**SBIR/STTR FAQs**

Please be sure that you are using the CURRENT SBIR/STTR Omnibus
Solicitation or Phase II SBIR/STTR Instructions, as appropriate
(available at URL <http://grants.nih.gov/grants/funding/sbir.htm#sol>):

**[ELIGIBILITY]{.underline}**

**Q. My company is a wholly-owned subsidiary of another
company/corporation. Am I eligible to participate in the SBIR/STTR
Program?**

A. STTR -- No.

SBIR -- Maybe.

Effective January 3, 2005, the Small Business Administration revised its
eligibility criteria for the ***[SBIR]{.underline}*** program (not STTR)
and now allows a wholly-owned subsidiary to participate providing its
parent company, with all of its affiliates, still meets the eligibility
criteria. It states:

> ...the small business concern must:

\(a\) Be at least 51 percent owned and controlled by one or more
individuals who are citizens of, or permanent resident aliens in, the
United States; OR (for SBIR only) it is a for-profit business concern
that is at least 51% owned and controlled by another for-profit business
concern that is at least 51% owned and controlled by one or more
individuals who are citizens of, or permanent resident aliens in, the
United States and.

\(b\) Not have more than 500 employees, including its affiliates.

13 C.F.R. § 121.702. The express terms of § 121.702(a) require that the
owners of the SBIR/STTR participant be \"individuals\" who are
\"citizens of, or permanent resident aliens in, the United States.\" The
regulations nowhere provide that corporations or other artificial
entities may qualify as \"individuals\" who are U.S. citizens, nor do
they suggest that indirect ownership of an SBIR participant by a U.S.
citizen satisfies the ownership requirements of § 121.702(a).

***Example 1***. Applicant to the [SBIR]{.underline} Program is owned
100% by Company A. Company A is owned 100% by U.S. citizens. The
applicant is eligible for the program because Company A is directly
owned and controlled 100% by citizens of or permanent resident aliens in
the United States.

***Example 2**.* Applicant to the [SBIR]{.underline} Program is owned
49% by U.S. citizens and permanent resident aliens of the United States
and 51% by multiple corporations that are owned by U.S. citizens of or
permanent resident aliens in the United States. It is not eligible for
the program, because 51% of the ownership rests with more than one
company.

***Example 3.*** Applicant to [STTR]{.underline} program is owned 51% by
Company A. Company A is owned 100% by U.S. citizens. The applicant is
*[not eligible]{.underline}* for the program because it is not directly
owned and controlled 51% by citizens of or permanent resident aliens in
the United States.

**Q. Am I permitted to submit a Phase II application if I have not yet
received my Phase I award?**

**A.** No. Small business concerns that have [received]{.underline} an
SBIR Phase I grant or an STTR Phase I grant are eligible to apply for
SBIR or STTR Phase II funding, respectively, of that program.

**Q. Must the Principal Investigator be a U.S. citizen?**

A. No. The PI, the individual who is responsible for the scientific and
technical direction of the project, is not required to have US
citizenship BUT the PI must be here legally in the United States and
must be available to perform the research proposed for the duration of
the project. The responsibility to meet these requirements for
individuals who do not have permanent resident status in the U.S. rests
with the small business concern.

**MAILING ADDRESS and APPLICATION SUBMISSION INFORMATION**

**Q. Must the application [be received by]{.underline} the posted
Solicitation receipt dates (April 1/August 1/December 1) or is a
postmark date acceptable?**

A. A postmark date of April 1/August 1/Decemebr 1 is acceptable. Grant
applications (**[NEW or REVISED]{.underline}**) submitted in response to
the SBIR/STTR Omnibus Grant Solicitation will be considered \"on time\"
if received by or mailed on or before the published receipt date and a
proof of mailing is provided. Proof of timely mailing consists of one of
the following: a legibly dated U.S. Postal Service postmark or a dated
receipt from a commercial carrier or the U.S. Postal Service. Private
metered postmarks are not acceptable.

