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SBIR Program: Demonstrate, Develop, and Market

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The Small Business Innovation Research SBIR program was established by Congress in 1982 to spur development of new products and processes by small companies. Congress recognized that while small businesses were the nations principle source of significant innovations, most federally funded research and development R and D had been conducted by large businesses, universities, and federal laboratories. They wanted large federal agencies to set aside 1.25 of their extramural or contract R and D budgets for small businesses under this SBIR program. Government SBIR funding can only be used for the first two phases of this three phase program. Phase I is a relatively small research effort to demonstrate the feasibility of the concept involved. Phase II is a main R and D effort expected to result in a well-defined deliverable product or process. SBIR funding is over 400 million a year for the 11 federal agencies that participate in the program. Success occurs when the Phase III commercialization stage is reached and where Government agencies can also procure the SBIR-developed product or process with non-SBIR funding. The Small Business Administration SBA surveyed over 800 Phase II projects stemming from the first three years of the program FY83 through FY85 and found that one-quarter of these firms had achieved Phase III success by the time their Phase II contract had been completed for four years. This paper describes the SBIR program and explains how it works. It identifies the technological areas of activities and some important programs and opportunities available to assist small firms with their SBIR endeavors. An overview of the U.S.Army Materials Technology Laboratorys MTL SBIR program is presented along with a description of their SBIR success stories. They sponsored the first U.S. Army-wide SBIR contractor to successfully reach Phase III.

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