The SBIR and STTR Programs
The SBIR and STTR FAQs
Useful STTR and SBIR Links
Advanced Technology Program
Advanced Technology Program FAQs
Advanced Technology Program Useful Links

Do Research Funding Programs Exist That Can Bridge Academic Research and Commercial Investment?

Yes, there are two grant funding programs under the U.S. Small Business Administration, and one under the U.S. Dept. of Commerce, that can potentially provide researchers and entrepreneurs with R&D funding with which to develop research for growing commercial ventures. This allows faculty researchers to move their ideas beyond the laboratory into a commercial domain while continuing to further develop those ideas in the process.

The Small Business Technology Transfer (STTR) and Small Business Innovative Research (SBIR) programs are both highly competitive funding opportunities that encourage small businesses to explore their technological potential, stimulate high-tech innovation and commercial development, and help the United States meet its specific R&D needs. The Advanced Technology Program (ATP) of the National Institute of Standards and Technology also seeks to fund innovative technologies through partnerships with the private sector, but with an eye toward comprehensive, "platform" technologies having high potentials for financial success.

Rice researchers may find these programs to be valuable sources of "early-stage" funding, especially as their laboratory research innovations necessitate more development in commercial areas. Likewise, Rice's "start-up" companies will recognize that these programs can provide crucial "gap-funding" opportunities, where outside investment and sales revenues fall short. By serving as a collaborator, consultant, or principal investigator, interested university faculty can gain long-term financial and scientific benefits. Collaboration with a company also offers access to company resources and expertise, and possibly careers for graduate students and postdoctoral fellows. As research institutions, like Rice, are becoming more committed to innovation and entrepreneurship to enhance the economic development of their regions, these programs will contribute to business development directly.

The following information provides some background on the STTR & SBIR programs, the ATP, and some guidelines for applying for those grants. The Office of Technology Transfer can assist researchers in developing a commercialization strategy that may include STTR & SBIR funding, as well as forming STTR & SBIR partnerships with small businesses.

The SBIR and STTR Programs

Since its enactment in 1982, as part of the Small Business Innovation Development Act, SBIR has helped thousands of small businesses to compete for federal research and development awards. Under SBIR, companies apply first for a six-month Phase I award of up to $100,000 to test the scientific, technical, and commercial merit and feasibility of a particular concept. If Phase I proves successful, the company may be invited to apply for a two-year Phase II award of $500,000 to $750,000 or more to further develop the concept, usually to the prototype stage. The STTR program, similar in structure to SBIR, was mandated by Congress in 1992 as a vehicle for moving ideas from U.S. research institutions to the market, where they can benefit both private sector and military customers. Proposals to both programs may request longer periods of time and greater amounts of funds necessary for completion of the project for Phase I and Phase II. Under the Small Business Reauthorization Acts of 2000 and 2001, SBIR and STTR funding is continued through September 2008 and 2009, respectively. All intellectual property from SBIR/STTR research is fully owned by the inventors. Both programs mandate that each Federal agency with an extramural R&D budget in excess of $100 million must designate a certain percentage of this budget for awards to small businesses. Currently, there are ten Federal agencies participating in the SBIR program.

The major differences between the two programs are these:

* First, under the SBIR program, the Principal Investigator must have his or her primary employment with the small business concern at the time of award and for the duration of the project period. However, under the STTR program, primary employment is not stipulated as a requirement for designating the Principal Investigator. This means that university faculty can serve as the Principal Investigator on STTR proposals. Ownership of intellectual property rights is formalized in a joint agreement between all partners, prior to the contract assignment.
* Second, the STTR program requires research partners, at universities and other non-profit research institutions, to have a formal collaborative relationship with the small business concern; not participating merely as consultants. Under the SBIR Program, university collaborators are limited to one-third of the contract award in Phase I, and 50% in Phase II. Under the STTR Program, at least 40 percent of research project is to be conducted by the small business concern and at least 30 percent of the work is to be conducted by the single, "partnering" research institution.
* Third, Phase II awards of $500,000 are provided under STTR, and awards of $750,000 are provided under SBIR, for two years each.
* Historically, about 15 to 20 percent of STTR and SBIR proposals are awarded a Phase I contract. In recent years, a much higher percentage of STTR Phase I proposals were awarded a Phase I contract. Approximately 40 percent of Phase I projects subsequently are awarded a Phase II contract.

