SUPPORTING STATEMENT

FOR PAPERWORK REDUCTION ACT SUBMISSION

**Justification for Small Business Innovation Research (SBIR) Program**

# Phase I -- Grant Application Package

# U.S. Department of Education

**     **

## A. Justification 

1\. Explain the circumstances that make the collection of information
necessary. Identify any legal or administrative requirements that
necessitate the collection. Attach a copy of the appropriate section of
each statute and regulation mandating or authorizing the collection of
information.

P.L. 106-554, the "Small Business Reauthorization Act of 2000, H.R.
5667" (the "Act") was enacted on December 21, 2000. The Act requires
certain agencies, including the Department of Education (ED), to
establish a Small Business Innovation Research (SBIR) program by
reserving a statutory percentage of their extramural research and
development budgets to be awarded to small business concerns for
research or research and development (R/R&D) through a uniform, highly
competitive, three-phase process each fiscal year. The Act further
requires the Small Business Administration (SBA) to issue policy
directives for the general conduct of the SBIR programs within the
Federal Government.

Awards are made on the basis of competitively reviewed applications. The
Department is requesting approval of this grant application package for
the information used to apply for new grants under the Small Business
Innovation Research (SBIR) Phase I program. Grants are for up to six
months to determine the scientific or technical merit and feasibility of
ideas awarded under a Phase I grant.

The purpose of this program is to stimulate technological innovation in
the private sector, strengthen the role of small business in meeting
Federal R/R&D needs, increase the commercial application of Department
of Education (ED) supported research results, and improve the return on
investment from Federally-funded research for economic and social
benefits to the Nation.

2\. Indicate how, by whom, and for what purpose the information is to be
used. Except for a new collection, indicate the actual use the agency
has made of the information received from the current collection.

The grant application package is necessary to standardize applications
for the SBIR program across participating program offices within the
Department of Education and to ensure that the information required by
SBIR program directives are collected efficiently and with the least
amount of burden to the applicants. Without the information contained in
this application package, the Department would not be able to
effectively comply with the legislative mandate and conduct expert peer
reviews to make Phase I funding decisions.

3\. Describe whether, and to what extent, the collection of information
involves the use of automated, electronic, mechanical, or other
technological collection techniques or forms of information technology,
e.g. permitting electronic submission of responses, and the basis for
the decision of adopting this means of collection. Also describe any
consideration of using information technology to reduce burden.

The Department intends to provide access instructions for electronic ED
standard forms \-- ED 424, the Application for Federal Education
Assistance (AFEA) (OMB No. 1890-0017) and ED 524, the U.S. Department of
Education Budget Information -- Non-Construction Programs (OMB No.
1890-0004) to record much of the information required by P.L. 106-554
and the SBA *Policy Directive*, some of the required information items
are outside the scope of these forms. The Department intends to use
Grants.gov APPLY and the e-Reader module of the U.S. Department of
Education e-Grants Web Portal for this program to expedite the
application review and project awards. Concurrently, this electronic
process is intended to reduce applicant burden.

4\. Describe efforts to identify duplication. Show specifically why any
similar information already available cannot be used or modified for use
of the purposes described in Item 2 above.

As stated in Item 3, the Department intends to use ED standard forms to
collect basic descriptive applicant information. In addition, this
package seeks to reduce burden and duplication by addressing SBA Policy
Directive collection mandates in a consolidated SBIR grant application
package.

5\. If the collection of information impacts small businesses or other
small entities (Item 5 of OMB Form 83-I), describe any methods used to
minimize burden.

The SBIR program is purposefully targeted for small business concerns.
In keeping with the legislative and regulatory intent of the SBIR
program, the Department has developed this uniform and consolidated
grant application package.

6\. Describe the consequences to Federal program or policy activities if
the collection is not conducted or is conducted less frequently, as well
as any technical or legal obstacles to reducing burden.

The Department would not comply with the legislative mandate (P.L.
106-554) if this collection were not conducted each year in which its
extramural R/R&D budget exceeds \$100 million.

