Small Business Innovation Research (SBIR)
Small Business Technology Transfer (STTR)
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How does the SBA define a “small business”?
In making a detailed definition, SBA may use a number of criteria, including the number of employees, annual receipts, affiliates, or other applicable factors. These specific criteria are set forth in the SBA Small Business Size Regulations, Title 13, Part 121 of the Code of Federal Regulations. For information on specific industry classifications (manufacturing, construction, services, transportation, refined petroleum products, and research development and testing), or more information on general small business definitions, please contact the SBA's office of Size Standards.
How can I get a DUNS number?
DUNS stands for “Data Universal Numbering System” and is used by the government to identify contractors and their locations. The number is also required to register with the Central Contractor Register (CCR) that is used by the government's electronic commerce/electronic data interchange (EC/EDI) system called FACNET. If you do not have a DUNS number, you can obtain one from Dun and Bradstreet (D&B) at no cost. Contact the company at (800) 333-0505.
What is the FedBizOpps?
FedBizOpps.gov is the single government point-of-entry (GPE) for Federal government procurement opportunities over $25,000. Government buyers are able to publicize their business opportunities by posting information directly to FedBizOpps via the Internet. Through one portal - FedBizOpps (FBO) - commercial vendors seeking Federal markets for their products and services can search, monitor and retrieve opportunities solicited by the entire Federal contracting community.
What is the 8(a) Program?
The 8(a) Business Development program is designed to provide business development assistance and technical assistance to help socially and economically disadvantaged American businesses gain access to the mainstream American economy. The program is named for the section of the Small Business Act that authorizes its policies and procedures.
What is the Vendor Identification Program?
The Vendor Identification Program (VIP) assists small businesses by identifying government purchasers for the items they produce for large defense contractors. The program helps SBA to increase competition by adding qualified sources to bidder lists and creating prime contracting opportunities for small businesses.
Through the Vendor Identification Program, SBA matches the past procurement history and acquisition needs of the government and identifies the actual manufacturer of systems, subsystems, components, and spare parts. This expedites the procurement process and facilitates the participation of small businesses as prime contractors. If your company has manufactured weapons system parts or items for a defense contractor, and you are interested in selling directly to the Government, the SBA's VIP program may benefit your firm.
What is the Certificate of Competency Program?
The Certificate of Competency (COC) program allows a small business to appeal a contracting officer's determination that it is unable to fulfill the requirements of a specific government contract on which it is the apparent low bidder. When the small business applies for a COC, SBA industrial and financial specialists conduct a detailed review of the firm's capabilities to perform on the contract. If the business demonstrates the ability to perform, the SBA issues a COC to the contracting officer requiring the award of that specific contract to the small business.
What is the 7(j) program?
Section 7(j) of the Small Business Act authorizes SBA to enter into grants, cooperative agreements or contracts, with public or private organizations that can deliver management or technical assistance to eligible individuals and enterprises. This assistance is delivered to 8(a) certified firms, small disadvantaged businesses, businesses operating in areas of high unemployment or low-income or firms owned by low-income individuals.
Can an agency count prime contract awards to small businesses toward more than one goal in the Goaling Program?
Yes. The Small Business (SB) Category shows the total procurement dollars to small businesses. All other categories are sub-sets of the SB Category. a procurement can be additionally counted in more than one sub-set category, as applicable, except 8(a) and small disadvantage business (SDB) that are reported separately, but together form the SDB Government-wide achievement. In fact, all prime contract awards to small businesses, women-owned small businesses, small disadvantaged businesses, 8(a) firms, HUBZone small businesses, service-disabled veteran-owned small businesses all count toward the government-wide small business goal. For example, if a business is awarded a contract and they are 8(a), small disadvantaged business, and a woman-owned small business, the agency counts the contract award in all categories that apply.
Can an agency get 8(a) credit for ordering from a Federal Supply Schedule from a company certified by SBA under the 8(a) program?
