Phase II Proposal Information
Important Documents to
Support the Phase II Proposal:
Milestone
Chart Example
Cooperative
Agreement Example
Commitment
Letter Examples
Proposal Preparation Instructions
and Requirements for SBIR/STTR
ALL
PHASE II PROPOSALS MUST BE SUBMITTED THROUGH FASTLANE -- Reference
the SBIR/STTR Web Page for Step-by-step
Instructions in Preparing a Phase II Proposal,
using FastLane (FL).
A.
Phase
II Objectives
B.
Phase
II Proposal Contents
A.
Phase II Objectives.
The objective of Phase II is to continue the R/R&D effort
from Phase I. Only NSF Phase I awardees may compete for NSF Phase
II projects. The SBIR Phase II proposals have fixed submission
dates, reference the Proposal
Submission Dates for SBIR/STTR.
B.
Phase II Proposal Contents.
All proposals are prepared in FastLane. For step-by-step
instructions reference the SBIR/STTR
Phase II Proposal Preparation Help Page.
A
Phase II proposal consists of the following parts:
Cover Sheet (consists of the NSF Cover sheet,
Certification, and SBIR Addendum page)
Project Summary: The summary
should begin as follows: "This SBIR or STTR Phase II project
. . ." The summary must have the following components:
1. a summary limited to 200 words addressing the Intellectual
Merits of the proposed activity. No proprietary information
should be included in the summary. Include a brief identification
of the problem or opportunity, the research objectives, a description
of the research, and the anticipated technical results
2. a summary limited to 200 words addressing the Broader Impacts
of the proposed activity. Include information on how the innovation
will enhance scientific and technological understanding. Describe
the potential societal and commercial impact of the project.
3. a listing of "key" words. The key words/phrases should
identify the areas of technical expertise in science, engineering,
or education which are to be invoked in reviewing the proposal;
and the areas of application that are the initial target of the
technology.
4. state the topic name and subtopic letter(s) that the Phase
I proposal was submitted under in Phase I
Table
of Contents (automatically generated by FastLane):
Project Description (cannot exceed 15 pages, all
parts must be labeled as presented below). Upload this
section (Parts 1-5) as one file. You must first create this file
with an editor that outputs Adobe compatible PDF files. The following
subsections should be labeled in the following manner:
Part
1. Results of the Phase I Project. Briefly describe how Phase
I has established the feasibility of the innovation, provide
justification for NSF support and intended commercial applications,
and demonstrated the ability of the proposer to conduct R/R&D.
Part
2. Phase II Technical Objectives, Approach,
and Work Plan. Define the specific technical objectives of the
Phase II research and technical approach to meet these objectives;
and provide a work plan defining specific tasks, performance schedules,
milestones, and deliverables. STTR proposals need to specifically
address the amount and type of work to be performed both by the
small business concern and by the research institution and describe
the necessary cooperation, coordination, and complementarity.
Part
3. Organizational Information. Consideration
is given to the company structure and resources available to successfully
complete the Phase II project and to commercialize the results.
Provide
a company income statement for the past year detailing revenue from
- Sales
- Licensing
- Contracts
- Consulting
- Other
Provide
a current staffing profile noting full and part time employees in
the following categories:
- Technical
- Management
- Administrative
- Marketing
and Manufacturing
Briefly
summarize future staffing plans.
Identify
the key members of the Phase II project team and confirm their specific
availability. Specific biographical information should
be provided in the Biographical Sketches section of FastLane.
Part 4. Consultant and
Subaward Agreements. The proposing firm
must perform a minimum of 50% of the research and/or analytical
effort as determined by budget expenditures during Phase II. Biographical
information is required for all consultants and key members of subawards;
place this information in the Biographical Sketches section of FastLane.
