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Phase I and Phase II Award Guidelines



A. SBIR and STTR Phase II Pre-Award Financial and Administrative Reviews -

    Once a proposal has been recommended for funding, the National Science Foundation (NSF) will perform the following financial and administrative reviews:

    1. Budget Review
    2. Accounting and Timekeeping System Review
    3. Financial Capability Review

    A description of each of these reviews and the related documentation requirements are found at the following web site: http://www.nsf.gov/bfa/dias/caar

    Organizations that are determined not to be financially viable based on the financial capability review will not be funded.
    Proposed costs that cannot be supported by adequate cost/pricing data will not be funded, or the requested amount of funding will be reduced accordingly.
    Questions concerning these reviews should be directed to CAAR at 703-292-8244.

B. Awards -

    SBIR/STTR Phase I and Phase II awards are subject to availability of funds. NSF has no obligation to make any specific number of SBIR/STTR Phase I or Phase II awards based on a solicitation, and may elect to make several or no awards under any specific technical topic or subtopic.

    SBIR/STTR Phase I awards are fixed-price grants and will not exceed $150,000. Typically, about 80% of those grantees that receive SBIR/STTR Phase I awards will apply for SBIR/STTR Phase II awards. SBIR/STTR Phase II awards are funded up to$750,000 for SBIR Phase I awardees under solicitation SBIR Phase I NSF 11-577 (awarded July 2012) or for STTR Phase I awardees under solicitation STTR Phase I NSF 11-561 (also awarded July 2012). Awardees from earlier Phase I solicitations may apply for SBIR/STTR phase II awards up to $500,000. In either case SBIR/STTR Phase II awards are for up to 24 months.

    Reasonable fees for profit will be considered under both phases (not to exceed 7%). Cost-sharing is permitted - however, it is not required, nor will it be a factor in the evaluation of a proposal.

    Prior to making an award, the Foundation may require certain organizational, managerial, and financial information for various administrative purposes. The submitting small business concern will be requested at that time to provide documentation that supports the costs proposed. This information should be returned to the requesting office as expeditiously as possible (see Certification of Current Cost or Pricing Data Requirements, for specific documentation requirements).

C. Payment Schedules for SBIR and STTR Phase I and II -

    C.1 SBIR Phase I Payment. No invoices are necessary for Phase I grants. Phase I payments will be made as follows: two-thirds of the awarded amount will be paid approximately 3-4 weeks after the effective date of the award provided that a Request for Initial Payment and ACH Vendor/Miscellaneous Payment enrollment forms are received by the NSF Division of Financial Management. The remaining one-third of the awarded amount will be released upon acceptance of a satisfactory Phase I Final Report by NSF. The first payment is automatic. The final payment will only be processed upon acceptance of the electronic submission of the Phase I Final Report and signed report cover page.

    C.2 STTR Phase I Payment. No invoices are necessary for Phase I grants. Phase I payments will be made as follows: two-thirds of the awarded amount will be paid approximately 3-4 weeks after the effective date of the award provided that a Request for Initial Payment and ACH Vendor/Miscellaneous Payment enrollment forms are received by the NSF Division of Financial Management. The remaining one-third of the awarded amount will be released upon acceptance of a satisfactory Phase I Final Report by NSF. The final payment will only be processed upon acceptance of the electronic submission of the Phase I Final Report and signed report cover page.

    C.3 SBIR/STTR Phase II Payment. Unless otherwise stated in the grant letter, NSF will typically make payments as follows:

    • A twenty-five percent (25%) advance payment will be made upon receipt of an SBIR/STTR Award Request for Initial Payment Form;
    • Twenty percent (20%) upon acceptance by NSF of the first interim progress report (usually about the 6th month of the grant performance period);
    • Twenty percent (20%) upon acceptance by NSF of the second interim progress report (usually about the 12th month of the grant performance period);
    • Twenty percent (20%) upon acceptance by NSF of the third interim progress report (usually about the 18th month of the grant performance period); and
    • The remaining fifteen percent (15%) will be paid upon acceptance by NSF of the SBIR Phase II Final Report and Commercialization Report.

    (See the SBIR Phase II General Grant Conditions, Articles 5 and 6, http://www.nsf.gov/publications/pub_summ.jsp?ods_key=sbirii1010).

D. Treatment and Protection of Proposal Information - 

    Proposals may contain proprietary information. However, proposers should limit proprietary information to that deemed essential to include for proper evaluation of the proposal. Proprietary information may be included in the body of the proposal or set apart from other text. Proprietary information submitted to NSF will be treated in confidence to the extent permitted by law if it is clearly identified, by sentence or paragraph in the proposal text, or on a separate page. Any proprietary information included in the body of the proposal must be clearly marked, by sentence or paragraph, as proprietary.Any proprietary information set apart from other text should be on a separate page and keyed to the text by numbers. Proposers should be selective and confine proprietary information to those critical items that, if disclosed, could jeopardize the obtaining of foreign or domestic patents or could reveal trade secrets or commercial or other financial information that could jeopardize the competitive position of the proposers. (Reference http://www.nsf.gov/cgi-bin/getpub?sbiri for Phase I andhttp://www.nsf.gov/cgi-bin/getpub?sbirii for Phase II.)

