DoD SBIR/STTR Overview Spring National SBIR Conference May 17, 2017 | National Harbor, MD David Sikora, Acting Program Administrator For Official Use Only

Effects of SBIR funding SBIR Impact: IntraLase Founded in 1997 First SBIR Award: 1998 Total SBIR Funding $2M from 8 awards Funding Agencies: Air Force, NIH Effects of SBIR funding “What we were trying to do was so risky that no rational investor would give us money,” recalls Angle. “The SBIR Program would listen because they were looking for innovative research.” Colin Angle, Cofounder of iRobot Originally for use on Air Force pilots, this innovation has improved eye surgery worldwide Over 5 million eyes surgeries performed using Intralase system Intralase acquired in 2007 for $877 million by Advanced Medical Optics, a division of Abbott https://www.youtube.com/watch?v=MvLfki2SKsA&index=6&list=PL1r0-edfDRwpOYZlm4Ofh6JcMkNy5e2cW SBIR Impact: IntraLase

About SBIR/STTR Programs Small Business Innovation Research (SBIR) Small Business Technology Transfer (STTR) Congressionally-mandated programs. SBIR started in 1982; STTR started in 1992 Funded as a set-aside assessment of extramural R&D budget; SBIR for Agencies with >$100M RDT&E budget; STTR for Agencies with > $1B RDT&E budget Encourage participation by minorities and disadvantaged persons in technological innovation SBA programmatic authority over federal SBIR & STTR programs (Program Policy Directives) For Official Use Only

Program Goals Small Business Innovation Research (SBIR) Small Business Technology Transfer (STTR) Create vehicles for moving ideas from research institutions to market 1 Stimulate technological innovation 1 Increase small business participation in federally funded R&D Enable researchers to pursue commercial application of technologies 2 2 Foster participation by socially and economically disadvantaged firms in technological innovation Bridge funding gap between basic research and commercial product 3 3 Increase private sector commercialization of federal R&D 4

Funds R&D at small businesses SBIR Overview & Eligibility SBIR Overview: SBIR Eligibility: Requires each federal agency with an extramural for R&D over >$100M to set-aside 3.0% for SBIR FY16 (3.2% in FY17) Funds R&D at small businesses Organized for-profit U.S. business 1 At least 51% U.S. owned by individuals and independently operated 2 3 500 or fewer employees PI’s primary employment with small business during project 4

Sole-sourcing allowed for follow-on awards What’s Unique About DoD Focused on the warfighter Issues contracts not grants Largest SBIR program in the Federal Government Retain data rights for 5 years DoD is both an investor and a customer Does not allow majority-owned by multiple VCOCs, equity, or hedge funds to participate Sole-sourcing allowed for follow-on awards For Official Use Only

STTR Overview & Eligibility STTR Eligibility: Requires each federal agency with an extramural for R&D over >$1B to set- aside 0.45% for STTR in FY16 and beyond Funds cooperative R&D between small businesses and research institutions Formal Cooperative R&D Effort with a U.S. Research Institution 1 2 Minimum 40% by small business, 30% by U.S. Research Institution Small business is Prime, PI can be from SBC or Research Institution 3 4 Intellectual Property Agreement

Participating DoD Components Army Navy Air Force Missile Defense Agency (MDA) Defense Threat Reduction Agency (DTRA) Defense Microelectronics Activity (DMEA) Defense Advanced Research Projects Agency (DARPA) Defense Health Program (DHP) Chemical and Biological Defense (CBD) Special Operations Command (SOCOM) National Geospatial Intelligence Agency (NGA) Defense Logistics Agency (DLA)

3 Phased Program Phase I: Feasibility Study The SBIR/STTR Programs are structured in three phases. Phase I determines the scientific, technical and commercial merit and feasibility of the ideas submitted. Phase II is the major research and development effort, funding the prototyping and demonstration of the most promising Phase I projects. Phase III is the ultimate goal of each SBIR/STTR effort and statute requires that Phase III work be funded by sources outside the SBIR/STTR Program. Phase I: Feasibility Study Phase II: Full Research, R&D to Prototype Phase III: Commercialization

Contracting Agencies Granting Agencies Contracts versus Grants Agency establishes plans, protocols, requirements Highly focused topics Procurement mechanism More fiscal requirements Invoiced on Progress DoD, DHS, NASA, EPA, DOT Investigator initiates approach Less-specified topics Assistance mechanism More flexibility Allows upfront payment NSF, DoE, USDA Contracting and Granting Agencies: HHS/NIH, DOC, ED

Figures are in millions DoD SBIR/STTR Budget SBIR is 3.2% of RDT&E in FY17 STTR is .45% of RDT&E in FY17 DoD is >50% of Federal SBIR Budget DoD Budget FY16 SBIR: $1.06B STTR: $152M $M Army Navy AF MDA DARPA OSD DTRA SOCOM CBD DLA/DMEA NGA DHP SBIR $190 $317 $293 $77 $77.5 $1.2 $9.1 $13.8 $16.6 $4.9 $0 $63 STTR $21 $47.5 $44 $11.5 $11.6 $.2 $1.37 $2.1 $2.5 $.7 $9.5 Figures are in millions

