Navy SBIR / STTR Program

Frequently Asked Questions

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 development needs of the Federal Government. The Phase I is typically a study phase to evaluate the scientific merit of the idea and or perform small scale testing. The Phase II is typically a demonstration phase in which prototypes are built and tested. The Phase II usually lasts two years and in the Navy has a base award of $600,000 with a $150,000 option. The Phase III is for production units or additional R&D for a DoD Program. It can be for any amount of money and time period, but can not use SBIR dollars.
Why is there a Phase I option?
Department of Navy awards for phase I base are for periods typically up to six months with a base amount not to exceed $70,000 and the phase I option not to exceed $30,000 for up to three months, with the exception of NAVAIR topics whose base amount should not exceed $80,000 and 6 months, and option that should not exceed $70,000 and 6 months.

The option will typically only be awarded if the company is selected for a phase II award. The option is used to provide the contractor with bridge funding between the end of the Phase I and start of the Phase II. It will not bridge the entire gap, but will reduce the time the company is with out funding while waiting for the Phase II award. It is very important to include the option funding in your original proposal so that it can be awarded as part of the phase I contract. If it is not, your company will not receive the $30,000 in phase I option funding.
Can I submit a Phase I proposal with a base higher than the amounts listed above?
No. The Navy will reject proposals with a base effort higher than the amounts listed.
What is Phase III?
Phase III is any non-SBIR dollars that are provided to the company. The Phase III is the goal of most SBIR projects. It can be Government funds or private sector funding. The success of the Navy SBIR program is measured by companies transition there SBIR efforts into products, tools or services that benefit the Navy acquisition community. One important strength of the SBIR program is that once a company has received a Phase I award the follow-on Phase II and III awards can be awarded in a non competitive process since the competitive process took place under phase I.
Do you have to be a Phase I awardee in order to be considered for Phase II of a project?
Yes.
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. [More information]
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.
Are non-profit concerns eligible for SBIR awards?
No, but they can be subcontractors to a small business.
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.
Can a Federal Agency or individual be a subcontractor or consultant on a SBIR contract?
No. The SBIR program was set up to provide money to small business not back to the Government. If work needs to be provided by a government employee it will be provided under a separate vehicle and with non-SBIR dollars.
What is the difference between SBIR solicitations and the SBIR Pre-Solicitation Announcement?
During the Pre-Solicitation phase the companies can review the topics that most likely will be included in the solicitation and call up the topic authors to further discuss the topic with them. Once the solicitation opens, there can be no direct conversations with the topic authors.

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