-Governmental entity has entered into a non-disclosure
agreement with the Government that complies with the terms for such
agreements outlined in Sec. 8 of the SBIR/STTR Policy Directive; and
(ii) The release or disclosure is--
(I) To a Federal Government support service contractor or their
subcontractor for purposes of supporting Government internal use or
activities, including evaluation, diagnosis and correction of
deficiencies, and adaptation, combination, or integration with other
Computer Software provided that SBIR/STTR Data incorporated into any
derivative software are subject to the rights in Sec. 3(ee) of the
SBIR/STTR Policy Directive; or
(II) Necessary to support certain narrowly-tailored essential
Government activities for which law or regulation permits access of a
non-Government entity to a contractors' data developed exclusively at
private expense, non-SBIR/STTR Data, such as for emergency repair and
overhaul.
(7) SBIR/STTR Data. All Data developed or generated in the
performance of an SBIR or STTR award, including Technical Data and
Computer Software developed or generated in the performance of an SBIR
or STTR award. The term does not include information incidental to
contract or grant administration, such as financial, administrative,
cost or pricing or management information.
(8) SBIR/STTR Data Rights. The Federal Government's license rights
in properly marked SBIR/STTR Data during the SBIR/STTR Protection
Period are as follows: SBIR/STTR Technical Data Rights in SBIR/STTR
Data that are Technical Data or any other type of Data other than
Computer Software; and SBIR/STTR Computer Software Rights in SBIR/STTR
Data that is Computer Software. Upon expiration of the protection
period for SBIR/STTR Data, the Federal Government has a royalty-free
license to use, and to authorize others to use on its behalf, these
data for Government Purposes, and is relieved of all disclosure
prohibitions and assumes no liability for unauthorized use of these
data by third parties. The Federal Government receives Unlimited Rights
in Form Fit, and Function Data, OMIT Data, and all unmarked SBIR/STTR
Data.
(9) SBIR/STTR Protection Period. The period of time during which
the Federal Government is obligated to protect SBIR/STTR Data against
unauthorized use and disclosure in accordance with SBIR/STTR Data
Rights. The SBIR/STTR Protection Period begins at award of an SBIR/STTR
Funding Agreement and ends not less than twenty years from that date
(See Sec. 8(b)(4) of the SBIR/STTR Policy Directive).
(10) SBIR/STTR Technical Data Rights. The Federal Government's
rights during the SBIR/STTR Protection Period in SBIR/STTR Data that
are Technical Data or any other type of Data other than Computer
Software.
(A) The Federal Government may, use, modify, reproduce, perform,
display, release, or disclose SBIR/STTR Data that are Technical Data
within the Government; however, the Government shall not use, release,
or disclose the data for procurement, manufacturing, or commercial
purposes; or release or disclose the SBIR/STTR Data outside the
Government except as permitted by paragraph (B) below or by written
permission of the Awardee.
(B) SBIR/STTR Data that are Technical Data may be released outside
the Federal Government without any additional written permission of the
Awardee only if the non-Governmental entity or foreign government has
entered into a non-disclosure agreement with the Federal Government
that complies with the terms for such agreements outlined in Sec. 8 of
the SBIR/STTR Policy Directive and the release is:
(i) Necessary to support certain narrowly-tailored essential
Government activities for which law or regulation permits access of a
non-Government entity to a contractors' data developed exclusively at
private expense, non-SBIR/STTR Data, such as for emergency repair and
overhaul;
(ii) To a Government support services contractor in the performance
of a Government support services contract for internal Government use
or activities, including evaluation, diagnosis or modification,
provided that SBIR/STTR Technical Data incorporated into any derivative
Data are subject to the rights in Sec. 3(ii) of the SBIR/STTR Policy
Directive, and the release is not
[[Page 12847]]
for commercial purposes or manufacture;
(iii) To a foreign government for purposes of information and
evaluation if required to serve the interests of the U.S. Government;
or
(iv) To non-Government entities or individuals for purposes of
evaluation.
(11) Technical Data. Recorded information, regardless of the form
or method of the recording, of a scientific or technical nature
(including Computer Software Documentation and Computer Databases). The
term does not include Computer Software or financial, administrative,
cost or pricing, or management information, or other data incidental to
contract or grant administration. The term includes recorded Data of a
scientific or technical nature that is included in Computer Databases.
