Contact (DMII)

Tel: 703-292-8330
Fax: 703-292-9056

E-Mail:
DMII Webmaster
SBIR Webmaster

Warren R. DeVries
Division Director

Phase IIB

A.  Phase IIB Option Objective

B.  Eligibility for Phase IIB

C.  Phase IIB Proposal Preparation  New FastLane Requirements!

D.  Review of Phase IIB Proposals

      Intellectual Merit Criterion
       Broader Impacts Criterion

E.  Award Recommendation

F.  Payment and Release of Funding

G.  Reporting Requirements

A.  Phase IIB Option Objective (only applicable for SBIR and STTR Phase II grantees.)
 
The Phase IIB Option helps bridge the gap in funding between Phase II and Phase III. The Phase IIB Option will provide additional funds to Phase II grantees that obtain third party funds. The objective of the Phase IIB Option is to extend the R&D efforts beyond a current grant to meet the product/process/software requirements of a third party investor to accelerate the Phase II project to the commercialization stage and/or enhance the overall strength of the commercial potential of the Phase II project. The Phase IIB Option extends the Phase II grant for only one year and the combined Phase II and IIB will not typically exceed 3 years in duration (for Phase IIB supplements in excess of $250,000, Phase II grants may be extended for two years, not to exceed 4 years in duration.) The Phase IIB option is a one-time opportunity that only applies to Phase II grants that are active on the day these proposals are due. There is no resubmission at a later date if a Phase IIB proposal is declined. A no cost extension disqualifies a grantee from the Phase IIB option.  Make sure that application is made for Phase IIB during the original performance period of the Phase II grant, (for further information call your Program Officer).

Please note these important changes to the Phase IIB Program:

* Phase II eligible grantees now have the choice of two deadlines for submission of Phase IIB proposals: March 1 or November 1.

* Both SBIR and STTR active Phase II grantees are eligible to apply for Phase IIB funding -- effective October 1, 2003.

* Effective November 1, 2003 -- the maximum for Phase IIB supplement has increased from $250,000 to $500,000. The total cumulative award for the Phase II grant and Phase IIB match has increased to $1,000,000.

Do not submit the proposals more than thirty days prior to the deadline. 
 
B.  Eligibility for Phase IIB 

The Following permits a company to participate in the Phase IIB process:
 
1. Completion of one year of work on  the Phase II grant (or special permission from your Program Officer).
2. Funding from a third party investor (reference definition of third party investor).
 
The third party investor must commit a minimum of $100,000. NSF will match up to 50% of funds received. The SBIR/STTR Phase II awards will be made for a maximum of $500,000 and the Phase IIB additional supplement will be made for a maximum of $500,000. The total cumulative award for the Phase II plus the Phase IIB match cannot exceed $1,000,000. Please note -- Phase IIB funding in excess of $250,000 up to $500,000 have additional requirements:

1. Only non-governmental, private sector third-party funding will be matched by NSF.

2. A representative from the SBIR grantee institution and one from the private sector third-party are expected to make a presentation to a NSF Program Officer panel.

3. The final award recommendation may be subject to SBA approval.

The additional Federal funds can be used only for advancing the research related elements of the project. The third-party investor funds can be used for research or other business related efforts in order to accelerate the innovation to commercialization. Market research, advertising, patent applications and refining of the business plan are good examples of uses for the third-party investor funds.

A letter of commitment from the third party investor must specify the amount of the investment and the method by which the investor will provide the funding to the company. The third party funding can be cash, liquid assets, tangible financial instruments but not in-kind or other "intangible assets". A proposer may submit the original third party funding commitments submitted in the Phase II proposal, provided new updated commitment letters were obtained for the Phase IIB proposal. Loans and investments with contingency clauses are not acceptable. Self-funding does not qualify for the Phase IIB option.
 
C.  Phase IIB Proposal Preparation (Phase IIB proposals MUST be submitted using FastLane.)
 
The Phase IIB proposal shall not exceed 15 pages.  The additional work proposed should be an expansion of the technical work being performed in the Phase II project and must fall within the scope of the present Phase II project. The proposal will contain the following:

The following sections count toward the 15 pages:

• An Executive Summary of the Commercialization Plan
• A discussion of the "New" R&D Activities (including how the third-party funding will be used to accelerate and/or expand commercialization
• Letter(s) of commitment(s) to provide the investment match for Phase IIB SBIR funding, signed by the third party investor(s)

The following sections do not count toward the 15 pages:

• An updated milestone chart reflecting the additional year of effort.
• A new Certificate of Current Cost Pricing Data
• A new budget for the portion of the funds requested from NSF for the Phase IIB project and budget line item justification  

The following are the steps for preparing the proposal using the FastLane system.

