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What is a Small Business Innovation Research (SBIR) and why should I care?

Updated: Mar 22, 2021




Small Business Innovation Research (SBIRs) are a great tool to accelerate the growth of your company. A SBIR is essentially the U.S. government giving you seed money for your technology or capability without taking any ownership or stock of your organization. The value of a SBIR varies by phase and organization i.e. a USAF Phase I SBIR is worth up to $50K over 3 months while a Navy Phase I SBIR is worth up to $250K over a 12 month period. The SBIR 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.


There are three SBIR phases. It not necessary to win all three, you can go direct to a Phase II and or you can go from a Phase I to a Phase III. The phases can be seen below:


- Phase I: The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed Research and or 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 3 - 12 months.


- Phase II: The objective of Phase II is to continue the Research and or 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. SBIR Phase II awards are generally $750,000 for 2 years, however they can be higher depending on additional funding.


In addition to a Phase II, there is a Tactical Funding Increase (TACFI) and Strategic Funding Increase (STRATFI) which serves as a plus up for a Phase II effort. TACFI ranges from $375K to $1.7M of SBIR funding and STRATFI ranges from $3M to $15M of SBIR funding.


- Phase III: The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I and or II Research and or R&D activities. The SBIR programs do not fund Phase III. Phase IIIs can accept any non-SBIR funding.


SBIRs can be great for new companies or established companies interested in breaking into the government space. Keep in mind that the instructions for SBIRs vary by organization and change frequently, sometimes even in the middle of a SBIR window.


Our defense industry consultants have decades of defense industry knowledge from all angles; end users, government program managers and contracting officers, and defense executives. We have led innovators to success and have won them over $30M+ in contracts including a STRATFI in 2020. S2RC can help guide you through the SBIR process by:


- Managing your proposal effort

- Writing all or some of your proposal

- Reviewing your proposal

- Providing copy editing

- Guiding you through the Defense SBIR/STTR Innovation Portal (DSIP) process

- Building or reviewing your Cost Volume

- Securing Memorandums of Understanding (MOUs)

- Conducting business development in support of your SBIR efforts Feel free to contact us if you have any questions!

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