**Q. If I am using an overnight courier, does the postmark date still
apply?**

A. Yes. A grant application submitted under this SBIR/STTR Phase I Grant
Solicitation will be considered **on time** if it is **received by or
mailed on or before the published receipt date and a proof of mailing is
provided.** Proof of timely mailing consists of one of the following: a
legibly dated U.S. Postal Service **postmark or a dated receipt from a
commercial carrier or the U.S. Postal Service.**

**Q. How many copies do I submit? What if my application overlaps with
more than one IC?**

A. The original plus 5 copies. PERIOD. We will make the additional
copies if needed.

**Q. To what address do I send my application?**

A. All applications sent through the **United States Postal Service
(regular and Express mail)** should be addressed as follows:

Center for Scientific Review

National Institutes of Health

6701 Rockledge Drive, Suite 1040

MSC 7710

Bethesda, MD 20892-7710

**For Express/Courier Non-USPS Service,** change the zip code to 20817

**Q. May I hand deliver my application?**

A.  No. Applications may not be delivered by individuals to the Center
    for Scientific Review but must be sent via a courier delivery
    service or the USPS.

    **FORMS/INSTRUCTIONS**

    **Q. What Forms/Instructions do I use?**

A. You must use the PHS 398 forms
(<http://grants.nih.gov/grants/funding/phs398/phs398.html#forms>) for a
Phase I or Phase II SBIR/STTR application.

The forms are also linked from the SBIR/STTR Omnibus Solicitation (see
above).

**PHASE I** Instructions: Follow the instructions contained in the
current SBIR/STTR Omnibus Solicitation

(Word Doc:
[http://grants.nih.gov/grants/funding/sbirsttr1/index.doc](http://grants.nih.gov/grants/funding/sbirsttr/index.doc))

(PDF Doc: <http://grants.nih.gov/grants/funding/sbirsttr1/index.pdf>)

**Phase II** Instructions: Follow the instructions located at:

(Word Doc:
<http://grants.nih.gov/grants/funding/sbirsttr2/PhaseII_SBIRSTTR.doc>)

(PDF Doc:
<http://grants.nih.gov/grants/funding/sbirsttr2/PhaseII_SBIRSTTR.pdf> )

**Q. Are there type size, font size, and page limit requirements?**

A. YES. NIH now requires the use of an Arial or Helvetica typeface and a
font size of 11 points or larger. As for page limit requirements \-- the
entire SBIR/STTR Phase I application *[may not exceed 25 single-spaced
standard size (8 ½\" x 11\") pages]{.underline}*, including the cover
page (Form Page 1), small business concern\'s budget pages (Form Pages 4
and 5), resources page, and Sections A-D of the Research Plan, as well
as corresponding \"continuation\" pages. Note: Sections A-D of the Phase
I research plan are limited to 15 pages. *[The \"25-pages\" **excludes**
the following:]{.underline}*

-   Cover letter.

-   Form Page 2 and Form Page 2-continued.

-   One-page "Introduction" required when submitting a revised
    application.

-   Biographical Sketch Format Page(s) (*[maximum]{.underline}* of 4
    pages for each key person).

-   Sections *[E-L]{.underline}* of the Research Plan.

-   Checklist Form Page.

-   Personal Data on Principal Investigator Form Page.

-   Letters of commitment from collaborators and consultants.

-   STTR Research Institution Budget Form Page.

-   List of Prior SBIR/STTR Phase II Awards (if applicable)

    For SBIR/STTR Phase II applications:

-   *[Items A-D]{.underline}* of the Phase II Research Plan are limited
    to 25 pages.

-   "Introduction" (maximum three pages) required when submitting a
    revised application.

There is no further limitation on the total number of pages for the
entire Phase II application.

**Q. How do I identify proprietary information in the application?**

**A.  **You are discouraged from submitting information considered
proprietary unless it is deemed essential for proper evaluation of the
application. However, when the application contains information that
constitutes trade secrets, information that is commercial or financial,
or information that is confidential or privileged, *[include a legend on
Form Page 3 to identify the appropriate page numbers. Also identify the
information by asterisks (\*) and page number in the Research
Plan]{.underline}*.

Include the following legend in the research plan of the application or
on PHS 398 Form Page 3 to identify the appropriate page numbers:

"These data shall not be disclosed outside the Government and shall not
be duplicated, used, or disclosed in whole or in part for any purpose
other than evaluation of this application. If a funding agreement is
awarded to this applicant as a result of or in connection with the
submission of these data, the Government shall have the right to
duplicate, use, or disclose the data to the extent provided in the
funding agreement and pursuant to applicable law. This restriction does
not limit the Government's right to use information contained in the
data if it is obtained from another source without restriction. The data
subject to this restriction are contained in pages \_\_\_\_\_\_ of this
application."