STTR and SBIR FAQs

What is the STTR Program?
STTR is a highly competitive three-phase program that reserves a specific percentage of Federal research and development funding for award to small businesses in partnership with nonprofit research institutions to move ideas from the laboratory to the marketplace, to foster high-tech economic development and to address the technological needs of the Federal Government.

What is the STTR Program?
STTR is a highly competitive three-phase program that reserves a specific percentage of Federal research and development funding for award to small businesses in partnership with nonprofit research institutions to move ideas from the laboratory to the marketplace, to foster high-tech economic development and to address the technological needs of the Federal Government.

What are the three phases of the STTR Program?
Phase I is the startup phase for the exploration of the scientific, technical, and commercial feasibility of an idea or technology. Awards are for periods of up to one year in amounts up to $100,000. Phase II is to expand Phase I results. During this period the R&D work is performed and the developer begins to consider commercialization potential. Awards are for periods of up to two years in amounts up to $500,000. Phase III is the period during which Phase II innovation moves from the laboratory into the marketplace. There is no STTR funding in this phase.

Who are the Federal participants in the STTR Program?
The following five Federal departments and agencies are eligible to participate: Department of Defense, Department of Energy, National Aeronautics and Space Administration, Department of Health and Human Services, National Science Foundation

Is it required to be an established business to propose an STTR?
No. However, you must be organized as a business at the time of award.

Who can propose for an STTR?
Only small for-profit businesses can propose. The university must play a significant role in the work performed on the project not to exceed 60%.

What are the size criteria to become eligible for an STTR?
A small business concern with 500 or fewer employees including subsidiaries and/or affiliates. The size of the nonprofit collaborator is not relevant

How are future rights to projects developed under STTR determined?
The small business concern and the research institution must develop a written agreement prior to a Phase I award. This agreement must be submitted to the awarding agency if requested.

Can proposal submissions skip Phase I and begin at Phase II in the STTR Program?
No. Phase II awards can only be awarded to firms having successfully completed Phase I at the same awarding agency.

Are subcontracts allowed in STTR -- either party or both?
Yes. Either party may subcontract, the research institution or the small business, or they may jointly fund a subcontractor.

Can a small business concern participate in both SBIR and STTR simultaneously at the same or differing agencies?
Yes, but they may not perform the same or essentially similar work under more than one contract or grant. Collecting funds more than once for the same work is fraud.

Must a successful Phase I small business concern use the same institution in Phase II?
No. The small business concern can change research institutions in Phase II.

Will an unsolicited proposal be accepted in the STTR Program?
No. Proposals must respond to the solicitation as published by one or more of the participating agencies.

Who is the prime contractor or grantee?
The small business concerned.

Does the Principal Investigator need to be employed by the small business?
No. The Principal Investigator can be designated from the research institution or the small business, by the prime contractor.

Must the small business concern and/or the research institution be located in the United States?
Yes. Both the small business concern and the institution must be on U.S. soil.

Can a Phase III follow-on contract for funding be made, without competition, to the firm that successfully completes Phase I and II?
Yes, the firm may be given a sole source contract in Phase III for further work or production.

What is the minimum percent breakout for small firms and institutions in conducting research?
Small business concerns must perform at least 40% and research institutions must perform at least 30% of the work.

Who resolves problems concerning STTR topics, awards, audits, etc.?
The agency issuing the Program Solicitation. SBA handles program policy for across the board uniformity, reporting to Congress and program oversight.