Yes, if the company has elected for its orders to be counted toward its 8(a) competitive mix and to allow for its orders to be counted as sales under the 8(a) program. If a company does not elect for them to be counted as 8(a) orders, then the agency will get credit for the order under the small disadvantage business (SDB) category. The agency will get credit toward its SDB goals, even if the FSS order was awarded under full-and-open-competition.
How are the GSA Federal Supply Schedules (FSS) counted in the goaling process?
Starting in FY 1998, each individual agency included Federal Supply Service (FSS) Schedule buys as part of their estimate of all of their prime contracts and resultant goals. In addition, each individual agency's goal achievements included all of their FSS Schedule buys.
How does the SBA ensure that agencies meet the government-wide 23 percent small business goal?
SBA negotiates with each agency mutually acceptable prime and subcontract goals for each small business category. SBA must ensure that the mutually established cumulative goals for all agencies meet or exceed the government-wide 23 percent small business goal. SBA can not accept an individual agency's goal until in the aggregate, the government-wide goal is established. Subsequently, SBA compiles and analyzes agencies' achievements against their individual goals and reports the results to the President
Why doesn't the SBA approve goals as soon as they are received?
SBA's responsibility under the Small Business Act 15(g)(1) is to ensure that the Government-wide goal for participation of small business concerns be established at not less than 23 percent of the total value of all prime contract awards for each fiscal year. The Small Disadvantaged Business (SDB) and Women-owned Small Business (WOSB) goal are also required to be established at not less than 5 percent.
What are the due dates for all the goaling actions?
The goaling “Calendar of Events” established the dates actions are due on the part of each agency. It is updated for each fiscal year and listed in the Goaling Guidance.
Are there any rewards for a Federal Agency in exceeding its goals?
Yes, the office of Government Contracting annually accepts nominations, including self-nominations, for the Gold Star Awards that are presented at the Annual Joint Industry/SBA Procurement Conference, Business Opportunity Expo and Awards Celebration, in Washington, D.C. The Gold Star Awards were established to recognize the Federal personnel within the office of Small and Disadvantaged Business Utilization (OSDBU) who have the primary responsibility for the aggressive goals and strategic initiatives that ensure small business a role in the Federal marketplace. The Gold Star Awards were established to recognize those Federal personnel for their exemplary performance. In addition, any Federal department or agency that has a winner of a Gold Star Award will receive a special agency award.
For the SBA's goaling program, is there a minimum subcontract percentage that prime contractors must have when bidding or submitting a proposal for a Federal contract?
No. Prime contractors shall propose a subcontract percentage (or goal) on each contract that represents the maximum practicable opportunity for small businesses. This means that the prime contractors have to do market research to determine how many small businesses may be able to perform the subcontract requirements. Prime contractors shall propose as subcontractors, if available, small business concerns; small business concerns owned and controlled by service disabled veterans; qualified HUBZone small business concerns; small business concerns owned and controlled by socially and economically disadvantaged individuals; and small business concerns owned and controlled by women.
If an option is being exercised on a contract with a company that self-certified they are a small-disadvantaged-business (SDB) before the formal SDB certification requirements became effective, can the agency still count this company as an SDB?
Yes. On the SF279, block 30 under “type of contractor.” the agency would check “A” which is SDB. However, on block 33B, the agency would check “F” which is that the SDB preference was “Not Applicable.”
Will the SBA provide funds for SBIR commercialization?
Yes. The total dollars awarded to small business concerns are derived from the type of contractor they are not based on the solicitation procedures. As stated in the Goaling Guidance, the dollars awarded to Small Business Concerns will be derived from the SF-279 which the type of contractor should be a Small Business or Small Disadvantaged Business or from the SF-281 for a Small Business.
Which categories of small business must be certified by SBA, and must these companies be listed in PRO-Net?
