9. Responsibilities of SBIR Participating Agencies and Departments
(a) The Act requires each agency participating in the SBIR Program
(1) Submit to SBA's Administrator, not later than 4 months after
the date of enactment of its annual Appropriations Act, a report
describing the methodology used for calculating the amount of its
extramural budget. The report must also include an itemization of each
research program excluded from the calculation of its extramural budget
and a brief explanation of why it is excluded.
(2) Unilaterally determine the categories of projects to be
included in its SBIR Program, giving special consideration to broad
research topics and to topics that further one or more critical
technologies, as identified by:
(i) the National Critical Technologies panel (or its successor) in
reports required under 42 U.S.C. 6683, or
(ii) the Secretary of Defense in accordance with 10 U.S.C. 2522.
(3) Release SBIR solicitations in accordance with the SBA master
(4) Unilaterally receive and evaluate proposals resulting from
program solicitations, select awardees, issue funding agreements, and
inform each awardee under such agreement, to the extent possible, of
the expenses of the awardee that will be allowable under the funding
(5) Require a succinct commercialization plan with each proposal
submitted for a Phase II award.
(6) Collect and maintain information from awardees and provide it
to SBA to develop and maintain the Tech-Net Database, as identified in
Section 11(e) of this policy Directive.
(7) Administer its own SBIR funding agreements or delegate such
administration to another agency.
(8) Include provisions in each SBIR funding agreement setting forth
the respective rights of the United States and the awardee with respect
to intellectual property rights and with respect to any right to carry
out follow-on research.
(9) Ensure that the rights in data developed under each Federally-
funded SBIR Phase I, Phase II, and Phase III award are protected
(10) Make payments to awardees of SBIR funding agreements on the
basis of progress toward or completion of the funding agreement
requirements and in all cases make payment to awardees under such
agreements in full, subject to audit, on or before the last day of the
12-month period beginning on the date of completion of such
(11) Provide an annual report on the SBIR Program to SBA. See
Section 10 of this Policy Directive.
(12) Report at least annually to SBA's Office of Technology all
instances in which an agency pursued research, development, production,
or any such combination of a technology developed by an SBC using an
award made under the SBIR Program of that agency, where the agency
determined that it was not practicable to enter into a follow-on non-
SBIR Program funding agreement with that concern. The report must
include, at a minimum:
(i) the reasons why the follow-on funding agreement with the
concern was not practicable;
(ii) the identity of the entity with which the agency contracted to
perform the research, development, or production; and
(iii) a description of the type of funding agreement under which
the research, development, or production was obtained.
(13) Include in its annual performance plan required by 31 U.S.C.
1115(a) and (b) a section on its SBIR Program, and submit such section
to the Senate Committee on Small Business and Entrepreneurship and to
the House Committees on Science and Small Business.
(b) The Act permits an agency that has established a Technology
Development Program to review for funding under that program, in each
(1) any proposal to provide outreach and assistance to 1 or more
SBCs interested in participating in the SBIR Program, including any
proposal to make a grant or loan to a company to pay a portion or all
of the cost of developing an SBIR proposal, from an entity,
organization, or individual located in--
(i) a State that is eligible to participate in that technology
development program; or
(ii) an Additionally Eligible State.
(2) any meritorious proposal for an SBIR Phase I award that is not
funded through the SBIR Program for that fiscal year due to funding
constraints, from an SBC located in a state identified in (i) or (ii)
(c) The Act allows discretionary technical assistance to SBIR
(1) Agencies may enter into agreements with vendors to provide
technical assistance to SBIR awardees, which may include access to a
network of scientists and engineers engaged in a wide range of
technologies or access to technical and business literature available
through on-line data bases. Each agency may select a vendor for a term
not to exceed 3 years. The vendor must be selected using competitive
and merit-based criteria. The purpose of this technical assistance is
to assist SBIR awardees in:
(i) making better technical decisions on SBIR projects;
(ii) solving technical problems that arise during SBIR projects;
(iii) minimizing technical risks associated with SBIR projects; and
(iv) commercializing the SBIR product or process.
(2) Phase I awards: Each agency may provide up to $4,000 of SBIR
funds for the technical assistance described above in (c)(1). The
amount will be in addition to the award and will count as part of the
agency's SBIR funding.
(3) Phase II awards: Each agency may allow awardees to expend up to
$4,000 of SBIR funds per year, using funds available from the SBIR
award, for the technical assistance described above in (c)(1).
(d) Agencies are encouraged to develop programs to reduce the time
period between the issuance of SBIR Phase I and Phase II awards. As
appropriate, agencies should adopt accelerated proposal, evaluation,
and selection procedures designed to address the gap in funding these
(e) Interagency actions.
(1) Joint funding. An SBIR project may be financed by more than one
Federal agency. Joint funding is not required but can be an effective
arrangement for some projects.
(2) Phase II awards. An SBIR Phase II award may be issued by a
Federal agency other than the one that made the Phase I award. The
Phase I and Phase II agencies should document their files
appropriately, providing clear rationale for the transfer of the Phase
II proposal to, and award by, the funding Federal agency.