A bit more...

Information contained in unfunded grant applications will remain the
property of the applicant. The Government may, however, retain copies of
all applications submitted. Public release of information in any
application submitted will be subject to existing statutory and
regulatory requirements. *[Confidential, proprietary information must be
clearly identified in the application by asterisks (\*)]{.underline}*.
When the application contains information that constitutes trade
secrets; or information that is commercial or financial; or information
that is confidential or privileged, it will be treated in confidence.

**Q. Are there special instructions for submission of a revised
SBIR/STTR application?**

A. Yes.

First read your Summary Statement closely. If it is not what you wanted
to "hear" then put it away for a day...then re-read it.

Second, discuss the reviewers' concerns/comments with your Program
Director (listed in the upper left hand corner of the Summary
Statement).

Third, in addition to following the standard Phase I or Phase II
instructions, you need to include an "Introduction" that addresses the
reviewer's criticisms/concerns/comments. See the SBIR/STTR Omnibus
Solicitation for specific instructions. In brief,

-   For Phase I, you need to include a one-page Introduction Page
    **[just before]{.underline}** the Research Plan.

-   For **Phase IIs**, you are **allowed a 3-page "Introduction", which
    should be inserted before the Phase II Research Plan.**

-   For **Fast Track Applications**, include a one page Introduction in
    the Phase I (just before the Phase I Research Plan) and no more than
    3 pages of Introduction in the Phase II application (just before the
    Phase II Research Plan).

The "Introduction" must summarize any substantial additions, deletions,
and changes that have been made. Also include responses to criticisms in
the previous summary statement. **Identify these changes within the text
of the Research Plan by appropriate bracketing, indenting, or *changing
of typography*.** Do not shade changes.

**Q. Do I need to identify an Institute or Center to submit the
application to or do I need to submit a Cover Letter?**

A. No. You do not need to identify an IC to which the application should
be assigned. We have a dedicated office, the Center for Scientific
Review/Receipt and Referral Office, which refers applications to the
appropriate Institute/Center (IC).

If you know that your proposed research overlaps with several ICs, then
you are encouraged to include a cover letter and request that your
application be assigned to those ICs. CSR makes the final call as to
assignments.

**Q. Do I need to include letters from consultants and collaborators
with my application?**

A. Yes. And... if this is a revised application, the letters must be
newly signed/dated. See the information on Consultant Letters in the
OMNIBUS SOLICITATION Item J. Consultants . Following is guidance for
such documentation: The letter should be prepared on the letterhead of
the consultant and addressed to the Small Business Concern (SBC). *[One
page is recommended.]{.underline}* At a minimum, each letter should (1)
verify the consultant's commitment to the project; (2) refer to the
specific project by name, acknowledging the Principal Investigator as
the lead on the project; and (3) specify what assets or services the
consultant will contribute (e.g. expertise, number of hours/ percent of
effort) as well as the consultant's remuneration. Also include
biographical sketches for each consultant.

**Q. The Biographical Sketch seems to include Research Support, but the
instructions say NOT to include \"Other Support.\" Is there a
difference?**

A. Yes. Research Support includes selected ongoing and completed (during
the last three years) research projects (federal or non-federal
support). As part of the biosketch section of the application, "Research
Support" highlights your accomplishments, and those of your colleagues,
as scientists. It is used by reviewers for the "investigator" evaluation
criterion. Briefly indicate the overall goals of the projects and
responsibilities of the key person identified on the Biographical
Sketch. **Do not include percent of effort or direct costs.**

"Other Support" information is required for all applications that are
selected to receive grant awards. Other Support goes beyond includes all
active and pending support AND requires that you provide percent effort
and costs associated with each grant/award. NIH staff will request
complete and up-to-date "other support" information from you
*[after]{.underline}* peer review. This information will be used to
check that the proposed research has not already been funded.