(12) Unlimited Rights. The Government's rights to access, use,
modify, prepare derivative works, reproduce, release, perform, display,
disclose, or distribute Data in whole or in part, in any manner and for
any purpose whatsoever, and to have or authorize others to do so.
(b) Allocation of SBIR/STTR Data Rights.
(1) An SBC retains ownership of all SBIR/STTR Data it develops or
generates in the performance of an SBIR/STTR award. The SBC retains all
rights in SBIR/STTR Data that are not granted to the Federal Government
in accordance with the SBIR/STTR Policy Directive. These rights of the
SBC do not expire.
(2) During the SBIR/STTR Protection Period, the Federal Government
receives SBIR/STTR Technical Data Rights in appropriately marked SBIR/
STTR Data that is Technical Data or any other type of Data other than
Computer Software; and SBIR/STTR Computer Software Rights in
appropriately marked SBIR/STTR Data that is Computer Software.
(3) After the protection period, the Federal Government may use,
and authorize others to use on its behalf, for Government Purposes,
SBIR/STTR Data that was protected during the SBIR/STTR Protection
Period. Awards issued by the U.S. Department of Energy are subject to
Unlimited Rights after the expiration of the SBIR/STTR Protection
Period.
(4) The Federal Government receives Unlimited Rights in Form Fit,
and Function Data, OMIT Data, and all unmarked SBIR/STTR Data
(c) Identification and Delivery of SBIR/STTR Data. Any SBIR/STTR
Data delivered by the Awardee, and in which the Awardee intends to
limit the Federal Government's rights to SBIR/STTR Data Rights, must be
delivered with restrictive markings. The Federal Government assumes no
liability for the access, use, modification, reproduction, release,
performance, display, disclosure, or distribution of SBIR/STTR Data
without markings. The Awardee or its subcontractors or suppliers shall
conspicuously and legibly mark all such SBIR/STTR Data with the
appropriate legend.
(1) The authorized legend shall be placed on each page of the SBIR/
STTR Data. If only portions of a page are subject to the asserted
restrictions, the SBIR/STTR Awardee shall identify the restricted
portions (e.g., by circling or underscoring with a note or other
appropriate identifier). With respect to SBIR/STTR Data embodied in
Computer Software, the legend shall be placed on: (1) The printed
material or media containing the Computer Software; or (2) the
transmittal document or storage container. The legend shall read as
follows:
SBIR/STTR Data Rights
------------------------------------------------------------------------
------------------------------------------------------------------------
Funding Agreement No..................... .............................
------------------------------------------------------------------------
Award Date............................... .............................
------------------------------------------------------------------------
SBIR/STTR Protection Period.............. .............................
------------------------------------------------------------------------
SBIR/STTR Awardee........................ .............................
------------------------------------------------------------------------
SBIR/STTR Awardee Address................ .............................
------------------------------------------------------------------------
This is SBIR/STTR Data (or is Computer Software or a Prototype
that embodies or includes SBIR/STTR Data) to which the SBIR/STTR
Awardee has SBIR/STTR Data Rights and to which the Federal
Government has received SBIR/STTR Technical Data Rights (or SBIR/
STTR Computer Software Rights) during the SBIR/STTR Protection
Period and rights of use for Government Purposes after the SBIR/STTR
Protection Period, as those terms are defined in the SBIR/STTR
Funding Agreement. Awards issued by the U.S. Department of Energy
are subject to Unlimited Rights after the SBIR/STTR Protection
Period, as that term is defined in the SBIR/STTR Funding Agreement.
Any reproduction of SBIR/STTR Data or portions of such data marked
with this legend must also reproduce the markings.
(End of Legend)
(2) Data submitted without correct or appropriate markings may be
corrected within 6 months from the date the data is delivered.
(d) Relation to patents. Nothing regarding SBIR/STTR Data Rights in
this clause shall imply a license to or imply a requirement to license
to the Federal Government any patent to a Subject Invention (as defined
under the Bayh-Dole Act implemented at 37 CFR 401) made under an SBIR/
STTR award.
(End of Clause)
(4) Copyrights. Include an appropriate statement concerning
copyrights and publications addressing national security
considerations, if any, and the appropriate acknowledgement and
disclaimer statement.