Where can I go for further information on how I get started or if there is other assistance available?
Information can be obtained from SBA Online Bulletin Board by dialing: 1-800-697-4636.

What is the SBIR Program?
The Small Business Innovation Research (SBIR) Program is a highly competitive three-phase award system which provides qualified small business concerns with opportunities to propose innovative ideas that meet the specific research and research and development needs of the Federal Government.

What federal agencies participate in SBIR?
Department of Agriculture, Department of Commerce, Department of Defense, Department of Education, Department of Energy, Department of Health and Human Services, Department of Transportation, Environmental Protection Agency, National Aeronautics and Space Administration, and National Science Foundation.

What is the annual funding amount from all agencies?
A GAO report released in June 1999 stated that the total funding level aggregated from all participating federal agencies is over $1 Billion annually.

Who qualifies for the Small Business Innovation Research Program (SBIR)?
Small businesses must meet certain eligibility criteria to participate in the SBIR program: American-owned and independently operated For-profit Principal researcher employed by business Company size limited to 500 employees.

What are the three phases of the SBIR Program?
Phase I is a feasibility study to evaluate the scientific and technical merit of an idea. Awards are for periods of up to six months in amounts up to $100,000. Phase II is to expand on the results of and further pursue the development of Phase I. Awards are for periods of up to two years in amounts up to $750,000. Phase III is for the commercialization of the results of Phase II and requires the use of private sector or non-SBIR Federal funding.

What is the small business size standard for purposes of the SBIR Program?
A small business concern for purposes of award of any funding agreement under the SBIR Program is one which, including its affiliates, has a number of employees not exceeding 500.

How can a small business concern obtain funding under SBIR?
A small business can obtain funding under SBIR by being the recipient of a competitively awarded SBIR funding agreement.

What is an SBIR funding agreement?
An SBIR funding agreement is a contract or grant entered into between an SBIR participating Federal agency and a small business concern for the performance of experimental, developmental, or research work funded by the Federal Government.

Does the Small Business Administration make any awards under the SBIR Program?
No. The SBA has authority and responsibility for monitoring and coordinating the Government-wide activities of the SBIR Program and reporting its results to Congress. The Federal agencies participating in SBIR have the responsibility for: (a) selecting SBIR topics (b) releasing SBIR solicitations (c) evaluating SBIR proposals (d) awarding SBIR funding agreements on a competitive basis.

Can a firm go directly to a Phase II award without having to compete for Phase I?
No. The SBIR Program was created for new innovations to meet existing Federal R&D needs. The results of a Phase I are a determining factor in deciding whether there will be a Phase II award to continue the effort.

Are foreign-based firms eligible for SBIR awards?
No. To be eligible for award of SBIR funding agreements, a small business concern has to meet the following qualifications: be independently owned and operated principal place of business is located in the United States at least 51 percent owned or in the case of a publicly owned business, at least 51% of its voting stock is owned by United States citizens or lawfully admitted permanent resident aliens.

May a portion of an SBIR award be subcontracted?
For Phase I, a minimum of two thirds of the research and/or analytical effort must be performed by the proposing firm, and for Phase II, a minimum of one-half of the research and/or analytical effort must be performed by the proposing firm.

Are nonprofit concerns eligible for SBIR awards? Not directly. If the nonprofit institution (university, government laboratory, independent research organization) collaborates with a small business concern, up to 33% of the contract can go to the nonprofit institution

Useful STTR and SBIR Links
General Information
The Small Business Administration's SBIR/STTR program site at http://www.sbaonline.sba.gov/SBIR/
Zyn Systems' SBIR Gateway: Information on Solicitations, Grants, and Conferences http://www.zyn.com/sbir/
Jade Research's SBIR Resource Center. SBIR consulting. http://www.win-sbir.com/
Pacific Northwest Laboratory SBIR/STTR Newsletter: http://www.pnl.gov/edo/sbir.stm

