a

GAO

United States Government Accountability Office

Report to Congressional Requesters

April 2006 SMALL BUSINESS 

INNOVATION 

RESEARCH

Information on 

Awards Made by NIH 

and DoD in Fiscal 

Years 2001 through 

2004

GAO-06-565

The electronic version of this report was reposted April 21, 2006, to correct the 

report cover title displayed in the previous version. The time period “Fiscal 

Years 2002 through 2004” has now been corrected to read “Fiscal Years 2001 

through 2004.” 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 2006

SMALL BUSINESS INNOVATION 

RESEARCH 

Information on Awards Made by NIH and 

DoD in Fiscal Years 2001 through 2004 

Highlights of GAO-06-565, a report to 

congressional requesters 

The Small Business Innovation 

Research (SBIR) program is a three 

phase program that increases the 

use of small businesses to meet 

federal research needs and 

encourages commercialization of 

this research. Venture capital is one 

source of funding to help 

commercialize SBIR projects. To

receive an award firms must meet

ownership and other criteria and

awards may exceed dollar 

guidelines. In 2002, the Small 

Business Administration (SBA) 

clarified that majority owners of 

firms that receive awards must be 

individuals rather than 

corporations.

Since 2002, controversy has arisen 

over the extent to which venture 

capital firms may own SBIR firms. 

GAO was asked to provide

information on SBIR for fiscal 

years 2001 - 2004. For NIH and 

DoD, we determined the (1) 

number and characteristics of 

awards, (2) number and

characteristics of awards above the 

guidelines, (3) changes in award 

characteristics after 2002, and (4) 

factors agencies consider, and data 

they collect on, SBIR awards. 

NIH, DoD, and SBA provided 

technical comments that were

incorporated, as appropriate. DoD 

said our findings were not 

surprising in light of differences in 

the markets for SBIR projects. SBA 

said our findings, though useful, 

may be misconstrued as suggesting

a link between venture capital 

investment and SBIR eligibility,

when no such link exists. 

During fiscal years 2001-2004, the National Institutes of Health (NIH) and 

Department of Defense (DoD) made 16,019 SBIR awards valued at $5.3 

billion. GAO identified the following characteristics of these awards: (1) 

most were concentrated in a few states; (2) a few agency component made 

most of the awards; (3) award amounts ranged from well below the 

guidelines to significantly above; (4) few awards were made to firms that had 

received venture capital investment, NIH made more than DoD; and (5) firms 

that received DoD SBIR awards were relatively small-sized. 

Overall, from fiscal year 2001 through 2004, about half of NIH awards and 12 

percent of DoD awards exceeded the guidelines, and most went to firms that 

had not received venture capital investment. Awards above the guidelines

accounted for 70 percent of NIH’s SBIR dollars and 23 percent of DoD’s. 

Agency officials said NIH and DoD made such awards generally to fund 

relatively expensive research or to ensure high-quality results. Awards above 

the guidelines to firms that had received venture capital investment 

accounted for 18 percent of NIH’s awards above the guidelines, and about 8 

percent of DoD’s. At NIH, firms that had received venture capital investment 

were more likely to receive the largest awards than firms that had not. A 

similar relationship existed for DoD’s phase I awards but not for its phase II 

awards. 

Since 2002, when SBA clarified SBIR ownership eligibility criteria, an 

increasing number of awards have been made to small business firms that 

had received venture capital investment; such firms have generally received 

larger awards at NIH and, in the aggregate, a larger share of NIH’s and DoD’s 

available SBIR funds. In addition, the average phase II award amount to 

firms that had received venture capital investment increased by over 70

percent, from about $860,000 in fiscal year 2001 to about $1.5 million in fiscal 

year 2004. As a result, such firms attracted a greater percentage of NIH’s 

total SBIR dollars each year—about 21 percent on average in fiscal years 

2003 and 2004, compared to an average of about 14 percent in fiscal years 

2001 and 2002. At DoD we found similar trends, but to a somewhat lesser 

extent. 

NIH, DoD, and SBA focus mainly on SBIR eligibility criteria relating to 

ownership, for-profit status, and the number of employees when reviewing 

applications. Although applicants self-certify that they meet these criteria, 

both NIH and DoD make efforts to verify the accuracy of the information 

prior to making an award. When agency officials are unable to verify the 

accuracy of an applicant’s information, they refer the matter to SBA. Both 

agencies limit their data collection efforts largely to information about the 

SBIR award itself, such as award size. Agencies are not required to gather 

data on characteristics of the firms receiving the awards, such as the 

presence of venture capital investment; as a result, this information is 

currently not being collected. 

www.gao.gov/cgi-bin/getrpt?GAO-06-565.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Anu Mittal at 

(202) 512-3841 or mittala@gao.gov. 
Page i GAO-06-565 Small Business Innovation Research

Contents

Letter 1

Results in Brief 4

Background 8

Key Characteristics of NIH’s and DoD’s SBIR Awards for Fiscal Years 

2001 through 2004 12

Few Awards above the Guidelines Were Made to Firms That Had 

Received Venture Capital Investment Although These Firms Tend 

to Receive Larger Awards 21

SBA’s Ownership Clarification Does Not Appear to Have Reduced 

Program Participation by Firms That Had and Had Not Received 

Venture Capital Investment 25

NIH, DoD, and SBA Focus Largely on Select Eligibility Criteria and 

Collect Limited Data on SBIR Awardees 38

Agency Comments and Our Evaluations 42

Appendixes

Appendix I: Scope and Methodology 45

Appendix II: Detailed Information on SBIR Awards Made by NIH During 

Fiscal Years 2001 through 2004 48

Appendix III: Detailed Information on SBIR Awards Made by DoD During 

Fiscal Years 2001 through 2004 59

Appendix IV: Comments from the Department of Defense 68

Appendix V: Comments from the Small Business Administration 69

Appendix VI: GAO Contact and Staff Acknowledgments 71

Tables Table 1: Total Number and Dollar Value of SBIR Awards Made by 

NIH and DoD During Fiscal Years 2001 - 2004 13

Table 2: Geographical Distribution of NIH’s Total SBIR 

Applications, Awards, and Dollars Awarded for the Top 10 

States During Fiscal Years 2001 - 2004 14

Table 3: Geographical Distribution of DoD’s Phase I SBIR 

Applications and Total Awards and Dollars Awarded for 

the Top 10 States During Fiscal Years 2001 - 2004 15

Table 4: Total SBIR Awards and Dollars Awarded for Four Primary 

NIH Awarding Components During Fiscal Years 2001 - 

2004 17
Contents

Page ii GAO-06-565 Small Business Innovation Research

Table 5: Total SBIR Awards and Dollars Awarded for Four Primary 

DoD Awarding Components During Fiscal Years 2001 - 

2004 18

Table 6: Total NIH SBIR Awards and Dollars Awarded to Firms That 

Had and Had Not Received Venture Capital Investment 

During Fiscal Yeasr 2001 - 2004 19

Table 7: Total DoD SBIR Awards and Dollars Awarded to Firms 

That Had and Had Not Received Venture Capital 

Investment During Fiscal Years 2001 - 2004 19

Table 8: Total Number and Dollar Value of NIH and DoD SBIR 

Awards within and above the Guidelines Made During the 

Period Fiscal Years 2001 - 2004 22

Table 9: Percentage of NIH and DoD SBIR Awards within and above 

the Guidelines to Firms that Had Received Venture Capital 

Investment During Fiscal Years 2001 - 2004 24

Table 10: Number of Awardee Firms by Agency, and Venture Capital 

Investment Status for Fiscal Years 2001 through 2004 28

Table 11: Number of SBIR Awards by Agency, and Venture Capital 

Investment Status of Awardee Firms for Fiscal Years 2001 

through 2004 29

Table 12: Average Award Amount by Agency, Venture Capital 

Investment Status of Awardee Firm, and Award Phase for 

Fiscal Years 2001 through 2004 29

Table 13: Number of SBIR Awards above and within the Guidelines 

by Agency and Venture Capital Investment Status of 

Awardee Firm for Fiscal Years 2001 through 2004 30

Table 14: Average Amount of SBIR Awards, above and within the 

Guidelines, by Agency and Venture Capital Investment 

Status of Awardee Firm for Fiscal Years 2001 through 

2004 31

Table 15: Share of Dollars Awarded by Agency and Venture Capital 

Investment Status of Awardee Firm for Fiscal Years 2001 

through 2004 32

Table 16: Share of Dollars Awarded above and within the Guidelines 

by Agency and Venture Capital Investment Status of 

Awardee Firm for Fiscal Years 2001 through 2004 33

Table 17: Geographical Distribution of NIH Dollars Awarded, Overall 

and to Firms That Had Received Venture Capital 

Investment, Fiscal Years 2001-2002 Compared to Fiscal 

Years 2003-2004 34
Contents

Page iii GAO-06-565 Small Business Innovation Research

Table 18: Geographical Distribution of DoD Dollars Awarded, 

Overall and to Firms That Had Received Venture Capital 

Investment, Fiscal Years 2001-2002 Compared to Fiscal 

Years 2003-2004 35

Table 19: Dollars Awarded by Four Primary NIH Awarding 

Components, Overall and to Firms that Had Received 

Venture Capital Investment, Fiscal Years 2001-2002 

Compared to Fiscal Years 2003-2004 36

Table 20: Dollars Awarded by Four Primary DoD Awarding 

Components, Overall and to Firms That Had Received 

Venture Capital Investment, Fiscal Years 2001-2002 

Compared to Fiscal Years 2003-2004 37

Table 21: SBIR Budgets and Number of Applications Submitted by 

Agency for Fiscal Years 2001 through 2004 38

Table 22: Percentage of Applications Funded by Agency for Fiscal 

Years 2001 through 2004 38

Table 23: Geographical Distribution of NIH’s Total SBIR 

Applications, Awards, Dollars Awarded, Dollars to Firms 

That Had and Had Not Received Venture Capital 

Investment, and Dollars to Awards within and above SBA’s 

Guidelines, Fiscal Years 2001 through 2004 48

Table 24: Component Distribution of NIH Awards, Dollars Awarded, 

Dollars to Firms That Had and Had Not Received Venture 

Capital, and Dollars to Awards within and above SBA’s 

Guidelines, Fiscal Years 2001 through 2004 51

Table 25: Geographical Distribution of NIH Dollars Awarded, Overall 

and to Firms That Had Received Venture Capital 

Investment, Fiscal Years 2001-2002 Compared to Fiscal 

Years 2003-2004 53

Table 26: Component Distribution of NIH Dollars Awarded, Overall 

and to Firms That Had Received Venture Capital 

Investment, Fiscal Years 2001-2002 Compared to Fiscal 

Years 2003-2004 56

Table 27: Geographical Distribution of DoD’s Phase I Applications, 

Total Awards, Total Dollars Awarded, Dollars to Firms That 

Had and Had Not Received Venture Capital Investment, 

and Dollars to Awards within and above SBA’s Guidelines, 

Fiscal Years 2001 through 2004 59

Table 28: Component Distribution of DoD Awards, Dollars Awarded, 

Dollars to Firms That Had and Had Not Received Venture 

Capital, and Dollars to Awards within and above SBA’s 

Guidelines, Fiscal Years 2001 through 2004 63
Contents

Page iv GAO-06-565 Small Business Innovation Research

Table 29: Geographical Distribution of DoD Dollars Awarded, 

Overall and to Firms That Had Received Venture Capital 

Investment, Fiscal Years 2001-2002 Compared to Fiscal 

Years 2003-2004 64

Table 30: Component Distribution of DoD Dollars Awarded, Overall 

and to Firms That Had Received Venture Capital 

Investment, Fiscal Years 2001-2002 Compared to Fiscal 

Years 2003-2004 67

Figure Figure 1: General Selection Process for SBIR Awards at NIH and 

DoD 11

Abbreviations

DoD Department of Defense

IDI Innovation Development Institute

NIH National Institutes of Health

R&D research and development

SBA Small Business Administration

SBIR Small Business Innovation Research

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Page 1 GAO-06-565 Small Business Innovation Research

United States Government Accountability Office

Washington, D.C. 20548

A

April 14, 2006 Letr

Congressional Requesters

As a competitor in the global economy, the United States relies heavily on 

innovation through research and development (R&D). The potential of 

small businesses to be sources of significant innovation led the Congress to 

increase government funding for R&D projects and establish the Small 

Business Innovation Research (SBIR) program. The Small Business 

Innovation Development Act of 19821

 established the SBIR program to, 

among other things, stimulate technological innovation related to each 

participating federal agency’s goals and mission, use small businesses to 

meet federal R&D needs, and increase private sector commercialization of 

innovations derived from federal R&D. From its inception in fiscal year 

1983, through fiscal year 2004, the SBIR program has awarded over $17 

billion to more than 82,000 projects. 

Every federal agency with an R&D budget of $100 million or more is 

required to establish and operate a SBIR program funded by 2.5 percent of 

that agency’s budget for research conducted by others, called extramural 

research. Participating agencies make awards and manage their own 

programs, while the Small Business Administration (SBA) plays a central 

administrative and oversight role. Of the federal agencies with SBIR 

programs, two—the National Institutes of Health (NIH) in the Department 

of Health and Human Services and the Department of Defense (DoD)—

account for the largest share of awards. NIH and DoD generally rely on the 

various components within the agency, such as the institutes and centers 

within NIH or the military and defense components within DoD, to help 

implement the SBIR program and make funding decisions. The extent of 

participation by awarding components differs in relation to their size, with 

larger components issuing more awards than smaller ones. 

SBIR is a three-phased program. During phase I, participating agencies 

fund a proposed idea that appears to have commercial potential to more 

fully investigate its scientific and technical merit and feasibility. In phase II, 

participating agencies fund projects to further develop the idea, again 

taking into account its commercial potential. Generally, phase I and II 

awards may not exceed $100,000 and $750,000, respectively. However, SBA 

has interpreted its statutory authority as providing it the discretion to allow 

1

Pub. L. No. 97-219 (1982).
Page 2 GAO-06-565 Small Business Innovation Research

participating agencies to make larger awards above these guidelines when 

appropriate. Funds for all SBIR awards are dispersed contingent upon the 

awardee firm successfully achieving planned milestones. In phase III, SBIR 

firms are expected to commercialize the resulting product or process, but 

with no further SBIR funding. Funding for commercialization may come 

from the private sector or from non-SBIR federal dollars. One source of 

private sector funding available to SBIR firms to help commercialize SBIRsupported projects is funding from venture capital firms. In return for their 

investment in SBIR awardee firms, venture capital firms often receive a 

share in the ownership of the firm and, ultimately, any profits that may 

result when the project is commercialized.

To qualify for SBIR awards, small business firms must meet certain SBIR 

ownership and other eligibility criteria, such as being 51 percent or more 

owned by individuals who are U.S. citizens or permanent resident aliens.2

Over the last several years, some controversy has arisen over whether SBIR 

awards can be made to small businesses whose majority owners are 

venture capital firms. In the fall of 2002, SBA provided additional 

clarification of the ownership criteria but did not specifically address the 

role of venture capital firms.3

 In 2003, an SBA administrative law judge 

issued a decision stating that venture capital firms could not be considered 

“individuals” for the purpose of satisfying the ownership criteria for the 

program. However, these events have raised concerns that small 

businesses that are majority-owned by venture capital firms are being 

unfairly excluded from participating in the SBIR program, and as a result, 

important research is not being funded and conducted. Others contend that 

small business firms that had not received venture capital investment are 

being excluded from the program because they are unable to compete 

against firms with venture capital investment that may, as a result of the 

venture capital investment, have access to greater management expertise 

and resources.

2

Effective early 2005, the 51 percent ownership requirement was revised to allow for 

majority ownership and control by another business concern or joint venture which itself 

meets the 51 percent requirement. 13 C.F.R. § 121.702(a).

3

SBA’s clarification took two forms: one was an updated Policy Directive promulgated 

through the Federal Register and the second was additional informal interpretive guidance 

provided by SBA’s Office of General Counsel in October of 2002. 67 Fed. Reg. 60072 (Sep. 24, 

2002).
Page 3 GAO-06-565 Small Business Innovation Research

In this context, you asked us to review the SBIR awards NIH and DoD 

made from fiscal year 2001 through 2004, including those made to firms 

whose majority owners were venture capital firms, and the agencies’ 

processes for determining eligibility. Because information on the degree of 

venture capital ownership is confidential and proprietary, and not available 

from the public or private sources we contacted, we could not directly 

respond to your inquiry. Instead, as agreed with your offices, this report 

provides information on those small business firms that had received 

venture capital investment at any time through fiscal year 2004, and also 

received an SBIR award in fiscal year 2001 through fiscal year 2004.4

Specifically, we determined (1) the total number and key characteristics of 

NIH’s and DoD’s phase I and phase II awards, including the geographic 

location of awardee firms, agency component making the award, amount of 

the award, presence of venture capital investment in the awardee firm, and 

number of employees working for the SBIR firm and its affiliates; (2) the 

number and key characteristics of NIH’s and DoD’s phase I and phase II 

awards that were above the guidelines, including the reasons the awards 

exceeded the guidelines; (3) changes, if any, in award characteristics, for 

awards above and below the guidelines, that occurred following SBA’s 

clarification of—and ruling on—the ownership criteria regarding venture 

capital ownership; and (4) the factors NIH, DoD, and SBA consider when 

determining eligibility for SBIR awards, and the data these agencies collect 

about SBIR awardees and applicants.

To conduct our work, we interviewed NIH, DoD, and SBA officials about 

their procedures and any changes that occurred from fiscal years 2001 

through 2004. We reviewed agency documentation on awards, award 

selection and funding, eligibility determinations, and the data elements that 

are collected during the eligibility process. We also interviewed officials 

from organizations that represent venture capital investors and 

biotechnology firms to obtain their views on the SBIR program and venture 

capital investment. 

To determine the total number of phase I and phase II awards and the key 

characteristics of these awards, we obtained data from NIH and DoD for all 

SBIR awards made during fiscal years 2001 through 2004. These data 

4

Ninety-three percent of the firms in our study that had received an SBIR award and venture 

capital investment first received venture capital investment between 1990 and 2004. The 

remaining 7 percent first received venture capital investment before 1990. The data also do 

not indicate the length of time venture capital investment remained in the awardee firm. 
Page 4 GAO-06-565 Small Business Innovation Research

included award amounts projected at the time the award was made as well 

as additional funding and supplemental amounts issued subsequent to the 

award, which allowed us to provide information on awards that originated 

in fiscal years 2003 and 2004 but which may not be completed until 2005 or 

later. As a result, our data differ from information provided in agency 

reports on the amounts distributed in any specific fiscal year. We also 

obtained data from two private sector firms, Innovation Development 

Institute (IDI) and Dow Jones-Venture One, to determine which awardee 

firms received venture capital investment before receiving an SBIR award 

between fiscal years 2001 and 2004. Initially, we selected IDI because its 

database included information that supplemented agency data on SBIR 

awardee firms. IDI’s database included information on venture capital 

investments in SBIR awardee firms that was compiled from published 

information such as company press releases. Subsequently, we obtained 

data from Dow Jones-Venture One to help corroborate, and supplement as 

necessary, the IDI data. We selected Dow Jones-Venture One because its 

database on venture capital investment is compiled and updated with 

information from both venture capital investors and the firms that receive 

the investment. These data do not indicate the length of time venture 

capital investment remained in the awardee firm. We interviewed key 

officials at IDI and Dow Jones-Venture One about their databases. We 

assessed the reliability of relevant fields in the databases and found them 

sufficient for our review.

