SBIR Gateway

SBIR Insider Newsletter
March 30, 2010 Edition (corrected)

Dear SBIR Gateway Insider,

This issue contains some important news, Q&As and errata. My goal is to keep this one short.

In this issue:

SBA Raises SBIR Award Threshold Guidelines

Today, March 30, 2010 the SBA has published a Notice of Final Amendments to their Small Business Innovation Research Program (SBIR) Policy Directive. The Policy Directive provides the rules and guidance of the SBIR program to the agencies and participants. These new amendments are effective immediately and deal only with the SBIR award amounts thresholds.

The SBA has raised the SBIR award threshold amounts from $100,000 to $150,000 for phase I, and $750,000 to $1,000,000 for phase II. This does not affect an agency's right to make awards of greater or lessor amounts. (Agencies are supposed to provide justification to SBA for awards in excess of the policy directive guidelines.)

The STTR program has a separate Policy Directive and is not affected by this change. A similar change is in the works for the STTR Policy Directive but it is unknown when this change will be applied to STTR.

For those of you wondering what role the SBA's SBIR Policy Directive plays in governing/guiding the 11 agencies participating in SBIR/STTR, here's a snippet of the official language from the law, 15 USC 638:

Section 9(j)(3) of the Small Business Act (Act) (15
U.S.C. 638(j)(3)) requires the Administrator of the U.S. Small Business
Administration (SBA) to modify the SBIR Program Policy Directive as
required for the general conduct of the SBIR Program within the Federal

The actual language of the Policy Directive changes now reads:

Section 7 - SBIR Funding Process
(h) Dollar Value of Awards.
(1) Generally, a Phase I award may not exceed $150,000 and a Phase II award may not exceed $1,000,000. SBA may adjust these amounts once every 5 years to reflect economic adjustments and programmatic considerations. There is no dollar level associated with Phase III SBIR awards.
(2) An awarding agency may exceed those award values where appropriate for a particular project. After award of any funding agreement exceeding $150,000 for Phase I or $1,000,000 for Phase II, the agency's SBIR representative must provide SBA with written justification of such action. This justification must be submitted with the agency's Annual Report data. Similar justification is required for any modification to a funding agreement that would bring the cumulative dollar amount to a total in excess of the amounts set forth above.

This should have little to no effect on the smaller agency programs such as USDA, EPA, NOAA and NIST, not sure about ED, but it could change some things for DoD, NIH, DOE, NASA, DHS, and NSF. It should be noted that NIH frequently makes larger awards, while parts of DoD occasionally makes larger awards.

Years ago our SBIR Gateway built an easy to use SBIR Policy Directive site and it is kept current. You'll find at (click on the SBIR Policy Directive link in the lower left, under Resources) or go directly to The policy directive explains may dimensions of the program from legislative provisions to program selection process, eligibility to terms of agreement under SBIR awards. Many of your questions can be answered from this document.

As to the process and ramifications of this change:

The Good: SBA finally got this done, and it should demonstrate to Congress that some of the issues being argued in the reauthorization process can, and should be handled by SBA via the Policy Directive. This also applies to size standards and the VC issue (more on this point in the next SBIR Insider).

The Bad: SBA's SBIR guidance and leadership over the past several years is tantamount to an absentee landlord. More support and "juice" needs to be provided to the SBA's Office of Technology which has been decimated over the years. In fairness, we hear that good things are happening in that regard and we hope to see some positive results soon.

The Ugly: SBA proposed raising the award levels back in August of 2008 and asked for your comments. SBA's announcement today states they received only 2 comments on those proposed changes. That's an outrage because the SBIR Insider received a couple of hundred in response to our August 20, 2008 SBIR Insider (see ) and we heard many complaints from people not being able to offer comments to SBA via the suggested Federal Rulemaking Portal . I reported this to the SBA at that time and I can't verify it was fixed, but I can tell you that it was still broken more than 3/4 through the 30 day time allotment for comments.

Congress often looks at comment statistics when evaluating changes to, or elimination of a program. Our small business community falsely looked inept and disinterested on this issue. It should be noted that this SBA failure was at the peak of many years of budget cuts, and there was NO support for the SBA Office of Technology (the office that administers the SBIR/STTR program).

NIH Wants Comments On Grants Application Changes

The NIH is asking for your feedback on the impact of eliminating the correction window from the electronic grant application submission process on their applicant organizations and the timing of such a change.

During the early days of NIH's morphing from paper to electronic submission (circa 2005), the agency built into the process a temporary error correction window to ensure a smooth and successful transition for applicants. This window provides applicants a period of time beyond the grant application due date to correct any error or warning notices of noncompliance with application instructions that are identified by NIH's eRA systems. (The standard NIH error correction window is 2 days, but it has been temporarily extended to 5 days to facilitate the transition for applicants to newly restructured, shorter applications.)

The NIH is considering the elimination of the error correction window within the year and they want your comments. You can download the Federal Register notice at

All comments must be submitted as directed in the Federal Register announcement and received by April 19, 2010. Thanks to Pat Dillon, Regional Director, Wisconsin Entrepreneurs' Network, for the heads up on this information.

Errata - Dates / Terms

In the last issue I gave the wrong year for the EPA's new SBIR solicitation. The announcement should have said:

The Environmental Protection Agency (EPA) opened its FY-2011 SBIR solicitation (PR-NC-10-10251) on March 25, 2010 with a closing date of May 11, 2010. Complete details are on their web site at

Thanks to Jaci Hancock from Maine's PTAC community for the correction.

Speaking of corrections, one of the SBIR Insider's good friends, David Metzger (one of the top SBIR and small business barristers in the land) noted in our article about Dr. Winslow Sargeant, that the position is "Chief Counsel for Advocacy" (not Council as I had stated). I've been making that mistake for years and I appreciate his "counsel" on correcting my grammar.

Questions & Answers

Q. How can I find out more about obtaining SBA's FAST funding and get invited to their session at the Hartford SBIR Conference?

A. FAST is SBA's Federal & State Technology Partnership program that is designed to provide low level matching funds to state government entities (or their assignees) with a purpose of performing outreach and education to small businesses, primarily (but not exclusively) newbies to SBIR. There is no direct funding from SBA to small businesses from the FAST program. The FAST/State session is only for state representatives, by invitation. If you are a state representative but did not receive an invitation, contact the SBA Office of Technology, or drop me a note and I'll help you contact the right people.

Q. I enjoy your Insider but the emails are ugly and hard to read on my Blackberry. Can you reformat them or put them into a PDF?

A. We send out the SBIR Insider in plain ASCII text so it can be read on all email programs and not carry and viral content. We tried the PDF attachment route but now PDFs are too easy to compromise, and many portable devices don't navigate PDFs well.

However, you can read the SBIR Insider (as well as back issues) from our web site, and there are often live links to supporting data. Just go to Allow 24 hours max before the issue is posted, although we try to get it up in a matter of hours.

Q. Do you believe SBIR will be reauthorized before the April 30 expiration date?

A. No, but that's just gut instinct. I think we'll see another CR with an unknown duration, again enacted at the 11th hour. The Senate will push for a longer period while the House (actually Nydia) will go shorter.

It's once again time for your king of "run on" sentences and dangling participles to say goodnight. I hope to have some good news for you soon.

Thanks again for your time and we welcome your comments.



Rick Shindell
SBIR Gateway
Zyn Systems
40 Alderwood Dr.
Sequim, WA 98382
[email protected]

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