SBIR Proposal Writing Basics: SBIR/STTR Reauthorization vs. Reality

Gail & Jim Greenwood, Greenwood Consulting Group, Inc.

Copyright © 2012 by Greenwood Consulting Group, Inc.

In January, we summarized the key changes in the SBIR/STTR programs that will occur as a result of the 2011 reauthorization. The agencies and the Small Business Administration (SBA) are diligently working on implementing the requirements and opportunities put forth in the reauthorization. While we are “in process” of this happening, you should expect some glitches along the way.

Case in point: Section 5105 of the Reauthorization states that the SBIR/STTR agencies “shall not include any invitation, pre-screening, or pre-selection process for eligibility…”    which suggests that the agencies have to accept proposals from anyone, and give them an equal and fair chance of getting funded.

But recently one of the agencies announced release of a 2012 SBIR/STTR solicitation/funding opportunity announcement (FOA) in which they “are requiring pre-applications for this FOA. The pre-application contains a project description that is limited to 2000 words and 5 pages. Following the pre-application review, only those who receive a letter encouraging a formal application may submit a formal application.”

So how do we resolve this apparent contradiction between the rules of the reauthorization and the reality of these instructions?  There are a couple of plausible explanations, and some inherent lessons therein:

First, SBA has told the agencies to conduct “business as usual” with their SBIR/STTR programs until it can develop and issue policy and other guidelines for the many provisions and requirements of the reauthorization legislation (a notable exception is the funding set asides: the agencies can immediately increase their SBIR set asides to 2.6% of their extramural R&D budgets, and 0.35% for their STTR programs). As we reported earlier, the reauthorization gave SBA a lot of responsibility, but didn’t give it any additional funding with which to carry it out. That means it may take some time for SBA to develop its guidance, and by its own admission, it may come out with “good” but not “perfect” guidelines. Therefore, it is possible to see agencies continuing past practices that violate the reauthorization’s requirements, until such time as SBA issues policy guidelines.

Second, not all of the provisions of the reauthorization are compatible or consistent with the others. At the same time that Section 5105 tells the agencies to not “pre-select” applicants, Section 5126 tells most of the agencies that they must make funding decisions within a mere 90 days of an SBIR/STTR proposal due date.  Given some agencies will receive 10 times the number of Phase 1 proposals that they can afford to fund, and now must “down select” to the winners within 90 days, we should expect them to find ways to meet this goal—and one of them could be to quickly screening out proposals that have little chance of being among the 10% that will be winners. Therefore, as agencies try to meet one requirement in the reauthorization, they may run afoul of other requirements.

Third, it turns out we were “selective” in our quoting of Section 5105 of the reauthorization legislation. The legislation actually reads that the agencies “shall not include any invitation, pre-screening, or pre-selection process for eligibility for Phase II…”    When we first saw the above quoted agency’s Phase I pre-application requirement, we thought it was contrary to the reauthorization. But then upon rereading Section 5105, we could see that it is not.

Of course, some might argue that, while the agency’s Phase 1 pre-application requirement does not violate the reauthorization, it does violate the spirit if one believes the intention was to prevent the agencies from denying a small business the opportunity to submit an SBIR/STTR proposal. What will SBA think as it develops policy guidelines for this provision of the reauthorization? And how will individual agencies interpret the legislation and SBA’s policy on it? We could see some agencies refusing to use any pre-selection techniques on Phase I or Phase II (following the belief that the Congressional intent was to prohibit such practices), while other agencies may use them in Phase I because they are not specifically prohibited from doing so, and see them as valuable tools to meet the 90 day selection mandate.

All of this could give you a massive headache. But we think the discomfort as the reauthorization is implemented is manageable if you keep several things in mind.

First, recognize that, for whatever reason, there may be some agency and SBA actions that are confusing and perhaps even appear contradictory to the reauthorization. This is natural, because implementation of the reauthorization is like sausage being made: it ain’t pretty to watch, but hopefully what comes out in the end is good.

Second, recognize that agencies will decide to implement the reauthorization in different ways. Some of this comes back to provisions that are agency-specific in the reauthorization legislation. For example, the reauthorization gives NIH and NSF a full year to make decisions on SBIR/STTR proposals, while the other nine agencies have only 90 days. And some of this will be based on how the agency interprets the reauthorization, and whether it wants to follow “the letter” or its interpretation of its “intent.”

Third, you really can’t get around reading, studying, and understanding the reauthorization legislation. You can find it at in various places, including  If you don’t know what’s in the reauthorization, then you will be at a serious disadvantage as the SBIR/STTR world evolves. And as we demonstrated earlier, you will need to REREAD it periodically to make sure you don’t miss anything important like the “…eligibility for Phase II…” qualifier on the ban on pre-selection of proposals.

Finally, we offer one silver lining in all of this: If you stay on top of the reauthorization and the agencies implementation thereof, you will be better prepared to submit proposals that reflect the latest nuances and regulations that come about as a result of the reauthorization. Some of your fellow competitors will not be as informed, and will not write a competitive proposal (or even one meeting minimum standards), which puts you at an advantage over them. With change comes opportunity, but you’ve got to be on top of the changes to be able to take advantage of the opportunity.

A BIG Thank You to Jim & Gail for continually providing the SBIR/STTR Community with helpful and useful tips and advice on the programs throughout the years!  To learn more about their consulting and training services, please visit their website HERE.