(5) Invention Reporting. Include requirements for reporting
inventions. Include appropriate information concerning the reporting of
inventions, for example:
SBIR/STTR Awardees must report inventions to the awarding agency
within 2 months of the inventor's report to the Awardee.
Note: Many federal agencies require electronic reporting of
inventions and patents made with Federal funds through the
Interagency Invention Reporting System (iEdison) that is maintained
and managed by NIH. The iEdison System is used to satisfy all
invention reporting requirements mandated by an SBIR/STTR award.
Access to iEdison is through a secure interactive internet site,
http://www.iedison.gov. All Federal Agencies are encouraged to use
the iEdison System. In addition to fulfilling reporting
requirements, iEdison notifies the user of future time sensitive
deadlines with enough lead-time to avoid the possibility of loss of
invention or patent ownership or rights.
(e) Cost Sharing. Include a statement essentially as follows:
Cost sharing is permitted for proposals under this Program
Solicitation; however, cost sharing is not required. Cost sharing
will not be an evaluation factor in consideration of your Phase I
proposal.
(f) Profit or Fee. Include a statement on the payment of profit or
fee on awards made under the SBIR/STTR Program Solicitation.
(g) Joint Ventures or Limited Partnerships. Include essentially the
following language:
Joint Ventures and limited partnerships are eligible provided
the entity created qualifies as a Small Business Concern as defined
in this Program Solicitation.
(h) Research and Analytical Work. Include essentially the following
statement:
SBIR:
(1) For Phase I a minimum of two-thirds of the research and/or
analytical effort must be performed by the proposing Small Business
Concern unless otherwise approved in writing by the Funding
Agreement officer after consultation with the agency SBIR program
manager/coordinator.
(2) For Phase II a minimum of one-half of the research and/or
analytical effort must be performed by the proposing Small Business
Concern unless otherwise approved in writing by the Funding
Agreement officer
[[Page 12848]]
after consultation with the agency SBIR program manager/coordinator.
STTR:
For both Phase I and Phase II, not less than 40 percent of the
R/R&D work must be performed by the Small Business Concern, and not
less than 30 percent of the R/R&D work must be performed by a
partnering Research Institution, as defined in this Program
Solicitation.
(i) Awardee Commitments. To meet the legislative requirement that
SBIR/STTR Program Solicitations be simplified, standardized and
uniform, clauses expected to be in or required to be included in SBIR/
STTR Funding Agreements must not be included in full or by reference in
SBIR/STTR Program Solicitations. Rather, Applicants must be advised
that they will be required to make certain legal commitments at the
time of execution of Funding Agreements resulting from SBIR/STTR
Program Solicitations. Essentially, the following statement must be
included in the ``Considerations'' section of SBIR/STTR Program
Solicitations:
Upon award of a Funding Agreement, the Awardee will be required
to make certain legal commitments through acceptance of numerous
clauses in Phase I Funding Agreements. The outline that follows is
illustrative of the types of clauses to which the contractor would
be committed. This list is not a complete list of clauses to be
included in Phase I Funding Agreements, and is not the specific
wording of such clauses. Copies of complete terms and conditions are
available upon request.
(j) Summary Statements. The following are illustrative of the type
of summary statements to be included immediately following the
statement in subparagraph (i). These statements are examples only and
may vary depending upon the type of Funding Agreement used.
(1) Standards of Work. Work performed under the Funding Agreement
must conform to high professional standards.
(2) Inspection. Work performed under the Funding Agreement is
subject to Government inspection and evaluation at all times.
(3) Examination of Records. The Comptroller General (or a duly
authorized representative) must have the right to examine any pertinent
records of the Awardee involving transactions related to this Funding
Agreement.
(4) Default. The Federal Government may terminate the Funding
Agreement if the contractor fails to perform the work contracted.
(5) Termination for Convenience. The Funding Agreement may be
terminated at any time by the Federal Government if it deems
termination to be in its best interest, in which case the Awardee will
be compensated for work performed and for reasonable termination costs.
(6) Disputes. Any dispute concerning the Funding Agreement that
cannot be resolved by agreement must be decided by the contracting
officer with right of appeal.
