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For Researchers:

Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) grant

panel of researchers speaking at a workshop

James Zavislan, associate dean of the Hajim School, and associate professor of Optics, of Dermatology, of Ophthalmology and of Biomedical Engineering, shares advice on applying for SBIR/STTR grants at a faculty workshop in April 2013.


About the programs / Am I eligible?
How do I find a business to work with? / How do I get started?
Key differences between SBIR and STTR / PI requirements
Issues to consider and potential risks / Questions?

To both increase awareness of SBIR/STTR funding opportunities and to also clearly outline issues to consider with these programs, this memo and guidance was provided in July 2013.

About the programs

The highly competitive Small Business Innovation Research (SBIR) program encourages domestic small business concerns (SBCs) to engage in Federal Research and Development (R&D) that has the potential for commercialization. Through a competitive awards-based program, SBIR enables small businesses to explore their technological potential and provides the incentive to profit from its commercialization.

The program is structured in three phases: Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed R&D efforts and to determine the quality of performance of the small business awardee prior to providing further federal support in Phase II. In Phase III, which is not federally funded, the business pursues commercialization based on Phase I/II R&D activities.

Small businesses may collaborate with a research institution in Phase I and Phase II.

Learn more about the SBIR program

Small Business Technology Transfer (STTR) is another program that expands funding opportunities in the federal innovation research and development (R&D) arena. Central to the program is expansion of the public-private sector partnership to include the joint venture opportunities for small businesses and nonprofit research institutions. The STTR program uses the same three-phase structure as the SBIR program (see above).

The unique feature of the STTR program is the requirement for the small business to formally collaborate with a research institution in Phase I and Phase II.

Learn more about the STTR program

The Small Business Administration (SBA) serves as the coordinating agency for both of these programs, which total more than $2 billon. Each year, federal agencies with extramural R&D budgets that exceed $100 million are required to allocate 2.5 percent of their R&D budget (0.3 percent for STTR)to these programs. These agency set-asides are scheduled to increase each year through FY 2017, when 3.2 percent will be set aside for SBIR and 0.45 percent for STTR.




Am I eligible?

In general, University of Rochester faculty members, staff and studentsare eligible to serve as a PI for an STTR award. Faculty can serve as aconsultant on an SBIR award, or a PI for an SBIR subaward. Please review the SBIR/STTR program elements and requirements outlined below and in the memo and guidance. Contact the Office of Research and Project Administration (ORPA) at (585) 275-4031 or resadmin@orpa.rochester.edu to confirm eligibility.




How do I find a business to work with?

Check with companies you already have a working relationship with to explore opportunities. Search and review companies that have received SBIR/STTR grants for leads. The Center for Emerging and Innovative Sciences , the Center for Medical Technology and Innovation, the Clinical and Translational Science Institute, the Center for Entrepreneurship, and High Tech Rochester are also good sources for corporate connections. Additionally, Hajim School Senior Design Projects often involve collaboration with local companies.




How do I get started?

Anyone considering collaboration with a small business through the SBIR/STTR program should contact the Office of Research and Project Administration (ORPA) early in the process to discuss requirements, eligibility and negotiations with the business. ORPA staff negotiates the written subcontract agreements with the small business. The agreement includes the scope of work, deliverables, reporting requirements, intellectual property terms, and other obligations. Please contact your ORPA research administrator for assistance.




Key differences between SBIR and STTR

SBIR Program

  • The principal investigator (PI) must be primarily employed by the Small Business Concern (SBC)
  • Phase I awards are for periods up to six months (up to $150K)
  • During Phase I, a maximum of 33% of grant may be subcontracted to other organizations, such as the UR
  • Phase II awards are for periods up to two years (up to $1M)
  • During Phase II, a maximum of 50% of grant may be subcontracted

STTR Program

  • PI’s primary employment is not stipulated, which means that UR faculty, staff, or students may be the PI
  • Phase I awards are for periods up to one year (up to $150K)
  • Phase II awards are for periods up to two years (up to $1M)
  • During Phase I and Phase II, a minimum of 30% of the grant funding (maximum 60%) must be subcontracted to a research institution (i.e., SBC must have formal collaboration with non-profit research institution/university at time of award and for the duration of the award)



