Gail & Jim Greenwood, Greenwood Consulting Group, Inc.

Copyright © 2003 by Greenwood Consulting Group, Inc.

Many of you are aware of the Small Business Technology Transfer (STTR) program, which is the smaller and less well known sibling to the SBIR program. Some of you also know that the STTR program requires that the proposing firm (which must be a small business) collaborate or otherwise team with a university, Federal Laboratory, or other non-profit research institution on the research effort. And those of you who are really "in the know" are aware that the STTR program was reauthorized by Congress recently, and as part of that legislation this little program doubled in size and Phase 1 and 2 awards can be as large as those in the SBIR program ($100k and $750k, respectively). With many of the agencies currently or soon to request STTR proposals, we thought we would focus on two important reasons why you may want to pursue STTR as well as SBIR in your high tech marketing efforts.

The first reason to consider submitting a proposal under the STTR program is the potential for a higher rate of awards than in the SBIR program. STTR has traditionally not attracted as many proposals per topic, for a number of reasons. This fiscal year, the STTR funding is doubled, but we don’t expect the number of proposals to double, so your odds of success may be even better. This doesn’t mean that sloppy or half-baked proposals will be funded, but it can mean that the agencies can fund more or all of the high quality proposals they receive (in SBIR, some very good proposals don’t get funded because there simply is not enough money to go around).

The second reason to consider the STTR program is a little less obvious. Traditionally, Federal Laboratories have been allowed to be research partners on both SBIR and STTR projects. However, there is a distinction between government owned, government operated (GOGO) and government owned, contractor operated (GOCO) federal labs. SBA issued a policy directive in late 2002 that greatly limits the use of both GOGO and GOCO federal labs in SBIR projects. Therefore, you are not allowed to use a GOGO or GOCO on your SBIR project unless you justify the unique resource that the lab brings to your project and get an SBA waiver to do so. But when it comes to STTR, there is no question that a GOCO federal laboratory, if it is listed as a Federally Funded Research and Development Center (FFRDC), can be your research partner. FFRDCs are permitted because the STTR legislation specifically includes them as possible research partners.

So what are the FFRDCs? Most are U.S. Department of Energy owned Federal Laboratories, like Sandia, Los Alamos, Oak Ridge, and Pacific Northwest National Laboratories. There are currently 36 FFRDCs under eight different Federal agencies. For a list, see http://www.nsf.gov/sbe/srs/nsf03308/start.htm.

Therefore, if you plan on using an FFRDC in your project, you may want to consider applying for an STTR award. It is still possible to involve an FFRDC in an SBIR project, but there is greater uncertainty about being allowed to do so because of the SBA waiver requirement. We don’t want to overstate this, however: we understand that the SBA has promptly and fairly considered requests for waivers on SBIR projects involving an FFRDC.

A word of caution if you plan to use an FFRDC on an STTR: even though we have summarized SBA’s guidance on this issue, we know that there is some inconsistency between this and the practice of some of the STTR awarding agencies. Also, we have witnessed an occasional problem in which the awarding STTR agency does not like an FFRDC and/or its parent Federal agency, and as a result proposals that include that FFRDC may be downgraded. Therefore, we recommend that you start the process early if you plan to include an FFRDC in your STTR proposal, and that you talk with the awarding agency to make sure that they are "okay" with the FFRDC you are planning to use.