**[Face Page]{.underline}**

**Q. Is it acceptable to list a Research Institution (e.g. university)
in Item 9 for the applicant organization?**

A. NO. [The small business concern is ALWAYS the applicant organization
for an SBIR or STTR award]{.underline}.

**Q. How do I know what the estimated start date of my project is?**

**A.** To select an appropriate requested project start date for a
**new** application, consult the following schedule:

+------------------------------+---------------------------------------+
| SBIR and STTR\               | Estimated                             |
| Receipt Dates\               |                                       |
| Phase I and Phase II         | Award Date                            |
+------------------------------+---------------------------------------+
| April 1                      | November 1                            |
+------------------------------+---------------------------------------+
| August 1\*                   | March 1                               |
+------------------------------+---------------------------------------+
| December 1                   | July 1                                |
+------------------------------+---------------------------------------+

PHS awarding components may not always be able to honor the requested
start date. No commitments or obligations should be made until
confirmation of the actual start date by the awarding component. At your
own risk, preaward costs for the project may be incurred up to 90 days
before the project period start date for costs that were requested in
the application, approved by peer review and the awarding component. The
Notice of Grant Award is the official authorization for approved funding
and project period.

**[BUDGET]{.underline}**

**Q. Is it permissible to submit a budget that deviates from the time
and dollars normally awarded to Phase I or Phase II?**

A. Yes. Deviations from the guidelines are acceptable, *[but must be
well justified on form page 5 of the application]{.underline}.* We
recognize that not all types of biomedical/behavioral research can be
performed under the prescribed amounts of time and dollars. Propose a
reasonable budget and project period that is appropriate for completion
of the research project and justify the need to go beyond the "norm."
***You are encouraged to discuss budgetary deviations with NIH Program
Staff or Grants Management Staff prior to submission of the
application.* (CDC and FDA do not make awards greater than the stated
guidelines.)**

**Q. In the past, I had the option of submitting a budget using a
modular budget form, but I can't find it in the current solicitation.
Are modular budgets still accepted, and if so, where might I locate the
form?**

A. Modular budgets are no longer used for SBIR/STTR applications. All
[SBIR]{.underline} applicants must use Form Page 4 and Form Page 5 and
all [STTR]{.underline} applicants must use Form Page 4, Form Page 5 and
the STTR Research Institution Budget Form Page. A separate Form Page 4
and Form Page 5 must be included for each consortium/subcontractor.

**Q. Where do I enter indirect costs (aka, Facilities and Administrative
(F&A) costs)?**

A. On The Checklist Page. All costs, including indirect/F&A must be
requested at the time of application. See Section IV.D.8 Checklist of
the SBIR/STTR Omnibus Solicitation for details on completing the
Checklist page.

Q.  **How do I proceed if I do not have a negotiated F&A rate?**

```{=html}
<!-- -->
```
A.  Phase I Applicants: If you do not have a currently effective
    negotiated F&A rate with a Federal agency, then you may propose
    estimated F&A costs at a rate not to exceed 40% of the total direct
    costs. Only actual F&A costs are to be charged to projects. If
    awarded at a rate of 40% of total direct costs or less, the rate
    used to charge actual F&A costs to projects cannot exceed the
    awarded rate. NIH will not negotiate a rate for Phase I awards.

> Phase II Applicants: If the requested F&A rate is 25 percent or less
> (of total direct costs), F&A costs will be awarded at the requested
> rate. However, applicant organizations are reminded that only actual
> F&A costs are to be charged to projects. If awarded at a rate of 25%
> or less of total direct costs, the rate used to charge actual F&A
> costs to projects cannot exceed the awarded rate. *[If the requested
> F&A rate is greater than 25 percent of total direct costs, additional
> information may be required prior to award to justify the requested
> rate]{.underline}*. You will need to enter into a formal negotiation
> with NIH for a rate that exceeds 25% of the total direct costs
> awarded. All F&A costs awarded, except for 10% of salary and wages,
> will be restricted in the Notice of Grant Award and unavailable to the
> project until the formal rate negotiation is completed. .