DoD Communities of Interest (COI) Advanced Electronics Air Platforms Autonomy Biomedical (ASBREM) C4I Counter IED Counter WMD Cyber Electronic Warfare Energy & Power Engineered Resilient Systems Ground & Sea Platforms Human Systems Materials & Manufacturing Processes Sensors Space Weapons Technologies

600+ 3 10,000 1,500 950 >$31B Starting with: Resulting in: Path To Success Starting with: 600+ 3 10,000 topics solicitations Phase I proposals Resulting in: 1,500 Phase I awards 950 Phase II awards >$31B in commercialized products & services

16 6 5 2 Participating Firms CA MA VA NY OH MD TX CO PA FL Top 10 States = 72% of Awards % Phase I Awards CA MA VA NY OH MD TX CO PA FL Minority Veteran Hub-Zone 16 Women 5 6 2 Source: % of Phase I awards from FY11-13 For statistical purposes only, small business self-certify ownership on the proposal coversheet. No preference is given.

33% 36% 15% 73% of applicants are new to the program Participating Firms 33% 36% of applicants are new to the program of firms have <9 employees 15% 73% of the awards are first time winners 73% of firms have <50 employees

SBIR Timeline Deliverable: Feasibility Study or Report 1+ Years 4 Years Deliverable: Feasibility Study or Report Deliverable: Prototype Solicitation & Evaluation Phase I (150k) Phase II Evaluation Phase II ($1M) Phase III Topic Generation & Review Phase II Enhancement Seek Program Sponsorship to Align with ACAT needs Begin project interface with PEO/PM & prime Detail design requirements / define risk and opportunities Obtain funding from program sponsors; prepare for transition

Solicitation Schedule A DoD Agency-wide announcement includes: SBIR 17.1 STTR 17.A SBIR 17.2 STTR 17.B SBIR 17.3 STTR 17.C DoD Instructions Service/Component Unique Instructions Topics Pre-Release 11/30/16 Open 1/10/17 Close 2/8/17 Pre-Release 4/21/17 Open 5/23/17 Close 6/21/17 Pre-Release 8/25/17 Open 9/26/17 Close 10/25/17 Not all Components participate in each solicitation. Multiple solicitations provide opportunities to participate throughout the fiscal year.

Solicitation Schedule Getting Started Each year, the services and defense agencies within the DoD issue three SBIR solicitations and three STTR solicitations. 1. Solicitation Schedule 2. Find a Topic 3. Register Your Firm 4. Start a Proposal 5. Submit Proposal https://sbir.defensebusiness.org

SBIR/STTR Interactive Topic Information System Available during Pre-Release & Solicitation Open Moderated system were questions are emailed to topic authors for response in 7 days Once DoD begins accepting proposals, questions may only be submitted through the SITIS system Topic authors may provide additional information thru SITIS: Unclassified Unlimited distribution Not copyrighted https://sbir.defensebusiness.org/sitis

Why Small Businesses Participate Largest source of Federal R&D funds for small businesses Follow-on Phase III awards can be sole sourced 1 5 SBIR invests more than VC community in pre-seed and early stage technology Company may maintain ownership of equipment purchased under Phase I and II 2 6 Builds credibility of company’s research while learning government contracting processes to become a supplier 3 No dilution of equity 7 State economic development programs, angels, and VC use SBIR as a pre-qualifier for their investment Company retains data rights for 4 years (5 years in DoD) 4 8

READ AND FOLLOW ANNOUNCEMENT INSTRUCTIONS Keys to Writing Winning Proposals 1 Each Service and agency is different. Read and follow announcement instructions 2 Know your customer. Make sure your approach is relevant 3 Take advantage of the pre-release. Contact the TPOC to ask questions 4 Emphasize your innovative approach. Articulate how it compares to the state of the art 5 Clearly and concisely answer who, what, when, where, how, and importantly, why 6 If there are technical barriers…address them! 7 Don’t underestimate commercialization. State your plan NOW! 8 Provide a detailed work plan and schedule with tasks that flow smoothly 9 Ensure that the proposed solution is reasonable, realistic, and feasible 10 Check spelling and grammar. Proposals can be difficult to read due to poor grammar READ AND FOLLOW ANNOUNCEMENT INSTRUCTIONS

New BAA Close Time

DoD SBIR Program Administrator David Sikora 571-372- 6329 Contacts DoD SBIR Program Administrator David Sikora 571-372- 6329 Army John Smith 443-345-2133 Navy Bob Smith 703-696-0342 Air Force David Shahady 937-904-4392 SOCOM Anthony Aldrich 813-826-9150 DTRA Mark Flohr 703-767-6991 DHA J.R. Myers 301-619-7377 MDA Doug Deason 256-955-2020 DARPA Susan Nichols 571-218-4922 CBD Larry Pollack 703-767-3307 NGA Stephen Sturtz 571-557-2715 DMEA George Graham 916-231-1511 DLA Denise Price 703-767-0111

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