SBIR & STTR Policy Directive from the SBA for 2014

The National Defense Authorization Act of 2012 re-authorized the SBIR & STTR programs but also made some changes to the programs.  The SBA published a preliminary Policy Directive on August 6th, 2012 and requested additional comments from Small Businesses.  These comments were collected through October 5th, 2012.  The Policy directive was updated based on these comments and authorized on December 26, 2013 and made effective on January 8, 2014.  These directives now define how the laws passed in the Defense Authorization Act of 2012 will be implemented.  What do these changes mean to small business?  I wanted to summarize the changes here.  ReliAscent will be releasing some Whitepapers on some of the more involved changes.

Here is a quick summary of the changes implemented with the Policy Directive:

  • Funding
    • Set Aside percentages increased
      • SBIR minimum set-aside is 2.9% in FY2014
      • STTR minimum set-aside is 0.4% in FY2014
    • Award sizes
      • STTR awards increased to match SBIR
        • $150,000 for Phase I
        • $1,000,000 for Phase II
        • May not exceed by more than 50% ($225,000 and $1,500,000 respectively)
    • Admin Funding Pilot
      • Agencies can use up to 3% of SBIR/STTR funds to administer the programs
    • Technical Assistance
      • Raised from $4,000 to $5,000 per award per year
  • Eligibility
    • VC Owned firms - limits on amount of ownership and VC firms must register with the Government
    • Company Registry - all applicants required to register at .
    • Cross Program Awards - Phase I & Phase II could be either SBIR or STTR
    • Cross Agency Awards - Phase II may be awarded by different agency than awarded Phase I
    • Direct to Phase II - NIH, DoD & DoEd may issue Phase II without Phase I
    • Open Phase II Competition - All Phase I awardees allowed to apply for Phase II
    • Second Phase II - Agencies may award a second, sequential Phase II to continue a Phase II project
  • Commercialization Standards
    • Phase I to Phase II transition Rate - meet agency specific standards
    • Phase II to Phase III Commercialization Rate - meet agency specific standards
    • Company Commercialization Record - prove commercialization success of past SBIR/STTR awards
  • Streamlining the Award process
  • Data & Reporting
    • Central Data System - Tech-Net database
  • New Measures to Guard Against Fraud, Waste & Abuse
    • Company Certifications - Must certify at time of award and during the award that companies are meeting program requirements
    • Information Systems - Agencies Hotlines
  • Increased Support for Commercialization
    • Technical Assistance
    • Commercialization Readiness Programs
    • Phase III Preference

Some of these changes are obviously great for Small Business, such as the increased amount of budget dollars that are reserved for the programs.  Other directives will add to administrative burdens both on the Government side as well as the Small Business side.  The intent is good, to increase the commercialization potential from the program.  The result could be in more "red tape" that a Small Business must deal with in order to receive these funds.  In my mind this points more and more to the Small Business needing experts to help navigate through all this "red tape".  That is exactly what ReliAscent does to help Small Business.  


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