To assess any differences that occurred following SBA’s October 2002 

clarification of ownership criteria and its May 2003 decision related to 

venture capital ownership in SBIR firms, we compared NIH and DoD data 

on awards made from October 1, 2000, through September 30, 2002, with 

data on awards made from October 1, 2002, through September 30, 2004. 

We used the combined data set to compare NIH and DoD awards from the 

two time periods in terms of the key characteristics described above. See 

appendix I for more details about our scope and methodology. We 

conducted our work in accordance with generally accepted government 

auditing standards.

Results in Brief During fiscal years 2001-2004, NIH and DoD made a total of 16,019 SBIR 

awards valued at $5.3 billion. We identified the following key 

characteristics of these awards:

• Most of the awards were concentrated in a few states. Firms in 

California and Massachusetts submitted about a third of all the 
Page 5 GAO-06-565 Small Business Innovation Research

applications and received about a third of all SBIR awards, totaling 

about a third of all dollars awarded. 

• A small number of awarding components in NIH and DoD made most of 

the awards. At NIH, four awarding components issued about half of the 

awards, while the other 19 participating institutes and centers issued the 

remainder. Similarly, at DoD, four awarding components issued over 80 

percent of the SBIR awards, while the other six participating 

components issued the remainder. 

• Award amounts ranged from well below the guidelines to significantly 

above the guidelines. At NIH, phase I awards averaged $162,537 and 

ranged from $61,750 to $1.7 million; phase II awards averaged $934,643 

and ranged from $150,593 to about $6.5 million. At DoD, phase I awards 

averaged $89,504 and ranged from $36,595 to $449,000; phase II awards 

averaged $771,362 and ranged from $69,997 to about $4.4 million.

• The percentage of awards to firms that had received venture capital 

investment was relatively small at both agencies, but was larger at NIH 

than at DoD. Specifically, about 17 percent of the NIH awards—

accounting for 18 percent of the dollars NIH awarded to SBIR firms—

and 7 percent of the DoD awards—accounting for 7 percent of the 

dollars DoD awarded—went to firms that had received venture capital 

investment. Awards to firms that had received venture capital 

investment were generally concentrated in the same states and in the 

same award-making agency components as for all of the awards. 

• The firms that received DoD SBIR awards were, on average, relatively 

small-sized firms. Specifically, half of the firms had 20 employees or 

fewer. SBIR awardee firms that had also received venture capital 

investment were, on average, about 30 percent larger than firms that had 

not. Comparable information on firm size was not available for NIH.

Overall, about 50 percent of NIH awards and 12 percent of DoD awards 

exceeded SBIR guidelines, and most went to firms that had not received 

venture capital investment. Awards above the guidelines accounted for 70 

percent of the dollars NIH awarded to SBIR firms and 23 percent of DoD’s. 

At NIH, phase I awards above the guidelines ranged from just over $100,000 

to $1.7 million, although most awards were $595,000 or less. Similarly, 

NIH’s phase II awards above the guidelines ranged from slightly above 

$750,000 to $6.5 million, but most were $2.1 million or less. According to 

NIH officials responsible for the SBIR program, awards above the 
Page 6 GAO-06-565 Small Business Innovation Research

guidelines generally are made for projects in selected technology areas 

(such as biotechnology) that may be relatively more expensive to 

complete. At DoD, phase I awards above the guidelines ranged from just 

over $100,000 to about $448,796, although most of the awards were 

$142,000 or less. Similarly, DoD’s phase II awards above the guidelines 

ranged from about $750,000 to $4.4 million, although most were $2.0 million 

or less. At DoD, the two main reasons awards exceeded the guidelines were 

because (1) the agency had determined that additional funds were needed 

to ensure a high-quality investigation of the proposed idea, or (2) the 

amount exceeding the guidelines included non-SBIR funds. With regard to 

the number of awards that exceeded the guidelines and were made to firms 

that had received venture capital investment, we determined that 18 

percent of awards above the guidelines at NIH and about 8 percent of 

awards above the guidelines at DoD went to such firms. However, at NIH 

we found that firms that had received venture capital investment were 

more likely than firms that had not received such investment to receive the 

largest awards. For example, firms that had received venture capital 

investment were about six times more likely to receive phase II awards 

greater than $2.5 million, which accounted for about 7 percent of NIH’s 

phase II dollars. A similar relationship existed for DoD’s phase I awards but 

not for its phase II awards. While the data, overall, indicate a relationship 

between firms that had received venture capital investment and high award 

amounts, by themselves they do not indicate whether the presence of 

venture capital was the reason these firms received such large awards.

Since 2002, when SBA clarified SBIR ownership eligibility criteria, an 

increasing number of awards have been made to small business firms that 

received venture capital investment; such firms have generally received 

larger awards at NIH and, in the aggregate, a larger share of NIH’s and 

DoD’s available SBIR funds. For example, the number of firms that 

received venture capital investment and also received SBIR awards from 

NIH steadily increased from 106 in fiscal year 2001 to 150 in fiscal year 

2004. The number of awards these firms received also increased from 155 

to 249. Moreover, the average phase II award amount to firms that had 

received venture capital investment increased by over 70 percent, from 

$861,488 in fiscal year 2001 to about $1.5 million in fiscal year 2004. 

Consequently, such firms attracted a greater percentage of NIH’s total SBIR 

dollars each year—about 21 percent on average in fiscal years 2003 and 

2004, compared to an average of about 14 percent in fiscal years 2001 and 

2002. At DoD we found similar trends, but to a somewhat lesser extent.
Page 7 GAO-06-565 Small Business Innovation Research

NIH, DoD, and SBA focus primarily on criteria relating to ownership, forprofit status, and number of employees to determine a firm’s eligibility for 

the SBIR program. Although applicants self-certify that they meet these 

criteria, both NIH and DoD perform certain actions to try and verify the 

accuracy of the information submitted by applicants prior to making an 

award. For example, both agencies frequently contact potentially 

successful applicants and may require additional documentation. When 

agency officials are unable to ensure the accuracy of an applicant’s 

information, they refer the matter to SBA. After SBA makes an eligibility 

determination, it makes information about the firms it finds ineligible 

publicly available on its Web site, but does not always indicate that the 

determination was for SBIR purposes. We also found that NIH and DoD 

take different approaches to retaining and sharing information on firms 

found ineligible. In 2003, NIH began to retain information centrally on firms 

it found ineligible and made the information available to all of its agency 

components that make SBIR awards. In contrast, DoD retains information 

on firms it finds ineligible in individual contract files and shares the 

information electronically with awarding components but does not retain 

the data in a centralized resource. With regard to data collected by the 

agencies, we determined that each agency limits its data collection efforts 

largely to information about the SBIR award itself, such as award size and 

location of the principal investigator. Agencies do not gather data on 

characteristics of the firms receiving the awards, such as the presence of 

venture capital investment or the extent of venture capital ownership. Nor 

do the agencies systematically gather data on the industry represented by 

the applicant.

In commenting on our report, NIH, DoD, and SBA provided technical 

comments that we incorporated, as appropriate. DoD agreed that because 

data on ownership are not publicly available, it is not possible to determine 

the extent to which venture capital firms own SBIR awardee firms. 

Moreover, DoD did not find the results of our analysis surprising in light of 

differences in markets for research supported by NIH and DoD. SBA noted 

that while the information may be useful, it could be misconstrued as 

suggesting a link between the presence of venture capital investment and 

SBIR ownership criteria when such a link does not exist. While we 

understand SBA’s concern, we believe the report clearly states that we used 

venture capital investment as a proxy for venture capital ownership 

because ownership data are proprietary and confidential. We also explicitly 

note in the report that no causal link can be inferred from the data. 
Page 8 GAO-06-565 Small Business Innovation Research

Background Of the eleven agencies that currently have SBIR programs, two—NIH and 

DoD—account for the largest share of awards.5

 Large agencies, such as 

NIH and DoD, generally rely on the various components within the agency 

such as the 23 participating institutes and centers within NIH and the 10 

participating military and defense components within DoD, to help 

implement the SBIR program and make funding decisions.6

 Agencies 

decide what type of research to fund, solicit and review applications for 

technical and scientific merit, verify that the applicant meets eligibility 

criteria, select which projects to fund, and decide the size of the award. 

Awards can be made to successful applicants in the form of grants, 

contracts, or cooperative agreements.7

 SBA plays a key administrative and 

oversight role, such as issuing policy directives and annual reports for the 

program and monitoring agencies’ annual funding allocations. Once an 

award has been issued, awarding agency staff monitor the progress of work 

on the project. 

The Small Business Innovation Development Act of 1982 established a 

three-phased structure for the SBIR program. During phase I, participating 

agencies fund a proposed idea that appears to have commercial potential to 

more fully investigate its scientific and technical merit and feasibility. Work 

on the phase I project is generally not to exceed 6 months. During phase II, 

participating agencies fund projects to further develop the idea, generally 

over a 2-year period, again taking into account its commercial potential. 

During phase III, firms are expected to commercialize the resulting product 

or process using other federal or private sector funds, but with no further 

SBIR funding. Unlike phases I and II, phase III has no general limits in time 

or dollar amounts. In addition to phase I and II awards, NIH and DoD also 

make awards through a streamlined process—known as fast track—for 

5

The nine other participating agencies are the Departments of Agriculture, Commerce, 

Education, Energy, Homeland Security, and Transportation; the Environmental Protection 

Agency, the National Aeronautics and Space Administration, and the National Science 

Foundation.

6

The names of two DoD components changed during the period of our review—fiscal years 

2001 through 2004. Specifically, the Ballistic Missile Defense Organization became the 

Missile Defense Agency in 2002, the National Imagery and Mapping Agency became the 

National Geospatial-Intelligence Agency in 2003.

7

At DoD, which almost exclusively uses contracts to make awards, contracting officials are 

responsible for ensuring that evaluations are based solely on the factors specified in the 

solicitation and that all requirements of law, executive orders, regulations, and all other 

applicable procedures—including clearances and approvals—have been met.
Page 9 GAO-06-565 Small Business Innovation Research

projects with high commercial potential.8 Both agencies use an expedited 

review process for fast track applications. However each agency operates 

its program differently. For example, to qualify for DoD’s fast track awards, 

firms that have received phase I awards must obtain commitments for 

outside funding that DoD will match while NIH’s program considers 

information on phases I and II simultaneously and does not involve 

matching funds. In addition, the two agencies account for their fast track 

awards differently. NIH maintains data on fast track awards separately 

from its data on phase I and II awards. At DoD, fast track awards are 

included in the phase I and phase II awards data. Funding for fast track 

awards, which comprise a small portion of each agency’s SBIR awards, are 

not subject to specific dollar limits. Funds for all awards are dispersed 

contingent upon the awarded firm successfully achieving planned 

milestones. 

Receipt of a phase II award is contingent upon successful completion of a 

phase I award. Firms may receive phase II awards from the same agency 

that funded their phase I award or from a different participating agency. 

Successful commercialization during phase III may immediately follow 

completion of the phase II project, or may not occur for several years, or 

much later; drug development and medical products and processes that 

require extensive testing and federal regulatory approval before marketing 

fall into this final category. 

Funding for commercialization may come from the private sector or from 

non-SBIR federal sources. Venture capital firms that typically invest in new 

or existing firms with the potential for above-average growth are one 

source of private sector funding available to small businesses that would 

like to commercialize their SBIR-supported projects. Venture capital firms 

may seek to invest in small businesses that have received SBIR awards 

because, in exchange for their venture capital, they receive an ownership 

stake in the business and, ultimately, a share of any potential profits that 

result when the SBIR-supported project is commercialized.

Generally, phase I and phase II awards may not exceed $100,000 and 

$750,000, respectively. SBA has interpreted its statutory authority as 

providing it with discretion to allow agencies to make awards above these 

8

While the fast track process is not explicitly provided for in the SBIR statute or Policy 

Directive, NIH and DoD have developed the process as one way to help ensure seamless 

funding between phase I and phase II.
Page 10 GAO-06-565 Small Business Innovation Research

guidelines, when appropriate, if they provide written justification to SBA 

after doing so. For example, in 2001, SBA granted NIH a waiver that 

allowed it to routinely make awards above the guidelines for unusually 

expensive research, such as medical treatment and drug research. 

Similarly, DoD makes awards above the guidelines on a case-by-case basis 

according to certain criteria, such as whether the cost was determined to 

be reasonable and necessary to ensure a high-quality product.

To compete for SBIR awards, firms must meet size, ownership, and other 

eligibility criteria.9

 For example, eligible firms must (1) be organized as forprofit firms that operate primarily within, or contribute significantly to, the 

U.S. economy; (2) be 51 percent or more owned by individuals who are U.S. 

citizens or permanent resident aliens; and (3) have, with their affiliates, no 

more than 500 employees.10 Under current law, applicants self-certify their 

eligibility and face potential criminal and civil penalties for misrepresenting 

the status of their firm in order to obtain an SBIR award. Although firms 

may receive multiple phase I and II SBIR awards for different projects—

either from the same or from different participating agencies—firms may 

not receive multiple awards for work that is essentially the same.

NIH and DoD follow similar procedures to select applicants and determine 

their eligibility for an SBIR award. (See fig. 1.) Specifically, each agency 

consults its various awarding components to develop research topics that 

further the agency’s mission, and periodically announces SBIR project 

opportunities through a solicitation to seek funding for research on those 

topics. Before the date applications are due, both agencies encourage 

potential applicants to contact agency staff to discuss any questions they 

may have, including questions about their eligibility. As of December 2005, 

both agencies require applicants to file electronically, and to register with 

the Central Contractor Register database. Submitted applications are 

9

The Small Business Act states that a small business must be “independently owned and 

operated,” must not be “dominant in its field,” and that the definition of small business can 

vary by industry. Over the years, SBA has established and revised numerical definitions, 

called size standards, which are almost always stated in terms of either the number of 

employees or average annual receipts of a firm. For SBIR, SBA established a size standard 

all participating agencies must use that is stated in terms of the number of employees in the 

firm.

10Effective early 2005, the 51 percent ownership requirement was revised to allow for 

majority ownership and control by another business concern or joint venture which itself 

meets the 51 percent requirement. 13 C.F.R. § 121.702(a).
Page 11 GAO-06-565 Small Business Innovation Research

reviewed internally for administrative completeness, and those that do not 

comply with the requirements may be rejected or take longer to review. 

Figure 1: General Selection Process for SBIR Awards at NIH and DoD

Note: This chart reflects the general process at NIH and DoD. Because agencies and their awarding 

components’ processes differ to some extent, not all awarding components execute each step in the 

same manner.

At NIH, appropriately completed applications are assigned to a scientific 

review group and a potential funding component to undergo a two-step 

external peer review. The scientific review groups evaluate each 

application for scientific and technical merit, and commercial potential; 

assign scores; and subject meritorious applications to a second review. The 

National Advisory Council or the board of the awarding component then 

evaluates the applications for scientific merit, factoring in the scientific 

review groups’ scores and relevance to the awarding component’s mission 

and goals, and recommends applications to be funded. The members of the 

scientific review groups and the National Advisory Council or the board of 

the awarding component are nonfederal scientists, physicians, and 

engineers who are recognized authorities in their field. In contrast, at DoD, 

after an application has been forwarded to the appropriate awarding 

component, internal agency staff review the scientific and technical merit 

and the commercial potential of the application, and make decisions about 

which ones to fund.

Once officials at each awarding component decide which of the 

meritorious applications to fund, both NIH and DoD largely rely on 

information that the applicant provides and certifies as accurate to 

determine eligibility, although each agency makes some effort to 

independently corroborate the self-certified information. To help conserve 

limited staff resources and provide a more timely determination, both NIH 

 NIH issues single 

annual solicitation

 Defense issues

three annual 

solicitations

 Electronic process

since 2005

 Administrative 

review

 Scientific and 

technical review

 Funding decisions

 Applicants

self-certify

 If unclear, SBA 

conducts size 

determination

 Grant, contract, or 

agreement is

monitored

Solicitation

issued

Applications

submitted

Review and 

selection

Eligibility 

verification

Award issued

Source: GAO.
Page 12 GAO-06-565 Small Business Innovation Research

and DoD verify the eligibility of only those firms that submit applications 

deemed meritorious by their review process.

In recent years, the ownership criteria have come under increased scrutiny, 

particularly with regard to majority ownership of SBIR awardee firms by 

venture capital firms. Specifically, in 2001, an SBA administrative law judge 

issued a decision clarifying that the terms “individuals” and “citizens” in the 

SBIR criteria meant only natural persons, not entities such as corporations. 

Subsequently, in the fall of 2002, SBA both revised its SBIR policy directive 

and provided additional informal clarification to participating agencies 

regarding the ownership criteria, but did not specifically address the role of 

venture capital firms or other corporations. Then in 2003, the same SBA 

administrative law judge issued a decision stating that venture capital firms 

could not be considered individuals for the purpose of satisfying the 

ownership criteria for the program. 

Key Characteristics of 

NIH’s and DoD’s SBIR 

Awards for Fiscal Years 

2001 through 2004

During fiscal years 2001 - 2004, NIH and DoD made a total of 16,019 SBIR 

awards valued at $5.3 billion. This section discusses the following key 

characteristics that we identified for these awards: (1) total number and 

value of the awards made, (2) geographical distribution of the awards 

made, (3) agency components making the awards, and (4) size of firms 

receiving the awards. In addition, this section provides detailed 

information on the key characteristics of those awards that were made to 

firms that had received venture capital investment.

Total Number and Value of 

NIH’s and DoD’s SBIR 

Awards for Fiscal Years 

2001 through 2004

From fiscal year 2001 through 2004, NIH and DoD issued a combined total 

of 11,146 phase I awards, totaling about $1.3 billion, and 4,675 phase II 

awards, totaling about $3.8 billion. As shown in table 1, during fiscal years 

2001 - 2004, DoD made twice as many awards as NIH totaling over $3.2 

billion.
Page 13 GAO-06-565 Small Business Innovation Research

Table 1: Total Number and Dollar Value of SBIR Awards Made by NIH and DoD During Fiscal Years 2001 - 2004 

Source: GAO analysis of NIH and DoD data.

a

DoD includes the number and full anticipated dollar value of its fast track awards in its data on phase I 

and phase II awards. 

