U.S. Army Small Business Innovation Research (SBIR) Program
Instructions for Submitting Phase II Proposals

1. INTRODUCTION
2. PROPOSAL SUBMISSION
3. PROPOSAL FORMAT (40 pages maximum)
1. Cover Pages
2. Results of the Phase I Work
3. Phase II Technical Objectives and Approach
4. Phase II Work Plan
5. Related Work
6. Relationship with Future Research or Research and Development
7. Commercialization Strategy
8. Key Personnel
9. Facilities/Equipment
10. Consultants
11. Cost Proposal
12. Commercialization Report
4. EVALUATION
5. CONTRACTUAL CONSIDERATIONS
1. Awards
2. Reports
3. Payment Schedule
4. Markings of Proprietary or Classified Proposal Information
5. Copyrights, Patents and Technical Data Rights
6. Joint Ventures or Limited Partnerships
7. Contractor Commitments
6. REPORTING OF PHASE III COMMERCIALIZATION EFFORTS

1. INTRODUCTION

Phase II Proposal Submission is by Army Invitation only.  Small businesses are invited in writing by the Army to submit a Phase II proposal from Phase I projects based upon Phase I progress to date and the continued relevance of the project to future Army requirements.  The Army exercises discretion on whether Phase I award recipient is invited to propose for Phase II.  Invitations are generally issued three to five months after the Phase I contract award, with the Phase II proposals generally due one month later.  In accordance with SBA policy, the Army reserves the right to negotiate mutually acceptable Phase II proposal submission dates with individual Phase I awardees, accomplish proposal reviews expeditiously, and proceed with Phase II awards.

The maximum dollar amount for an Army Phase II proposal is $730,000, regardless of whether or not the small company received a Phase I Option.

DoD maintains a database containing all DoD SBIR and STTR abstracts and award data (http://www.acq.osd.mil/sadbu/sbir/). This link provides information that may assist small companies in preparing a Phase II proposal.

FAST TRACK - (see http://www.dodsbir.net/ft-ph2/default.html#ftoverview) Small businesses that participate in the Fast Track program do not require an invitation, but must submit an application within 150 days after the effective date of their SBIR Phase I contract, and Phase II proposal within 180 days after the effective date of their Phase I contract.

Commercialization Pilot Program (CPP) CPP introduction (http://www.armysbir.com/sbir/cpp_desc.htm)

2. PROPOSAL SUBMISSION

Small businesses invited to submit a Phase II Proposal will use the DoD SBIR electronic proposal submission system (http://www.dodsbir.net/submission/). This site contains step-by-step instructions for the preparation and submission of the Proposal Cover Sheet, the Company Commercialization Report, the Cost Proposal, and how to upload the Technical Proposal. For general inquiries or problems with proposal electronic submission, contact the DoD Help Desk at 1-866-724-7457 (8am to 5pm EST). 

The following event schedule outlines the Phase II proposal process. Contract award dates are subject to successful negotiations and the funding availability. Phase II Proposals must be submitted NLT 30 days after invitation from the Army.

3. PROPOSAL FORMAT (40 pages maximum)

The maximum proposal length, including all attachments (i.e. letters of endorsement), is 40 single-sided pages numbered consecutively. All documentation should use no smaller than 10 point font on standard 8.5" X 11" paper with one-inch margins. Note that the Cost Proposal and Company Commercialization Report are not counted in the 40 page limit.

