The SBIR and STTR Programs
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are highly competitive programs that encourage domestic small businesses to engage in Federal Research/Research and Development (R/R&D) with the potential for commercialization. Through a competitive awards-based program, SBIR and STTR enable small businesses to explore their technological potential and provide the incentive to profit from its commercialization. By including qualified small businesses in the nation's R&D arena, high-tech innovation is stimulated, and the United States gains entrepreneurial spirit as it meets its specific research and development needs.
Central to the STTR program is the partnership between small businesses and nonprofit research institutions. The STTR program requires the small business to formally collaborate with a research institution in Phase I and Phase II. STTR's most important role is to bridge the gap between performance of basic science and commercialization of resulting innovations.
Mission
The mission of the SBIR/STTR programs is to support scientific excellence and technological innovation through the investment of Federal research funds in critical American priorities to build a strong national economy.
The program's goals are to:
- Stimulate technological innovation.
- Meet Federal research and development needs.
- Foster and encourage participation in innovation and entrepreneurship by women and socially or economically disadvantaged persons.
- Increase private-sector commercialization of innovations derived from Federal research and development funding.
In addition, the STTR program aims to:
- Foster technology transfer through cooperative R&D between small businesses and research institutions.
Eligibility
Only United States small businesses are eligible to participate in the SBIR/STTR programs. A small business must meet the eligibility requirements set forth in 13 CFR 121.702 "What size and eligibility standards are applicable to the SBIR and STTR programs?" at the time of Phase I and II awards, which specify the following criteria
- Organized for profit, with a place of business located in the United States
- More than 50% owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States, or by other small business concerns that are each more than 50% owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States; and
- No more than 500 employees, including affiliates
For SBIR awards from agencies using the authority under 15 U.S.C. 638(dd)(1), an awardee may be owned and controlled by more than one VC, hedge fund, or private equity firm so long as no one such firm owns a majority of the stock.
Phase I awardees with multiple prior awards must meet the benchmark requirements for progress toward commercialization.
For STTR, the partnering nonprofit research institution must also meet certain eligibility criteria:
- Located in the US
-
Meet one of three definitions:
- Nonprofit college or university
- Domestic nonprofit research organization
- Federally funded R&D center (FFRDC)
STTR differs from SBIR in three important aspects:
- The small business awardee and its partnering institution are required to establish an intellectual property agreement detailing the allocation of intellectual property rights and rights to carry out follow-on research, development or commercialization activities.
- STTR requires that the small business perform at least 40% of the R&D and a single partnering research institution perform at least 30% of the R&D.
- The STTR program allows the Principal Investigator to be primarily employed by the partnering research institution.
See the Eligibility Guide for more detailed information.
The Three Phases of SBIR/STTR
The SBIR Program is structured in three phases:
Phase I. The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed R/R&D efforts and to determine the quality of performance of the small business awardee organization prior to providing further Federal support in Phase II. SBIR/STTR Phase I awards are generally $50,000 - $250,000 for 6 months (SBIR) or 1 year (STTR).
Phase II. The objective of Phase II is to continue the R/R&D efforts initiated in Phase I. Funding is based on the results achieved in Phase I and the scientific and technical merit and commercial potential of the project proposed in Phase II. Typically, only Phase I awardees are eligible for a Phase II award. SBIR/STTR Phase II awards are generally $750,000 for 2 years.
Phase III. The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I/II R/R&D activities. The SBIR/STTR programs do not fund Phase III. At some Federal agencies, Phase III may involve follow-on non-SBIR/STTR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.
Award Funding Amounts
The SBIR/STTR Statute (15 U.S.C. §638) establishes cap for the maximum dollar amount of SBIR and STTR awards, above which an agency must request a SBA-approved waiver. SBA shall adjust the maximum dollar amount every year for inflation. The adjusted cap is effective for all solicitations and corresponding topics issued on or after the date of the adjustment. Agencies may amend their solicitation and other program literature accordingly. Agencies have the discretion to issue awards for less than maximum dollar amount. For more information regarding a specific agency's award guidelines, please visit their solicitation and website. Agencies may exceed this cap for a specific topic with approval from SBA prior to the release of the solicitation, award, or modification to the award for a topic issued on or after the date of adjustment.