Notes:

(1) The dollar value of NIH’s phase I and II awards includes anticipated funding throughout the life of 

the project. The dollar value of fast track awards includes total dollars allotted to the projects through 

the end of fiscal year 2005 and does not include anticipated funding for projects that will continue after 

fiscal year 2005.

(2) DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

However, NIH awards were, on average, larger than the DoD awards. We 

found the following at NIH:

• Phase I awards averaged $162,537, with a median of $100,658, and 

ranged from $61,750 to $1.7 million, with about 90 percent falling 

between $96,000 and $489,000. 

• Phase II awards averaged $934,643, with a median of $763,719, and 

ranged from $150,593 to about $6.5 million, with about 90 percent falling 

between $542,000 and $1.8 million. 

• Fast track awards averaged $1.1 million, with a median of $850,000, and 

ranged from $96,514 to $9.6 million, with about 90 percent falling 

between $173,000 and $2.5 million.

In contrast, at DoD, we found the following:

• Phase I awards averaged $89,504, with a median of $99,000, and ranged 

from $36,595 to $449,000, with about 90 percent falling between $68,000 

and $120,000.

(Dollars in millions)

Agency

Phase I awards Phase II awards Fast track awards Dollar value of 

Number Dollar value Number Dollar value Number Dollar value all awards

NIH 3,580 $582 1,283 $1,199 198 $211 $1,992

DoD 7,566 $677 3,392 $2,616 a a $3,294

Total 11,146 $1,259 4,675 $3,816 198 $211 $5,286
Page 14 GAO-06-565 Small Business Innovation Research

• Phase II awards averaged $771,362, with a median of $747,622, and 

ranged from $69,997 to about $4.4 million, with about 90 percent falling 

between $450,000 and $1.2 million.

Geographical Distribution 

of NIH’s and DoD’s SBIR 

Awards for Fiscal Years 

2001 through 2004

While a firm in every state received at least one SBIR award from both NIH 

and DoD, a small number of states accounted for most of the awards. 

Specifically, about 70 percent of all SBIR awards and dollars awarded went 

to firms in 10 states, although the states differed between NIH and DoD. 

Moreover, firms in these states also submitted about 70 percent of the 

phase I and II applications at NIH, and phase I applications at DoD. DoD 

does not maintain comparable information on phase II applications by 

state. For example, at NIH and DoD, small businesses from California and 

Massachusetts submitted about a third of the applications and received 

about a third of the awards and a third of the dollars awarded. Tables 2 and 

3 provide information on the geographical distribution of NIH’s and DoD’s 

total SBIR applications and awards for the top 10 states for fiscal years 

2001 through 2004; detailed information on the distribution of applications, 

awards, and awarded dollars among all states is presented in appendix II 

for NIH and appendix III for DoD. 

Table 2: Geographical Distribution of NIH’s Total SBIR Applications, Awards, and 

Dollars Awarded for the Top 10 States During Fiscal Years 2001 - 2004

(Dollars in millions)

State

Total applications - 

number and 

percentage

Total awards - 

number and 

percentage

Total dollars awarded - 

number and 

percentage

California 3,918

(21%)

988

(20%)

$395

(20%) 

Massachusetts 2,364

(12%)

707

(14%)

$285

(14%) 

Maryland 1,224

(6%)

327

(6%)

$142

(7%) 

New York 830

(4%)

216

(4%)

$118

(6%) 

Texas 906

(5%)

213

(4%)

$81

(4%) 

Pennsylvania 725

(4%)

212

(4%)

$81

(4%) 
Page 15 GAO-06-565 Small Business Innovation Research

Source: GAO analysis of NIH data.

a

Also included in this total are three applications submitted by firms in Puerto Rico, none of which were 

funded.

Table 3: Geographical Distribution of DoD’s Phase I SBIR Applications and Total 

Awards and Dollars Awarded for the Top 10 States During Fiscal Years 2001 - 2004

Washington 646

(3%)

195

(4%)

$80

(4%) 

Virginia 728

(4%)

167

(3%)

$66

(3%) 

Ohio 584

(3%)

181

(4%)

$59

(3%) 

New Jersey 507

(3%)

136

(3%)

$57

(3%) 

Subtotal 12,432

(66%)

3,342

(66%)

$1,364

(68%) 

Other states 6,516

(34%)

1,719

(34%)

$629

(32%) 

Total 18,948a

(100%)

5,061

(100%)

$1,992

(100%) 

(Dollars in millions)

State

Phase I applications - 

number and 

percentage

Total awards - 

number and 

percentage

Total dollars awarded - 

number and 

percentage

California 10,584

(21%) 

2,433

(22%) 

$741

(23%) 

Massachusetts 6,173

(12%) 

1,568

(14%) 

$483

(15%) 

Virginia 3,787

(7%) 

825

(8%) 

$245

(7%) 

Ohio 2,022

(4%) 

485

(4%) 

$163

(5%) 

Colorado 1,956

(4%)

543

(5%) 

$160

(5%) 

Maryland 2,594

(5%)

543

(5%)

$152

(5%) 

Pennsylvania 1,840

(4%)

440

(4%)

$132

(4%) 

(Continued From Previous Page)

(Dollars in millions)

State

Total applications - 

number and 

percentage

Total awards - 

number and 

percentage

Total dollars awarded - 

number and 

percentage
Page 16 GAO-06-565 Small Business Innovation Research

Source: GAO analysis of DoD data.

a

Also included in this total are six phase I applications submitted by firms in Puerto Rico to DoD, none 

of which were funded.

Note: DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

NIH and DoD Agency 

Components Making SBIR 

Awards for Fiscal Years 

2001 through 2004

At both NIH and DoD a small number of awarding components accounted 

for most of the SBIR awards and dollars awarded. Specifically, 4 of NIH’s 23 

participating institutes and centers accounted for about half of the SBIR 

awards and dollars. The National Cancer Institute had the largest share at 

NIH, accounting for almost 20 percent of the SBIR awards and dollars. 

Table 4 shows the total SBIR awards and dollars associated with these four 

NIH awarding components. For information on the distribution of SBIR 

awards and dollars among all participating NIH components, see appendix 

II.

New York 1,946

(4%)

423

(4%)

$126

(4%) 

Texas 2,619

(5%)

447

(4%)

$125

(4%) 

New Jersey 1,644

(3%)

305

(3%)

$88

(3%) 

Subtotal 35,165

(69%)

8,012

(73%)

$2,414

(73%) 

Other states 15,610

(31%)

2,946

(27%)

$880

(27%) 

Total 50,775a

(100%)

10,958

(100%)

$3,294

(100%) 

(Continued From Previous Page)

(Dollars in millions)

State

Phase I applications - 

number and 

percentage

Total awards - 

number and 

percentage

Total dollars awarded - 

number and 

percentage
Page 17 GAO-06-565 Small Business Innovation Research

Table 4: Total SBIR Awards and Dollars Awarded for Four Primary NIH Awarding 

Components During Fiscal Years 2001 - 2004

Source: GAO analysis of NIH data.

Similarly, four of DoD’s ten awarding components accounted for more than 

80 percent of the SBIR awards and dollars awarded, with the Air Force and 

the Army together accounting for 43 percent of awards and just over half of 

the dollars. Table 5 shows the total SBIR awards and dollars awarded 

associated with these four DoD awarding components. For more 

information on the distribution of SBIR awards and awarded dollars among 

all participating DoD components, see appendix III.

(Dollars in millions)

Awarding component 

Total awards - 

number and 

percentage

Total dollars 

awarded - 

number and 

percentage

National Cancer Institute 945

(19%)

$347

(17%) 

National Institute of Allergy and Infectious 

Diseases

618

(12%)

$276

(14%) 

National Heart, Lung, and Blood Institute 597

(12%)

$236

(12%) 

National Institute of General Medical Sciences 390

(8%)

$151

(8%) 

Subtotal 2,550

(50%)

$1,011

(51%) 

Remaining 19 institutes and centers 2,511

(50%)

$982

(49%) 

Total 5,061

(100%)

$1,992

(100%)
Page 18 GAO-06-565 Small Business Innovation Research

Table 5: Total SBIR Awards and Dollars Awarded for Four Primary DoD Awarding 

Components During Fiscal Years 2001 - 2004

Source: GAO analysis of DoD data.

Note: DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

Characteristics of NIH and 

DoD SBIR Awards Made to 

Firms that Had Received 

Venture Capital Investment

Firms that had received venture capital investment received a relatively 

small percentage of the NIH and DoD SBIR awards, although they received 

a somewhat larger percentage of awards from NIH than DoD.11 As shown in 

table 6, at NIH, firms that had received venture capital investment received 

about 18 and 14 percent of the phase I and II awards, respectively, 

accounting for about 18 percent of the agency’s total SBIR dollars. 

(Dollars in millions)

Awarding component

Total awards - number 

and percentage

Total dollars awarded - 

number and percentage

Air Force 2,783

(25%)

$1,018

(31%) 

Army 2,003

(18%)

$683

(21%) 

Navy 2,548

(23%)

$619

(19%) 

Missile Defense Agency 1,912

(17%)

$483

(15%) 

Subtotal 9,246

(84%)

$2,803

(85%) 

Remaining six awarding 

components

1,712

(16%)

$490

(15%) 

Total 10,958

(100%)

$3,294

(100%) 

11Ninety-three percent of the firms in our study that had received an SBIR award and venture 

capital investment first received venture capital investment between 1990 and 2004, while 

the remaining 7 percent first received venture capital investment before 1990. The data do 

not indicate the length of time the venture capital investment remained in the awardee firm.
Page 19 GAO-06-565 Small Business Innovation Research

Table 6: Total NIH SBIR Awards and Dollars Awarded to Firms That Had and Had Not Received Venture Capital Investment 

During Fiscal Yeasr 2001 - 2004

Source: GAO analysis of NIH, Dow Jones, and IDI data.

As shown in table 7, at DoD about 7 percent of phase I and II awards were 

made to firms that had received venture capital investment. These awards 

accounted for about 7 percent of the dollars DoD awarded to SBIR firms. 

Table 7: Total DoD SBIR Awards and Dollars Awarded to Firms That Had and Had Not Received Venture Capital Investment 

During Fiscal Years 2001 - 2004

Source: GAO analysis of DoD, Dow Jones, and IDI data.

Note: DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

(Dollars in millions)

Phase I awards Phase II awards Fast track awards Total awards

Number and 

percentage

Dollars 

awarded 

and 

percentage

Number and 

percentage

Dollars 

awarded 

and 

percentage

Number 

and 

percentage

Dollars 

awarded 

and 

percentage

Number and 

percentage

Dollars 

awarded 

and 

percentage

Firms that had 

received venture 

capital investment

627 

(18%)

$112 

(19%)

183 

(14%)

$212

 (18%)

34

(17%)

$32

(15%)

844

(17%)

$356

(18%)

Firms that had not 

received venture 

capital investment

2,953 

(82%)

$470 

(81%)

1,100

 (86%)

$988 

(82%)

164

(83%)

$179

(85%)

4,217

(83%)

$1,637

(82%)

Total 3,580

(100%)

$582

(100%)

1,283

(100%)

$1,199

(100%)

198

(100%)

$211

(100%)

5,061

(100%)

$1,992

(100%)

(Dollars in millions)

Phase I awards Phase II awards Total awards

Number and 

percentage

Dollars awarded 

and percentage

Number 

and 

percentage

Dollars 

awarded and 

percentage

Number and 

percentage

Dollars awarded 

and percentage

Firms that had received 

venture capital investment

517 

(7%)

$47 

(7%)

230 

(7%)

$172 

(7%)

747

(7%)

$218

(7%)

Firms that had not received 

venture capital investment

 7,049 

(93%)

$630 

(93%)

3,162 

(93%)

$2,445 

(93%)

10,211

(93%)

$3,075

(93%)

Total 7,566

(100%)

$677

(100%)

3,392

(100%)

$2,616

(100%)

10,958

(100%)

$3,294

(100%)
Page 20 GAO-06-565 Small Business Innovation Research

Awards to firms that had received venture capital investment were 

generally concentrated in the same states and in the same agency 

components as for all SBIR awards. At NIH, the 10 states that accounted for 

close to 70 percent of the total SBIR dollars also accounted for about 77 

percent of the dollars to firms that had received venture capital investment. 

Likewise, at NIH, the four awarding components that issued about half of 

the SBIR dollars also accounted for 73 percent of the dollars to firms that 

had received venture capital investment. At DoD, the 10 states that 

accounted for 73 percent of the total dollars awarded to SBIR firms also 

accounted for about 70 percent of the dollars to firms that had received 

venture capital investment. In addition, the four awarding components that 

issued 85 percent of the dollars also issued 82 percent of the dollars to 

firms that had received venture capital investment. 

In contrast, awards to firms that had not received venture capital 

investment were more widely distributed, although small businesses in 

every state received at least one SBIR award from NIH and DoD. 

Specifically, we found that in 17 states, none of the firms that had received 

SBIR awards from NIH had received venture capital investment. For 

example, awardee firms in Nebraska, Vermont, and Delaware each 

accounted for less than 1 percent of NIH’s SBIR dollars, and none of the 

firms in these states had received venture capital investment. For DoD, we 

found that in 21 states, none of the firms that had received SBIR awards 

had received venture capital investment. For example, awardee firms in 

Nevada, Tennessee, and Rhode Island each accounted for about 1 percent 

or less of the dollars DoD awarded, and none of the firms in these states 

had received venture capital investment. Detailed information on the 

geographical distribution of applications, awards, and dollars awarded to 

firms that had received venture capital investment is presented in appendix 

II for NIH and appendix III for DoD. 

Size of SBIR Firms That 

Received Awards from DoD

The firms that received DoD SBIR awards were, on average, relatively 

small-sized firms. Half of the firms had 20 or fewer employees, as reported 

by awardees at the time they applied for SBIR awards. DoD SBIR awardee 

firms that had received venture capital investment were also small-sized, 

on average, but about 30 percent larger than firms that had not received 

such investment. We could not determine the size of SBIR awardee firms 

for NIH, because the agency does not maintain comparable information on 

the number of employees at awardee firms. 
Page 21 GAO-06-565 Small Business Innovation Research

Few Awards above the 

Guidelines Were Made 

to Firms That Had 

Received Venture 

Capital Investment 

Although These Firms 

Tend to Receive Larger 

Awards

While about half of NIH awards and 12 percent of DoD awards were above 

the guidelines, less than 20 percent of such awards at NIH and about 8 

percent at DoD went to firms that had received venture capital investment. 

However, at NIH, we found that firms that had received venture capital 

investment were more likely than firms that had not received such 

investment to receive the largest awards. A similar relationship existed for 

DoD’s phase I awards but not for its phase II awards. While the data, 

overall, indicate a relationship between firms that had received venture 

capital investment and high award amounts, they do not indicate whether 

the presence of venture capital investment was the reason the firms 

received an SBIR award. Awards above the guidelines were generally 

concentrated in the same states and made by the same awarding agency 

components as were awards that were within the guidelines. 

Number and Value of NIH 

and DoD SBIR Awards That 

Were above the Guidelines

From fiscal years 2001 through 2004, 2,674 of the 5,061 SBIR awards made 

by NIH exceeded the guidelines. These awards totaled about $1.4 billion 

and accounted for 70 percent of NIH’s SBIR dollars. During the same time 

period, 1,302 of the 10,958 SBIR awards made by DoD exceeded the 

guidelines. These awards totaled $743 million and accounted for 23 percent 

of the dollars DoD awarded. Table 8 shows the total number and dollar 

value of the SBIR awards made by NIH and DoD during fiscal years 2001 - 

2004 that were both within and above the guidelines.12

12The percentage of DoD awards that exceeded SBA’s guidelines due to SBIR funds alone 

may be lower than 12 percent because awarding components may add non-SBIR program 

funds to individual awards. DoD does not account for these funds in a way that allowed us 

to separate program from SBIR dollars. 
Page 22 GAO-06-565 Small Business Innovation Research

Table 8: Total Number and Dollar Value of NIH and DoD SBIR Awards within and above the Guidelines Made During the Period 

Fiscal Years 2001 - 2004

Source: GAO analysis of NIH and DoD data.

a

All DoD fast track awards are included with DoD’s phase I and phase II awards.

Note: Almost all of DoD’s phase I awards above the guidelines are attributable to the Army’s effort to 

provide funding for the transition from phase I to phase II. However, the amount above the guidelines 

generally reduces subsequent phase II award amounts.

At NIH we found the following:

• Phase I awards that exceeded the guidelines averaged $223,106, with a 

median of $153,138, and ranged from just over $100,000 to $1.7 million, 

but about 90 percent were $595,000 or less. 

• Phase II awards above the guidelines averaged $1.1 million, with a 

median of $924,914, and ranged from just over $750,000 to $6.5 million, 

but about 90 percent were $2.1 million or less. 

(Dollars in millions)

NIH DoD

Within the 

guidelines – number 

and percentage

Above the guidelines – 

number and percentage

Within the guidelines – 

number and percentage

Above the guidelines – 

number and 

percentage

Phase I

 Number of awards 1,738

(49%)

1,842

(51%)

6,826

(90%)

740

(10%)

 Dollar value of awards $171

(29%)

$411

(71%)

$587

(87%)

$91

(13%)

Phase II

 Number of awards 549

(43%)

734

(57%)

2,830

(83%)

562

(17%)

 Dollar value of awards $376

(31%)

$823

(69%)

$1,964

(75%)

$653

(25%)

Fast track

 Number of awards 100

(51%)

98

(49%)

a a

 Dollar value of awards $59

(28%)

$152

(72%)

a a

Total

 Number of awards 2,387

(47%)

2,674

(53%)

9,656

(88%)

1,302

(12%)

 Dollar value of awards $606

(30%)

$1,386

(70%)

$2,550

(77%)

$743

(23%)
Page 23 GAO-06-565 Small Business Innovation Research

• Fast track awards above the guidelines averaged $1.5 million, with a 

median of $1,151,979, and ranged from just over $850,000 to $9.6 million, 

but about 90 percent were $3.4 million or less.

Although NIH does not retain data centrally on the reason individual 

projects exceeded the SBA guidelines, it generally makes such awards for 

research in specific fields, such as biotechnology, that is relatively costly to 

conduct. In 2001, SBA granted NIH a waiver that allows the agency to issue 

awards that exceed the guidelines without reporting data on individual 

projects. In the waiver, SBA recognized that NIH routinely issues awards 

for particularly expensive technologies. During the review process, 

external peer reviewers also assess the reasonableness of cost estimates 

before agency officials make awards above the guidelines.