(3) Timely notification of awards. In order to avoid duplicate
funding of an SBIR project, agencies must promptly search the Tech-Net
Database System for awards for essentially equivalent work. Discussion
among agencies receiving similar proposals is strongly encouraged
before an SBIR award is made.
(4) Participation by women-owned SBCs and socially and economically
disadvantaged SBCs in the SBIR Program. In order to meet statutory
requirements for greater inclusion, SBA and the Federal participating
agencies must conduct outreach efforts to find and place innovative
women-owned SBCs and socially and economically disadvantaged SBCs in
the SBIR Program information system. These SBCs will be required to
compete for SBIR awards on the same basis as all other SBCs. However,
participating agencies are encouraged to work independently and
cooperatively with SBA to develop methods to encourage qualified women-
owned SBCs and socially and economically disadvantaged SBCs to
participate in the SBIR Program.
(f) Limitation of participation and use of funds.
(1) Each SBIR agency must expend 2.5 percent of its extramural
budget on awards made to SBCs. Agencies may not make available for the
purpose of meeting the 2.5 percent an amount of its extramural budget
for basic research that exceeds 2.5 percent. Funding agreements with
SBCs for R/R&D that result from competitive or single source selections
other than an SBIR Program must not be considered to meet any portion
of the 2.5 percent.
(2) An agency must not use any of its SBIR budget for the purpose
of funding administrative costs of the program, including costs
associated with program operations, employee salaries, and other
(3) An agency must not issue an SBIR funding agreement that
includes a provision for subcontracting any portion of that agreement
back to the issuing agency, to any other Federal Government agency, or
to other units of the Federal Government. SBA may issue a case-by-case
waiver to this provision after review of an agency's written
justification that includes the following information:
(i) An explanation of why the SBIR research project requires the
use of the Federal facility or personnel, including data that verifies
the absence of non-federal facilities or personnel capable of
supporting the research effort.
(ii) Why the Agency will not and can not fund the use of the
federal facility or personnel for the SBIR project with non-SBIR money.
(iii) The concurrence of the SBC's chief business official to use
the federal facility or personnel.
(4) No agency, at its own discretion, may unilaterally cease
participation in the SBIR Program. R/R&D agency budgets may cause
fluctuations and trends that must be reviewed in light of SBIR Program
purposes. An agency may be considered by SBA for a phased withdrawal
from participation in the SBIR Program over a period of time sufficient
in duration to minimize any adverse impact on SBCs. However, the SBA
decision concerning such a withdrawal will be made on a case-by-case
basis and will depend on significant changes to extramural R/R&D 3-year
forecasts as found in the annual Budget of the United States Government
and National Science Foundation breakdowns of total R/R&D obligations
as published in the Federal Funds for Research and Development. Any
withdrawal of an SBIR Federal participating agency from the SBIR
Program will be accomplished in a standardized and orderly manner in
compliance with these statutorily mandated procedures.
(5) Federal agencies not otherwise qualified for the SBIR Program
may participate on a voluntary basis. Federal agencies seeking to
participate in the SBIR Program must first submit their written
requests to SBA. Voluntary participation requires the written approval
(g) To the extent permitted by the law, and in a manner consistent with the mission of that agency and the purpose of the SBIR program, each participating agency must give priority in the SBIR program to manufacturing-related research and development, including the following:
(1) Unit process level technologies that create or improve manufacturing processes, including:
(i) Fundamental improvements in existing manufacturing processes that deliver substantial productivity, quality, or environmental benefits; or
(ii) Development of new manufacturing processes, including new materials, coatings, methods, and associated practices.
(2) Machine level technologies that create or improve manufacturing equipment, including:
(i) Improvements in capital equipment that create increased capability (such as accuracy or repeatability), increased capacity (through productivity improvements or cost reduction), or increased environmental efficiency (safety, energy efficiency, environmental impact); or
(ii) New apparatus and equipment for manufacturing, including additive and subtractive manufacturing, deformation and molding, assembly and test, semiconductor fabrication, biologics, biomaterials, vaccines or drug production, and nanotechnology.
(3) Systems level technologies for innovation in the manufacturing enterprise, including:
(i) Advances in controls, sensors, networks, and other information technologies which improve the quality and productivity of manufacturing cells, lines, systems, and facilities;
(ii) Innovation in extended enterprise functions critical to manufacturing, such as quality systems, resource management, supply change integration, and distribution, scheduling and tracking; or
(iii) Technologies that enable integrated and collaborative product and process development, including computer-aided and expert systems for design, tolerancing, process and materials selection, life-cycle cost estimation, rapid prototyping, and tooling.
(4) Environmental or societal level technologies that improve workforce abilities, productivity, and manufacturing competitiveness, including:
(i) Technologies for improved workforce health and safety, such as human factors and ergonomics; or
(ii) Technologies that aid and improve workforce manufacturing skill and technical excellence, such as educational systems incorporating improved manufacturing knowledge and instructional methods.
(h) Agencies must develop an Action Plan for implementing Executive Order 13329, which identifies activities used to give priority in the SBIR program to manufacturing-related research and development. These activities should include adding information on the Executive Order to the agency's SBIR program website.
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