7\. Explain any special circumstances that would cause an information
collection to be conducted in a manner:

-   requiring respondents to report information to the agency more often
    than quarterly;

-   requiring respondents to prepare a written response to a collection
    of information in fewer than 30 days after receipt of it;

-   requiring respondents to submit more than an original and two copies
    of any document;

-   requiring respondents to retain records, other than health, medical,
    government contract, grant-in-aid, or tax records for more than
    three years;

-   in connection with a statistical survey, that is not designed to
    produce valid and reliable results than can be generalized to the
    universe of study;

-   requiring the use of a statistical data classification that has not
    been reviewed and approved by OMB;

-   that includes a pledge of confidentiality that is not supported by
    authority established in statute or regulation, that is not
    supported by disclosure and data security policies that are
    consistent with the pledge, or which unnecessarily impedes sharing
    of data with other agencies for compatible confidential use; or

-   requiring respondents to submit proprietary trade secrets, or other
    confidential information unless the agency can demonstrate tht it
    has instituted procedures to protect the information's
    confidentiality to the extent permitted by law.

At the discretion of the applicant, proprietary information may be
included in an application. This would be for the purpose of explaining
the proposed research and/or research and development activity*.*
Confidentiality assurances and information protection mechanisms are
explained in item 9.

8.  If applicable, provide a copy and identify the date and page number
    of publication in the Federal Register of the agency's notice,
    required by 5 CFR 1320.8(d), soliciting comments on the information
    collection prior to submission to OMB. Summarize public comments
    received in response to that notice and describe actions taken by
    the agency in response to these comments. Specifically address
    comments received on cost and hour burden.

Describe efforts to consult with persons outside the agency to obtain
their views on the availability of data, frequency of collection, the
clarity of instruction and record keeping, disclosure, or reporting
format (if any), and on the data elements to be recorded, disclosed, or
reported.

Consultation with representatives of those from whom information is to
be obtained or those who must compile records should occur at least once
every 3 years -- even if the collection of information activity is the
same as in prior periods. There may be circumstances that may preclude
consultation in a specific situation. These circumstances should be
explained.

The notice regarding this information collection will be published in
the *Federal Register.* The Grant Application Notice will be revised to
include relevant information from participating Program Offices once
budget levels are established.

9\. Explain any decision to provide any payment or gift to respondents,
other than remuneration of contractors or grantees.

There are no payments or gifts to respondents other than the
remuneration of grantees.

10\. Describe any assurance of confidentiality provided to respondents
and the basis for the assurance in statute, regulation, or agency
policy.

There are assurances of confidentiality provided to applicants using
this data collection. These respond to requirements contained in the
SBIR *Policy Directive* (Appendix -- Instructions for SBIR Program
Solicitation Preparation) "Proposal Cover Sheet" \[Section 3(b)(11),
page 60093\]; and, "Considerations \-- Proprietary Information"
\[Section 5(d)(1)(i), page 60095\].

The assurances in the ED grant application package are contained on:

-   Page 9 -- Section IV. Grant Application Preparation Instructions and
    Requirements \[part B "Protection of Information in Applications"\];

-   Pages 11-12 -- Section IV. Grant Application Preparation
    Instructions and Requirements \[part D(2)(d) "Legend for Proprietary
    Information"\]; and,

-   Pages 18-19 -- Section VI. Considerations \[part C(1) "Rights in
    Data Developed Under SBIR Funding Agreements"\].

11\. Provide additional justification for any questions of a sensitive
nature, such as sexual behavior and attitudes, religious beliefs, and
other matters that are commonly considered private. The justification
should include the reasons why the agency considers the questions
necessary, the specific uses to be made of the information, the
explanation to be given to persons from whom the information is
requested, and any steps to be taken to obtain their consent.

There are no questions of a sensitive nature.