At DoD, we found the following:

• Phase I awards that exceeded the guidelines averaged $122,312, with a 

median of $119,911, and ranged from just over $100,000 to $448,796, but 

about 90 percent were $142,000 or less.

• Phase II awards above the guidelines averaged $1.2 million, with a 

median of $1 million, and ranged from just over $750,000 to $4.4 million, 

but about 90 percent were $2.0 million or less. 

At DoD, the two main reasons awards exceeded the guidelines were that 

(1) extra funds were needed to ensure a high-quality investigation of a 

proposed idea and (2) the amount above the guidelines included non-SBIR 

program funds. These non-SBIR funds, called mission funds, are not 

included in DoD’s calculation of its 2.5 percent obligation to fund the SBIR 

program. For example, a DoD component, such as the Army, Navy, or Air 

Force, may add mission funds to a SBIR project if it decides that the project 

may help support its programmatic goals. Moreover, it is DoD’s policy to 

encourage its awarding components to match these and other non-SBIR 

dollars with SBIR dollars. At DoD, about half of phase II awards above the 

guidelines have received mission funds from awarding components. 
Page 24 GAO-06-565 Small Business Innovation Research

Extent to Which NIH and 

DoD SBIR Awards above the 

Guidelines Were Made to 

Firms That Had Received 

Venture Capital Investment

At both NIH and DoD, most of the awards that exceeded the guidelines 

went to firms that had not received venture capital investment. As shown in 

table 9, only 18 percent of awards above the guidelines at NIH and only 

about 8 percent of awards above the guidelines at DoD went to firms that 

had received venture capital investment. 

Table 9: Percentage of NIH and DoD SBIR Awards within and above the Guidelines to Firms that Had Received Venture Capital 

Investment During Fiscal Years 2001 - 2004 

Source: GAO analysis of NIH, DoD, Dow Jones, and IDI data.

a

All DoD fast track awards are included with DoD’s phase I and phase II awards.

Note: DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

While firms that had received venture capital investment received a small 

share of the total SBIR awards, these firms were generally more likely than 

firms that had not received such investment to receive the largest awards 

from NIH. Specifically, firms that had received venture capital were twice 

as likely as firms that had not received such investment to receive phase II 

awards from NIH greater than $1 million, which accounted for about 37 

percent of NIH’s phase II dollars; these firms were about six times more 

likely to receive phase II awards greater than $2.5 million, which accounted 

for about 7 percent of the phase II dollars.

Similarly, for DoD phase I awards, we found that firms that had received 

venture capital investment were more likely to receive awards above the 

guidelines than firms that had not received such investment. However, this 

relationship did not hold true for DoD’s phase II awards. We found that 

phase II awardee firms that had received venture capital were less likely to 

receive large awards than firms that had not received such investment. 

NIH DoD

Awards within the 

guidelines - percentage 

to firms that had 

received venture capital 

investment

Awards above the 

guidelines – percentage 

to firms that had 

received venture capital 

investment

Awards within the 

guidelines - percentage 

to firms that had 

received venture capital 

investment

Awards above the 

guidelines – percentage 

to firms that had 

received venture capital 

investment

Phase I 16 19 7 9

Phase II 12 16 7 6

Fast track 18 16 a a

Total 15 18 7 8
Page 25 GAO-06-565 Small Business Innovation Research

While the data, overall, indicate a relationship between firms that received 

venture capital investment and high award amounts, by themselves the 

data do not indicate whether the presence of venture capital was the 

reason these firms received such large awards. Many factors can influence 

the willingness of venture capital firms to invest funds in small businesses.

NIH and DoD awards that exceeded SBA’s guidelines were generally 

concentrated in the same states and in the same agency components as 

were all SBIR awards. At NIH, the 10 states that received close to 70 

percent of the total SBIR dollars also received 72 percent of the dollars for 

awards above the guidelines. Likewise, at NIH, the four components that 

awarded about half of the SBIR program dollars accounted for 54 percent 

of the awards above the guidelines. At DoD, the 10 states that received 73 

percent of the total dollars awarded also received about 74 percent of the 

awards above the guidelines. In addition, the four DoD agency components 

that awarded 85 percent of the dollars also awarded about 89 percent of the 

awards above the guidelines. Detailed information on the geographical and 

agency component distribution for awards that were above the guidelines, 

as well as awards that were within the guidelines, and their associated 

dollars is presented in appendix II for NIH and appendix III for DoD. 

SBA’s Ownership 

Clarification Does Not 

Appear to Have 

Reduced Program 

Participation by Firms 

That Had and Had Not 

Received Venture 

Capital Investment 

During fiscal years 2001 - 2004, participation in NIH’s and DoD’s SBIR 

programs substantially increased for both types of firms—those that had, 

and those that had not, received venture capital investment. However, we 

did observe the following differences in the awards made by NIH and DoD 

over the 4-year period including the 2 years before and the 2 years after 

SBA provided additional clarification of the ownership criteria in October 

2002:

• Overall participation in the SBIR program by firms that had received, 

and that had not received, venture capital investment increased. 

However, firms that had received venture capital investment were added 

to the program at a significantly higher rate than those that had not. For 

example, at NIH, over the 4-year period, we noted that participation by 

firms that had received venture capital investment grew at a rate of 42 

percent, compared to 19 percent for those that had not received this 

type of investment. 

• The total number of awards made by NIH and DoD to both types of 

firms in the 2 years after the clarification was greater than the number of 

awards made before the clarification. However, the rate at which 
Page 26 GAO-06-565 Small Business Innovation Research

awards were made to firms that had received venture capital investment 

was significantly greater than the rate at which awards were made to 

firms that had not received venture capital investment. For example, 

over the 4-year period, the number of awards that DoD made to firms 

that had received venture capital investment increased by 167 percent, 

compared to a 65 percent increase in awards to firms that had not. More 

specifically, the number of awards to firms that had received venture 

capital increased from 270 in the 2 years before the clarification to 477 

in the 2 years after. Whereas, awards to firms that had not received 

venture capital increased from 4,154 in the 2 years before the 

clarification to 6,057 in the 2 years after.

• For firms that had and had not received venture capital investment, the 

average dollar value of awards generally increased at NIH, but 

decreased or remained about the same at DoD over this 4-year period. 

For example, at NIH, although both types of firms received increasingly 

larger phase II awards between fiscal years 2001 and 2004, the awards to 

firms that had received venture capital investment were substantially 

larger than those to firms that had not received this kind of investment. 

Specifically, in the 2 years before the clarification, phase II awards to 

firms that had received venture capital investment averaged about 

$885,000 compared to over $1.3 million in the 2 years following, while 

awards to firms that had not received venture capital averaged less than 

$860,000 before the clarification compared to less than $950,000 after 

the clarification.

• The number of awards that were above the guidelines increased 

significantly at NIH after the clarification but decreased at DoD. For 

example, from 2001 to 2004, the number of awards above the guidelines 

increased by 45 percent at NIH from about 600, on average, in the 2 

years before the clarification to about 730, on average, in the 2 years 

after. In contrast, at DoD, these awards decreased by 26 percent, from 

about 351 on average, in the 2 years before the clarification to about 300, 

on average, in the 2 years after the clarification. 

• Firms that had received venture capital investment received an 

increasing share of total dollars awarded at both NIH and DoD although 

the change at DoD was significantly less. For example, at NIH, in the 2 

years prior to the clarification, firms that had received venture capital 

investment were awarded about 14 percent of total SBIR program funds, 

and in the 2 years following the clarification this share had increased to 

about 22 percent. At DoD, firms that had received venture capital 
Page 27 GAO-06-565 Small Business Innovation Research

investment received 6 percent, on average, of the dollars awarded in the 

2 years before the clarification and 7 percent, on average, in the 2 years 

following the clarification.

• At both NIH and DoD, 10 states accounted for the majority of dollars 

awarded both before and after the clarification. However, the 

concentration of NIH’s dollars awarded to firms that had received 

venture capital investment increased somewhat in the 10 states 

following the clarification, while the concentration of DoD’s dollars 

awarded to such firms in the 10 states decreased somewhat.

• Four agency components generally accounted for the majority of dollars 

awarded and dollars awarded to firms that had received venture capital 

investment both before and after the clarification. At both NIH and DoD, 

the concentration of the dollars awarded by the four agency 

components to firms that had received venture capital investment 

increased following the clarification but to a lesser extent at DoD.

• Finally, the number of applications received by both NIH and DoD 

continued to increase following the SBA clarification. Both agencies 

experienced a significant growth in the number of applications received 

in the 2 years after the clarification compared to the 2 years preceding 

the clarification. For example, at DoD, the total number of applications 

in fiscal years 2001 and 2002 was 22,139 and the total number of 

applications received in fiscal years 2003 and 2004 was 33,922. 

According to officials responsible for the SBIR program at NIH and 

DoD, the quality of the applications for SBIR awards increased or 

remained the same during the 4-year period. However, because the 

number of applications received increased at a faster rate than the 

agencies' SBIR budgets, the percentage of the applications funded by 

NIH and DoD has generally decreased. 

Tables 10 through 22 provide detailed data for NIH’s and DoD’s SBIR 

awards broken out by fiscal year from 2001 to 2004.
Page 28 GAO-06-565 Small Business Innovation Research

Table 10: Number of Awardee Firms by Agency, and Venture Capital Investment Status for Fiscal Years 2001 through 2004

Source: GAO analysis of NIH, DoD, Dow Jones, and IDI data.

Note: Subtotals do not add to totals because a small number of firms received SBIR awards in the 

same fiscal year, both before and after they received venture capital investment.

Fiscal year 

2001

Fiscal year 

2002

Fiscal year 

2003

Fiscal year

2004

Percentage 

increase from 

2001

NIH

Number of firms that had received venture capital and an 

SBIR award 106 145 146 150 42

Number of firms that had not received venture capital but 

had received an SBIR award 668 715 675 797 19

NIH total 773 859 820 946 22

DoD

Number of firms that had received venture capital and a 

SBIR award 42 69 95 100 138

Number of firms that had not received venture capital but 

had received a SBIR award 932 1,151 1,407 1,377 48

DoD total 972 1,220 1,500 1,476 52
Page 29 GAO-06-565 Small Business Innovation Research

Table 11: Number of SBIR Awards by Agency, and Venture Capital Investment Status of Awardee Firms for Fiscal Years 2001 

through 2004

Source: GAO analysis of NIH, DoD, Dow Jones, and IDI data.

Table 12: Average Award Amount by Agency, Venture Capital Investment Status of Awardee Firm, and Award Phase for Fiscal 

Years 2001 through 2004

Fiscal year 

2001

Fiscal year 

2002

Fiscal year 

2003

Fiscal year 

2004

Percentage 

increase

from 2001

NIH

Awards to firms that had received venture capital 

investment 155 219 221 249 61

Awards to firms that had not received venture 

capital investment 1,009 1,060 980 1,168 16

NIH total 1,164 1,279 1,201 1,417 22

DoD

Awards to firms that had received venture capital 

investment 98 172 215 262 167

Awards to firms that had not received venture 

capital investment 1,830 2,324 3,042 3,015 65

DoD total 1,928 2,496 3,257 3,277 70

Fiscal year 

2001

Fiscal year 

2002

Fiscal year 

2003

Fiscal year 

2004

Percentage 

change

NIH SBIR awards to firms that had received venture 

capital investment

Phase I 168,190 159,548 169,038 212,241 26

Phase II 861,488 907,879 1,262,073 1,475,188 71

Fast track 783,884 977,551 1,064,922 833,293 6

NIH awards to firms that had not received venture 

capital investment

Phase I 136,463 147,481 166,400 181,051 33

Phase II 837,487 871,835 908,577 985,544 18

Fast track 1,051,212 1,456,464 1,168,800 766,553 -27

DoD SBIR awards to firms that had received venture 

capital investment

Phase I 91,032 90,192 89,814 91,520 1

Phase II 795,780 855,745 739,721 679,724 -15

DoD awards to firms that had not received venture 

capital investment
Page 30 GAO-06-565 Small Business Innovation Research

Source: GAO analysis of NIH, DoD, Dow Jones, and IDI data.

Note: DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

Table 13: Number of SBIR Awards above and within the Guidelines by Agency and Venture Capital Investment Status of Awardee 

Firm for Fiscal Years 2001 through 2004

Source: GAO analysis of NIH, DoD, Dow Jones, and IDI data.

Phase I 90,278 88,907 87,891 91,143 1

Phase II 831,144 809,933 764,919 725,277 -13

(Continued From Previous Page)

Fiscal year 

2001

Fiscal year 

2002

Fiscal year 

2003

Fiscal year 

2004

Percentage 

change

Fiscal year 

2001

Fiscal year 

2002

Fiscal year 

2003

Fiscal year 

2004

Percentage 

change

NIH awards above the guidelines

Awards to firms that had received venture 

capital investment 79 119 125 162 105

Awards to firms that had not received venture 

capital investment 484 531 518 656 36

Subtotal – awards above the guidelines 563 650 643 818 45

NIH awards within the guidelines

Awards to firms that had received venture 

capital investment 76 100 96 87 14

Awards to firms that had not received venture 

capital investment 525 529 462 512 -2

Subtotal – awards within the guidelines 601 629 558 599 Less than -1

NIH total 1,164 1,279 1,201 1,417 22

DoD awards above the guidelines

Awards to firms that had received venture 

capital investment 22 34 25 19 -14

Awards to firms that had not received venture 

capital investment 320 326 323 233 -27

Subtotal – awards above the guidelines 342 360 348 252 -26

DoD awards within the guidelines

Awards to firms that had received venture 

capital investment 76 138 190 243 220

Awards to firms that had not received venture 

capital investment 1,510 1,998 2,719 2,782 84

Subtotal – awards within the guidelines 1,586 2,136 2,909 3,025 91

DoD total 1,928 2,496 3,257 3,277 70
Page 31 GAO-06-565 Small Business Innovation Research

Note: DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

Table 14: Average Amount of SBIR Awards, above and within the Guidelines, by Agency and Venture Capital Investment Status 

of Awardee Firm for Fiscal Years 2001 through 2004

Agency, investment status, and award 

phase

Fiscal year 

2001

Fiscal year 

2002

Fiscal year 

2003

Fiscal year 

2004

Percentage 

change

NIH SBIR awards to firms that had received 

venture capital investment

Awards above the guidelines

Phase I 227,867 214,623 234,256 275,301 21

Phase II 1,061,762 1,034,901 1,503,443 1,830,112 72

Fast track 858,545 2,098,561 1,360,918 1,234,942 44

Awards within the guidelines

Phase I 99,151 99,033 98,803 98,542 -1

Phase II 680,288 653,835 693,131 632,244 -7

Fast track 765,218 529,147 472,932 431,644 -44

NIH SBIR awards to firms that had not 

received venture capital investment

Awards above the guidelines

Phase I 181,217 200,314 230,007 248,623 37

Phase II 976,319 1,040,435 1,076,773 1,148,833 18

Fast track 1,147,764 2,068,788 1,781,892 1,195,005 4

Awards within the guidelines

Phase I 98,640 98,267 98,167 97,899 -1

Phase II 694,630 681,442 682,759 693,059 Less than 1

Fast track 729,372 555,988 683,436 546,206 -25

DoD SBIR awards to firms that had received 

venture capital investment

Awards above the guidelines

Phase I 123,356 126,304 144,474 120,128 -3

Phase II 1,090,605 1,186,847 993,327 1,349,711 24

Awards within the guidelines

Phase I 82,628 82,767 83,080 88,548 7

Phase II 693,726 727,577 700,705 657,140 -5

DoD SBIR awards to firms that had not 

received venture capital investment

Awards above the guidelines

Phase I 119,844 123,022 123,061 119,903 Less than 1
Page 32 GAO-06-565 Small Business Innovation Research

Source: GAO analysis of NIH, DoD, Dow Jones, and IDI data.

Note: DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

Table 15: Share of Dollars Awarded by Agency and Venture Capital Investment Status of Awardee Firm for Fiscal Years 2001 

through 2004

Source: GAO analysis of NIH, DoD, Dow Jones, and IDI data.

Phase II 1,182,723 1,131,501 1,168,355 1,175,187 -1

Awards within the guidelines

Phase I 86,446 85,005 84,403 88,551 2

Phase II 689,116 706,179 693,342 692,485 Less than 1

(Continued From Previous Page)

Agency, investment status, and award 

phase

Fiscal year 

2001

Fiscal year 

2002

Fiscal year 

2003

Fiscal year 

2004

Percentage 

change

(Dollars in millions)

Fiscal year 

2001

Fiscal year 

2002

Fiscal year 

2003

Fiscal year 

2004

NIH

Awards to firms that had received venture capital 

Total dollars awarded $57 $72 $99 $127 

Percentage of dollars 14 14 20 22

Awards to firms that had not received venture capital 

Total dollars awarded $358 $438 $394 $447

Percentage of dollars 86 86 80 78

Total dollars awarded by NIH $415 $510 $493 $574 

DoD

Awards to firms that had received venture capital 

Total dollars awarded $34 $48 $58 $78 

Percent of dollars 5 7 7 7

Awards to firms that had not received venture capital 

Total dollars awarded $636 $653 $811 $975

Percent of dollars 95 93 93 93

Total dollars awarded by DoD $670 $701 $869 $1,053 
Page 33 GAO-06-565 Small Business Innovation Research

Table 16: Share of Dollars Awarded above and within the Guidelines by Agency and Venture Capital Investment Status of 

Awardee Firm for Fiscal Years 2001 through 2004

Source: GAO analysis of NIH, DoD, Dow Jones, and IDI data.

Note: DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

(Dollars in millions)

Fiscal year 

2001

Fiscal year 

2002

Fiscal year 

2003

Fiscal year 

2004

NIH SBIR awards to firms that had received venture capital

Awards above the guidelines

Total dollars awarded $34 $52 $80 $108

Percentage of total dollars awarded 8 10 16 19

Awards within the guidelines

Total dollars awarded $22 $20 $19 $19

Percentage of total dollars awarded 5 4 4 3

NIH SBIR awards to firms that had not received venture capital 

Awards above the guidelines

Total dollars awarded $220 $293 $271 $327

Percentage of total dollars awarded 53 57 55 57

Awards within the guidelines

Total dollars awarded $138 $145 $123 $120

Percentage of total dollars awarded 33 29 25 21

Total dollars awarded by NIH $415 $510 $493 $574 

DoD SBIR awards to firms that had received venture capital

Awards above the guidelines

Total dollars awarded $11 $17 $10 $6

Percentage of total dollars awarded 2 2 1 1

Awards within the guidelines

Total dollars awarded $22 $31 $48 $72

Percentage of total dollars awarded 3 4 6 7

DoD SBIR awards to firms that had not received venture capital 

Awards above the guidelines

Total dollars awarded $233 $192 $166 $107

Percentage of total dollars awarded 35 27 19 10

Awards within the guidelines

Total dollars awarded $404 $461 $645 $868

Percentage of total dollars awarded 60 66 74 82

Total dollars awarded by DoD $670 $701 $869 $1,053 
Page 34 GAO-06-565 Small Business Innovation Research

Table 17: Geographical Distribution of NIH Dollars Awarded, Overall and to Firms That Had Received Venture Capital Investment, 

Fiscal Years 2001-2002 Compared to Fiscal Years 2003-2004

Source: GAO analysis of NIH, Dow Jones, and IDI data.

