A Winning SBIR Strategy: Connect to the Source NASA’s SBIR and STTR Programs

1. A Winning SBIR Strategy: Connect to the Source NASA’s SBIR and STTR Programs Presented by: Martin Zeller Date: May 25, 2005 U S C E N G I N E E R I N G T E C H N O L O G Y T R A N S F E R C E N T E R A N A S A R E G I O N A L T E C H N O L O G Y T R A N S F E R C E N T E R h t t p : / / w w w . u s c . e d u / g o / t t c

2. NASA’s Technology Transfer Network Northeast RTTC Midwest RTTC Mid- Atlantic RTTC Far West RTTC Southeast RTTC Mid-Continent RTTC

3. NASA Technology Transfer Mechanisms • Licensing of NASA-owned intellectual property • Collaborative arrangements and partnerships • Space Act Agreements • Reimbursable or non-reimbursable • Joint Sponsored Research Agreements • Cooperative agreements and grants • MOU/MOA • SBIR/STTR

4. Objectives of the SBIR Program • Stimulate technological innovation • Use small business to meet federal R&D needs • Increase private sector commercialization derived from federal R&D • Encourage participation by disadvantaged and minority persons in technological innovation

5. SBIR in a Nutshell • SBIR is a federal set-aside funding program for small businesses • Eleven federal agencies solicit proposals for innovative research in areas of interest to the agencies • 2.5 % of agency extramural R&D budget • SBIR funds innovative, high-risk, early-stage technology R&D projects that have potential for commercial success • Eligible small businesses compete for SBIR awards • Over $2 billion in funding is available this year

6. STTR: Companion Program to SBIR • STTR is the Small Business Technology Transfer Program • Five federal agencies participate • Set-aside is only 0.3% of the agencies’ extramural R&D budgets (compared to 2.5% for SBIR) • A small business must form a partnership with a nonprofit research institution to be funded under STTR • The small business is the prime contractor • Goal is to facilitate commercialization of technology developed by a nonprofit research institution through the entrepreneurship of a small business

7. Agency SBIR/STTR Annual Funding Levels Total of all agencies is more than $2 Billion! DoD $1.08 Billion (FY05)--SBIR/STTR DHHS/NIH $631 Million (FY04)--SBIR/STTR NASA $120 Million (FY05)--SBIR/STTR DoE $114 Million (FY05)--SBIR/STTR NSF $103.6 Million (FY03)--SBIR/STTR HSARPA $23 Million (FY05) USDA $18.3 Million (FY05) DoED $8.7 Million (FY02) DoC $8.5 Million (FY04) EPA $6 Million (FY05) DoT $5.3 Million (FY03)

8. Firm Size Distribution* *FY01 Phase I DOD Award Winners Who Participates in SBIR

9. The Three Phases of NASA SBIR/STTR • Phase I: Feasibility Study • SBIR - $70,000 for 6 months • STTR - $100,000 for 12 months • Phase II: Prototype Development • SBIR and STTR - $600,000 for 24 months • Phase III: Commercialization • No SBIR funds available for Phase III • Small business procures other NASA program development funds, product orders, intellectual property licenses, commercial partners, etc.

10. What’s in it for the Small Business? • A source of funds to conduct research and development that a small firm might not otherwise be able to afford • Small business incurs no debt, loss of equity or control of the company • Best utilized by companies that integrate SBIR funds into a strategic plan for growth through new product or service development • Tacit endorsement by the federal government of the small firm’s research qualifications (looks good on the resume) • A chance to become a supplier of specialized products or services to the private sector or back to a government agency (technology infusion) • An opportunity to grow the small business through strategic alliances with larger corporate partners

11. Before You Dive In to NASA SBIR • NASA accepts phase I proposals only during one ten week period each year, usually from July to September • Success is not just about getting phase I and phase II funding • To succeed in SBIR requires following through all the way to commercialization (phase III) • A small business must have a “commercialization mindset” going into phase I to succeed ultimately in SBIR • Do not propose SBIR efforts that distract you from your company’s strategic goals

12. The First Goal of Any SBIR Proposer • Win a phase I award • This is critical since companies can not bypass phase I and jump in at phase II

13. Understand NASA SBIR Technology Needs • Review past solicitations • Get to know your customer • Establish a relationship with relevant NASA sub-topic manager(s) • Get feedback on whether your proposed approach meets a NASA need • Caveat: NASA sub-topic managers are not identified in the SBIR/STTR solicitation • Blackout period when solicitation is open

14. NASA Quirks and Nuances • Only one solicitation per year • Projects are funded by contracts, not grants • No fast track option • Phase I SBIR win rate is about 1:8 • Phase I STTR win rate is about 1:4

15. Prepare High Quality SBIR Proposals • Read and follow the solicitation carefully • Know your customer • Know the evaluation criteria • Get help from other resources

16. Prepare High Quality SBIR Proposals • Read and Follow the Solicitation Carefully • Get it from http://sbir.nasa.gov • The solicitation provides all necessary forms and instructions for preparation, assembly and submission of a proposal • Resist the urge to organize your proposal in a free-form, stream-of-consciousness fashion • Use the section numbering scheme prescribed in the solicitation • The solicitation tells precisely what to cover in each section; so cover it. If a section is not applicable, say so. • Submit on time and meet administrative screening requirements

17. Prepare High Quality SBIR Proposals • Know Your Customer • Use last year’s solicitation to identify topics to which you believe you can be responsive • Use RTTC, NASA SBIR Manager to identify NASA authors of relevant SBIR topics (NASA calls them Sub-Topic Managers) • Establish a relationship with the Sub-Topic Manager. He or she may be your customer if you win an award. • These people can help you understand NASA’s real, sometimes unstated, needs and priorities. • Tailor your SBIR proposal accordingly • Timing is important: Sub-Topic Managers are not available to advise you during the ten-week period each year when NASA is accepting proposals. Plan ahead.

18. Prepare High Quality SBIR Proposals • Know The Evaluation Criteria • The solicitation tells you what the evaluation criteria are • For phase I proposals: • Scientific/technical merit and feasibility (50%) • Experience, qualifications and facilities (25%) • Effectiveness of proposed work plan (25%) • Commercial merit and feasibility (qualitative score, used for breaking ties) • Increase the odds of winning by making your proposal shine in each of these areas • Look outside the company to acquire necessary resources to address deficiencies

19. Prepare High Quality SBIR Proposals • Know and Use SBIR Program Resources • NASA Far West RTTC • NASA SBIR Managers • NASA SBIR website (http://sbir.nasa.gov) • NASA SBIR Solicitation • Participation guide • Previous Award Winners • Successes • Key NASA Contacts • NASA SBIR Support contractor • REI Systems

20. For Further Information . . . • NASA Far West Regional Technology Transfer Center • http://www.usc.edu/go/ttc • 213-743-2353 • 800-642-2872 • nasa@usc.edu

21. For Further Information . . . NASA SBIR Websitehttp://sbir.nasa.gov