1. Go to the FastLane Home Page (www.fastlane.nsf.gov)

2. Select from the left hand-side of the page the "Proposals, Awards and Status" link

3. Provide your Last Name, SSN, and Password.  Click on "Login"

4. Select from the Principal Investigator (PI)/Co-Principal Investigator (Co-PI) Management Screen the option entitled "Award And Reporting Functions"

5. Select the "Supplemental Funding Request" link

6. A List of Current Awards will appear.  Highlight the award you are preparing the Phase IIB proposal for and then click "Prepare Supplemental Funding Request"

7. Highlight award number (it should already be highlighted) and then click on "Create New Supplemental Funding Request"

8. At the Form Preparation Screen 6 "GO" buttons appear.  The following information MUST be provided in each:

GO  Summary of Proposed Work

A. Executive Summary of the Commercialization
B."New" R&D Activities Proposed

GO  Justification for Supplement

Upload the "Third-Party Commitment Letters, Purchase Orders, Licensing Agreements, etc.

GO Supplementary Docs

Upload the following documents (combine the two word documents and upload as one file).  The Word templates for the Milestone Chart and the Certificate of Current Cost Pricing Data can be found at: http://www.eng.nsf.gov/sbir/forms.htm

• New Milestone Chart
• Certificate of Current Cost Pricing Data

GO  Revised Expiration Date:

Add 12 months (or 24 months for a super-sized Phase IIB) to your current expiration date

GO  Budgets (including Justification)

Prepare new budget for the Phase IIB activities (only the NSF funding). Make sure to budget one trip to the DMII Conference.

Provide complete line item justification for ALL budget items

GO  Add/Delete Non Co-PI Senior Personnel

Use this module if personnel for the Phase IIB activities will change from
the present Phase II project

9. Complete all required forms and then click on "Go Back"

10. At the "Request for Supplemental Funding" screen click on "Allow SRO Access"

11. At the "Sponsored Research Office (SRO) Access Control" screen, select "Allow SRO to view, edit and submit proposal"

12. A confirmation message stating that the SRO has access to the proposal will appear.

13. To actually submit the Phase IIB proposal the following steps will need to be performed. This can only be done by the individual that the company has designated as the "Authorized Organizational Representative"

• Go to the FastLane Home Page.
• Select from the left hand-side the "Research Administration" link
• Provide your Last Name, SSN, and Password.
• From the "Research Administration Functions for Your Company" select the "Submit Proposals to NSF" GO button
• In the Proposals in Progress Window, highlight the proposal and then select "Submit"

14. If you have problems or questions please contact the NSF FastLane Help Desk at 800-673-6188.  Make sure to inform the Help Desk that you are submitting a Supplemental Funding Request.

D. Review of Phase IIB Proposals

All Phase IIB proposals will be reviewed in-house by a minimum of two NSF Program Officers. Each proposal will be reviewed based on the review criteria below.

Criterion: What is the intellectual merit of the proposed activity?

Potential considerations: Will the completion of the proposed activity lead to a solid foundation of the scientific and engineering knowledge and understanding base? Has the firm progressed satisfactorily in the Phase II activity to justify a Phase IIB activity? Is the proposed plan a sound approach for establishing technical feasibility that could lead to commercialization?

Criterion: What are the broader impacts of the proposed activity?

Potential considerations: Does the commercialization plan summary in the proposed activity show a clear path to commercial and societal benefits? Does the proposed activity reflect changes to the Phase II commercialization plan that further improves the chances of conversion of research in order to provide societal benefits? What are the expectations of the third party and how effective will the third party funded activity lead to commercial and societal benefit? Evaluate the competitive advantages of this technology vs. alternate technologies that can meet similar market needs.

E.  Award Recommendation
 
A Phase IIB applicant will be notified within 60 days from submission deadline of the Phase IIB proposal. If a proposal is recommended for award, the company must submit proof of the bank transaction showing that the third party has exercised its commitment.

F.  Payment and Release of Funding
The Phase IIB match will be released in two installments.  The first 50% of the NSF matching funds will be released upon the award of the Phase IIB supplement.  The last 50% of the NSF matching funds will be released on completion of 6 months of work into the Phase IIB program, and submission of an acceptable 6-month interim report.  The final payment on the original Phase II will be made at the end of the Phase IIB supplement.*

Payment will be released upon the receipt of a letter that the entire amount of the funds from the outside investor has been transferred to the company; this letter must be signed by both the company and the third party investor and must specifically state the total amount of the third party investment.  For other forms of third party matches, such as contracts or purchase orders, a detailed release schedule (if applicable) must be provided.*  A copy of the bank statement, contract, or purchase order must be provided to NSF.  This information should be sent to the cognizant NSF SBIR Program Officer.  The deadline for receipt of all financial documentation is 60 days following notification of selection for Phase IIB funding.

* All third party investment funds, upon which the Phase IIB supplement is made, must be transferred to the company by the end of the Phase IIB award.  A copy of bank statements must be provided to NSF to verify that all funds have been transferred.

G. Reporting Requirements.

In updating the milestone chart, the report due at the end of the 4th reporting period will be treated as an interim progress report using the standard progress report format. The final reporting documents will now be required at the end of Phase IIB. Upon completion of the Phase IIB, complete documentation, including initial Phase II as well as Phase IIB supplemental activities must be reported. The report must include:

1.) Combined Phase II and IIB Final Report (submitted electronically)
2.) Commercialization Report inclusive of updated Commercialization Plan

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Last updated:
19-Nov-2003