Note: Totals and percentages may not add because of rounding.

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

State

Dollars awarded - total 

and percentage

Dollars awarded to firms 

that had received venture 

capital investment – total 

and percentage

Dollars awarded - total 

and percentage

Dollars awarded to firms 

that had received venture 

capital investment – total 

and percentage

California $176

(19%)

$52

(41%)

$219

(21%)

$80

(35%)

Massachusetts $142

(15%)

$9

(7%)

$142

(13%)

$20

(9%)

Maryland $65

(7%)

$3

(2%)

$77

(7%)

$20

(9%)

New York $47

(5%)

$10

(8%)

$71

(7%)

$28

(12%)

Texas $26

(3%)

$5

(4%)

$55

(5%)

$6

(3%)

Pennsylvania $38

(4%)

$5

(4%)

$43

(4%)

$6

(3%)

Washington $40

(4%)

$7

(6%)

$39

(4%)

$10

(4%)

Virginia $28

(3%)

$2

(1%)

$38

(4%)

$2

(1%)

Ohio $32

(3%)

$2

(2%)

$27

(3%)

$1

(1%)

New Jersey $31

(3%)

$2

(1%)

$26

(2%)

$3

(1%)

Subtotal $626

(68%)

$97

(76%)

$737

(69%)

$176

(78%)

Other states $299

(32%)

$32

(24%)

$330

(31)

$51

(22%)

Total $925

(100%)

$129

(100%)

$1,068

(100%)

$227

(100%)
Page 35 GAO-06-565 Small Business Innovation Research

Table 18: Geographical Distribution of DoD Dollars Awarded, Overall and to Firms That Had Received Venture Capital 

Investment, Fiscal Years 2001-2002 Compared to Fiscal Years 2003-2004

Source: GAO analysis of DoD, Dow Jones, and IDI data.

Notes:

(1) Totals and percentages may not add because of rounding.

(2) DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

State

Dollars awarded - total 

and percentage

Dollars awarded to firms 

that had received venture 

capital investment – total 

and percentage

Dollars awarded - total 

and percentage

Dollars awarded to firms 

that had received venture 

capital investment – total 

and percentage

California $320

(23%)

$28

(34%)

$421

(22%)

$40

(29%)

Massachusetts $204

(15%)

$2

(2%)

$279

(15%)

$15

(11%)

Virginia $115

(8%)

$7

(9%)

$130

(7%)

$5

(4%)

Ohio $72

(5%)

$0

(0)

$90

(5%)

$1

(1%)

Colorado $68

(5%)

$8

(9%)

$92

(5%)

$6

(4%)

Maryland $57

(4%)

$2

(3%)

$94

(5%)

$5

(3%)

Pennsylvania $54

(4%)

$1

(1%)

$78

(4%)

$1

(Less than 1)

New York $47

(3%)

$3

(4%)

$80

(4%)

$10

(8%)

Texas $47

(3%)

$3

(3%)

$78

(4%)

$3

(2%)

New Jersey $40

(3%)

$5

(6%)

$48

(2%)

$7

(5%)

Subtotal $1,025

(75%)

$58

(71%)

$1,389

(72%)

$93

(68%)

Other states $347

(25%)

$24

(29%)

$533

(28%)

$43

(32%)

Total $1,371

(100%)

$82

(100%)

$1,922

(100%)

$136

(100%)
Page 36 GAO-06-565 Small Business Innovation Research

Table 19: Dollars Awarded by Four Primary NIH Awarding Components, Overall and to Firms that Had Received Venture Capital 

Investment, Fiscal Years 2001-2002 Compared to Fiscal Years 2003-2004

Source: GAO analysis of NIH, Dow Jones, and IDI data.

Note: Totals and percentages may not add because of rounding.

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

Awarding 

component

Dollars awarded - total 

and percentage

Dollars awarded to firms 

that had received venture 

capital investment – total 

and percentage

Dollars awarded - total 

and percentage

Dollars awarded to firms 

that had received venture 

capital investment – total 

and percentage

National Cancer 

Institute

$156

(17%)

$27

(21%)

$192

(18%)

$53

(23%)

National Institute of 

Allergy and 

Infectious Diseases

$103

(11%)

$38

(29%)

$173

(16%)

$82

(36%)

National Heart, 

Lung, and Blood 

Institute

$115

(12%)

$10

(8%)

$121

(11%)

$18

(8%)

National Institute of 

General Medical 

Sciences 

$75

(8%)

$14

(11%)

$76

(7%)

$19

(8%)

Subtotal $449

(49%)

$89

(69%)

$562

(53%)

$172

(76%)

Remaining 19 

institutes and 

centers

$476

(51%)

$40

(31%)

$506

(47%)

$55

(24%)

Total $925

(100%)

$129

(100%)

$1,068

(100%)

$227

(100%)
Page 37 GAO-06-565 Small Business Innovation Research

Table 20: Dollars Awarded by Four Primary DoD Awarding Components, Overall and to Firms That Had Received Venture Capital 

Investment, Fiscal Years 2001-2002 Compared to Fiscal Years 2003-2004

Source: GAO analysis of DoD, Dow Jones, and IDI data.

Notes:

(1) Totals and percentages may not add because of rounding.

(2) DoD’s award amounts include both SBIR dollars and additional non-SBIR dollars from awarding 

components.

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

Awarding 

component 

Dollars awarded - total 

and percentage

Dollars awarded to firms 

that had received venture 

capital investment – total 

and percentage

Dollars awarded - total 

and percentage

Dollars awarded to firms 

that had received venture 

capital investment – total 

and percentage

Air Force $479

(35%)

$22

(27%)

$539

(28%)

$31

(22%)

Army $286

(21%)

$20

(24%)

$398

(21%)

$41

(30%)

Navy $267

(19%)

$12

(14%)

$352

(18%)

$21

(15%)

Missile Defense 

Agency

$144

(10%)

$12

(14%)

$339

(18%)

$20

(14%)

Subtotal $1,176

(86%)

$66

(80%)

$1,628

(85%)

$112

(82%)

Remaining six 

awarding 

components

$196

(14%)

$16

(20%)

$295

(15%)

$24

(18%)

Total $1,371

(100%)

$82

(100%)

$1,922

(100%)

$136

(100%)
Page 38 GAO-06-565 Small Business Innovation Research

Table 21: SBIR Budgets and Number of Applications Submitted by Agency for Fiscal Years 2001 through 2004

Source: GAO analysis of NIH and DoD data.

Note: Data for DoD are from the agency’s fiscal year reports, which coincide more closely with the 

calendar year.

Table 22: Percentage of Applications Funded by Agency for Fiscal Years 2001 through 2004

Source: GAO analysis of NIH and DoD data.

NIH, DoD, and SBA 

Focus Largely on 

Select Eligibility 

Criteria and Collect 

Limited Data on SBIR 

Awardees

NIH, DoD and SBA focus primarily on criteria relating to ownership, forprofit status, and the number of employees to determine a firm’s eligibility 

for the SBIR program and take steps to verify eligibility information 

provided by applicants. When NIH or DoD officials are unable to ensure the 

accuracy of an applicant’s information, they refer the matter to SBA. After 

SBA makes an eligibility determination, it makes information about the 

firms it finds ineligible available on its Web site, but does not always 

indicate that the determination was for SBIR purposes. NIH makes 

information on ineligible firms centrally available to participating agency 

(Dollars in millions)

Agency

Fiscal year 

2001

Fiscal year 

2002

Fiscal years 

2001-2002

Fiscal year 

2003

Fiscal year 

2004

Fiscal years 

2003-2004

Percentage 

increase – fiscal 

years 2001-2002 

compared to fiscal 

years 2003-2004

NIH – total SBIR budget $402 $471 $873 $525 $566 $1,091 25

NIH – total applications 

submitted

3,601 4,049 7,650 5,176 6,122 11,298 48

DoD – total SBIR budget $638 $779 $1,417 $895 $1,016 $1,911 35

DoD – total applications 

submitted

8,225 13,914 22,139 16,520 17,402 33,922 53

Agency Fiscal year 2001 Fiscal year 2002 Fiscal year 2003 Fiscal year 2004

NIH total 34% 32% 27% 22%

NIH phase I 30% 28% 24% 20%

NIH phase II 53% 49% 44% 38%

NIH fast track 30% 29% 22% 18%

DoD total 24% 20% 19% 19%

DoD phase I 18% 17% 14% 13%

DoD phase II 75% 63% 73% 68%
Page 39 GAO-06-565 Small Business Innovation Research

components while DoD does not. Each agency limits its data collection 

efforts largely to information about the SBIR award itself, such as award 

size and location of the principal investigator, and does not collect 

information on certain characteristics of the firms receiving the awards, 

such as the presence of venture capital investment.

Officials at NIH, DoD, and SBA told us that they focus largely on three SBIR 

criteria in their eligibility reviews—ownership, size in terms of the number 

of employees, and for-profit status of SBIR applicants. However, they also 

stated that they consider information on the full range of criteria, such as 

whether the principal investigator is employed primarily by the applying 

firm, and the extent to which work on the project will be performed by 

others.13 Both NIH and DoD rely on applicants to self-certify that they meet 

all of the SBIR program’s eligibility requirements as part of their SBIR 

applications. At NIH, applicants certify they meet the eligibility criteria by 

completing a verification statement when NIH notifies them that their 

application has been selected for funding but prior to NIH making the 

award. The verification statement requires applicants to respond to a series 

of questions to certify they meet SBA’s eligibility criteria relating to forprofit status, ownership, number of employees, where the work will be 

performed, and the primary employment of the principal investigator, 

among others. NIH also refers applicants to its notice of SBIR funding 

opportunities, known as a solicitation, for more detail on SBA’s eligibility 

requirements. NIH will not issue an award until it receives and accepts the 

applicant’s responses to the verification statement. At DoD, the cover sheet 

for each SBIR application requires applicants to certify they meet SBA’s 

eligibility criteria. The cover sheet also refers applicants to DoD’s 

solicitation that details the requirements. As with NIH, DoD will not fund 

applications if the questions on the cover sheet are not answered. Both NIH 

and DoD warn applicants of the civil and criminal penalties for making 

false, fictitious, or fraudulent statements. In addition to the eligibility 

criteria provided in the agency’s solicitations, NIH and DoD support 

periodic conferences during which potential applicants can learn about 

SBIR eligibility criteria, and both agencies post eligibility requirements on 

their Web sites.

13SBA guidance states that awardees must perform at least two-thirds of the research and 

analysis effort on phase I projects and half of the work on phase II projects, although the 

agency may approve deviations from this guidance.
Page 40 GAO-06-565 Small Business Innovation Research

Although agencies rely largely on applicants to self-certify that they meet 

the SBIR program’s eligibility criteria, both NIH and DoD make additional 

efforts to ensure the accuracy of the information provided by applicants 

prior to making an award. At NIH, officials in participating institutes and 

centers conduct Web searches, check press releases, and may request 

documentation from applicants to verify information on their eligibility 

status, including, but not limited to, information on ownership, size, 

principal investigators, board members, location, e-mail addresses, and 

affiliations with other firms. In addition, NIH officials search published 

information on such features as venture capital investments, and whether 

the applicant has been purchased by another company or changed its 

name, as well as internal information on whether NIH has received other 

grant applications from the applicant. NIH officials review this information, 

among other things, to identify potential concerns regarding the applicant’s 

eligibility status. For example, an “.edu” e-mail extension could indicate 

that the principlal investigator is primarily employed by a university rather 

than by the applicant, as required by SBIR criteria. If no concerns arise, 

NIH deems the company eligible. However, when concerns cannot be 

resolved, NIH officials contact the applicant to ask a standard list of 

questions. Currently, the list of questions varies by institute and center, but 

according to NIH officials, the agency is in the process of creating a 

uniform list of eligibility questions to be used throughout NIH. NIH officials 

also told us that it has incorporated eligibility training into the curriculum 

for its SBIR staff.

At DoD, prior to making an award, officials check the information 

applicants provided in the application cover sheet for consistency with the 

eligibility information applicants entered into the Central Contractor 

Registration database that is required for all applications, and the Online 

Representations and Certifications Application system that is required for 

phase II applications. According to DoD officials, most discrepancies 

between information on the cover sheets and in the databases occur 

because the applicant was purchased by another company, the e-mail 

addresses have changed, or the principal investigator appears to be a fulltime employee of an educational institution. To resolve discrepancies, DoD 

officials may choose to contact the applicant, or search on the Web for 

information. Typically, officials told us, DoD awarding components work 

with firms to answer their eligibility questions and help ensure that they 

prepare the necessary documentation properly. In addition, DoD 

encourages self-policing by applicants by posting the names of recent SBIR 

awardees on its Web site so that competitors can raise any eligibility 

concerns they may have. However, Office of Naval Research officials said 
Page 41 GAO-06-565 Small Business Innovation Research

competing firms seldom raise concerns, usually only one per year, and that 

typically the concern is related to whether the awardee firm has been 

purchased by another company.

When officials at either NIH or DoD have unresolved concerns about the 

accuracy of an applicant’s eligibility information, they refer the matter to 

SBA to make an eligibility determination.14 Upon receipt of a letter from the 

agency detailing its concerns, SBA officials contact the applicant, ask them 

to re-certify their eligibility status, and may request additional 

documentation on the criteria of concern. For example, SBA officials may 

request articles of incorporation and information on the distribution of 

ownership to determine whether the applicant was at least 51 percent 

owned by qualified individuals. Upon making a determination of eligibility, 

SBA then notifies the official at the inquiring agency, and the applicant, of 

its decision. Further, SBA makes the information about firms it finds 

ineligible publicly available on its Web site so that all participating agencies 

and the public can access the information. However, SBA does not 

currently require its eligibility officials to include information on the Web 

site identifying whether or not the determination was for SBIR purposes. 

An SBA official told us the agency plans to include such information on its 

Web site more systematically before the end of fiscal year 2006. 

NIH and DoD take different approaches to retaining and sharing 

information on firms found ineligible by SBA. At NIH, when SBA notifies 

the referring agency official that it has deemed an SBIR applicant as 

ineligible, the official notes the determination in the applicant’s file. 

However, according to NIH officials, in response to the May 2003 SBA 

decision, NIH also began centrally tracking firms SBA found ineligible, as 

well as firms that self-selected themselves as ineligible and withdrew their 

applications at some point in the review process. The agency makes this 

information available to all of its institutes and centers that make SBIR 

awards. In addition, agency officials told us that, if during the eligibility 

review process, a firm was determined to be ineligible for an SBIR award, 

NIH advises the applicant to be recertified by SBA before applying for 

additional awards. In contrast, DoD retains information on firms 

determined to be ineligible in the applicants’ files and does not have a 

centralized process to share the information across DoD awarding 

components. However, DoD officials said it is common practice for 

awarding components to share such information electronically.

14SBA refers to these eligibility determinations as “size determinations.”
Page 42 GAO-06-565 Small Business Innovation Research

For the most part, NIH and DoD limit their data collection efforts largely to 

information about the SBIR awards they make. Key information the 

agencies track includes the phase, date, and amount of the award; the 

geographic location of the awardee firm and principal investigator; and 

contact information. Currently, the agencies do not maintain detailed data 

on (1) applicants that the agencies decided not to select for funding, (2) the 

reasons applicants were not selected for funding, and (3) characteristics of 

the firms receiving the awards, such as the presence of venture capital 

investment or the extent of ownership by venture capital firms or 

otherentities.15 Moreover, neither NIH nor DoD systematically categorizes 

SBIR projects by the industry represented or by the specific type of 

research, such as whether the research is for a process or product or 

whether the research is for software or therapeutic devices. However, both 

agencies categorize projects by the general research topics listed in each 

agency’s solicitation.

Agency Comments and 

Our Evaluations

We provided NIH, DoD, and SBA with a draft of this report for their review 

and comment. NIH only provided technical comments that we have 

incorporated, as appropriate. DoD agreed that because data on ownership 

are not publicly available, it is not possible to determine the extent to 

which venture capital firms own SBIR awardee firms. Moreover, DoD did 

not find the results of our analysis surprising in light of differences in 

markets for SBIR projects supported by NIH and DoD. SBA noted in its 

comments that while the information in the report may be useful, it could 

be misconstrued as suggesting a link between the presence of venture 

capital investment and SBIR ownership criteria when such a link does not 

exist. While we understand SBA’s concern, we believe that our report 

clearly states that we used venture capital investment as a proxy for 

venture capital ownership because ownership data are proprietary and 

confidential or not readily available. We also explicitly note in the report 

that no causal link can be inferred from the data. Both DoD and SBA also 

provided technical comments that we incorporated, as appropriate. The 

comments from DoD and SBA are included in this report as appendixes IV 

and V, respectively.

15Awardee firms will be asked to provide information on venture capital investment 

associated with specific SBIR projects as part of efforts to build a government database that 

includes information on commercialization of SBIR projects, among other things.
Page 43 GAO-06-565 Small Business Innovation Research

We are sending copies of this report to the Director of the National 

Institutes of Health, the Secretary of Defense, the Administrator of the 

Small Business Administration, and other interested parties. We will make 

copies available to others upon request. In addition, this report will be 

available, at no charge, on GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me 

at (202) 512-3841 or mittala@gao.gov. Contact points for our Offices of 

Congressional Relations and Public affairs may be found on the last page of 

this report. Key contributors to this report are listed in appendix VI.

Anu K. Mittal

Director, Natural Resources and Environment 
Page 44 GAO-06-565 Small Business Innovation Research

List of Requesters

The Honorable John F. Kerry

Ranking Member

Committee on Small Business and Entrepreneurship 

United States Senate

The Honorable Edward M. Kennedy

Ranking Minority Member

Committee on Health, Education, Labor and Pensions

United States Senate

The Honorable Michael B. Enzi

Chairman

Committee on Health, Education, Labor and Pensions

United States Senate

The Honorable Olympia J. Snowe

Chair

Committee on Small Business and Entrepreneurship 

United States Senate

The Honorable Donald A. Manzullo

Chairman

Committee on Small Business 

House of Representatives
Page 45 GAO-06-565 Small Business Innovation Research

Appendix I

Scope and Methodology AAppenednxidexiIs

In conducting our work, we interviewed officials at the National Institutes 

of Health (NIH), the Department of Defense (DoD), and the Small Business 

Administration (SBA) about their procedures in place, and any changes 

that occurred during the time period of our review—fiscal years 2001 

through 2004. We reviewed agency documentation on awards, award 

selection and funding, eligibility determinations, and the data elements that 

are collected during the eligibility process. We also interviewed officials 

from organizations that represent venture capital investors and 

biotechnology firms to obtain their views on the Small Business Innovation 

Research (SBIR) program and venture capital investment. 

