Weekly Policy Update: Small Business Innovation Research and Small Business Technology Transfer Programs

A longstanding policy priority for CBSA is supporting our ecosystem’s need for increased access to capital. Through our Capital + Growth efforts, we work closely with public and private partners to accelerate investment in life sciences companies at all stages of commercialization. Public sources include the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. These programs are critical for our life sciences community, as they provide early non-dilutive funding to help advance high-risk, early-stage innovative research. As the cost of conducting biomedical research continues to grow, this “first money” becomes increasingly important for attracting additional capital and private investors. In 2019, Colorado life sciences companies and organizations received 258 SBIR awards and STTR awards totaling over $82 million dollars.

Both programs are housed within the Small Business Administration (SBA) and they are renewed every five years by Congress. The programs are set to expire in September of this year without congressional action to further renew the programs. Ongoing conversations in Congress, particularly among members of the Senate Small Business Committee, indicate outreach to members of Congress will be important to ensure that they fully understand the necessity and impact of these programs. In the coming months, CBSA and our national partners will be collaborating with members of Congress to secure the renewal of these programs.

Program Background

The SBIR/STTR programs are highly competitive programs that encourage small businesses to engage in federal research and development with the potential for commercialization.

The SBIR/STTR programs are structured in three phases:

Phase I: The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed R/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 six months (SBIR) or 1 year (STTR).

Phase II: The objective of Phase II is to continue the R/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. Typically, only Phase I awardees are eligible for a Phase II award. SBIR/STTR Phase II awards are generally $750,000 for two years.

Phase III: The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I/II R/R&D activities. The SBIR/STTR programs do not fund Phase III. At some federal agencies, Phase III may involve follow-on non-SBIR/STTR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.

Program Eligibility

  • Organized for profit, with a place of business located in the United States
  • More than 50% owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States, or by other small business concerns that are each more than 50% owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States; and
  • No more than 500 employees, including affiliates

Your Support Needed

In the coming weeks, CBSA and our national partners will work to mobilize life sciences leaders to support advocacy efforts. We will be asking CBSA members to reach out to the Colorado Congressional Delegation to communicate the impact of SBIR/STTR grants in our state.

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