**Q. What is Fee/Profit?**

A. A reasonable profit/fee is available to small business concerns
receiving awards under the SBIR/STTR program; **however, this profit/fee
must be included in your budget request at the time of application.**
*[The amount of the fee approved by the agencies participating in this
solicitation normally will not exceed **7% of total costs** (direct and
indirect) for each Phase (I and II) of the project]{.underline}*. The
fee is not a "cost" item and may be used by the small business concern
for any purpose, including additional effort under the SBIR/STTR award.
The fee is intended to be a reasonable profit factor available to
for-profit organizations, consistent with normal profit margins provided
to profit-making firms for research and development work. The profit/fee
applies solely to the small business concern receiving the SBIR/STTR
award and not to any other participant in the project. However, the
grantee may pay a profit/fee to a contractor providing routine goods or
services in accordance with normal commercial practice. To request a
fee/profit, complete the "Fee/Profit" sections of form pages 4 and 5.

**Q. Where can I find information about allowable costs to SBIR/STTR
grants?**

A. See [NIH Grants Policy Statement (12/03) - Part II: Terms and
Conditions of NIH Grant Awards - Subpart B: Terms and Conditions for
Specific Types of Grants, Grantees, and Activities \-- File 5 of 5
\<<http://odoerdb2.od.nih.gov/gmac/nihgps_2003/NIHGPS_Part13.htm>\>]{.underline}

The cost principles for commercial organizations set forth in the
Federal Acquisition Regulation (FAR) (48 CFR Part 31.2) generally are
used to determine allowable costs under NIH grants to for-profit
organizations.

**Q. Are patent costs, licensing fees, and legal fees allowable direct
costs on SBIR/STTR grants?**

A. Although there has been a recent change relative to the allowability
of patent costs for universities, such change does not affect the
allowability of such costs for commercial companies, i.e., unless
required by the grant, patent costs are unallowable costs except for
general counseling services relating to patent matters such as advice on
patent laws, regulations, clauses and employee agreements which are
allowable. Normally, general counseling services/legal fees are included
the facilities and administrative costs.

**Q. Are SBIR/STTR recipients required to have audits?**

A. Yes. A commercial organization is subject to audit requirements for a
non-federal audit if, during its fiscal year, it expended \$500,000 or
more under HHS awards and at least one award is an HHS grant or
subgrant. Therefore, the organization must have one grant or subgrant in
order to be required to obtain a non-federal audit, but other HHS awards
are included in the threshold calculations and the scope of the audit.

NIH/Division of Financial Advisory Services (DFAS) has FAQs relating to
for-profit audit requirements at
[\<<http://oamp.od.nih.gov/dfas/faqforprofitaudits.html>\>
\<<http://ocm.od.nih.gov/dfas/dfas.htm>\>
\<<http://ocm.od.nih.gov/dfas/faqforprofitaudits.htm>\>]{.underline}

Audits shall be completed and submitted to the following office within
the earlier of 30 days after receipt of the auditor\'s report or nine
months after the end of the organization\'s fiscal year: National
External Audit Resources, HHS Office of Audit Services, Lucas Place, 323
West 8th Street, Room 514, Kansas City, MO 64105.

**[HUMAN SUBJECTS]{.underline}**

Office of Human Research Protection (OHRP) Website:
**<http://ohrp.osophs.dhhs.gov/index.htm>**

**Q. I will be subcontracting ALL of the Human Subjects work to a
University, so do I still need to address the points delineated in
Section E. of the Research Plan?**

A. YES.YES. YES. This is the one area that, if not addressed, will
result in your application being returned. Carefully read Section E. of
the Research Plan in the solicitation and use the set of questions and
the decision table to determine to what extent you have human subjects
involved. Depending on the conclusion that is reached,
***[explicitly]{.underline}*** follow the instructions that are provided
so the appropriate information is included in your application. A part
of the peer review process includes careful consideration of protections
from research risks, as well as the appropriate inclusion of women,
minorities, and children. The Scientific Review Group will assess the
adequacy of safeguards of the rights and welfare of research
participants, and the appropriate inclusion of women, minorities, and
children, based on the information you provide in the application. So
read this section very carefully and be sure to provide all of the
required information.

####### As an added note...you do NOT need to have Institution Review Board (IRB)approval date or a Federal-wide assurance (FWA) at the time of application submission. 

**Q. I will be using Human Subjects in my research but do not have
approval by an Institutional Review Board yet. Is this required at the
time of submission?**

A. No. Your company will be required to obtain a Federal Wide Assurance
and the IRB review data before an award is made. You may apply for an
FWA before you receive a grant. See the (OHRP) website
<http://www.hhs.gov/ohrp/assurances/assurances_index.html> FWAs are
negotiated between the small business concern and the OHRP. Follow their
instructions!