Consultant: Anticipated consultant
services should be justified and information furnished on each individual's
expertise, primary organizational affiliation, normal daily compensation
rate, number of days of expected service, and how his or her efforts
will contribute to the project. In addition, proposers must provide
a signed statement from each consultant, whether paid or unpaid,
confirming his/her availability and commitment, role in the project,
and agreed consulting rate. Payment for a consultant's services,
exclusive of expenses, may not exceed the consultant's normal rate
or the daily maximum rate established annually by NSF, whichever
is less. The NSF
maximum consultant rate per day is the limit for personal compensation
and is exclusive of any indirect costs, travel, per diem, clerical
services, fringe benefits, and supplies.
The signed consultant statements must be scanned into the proposal
and placed under Part 4. A statement of the number of days
and the daily compensation rate (which will not exceed the NSF maximum
consultant rate) must be specifically stated.
Subaward
(a.k.a. subcontract): A SBIR Phase II subaward cannot exceed
50% of the total budget. A STTR Phase II subaward to other
than the cooperating research institution cannot exceed 30% of the
total budget. If subawards (including contracts, subcontracts
and other arrangements) are used for research, describe the tasks
to be performed and how these are related to the overall project.
No significant part of the research or substantive effort under
a NSF grant may be contracted or otherwise transferred to another
organization without prior NSF authorization (this excludes the
procurement of items such as commercially available supplies, materials,
equipment or general support services allowable under the grant).
The intent to enter into such arrangements should be disclosed in
the proposal.
Each
subaward shall use a Proposal Budget, providing detail of subaward
costs by cost category. Enter the total amount under Subawards (Line
G.5) of the company budget for the overall project. Each subawardee
budget can be prepared in FastLane.
Purchases of analytical or other routine services from commercial
sources and the acquisition of fabricated components from commercial
sources are not regarded as reportable subaward activity. Such items
-- routine analytical or other routine services -- should be reported
in the Budget under Other Direct Costs/Other (Item G.6). All
research, including subaward and consultant activities, must be
carried out in the U.S.
Part
5. Equivalent or Overlapping Proposals to Other Federal Agency.
A firm may elect to submit proposals for
essentially equivalent or overlapping work under other Federal program
solicitations or may have received or expect to receive other Federal
awards for essentially equivalent or overlapping work. In these
cases, the proposer MUST
inform NSF of related proposals and awards and must first certify
on the Proposal Cover page whether the proposer (a) has received
Federal government awards for related work, or (b) has submitted
currently active proposals for similar work under other Federal
government program solicitations or intends to submit proposals
for such work to other agencies during the same year. For all such
cases, the following information is required:
* The name, address, and telephone contact
of the sponsoring agency to which the proposal was or will be submitted;
* Date(s) of proposal submission(s);
* Title, number, and date of Solicitation
under which the proposal was submitted or will be submitted;
* Title and performance period of the proposal;
and
* Name and Title of the Principal Investigator
(person-months (per year) (calendar-months) devoted by any personnel
on the equivalent or overlapping project who overlap with PI and
personnel on this proposal)
If no equivalent or overlapping proposals
are under consideration, state, NONE. NSF will
not make awards that essentially duplicate research funded (or expected
to be funded) by other agencies, although in some cases NSF may
fund portions of work described in an overlapping proposal provided
that the budgets appropriately allocate costs among the various
sponsors. IF A PROPOSER FAILS TO DISCLOSE EQUIVALENT OR
OVERLAPPING PROPOSALS AS PROVIDED IN THIS SECTION, THE PROPOSER
COULD BE LIABLE FOR ADMINISTRATIVE, CIVIL, OR CRIMINAL SANCTIONS.
References
Cited. Provide a comprehensive listing of relevant reference
sources, including patent citations.
Biographical sketches.
Provide relevant biographical information for the Principal
Investigator and key personnel from the company as well as consultant
and key subawardee personnel. Include information on present and
past employment, education (highest degree and year), and professional
experience. Provide a listing of relevant publications and summarize
other contributions to the technical literature not directly pertinent
to this proposal.
Proposal Budget.
The NSF Summary Proposal Budget is generated in FastLane. Prepare
a budget for each year. The system will automatically generate a
cumulative budget for the entire project. Provide the required budget
justification on all line items. Please reference the NSF web site
for clear direction on how to document
budget line item expenses, following the directions will help
expedite processing if a proposal is recommended for support.