To determine the total number and key characteristics of SBIR awards, we 

obtained data from NIH and DoD for all awards made during fiscal years 

2001 - 2004. Specifically, we asked for funding data on all SBIR awards that 

originated in fiscal years 2001 through 2004 and excluded data on funding 

to awards that originated before and after our time frame. These data 

included award amounts projected at the time the award was made and 

supplemental amounts issued subsequent to the award. We compared these 

data to data on funds actually issued to awardee firms to ensure that the 

projections were reasonable. We based our analysis on the projected 

amounts combined with supplemental funds, which allowed us to provide 

information on awards that originated in fiscal years 2003 and 2004 but 

which may not be completed until 2005 or later. However, for NIH fast track 

awards, we based our analysis on the actual dollars NIH spent on the award 

as of September 30, 2005. We did not analyze awards NIH made as 

contracts, which were a small portion of NIH’s awards, because certain 

data elements essential for our analysis were not available. We interviewed 

key officials at NIH and DoD about their databases. We assessed the 

reliability of relevant fields in the agencies’ databases and found them 

sufficient for our review. Our assessment included tests of the data itself as 

well as reviews of internal quality control procedures. We used analytic 

software to identify the following key characteristics of awards made by 

NIH and DoD: the number of firms receiving these awards; geographic 

location of these firms; agency components making the awards; the 

amounts of the awards; and for DoD, the number of employees working for 

the SBIR firms and their affiliates.

We also obtained data from two private sector firms, the Innovation 

Development Institute (IDI) and Dow Jones-Venture One. Initially, we 

selected IDI because its database included information that supplemented
Appendix I

Scope and Methodology

Page 46 GAO-06-565 Small Business Innovation Research

agency data on SBIR awardee firms. IDI’s database included information on 

venture capital investments in SBIR awardee firms that was compiled from 

published information such as company press releases. Subsequently, we 

obtained data from Dow Jones-Venture One to help corroborate, and 

supplement as necessary, the IDI data. We selected Dow Jones-Venture One 

because its database on venture capital investment is compiled and 

updated with information from both venture capital investors and the firms 

that receive the investment. We interviewed key officials at IDI and Dow 

Jones-Venture One about their databases. We assessed the reliability of 

relevant fields in the databases and found them sufficient for our review. 

Our assessment included tests of the data itself as well as reviews of 

internal quality control procedures. 

We combined data from NIH and DoD with data from the private sector 

sources to identify firms that had received venture capital investment at 

any time before they received an SBIR award in our time frame. In a small 

number of cases, the venture capital investment occurred as early as 1980, 

although most occurred in or after 1990. Specifically, at both agencies 

combined, 93 percent of SBIR firms first received venture capital 

investment between 1990 and 2004, 6 percent first received investment 

between 1985 and 1989, and 1 percent first received investment earlier than 

1985. The private sector data did not include information on whether the 

venture capital investment was still present in the firm at the time of the 

SBIR award, or whether the venture capital firms were majority owners. 

We used analytic software to determine the number of awards made, the 

amounts of the awards, the percentage of applications receiving awards, 

and how the awards were distributed geographically. Similarly, to identify 

the number of phase I and phase II awards that were above the guidelines 

and their key characteristics, we used analytic software on the agency data 

and the combined data to identify firms that had received venture capital 

investment by the time they received an SBIR award above the guidelines 

in our time frame. 

In our analyses, we express differences in the likelihoods of receiving 

awards that exceeded SBA’s guidelines by using odds ratios. An odds ratio 

is generally defined as the ratio of odds of an event occurring in one group
Appendix I

Scope and Methodology

Page 47 GAO-06-565 Small Business Innovation Research

compared to the odds of it occurring in another group.1 In our analyses, the 

event of interest was receiving an award that exceeded SBA’s guidelines 

versus one that did not. We computed odds ratios to indicate the difference 

between firms that had and firms that had not received venture capital 

investment in the likelihood of receiving awards that (1) exceeded SBA’s 

guidelines at all, and (2) exceeded the guidelines by large amounts. For 

example, the odds that a firm that had received venture capital investment 

received an NIH phase II award above $1 million were .499 while the odds 

that a firm that had not received venture capital investment received such 

an award were .244. Therefore, the ratio of those two odds was 2.045 (.499 / 

.244), indicating that firms that had received venture capital investment 

were 2.045 times (about 2 times) more likely to receive phase II awards 

over $1 million than firms that had not received such investment. 

To assess any differences that occurred to awards both above and below 

the guidelines following SBA’s October 2002 additional clarification of the 

SBIR ownership criteria and its May 2003 decision that addressed 

ownership of SBIR firms by venture capital firms, we compared NIH and 

DoD data on awards made from October 1, 2000, through September 30, 

2002, with data on awards made from October 1, 2002, through September 

30, 2004. We used the combined data set to compare NIH and DoD awards 

from the two time periods in terms of the key characteristics described 

above. We conducted our work in accordance with generally accepted 

government auditing standards.

1

Odds are generally defined as the probability of being in one group divided by the 

probability of not being in the group. For example, 33.3 percent of the NIH phase II awards 

that went to firms that had received venture capital investment exceeded $1 million. So, the 

probability that firms that had received venture capital investment received phase II awards 

that exceeded $1 million was .333, and the odds that such firms received these large awards 

were .499 (.333/.667). 
Page 48 GAO-06-565 Small Business Innovation Research

Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 2004 ApendxiI

Table 23: Geographical Distribution of NIH’s Total SBIR Applications, Awards, Dollars Awarded, Dollars to Firms That Had and 

Had Not Received Venture Capital Investment, and Dollars to Awards within and above SBA’s Guidelines, Fiscal Years 2001 

through 2004 

(Dollars in millions)

State

Total 

applications – 

number and 

percentage

Total awards - 

number and 

percentage

Total dollars 

awarded - 

number and 

percentage

Dollars to

firms that had 

received 

venture capital 

investment – 

number and 

percentage

Dollars to 

firms that had 

not received 

venture 

capital 

investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards above 

SBA’s 

guidelines – 

number and 

percentage

California 3,918

(21%)

988

(20%)

$395 

(20%)

$132

(37%)

$263

(16%)

$93

(15%)

$302

(22%)

Massachusetts 2,364

(12%)

707

(14%)

$285

(14%)

$30

(8%)

$255

(16%)

$83

(14%)

$202

(15%)

Maryland 1,224

(6%)

327

(6%)

$142

(7%)

$23

(7%)

$119

(7%)

$30

(5%)

$111

(8%)

New York 830

(4%)

216

(4%)

$118

(6%) 

$37

(11%)

$81

(5%)

$27

(4%)

$92

(7%)

Texas 906

(5%)

213

(4%)

$81

(4%)

$11

(3%)

$70

(4%)

$23

(4%)

$58

(4%)

Pennsylvania 725

(4%)

212

(4%)

$81

(4%)

$11

(3%)

$70

(4%)

$24

(4%)

$57

(4%)

Washington 646

(3%)

195

(4%)

$80

(4%)

$17

(5%)

$63

(4%)

$37

(6%)

$43

(3%)

Virginia 728

(4%)

167

(3%)

$66

 (3%)

$3

(1%)

$63

(4%)

$21

(3%)

$45

(3%)

Ohio 584

(3%)

181

(4%)

$59

(3%)

$3

(1%)

$55

(3%)

$19

(3%)

$40

(3%)

New Jersey 507

(3%)

136

(3%)

$57

(3%)

$5

(1%)

$52

(3%)

$16

(3%)

$41

(3%)

North Carolina 484

(3%)

127

(3%)

$56

(3%)

$4

(1%)

$53

(3%)

$15

(2%)

$42

(3%)

Wisconsin 295

(2%)

103

(2%)

$45

(2%)

$11

(3%)

$35

(2%)

$10

(2%)

$35

(3%)

Oregon 297

(2%)

112

(2%)

$43

(2%)

$3

(1%)

$40

(2%)

$17

(3%)

$26

(2%)

Michigan 450

(2%)

110

(2%)

$41

(2%)

$3

(1%)

$38

(2%)

$15

(3%)

$25

(2%)

Colorado 430

(2%)

127

(3%)

$39

(2%)

$4

(1%)

$35

(2%)

$20

(3%)

$19

(1%)

Illinois 528

(3%)

109

(2%)

$38

(2%)

$6

(2%)

$31

(2%)

$12

(2%)

$25

(2%)
Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 

2004

Page 49 GAO-06-565 Small Business Innovation Research

State

Total 

applications – 

number and 

percentage

Total awards - 

number and 

percentage

Total dollars 

awarded - 

number and 

percentage

Dollars to

firms that had 

received 

venture capital 

investment – 

number and 

percentage

Dollars to 

firms that had 

not received 

venture 

capital 

investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards above 

SBA’s 

guidelines – 

number and 

percentage

Minnesota 336

(2%)

90

(2%)

$31

(2%)

$1

(Less than 1%)

$31

(2%)

$13

(2%)

$19

(1%)

Connecticut 256

(1%)

77

(2%)

$26

(1%)

$4

(1%)

$22

(1%)

$8

(1%)

$18

(1%)

Arizona 219

(1%)

60

(1%)

$26

(1%)

$3

(1%)

$23

(1%)

$12

(2%)

$14

(1%)

Florida 393

(2%)

81

(2%)

$23

(1%)

$1

(Less than 1%)

$23

(1%)

$11

(2%)

$13

(1%)

Utah 267

(1%)

72

(1%)

$21

(1%)

$1

(Less than 1%)

$19

(1%)

$13

(2%)

$8

(1%)

New Hampshire 168

(1%)

58

(1%)

$20

(1%)

$1

(Less than 1%)

$19

(1%)

$11

(2%)

$9

(1%)

Georgia 209

(1%)

51

(1%)

$20

(1%)

$6

(2%)

$14

(1%)

$5

(1%)

$15

(1%)

Indiana 170

(1%)

44

(1%)

$18

(1%)

$4

(1%)

$13

(1%)

$4

(1%)

$13

(1%)

District of 

Columbia

123

(1%)

42

(1%)

$16

(1%)

$0

(0%)

$16

(1%)

$5

(1%)

$12

(1%)

Rhode Island 115

(1%)

37

(1%)

$16

(1%)

$1

(Less than 1%)

$14

(1%)

$3

(1%)

$12

(1%)

Hawaii 45

(Less than 1%)

13

(Less than 1%)

$14

(1%)

$13

(4%)

$1

(Less than 1%)

Less than $1

(Less than 1%)

$14

(1%)

Missouri 188

(1%)

43

(1%)

$13

(1%)

$2

(1%)

$11

(1%)

$9

(2%)

$4

(Less than 1%)

Alabama 127

(1%)

36

(1%)

$12

(1%)

$2

(1%)

$10

(1%)

$5

(1%)

$7

(1%)

South Carolina 110

(1%)

33

(1%)

$12

(1%)

$4

(1%)

$7

(Less than 1%)

$3

(1%)

$8

(1%)

New Mexico 137

(1%)

37

(1%)

$11

(1%)

$1

(Less than 1%)

$10

(1%)

$5

(1%)

$6

(Less than 1%)

Iowa 81

(Less than 1%)

20

(Less than 1%)

$9

(Less than 1%)

$1

(Less than 1%)

$8

(Less than 1%)

$2

(Less than 1%)

$7

(1%)

Oklahoma 78

(Less than 1%)

19

(Less than 1%)

$9

(Less than 1%)

$3

(1%)

$6

(Less than 1%)

$3

(Less than 1%)

$6

(Less than 1%)

(Continued From Previous Page)

(Dollars in millions)
Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 

2004

Page 50 GAO-06-565 Small Business Innovation Research

State

Total 

applications – 

number and 

percentage

Total awards - 

number and 

percentage

Total dollars 

awarded - 

number and 

percentage

Dollars to

firms that had 

received 

venture capital 

investment – 

number and 

percentage

Dollars to 

firms that had 

not received 

venture 

capital 

investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards above 

SBA’s 

guidelines – 

number and 

percentage

Tennessee 151

(1%)

28

(1%)

$9

(Less than 1%)

Less than $1

(Less than 1%)

$8

(1%)

$3

(1%)

$5

(Less than 1%)

Kentucky 120

(1%)

21

(Less than 1%)

$8

(Less than 1%)

$2

(Less than 1%)

$7

(Less than 1%)

$3

(1%)

$5

(Less than 1%)

Nebraska 44

(Less than 1%)

16

(Less than 1%)

$8

(Less than 1%)

$0

(0%)

$8

(Less than 1%)

$2

(Less than 1%)

$6

(Less than 1%)

Vermont 64

(Less than 1%)

20

(Less than 1%)

$7

(Less than 1%)

$0

(0%)

$7

(Less than 1%)

$3

(Less than 1%)

$5

(Less than 1%)

Delaware 115

(1%)

22

(Less than 1%)

$6

(Less than 1%)

$0

(0%)

$6

(Less than 1%)

$3

(1%)

$3

(Less than 1%)

Kansas 66

(Less than 1%)

19

(Less than 1%)

$5

(Less than 1%)

$0

(0%)

$5

(Less than 1%)

$3

(1%)

$2

(Less than 1%)

Montana 66

(Less than 1%)

12

(Less than 1%)

$4

(Less than 1%)

$0

(0%)

$4

 (Less than 1%)

$1

(Less than 1%)

$3

(Less than 1%)

Nevada 49

(Less than 1%)

12

(Less than 1%)

$4

(Less than 1%)

$0

(0%)

$4

(Less than 1%)

$4

(1%)

Less than $1

(Less than 1%)

Maine 55

(Less than 1%)

13

(Less than 1%)

$4

(Less than 1%)

$0

(0%)

$4

(Less than 1%)

$2

(Less than 1%)

$2

(Less than 1%)

Wyoming 19

(Less than 1%)

8

(Less than 1%)

$3

(Less than 1%)

$0

(0%)

$3

(Less than 1%)

$2

(Less than 1%)

$1

(Less than 1%)

Arkansas 47

(Less than 1%)

10

(Less than 1%)

$2

(Less than 1%)

$0

(0%)

$2

(Less than 1%)

$1

(Less than 1%)

$1

(Less than 1%)

North Dakota 27

(Less than 1%)

7

(Less than 1%)

$2

(Less than 1%)

$0

(0%)

$2

(Less than 1%)

$1

(Less than 1%)

$1

(Less than 1%)

Louisiana 75

(Less than 1%)

9

(Less than 1%)

$2

(Less than 1%)

$0

(0%)

$2

(Less than 1%)

$1

(Less than 1%)

$1

(Less than 1%)

South Dakota 35

(Less than 1%)

4

(Less than 1%)

$2

(Less than 1%)

$0

(0%)

$2

(Less than 1%)

$1

(Less than 1%)

$1

(Less than 1%)

Idaho 28

(Less than 1%)

8

(Less than 1%)

$1

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$1

(Less than 1%)

Less than $1

(Less than 1%)

Mississippi 18

(Less than 1%)

6

(Less than 1%)

$1

 (Less than 1%)

$0

(0%)

$1

 (Less than 1%)

Less than $1

(Less than 1%)

$1

(Less than 1%)

Alaska 11

(Less than 1%)

2

(Less than 1%)

Less than $1

(Less than 1%)

$0

(0%)

Less than $1

(Less than 1%)

Less than $1

(Less than 1%)

Less than $1

(Less than 1%)

West Virginia 17

(Less than 1%)

1

(Less than 1%)

Less than $1

(Less than 1%)

$0

(0%)

Less than $1

(Less than 1%)

Less than $1

(Less than 1%)

$0

(0%)

(Continued From Previous Page)

(Dollars in millions)
Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 

2004

Page 51 GAO-06-565 Small Business Innovation Research

Source: GAO analysis of NIH, Dow Jones, and IDI data.

a

Also included in this total are three applications submitted to NIH by firms in Puerto Rico, 

none of which were funded.

Note: Percentages and totals may not add because of rounding. 

