Gail & Jim Greenwood, Greenwood Consulting Group, Inc.

Copyright © 1999 by Greenwood Consulting Group, Inc.

Every SBIR proposal needs to designate a person who will serve as the principal investigator (PI) of the proposed project. While the agencies offer varying definitions, the NASA solicitation summarizes the role of the PI as "planning and directing the SBIR project; leading it technically and making substantial personal contributions during its implementation; serving as the primary contact with NASA on the project; and ensuring that the work proceeds according to contract agreements." Clearly, the PI must perform an important and central role in the conduct of the SBIR project, and must appear to be credible in this role in the firm’s proposal.

All SBIR agencies expect the PI to be "primarily employed" by the small business that is submitting the proposal. This is usually defined as (1) spending a minimum, on average, of 20 hours per week as an employee of the firm, and (2) not working full time for anyone else. Some agencies supplement this basic requirement with additional criteria. For example:

NASA: PI must spend at least half of their total employed time with the small company (this prevents the PI from working 20 hours for the proposing firm and 30 or 40 hours employed elsewhere)

Department of Energy: PI must devote at least a total of 130 hours to the Phase I project, and a minimum of five hours per week, on average

National Science Foundation: A PI who at the time of submittal of the Phase I proposal is employed full-time at an academic institution must submit a statement signed by a Department Head and Authorized Representative clarifying that they will be drop to less than half-time (<49%) employment at the institution during the Phase I and II projects.

Agency-specific requirements on the PI change over time, so the proposer should always scan the latest solicitation to ensure that they are in compliance with those requirements (see, for example, the relatively new National Institutes of Health requirement that a Personal Data form on the PI be included as part of the SBIR proposal). Proposers also should avoid the tendency to automatically designate the company’s president or CEO as the PI: to have a chance at funding, the company needs to put its best foot forward, and therefore some other member of the research team may be a better candidate for role as PI.

Sometimes, the PI may not be the "shining technical star" of the proposed research team. This occurs when the most qualified individual is not an employee of the firm (e.g., a faculty member consulting on the project), does not meet the employment requirements of the PI, or has too many other responsibilities within the firm to perform the PI role on the proposed project. This happens quite often, and while it is not as good as having your star in the PI role, it is often palatable to the agency—provided that the person who is designated as the PI is still credible in that role. Credibility requires that they have some technical expertise: the PI should not appear to have only business or managerial credentials.

Two final thoughts: first, we often see proposals in which two or more persons are proposed as "co-PIs." This is not allowed in the SBIR program. A single individual who meets the minimum employment requirements stated above should be listed as the PI, and the other individual should assume another title on the project.

Second, be sure to have an employment agreement with your PI stipulating ownership of any intellectual property that is created as part of the SBIR project. You also may want to include a noncompete clause in that agreement to help avoid your PI from becoming your competitor in the future.

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