Chapter 10.0 Proposal Preparation Instructions and Requirements for SBIR Phase II Proposals
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10.1 Phase II Proposals
10.2 Phase II Proposal Contents
10.3 Phase IIB Option
10.1 Phase II Proposals.
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 dates, reference the Table of Deadlines (Section 6.3).
10.2 Phase II Proposal Contents.
In general, Phase II proposals follow the format of Phase I proposals (reference Chapter 3.0 The Phase II proposal is limited to a total of 35 consecutively numbered pages (single- or doubled-spaced). Phase II proposals shall be addressed in the following "Part" order listed.
Part 1: Phase II Proposal Cover and Certification. ( Attachment F)
Part 2: Project Summary. (Attachment C)
Information about Principal Investigator/Project Directors (NSF Form 1225). ( Attachment A) Reference Chapter 3.0, Section 3.4.3
Part 3. Table of Contents.
Part 4. Results of the Phase I Project.
Part 5. Phase II Technical Objectives, Approach, and Work Plan.
Part 6. Company Information.
For young or newly formed companies please address future staffing plans.
Please state company's financial record for the past year specifying income for each of the following areas:
Part 7. Management Team.
Part 8. Facilities and Equipment.
Part 9. Consultant and Subaward Agreements.
Part 10. Equivalent or Overlapping Proposals to other Federal Agency.
Part 11. Current and Pending Support of Principal Investigator and Senior Personnel.
Part 12. Summary Proposal Budget. ( Attachment D
Research effort is to be estimated in calendar person-months.
The commitment of the PI must be for at least 2 months per year. Enter the estimated number of NSF-funded person-months (not in hours) in the column headed by "CAL".
Enter the estimated number of NSF-funded person-months (not in hours) in the column headed by "CAL".
Reference Chapter 2.0, Section 2.9. 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 which a business in the field should be expected to have available.
Reference Chapter 2.0, Section 2.2. The proposal must include a signed statement from each consultant confirming availability and commitment, research role in the project, and agreed consulting rate. The number of days on the project may be specified in the consultant's statement or by referencing the proposal. Costs proposed for a consultant's services, excluding expenses, may not exceed the NSF maximum daily rate, which is currently $453 per day.
Reference Chapter 2.0, Section 2.18. For each subaward, a Summary Proposal Budget form ( Attachment D) is required. Provide details of subaward costs by cost category. An authorized subawardee company representative must sign the subaward budget form. The total amount of subawards should be shown on Line G.5 on the budget for the overall project.
a minimum of one-half of the research and/or analytical effort 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 activity. 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" (item G.6) and describe on the budget explanation page.
Indirect costs may be requested. The amount proposed should be based on the application of substantiated indirect cost rates (see Chapter 5.0).
NOTE: PARTS 13-15 DO NOT COUNT TOWARD THE PAGE COUNT.
Part 13. 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 Grant General Conditions, Article 6, ( http://www.nsf.gov/cgi-bin/getpub?sbirii) is not appropriate, you must 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 (see Chapter 5.0). This request must be reviewed and approved by NSF.
The milestone (Gantt type) chart must show the duration and timing of major component tasks that are required to implement your 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.
In an attachment to the chart, 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.
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Narrative: Attach brief description of each task;
Other includes indirect costs, materials, travel, etc. |
Semi-Annual Key Resource Expenditures.
IMPORTANT TO REMEMBER:
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Part 14. Commercialization Plan and Follow-On Funding Commitment(s).
A Commercialization Plan
The Commercialization Plan should describe plans for commercialization in terms of each of the following areas:
Brief description of your company including its principal field(s) of interest, present size (annual sales level and number of employees), and any current products that have had significant sales.
A concise lay person's description of the proposed project and its key technology objectives.
Potential commercial applications of the research results specifying customers and the specific needs which will be satisfied by the technology, particularly those applications with the greatest near term potential.
Do you have or intend to file for one or more patents as a result of the SBIR project?
What is particularly innovative about the anticipated technology or products? (Innovation may be expressed in terms of applications, performance, technique efficiencies, or significantly reduced cost.)
What significant advantages in application, performance, technique, efficiency, or costs, do you anticipate your new technology will have over existing technology?
What are the anticipated specific markets for the resulting technology, their estimated size, classes of customers, and your estimated market share five years after the Phase II project is completed and/or after the first sales?
Who are the major competitors in these markets, present and/or anticipated?
Briefly describe how you plan to produce your product. Do you intend to manufacture it yourself, subcontract the manufacturing, enter into a joint venture or manufacturing agreement, license the product, etc.? And when do you anticipate doing so? (With high technology products, early market entrance is often critical to success.)
Briefly describe the potential societal, educational, and scientific benefits this project could provide.
Briefly describe the approach and steps you plan to take in commercializing the research results from the end of Phase II to significant sales. Do you plan to market the product yourself, through dealers, contract sales, marketing agreements, a joint venture, sales representatives, foreign companies, etc.?
Briefly describe your plan to raise money to support your commercialization plan after Phase II.
Follow-on Funding Commitment(s).