Table 24: Component Distribution of NIH Awards, Dollars Awarded, Dollars to Firms That Had and Had Not Received Venture 

Capital, and Dollars to Awards within and above SBA’s Guidelines, Fiscal Years 2001 through 2004

State

Total 

applications – 

number and 

percentage

Total awards - 

number and 

percentage

Total dollars 

awarded - 

number and 

percentage

Dollars to

firms that had 

received 

venture capital 

investment – 

number and 

percentage

Dollars to 

firms that had 

not received 

venture 

capital 

investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards above 

SBA’s 

guidelines – 

number and 

percentage

Total 18,948a

(100%)

5,061

(100%)

$1,992

(100%)

$356

(100%)

$1,637

(100%)

$606

(100%)

$1,386

(100%)

(Continued From Previous Page)

(Dollars in millions)

(Dollars in millions)

Awarding component 

Total awards – 

number and 

percentage

Total dollars 

awarded – 

number and 

percentage

Dollars to firms 

that had received 

venture capital 

investment – 

number and 

percentage

Dollars to firms 

that had not 

received venture 

capital investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards above 

SBA’s 

guidelines – 

number and 

percentage

National Cancer 

Institute

945

(19%)

$347

(17%)

$80 

(23%)

$267

(16%)

$83

(14%)

$264

(19%)

National Institute of 

Allergy and Infectious 

Diseases

618

(12%)

$276

(14%)

$120

(34%) 

$156

(10%)

$52

(9%)

$224

(16%)

National Heart, Lung, 

and Blood Institute

597

(12%)

$236

(12%)

$28

(8%) 

$209

(13%)

$78

(13%)

$159

(11%)

National Institute of 

General Medical 

Sciences 

390

(8%)

$151

(8%)

$33

(9%) 

$118

(7%)

$51

(8%)

$100

(7%)

National Institute of 

Diabetes and Digestive 

and Kidney Diseases

335

(7%)

$142

(7%)

$18

(5%)

$123

(8%)

$36

(6%)

$106

(8%)

National Institute of 

Neurological Disorders 

and Stroke

289

(6%)

$111

(6%)

$21

(6%)

$90

(5%)

$36

(6%)

$75

(5%)

National Center for 

Research Resources

212

(4%)

$106

(5%)

$8

(2%)

$98

(6%)

$33

(5%)

$73

(5%)
Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 

2004

Page 52 GAO-06-565 Small Business Innovation Research

Awarding component 

Total awards – 

number and 

percentage

Total dollars 

awarded – 

number and 

percentage

Dollars to firms 

that had received 

venture capital 

investment – 

number and 

percentage

Dollars to firms 

that had not 

received venture 

capital investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards above 

SBA’s 

guidelines – 

number and 

percentage

National Institute of 

Child Health and 

Human Development

240

(5%)

$91

(5%)

$6

(2%)

$85

(5%)

$60

(10%)

$30

(2%)

National Institute of 

Mental Health

201

(4%)

$80

(4%)

$3

(1%)

$77

(5%)

$26

(4%)

$55

(4%)

National Institute on 

Aging

197

(4%)

$78

(4%)

$4

(1%)

$74

(5%)

$23

(4%)

$55

(4%)

National Institute on 

Drug Abuse

132

(3%)

$56

(3%)

$3

(1%)

$53

(3%)

$18

(3%)

$39

(3%)

National Eye Institute 159

(3%)

$50

(3%)

$5

(1%)

$46

(3%)

$15

(3%)

$35

(3%)

National Institute of 

Environmental Health 

Sciences

125

(2%)

$47

(2%)

$3

(1%)

$44

(3%)

$21

(3%)

$26

(2%)

National Institute of 

Arthritis and 

Musculoskeletal and 

Skin Diseases

120

(2%)

$38

(2%)

$5

(1%)

$33

(2%)

$12

(2%)

$26

(2%)

National Human 

Genome Research 

Institute

92

(2%)

$36

(2%)

$12

(3%)

$25

(2%)

$7

(1%)

$29

(2%)

National Institute on 

Deafness and Other 

Communication 

Disorders

98

(2%)

$35

(2%)

Less than $1

(Less than 1%)

$35

(2%)

$15

(2%)

$21

(2%)

National Institute of 

Biomedical Imaging 

and Bioengineering

99

(2%)

$32

(2%)

$2

(1%)

$30

(2%)

$10

(2%)

$23

(2%)

National Institute of 

Dental and Craniofacial 

Research

90

(2%)

$28

(1%)

$1

(Less than 1%)

$27

(2%)

$13

(2%)

$15

(1%)

National Institute on 

Alcohol Abuse and 

Alcoholism

58

(1%)

$25

(1%)

$0

(0%)

$25

(2%)

$7

(1%)

$18

(1%)

National Institute of 

Nursing Research

25

(Less than 1%)

$11

(1%)

Less than $1

(Less than 1%)

$11

(1%)

$6

(1%)

$5

(Less than 1%)

National Center for 

Complementary and 

Alternative Medicine

28

(1%)

$9

(Less than 1%)

$2

(Less than 1%)

$8

(Less than 1%)

$2

(Less than 1%)

$8

(1%)

(Continued From Previous Page)

(Dollars in millions)
Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 

2004

Page 53 GAO-06-565 Small Business Innovation Research

Source: GAO analysis of NIH, Dow Jones, and IDI data.

Note: Percentages and totals may not add because of rounding.

Table 25: Geographical Distribution of NIH Dollars Awarded, Overall and to Firms That Had Received Venture Capital Investment, 

Fiscal Years 2001-2002 Compared to Fiscal Years 2003-2004

Awarding component 

Total awards – 

number and 

percentage

Total dollars 

awarded – 

number and 

percentage

Dollars to firms 

that had received 

venture capital 

investment – 

number and 

percentage

Dollars to firms 

that had not 

received venture 

capital investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards above 

SBA’s 

guidelines – 

number and 

percentage

National Library of 

Medicine

9

(Less than 1%)

$4

(Less than 1%)

$1

(Less than 1%)

$3

(Less than 1%)

$2

(Less than 1%)

$2

(Less than 1%)

National Center on 

Minority Health and 

Health Disparities

2

(Less than 1%)

Less than $1

(Less than 1%)

$0

(0%)

Less than $1

(Less than 1%)

Less than $1

(Less than 1%)

Less than $1

(Less than 1%)

Total 5,061

(100%)

$1,992

(100%)

$356

(100%) 

$1,637

(100%)

$606

(100%)

$1,386

(100%)

(Continued From Previous Page)

(Dollars in millions)

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

State

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

California $176

(19%)

$52

(41%)

$219

(21%)

$80

(35%)

Massachusetts $142

(15%)

$9

(7%)

$142

(13%)

$20

(9%)

Maryland $65

(7%)

$3

(2%)

$77

(7%)

$20

(9%)

New York $47

(5%)

$10

(8%)

$71

(7%)

$28

(12%)

Texas $26

(3%)

$5

(4%)

$55

(5%)

$6

(3%)

Pennsylvania $38

(4%)

$5

(4%)

$43

(4%)

$6

(3%)

Washington $40

(4%)

$7

(6%)

$39

(4%)

$10

(4%)

Virginia $28

(3%)

$2

(1%)

$38

(4%)

$2

(1%)
Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 

2004

Page 54 GAO-06-565 Small Business Innovation Research

State

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Ohio $32

(3%)

$2

(2%)

$27

(3%)

$1

(1%)

New Jersey $31

(3%)

$2

(1%)

$26

(2%)

$3

(1%)

North Carolina $32

(3%)

$1

(1%)

$24

(2%)

$3

(1%)

Wisconsin $20

(2%)

$6

(5%)

$25

(2%)

$5

(2%)

Oregon $22

(2%)

$1

(1%)

$21

(2%)

$2

(1%)

Michigan $17

(2%)

$1

(1%)

$24

(2%)

$1

(1%)

Colorado $18

(2%)

$2

(1%)

$21

(2%)

$2

(1%)

Illinois $20

(2%)

$3

(2%)

$17

(2%)

$3

(2%)

Minnesota $14

(2%)

$0

(0%)

$17

(2%)

$1

(Less than 1%)

Connecticut $8

(1%)

$1

(Less than 1%)

$18

(2%)

$4

(2%)

Arizona $16

(2%)

$1

(1%)

$11

(1%)

$2

(1%)

Florida $9

(1%)

Less than $1

(Less than 1%)

$14

(1%)

Less than $1

(Less than 1%)

Utah $14

(2%)

$1

(1%)

$6

(1%)

Less than $1

(Less than 1%)

New Hampshire $9

(1%)

Less than $1

(Less than 1%)

$11

(1%)

$1

(Less than 1%)

Georgia $9

(1%)

$2

(1%)

$11

(1%)

$4

(2%)

Indiana $7

(1%)

$1

(1%)

$11

(1%)

$3

(1%)

District of 

Columbia

$9

(1%)

$0

(0%)

$7

(1%)

$0

(0%)

Rhode Island $7

(1%)

Less than $1

(Less than 1%)

$8

(1%)

$1

(1%)

Hawaii $3

(Less than 1%)

$2

(2%)

$11

(1%)

$11

(5%)

(Continued From Previous Page)

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004
Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 

2004

Page 55 GAO-06-565 Small Business Innovation Research

State

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Missouri $7

(1%)

$2

(1%)

$6

(1%)

Less than $1

(Less than 1%)

Alabama $8

(1%)

$2

(1%)

$4

(Less than 1%)

$1

(Less than 1%)

South Carolina $6

(1%)

$2

(2%)

$6

(1%)

$2

(1%)

New Mexico $5

(1%)

$1

(1%)

$6

(1%)

Less than $1

(Less than 1%)

Iowa $6

(1%)

$0

(0%)

$3

(Less than 1%)

$1

(1%)

Oklahoma $3

(Less than 1%)

$1

(1%)

$6

(1%)

$2

(1%)

Tennessee $2

(Less than 1%)

Less than $1

(Less than 1%)

$6

(1%)

$0

(0%)

Kentucky $3

(Less than 1%)

$1

(1%)

$5

(Less than 1%)

$1

(Less than 1%)

Nebraska $2

(Less than 1%)

$0

(0%)

$6

(1%)

$0

(0%)

Vermont $2

(Less than 1%)

$0

(0%)

$6

(1%)

$0

(0%)

Delaware $2

(Less than 1%)

$0

(0%)

$3

(Less than 1%)

$0

(0%)

Kansas $3

(Less than 1%)

$0

(0%)

$2

(Less than 1%)

$0

(0%)

Montana $2

(Less than 1%)

$0

(0%)

$3

(Less than 1%)

$0

(0%)

Nevada $3

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$0

(0%)

Maine $3

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$0

(0%)

Wyoming $1

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$0

(0%)

Arkansas $1

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$0

(0%)

North Dakota $1

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$0

(0%)

Louisiana $1

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$0

(0%)

(Continued From Previous Page)

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004
Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 

2004

Page 56 GAO-06-565 Small Business Innovation Research

Source: GAO analysis of NIH, Dow Jones, and IDI data.

Note: Percentages and totals may not add because of rounding.

Table 26: Component Distribution of NIH Dollars Awarded, Overall and to Firms That Had Received Venture Capital Investment, 

Fiscal Years 2001-2002 Compared to Fiscal Years 2003-2004

State

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

South Dakota $2

(Less than 1%)

$0

(0%)

$0

(0%)

$0

(0%)

Idaho $1

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$0

(0%)

Mississippi Less than $1

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$0

(0%)

Alaska $0

(0%)

$0

(0%)

Less than $1

(Less than 1%)

$0

(0%)

West Virginia Less than $1

(Less than 1%)

$0

(0%)

$0

(0%)

$0

(0%)

Total $925

(100%)

$129

(100%)

$1,068

(100%)

$227

(100%)

(Continued From Previous Page)

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

Awarding component 

Total dollars 

awarded – number 

and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

National Cancer 

Institute

$156

(17%)

$27

(21%)

$192

(18%)

$53

(23%)

National Institute of 

Allergy and Infectious 

Diseases

$103

(11%)

$38

(29%)

$173

(16%)

$82

(36%)

National Heart, Lung, 

and Blood Institute

$115

(12%)

$10

(8%)

$121

(11%)

$18

(8%)

National Institute of 

General Medical 

Sciences 

$75

(8%)

$14

(11%)

$76

(7%)

$19

(8%)

National Institute of 

Diabetes and Digestive 

and Kidney Diseases

$63

(7%)

$7

(6%)

$79

(7%)

$11

(5%)
Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 

2004

Page 57 GAO-06-565 Small Business Innovation Research

Awarding component 

Total dollars 

awarded – number 

and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

National Institute of 

Neurological Disorders 

and Stroke

$54

(6%)

$8

(6%)

$57

(5%)

$14

(6%)

National Center for 

Research Resources

$61

(7%)

$2

(2%)

$45

(4%)

$6

(3%)

National Institute of 

Child Health and 

Human Development

$44

(5%)

$3

(2%)

$47

(4%)

$3

(1%)

National Institute of 

Mental Health

$39

(4%)

$1

(1%)

$41

(4%)

$2

(1%)

National Institute on 

Aging

$40

(4%)

Less than $1

(Less than 1%)

$38

(4%)

$3

(1%)

National Institute on 

Drug Abuse

$29

(3%)

$3

(2%)

$28

(3%)

Less than $1

(Less than 1%)

National Eye Institute $22

(2%)

$2

(2%)

$28

(3%)

$3

(1%)

National Institute of 

Environmental Health 

Sciences

$22

(2%)

$1

(1%)

$25

(2%)

$2

(1%)

National Institute of 

Arthritis and 

Musculoskeletal and 

Skin Diseases

$20

(2%)

$3

(2%)

$18

(2%)

$2

(1%)

National Human 

Genome Research 

Institute

$19

(2%)

$7

(5%)

$17

(2%)

$5

(2%)

National Institute on 

Deafness and Other 

Communication 

Disorders

$19

(2%)

$0

(0%)

$16

(2%)

Less than $1

(Less than 1%)

National Institute of 

Biomedical Imaging 

and Bioengineering

$8

(1%)

$0

(0%)

$25

(2%)

$2

(1%)

National Institute of 

Dental and Craniofacial 

Research

$15

(2%)

$1

(1%)

$13

(1%)

Less than $1

(Less than 1%)

National Institute on 

Alcohol Abuse and 

Alcoholism

$8

(1%)

$0

(0%)

$17

(2%)

$0

(0%)

(Continued From Previous Page)

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004
Appendix II

Detailed Information on SBIR Awards Made 

by NIH During Fiscal Years 2001 through 

2004

Page 58 GAO-06-565 Small Business Innovation Research

Source: GAO analysis of NIH, Dow Jones, and IDI data.

Note: Percentages and totals may not add because of rounding.

Awarding component 

Total dollars 

awarded – number 

and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

National Institute of 

Nursing Research

$5

(1%)

$0

(0%)

$6

(1%)

Less than $1

(Less than 1%)

National Center for 

Complementary and 

Alternative Medicine

$6

(1%)

$1

(1%)

$3

(Less than 1%)

$1

(Less than 1%)

National Library of 

Medicine

$2

(Less than 1%)

$0

(0%)

$2

(Less than 1%)

$1

(Less than 1%)

National Center on 

Minority Health and 

Health Disparities

$0

(0%)

$0

(0%)

Less than $1

(Less than 1%)

$0

(0%)

Total $925

(100%)

$129

(100%)

$1,068

(100%)

$227

(100%)

(Continued From Previous Page)

(Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004
Page 59 GAO-06-565 Small Business Innovation Research

Appendix III

Detailed Information on SBIR Awards Made 

by DoD During Fiscal Years 2001 through 2004ApendxiI

Table 27: Geographical Distribution of DoD’s Phase I Applications, Total Awards, Total Dollars Awarded, Dollars to Firms That 

Had and Had Not Received Venture Capital Investment, and Dollars to Awards within and above SBA’s Guidelines, Fiscal Years 

2001 through 2004 

(Dollars in millions)

State

Phase I 

applications 

– number 

and 

percentage

Total phase I 

and phase II 

awards - 

number and 

percentage

Total 

dollars 

awarded - 

number 

and 

percentage

Dollars to firms 

that had 

received 

venture capital 

investment – 

number and 

percentage

Dollars to 

firms that had 

not received 

venture capital 

investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards 

above SBA’s 

guidelines – 

number and 

percentage

California 10,584

(21%)

2,433

(22%)

$741

(23%)

$68

(31%) 

$673

(22%)

$567

(22%)

$175

(24%)

Massachusetts 6,173

(12%)

1,568

(14%)

$483

(15%)

$17

(8%) 

$465

(15%)

$363

(14%)

$120

(16%)

Virginia 3,787

(7%)

825

(8%)

$245

(7%)

$12

(6%)

$232

(8%)

$185

(7%)

$60

(8%)

Ohio 2,022

(4%)

485

(4%)

$163

(5%)

$1

(1%) 

$161

(5%)

$130

(5%)

$33

(4%)

Colorado 1,956

(4%)

543

(5%)

$160

(5%)

$14 

(6%)

$146

(5%)

$128

(5%)

$32

(4%)

Maryland 2,594

(5%)

543

(5%)

$152

(5%)

$7 

(3%)

$145

(5%)

$121

(5%)

$31

(4%)

Pennsylvania 1,840

(4%)

440

(4%)

$132

(4%)

$2

(1%) 

$131

(4%)

$103

(4%)

$29

(4%)

New York 1,946

(4%)

423

(4%)

$126

(4%)

$14

(6%) 

$113

(4%)

$97

(4%)

$29

(4%)

Texas 2,619

(5%)

447

(4%)

$125

(4%)

$6

(3%) 

$119

(4%)

$101

(4%)

$23

(3%)

New Jersey 1,644

(3%)

305

(3%)

$88

(3%)

$12

(5%) 

$76

(2%)

$68

(3%)

$20

(3%)

Florida 1,662

(3%)

280

(3%)

$83

(3%)

$2

(1%)

$81

(3%)

$66

(3%)

$17

(2%)

Alabama 1,139

(2%)

280

(3%)

$81

(2%)

$6

(3%)

$75

(2%)

$67

(3%)

$14

(2%)

Michigan 1,400

(3%)

224

(2%)

$69

(2%)

$14

(7%)

$55

(2%)

$52

(2%)

$17

(2%)

Washington 828

(2%)

179

(2%)

$63

(2%)

$3

(2%)

$60

(2%)

$47

(2%)

$17

(2%)

Arizona 1,291

(3%)

226

(2%)

$60

(2%)

$3

(1%)

$56

(2%)

$51

(2%)

$9

(1%)

New Mexico 801

(2%)

179

(2%)

$50

(2%)

$1

(1%)

$48

(2%)

$37

(1%)

$13

(2%)
Appendix III

Detailed Information on SBIR Awards Made 

by DoD During Fiscal Years 2001 through 

2004

Page 60 GAO-06-565 Small Business Innovation Research

Connecticut 705

(1%)

151

(1%)

$46

(1%)

$3

(1%)

$43

(1%)

$39

(2%)

$8

(1%)

New Hampshire 541

(1%)

142

(1%)

$44

(1%)

Less than $1

(Less than 

1%)

$43

(1%)

$31

(1%)

$13

(2%)

Minnesota 645

(1%)

134

(1%)

$41

(1%)

$11

(5%)

$31

(1%)

$35

(1%)

$6

(1%)

Georgia 673

(1%)

101

(1%)

$34

(1%)

$8

(4%)

$27

(1%)

$23

(1%)

$11

(2%)

Illinois 788

(2%)

112

(1%)

$31

(1%)

Less than $1

(Less than

1%)

$31

(1%)

$27

(1%)

$5

(1%)

Nevada 189

(Less than 

1%)

62

(1%)

$25

(1%)

$0

(0%)

$25

(1%)

$17

(1%)

$8

(1%)

North Carolina 478

(1%)

92

(1%)

$23

(1%)

$6

(3%)

$16

(1%)

$21

(1%)

$1

(Less than

1%)

Oregon 350

(1%)

73

(1%)

$21

(1%)

$1

(1%)

$19

(1%)

$17

(1%)

$4

(1%)

Utah 352

(1%)

63

(1%)

$21

(1%)

$1

(Less than 

1%)

$20

(1%)

$16

(1%)

$4

(1%)

Tennessee 383

(1%)

57

(1%)

$17

(1%)

$0

(0%)

$17

(1%)

$15

(1%)

$2

(Less than 

1%)

Rhode Island 151

(Less than

1%)

35

(Less than

1%)

$15

(Less than 

1%)

$0

(0%)

$15

(Less than 

1%)

$11

(Less than 

1%)

$4

(1%)

West Virginia 201

(Less than

1%)

45

(Less than 

1%)

$15

(Less than 

1%)

$0

(0%)

$15

(Less than

1%)

$8

(Less than

1%)

$7

(1%)

Indiana 287

(1%)

49

(Less than

1%)

$14

(Less than 

1%)

$1

(1%)

$12

(Less than

1%)

$11

(Less than

1%)

$3

(Less than 

1%)

Maine 154

(Less than

1%)

40

(Less than

1%)

$13

(Less than 

1%)

$1

(Less than 1%)

$13

(Less than 

1%)

$8

(Less than 

1%)

$5

(1%)

(Continued From Previous Page)

(Dollars in millions)