As of November 2021, agencies may issue a Phase I award (including modifications) up to $275,766 and a Phase II award (including modifications) up to $1,838,436 without seeking SBA approval. Any award above those levels will require a waiver. Agencies considering this authority should review SBIR/STTR Policy Directive §7(i)(4) for additional information.
SBIR/STTR Participating Agencies
Each year, Federal agencies with extramural research and development (R&D) budgets that exceed $100 million are required to allocate 3.2% (since FY2017) of this extramural R&D budget to fund small businesses through the SBIR program. Federal agencies with extramural R&D budgets that exceed $1 billion are required to reserve 0.45% (since FY2016) of this extramural R&D budget for the STTR program. Currently, eleven Federal agencies participate in the SBIR program and five of those agencies also participate in the STTR program.
Each agency administers its own individual program within guidelines established by Congress. These agencies designate R&D topics in their solicitations and accept proposals from small businesses. Awards are made on a competitive basis after proposal evaluation.
SBA Role
The US Small Business Administration serves as the coordinating agency for the SBIR program. It directs the agencies' implementation of SBIR, reviews their progress, and reports annually to Congress on its operation. SBA is also the information link to SBIR program.
For more information on the SBIR Program, please contact:
US Small Business Administration Office of Innovation and Technology 409 Third Street, SW Washington, DC 20416
All of SBA's programs and services are extended to the public on a nondiscriminatory basis.
Policy Directive
The Small Business Act (the Act) requires that the SBA issue a policy directive setting forth guidance to the Federal Agencies participating in the SBIR and STTR programs (Participating Agencies). The SBIR/STTR Policy Directive outlines how agencies must generally conduct their programs. 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.
- 2020 SBIR/STTR Policy Directive (October 1, 2020)
Official Federal Register Notices and Prior SBIR/STTR Policy Directives
2019
- 2019 SBIR/STTR Policy Directive Federal Register Notice
- 2019 SBIR/STTR Policy Directive (May 2, 2019)
2014
- 2014 SBIR Policy Directive Federal Register Notice
- 2014 SBIR Policy Directive (February 24, 2014)
- 2014 STTR Policy Directive Federal Register Notice
- 2014 STTR Policy Directive (February 24, 2014)
- 2014 Appendices
Congressional History
The SBIR program was established under the Small Business Innovation Development Act of 1982 (P.L. 97-219) with the purpose of strengthening the role of innovative small business concerns in Federally-funded research and development (R&D). Through FY2019, over 179,000 awards have been made totaling more than $54.3 billion.
The SBIR program has been reauthorized and extended multiple times since its creation, including in 1992 when Congress passed the Small Business Research and Development Enhancement Act (P.L. 102-564), in 2000 when the program was reauthorized by the Small Business Reauthorization Act of 2000 (P.L. 106-554), and in 2011 through the National Defense Authorization Act for Fiscal Year 2012 (P.L. 112-81). Subsequently, Congress has further modified and extended the program, the most recent of which extends the SBIR program through 2022.
Modeled after the Small Business Innovation Research (SBIR) program, STTR was established as a pilot program by the Small Business Technology Transfer Act of 1992 (Public Law 102-564, Title II). Government agencies with R&D budgets of $1 billion or more are required to set aside a portion of these funds to finance the STTR activity. In 2001, Congress passed the Small Business Reauthorization Act of 1997 (P.L. 105-135). The program was reauthorized again until September 30, 2009, by the Small Business Technology Transfer Program Reauthorization Act of 2001 (P.L.107-50). Subsequently, Congress has passed numerous extensions, the most recent of which extends the STTR program through 2022. The goal of the STTR program is to facilitate the transfer of technology developed by a research institution through the entrepreneurship of a small business concern.
Proof of Concept Partnership Pilot Program
The Phase 0 Proof of Concept Partnership Pilot Program was created through the National Defense Authorization Act for Fiscal Year 2012 (P.L. 112-81), adding section 9(jj) of the Small Business Act (15 U.S.C. 638(jj)). This pilot program allowed the National Institutes of Health (NIH) to use STTR funds to make awards to research institutions to accelerate the creation of small businesses and the commercialization of research innovations. The pilot program was initially authorized through the end of FY 2017, but was subsequently reauthorized through FY 2022 in the John McCain National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515 Sec 854).
