Gail & Jim Greenwood, Greenwood Consulting Group, Inc.

Copyright © 2004 by Greenwood Consulting Group, Inc.

NOTE: this version of this article reflects changes made after a dialog between GCGI and JoAnne Goodnight of the NIH subsequent to its publication in the SBIR Alerting Service.

In recent years, the National Institutes of Health (NIH) have developed a reputation for being very flexible in how much funding they will make available under a Phase I or Phase II SBIR project. However, that flexibility differs from one NIH program to another, and the degree of flexibility has changed recently. Therefore, we are focusing this proposal writing tip on NIH funding limits.

The first key issue is whether you are considering applying to NIH’s grant or contract SBIR program. Most of NIH’s SBIR funding goes into its grant program, but they also have a small SBIR contract program that is announced each fall in a separate solicitation. If you are applying under NIH’s contract program, then the $100k Phase I and $750k Phase II limits are not firm, but (per the solicitation) are "normally" not exceeded. We would recommend you speak with the NIH staff before submitting a proposal with a budget higher than these limits.

The second issue is whether you are truly applying to NIH, or to one of its sibling agencies. NIH is one of several components of the Department of Health and Human Services (DHHS) that participate in the SBIR program. Within the Omnibus DHHS Grant solicitation each year (this year’s solicitation is #PHS 2004-2), you will find the Food and Drug Administration (FDA) and Centers for Disease Control & Prevention (CDC) as well as NIH. Why is this important? Because neither FDA nor CDC allow you to exceed the $100k Phase I, $750k Phase II maximums on a grant proposal you submit to them.

The third issue is whether you are submitting an SBIR grant proposal to NIH under the aforementioned Omnibus Solicitation, or whether it is under one of NIH’s Program Announcements (PAs) or Request for Applications (RFAs). If you are submitting under the solicitation, you can exceed $100k on a Phase I grant application and $750k on a Phase II request, but you are "encouraged" to only do this after discussing your intent with NIH staff. The wording in the solicitation is "must" discuss with NIH staff beforehand, but leadership of the NIH SBIR/STTR program says that "encourage" is the right word. Regardless of the wording, we think the message is clear: talk with NIH staff before submitting a grant proposal under the Omnibus NIH SBIR/STTR solicitation that exceeds the $100k, $750k limits. By the way, we also understand from NIH leadership that even if NIH staff does not support the high budget, this does not prevent you from submitting such a proposal since selection decisions ultimately rest with the reviewers who are not NIH staff.

What if you are submitting your NIH grant proposal in response to a PA or RFA? Then the limits on how much money you can ask for are stipulated within the PA or RFA description. As a rule, funding limits on NIH’s PAs and RFAs are considerably higher than the $100k Phase I, $750k Phase II norms. To know if your proposal fits one of the PAs or RFAs, check the list at http://grants1.nih.gov/grants/funding/sbir_announcements.htm, or do a key word search at www.sbirworld.com or www.zyn.com . You may also want to look at our SBIR Alerting Service proposal writing tip from December 2003 (archived at

http://g-jgreenwood.home.att.net) on NIH’s PAs and RFAs.

In summary, NIH continues to entertain Phase I and Phase II SBIR projects at funding levels above $100k and $750k, respectively, but there are limitations that you must know about and comply with. Understand those limitations and follow them fully, otherwise your wonderful SBIR proposal may be thrown out on a technicality.