1. Cover Pages. Complete the proposal cover sheet online. Include a brief description of the problem or opportunity, objectives, description of the effort and anticipated results. Summarize expected benefits and applications of the proposed research to the Government or the private sector in the space provided. The Project Summary of successful proposals will be submitted for publication with unlimited distribution.  Therefore, the summary should not contain classified or proprietary information.
2. Results of the Phase I Work. Discuss the objectives of the Phase I effort, the type of research conducted, findings or results of the research, and technical feasibility. In accordance with solicitation guidelines, if the Phase I effort is not complete at time of Phase II submission, the small business may use the Phase I progress report language reported in the Phase II proposal verbatim for purposes of the Phase I final report. Changes to accommodate results and modifications required to integrate the final report into a self-contained, comprehensive, and logically structured document after Phase II proposal submission is allowed.
3. Phase II Technical Objectives and Approach. List the specific technical objectives of the Phase II research and describe the technical approach to be used in meeting these objectives. Methods designed to achieve each objective should be discussed in detail.
4. Phase II Work Plan. Provide an explicit, detailed description of the Phase II approach. Indicate what is planned, how and where the work will be carried out, a schedule of major events, and the final product to be delivered. A Phase II effort should attempt to accomplish the technical feasibility demonstrated in Phase I, including any potential transition of results to the Government or private sector. This section contains a substantial portion of the total proposal and must clearly show advancement in the research, or research and development, appropriate for Phase II. The proposing small business must perform a minimum of 50% of the research or research and development effort. The primary employment of the Principal Investigator must be with the small business at the time of award and during the conduct of the proposed effort. The research or research and development must be performed by the small business in the United States. Deviations from these requirements must be approved in writing by the Contracting Officer during contract negotiations.
5. Related Work. Describe significant activities directly related to the proposed effort, including any activities conducted by the Principal Investigator, the small business, consultants, or others. Report how these activities interface with the proposed project and discuss any planned coordination with outside sources. The proposal must convey to evaluators state of the art awareness in the specific approach proposed by the small business.
6. Relationship with Future Research or Research and Development. State the anticipated results of the proposed approach if the project is successful. Discuss the significance of the Phase II effort in providing a foundation for a Phase III research or research and development effort.
7. Technology Transition and Commercialization Strategy. Phase II Proposals must describe the "vision" or "end-state" of the research and the most likely strategy or path for transition of the SBIR from research to an operational capability that satisfies one or more Army operational or technical requirements in a new or existing system, larger research program, or as a stand-alone product or service.  Also describe the strategy for converting the results of the proposed SBIR Phase II research into a product or non-R&D service with widespread commercial use -- including private sector. The commercialization strategy must address the following questions:

1. What is the first product that this technology will go into?

2. Who will be your customers, and what is your estimate of the market size?

3. How much money will you need to bring the technology to market, and how will you raise that money?

4. Does your company contain marketing expertise and, if not, how do you intend to bring that expertise into the company?

5. Who are your competitors, and what is your price and/or quality advantage over your competitors?

The commercialization strategy must also include a schedule showing the quantitative commercialization results from the Phase II project that your company expects to report in its Company Commercialization Report Updates one year after the start of Phase II, at the completion of Phase II, and after the completion of Phase II (i.e., amount of additional investment, sales revenue, etc. - see section 5.4 at the front of the DoD SBIR Program Solicitation). Note that the technology transition and commercialization strategy is separate from the Commercialization Report described below in Section 6. The strategy addresses how you propose to transition and/or commercialize this research, while the report addresses success in commercializing the results of past Phase II awards.

8. Key Personnel. Identify key personnel who will be involved in the Phase II effort, include education and experience directly related to the effort, and list any relevant publications. Identify the Principal Investigator and include a concise résumé.
9. Facilities/Equipment. Describe available instrumentation and physical facilities necessary to carry out the Phase II effort. Justify items of equipment detailed in the cost proposal to be purchased, including Government Furnished Equipment (GFE). All requirements for government furnished equipment or other assets, as well as associated costs, must be determined and agreed to during Phase II contract negotiations. State whether or not the facilities where the proposed work will be performed meet federal, state (name) and local environmental laws and regulations including, but not limited to: airborne emissions, waterborne effluents, external radiation levels, outdoor noise, solid and bulk waste disposal practices, and handling and storage of toxic and hazardous materials.
10. Consultants. Describe in detail and identify in the cost proposal involvement of university, academic institution, or other consultants in the project. As stated previously, a minimum of one half of the research or research and development effort must be performed by the small business firm proposing the Phase II work.
11. Cost Proposal ($730,000 maximum). A detailed, firm fixed price or cost plus fixed fee Phase II proposal must be submitted online and in the proper format shown in the Cost Breakdown Guidance in Section 3.5.c of the DoD SBIR Solicitation. There is no need to provide information for items that do not apply to the proposed project, however, enough information must be provided to allow the Army evaluators to assess how the small business plans to use the requested funds if the contract is awarded. Phase II proposals should reflect cost data based upon a contract award date six months after submission of the Phase II proposal. Phase II contracts are awarded for a two year development and prototype production. Indicate funding requirements for "Year 1" and "Year 2" in the cost proposal.

12. Commercialization Report. The DoD requires all Small Businesses to submit a Company Commercialization Report online for all Phase II proposals. This information does not count against the 40-page limit. This report contains the name of the awarding agency, date of award, contract number, topic or subtopic title, and award amount for each SBIR Phase II project performed by the small business. Note that the Commercialization Report is separate from the commercialization strategy described above in Section 3.g above. The report addresses success in commercializing the results of past Phase II awards, while the strategy addresses how you propose to commercialize this research. Failure to submit this report may result in the proposal being substantially delayed. Complete and accurate reporting of Phase III performance data by all participating companies is critical to the future of the SBIR program.