If a partner commits funds
The commitment agreement may be from any of a number of different sources. These sources include:
If negotiations are underway, the small business concern and the potential third party should provide evidence of their potential collaboration. A letter of describing the negotiations and the intent to seek a final agreement for Follow-On Funding should be attached to the Phase II proposal. A few clearly defined and measurable key technical objectives should be stated in the commitment agreement including indication of the threshold level that would justify private investment, if those technical objectives were achieved in Phase II. The objectives do not have to be the same as those stated in the proposal, but they must be attainable within the scope of the proposed Government-funded research.
The commitment agreement should set forth the specific amount of Phase III funds that will be made available to the small firm and indicate the dates the funds will be provided. The commitment may be contingent upon: (1) the receipt of a Phase II award; (2) Phase II achieving a few stated key technical objectives; (3) the resulting technology not being bypassed in the marketplace during Phase II; and (4) the technology appearing to be economically viable. If these objectives are met, the commitment should become exercisable and the Phase III funding should take place. The terms cannot be contingent upon the obtaining of a patent due to the length of time this process requires. If a commitment is obtained from a foreign source, it must state that production for the U.S. market will be carried out in the U.S. The commitment should be consistent with the terms outlined above, Chapter 4.0, Section 4.2.3 discusses the Evaluation of Follow-On Funding Commitment(s) and Commercialization Plan.
Non-Federal Phase III Funding Support.
NSF recommends starting early in seeking non-federal funding. Browsing the World Wide Web (www) on the Internet could be one starting point. The Small Business Administration (SBA) is an excellent resource; their web address is: http://www.sbaonline.sba.gov. The SBA has an Internet service that matches entrepreneurs with "angel" investors. The Internet address is: https://ace-net.sr.unh.edu/.
To acquire directories of venture capital companies, contact one or both of the following associations:
National Association of Small
#700 Business Investment Companies
1199 No. Fairfax Street, Suite 200
Alexandria, VA 22314
(703) 683-1601
To obtain a list of large industrial companies that have indicated an interest in SBIR companies in specific areas, you may contact:
Information on state agencies and programs that provide assistance to SBIR companies is contained in the BMDO SBIR Outreach Notebook, Ballistic Missile Defense Organization, (updated annually); it may be obtained from BMDO by calling 1-800-937-3150. Some of the state economic development organizations that can be contacted are as follows: The Ben Franklin Partnership Program in Pennsylvania; Connecticut Innovations, Inc.; the Massachusetts Technology Development Corporation; and the Utah Technology Finance Corporation.
Commercialization assistance can often be obtained from many sources, such as trade journals; conferences; consultants; venture capitalists; patent lawyers; some Small Business Development Centers (SBDCs); some Small Business Administration Service Core of Retired Executives (SBA SCORE) personnel; the Kaufman Foundation; and the various MIT Enterprise Forums.
Part 15. Company Commercialization History.
10.3 Phase IIB Option (Only applicable for SBIR 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 and to also accelerate the Phase II project to the commercialization stage. 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. Phase IIB proposals are due by February 1, 2000. A reminder invitation letter will be sent during the last six months of the Phase II grant.
Eligibility for Phase IIB is as follows:
A letter of commitment from the third party investor must specify the amount of the investment and the method in 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 follow-on funding commitments submitted along with the Phase II proposal, provided new updated commitment letters were obtained. Self-funding does not qualify for the Phase IIB option.
Phase IIB Proposal Preparation
A proposal no longer than 15 pages is required. Three copies must be submitted. The proposal Package must contain:
Review
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 1. 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 2. What are the broader impacts of the proposed activity?
Potential considerations: Does the business 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 advantage of this technology vs. alternate technologies that can meet the market needs.
Award Recommendation
A Phase IIB applicant will be notified within 60 days from receipt 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.
Payment and Release of Funding
The Final payment on the original Phase II (the fifth payment in a standard
Phase II grant) will be made at the end of Phase IIB. Therefore, there is no
payment corresponding to the "24th month" progress report for those
selected for the Phase IIB option. NSF will release the Phase IIB payment only
upon 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. This letter must state that
$________ in cash has been transferred to our company from the third party
investor in accord with the SBIR Phase IIB procedures." The letter must be
sent to the cognizant NSF SBIR Program Officer along with a letter from the
bank certifying that the funds have been transferred to the company's account
or a copy of the company's bank statement showing the funds have been
deposited. The deadline for receipt of the letter is 30 days following
notification of selection for award.
Reporting Requirements
In updating the milestone chart, the report due at the end of "24th month" will be treated as a 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, the company is required to submit the normal Phase II completion documentation, including initial Phase II as well as Phase IIB supplemental activities:
All Phase IIB Proposals should be mailed to:
(1) The investor must be a third party
investor, which may include such entities as another company, a venture capital
firm, an individual "angel" investor, state or local government, or any
combinations of the above. It does not include owners of the small business,
their family members, and/or "affiliates" of the small business, as defined in
Title 13 of the Code of
Federal Regulations (C.F.R.), Section 121.103. (Reference:
http://frwebgate1.access.gpo.gov/cgi-bin/test-get-cfr.cgi)