    Without assuming any liability for inadvertent disclosure, NSF will limit dissemination of properly marked information to its employees, and, as necessary for the evaluation of the proposal, to outside reviewers on a confidential basis. Howeverproposals or reports that attempt to restrict dissemination of large amounts of information may be found unacceptable by NSF and may result in return of the proposal.
    Phase II proposals and Phase I Final Reports may also contain technical data developed under the Phase I grant. The grantee must properly identify and mark such technical data as described in Rights in Data Developed under SBIR/STTR Grants.
    Information contained in unsuccessful proposals will remain the property of the proposer, but NSF will retain file copies of all proposals. Public release of information in any proposal or report delivered under a grant will be subject to existing statutory and regulatory requirements.

E. Rights in Data Developed Under SBIR/STTR Grants - 

    The grantee may retain rights in technical data, including software, developed under the NSF grant, except that the Government shall have the right to use such data for governmental purposes. Final Reports delivered under the grant, including technical data, may be made available to the public by the Government except for that portion of the report containing technical data properly identified and marked as set forth below.
    To the extent permitted by law, the Government will not release properly identified and marked technical data, such as data relating to an invention or software, outside the Government except for evaluation purposes for a period of four years from the expiration of a Phase II grant, or from the expiration of the Phase I grant when no Phase II award is made, without the approval of the grantee. The grantee must properly identify such technical data in the text or on a separate page keyed to the text by numbers in any submission to the Foundation. Such data must be clearly labeled as proprietary technical data and marked with a legend similar to the following:

    "The following is proprietary technical data which (name of grantee) requests not be released to persons outside the Government, except for purposes of evaluation, for a period of four years from the expiration date of Grant No. ________ or, the expiration date of a follow-on Phase II grant if awarded, whichever is later."
    In addition to the rights vested in the Government to use proprietary technical data during the four-year period mentioned above, the Government shall retain a royalty free, irrevocable, worldwide license to use the data right after the conclusion of the four-year period whether or not the grantee has sought or obtained patent protection or claimed copyright protection.

F. Copyrights - 

    The grantee normally may copyright and publish (consistent with appropriate security considerations, if any) material developed with NSF support. The National Science Foundation receives a royalty-free license for the Federal Government and requires that each publication contain an acknowledgment and disclaimer statement as stated in the Reporting Requirements section.

G. Patents - 

    Each award agreement will contain a patent rights clause under which small business firms normally may retain the principal worldwide patent rights to any invention made with NSF support. NSF receives a royalty-free license for Federal Government use, reserves the right to require the patent holder to license others in certain circumstances, and requires that anyone exclusively licensed to sell the invention in the United States must normally manufacture it domestically. To the extent authorized by 35 U.S.C. 205, the National Science Foundation will not make public any disclosure by the grantee of a NSF-supported invention for a four-year period to allow the grantee a reasonable time to file a patent application. The time period for filing is specified in the patent rights clause and applicable Federal regulations (45 CFR 650.4). Additional information may be obtained from the Office of the General Counsel, Room 1265, National Science Foundation, 4201 Wilson Boulevard, Arlington, VA 22230.

    The Interagency Edison project provides Federal grantee/contractor organizations for invention reporting to the Government. The grantee should report the invention through the iedison database at www.iedison.gov.

H. Supplemental Funding -

I. Management Responsibility - 

    The responsibility for the performance of the Principal Investigator and other employees or consultants who carry out the proposed work lies with the management of the firm receiving an award.

J. Accuracy of Information - 

    The proposing small business concern and the Principal Investigator are responsible for the accuracy and validity of all the administrative, fiscal, and scientific information in the proposal. Deliberate withholding, falsification, or misrepresentation of information could result in administrative actions such as declination of a proposal or the suspension and/or termination of an award, as well as possible civil or criminal penalties.

K. Audits - 

L. Changes in Organization or Principal Investigator Status - 

    The SBIR Program must be notified promptly if there is any change in the name or address of the firm or if the firm no longer qualifies as a small business. Any change in the Principal Investigator under an active grant must be requested via FastLane (see PI Change Instructions).

M. Inconsistencies - 

    The Program Solicitation is intended for informational purposes and reflects current planning. If there are any inconsistencies between the information contained herein and the terms of any resulting SBIR or STTR grant, the terms of the grant are controlling. 

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Any opinions, findings, conclusions or recommendations presented in this material are only those of the presenter grantee/researcher, author, or agency employee; and do not necessarily reflect the views of the National Science Foundation.