12\. Provide estimates of the hour burden of the collection of
information. The statement should :

-   Indicate the number of respondents, frequency of response, annual
    hour burden, and an explanation of how the burden was estimated.
    Unless directed to do so, agencies should not conduct special
    surveys to obtain information on which to base hour burden
    estimates. Consultation with a sample (fewer than 10) of potential
    respondents is desirable. If the hour burden on respondents is
    expected to vary widely because of differences in activity, size, or
    complexity, show the range of estimated hour burden, and explain the
    reasons for the variance. Generally, estimates should not include
    burden hours for customary and usual business practices.

-   If this request for approval covers more than one form, provide
    separate hour burden estimates for each form and aggregate the hour
    burdens in item 13 of OMB Form 83-I.

-   Provide estimates of annualized cost to respondents of the hour
    burdens for collections of information, identifying and using
    appropriate wage rate categories. The cost of contracting out or
    paying outside parties for information collection activities should
    not be included here. Instead, this cost should not be included in
    Item 14.

Estimates of Hour Burden for this Information Collection:

> Number of Applications................... 200
>
> Hours Needed to Complete ........... 45
>
> Total Burden Hours .......................... 9,000

Estimates of Annual Cost Burden to Respondents for this Information
Collection:

Preparation of Application (\$28.00 per hour X 9,000 burden hours)
............. \$252,000

Postage and Printing (\$50.00 per application X 200 applications)
................ [\$ 10,000]{.underline}

Total Cost Burden ............. \$262,500

13\. Provide an estimate of the total annual cost burden to respondents
or record keepers resulting from the collection of information. (Do not
include the cost of any hour burden shown in Items 12 and 14.)

-   The cost estimate should be split into two components: (a) a total
    capital and start-up cost component (annualized over its expected
    useful life); and (b) a total operation and maintenance and purchase
    of services component. The estimates should take into account costs
    associated with generating, maintaining, and disclosing or providing
    the information. Include descriptions of methods used to estimate
    major cost factors including system and technology acquisition,
    expected useful life of capital equipment, the discount rate(s), and
    the time period over which costs will be incurred. Capital and
    start-up costs include, among other items, preparations for
    collecting information such as purchasing computers and software;
    monitoring, sampling, drilling and testing equipment; and record
    storage facilities.

-   If cost estimates are expected to vary widely, agencies should
    present ranges of cost burdens and explain the reasons for the
    variance. The cost of contracting out information collection
    services should be a part of this cost burden estimate. In
    developing cost burden estimates, agencies may consult with a sample
    of respondents (fewer than 10), utilize the 60-day pre-OMB
    submission public comment process and use existing economic or
    regulatory impact analysis associated with the rulemaking containing
    the information collection, as appropriate.

-   Generally, estimates should not include purchases of equipment or
    services, or portions thereof, made: (1) prior to October 1,
    1995, (2) to achieve regulatory compliance with requirements not
    associated with the information collection, (3) for reasons other
    than to provide information or keep records for the government,
    or (4) as part of customary and usual business or private practices.

Total Annualized Capital/Startup Cost : \$ .00

Total Annual Costs (O&M) : .00

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Total Annualized Costs Requested : \$ .00

There are no other respondent costs beyond those provided under Item 12.

14\. Provide estimates of annualized cost to the Federal government.
Also, provide a description of the method used to estimate cost, which
should include quantification of hours, operational expenses (such as
equipment, overhead, printing, and support staff), and any other expense
that would not have been incurred without this collection of
information. Agencies also may aggregate cost estimates from Items 12,
13, and 14 in a single table.

Estimates of Annualized Cost to the Federal Government:

> Work of Program Staff (\$44.23 per hour X 1,500)
> ....................................... \$66,345

Reviews by Outside Reviewers (40 Reviewers Working 1-3 days X \$1,500)
..... \$60,000

> Printing Costs (1,500 applications)
> ................................................\.........
> [\$1,200]{.underline}
>
> Total Cost to the Federal Government .......... \$127,545

15\. Explain the reasons for any program changes or adjustments reported
in Items 13 or 14 of the OMB Form 83-I.