Agency STTR/SBIR Sites
The Department of Defense's SBIR/STTR page: http://www.acq.osd.mil/osbp/programs/index.htm#sbir
The NIH's SBIR/STTR page: http://grants.nih.gov/grants/funding/sbir.htm
The EPA's SBIR/STTR page: http://es.epa.gov/ncer/sbir/
NIST SBIR/STTR page: http://patapsco.nist.gov/ts_sbir/
The DOE's SBIR/STTR page: http://sbir.er.doe.gov/sbir/
The NSF's SBIR/STTR page: http://www.eng.nsf.gov/sbir/
SBIR World, An NSF sponsored site: http://www.sbirworld.com/

"Prosperity Through Innovation" the Advanced Technology Program for Rice "Start-Up" Companies

The National Institute of Standards and Technology (NIST) hosts not only its own SBIR program through the Dept. of Commerce, but also the Advanced Technology Program, or ATP. The ATP is structured to favor technologies that hold significant commercial potential and broad national benefit. The ATP is different from SBIR or STTR in that ATP projects focus on the technology needs of industry rather than government. The strength of the commercialization plan weighs heavily as a factor in a proposal's review process. Under the ATP, for-profit companies conceive, propose, co-fund, and execute ATP projects and programs in partnerships with academia, independent research organizations and federal labs. The intellectual property resulting from an ATP project belongs permanently to the small business. Unlike SBIR & STTR Phase II projects, ATP projects do not fund product development, only new technologies, such as those areas Rice's "start-up" companies are constantly exploring. The ATP partners with companies of all sizes, universities and non-profits. However, the ATP program restricts the assignment of intellectual property rights to the for-profit organization(s). Rice "start-up" companies would qualify for that for-profit status. The ATP accepts proposals only in response to specific, published solicitations, and only from "for-profit", American-owned companies. Notices of ATP competitions are published in Commerce Business Daily.

In addition to innovative technologies with the potential for broad national benefits, the ATP looks for:

* Projects where the proposers have a clear vision of the marketplace and a commercialization plan for the proposed technology. (The ATP does not fund product-development or commercialization activities.)
* Projects that have clearly identified the technical risks and propose a credible approach to solving the problems.
* Projects that need the ATP. Projects where the technical risks mean that the project would not be funded at all, or would be funded at a level so low that progress would be too slow to be at the forefront of rapidly evolving world markets.

ATP FAQs

What is the Advanced Technology Program (ATP)?
The Advanced Technology Program (ATP) began in 1990 to provide cost shared funding to industry to accelerate the development and broad dissemination of challenging, high-risk technologies that promise significant commercial payoffs and widespread benefits for the nation. This unique government-industry partnership accelerates the development of emerging or enabling technologies, leading to revolutionary new products, industrial processes and services that can compete in rapidly changing world markets. The program challenges industry to take on higher risk projects with commensurately higher potential payoff to the nation than they would otherwise.

Who may apply?
A single for-profit company and/or an industry-led joint venture may apply and receive the award. Non-profit entities and/or research institutions may participate as collaborators only.

What are the guidelines for preparing an ATP proposal? Detailed instructions for preparing an ATP proposal are provided in the Proposal Preparation Kit. Proposals submitted will be reviewed under a multiple stage and sequential review process to reduce the amount of information required at one time. Required information may be submitted at different stages as determinations are made by the ATP that a proposal has high merit based on the selection criteria. The ATP calls these stages in the review process "gates." A proposal must pass through each gate in order to receive funding.

How many stages are there in this new proposal submission process?
There are four "gates" as follows:

Gate 1: The proposer submits detailed information to address the scientific and technological merit selection criterion. Additionally, the proposer submits preliminary information to address the selection criterion on the potential for broad-based economic benefits. If the information submitted is determined to have high merit, ATP notifies the proposer and requests that the required additional information be submitted for consideration in Gate 2.

Gate 2: The proposer submits more detailed information to address the potential for broad-based economic benefits selection criterion and detailed budget data. If the information submitted is determined to have high merit, ATP notifies the proposer of its selection as a semi-finalist and the proposal proceeds to Gate 3.