State

Phase I 

applications 

– number 

and 

percentage

Total phase I 

and phase II 

awards - 

number and 

percentage

Total 

dollars 

awarded - 

number 

and 

percentage

Dollars to firms 

that had 

received 

venture capital 

investment – 

number and 

percentage

Dollars to 

firms that had 

not received 

venture capital 

investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards 

above SBA’s 

guidelines – 

number and 

percentage
Appendix III

Detailed Information on SBIR Awards Made 

by DoD During Fiscal Years 2001 through 

2004

Page 61 GAO-06-565 Small Business Innovation Research

South Carolina 190

(Less than 

1%)

42

(Less than 

1%)

$11

(Less than 

1%)

$0

(0%)

$11

(Less than 

1%)

$8

(Less than 

1%)

$3

(Less than 

1%)

Wisconsin 173

(Less than

1%)

29

(Less than 

1%)

$11

(Less than 

1%)

$1

(Less than 

1%)

$10

(Less than 

1%)

$9

(Less than

1%)

$1

(Less than 1%)

Oklahoma 226

(Less than 

1%)

46

(Less than

1%)

$10

(Less than 

1%)

$3

(1%)

$7

(Less than 

1%)

$8

(Less than 

1%)

$2

(Less than

1%)

Idaho 178

(Less than 

1%)

27

(Less than 

1%)

$9

(Less than 

1%)

$0

(0%)

$9

(Less than 

1%)

$4

(Less than 

1%)

$5

(1%)

Missouri 248

(Less than 

1%)

36

(Less than

1%)

$8

(Less than 

1%)

$0

(0%)

$8

(Less than 

1%)

$8

(Less than 

1%)

Less than $1

(Less than 

1%)

Montana 173

(Less than

1%)

30

(Less than 

1%)

$8

(Less than 

1%)

$0

(0%)

$8

(Less than

1%)

$7

(Less than

1%)

$1

(Less than 

1%)

Vermont 120

(Less than 

1%)

19

(Less than

1%)

$7

(Less than 

1%)

$0

(0%)

$7

(Less than

1%)

$5

(Less than 

1%)

$1

(Less than

1%)

Kansas 108

(Less than 

1%)

20

(Less than 

1%)

$7

(Less than 

1%)

$0

(0%)

$7

(Less than 

1%)

$6

(Less than

1%)

Less than $1

(Less than

1%)

Louisiana 166

(Less than 

1%)

29

(Less than 

1%)

$6

(Less than 

1%)

Less than $1

(Less than 

1%)

$6

(Less than

1%)

$5

(Less than 

1%)

$1

(Less than 

1%)

District of Columbia 129

(Less than 

1%)

20

(Less than

1%)

$6

(Less than 

1%)

$0

(0%)

$6

(Less than 

1%)

$5

(Less than 

1%)

$1

(Less than 

1%)

Hawaii 158

(Less than

1%)

22

(Less than 

1%)

$6

(Less than 

1%)

$0

(0%)

$6

(Less than

1%)

$4

(Less than 

$2

(Less than 

1%)

Iowa 143

(Less than 

1%)

17

(Less than 

1%)

$5

(Less than 

1%)

$0

(0%)

$5

(Less than 1%)

$4

(Less than 

1%)

$2

(Less than

1%)

Delaware 153

(Less than

1%)

21

(Less than 

1%)

$4

(Less than 

1%)

$0

(0%)

$4

(Less than

1%)

$3

(Less than 

1%)

$1

(Less than 

1%)

(Continued From Previous Page)

(Dollars in millions)

State

Phase I 

applications 

– number 

and 

percentage

Total phase I 

and phase II 

awards - 

number and 

percentage

Total 

dollars 

awarded - 

number 

and 

percentage

Dollars to firms 

that had 

received 

venture capital 

investment – 

number and 

percentage

Dollars to 

firms that had 

not received 

venture capital 

investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards 

above SBA’s 

guidelines – 

number and 

percentage
Appendix III

Detailed Information on SBIR Awards Made 

by DoD During Fiscal Years 2001 through 

2004

Page 62 GAO-06-565 Small Business Innovation Research

Source: GAO analysis of DoD, Dow Jones, and IDI data.

a

Also included in this total are six phase I applications submitted to DoD by firms in Puerto Rico, none 

of which were funded.

Notes: 

(1) Dollar totals include SBIR dollars and non-SBIR funds from DoD awarding components. 

(2) Percentages and totals may not add because of rounding. 

Arkansas 81

(Less than 

1%)

12

(Less than 

1%)

$4

(Less than 

1%)

$0

(0%)

$4

(Less than 

1%)

$4

(Less than 

1%)

$0

(0%)

Mississippi 95

(Less than 

1%)

19

(Less than 

1%)

$3

(Less than 

1%)

$1

(1%)

$2

(Less than 

1%)

$3

(Less than 

1%)

$0

(0%)

Nebraska 49

(Less than 

1%)

10

(Less than 

1%)

$3

(Less than 

1%)

$0

(0%)

$3

(Less than 

1%)

$2

(Less than 

1%)

$1

(Less than

1%)

Kentucky 64

(Less than 

1%)

6

(Less than 

1%)

$2

(Less than 

1%)

$0

(0%)

$2

(Less than 

1%)

Less than $1

(Less than

1%)

$2

(Less than

1%)

Wyoming 42

(Less than 

1%)

5

(Less than

1%)

$2

(Less than 

1%)

$0

(0%)

$2

(Less than

1%)

$2

(Less than 

1%)

Less than $1

(Less than

1%)

Alaska 36

(Less than 1%)

4

(Less than 1%)

$1

(Less than 

1%)

$0

(0%)

$1

(Less than 1%)

$1

(Less than 1%)

$0

(0%)

North Dakota 25

(Less than 1%)

3

(Less than 1%)

$1

(Less than 

1%)

$0

(0%)

$1

(Less than

1%)

$1

(Less than 

1%)

Less than $1

(Less than

1%)

South Dakota 29

(Less than

1%)

5

(Less than 1%)

Less than $1

(Less than 

1%)

$0

(0%)

Less than $1

(Less than 

1%)

Less than $1

(Less than 

1%)

$0

(0%)

Total 50,775a

(100%)

10,958

(100%)

$3,294

(100%)

$218

(100%) 

$3,075

(100%)

$2,550

(100%)

$743

(100%)

(Continued From Previous Page)

(Dollars in millions)

State

Phase I 

applications 

– number 

and 

percentage

Total phase I 

and phase II 

awards - 

number and 

percentage

Total 

dollars 

awarded - 

number 

and 

percentage

Dollars to firms 

that had 

received 

venture capital 

investment – 

number and 

percentage

Dollars to 

firms that had 

not received 

venture capital 

investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards 

above SBA’s 

guidelines – 

number and 

percentage
Appendix III

Detailed Information on SBIR Awards Made 

by DoD During Fiscal Years 2001 through 

2004

Page 63 GAO-06-565 Small Business Innovation Research

Table 28: Component Distribution of DoD Awards, Dollars Awarded, Dollars to Firms That Had and Had Not Received Venture 

Capital, and Dollars to Awards within and above SBA’s Guidelines, Fiscal Years 2001 through 2004

Source: GAO analysis of DoD, Dow Jones, and IDI data.

Notes: 

(1) DoD’s dollar totals include SBIR dollars and additional non-SBIR funds from DoD awarding 

components. 

(2) Percentages and totals may not add because of rounding.

(Dollars in millions)

Awarding component 

Total awards – 

number and 

percentage

Total dollars 

awarded – 

number and 

percentage

Dollars to 

firms that had 

received 

venture capital 

investment – 

number and 

percentage

Dollars to 

firms that had 

not received 

venture 

capital 

investment – 

number and 

percentage

Dollars to 

awards within 

SBA’s 

guidelines – 

number and 

percentage

Dollars to 

awards above 

SBA’s 

guidelines – 

number and 

percentage

Air Force 2,783

(25%)

$1,018

(31%)

$53

(24%)

$965

(31%)

$756

(30%)

$263

(35%)

Army 2,003

(18%)

$683

(21%)

$61

(28%)

$622

(20%)

$499

(20%)

$185

(25%)

Navy 2,548

(23%)

$619

(19%)

$32

(15%)

$587

(19%)

$508

(20%)

$111

(15%)

Missile Defense Agency 1,912

(17%)

$483

(15%)

$32

(14%)

$451

(15%)

$382

(15%)

$101

(14%)

Defense Advanced 

Research Projects Agency

680

(6%)

$235

(7%)

$23

(11%)

$212

(7%)

$168

(7%)

$67

(9%)

Office of Secretary of 

Defense

653

(6%)

$163

(5%)

$8

(4%)

$155

(5%)

$159

(6%)

$4

(1%)

Chemical Biological Defense 141

(1%)

$35

(1%)

$6

(3%)

$30

(1%)

$32

(1%)

$4

(Less than 

1%)

Special Operations 

Command

149

(1%)

$35

(1%)

$2

(1%)

$33

(1%)

$27

(1%)

$8

(1%)

Defense Threat Reduction 

Agency

72

(1%)

$18

(1%)

$1

(Less than 

1%)

$17

(1%)

$17

(1%)

$1

(Less than 

1%)

National GeospatialIntelligence Agency17

(Less than 

1%)

$4

(Less than 

1%)

$1

(Less than 1

%)

$3

(Less than 

1%)

$4

(Less than

1%)

$0

(0%)

Total 10,958

(100%)

$3,294

(100%)

$218

(100%)

$3,075

(100%)

$2,550

(100%)

$743

(100%)
Appendix III

Detailed Information on SBIR Awards Made 

by DoD During Fiscal Years 2001 through 

2004

Page 64 GAO-06-565 Small Business Innovation Research

Table 29: Geographical Distribution of DoD Dollars Awarded, Overall and to Firms That Had Received Venture Capital 

Investment, Fiscal Years 2001-2002 Compared to Fiscal Years 2003-2004

 (Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

State

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

California $320

(23%)

$28

(34%)

$421

(22%)

$40

(29%)

Massachusetts $204

(15%)

$2

(2%)

$279

(15%)

$15

(11%)

Virginia $115

(8%)

$7

(9%)

$130

(7%)

$5

(4%)

Ohio $72

(5%)

$0

(0%)

$90

(5%)

$1

(1%)

Colorado $68

(5%)

$8

(9%)

$92

(5%)

$6

(4%)

Maryland $57

(4%)

$2

(3%)

$94

(5%)

$5

(3%)

Pennsylvania $54

(4%)

$1

(1%)

$78

(4%)

$1

(Less than 1%)

New York $47

(3%)

$3

(4%)

$80

(4%)

$10

(8%)

Texas $47

(3%)

$3

(3%)

$78

(4%)

$3

(2%)

New Jersey $40

(3%)

$5

(6%)

$48

(2%)

$7

(5%)

Florida $34

(2%)

$1

(1%)

$50

(3%)

$1

(1%)

Alabama $23

(2%)

$1

(2%)

$58

(3%)

$4

(3%)

Michigan $25

(2%)

$4

(5%)

$44

(2%)

$10

(7%)

Washington $24

(2%)

$1

(1%)

$40

(2%)

$3

(2%)

Arizona $31

(2%)

$2

(3%)

$29

(2%)

$1

(1%)

New Mexico $24

(2%)

$0

(0%)

$25

(1%)

$1

(1%)

Connecticut $19

(1%)

Less than $1

(Less than 1%)

$28

(1%)

$3

(2%)
Appendix III

Detailed Information on SBIR Awards Made 

by DoD During Fiscal Years 2001 through 

2004

Page 65 GAO-06-565 Small Business Innovation Research

New Hampshire $16

(1%)

Less than $1

(Less than 1%)

$28

(1%)

$0

(0%)

Minnesota $20

(1%)

$6

(7%)

$21

(1%)

$5

(4%)

Georgia $19

(1%)

$5

(6%)

$16

(1%)

$3

(2%)

Illinois $11

(1%)

Less than $1

(Less than 1%)

$21

(1%)

Less than $1

(Less than 1%)

Nevada $9

(1%)

$0

(0%)

$16

(1%)

$0

(0%)

North Carolina $8

(1%)

$2

(2%)

$14

(1%)

$5

(3%)

Oregon $8

(1%)

Less than $1

(Less than 1%)

$13

(1%)

$1

(1%)

Utah $7

(1%)

Less than $1

(Less than 1%)

$14

(1%)

$1

(1%)

Tennessee $8

(1%)

$0

(0%)

$9

(Less than 1%)

$0

(0%)

Rhode Island $8

(1%)

$0

(0%)

$7

(Less than 1%)

$0

(0%)

West Virginia $2

(Less than 1%)

$0

(0%)

$14

(1%)

$0

(0%)

Indiana $4

(Less than 1%)

Less than $1

(Less than 1%)

$10

(1%)

$1

(1%)

Maine $5

(Less than 1%)

$0

(0%)

$9

(Less than 1%)

$1

(1%)

South Carolina $4

(Less than 1%)

$0

(0%)

$7

(Less than 1%)

$0

(0%)

Wisconsin $3

(Less than 1%)

Less than $1

(Less than 1%)

$8

(Less than 1%)

$1

(1%)

Oklahoma $2

(Less than 1%)

$0

(0%)

$7

(Less than 1%)

$3

(2%)

Idaho $5

(Less than 1%)

$0

(0%)

$3

(Less than 1%)

$0

(0%)

Missouri $3

(Less than 1%)

$0

(0%)

$6

(Less than 1%)

$0

(0%)

Montana $4

(Less than 1%)

$0

(0%)

$4

(Less than 1%)

$0

(0%)

(Continued From Previous Page)

 (Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

State

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage
Appendix III

Detailed Information on SBIR Awards Made 

by DoD During Fiscal Years 2001 through 

2004

Page 66 GAO-06-565 Small Business Innovation Research

Source: GAO analysis of DoD, Dow Jones, and IDI data.

Notes: 

(1) DoD’s dollar totals include SBIR dollars and additional non-SBIR funds from DoD awarding 

components. 

(2) Percentages and totals may not add because of rounding.

Vermont Less than $1

(Less than 1%)

$0

(0%)

$6

(Less than 1%)

$0

(0%)

Kansas $3

(Less than 1%)

$0

(0%)

$3

(Less than 1%)

$0

(0%)

Louisiana $2

(Less than 1%)

Less than $1

(Less than 1%)

$4

(Less than 1%)

$0

(0%)

District of 

Columbia

$2

(Less than 1%)

$0

(0%)

$4

(Less than 1%)

$0

(0%)

Hawaii $1

(Less than 1%)

$0

(0%)

$5

(Less than 1%)

$0

(0%)

Iowa $3

(Less than 1%)

$0

(0%)

$2

(Less than 1%)

$0

(0%)

Delaware $2

(Less than 1%)

$0

(0%)

$2

(Less than 1%)

$0

(0%)

Arkansas $1

(Less than 1%)

$0

(0%)

$3

(Less than 1%)

$0

(0%)

Mississippi $2

(Less than 1%)

$1

(1%)

$2

(Less than 1%)

Less than $1

(Less than 1%)

Nebraska $3

(Less than 1%)

$0

(0%)

Less than $1

(Less than 1%)

$0

(0%)

Kentucky Less than $1

(Less than 1%)

$0

(0%)

$2

(Less than 1%)

$0

(0%)

Wyoming $1

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$0

(0%)

Alaska Less than $1

(Less than 1%)

$0

(0%)

$1

(Less than 1%)

$0

(0%)

North Dakota $1

(Less than 1%)

$0

(0%)

$0

(0%)

$0

(0%)

South Dakota Less than $1

(Less than 1%)

$0

(0%)

Less than $1

(Less than 1%)

$0

(0%)

Total $1,371

(100%)

$82

(100%)

$1,922

(100%)

$136

(100%)

(Continued From Previous Page)

 (Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

State

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage
Appendix III

Detailed Information on SBIR Awards Made 

by DoD During Fiscal Years 2001 through 

2004

Page 67 GAO-06-565 Small Business Innovation Research

Table 30: Component Distribution of DoD Dollars Awarded, Overall and to Firms That Had Received Venture Capital Investment, 

Fiscal Years 2001-2002 Compared to Fiscal Years 2003-2004

Source: GAO analysis of DoD, Dow Jones, and IDI data.

Notes: 

(1) DoD’s dollar totals include SBIR dollars and additional non-SBIR funds from DoD awarding 

components. 

(2) Percentages and totals may not add because of rounding.

 (Dollars in millions)

Fiscal years 2001-2002 Fiscal years 2003-2004

Awarding component

Total dollars awarded – 

number and percentage

Dollars to firms that had 

received venture capital 

investment – number and 

percentage

Total dollars awarded 

– number and 

percentage

Dollars to firms that 

had received venture 

capital investment – 

number and percentage

Air Force $479

(35%)

$22

(27%)

$539

(28%)

$31

(22%)

Army $286

(21%)

$20

(24%)

$398

(21%)

$41

(30%)

Navy $267

(19%)

$12

(14%)

$352

(18%)

$21

(15%)

Missile Defense 

Agency

$144

(10%)

$12

(14%)

$339

(18%)

$20

(14%)

Defense Advanced 

Research Projects 

Agency

$95

(7%)

$10

(12%)

$140

(7%)

$14

(10%)

Office of Secretary of 

Defense

$54

(4%)

$3

(4%)

$109

(6%)

$5

(4%)

Chemical Biological 

Defense

$18

(1%)

$3

(4%)

$17

(1%)

$3

(2%)

Special Operations 

Command

$11

(1%)

Less than $1

(Less than 1%)

$24

(1%)

$1

(1%)

Defense Threat 

Reduction Agency

$15

(1%)

Less than $1

(Less than 1%)

$3

(Less than 1%)

$1

(Less than 1%)

National GeospatialIntelligence Agency$2

(Less than 1%)

Less than $1

(Less than 1%)

$1

(Less than 1%)

$1

(Less than 1%)

Total $1,371

(100%)

$82

(100%)

$1,922

(100%)

$136

(100%)
Page 68 GAO-06-565 Small Business Innovation Research

Appendix IV

Comments from the Department of Defense ApendxiIV
Page 69 GAO-06-565 Small Business Innovation Research

Appendix V

Comments from the Small Business 

Administration ApendxiV
Appendix V

Comments from the Small Business 

Administration

Page 70 GAO-06-565 Small Business Innovation Research
Page 71 GAO-06-565 Small Business Innovation Research

Appendix VI

GAO Contact and Staff Acknowledgments ApendxiVI

GAO Contact Anu K. Mittal (202) 512-3841

Staff 

Acknowledgments

In addition to the individual named above, Cheryl Williams (Assistant 

Director), Stephen Cleary, Curtis Groves, Annamarie Warman Lopata, 

Gregory Marchand, Marcus Oliver, Alison O’Neill, G. Gregory Peterson, and 

Anne Rhodes-Kline made key contributions to this report.

(360617)
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