REVISED OCTOBER 2018. This document applies to all NIH grants and cooperative agreements for budget periods beginning on or after October 1, 2018

For-profit, for profit, small business innovation research and small business technology transfer programs, SBIR, STTR, business

18.5 Small Business Innovation Research and Small Business Technology Transfer Programs

NIH is required by statute to reserve a portion of its annual extramural budget for projects under the SBIR and STTR programs. These programs primarily are intended to encourage private-sector commercialization of technology and to increase small business participation in federally funded R&D.

The SBIR and STTR programs were reauthorized by Congress in P.L. 112-81, December 31, 2011. The reauthorization modified several aspects of the programs, including small business eligibility requirements. Updates on reauthorization implementation will be posted on http://sbir.nih.gov. NIH will issue Guide Notice/s to advise the community about the impact on NIH's SBIR and STTR programs.

Both the SBIR and STTR programs consist of the following three phases:

  • Phase I. The objective of this phase is to establish the technical merit and feasibility of proposed research or R&D efforts and to determine the quality of performance of the applicant (small business concern or SBC) before providing further Federal support in Phase II.
  • Phase II. The objective of this phase is to continue the research or R&D efforts initiated in Phase I. Funding will be based on the results of Phase I and the scientific and technical merit and commercial potential of the Phase II application. Only Phase I recipients are eligible to receive Phase II funding. Unless submitted as a Fast-Track application (see here), Phase II applications may be submitted only after the Phase I award is made. NIH expects non Fast-Track Phase II applications to be submitted within the first six receipt dates following expiration of the Phase I budget period, i.e., normally 2 years beyond the completion date of the Phase I award.

Some NIH ICs offer Phase II SBIR/STTR awardees the opportunity to apply for Phase IIB Competing Renewal awards. These are available for those projects that require extraordinary time and effort in the R&D phase and may or may not require FDA approval for the development of such projects, including drugs, devices, vaccines, therapeutics, and medical implants related to the mission of the ICThe NIH organizational component responsible for a particular grant program or set of activities. The terms "NIH IC," or "awarding IC" are used throughout this document to designate a point of contact for advice and interpretation of grant requirements and to establish the focal point for requesting necessary prior approvals or changes in the terms and conditions of award.. Some ICs have announced this opportunity through the NIH Guide for Grants and Contracts and some are using the Omnibus SBIR/STTR Grant Solicitation. Only those small business concerns who have been awarded a Phase II are eligible to apply for a Phase IIB Competing Renewal award. Prospective applicants are strongly encouraged to contact NIH staff prior to submission. Additional requirements and instructions (e.g., submission of a letter of intent) are available in the specific ICThe NIH organizational component responsible for a particular grant program or set of activities. The terms "NIH IC," or "awarding IC" are used throughout this document to designate a point of contact for advice and interpretation of grant requirements and to establish the focal point for requesting necessary prior approvals or changes in the terms and conditions of award. research topics section and in the specific ICThe NIH organizational component responsible for a particular grant program or set of activities. The terms "NIH IC," or "awarding IC" are used throughout this document to designate a point of contact for advice and interpretation of grant requirements and to establish the focal point for requesting necessary prior approvals or changes in the terms and conditions of award. Program Funding Opportunity Announcements.

  • Phase III. The objective of this phase, where appropriate, is for the SBC to pursue, with non-SBIR/STTR funds, the commercialization of the results of the research or R&D funded in Phases I and II.

There are two major differences between the SBIR and STTR programs:

  • Under SBIR Program, the Project Director/Principal Investigator (PD/PI) must have his/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 the PD/PI may have his/her primary employment with either the small business concern or the collaborating research institution. On an STTR project, the PD/PI must devote at least 10 percent of his/her time to the STTR project. For purposes of the SBIR and STTR Programs, personnel obtained through a Professional Employer Organization or other similar personnel leasing company may be considered employees of the awardee. The STTR program requires for both phases I and II that the SBC formally partner with a single, non-profit research institution. At least 40 percent of the STTR research project is to be conducted by the SBC and at least 30 percent of the work is to be conducted by the single, "partnering" research institution through a formal, cooperative arrangement. Such organizations include universities, non-profit hospitals, and other non-profit research organizations as well as Federally Funded Research and Development Centers. STTR grants are awarded to the SBC, which will receive all of the funding for the project and disburse the appropriate funding to the research institution. The SBIR program allows subcontracting, it does not require it so the SBC may conduct the entire SBIR project without outside collaboration.

SBIR/STTR program policy now allows the following:

  • Phase I STTR Awardees may apply for NIH SBIR or STTR Phase II.
  • Phase I SBIR Awardees may apply for NIH SBIR or STTR Phase II.
  • Phase II STTR Awardees may apply for NIH SBIR or STTR Phase IIB.
  • Phase II SBIR Awardees may apply for NIH SBIR or STTR Phase IIB.

Applicants may ‘switch' programs to any active and open NIH SBIR or STTR solicitation, including the Omnibus and any targeted funding opportunity.

Note: There are distinct policies for each program-SBIR and STTR-and each phase within these programs. Applicants that ‘switch' programs must comply with the policies for the program and FOA to which they submit the application. See 18.5.5.4 SBIR Life Cycle Certification and Sec. 18.5.5.5 STTR Life Cycle Certification for further information.

  • NIH launched a pilot project in February 2014 (PAR-14-088) allowing an eligible small business entity to apply directly to Phase II if it had already completed Phase I-like research and development work using funding from sources other than the SBIR/STTR program. Small business concerns (SBCs) eligible to submit Phase II applications for projects that were supported with a Phase I SBIR or STTR award from NIH or any other agency are expected to submit the regular Phase II application through SBIR/STTR solicitations as "Renewal" applications based on the awarded Phase I SBIR or STTR project. Only one Phase II application may be awarded for a specific project supported by a Phase I award. NIH policies regarding overlapping applications (Sec. 2.3.7.4) still apply. A Phase II awardee may receive one additional, sequential Phase II award (called the NIH Phase IIB) to continue the work of an initial Phase II award.