Gate 3: The proposer is requested to submit required forms and additional documentation, as necessary, and may be invited to NIST for an oral review. If ATP determines, based on all the information received, that the proposal has high merit to be funded, the proposal is considered a finalist and proceeds to Gate 4.

Gate 4: Final award processing and issuance, if selected.

Can universities, governmental laboratories, and independent research organizations participate?
Universities, governmental laboratories (excluding NIST laboratories), and/or independent research organizations may participate in an ATP project in the following two ways.

First, as subcontractors to a single company or to a joint venture. (Note that if a subcontractor(s) performs the bulk of the R&D tasks, the proposal stands little chance of being selected.)

Second, as additional partners in a joint venture. Any one of these three types of organizations can serve as the catalyst to organize a joint venture. However, of these three organizations, only an independent research organization may (i.e., a university or governmental laboratory may not) submit a proposal on behalf of a joint venture and administer the project.

Will confidential/proprietary information in my proposal be protected?
Yes. Information obtained by ATP on a confidential basis regarding business operations and trade secrets possessed by any company or joint venture (including research university partners) will be protected by the government to the full extent of the law. Such information will be withheld from disclosure under the Freedom of Information Act.

Who retains the rights to the resulting intellectual property from an ATP project?
Pursuant to the ATP statutory and regulatory authorities, title to any inventions arising from an ATP-funded project must be held by a for-profit company or companies incorporated or organized in the United States. A university, governmental laboratory, or independent research organization cannot retain title to patents, although such organizations can receive mutually agreeable payments (either one-time, or continuing) from the company or companies holding title to the patent. A for-profit corporation organized by a university may be considered a for-profit company for the purpose of retaining title to patents arising from an ATP award. In such cases, documentation of the corporation's for-profit status must be provided in the proposal. If your organization plans to be involved in an ATP project, and if your organization is not a for-profit company, make sure your legal department can accept this provision. The ATP cannot waive this legislatively mandated provision. Title to any such invention shall not be transferred or passed, except to a company organized in the United States, until the expiration of the first patent obtained in connection with such invention.

Where can I seek help with preparing my proposal?
Visit the ATP's website at http://www.atp.nist.gov/atp/resources.htm which provides links to State agencies and to other resources, both public and private, that can help proposers develop ATP proposals.

Is there a deadline for submitting an ATP proposal? Yes. Once an ATP solicitation/request for proposals is published, you may submit your proposal until the date specified. ATP solicitations/requests, once released, can be found on the ATP's home page, http://www.atp.nist.gov.

Who is eligible to apply?
Single for-profit companies which are substantially involved in R&D, and industry-led joint ventures may apply for ATP funding. Most ATP joint ventures consist of companies who formally agree to collaborate on the R&D and establish an effective plan to commercialize the technology if successful. In addition to two separately owned for-profit companies, the joint venture may include additional for-profit companies and other organizations which may or may not contribute funds (other than Federal funds) to the project and may perform research.

How much funding can companies receive and do they have to provide cost sharing?
A single company can receive up to $2 million for R&D activities for up to 3 years. ATP funds may only be used to pay for direct costs for single company recipients. Single company recipients are responsible for funding all of their overhead/indirect costs. Small and medium size companies applying as single company proposers are not required to provide cost sharing of direct costs; however, they may pay a portion of the direct costs if they wish, in addition to all indirect costs. Large companies applying as single company proposers, however, must cost share at least 60 percent of the yearly total project costs (direct plus all of the indirect costs). A joint venture can receive funds for R&D activities for up to 5 years with no funding limitation other than the announced availability of funds. Joint ventures must cost share more than 50 percent of the yearly total project costs (direct plus indirect costs).

USEFUL ATP LINKS
ATP Related Sites

NIST ATP site: http://www.atp.nist.gov/
NIST Manufacturing Extension Partnership: http://www.mep.nist.gov