FastLane provides budget justification pages.
The proposed costs indicated on the proposal budget should be consistent
with the scope of the research effort and must be based on accurate,
complete, and current cost or pricing data. SBIR/STTR Phase II awards
are typically up to $500,000 and for up to 24 months. A STTR Phase
II proposal requires a minimum of 40 percents of the budget be allocated
to the small business and a minimum of 30 percent allocated to the
research institution.
Tuition costs are not supported
costs under a SBIR/STTR grant. NSF does not consider tuition costs
research or research and development.
NSF requires that you budget travel
(for each year of your project) to attend the annual DMII Conference,
typically held each year in January. A good estimate for this travel
is $2,000 per year for this conference.
NOTE: Travel Costs for attending
professional conferences are generally NOT considered directly related
to research and should be included in the "indirect" cost
pool. Reasonable travel costs for presentation of your
project findings at professional conferences are acceptable.
For guidance on budget documentation -- reference
the Cost Analysis and Audit Resolution Branch web
page. Some key components to pay close attention to when preparing
the SBIR/STTR Phase II budget are as follows:
1. Salaries and Wages. Research
effort is to be estimated in calendar person-months.
2. Principal Investigator. The
commitment of the PI must be for at 2 months per year. Enter the
estimated number of NSF-funded person-months (not in hours) in the
column headed by "CAL".
3. Key Personnel. Enter
the estimated number of NSF-funded person-months (not in hours)
in the column headed by "CAL".
4. Permanent Equipment. (Reference
the definition of Permanent
Equipment.) Individual items must be justified in terms of their
specific importance to the proposed research. List permanent equipment
on line D of the budget form. Requests should not be made for routine
equipment that a business in the field should be expected to have
available.
5. Consultants. (Reference
the definition of Consultant.)
The proposal must include a "signed" statement from each
consultant confirming availability and commitment, research role
in the project, and agreed consultant rate. The number of days on
the project MUST be specified in the consultant's
statement. Costs proposed for a consultant's services, excluding
expenses, may not exceed the NSF
maximum daily rate.
6. Subawards (a.k.a. subcontracts).
(Reference the definition of Subaward.)
For each subaward, a Proposal Budget is required. Provide details
of subaward costs by cost category. The electronic signature policy
eliminates the requirement of providing a signed paper copy of the
subaward budget. The total amount of subawards should be shown on
Line G.5 on the cumulative budget for the project. NOTE
-- under SBIR, a minimum of one-half of the research and/or
analytical effort, as measured by the budget, must be performed
by the proposing small business concern.
Purchases of routine analytical or other
routine services from commercial sources are not regarded as reportable
subcontract activities. No letter is required for such activity.
Routine analytical or other routine services should be reported
on the proposal budget under "Other Direct Costs/Other"
(line item G.6) and describe on the budget justification page.
7. Indirect Costs. Indirect
costs may be requested. The amount proposed should be based on the
application of substantiated indirect costs rates (see Indirect
Costs). Note that Independent Research and Development (IR&D)
costs must be treated as direct costs when calculating indirect
cost rates for use under NSF grants (see NSF Grant Policy Manual
Chapter
6).
Note: NSF does not fund
Independent Research and Development (IR&D) as part of an indirect
cost rate under its grants. IR&D, as defined at FAR
31.205-18(a), includes cost of effort that is not sponsored
by a grant or required in performance of a contract and that consists
of projects falling within the four following areas:
1. Basic Research;
2. Applied Research;
3. Development; and
4. Systems and other concept formulation studies.
NSF's primary purpose is to support and
advance independent research within the scientific and engineering
community. NSF has well recognized and established procedures for
supporting research through competitive grant awards based on merit
review of proposed projects. Reimbursement for independent research
and development costs through the indirect cost mechanism could
circumvent this competitive process. Accordingly, NSF does not fund
IR&D as part of an indirect cost rate under its programs including
the SBIR and STTR programs.
