DATE: September 24, 2002

SUBJECT: Small Business Administration; Small Business Innovation Research Program

SOURCE: Federal Register, September 24, 2002, Vol. 67, No. 185, page 60071

AGENCIES: Small Business Administration (SBA)

ACTION: Final Policy Directive

SYNOPSIS: SBA is revising its policy directive on the Small Business Innovation Research (SBIR) program for the first time since 1993 to implement provisions of the Small Business Innovation Research Program Reauthorization Act of 2000 (Public Law 106-554), and to provide guidance to federal agencies for the general conduct of the program.

EDITOR'S NOTE: The purpose of the SBIR program is to strengthen the role of innovative small businesses in federally-funded research and development (R&D). The program applies to all agencies with R&D budgets of more than $100 million to set aside at least 2.5% of their R&D budgets for businesses with no more than 500 employees. The ten agencies currently participating in the SBIR program are the Departments of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, and Transportation; the Environmental Protection Agency; the National Aeronautics and Space Administration; and the National Science Foundation.

The SBIR program consists of three phases:

Phase I: An agency solicits proposals from small businesses that describe an experimental or theoretical research effort up to six months long and generally costing no more than $100,000. The agency may award more than one contract if several different approaches have merit.

Phase II: If the results of Phase I are promising, the agency may provide further funding to allow the small business to expand and develop the research. The effort may be up to two years and generally cost no more than $750,000. However, the agency is under no obligation to fund a Phase II effort.

Phase III: The agency may enter into a non-SBIR funded agreement with the small business or contract with the small business for additional work. Phase III small businesses are encouraged to obtain non-federal funds for commercial applications of the R&D.

For more on the proposed policy directive, see the May 18, 2001, FEDERAL CONTRACTS DISPATCH "Small Business Administration; Small Business Innovation Research Program."

EFFECTIVE DATE: September 24, 2002.

FOR FURTHER INFORMATION CONTACT: Maurice Swinton, Assistant Administrator for Technology, Office of Technology, Office of Government Contracting, Office of Government Contracting/Business Development, U.S. Small Business Administration, 409 3rd Street, SW, Washington, DC 20416, or by e-mail to technology@sba.gov.

SUPPLEMENTAL INFORMATION: In 1982, Congress established the SBIR program and directed SBA to "issue policy directives for the general conduct of the SBIR programs within the federal government." SBA published the first SBIR policy directive almost 20 years ago; the last SBIR policy directive was published more than nine years ago. Because of the legislative requirement to "issue policy directives," there is no coverage of the SBIR program in SBA's regulations or in the Federal Acquisition Regulation (FAR) (although the memorandum forwarding the policy directive to the various agencies' SBIR program directors states that "the Federal Acquisition Regulations may need to be modified to conform to the requirements of the Reauthorization Act and a final policy directive").

The SBIR Program Reauthorization Act of 2000 extended the SBIR program expiration date from September 30, 2000, to September 30, 2008. In addition, it made several other changes to the SBIR program and directed SBA to revise its SBIR program policy directive within 120 days to reflect those changes. On May 18, 2001, SBA published a proposed SBIR program policy directive to comply with that Congressional direction and to streamline the policy directive. SBA received more than 200 comments from 30 respondents, and the final policy directive reflects some of those comments.

The policy directive is organized into 12 sections:

1. Purpose
2. Summary of Legislative Provisions
3. Definitions
4. Competitively Phased Structure of the Program
5. Program Solicitation Process
6. Eligibility and Application (Proposal) Requirements
7. SBIR Funding Process
8. Terms of Agreement Under SBIR Awards
9. Responsibilities of SBIR Participating Agencies and Departments
10. Annual Report to the Small Business Administration (SBA)
11. Responsibilities of the SBA
12. Federal and State Technology (FAST) Partnership Program and Rural Outreach Program

Appendix I: Instructions For SBIR Program Solicitation Preparation
Appendix II: Tech-Net Data Fields For Public Database

The following are some of the more significant changes that are made to the policy directive, as well as significant changes between the proposed and final policy directives:

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2002 by Panoptic Enterprises. All Rights Reserved.

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