There were programs from 4 Program Offices originally included in this
information collection. Those Program Offices are OVAE, IES, OPE and
OSERS. OVAE has not received funding for their SBIR Programs and does
not expect to receive future funding for them. IES is doing
solicitations and accepting proposals for this program as contracts. IES
expects to solicit and run this program in the form of contacts for the
next few years. OPE is working on their application package and their
estimated number of respondents and burden hours have not been counted
in this information collection. An OMB 83C Change Worksheet form will be
submitted to OMB/OIRA when OPE has built, reviewed and approved their
grant application package for this information collection. OPE's
estimated number of respondents, burden hours and percentage of
responses submitted electronically will be included in the OMB-83C
Change Worksheet.

16\. For collections of information whose results will be published,
outline plans for tabulation and publication. Address any complex
analytical techniques that will be used. Provide the time schedule for
the entire project, including beginning and ending dates of the
collection of information, completion of report, publication dates, and
other actions.

Some of the information that is collected from the applicants is
reported to the SBA in order to comply with the requirements of the
legislative mandate (P.L. 106-554) and the SBA *Policy Directive*
("Federal Register / Vol. 67, No. 185 / Tuesday, September 24, 2002;"
see "Section 10 -- Annual Report to the Small Business Administration,"
page 60090). In addition, the Department of Education publishes select
awardee information on the ED SBIR website (firm name, address, phone
number and e-mail; award amount; Principal Investigator; and, project
title and abstract).

17\. If seeking approval to not display the expiration date for OMB
approval of the information collection, explain the reasons that display
would be inappropriate.

OMB approval of this collection with the expiration date will be
displayed.

18\. Explain each exception to the certification statement identified in
Item 20, "Certification for Paperwork Reduction Act Submissions," of OMB
Form 83-I.

There are no exceptions to the Certification Statement.

**B. Collection of Information Employing Statistical Methods**

The agency should be prepared to justify its decision not to use
statistical methods in any case where such methods might reduce burden
or improve accuracy of results. When Item 17 on Form 83-I is checked
"Yes," the following documentation should be included in the Supporting
Statement to the extent that it applies to the methods proposed:

1.  Describe the potential respondent universe (including a numerical
    estimate) and any sampling or other respondent selection method to
    be used. Data on the number of entities (e.g., establishments, state
    and local government units, households, or persons) in the universe
    covered by the collection and in the corresponding sample are to be
    provided in tabular form for the universe as a whole and for each of
    the strata in the proposed sample. Indicate expected response rates
    for the proposed sample. Indicate expected response rates for the
    collection as a whole. If the collection had been conducted
    previously, include the actual response rate achieved during the
    last collection.

2.  Describe the procedures for the collection of information,
    including:

-   Statistical methodology for stratification and sample selection.

-   Estimation procedure.

-   Degree of accuracy needed for the purpose described in the
    justification.

-   Unusual problems requiring specialized sampling procedures, and

-   Any use of periodic (less frequent than annual) data collection
    cycles to reduce burden.

1.  Describe methods to maximize response and to deal with issues of
    non-response. The accuracy and reliability of information collected
    must be shown to be adequate for intended uses. For collections
    based on sampling, a special justification must be provided for any
    collection that will not yield "reliable" data that can be
    generalized to the universe studied.

2.  Describe any tests of procedures or methods to be undertaken.
    Testing is encouraged as an effective means of refining collections
    of information to minimize burden and improve utility. Tests must be
    approved if they call for answers to identical questions from 10 or
    more respondents. A proposed test or set of tests may be submitted
    for approval separately or in combination with the main collection
    of information.

3.  Provide the name and telephone number of individuals consulted on
    statistical aspects of the design and the name of the agency unit,
    contractor(s), grantee(s), or other persons who will actually
    collect and/or analyze the information for the agency.

This collection does not employ statistical methodology.