Small Business Innovation Research Program

The SBIR program is a highly competitive program that encourages small businesses to explore their technological potential while providing the incentive to profit from its commercialization. SBIR funds the critical startup and development phases of R projects that serve a government need and have the potential for commercialization in private sector and/or government markets. Although the risk and expense of conducting serious R efforts are often beyond the means of many small businesses, by reserving a specific percentage of federal R funds for small business, SBIR protects the small business and enables it to compete on the same level as larger businesses.

The program, which was extended until through 2012, was administered by the following ten federal agencies:

• Department of Agriculture
• Department of Commerce
• Department of Defense
• Department of Education
• Department of Energy
• Department of Health and Human Services
• Department of Transportation
• Environmental Protection Agency
• National Aeronautics and Space Administration
• National Science Foundation

The government agencies issue a SBIR solicitation once or twice a year, depending on the size of the agency's budget, describing its R needs and inviting R proposals. Only small, for-profit, American-owned, independently operated businesses can apply under the program. (To be considered "small" under SBIR, the business must have 500 or fewer employees, including all affiliates and/or subsidiaries.) In addition, the principal researcher must be employed by the business.

Companies apply first for a six-month Phase I award of $50,000 to $100,000 to test the scientific, technical and commercial merit and feasibility of a particular concept. If Phase I proves successful, the company may be invited to apply for a two-year Phase II award of $500,000 to $750,000 to further develop the concept, usually to the prototype stage. Proposals are judged competitively on the basis of scientific, technical and commercial merit. Following completion of Phase II, small companies are expected to obtain funding from the private sector and/or non-SBIR government sources for Phase III, which is to develop the concept into a product for sale in private sector and/or government markets.

Since its enactment in 1982, as part of the Small Business Innovation Development Act, SBIR has helped thousands of small businesses to compete for federal research and development awards. Their contributions have enhanced the nation's defense, protected the environment, advanced health care, and improved the management and manipulation of information and data.

For more information on SBIR solicitations, go to the SBA website

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