SBIR Gateway

SBIR Insider Newsletter
January 28, 2013

Dear SBIR Insider,

We are off and running with HHS/NIH releasing their large omnibus SBIR/STTR solicitation that remains open all year, with 6 separate receipt dates (includes AIDS related topics that have 3 of their own dates). The DoD released their FY-2013A STTR solicitation, which is usually their largest of the 2 STTR solicitations they do each year.

There are some surprises in both solicitations, but it is early in the cycle for you to plan and respond. As we've noted before, this is a new day and you should read the solicitations very carefully, because they may not match your impressions of the SBA's SBIR and STTR Policy Directives, and new size rulings.

In this issue:

New SBA SBIR/STTR Requirements Take Effect

On January 28, 2013 the SBA's new size rule for SBIR became effective and brought about many changes. The new rule was discussed in depth during an SBA webinar that was held on January 16, 2013.

The SBA staff did a nice job of explaining many points in detail but also admitted that there were some very complex details beyond the scope of the webinar.

One question I've received countless times concerning ownership and control was in regards to the use of the word "multiple" in the references to: "small business concerns that are owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms…"

Some people believed the word multiple only referred to VCs, but SBA's Sean Greene made it clear that "multiple" included hedge funds and private equity firms, capping his statement by saying no one of these entities can own more than 50% of the small business.

SBA promised to have the webinar available on but as of this time it is not yet available. You can see the latest post at

As we reported in earlier issues, the process of SBIR was becoming more complicated and that includes the fact that the new rules state that all companies applying for SBIR/STTR will have to register their company on the SBA's web site. However, we suggested that you should follow the instructions in the agency's solicitation you were applying to because there will be some variations.

Careful wording does not always equate to clarity of wording. In this case we have the SBA statement: "Going forward, each applicant will need to register with SBA prior to submitting their applicant." {not my typo…} The meaning here (as far as the agencies are concerned) is that it only applies to solicitations RELEASED after the January 28, 2013 date, not the date you apply for a solicitation.

Consequently the new HHS/NIH omnibus SBIR/STTR solicitation released January 24, 2013, and the DoD's STTR solicitation released January 25, 2013, are not subject to new size ruling and registration. See our articles on the NIH and DoD later in this issue.

NIH Opens FY-2013-2 Omnibus STTR/STTR

We always say "NIH" when in fact it is the Department of Health & Human Services (HHS) who is the overlord of the solicitation, with the NIH being the largest component, who does most of the management of the SBIR/STTR solicitation process. Also, NIH is the only HHS component large enough to have an STTR program, so only NIH gives you the choice of applying for their topics as SBIR or STTR. The other HHS components are the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), and the Administration for Children and Families (ACF), all of whom have only SBIR programs covered under the omnibus solicitation.

SBIR reauthorization has presented many challenges to the agencies as well as adding many new opportunities and some restrictions to the overall SBIR process. Some of these changes require substantive modifications to the overall granting process, computer systems, and external systems that are not part of NIH.

Arguably the biggest change to the SBIR program is the allowing of multiple VC's, hedge funds, and private equity organizations to have majority ownership of a small business and still be eligible for SBIR. The NIH was the central focus of that change driven largely by the biotech community.

However, the newly released NIH SBIR will not allow the new VC/HF/PE majority ownership rule to be implemented at this time. This is not because the NIH is unsupportive of the new rule, but for a variety of reasons including the fact that the new rule didn't become effective until today, January 28, and the NIH solicitation was released January 24, 2013. Also, the computer systems are not equipped to handle all the new data required, and this will take time.

It may sound to some like NIH jumped the gun in order to release their solicitation before the new size rule took effect. That's not the case because it takes a great deal of time to create such a large solicitation, and the size standard rule wasn't even published until December 27, 2012. HHS had to get their solicitation out in order to meet the April 5 receipt date, which is a part of many NIH grant opportunities.

HHS has publicly stated: "HHS intends to revise, amend or re-issue the Omnibus FOAs in the middle of 2013 to implement additional reauthorization provisions as guidance from the SBA is received and electronic system and form updates at NIH and SBA are implemented.