Small Disadvantaged Businesses (SDB), HUBZone small business concerns, and 8(a) firms must be certified by SBA. PRO-Net is the official SBA database for verifying their certification. Other categories, including small businesses, women-owned small businesses, veteran-owned small businesses, and service-disabled veteran small businesses may self-certify as to their status. PRO-Net may be used to verify their "self-certification" but they are not required to be listed in PRO-Net.
When prime contractors submit their SF-294 and SF-295 reports to the government, they are allowed to take credit for only those SDBs that are listed in PRO-Net. (For the SDB certification requirement, this applies only to solicitations issued by the Government on or after October 1, 1999, the effective date of the regulation.) SBA also recommends that you use PRO-Net to also confirm the firms that “self-certify” they are HUBZone certified as stated in the Federal Acquisition Regulations (FAR) 52.219-8(c)(2). Companies may accept self-certification for all the other categories.
Who do I call if I have questions on the Goaling Program?
Please contact .
Can the SBA approve the goals without all goals submitted?
SBA has the responsibility to ensure that agencies' goals, in the aggregate, meet the Government-wide goals established at 15(g)(1) of the Act. This can only be done if SBA has received all the proposed goals to statistically calculate that we can achieve the Government-wide statutory goals.
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How can I determine if my product or service is needed in other countries?
Before you make the decision to go international make certain that there is a market for your product or service. State and federal trade development agencies publish trade statistics and country market reports that can help you learn more and make informed decisions.
Will my product or service have to be adapted for international markets?
The factors that will determine whether you need to modify your product or service for your target markets are: government regulations, non-governmental standards, geography and climate, cultural sensitivity, and servicing.
How should I market my product or service internationally?
Strategies that work in the United States probably won't work in Japan or China and may not work in Europe or Latin America without some adapting. Learn more about specific strategies by talking to experts in the countries in which you're interested.
Do I need to translate my sales literature?
If you are serious about succeeding in the market, it is strongly recommended that you translate your marketing materials into the language of the prospective buyer. You'll also want to convert all measurements from the U.S. system of measurement to the metric system, which is used by virtually every other country of the world.
Will I need to learn another language?
Having someone within your company who is capable of speaking in the language of the culture in which you are doing business demonstrates commitment to the market. While it's true that much international business is conducted in English, to be truly successful you must respect your partners' culture. If necessary, hire an interpreter.
How do I learn about differing customs which could affect my company, product, or way of doing business?
The best way to learn the ins and outs of doing business in another country is to travel there to learn and to have face-to-face meetings. But first, do your homework. There is a growing body of resources available on each country's history, social and political systems, protocol, and business etiquette available online. Many firms specialize in intercultural communications for business people, whether traveling or hosting foreign visitors.
How should I ship my product overseas?
A successful export program uses reliable, cost-effective transportation. The buyer should compare competitive products on the basis of delivered cost. Your company needs to make sure the product is delivered in good condition, on time, and keep the cost in line with competitive products. The transportation choice, therefore, should blend the most cost effective of these factors.
How can I finance my international sales?
A top concern of most new exporters is where to get help at both pre- and post-export financing stages of the export process. Pre-export financing is the financing required of the exporter which covers the period from building the product to shipping. Post-export financing refers to the financing that spans the period from shipment through receipt of payment from the overseas buyer. Government sources of export financing are: SBA Export Working Capital Program, EX-IM Bank Working Capital Guarantee.
How can I ensure I'll get paid for my international sales?
Before making the sale, evaluate the risks-country, currency, and commercial-of doing business in a particular market. Once you and your buyer have come to terms, there are many different methods of payment, including cash in advance, letter of credit, collection and open account that you will need to agree upon.
How long will it take to see a profit from international sales?
Naturally, the time frame from when you initiate your international activity to when you make your first sale and start enjoying profits will vary greatly from firm to firm depending on your export experience and the challenges of the market. In general, expect the turnaround to be at least one to two years.
What agencies, groups, or others can provide assistance to my company on the various facets of the exporting process? How much will this expertise cost?