To ensure that all projects receive similar
and equal consideration, eligible organizations may compete for
direct funding of independent research projects they consider worthy
of support by submitting proposals for those projects to NSF. Since
proposals for these project may be submitted for direct funding,
costs for IR&D projects are not allowable as indirect costs
under NSF grants.
Current and Pending
Support. This section should show that the Principal Investigator
and senior personnel have the time available to perform the proposed
research during the grant period. The proposal should provide information
about all research to which the Principal Investigator and other
senior personnel either have committed time or have planned to commit
time (in the event that other pending projects are supported during
the SBIR/STTR Phase II period of performance), whether or not salary
for the person involved is included in the budgets of the various
projects. If none, state NONE.
For all ongoing or proposed projects, excluding
any proposals cited in the Equivalent and Overlapping Proposals
subsection to other Federal agencies, or proposals that will be
submitted in the near future, involving the Principal Investigator
or senior personnel, provide the following information:
* Name of sponsoring organization;
* Title and performance period of the proposal; and
* Person-months (per year) (calendar months) devoted to the project
by the Principal Investigator and each of the senior personnel.
A Current and Pending Support statement should
be included in the proposal at the time of submission.
Facilities
and Equipment. Discuss requirements for and the availability
of equipment, instrumentation, and facilities required for Phase
II. If a proposer wants to arrange the use of unique or one-of-a-kind
Government facilities, a waiver must be obtained from the Small
Business Administration.
Supplementary
Doc. Consists of the following components:
A. Payment
Schedule and Project Milestone Chart. A payment schedule
and project milestone chart are required components for all Phase
II proposals.
Based on the expected utilization of resources
and expenditures of funds, if the standard payment schedule as described
in the SBIR Phase II General Conditions, Article 6, (http://www.nsf.gov/cgi-bin/getpub?sbirii)
is not appropriate, provide a list of the number of payments, the
percentage amount of each payment, and a brief justification for
the departure from the standard schedule. The standard schedule
is an initial payment of 25% of the total budget, followed by 3
payments of 20% and a final payment of 15%. A deviation from the
standard payment schedule must be approved by NSF (the final payment
of on a payment deviation but be 15% of the total budget).
The milestone (Grantt type) chart must show
the duration and timing of major component tasks that are required
to implement the research plan. Milestone markings indicating the
initiation and completion of tasks should appear clearly in the
24-month time line and in relation to other tasks.
Briefly define each task in terms of how
it contributes to the research plan, and describe each milestone
event in terms of a concrete accomplishment that marks significant
technical progress towards your proposed research objectives.
A sample of a Phase II Milestone Chart is
provided for guidance (Milestone
Chart).
The original milestone chart should have
projected expenditures for each interim reporting period of the
project. Resources are defined as follows:
* Level of effort (in person-months) by the
PI and/or key personnel (including consultants and subawardees).
* Level of effort (in dollars) by PI and/or
key personnel (including consultants and subawardees).
* Permanent equipment (leased or purchased)
and/or major purchases of supplies.
The total expenditures should include "Other",
i.e. all project costs including indirect costs.
For each interim reporting period, enter
certain key resource expenditures that will be charged against the
grant milestones. Reference the Phase II Reporting Requirements
for Interim
Progress Reports.
The original milestone chart should show
a complete overview of the proposed project schedule. Actual progress
on achieving the milestones along with the person-month effort,
and expenditures for each interim reporting period will be required
for each reporting period. Each succeeding interim reporting period
will show the progress and expenditure data for all preceding periods.
B. Commercialization
Plan ( Cannot exceed 15 pages, including letters of support.) The
commercialization plan offers the opportunity to present a compelling
value proposition for the proposed Phase II project. The commercialization
plan should provide qualitative and quantitative information directly
relating to Phase III; the time interval between the completion
of Phase II work and the launching of the innovative product, process,
or service into the marketplace. For Phase III, the company must
secure funding from sources other than SBIR/STTR. The commercialization
plan should provide a description, illustrated with tables and charts
as appropriate, in each of the following areas:
1. Introduction of the SBIR Project,
Expected Outcomes, and Impact. Describe, in layperson's
terms, the proposed project and its key technology objectives. Clarify
the need addressed, specifying weaknesses in the current approaches
to meet this need. In addition, describe the commercial applications
of the research and the innovation inherent in this application(s).
