1. Phase II Review Process:
Behind the Curtain
SBIR/STTR Phase I Workshop
March 20, 2018

2. Agenda Presentation: Q&A with the panel Phase II review process
Financial & Admin Review by the Cost Analysis & Pre-Award Branch (CAP - formerly known as CAAR) – before the award
The commercial review
Q&A with the panel

3. Phase II Review Process

4. Phase II Review Process
Proposals screened and sorted into panels, panelists recruited
Mix of technical reviewers and commercial reviewers
Panelists review proposals in advance of panel
Review panels conducted
PD performs due diligence
PD recommends proposals for award
Request for financial/admin information package
Review by Cost Analysis & Pre-Award Branch (CAP)
Final review by Division of Grants & Agreements (DGA)
Total duration: 6-8 months

5. What is CAP? (formerly CAAR)
Cost Analysis & Pre-Award (CAP) – the branch of NSF that does pre-award administrative and financial reviews of NSF grants
For SBIR/STTR, CAP requires a full pre-award review of ALL Phase II awards

6. What is DGA?
Division of Grants & Agreements (DGA) – the division of NSF that is responsible for reviewing and awarding grants and agreements recommended by NSF program offices
Any official notification or change relating to an NSF proposal or award (including a Phase II award) will likely come from a DGA staff member

7. Tomorrow
Open Session: Cost Analysis & Pre-Award Branch (CAP) and Division of Grants & Agreements (DGA)
Potomac Rooms 1 & 2
10:30am – 12:30pm
Ask an questions about budgets, accounting or other financial or administrative aspects of your NSF grant

8. Phase II Financial Review Guidance

9. What reviews does CAP do?
Financial Capability Review – Does the company have adequate financial resources to perform the award?
Accounting System Review – Does the company meet the basic accounting requirements for a federal award?
Budget Review – Are the budgeted amounts fair and reasonable, based on certified cost and pricing data, and justified properly?

10. Recommend award at full requested amount
Possible outcomes of a CAP Review
Recommend award at full requested amount
Recommend award with reductions
Recommend declination on financial or administrative grounds

11. CAP Process
Commences approximately 3-4 months after Phase II submission
10-day lead time to submit initial financial package
Follow-up requests possible for up to 6 weeks or so, with potentially short turnaround times
Most communication may be with a CPA firm contracted by NSF

12. Financial Capability Review
Does the company have adequate financial resources to perform the award?
All proposing small businesses must provide accounting data from the two most recent years:
- Financial statements
- Most recent audit, if available
- Tax returns

13. Accounting System Review
Does the company meet the basic accounting systems requirements for a Federal award?
All proposing small businesses must provide :
Responses to “Financial Management Systems Questionnaire” (Appendix 4 of “Prospective New Awardee Guide”)
Sample timesheet
Prior Federal audits and/or accounting system reviews, if available

14. All budgeted costs must be:
Budget Review
Are the budgeted amounts fair and reasonable, based on certified cost and pricing data, and justified properly?
All budgeted costs must be:
Necessary to accomplish the project
Allowable, allocable and reasonable per the Federal Acquisition Regulations (FAR)
Based on current cost and pricing information (invoices, purchase orders, quotations)

15. Ask your PD and/or CAP early! Find a good accountant
General Advice
Ask your PD and/or CAP early!
Find a good accountant
CAP Frequently Asked Questions:
Get a head start on the CAP information:

16. CAP Q&A Webinar
Webinar on YouTube: SBIR/STTR Phase II Administrative and Financial Review
Also available at:
click on “CAAR Videos for Phase I awardees”

17. Your Contact at CAP
Sohel Ahmed –

18. Phase II Commercial Review

19. Commercial Reviewers
Expertise in start-ups, investments, technology commercialization and/or relevant market segment
May or may not have relevant technical training
Review and discuss proposals in depth
Strong focus on the commercialization plan – review criteria mirror the format of the commercialization plan

20. Section 1: Market Opportunity
What is the product or service?
Who is the target customer/user? How do they currently meet the targeted need?
What customer needs will your technology address? What is the associated value proposition?
How large is the addressable market and what are the trends/drivers?
What are the barriers (for your company) to market entry?

21. Section 2: Company/Team
What is the size/structure/vision of the company?
What is the commercial/funding track record of the company?
Who owns/operates the company and who are the people responsible for the project? What are their credentials? What is their level of commitment?
What additional advisors/resources/advantages can the company bring to bear on the project?

22. Section 3: Product/Technology and Competition
What customer need/pain point can your product or service address?
What is the value proposition? How has this been validated?
What is the competitive advantage/landscape?
How will you maintain/defend your competitive advantage?
What is the company’s IP position and strategy?

23. Section 4: Finance & Revenue Model
What is the revenue model?
What revenue growth and financial trajectory do you project for the company (pro-forma financial projections)?
What additional funds/resources will be needed, and when? How will the company access these resources?

24. References / Further Info
Phase II proposal preparation:
Phase II Commercial Review Criteria:
werForm.doc
Review Process:
Switching from STTR to SBIR:

25. Contact your Program Director
Before you raise funds using a debt instrument
Changes in your company – including a change of PI
Before you pivot:
Revising your R&D plan
Revising your budget
No-Cost Extension
Keep your PD posted on developments

26. Questions for Panelists