SBDC consulting services are free. Its education and training programs are offered at a nominal fee. Industry trade associations also sponsor a variety of programs specific to their industries. Watch the business calendars in the local media and on this website to keep up with export training opportunities.
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How do I commercialize my food product?
While friends and family may love your product when it is offered as a free sample, repeat sales, the key to success in the food business, is more elusive and difficult to achieve.
A business plan including a focused market plan is the recommended way to launch a new product successfully. Formation of an advisory board of 3-5 knowledgeable non-competing companies is also a helpful tool to provide entrepreneurs with constructive input at an early stage.
As a first step outside of your property, you can locate a test kitchen to product small quantities of products as samples to test the market. The food industry specialists at PennTAP are an excellent resource for technical assistance related to food production issues and possible manufacturers who may be able to refer you to a potential co-packer.
The plan may include efforts and costs to manufacture the product or target a co-packer to produce the product to your specifications for a stated cost. You may need a lawyer at this stage to draft a non-disclosure agreement as a prerequisite to discussing your product and process with a co-packer. Typically, co-packers will have minimum production runs and lead times. They may also charge for storage, especially if you have a refrigerated or frozen product. The co-packer will need to see your packaging & outside Carton as well as ingredients listing and process.
How do I find food brokers and distributors?
Brokers and distributors can be identified from the local Yellow Pages, the Internet, recommendations from non-competing food companies, NASFT (National Association for the Specialty Food Trade) Brokers Directory, Directory of Pennsylvania Food Brokers and the Directory of Food & Beverage Private Label Manufacturers in the Northeastern and Midwestern United States. These resources are available from the Kutztown University SBDC.
It is important to understand costs and fees prior to engaging these services which should be formalized in a written agreement. Some brokers will require an upfront fee while others will work on a commission basis.
Whom do I contact to warehouse and transport my products?
The manufacturer or co-packer may offer this service or contact with an outside carrier for warehousing and transport. You can identify other sources for these services in the Yellow Pages of the telephone book or online via a search engine. It is always advisable to visit a warehouse prior to storing product there. Recommendations from other food manufacturers for storage and transport are helpful as well.
Volatile fuel prices may result in surcharges for transport and storage. This should be clarified prior to contracting for these services. You should also inquire about insurance coverage when working with any outside contractor.
What sales and marketing materials do I need?
Generally, it is advisable to have a product summary sheet, commonly called a sell sheet or point of sale information. You would include company and contact information, product photos & applications and your logo. The reverse side of the sheet can mention product case specifications (net and gross weights, cube of the carton), product and size variations, recipes, nutritional information, order lead times or minimum order sizes.
Companies, even start-ups, are expected to have at least a website highlighting key product selling points. Blogs and Facebook entries are increasingly used by new and established companies to communicate with customers and prospects.
What markets should I first approach?
Your marketing approach depends on your target market that should be clearly defined in your marketing plan. Companies selling direct to customers may sell through farm stands and farmers markets, a restaurant or a public forum such as a sports event. While owners enjoy higher gross margins, the quantities are small.
Alternatively, selling to a supermarket chain, a restaurant wholesaler or a “big box” store may require broker and distributor fees as well as a longer, more bureaucratic, decision-making process. Retail grocers may demand a slotting fee per store which is sometimes negotiable.
For new-to-market companies, it is recommended that you start with the local and regional market because it is easier and less expensive to supply. Entrepreneurs can also observe consumption and order patterns more closely that offer valuable lessons on target markets as you expand your product distribution.
What should I sell my product for?
While there is of course no one answer, creating a budget as part of a marketing plan for your product launch is critical to its success. In addition to the specific items below, consider whether you are manufacturing the product or contracting to a processor, intensity and type (local manufacturers vs. national brands) of competition and the value-added proposition of your product in your pricing. Typically manufacturers will realize higher margins that companies that contract with co-packers.