Be sure to also specify the potential societal, educational, scientific
benefits of this work. Explain the non-commercial impacts to the
overall significance of the project.
2. The Company. Give a
brief description of your company including corporate objectives,
core competencies, present size (annual sales level and number and
types of employees), and any current products/services that have
significant sales. Clarify your plans to have an appropriate management
team in place to see the Phase II project through to commercialization.
Indicate your vision for the future and how you will grow/maintain
a sustainable business entity. Include a short description of the
origins of the company.
3. The Market, Customer, and Competition.
Describe the market and/or market segments you are targeting and
provide a brief profile of the potential customer. Tell what significant
advantages your innovation will bring to the market, e.g., better
performance, lower cost, faster, more efficient or effective, new
capability. Explain the hurdles you will have to overcome in order
to gain market/customer acceptance of your innovation. Elaborate
briefly upon the plans you have for approaching your potential customers
– that is, your marketing and sales strategy. Give an overview
of the current competitive landscape and any potential competitors
over the next several years. (N.B., it is very important that you
understand and know the competition.)
4. Intellectual Property (IP) Protection.
Describe how you are going to protect the IP that results from your
innovation. Also note other actions you may consider taking that
will constitute at least a temporal barrier to others aiming to
provide a solution similar to yours.
5. Financing. Once you
have finished a Phase II project, you are on your own to raise the
necessary financing for Phase III, to launch your innovation, and
to begin the revenue stream . By the time you prepare your Phase
II proposal, it is already important to have a clear idea of how
you are going to get this financing. How you plan to obtain financing
is a critical review consideration. Please provide a listing of
estimated funds needed for Phase III by the year, for each of the
5 years following the completion of the Phase II project, and the
potential sources of funding as well as amounts from each source
for a given year. In addition, you must show that you have a plan
for this funding in one or more of the following ways:
A letter (or letters) of commitment for
Phase III funding; A letter (or letters) of intent or evidence of
negotiations to provide Phase III funding, should the Phase II project
be successful and the market need still exists; A letter of support
for the project and/or some in-kind commitment, e.g. to test or
to evaluate the innovation; A statement, detailing the specific
roadmap of the steps you are going to take to secure Phase III funding
from one or more sources; the progress of this procedure must be
commented upon in the Phase II progress reports.
See Financial Support and Commitments for
a suggested example of commitment
letters. Your Phase III funding may be from any of a number
of different sources including:
SBIR/STTR firm itself
Private investors or "angels"
Venture capital firms
Investment companies
Joint ventures
R&D limited partnerships
Strategic alliances
Research contracts
Sales of prototypes (built as part of this project)
Public offering
State finance programs
Phase III may also involve non SBIR-funded R&D or production
commitments from a Federal agency with the intention that the results
will be used by the United States government.
Other industrial firms
N.B., Small businesses
with NSF SBIR/STTR Phase II awardees should also actively pursue
funding commitments. As an incentive to the awardees, supplemental
Phase IIB funding is available to those companies who secure and
receive third party (private or non-SBIR government) funding during
Phase II. The main objective of the Phase IIB Option is to extend
the R&D efforts beyond the Phase II grant to meet the requirements
of a third party investor, to accelerate the Phase II project to
the commercialization stage, and/or to enhance the overall strength
of the commercial potential of the Phase II project. For more information,
please refer to the Phase IIB web page. Commitments for a third
party to spend the money directly or to provide in-kind services
are not acceptable. However, instruments, computers, software, equipment,
etc., provided to the awardee firm at fair market value are acceptable.
6. Revenue Stream. Explain
how you are going to generate a revenue stream for your company
should this project be a success. Examples of revenue stream generation
include, but are not limited to, manufacture and direct sales, sales
through value added resellers or other distributors, joint venture,
licensing, service. Please clearly indicate if your company will
be the manufacturing entity (or directly providing a service), or
if you expect to commercialize the technology and the product through
third parties (for example, through a licensing or royalties agreement).