Details of what is changing (and what isn't) at NIH is available at: (a must read for anyone interested in the NIH program)

NIH also has a comprehensive web site on the changes and schedules for upcoming changes at:

And let's not forget their new attractive but not "glitzy" SBIR new web site at:

DoD Releases FY-2013A STTR

On January 25 the DoD released (actually they refer to it as a pre-release) of their new FY-2013A STTR with topics from Air Force, Army, Navy, and DARPA. DoD usually does two STTR solicitations each year, and the first one (known as "A") is usually the largest.

Although constructed very much like its cousin SBIR, the STTR program differs in that it requires the small business to partner with a research institution (such as a university). The small business must perform a minimum of 40% of the effort while the research institution must perform not less that 30% (thereby allowing a window of up 60% for the research institution).

Also in STTR, the principle investigator (PI) can be an employee of the research partner rather than the small business. However, the small business concern must have at least one employee in a management position whose primary employment (more than 50%) is with the small business and who is not also employed by the research institution.

As we mentioned in the previous article, since this solicitation was released before the new size rule was implemented, registration with the SBA's web site is not necessary. However, certain rules of the policy directive issued on August 6, 2012 are in force.

You're going to get tired of me saying this but read the instructions carefully, not only the overall DoD instructions, but those of each agency component as well. There are substantive differences. The DoD solicitation is available on their web site at

Find a Partner for the DoD FY-2013A STTR

The STTR program is a partnering hallmark between small high tech businesses and research institutions such as universities, federally funded R&D centers (FFRDCs) and other non-profit research entities.

As described in the previous article, STTR requires partnering. This DoD STTR has 71 precise topic opportunities. DoD isn't all about guns and ammo, it also has opportunities in energy, medicine, coatings, manufacturing and much more.

For example, here are a few of the topics that you might not equate to the DoD.

Medicine: Technologies that Promote Reinnervation of Muscle; Probiotics for Maintaining Dolphin (Tursiops truncatus) Health and the Readiness of the U.S. Navy’s Marine Mammal Systems; Functional Imaging to Develop Outstanding Service-Dogs (FIDOS).

Energy: Broad Band, High Efficiency Solar Cells

Manufacturing: Additive Manufacturing of Multifunctional Nanocomposites (3-d printing)

Due to many requests we received from our users, we have decided to once again open our "Find a Partner" portal of our SBIR Gateway web site. It may look old and unattractive, but it's powerful, easy to navigate and FREE!

Here's how it works. You visit the site and we have all the DoD topics indexed for you. You can scan or search the topics, then check off topics you would like to find a partner for. After our first week of operation we open the "Partnering List" portion of the site which is updated weekly. You select a topic from the form and a list of entities (be it small business, universities, FFRDCs or others) who expressed interest in that topic, will be presented to you.

Our first year was good, the second excellent, the third only fair. The reason is because too many people sat back and waited for someone else to register. If you want this to work, you'll have to get involved and register early, the topic(s) you are interested in.

It's all free and if you change your mind once you're registered, just drop us an email and we remove your listing. My hope is that if this project is worthwhile to you and the program, the DoD will pick it up and do it themselves, where it should be more attractive and of course "official."

Remember that the FFRDCs include most of the DOE's national laboratories, including Lawrence Livermore, Lawrence Berkeley, Los Alamos, Pacific Northwest National Lab, National Renewable Energy Lab and more. There are also some non-DOE labs such as NASA's Jet Propulsion Laboratory. Other federal labs that are government owned and government operated (GOGOs), are not eligible as research partners in STTR.

You'll find everything you need to get started at

The New World of Awardee Selected Technical Assistance

I promised to cover the topic of "Technical Assistance" where a phase I or II winner will be able to get up to $5,000 worth of technical assistance (previously provided by an agency's vendor) from a qualified vendor of your own choice.

I said it was a dual edge sword and I acquired several wounds in trying to put the story together. It is a lot more complex than I envisioned, and it requires more input from some of the stakeholders.

At this point I'm seeing many points as to why you would want to use an agency's provider(s), and a few why you would want to select your own.

I'm very interested in hearing from those of you who've had experience in getting assistance from both agency and small business perspective. We'll have more you in the next issue.

Closing Thoughts

I wanted to give you a break from politics, but the next issue will have some news on our new congress and SBIR. We have a good deal of educating to do, or as former SBIR champion and ED program manager Lee Eiden used to say "Leducation."

So long!



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

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