Some specific key issues to consider are:
- Equipment costs
- Minimum product runs
- Cost of raw materials, both food and non-food
- Storage and transport costs
- Design of label and point of sales materials
- Website costs
- Label design and production costs
- Packaging Costs
- Brokerage fees
- Possible distributor charges
- Advertising, promotional and coupon costs
- Taste testing
- Exhibit display
- Trade show costs
- Tolling fee if you are not manufacturing the product
Finally, you may consider as part of your product launch strategy, introductory pricing, special packaging or pairing your product with a complimentary product.
How much does it cost to launch a new food product?
In addition to the above factors, it may be useful to divide costs into pre-launch/product development and in-business costs. Simply budgeting the for all of the product development costs is insufficient since one a business is open, it will of course incur additional costs to manufacture and sell products before realizing profits. Therefore effective cash flow management is crucial at this the product launch stage.
As a start-up company, your suppliers may require prepayment for contracted services while your customers may demand terms or pay beyond the agreed payment terms. A line of credit, business loan or other accessible source of funds is essential for working capital. Over time, it may be possible to negotiate terms with your suppliers, food, non-food and servicers while your leverage with your commercial customers for prompt payment may remain weak. Charge backs by retail stores and retail & food service wholesalers can be costly and unexpected. Therefore understanding a customer’s chargeback policy should be clearly understood prior to making the sale.
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Small Business Innovation Research (SBIR)
What is the SBIR Program?
The Small Business Innovation Research (SBIR) Program is a highly competitive three-phase award system which provides qualified small business concerns with opportunities to propose innovative ideas that meet the specific research and research and development needs of the Federal Government.
What are the three phases of the SBIR Program?
Phase I is a feasibility study to evaluate the scientific and technical merit of an idea. Awards are for periods of up to six months in amounts up to $100,000. Phase II is to expand on the results of and further pursue the development of Phase I. Awards are for periods of up to two years in amounts up to $750,000. Phase III is for the commercialization of the results of Phase II and requires the use of private sector or non-SBIR Federal funding.
Do you have to be a Phase I awardee in order to be considered for Phase II of a project?
Yes. In order to be considered for any of the later Phases of SBIR awards you must first have been awarded a Phase I grant.
What is the small business size standard for purposes of the SBIR Program?
A small business concern for purposes of award of any funding agreement under the SBIR Program is one which, including its affiliates, has a number of employees not exceeding 500.
How can a small business concern obtain funding under SBIR?
A small business can obtain funding under SBIR by being the recipient of a competitively awarded SBIR funding agreement.
What is an SBIR funding agreement?
An SBIR funding agreement is a contract or grant entered into between an SBIR participating Federal agency and a small business concern for the performance of experimental, developmental, or research work funded by the Federal government.
Who are the participants in the SBIR Program?
The following Federal agencies are eligible to participate:
- Department of Agriculture
- Department of Commerce
- Department of Defense
- Department of Education
- Department of Energy
- Department of Health and Human Services
- Department of Transportation
- Environmental Protection Agency
- National Aeronautics and Space Administration
- National Science Foundation
Can a firm go directly to a Phase II award without having to compete for Phase I?
No. The SBIR Program was created for NEW innovations to meet existing Federal R&D needs. The results of a Phase I are a determining factor in deciding whether there will be a Phase II award to continue the effort.
Is a small US firm still eligible to compete for an SBIR award if it forms a 50-50 joint venture with a non-profit or foreign firm?
Are foreign-based firms eligible for SBIR awards?
No. To be eligible for award of SBIR funding agreements, a small business concern has to meet the following qualifications: be independently owned and operated principal place of business is located in the United States at least 51 percent owned or in the case of a publicly owned business, at least 51% of its voting stock is owned by United States citizens or lawfully admitted permanent resident aliens.
Are non-profit concerns eligible for SBIR awards?
May a portion of an SBIR award be subcontracted?
For Phase I, a minimum of two thirds of the research and/or analytical effort must be performed by the proposing firm, and for Phase II, a minimum of one-half of the research and/or analytical effort must be performed by the proposing firm.