Note: DO NOT TYPE IN THE FWA NUMBER OF THE COLLABORATING INSTITUTION ON
THE FACE PAGE OF THE APPLICATION.

**[Vertebrate Animals]{.underline}**

Office of Laboratory Animal Welfare (OLAW) website:
<http://grants.nih.gov/grants/olaw/olaw.htm>

**Q. I will be using live, vertebrate animals in my research. Do I need
to have an IACUC approval at the time of submission or within 60 days of
submission?**

A. No. This is submitted to the awarding component "just-in-time" prior
to the award. The applicant organization (small business) must have a
Single Project Assurance number from OLAW or its own Animal Assurance
Number prior to award. The Institutional Animal Care and Use Committee
(IACUC) certification of approval is not required at the time of
application, **but you must address the points under the Vertebrate
Animal section of the Research Plan.** IACUC approval must be submitted
in a \"just-in-time\" fashion prior to award (as is now permitted for
IRB approval.) Additional information is available on the following NIH
Guide Notice:
<http://grants2.nih.gov/grants/guide/notice-files/NOT-OD-02-064.html>

Note: DO NOT TYPE IN THE IACUC NUMBER OF COLLABORATING INSTITUTIONS on
the face page of the SBIR/STTR application.

**[Inventions]{.underline}**

**Q. Am I required to report inventions made in the course of, or under,
my NIH SBIR/STTR research grant?**

**A.** Yes. Inventions must be promptly and fully disclosed to NIH
within 2 months after the inventor provides written disclosure to the
grantee\'s authorized official. NIH has developed an online Extramural
Invention Information Management System, known as "IEdison," to
facilitate grantee compliance with the disclosure and reporting
requirements of 37 CFR 401.14(h) See
[http://www.iedison.gov](http://www.iedison.gov/). *[Information from
these reports is not made publicly available]{.underline}*. Additional
details are included in the Phase I and Phase II SBIR/STTR instructions
in the SBIR/STTR Omnibus Solicitation.

**[STTR]{.underline}**

**Q. I am submitting a Phase I STTR. What forms does the Small Business
and the Research Institution (RI) need to include?**

A. The Small Business completes/submits Form Pages 4 and 5. The RI
completes/submits the STTR Research Institution Budget Form Page and
Form Page 5 (if there are more than 12 months requested in the Phase I).

**Q. I am submitting a Phase II STTR. What forms does the Small Business
and the Research Institution (RI) need to include?**

A. The Small Business completes/submits Form Pages 4 and The RI
completes/submits the STTR Research Institution Budget Form Page (for
the Initial Year of the Budget) and Form Page 5 (for the additional
years).

For both SBIR and STTR, Form Pages 4 and 5 must also be submitted for
any subcontractors. Type the names of these organizations at the top of
the Forms to distinguish them from the small company's budget pages. Be
sure to justify the contractual/consortium costs in the budget
justification.

**Q. The STTR Research Institution Budget Form Page has the role of the
first personnel slot pre-labeled \"Principal Investigator\" (PI).  In
the case where the PI is paid by the applicant small business concern
(SBC), is the top row on the Research Institution (RI) Budget Form
Page to be left blank?**

A. This can be left blank or you can enter "See SBC budget page". The PI
should be paid by either the research institution or the small business,
not both. Therefore, the PI's name should not be listed on both the
small business and the research institution budget pages.

**[MISC.]{.underline}**

**Q. I need more time to complete my project! What should I do?**

A. Under the Expanded Authorities (EA), BEFORE the project ends, the
applicant's authorized official may notify the grants management
specialist named on the Notice of Grant Award that the small business
has extended the project period. The notice must provide the new project
period end date, which must be no more that 12 months beyond the
original project period end date. The notification may be sent by e-mail
or faxed to the grants specialist. NIH prior approval is required if
additional time is needed beyond the first 12 month extension. Send the
request BEFORE the project period ends, with the new requested end date
(not to exceed 12 additional months). The request must explain why
another extension is necessary, and include information about funds
available to complete the research. The NIH will revised the Notice of
Grant Award if the second extension is approved.

File Updated: February 2005