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NASA's Small Business Innovation Research program and Small Business Technology Transfer program are engines for starting up new technologies and industries and providing researchers with valuable tools for exploring the unknown, defining research paths and identifying advancements in revolutionary technologies.

F-16XL water tunnel model
Image Above: The F-16XL water tunnel model was used for time-dependant aerodynamics work that is part of an SBIR contract with Langley Research Center, Hampton, Va. The test technique indicates changes in density, an indicator of the formation of a shock wave. Photo courtesy of Rolling Hills Research Corp.

The U.S. Congress has strongly supported these programs, which have seen worthy proposals go forward in each state - to the tune of 6,957 SBIR contracts awarded nationally between 1983 and 2000. The SBIR/STTR programs have provided a stable revenue stream in the research and development environment, where the problem of shrinking discretionary funds is commonplace. For Dryden, the SBIR/STTR programs also offer a route to acquiring funding and staff to help achieve research goals.

"I think the best use of the SBIR/STTR program is to assist the government in developing needed technology through the capability and creativity of small businesses," said Rod Bogue, Dryden's SBIR/STTR program manager. "One valuable contribution is the technology that results from SBIR/STTR contracts, but in addition valuable contacts are established between the participating companies that often persist into other activities. Another benefit is to make fresh ideas from the private sector available to the government to assist in meeting requirements to support national objectives."

That is a sentiment shared by John Del Frate, who managed a SBIR contract on fuel cell development.

"I think it's a healthy process," Del Frate said. "There's a certain beauty to working with small companies because they're very keen on meeting your needs. They have very little or no bureaucracy yet so they move fast. It's exciting to be associated with them. It's not like the 800-pound gorilla, where it's hard to get someone's attention and they have other things they're more interested in or (that) have greater revenue capability.

"The bottom line is it's good for our country and it's good for us. And there are some exciting opportunities out there."

Does this sound too good to be true? Consider this: funding for SBIR contracts in 2005 was $107.5 million, with STTR programs receiving another $12.9 million. Allocation of the funds is determined by the merit of the proposals, and not the geographical area from which they are submitted.

Marty Brenner, SBIR manager for the Modeling, Identification and Simulation for Control of Aerospace Vehicles subtopic, said SBIR/STTR contracts have a big up side.

"A valuable contribution of the SBIR/STTR contract is good coordination between contractor/university and NASA facilities in developing novel hardware and software solutions for promoting NASA's goals, assisting in the small business commercialization strategy and integrating university expertise in a collaborative process among commercial interests, government and academic research," he said.

Larry Fruedinger, a former SBIR contract technical monitor and SBIR subtopic manager for the Automated and Online Data Reduction category, knows the value of these contracts.

"Some companies build a better mousetrap that catapults them to revenues in the millions," he said. "Other companies work on mousetraps for smaller markets, or work on mousetraps with markets that are still years away from being ready to accept the new mousetrap. The success of SBIR is to establish an environment for invention of new mousetraps."

In NASA's quest for that next mousetrap, Dryden has primary responsibility for three SBIR subtopics: Revolutionary Atmospheric Flight Concepts; Modeling, Identification and Simulation for Control of Aerospace Vehicles and Flight Sensors, and Airborne Instruments for Flight Research. In fiscal year 2005, Dryden received 24 STTR proposals and 133 SBIR proposals.

Proposals for NASA SBIR contracts are written against Agency needs identified in the Agency-wide solicitation issued each year. Specific needs are organized into application area subtopics. In additionto the three subtopics listed above, Dryden also assists with subtopic evaluations in eight other subtopics managed at Ames Research Center, Moffett Field, Calif.; Glenn Research Center, Cleveland; Johnson Space Center, Houston; Langley Research Center, Hampton, Va.; and Marshall Space Flight Center, Huntsville, Ala.

Congress created the SBIR program in 1982 to provide avenues through which small businesses could participate in government research and development and as a means of increasing national employment and improving U.S. competitiveness.

The STTR program was created in 1994 for similar reasons. Additional opportunities the two programs were designed to create for small businesses include cooperative research and development with a nonprofit research institution and intellectual property (research findings, usually in the form of patents, copyrights, trade secrets, or proprietary data) exploitation among research institutions.

The programs have many similarities and share the same three-phase structure. The first phase examines the merit of a good idea or concept. Phase I contracts deemed worthy of additional support are approved for further refinement in a Phase II contract. Ultimately, the goal of both programs is to enter a third phase, in which the idea or concept becomes a commercial product, or the project is funded entirely from a company or government entity outside the parameters of the SBIR/STTR program. Once an idea or concept becomes a commercial product or has outside partners it is considered a success story.

An SBIR contract enables government researchers to find small business partners with common technology-development interests. NASA Phase I contract awards are usually made in November, with six-month contracts worth up to $70,000 for SBIR work and one-year contracts with funding up to $100,000 for STTR contracts. A Phase 1 contract is expected to prove the proposed concept by a convincing demonstration sufficiently persuasive to merit a Phase II award. This work often results in a physical working model or a software package that makes the benefits of the concept obvious to interested patrons.

A company is considered a qualifying small business if it numbers fewer than 500 employees, is based in the U.S. and is organized for profit. The company also must perform the bulk of the research for those proposals.

The contracts are awarded based on feasibility and technical merit. Typically, awards are made in the areas of emerging technologies, scientific breakthroughs, novel applications of existing technologies and new capabilities or major improvements to existing technologies.

Those projects that advance to Phase II - which number just under half, or about 45 percent of Phase I entries - can receive a contract worth up to $600,000 over 24 months to breach technology barriers and develop prototype solutions to address needs described in contract solicitations. These awards usually are made in July or August and usually culminate in a product prototype that will demonstrate benefits beyond those shown in Phase I. In addition to the technical advances in Phase II, the small business is expected to provide a business case for the proposed product to include market analysis, financial planning and business expertise beyond that required in technical areas.

SBIR/STTR proposals are funneled to the NASA center that manages the SBIR/STTR subtopic under which the proposal was submitted. Center representatives review all proposals and at least two evaluations are performed for each proposal. In some cases, more evaluations are needed when there is a difference of opinion between two evaluators.

The evaluators work independently and judge proposals on technical merits. The most innovative and promising proposals are selected. Each evaluator comments on the proposals and justifies his or her recommendations, especially regarding the value to NASA and to the center involved. The reviewers are technically qualified individuals assigned by organizational leads at each center. A Web site is used to facilitate the evaluation process, assure that legal requirements are satisfied and provide an on-line repository for evaluator findings.

Technical factors, commercial merit, expected benefits to NASA and feasibility are assessed by evaluators and forwarded to the respective subtopic managers for review and recommendation to the ranking board. Findings from the evaluator assessment are forwarded to the proposal's authors to provide feedback in case the proposal is not selected for an award. This is to provide help to the respective small businesses should they decide to improve the proposal for re-submission at a later date.

Researchers are encouraged to find a small business working on technology that may be useful in addressing center needs. They can help the company's leadership understand the center's requirements and if appropriate, urge them to submit an SBIR proposal for consideration. Researchers may volunteer to evaluate the proposal when it is submitted and serve as NASA's technical representative overseeing the contract if the proposal is awarded.

The hands and minds of innovative researchers struggling today with tomorrow's challenges are supplying the technology pipeline with solutions and opportunities. When it comes to solving problems, NASA's SBIR/STTR program is a proven tool.

Jay Levine
X-Press Editor