Proposals that are found to be responsive to a Solicitation will be evaluated competitively in a process of external merit review by scientists, engineers, or educators knowledgeable in the appropriate fields and by individuals familiar with commercial product development. Reviewers may be employed or recently retired from by academic institutions, non-profit research laboratories or other research institutions, Federal, State and Local governments, employees from industrial firms and organizations, and small business concerns. In all instances, proposals will be handled on a confidential basis with care taken to avoid conflicts of interest. Evaluations will be confidential to NSF, to the proposed Principal Investigator and to the submitting small business concern, to the extent permitted by law.

It is likely that more proposals will be found meritorious than can be supported. Evaluations by external reviewers are advisory to the cognizant program officer for the topic or subtopic, who in turn makes a recommendation for each proposal to the SBIR/STTR Program. Other factors that may enter into consideration include the following: the balance among NSF programs; past commercialization efforts by the firm where previous awards exist; excessive concentration of awards in one firm or with one principal investigator; participation by women-owned and socially and economically disadvantaged small business concerns; geographical distribution of awards; importance to science or society; and critical technology areas. The SBIR/STTR Program then makes its recommendations for awards to the Division of Grants and Agreements (DGA).

C.1. Phase I: SBIR Phase I is a six-month experimental or theoretical investigation on the proposed innovative research or activity. It should determine the scientific, technical and commercial merit, and feasibility of the idea or concept. The STTR Phase I project is a collaborative effort with a Research Institution (see definition) and is a 12-month effort. The SBIR/STTR Phase I program offers a supplemental program called Phase IB; for information, see the Phase IB web page. The work proposed for SBIR/STTR Phase I should be suitable in nature for subsequent progression to Phases II and III. Contingent upon the success of the effort in Phase I, the ultimate aim of the research should be to develop products, processes, devices, or techniques that can be commercialized. The Principal Investigator should approach the SBIR/STTR Programs with the objective of bringing the project to fruition in Phase III, via the Phase II effort.

SBIR/STTR Phase I proposals should be prepared in accordance with the current Program Solicitation. Evaluation and selection criteria are described on the SBIR/STTR Evaluation & Selection Criteria web page.

A Phase I Final Report is required for the completion of a Phase I SBIR/STTR project. All Phase I Final Reports must be prepared in accordance with the Reporting Instructions. SBIR and STTR Phase I awards are fixed-price grants.

C.2. Phase II: Phase II further develops the proposed concept, building on the feasibility project undertaken in Phase I and incorporating the reassessment of scientific, technical, and commercial merit and feasibility, as well as other relevant information in the Phase II plans. Only an NSF SBIR/STTR Phase I grantee who successfully completes a Phase I project and submits an acceptable Phase I Final Report is eligible to submit an NSF SBIR/STTR Phase II proposal pursuant to that Phase I award. Phase II SBIR/STTR awards have an expected period of performance of 24 months. The SBIR/STTR Phase II program offers a supplemental program called Phase IIB; for information, reference the Phase IIB web page. Additional supplements are available; for information see the Phase II Supplemental Opportunities web page.
SBIR/STTR Phase II proposals must be prepared in accordance with instructions provided on the SBIR/STTR Phase II Proposal Information web page.

C.3 Phase III: The objective of Phase III is to pursue commercial applications of the government-funded research. Phase III is to be conducted with non-SBIR/STTR funds (either Federal or non-Federal). NSF normally will not fund Phase III efforts. NSF favorably views those firms that have valid business arrangements to pursue continued development of applications developed under NSF SBIR/STTR Phases I and II.

D.1 Small Business Concern: Only firms qualifying as small business concerns are eligible to participate in the SBIR/STTR program (see definition). Socially and economically disadvantaged small business concerns and women-owned small business concerns, in particular, are encouraged to submit proposals.

Proposals from joint ventures (see definition) and partnerships are permitted, provided the entity created qualifies as a small business (see definition). Proposing firms also are encouraged to take advantage of research expertise and facilities that may be available to them at colleges, universities, national laboratories and from other research providers. Such collaborations may include research subawards (a.k.a. subcontracts), consulting agreements, or the employment of faculty as "Senior Personnel" and graduate or undergraduate students as assistants by the small business.
In an SBIR Phase I, a maximum of one-third of the budget, as determined by the total budget, may be used for faculty/university and/or other consultant/subawardee participation. In an SBIR Phase II, a maximum of one-half of the budget may be expended for any combination of consulting and subcontracting by university faculty and/or other consultant/subawardee.

In the STTR Program (Phases I and II), research is to be conducted jointly by a small business concern and a non-profit research institution. Not less than 40 percent of the research as measured by the budget must be performed by the small business concern, and not less than 30 percent of the research as measured by the budget by the non-profit research institution. That is, a minimum of 40 percent of the budget must be allocated to the small business concern, and a minimum of 30 percent of the budget must be allocated to the cooperating research institution.

ONLY THOSE NSF SBIR/STTR PHASE I GRANTEES THAT HAVE SUBMITTED PHASE I FINAL REPORTS (that have been accepted by the SBIR Program Manager) ARE ELIGIBLE TO SUBMIT SBIR/STTR PHASE II PROPOSALS TO NSF.

D.2 Research Institution: (pertains only to STTR proposals). The cooperating research institution must qualify as a non-profit research institution. However, NSF normally does not normally support activities of those scientists and engineers employed by Federally Funded Research and Development Centers (FFRDCs).

D.3 Place of Performance: The R/R&D must be performed in the United States (see definition)

D.4 Principal Investigator: The Principal Investigator (PI) is considered key to the success of the effort (see definition). For an STTR proposal, a Research Institution Investigator from the research institution also must be identified (see definition of Research Institution Investigator).

The PI is responsible for the planning and directing the SBIR project, leading it technically and making substantial personal contributions during its implementation, serving as the primary contact with NSF on the project, and ensuring that the work proceeds according to the grant agreement. The Phase I proposal shall describe the nature of the PI's activities and the amount of time that the PI personally will spend on the project.

The PI must be an employee of the company at the time of an award. The qualifications of the proposed PI must be presented in the proposal. If the proposed PI is not a U.S. citizen, he/she must legally reside in the U.S. and be legally empowered to work in the U.S. at the time that an award is made. INS Form I-9 incorporates the requirements for non-US citizen residency with information on participation in the SBIR and other Federal programs (see the U.S. Citizenship and Immigration Services Web Page).

Co-Principal Investigators: Co-PIs are not permitted.

PI Substitutions: A PI substitution by a small business concern requires NSF's approval! A written request for NSF approval is required 30 days prior to the PI change. PI change requests must be prepared and submitted via FastLane. NSF (reference PI Change instructions) expects the original PI to complete Phase I and to continue any subsequent Phase II award.

The PI must be primarily employed (at least 51% in a calendar year) by the small business concern.

Academic or Non-Profit Organizations/Affiliations: An individual employed full-time by an academic or non-profit institution may become eligible to serve as a PI if the individual provides a statement signed (and placed in the proposal) by his/her Department Head and an Authorized Organizational Representative of the institution approving a minimum of 51 percent release from full-time employment at the in

E.1 Electronic Distribution of Solicitation: The SBIR/STTR Phase I Solicitations only will be available via electronic means through the NSF SBIR/STTR home page (http://www.nsf.gov/eng/iip/sbir). Printed copies of the solicitation will not be distributed. Potential proposers are encouraged to check the SBIR/STTR home page for updates on the program. Any updates or corrections to the solicitation will be posted there.

E.2 Other Means of Contacting NSF SBIR
The SBIR/STTR Program Support Office may be contacted via e-mail at sbir@nsf.gov