In either case, using a table or other appropriate format, please
provide estimates for the revenue stream, by the year, for each
of the 5 years following the completion of the Phase II project,
for your company and for the licensee, if applicable. Please make
sure that all of your assumptions for the revenue stream estimates
are clearly stated. Examples of pertinent financial information
relevant to these estimates are total sales revenues , the market
share basis for these revenues, the cost of goods sold (or the cost
of services provided), the gross income, the operating expenses
and the operating income. In addition, please provide the breakdown
for the cost of goods (or cost of services) estimates.
Sources for Researching Phase III
Funding
There are numerous sources for researching
Phase III funding. Browsing the World Wide Web (WWW) could be a
starting point. The Small Business Administration (SBA) is an excellent
resource; their web address is http://www.sbaonline.sba.gov.
The SBA also has a service that matches entrepreneurs with "angel"
investors at http://ace-net.sr.unh.edu/.
To acquire directories of venture capital
companies, contact one or all of the following:
National Venture Capital Association
Phone: 703-524-2549
web: http://www.nvca.org/
National Association of Small Business
Investment Companies
Phone: 202-628-5055
web: http://www.nasbic.org/
State Science & Technology Institute
(SSTI)
Phone: 614-901-1690
web: http://www.ssti.org/
To obtain a list of large industrial companies
that have indicated an interest in SBIR/STTR companies in specific
areas, you may contact:
Commercialization Matching System SBA-SBIR
409 Third Street, SW 8th Floor
Washington, DC 20416
Phone: 202-205-6450
Information on state agencies and programs
that provide assistance to SBIR companies is contained in the Missile
Defense Agency (MDA) Outreach Notebook that is updated annually.
It may be obtained from MDA by calling 1-800-937-3150.
Some of the state economic development organizations
that can be contacted are as follows:
* The Ben Franklin Partners Program in Pennsylvania:
http://www.benfranklin.org
* Massachusetts Technology Development Corporation:
http://www.mtdc.com
* Connecticut Innovations, Inc.: http://www.ctinnovations.com/
* Utah Technology Finance Corporation: http://www.utfc.org
C. Company
Commercialization History. NOTE -- Please read carefully and respond
to questions. This section is a requirement for any proposer who
has ever received a Phase II award (from any Federal agency)! Failure
to provide complete answers to ALL questions will render the proposal
as "non-responsive" and the proposal will be returned
without review!
Firms that have received one or more SBIR/STTR
Phase II awards from any Federal agency must submit a report on
Company Commercialization History. The following are necessary components
for this section:
1. Firm Name
2. Identify any name change your firm has
gone through within the past 5 years.
3. List the parent company if you are a subsidiary
of a spin-off.
4. Percentage of the Firm's Revenues for
each of the past THREE Fiscal Years from Federal
SBIR and/or STTR funding (including Phase I and Phase II awards).
5. Number of SBIR/STTR Phase II Awards Firm
Received from the Federal Government.
6. Identify each of the Phase II SBIR/STTR
Awards the firm has received by agency, award amount, and award
number.
7. Total revenues to Date From the Commercialization
Results of these Awards.
D. Phase I
Final Report. Upload a complete copy of your Phase I Final
Report associated with the Phase II proposal.
E. Cooperative
Agreement (for STTR Proposals Only). If the plan from Phase
I is still valid, have the Research Institution provide a letter
stating this fact.
The agreement between the small business
concern and the research institution must cover the allocation of
intellectual property rights, if any, to carry out follow-on research
development, or commercialization.
A model
agreement relating to these issues is provided. This model is
for guidance only and may be modified by the parties. The agreement
must contain the signatures of an official of the small business
concern and an appropriate official of the research institution.
By electronically signing the proposal, the
official of the small business concern certifies that the agreement
negotiated with the research institution is satisfactory to the
small business concern.
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