(7) Contract Work Hours. The Awardee may not require an employee to
work more than 8 hours a day or 40 hours a week unless the employee is
compensated accordingly (for example, overtime pay).
(8) Equal Opportunity. The Awardee will not discriminate against
any employee or applicant for employment because of race, color,
religion, sex, or national origin.
(9) Equal Opportunity for Veterans. The Awardee will not
discriminate against any employee or application for employment because
he or she is a disabled veteran or veteran of the Vietnam era.
(10) Equal Opportunity for People with Disabilities. The Awardee
will not discriminate against any employee or applicant for employment
because he or she is physically or intellectually disabled.
(11) Officials Not To Benefit. No Federal Government official may
benefit personally from the SBIR/STTR Funding Agreement.
(12) Covenant Against Contingent Fees. No person or agency has been
employed to solicit or secure the Funding Agreement upon an
understanding for compensation except bona fide employees or commercial
agencies maintained by the Awardee for the purpose of securing
business.
(13) Gratuities. The Funding Agreement may be terminated by the
Federal Government if any gratuities have been offered to any
representative of the Government to secure the award.
(14) Patent Infringement. The Awardee must report each notice or
claim of patent infringement based on the performance of the Funding
Agreement.
(15) American Made Equipment and Products. When purchasing
equipment or a product under the SBIR/STTR Funding Agreement, purchase
only American-made items whenever possible.
(k) Additional Information. Information pertinent to an
understanding of the administration requirements of SBIR/STTR proposals
and Funding Agreements not included elsewhere must be included in this
section. As a minimum, statements essentially as follows must be
included under ``Additional Information'' in SBIR/STTR Program
Solicitations:
(1) This Program Solicitation is intended for informational
purposes and reflects current planning. If there is any inconsistency
between the information contained herein and the terms of any resulting
SBIR/STTR Funding Agreement, the terms of the Funding Agreement are
controlling.
(2) Before award of an SBIR/STTR Funding Agreement, the Federal
Government may request the Applicant to submit certain organizational,
management, personnel, and financial information to assure
responsibility of the Applicant.
(3) The Federal Government is not responsible for any monies
expended by the Applicant before award of any Funding Agreement.
(4) This Program Solicitation is not an offer by the Federal
Government and does not obligate the Government to make any specific
number of awards. Also, awards under the SBIR/STTR program are
contingent upon the availability of funds.
(5) The SBIR/STTR program is not a substitute for existing
unsolicited proposal mechanisms. Unsolicited proposals must not be
accepted under the SBIR/STTR program in either Phase I or Phase II.
(6) If an award is made pursuant to a proposal submitted under this
SBIR/STTR Program Solicitation, a representative of the contractor or
grantee or party to a cooperative agreement will be required to certify
that the concern has not previously been, nor is currently being, paid
for Essentially Equivalent Work by any Federal Agency.
Sec. 6. Submission of Proposals.
(a) This section must clearly specify the closing date on which all
proposals are due to be received.
(b) This section must specify the number of copies of the proposal
that are to be submitted.
(c) This section must clearly set forth the complete mailing and/or
delivery address(es) where proposals are to be submitted.
(d) This section may include other instructions such as the
following:
(1) Bindings. Please do not use special bindings or covers. Staple
the pages in the upper left corner of the cover sheet of each proposal.
(2) Packaging. All copies of a proposal should be sent in the same
package.
Sec. 7. Scientific and Technical Information Sources. Wherever
descriptions of research topics or subtopics include reference to
publications, information on where such publications will normally be
[[Page 12849]]
available must be included in a separate section of the solicitation
entitled ``Scientific and Technical Information Sources.''
Sec. 8. Submission Forms. Multiple copies of proposal preparation
forms necessary to the contracting and granting process may be
required. This section may include Proposal Summary, Proposal Cover,
Budget, Checklist, and other forms the sole purpose of which is to meet
the mandate of law or regulation and simplify the submission of
proposals.
Sec. 9. Research Topics. Describe sufficiently the R/R&D topics
and subtopics for which proposals are being solicited to inform the
Applicant of technical details of what is desired. Allow flexibility in
order to obtain the greatest degree of creativity and innovation
consistent with the overall objectives of the SBIR/STTR program.
[FR Doc. 2019-06129 Filed 4-1-19; 8:45 am]
BILLING CODE 8025-01-P