PI Requirements

  • Under the SBIR program, the PI must have his/her primary employment with the SBC at the time of award and for the duration of the award (e.g., at least 51%)
  • The SBIR PI applicant should not be a UR employee, reflecting both eligibility requirements and UR policy.
  • Under the STTR program, primary employment of the PI with the SBC is not stipulated. The STTR PI applicant can be a UR employee, but should not have a management role in the SBC.
  • The STTR program requires research partners at universities and other non-profit research institutions to have a formal, collaborative relationship with the SBC in place.
  • Consistent with federal guidelines, the PI for the SBIR application and the PI for the subcontract to UR must be different individuals.
  • The PI for the STTR application and the PI for the subcontract to UR will generally be different individuals. Exceptions to this must be approved by the Dean’s Office.



Issues to consider and potential risks

Participating in a SBIR or STTR program can provide a unique opportunity to stimulate collaborations and technology development, but it can also lead to potential conflicts of interest and conflicts of commitment if guidelines are not strictly adhered to. Clear distinctions must exist between activities performed at the UR and activities performed at the small business (SBC) location. The roles of the PIs (and any student involvement) must be clearly delineated.

As a result:

  • SBIR/STTR proposals (including any subcontracts) involving research at UR must be reviewed by the relevant Department chair and appropriate Dean of Research, prior to submission to ORPA. This review is designed to consider:
  • Scientific merit;
  • Appropriate use of UR facilities;
  • Potential conflicts of commitment and conflicts of interest;
  • Unique and appropriate scope of work given other current research projects;
  • Budget consistent with scope of work for UR portion, allows full cost recovery and reflects researchers required effort;
  • Potential impact on any students and postdoctoral researchers involved in the proposed project.
  • If a UR researcher chooses to partner in a phase I SBIR proposal, a consulting relationship should be considered due to the limited funding available for Phase I awards and to provide time to initially begin the collaboration. If a consulting role is selected, however, no University resources can be used by the UR researcher in the performance of the work. Phase II could transition to a sub-award, when the funding and collaboration would be more significant. Note: faculty should not concurrently engage in both activities under the same SBIR award.
  • It is a Federal requirement that some of the research must be conducted by the SBC in facilities that it owns or controls. SBC’s can contact High Tech Rochester to explore options for incubator space. SBC’s are sometimes virtual; UR space cannot be used by the SBC without UR approval, which will be given only in exceptional circumstances. If the UR does allow for the use of space, it must be located apart from the investigator’s UR research labs and the SBC must pay a fair-market value for the lease.
  • UR investigators should not request their graduate students or postdoctoral researchers to serve as a PI for the small business. Further, the roles for students should be closely evaluated for potential conflicts.
  • SBC’s often need assistance in writing and submitting the application. UR personnel should not be used in this role. SBC’s can seek assistance from High Tech Rochester.
  • The SBC may not use UR developed IP, data or technology without an option or license from UR Ventures.
  • UR-based research requires a formal sub-award from the SBC. UR cannot start the research without a formal agreement. SBC’s often do not have grant or legal support.
  • UR-based research funded through the SBIR/STTR award must be conducted according to the requirements of the sub-award and cannot be used as a gift to support the research.
  • SBC’s are often unfamiliar with Federal regulations (e.g., human subjects, COI, export control regulations, financial systems that segregate Federal funding) or may lack the controls to receive Federal funding. UR cannot accept a sub-award if the SBC does not meet eligibility criteria.
  • SBC’s may not spend the UR sub-award funds, and payments from the SBC should be closely monitored.



Questions?

For general questions about the SBIR/STTR programs or this guidance, please contact Scott Steele (scott.steele@rochester.edu) or Gunta Liders (gunta.liders@rochester.edu).

Anyone considering submitting an application through these programs should contact the Office of Research and Project Administration (ORPA)at (585) 275-4031 or resadmin@orpa.rochester.edu.

For questions regarding University of Rochester developed intellectual property or broader technology transfer and commercialization issues, please contact the UR Ventures at (585) 276-6600.

Regional small businesses can seek assistance from High Tech Rochester for incubator space and assistance with the SBIR/STTR application process.