Can a Federal agency other than the one originating the Phase I award make the Phase II award under the same SBIR topic?
No. Awards of this type would be the result of an unsolicited proposal, and therefore, would be considered outside the scope of the SBIR Program.
What is the difference between SBIR solicitations and the SBIR Pre-Solicitation Announcement?
SBIR solicitations are specific Requests for Proposals released by the Federal agencies participating in the program which may result in the award of Phase I SBIR funding agreements. SBIR Pre-Solicitation Announcements, released by SBA, contain pertinent data on SBIR solicitations that are about to be released by the participating Federal agencies.
Are data rights protected and for what length of time?
Data rights are protected by agencies for a period of not less than 4 years from delivery of the last deliverable under the Phase I, II, or III award.
Will innovations that have been patented or have patents pending be considered under SBIR?
No. SBIR is a program for new high tech innovations.
Can participating Federal agencies provide funds for SBIR commercialization?
No. Private sources of capital should be used. However, the agencies can provide support for technical assistance. SBIR awardees are encouraged to seek information on all of the services made available to the small business community.
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Small Business Technology Transfer (STTR)
What is the STTR Program?
STTR is a highly competitive three-phase program that reserves a specific percentage of Federal research and development funding for award to small businesses in partnership with nonprofit research institutions to move ideas from the laboratory to the marketplace, to foster high-tech economic development and to address the technological needs of the Federal government.
What are the three phases of the STTR Program?
Phase I is the startup phase for the exploration of the scientific, technical, and commercial feasibility of an idea or technology. Awards are for periods of up to one year in amounts up to $100,000. Phase II is to expand Phase I results. During this period the R&D work is performed and the developer begins to consider commercialization potential. Awards are for periods of up to two years in amounts up to $500,000. Phase III is the period during which Phase II innovation moves from the laboratory into the marketplace. There is no STTR funding in this phase.
Must you be an established business when you propose?
No. However, you must be organized as a business at the time of award.
Who can propose?
Only small for-profit businesses can propose.
What is the size criteria?
A small business concern with 500 or fewer employees including subsidiaries and/or affiliates. The size of the non-profit collaborator is not relevant.
How are future rights to projects developed under STTR determined?
The small business concern and the research institution must develop a written agreement prior to a Phase I award. This agreement must be submitted to the awarding agency if requested.
Who are the Federal participants in the STTR Program?
The following five Federal departments and agencies are eligible to participate:
- Department of Defense
- Department of Energy
- National Aeronautics and Space Administration
- Department of Health and Human Services
- National Science Foundation.
Can I skip Phase I and begin at Phase II?
No. Phase II awards can only be awarded to firms having successfully completed Phase I at the same awarding agency.
Can you subcontract in STTR – either party or both?
Yes. Either party may subcontract or they may jointly fund a subcontractor.
Can a small business concern participate in both SBIR and STTR simultaneously at the same or differing agencies?
Yes, but they may not perform the same or essentially similar work under more than one contract or grant. Collecting funds more than once for the same work is fraud.
Must a successful Phase I small business concern use the same institution in Phase II?
No. The small business concern can change research institutions in Phase II.
Will an unsolicited proposal be accepted in the STTR Program?
No. Proposals must respond to the solicitation as published by one or more of the participating agencies.
Must the small business concern and/or the research institution be located in the United States?
Yes. Both the small business concern and the institution must be on U.S. soil.
Can a Phase III follow-on contract for funding be made, without competition, to the firm that successfully completes Phase I and II?
Yes, the firm may be given a sole source contract in Phase III for further work or production.
What is the minimum percent breakout for small firms and institutions in conducting research?
Small business concerns must perform at least 40% and research institutions must perform at least 30% of the work.
Where can I go for further information on how I get started or if there is other assistance available?
Information can be obtained from SBA Online Bulletin Board by dialing (800) 697-4636. To receive information on other SBA programs, please contact your local SBA office or call the SBA Answer Desk at (800) 8-ASK-SBA.
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