4. EVALUATION

The Phase II proposal will be reviewed for overall merit based upon the criteria which are listed below in descending order of importance, with (b) and (c) having equal weight.

(a)   The soundness, technical merit, and innovation of the proposed approach and its incremental progress toward topic or subtopic solution.

(b)   The qualifications of the proposed principal/key investigators, supporting staff, and consultants.  Qualifications include not only the ability to perform the research and development but also the ability to commercialize the results.

(c)   The potential for commercial (Government or private sector) application and the benefits expected to accrue from this commercialization

Firms with a Commercialization Achievement Index (CAI) at the 20th percentile or below may receive no more than half of the evaluation points available for the commercial potential criteria.  CAI is fully explained in the DoD SBIR Solicitation.

Other factors that may be considered during the selection process are: a commitment for Phase III follow-on funding, the possible duplication with other research or research and development, program balance, budget limitations, and the potential of a successful Phase II effort leading to a product of continuing interest to DoD.

5. CONTRACTUAL CONSIDERATIONS

1. Awards.The number of Phase II awards made will depend upon the quality of the Phase I efforts, the quality of the Phase II proposals, and the availability of funds. Each Phase II proposal selected for award will be funded under a negotiated contract signed by both parties before work begins. At the Contracting Officer's discretion, Phase II projects may be evaluated after the base year prior to extending funding for the second year.
2. Reports.

(1)  Incrementally funded Phase II projects may require an interim written report 30 days prior to the conclusion of the first incrementally-funded period (at the discretion of the awarding agency). The balance of the interim report should discuss, in detail, the project objectives, work carried out, and results obtained, thus far. Copies of a final report on the Phase II work must be submitted to the sponsoring organization in accordance with the negotiated delivery schedule. The final report shall include a single page Project Summary as the first page identifying the purpose of the work, a brief description of the work carried out, the findings or results, and potential applications of the effort. The summary may be published by DoD, therefore, must not contain proprietary or classified information. The balance of the report should indicate, in detail, the project objectives, work carried out, and results obtained.

(2)  Additionally, all Phase II award winners must submit a Phase II Non-Proprietary Summary Report at the end of their Phase II project. The summary report is an unclassified, non-sensitive, and non-proprietary summation of Phase II results that is intended for public viewing on the Army SBIR / STTR Small Business website. This summary report is in addition to the required Final Technical Report.  The Non-Proprietary Summary Report should not exceed 700 words, and must include the technology description and anticipated applications / benefits for government and or private sector use. It should require minimal work from the contractor because most of this information is required in the final technical report. The summary report shall be submitted in accordance with the format and instructions posted within the Army SBIR Small Business Portal at http://www.armysbir.com/.

3. Payment Schedule. Per DoD SBIR Program Solicitation.
4. Markings of Proprietary or Classified Proposal Information. Per DoD SBIR Program Solicitation.  The Army does not accept classified proposals.
5. Copyrights, Patents and Technical Data Rights. Per DoD SBIR Program Solicitation.
6. Joint Ventures or Limited Partnerships. Per DoD SBIR Program Solicitation.
7. Contractor Commitments. The information in the DoD SBIR Program Solicitation is applicable to the types of provisions that may be included in a Phase II contract.

6. REPORTING OF PHASE III COMMERCIALIZATION EFFORTS

The objective of every SBIR project is to develop a technology, product, or service that generates follow-on, non-SBIR revenues for the small business. These revenues could come from government or private sector sources, and could represent additional developmental funding in addition to product sales. The Army tracks the outcomes of all SBIR efforts to monitor and report Phase III progress. In addition, Phase III commercialization is monitored by Congress, the General Accounting Office, and the Department of Defense to determine the impact and effectiveness of the SBIR program in meeting its objectives of assisting participating small businesses. In particular, Congress weighs Phase III performance during its periodic reauthorization of the federal SBIR program. Complete and accurate reporting of Phase III performance data by all participating companies is critical to the future of the SBIR program.

Small businesses that receive a Phase II award are required to report all Phase III activities on their Company Commercialization Report at http://www.dodsbir.net/submission/SignIn.asp and through the Army SBIR Small Business Portal website at http://www.armysbir.com. These updates on the project will be required one year after the start of Phase II, at the completion of Phase II, and subsequently when the contractor submits a new SBIR or STTR proposal to DoD.  Firms that do not submit a new proposal to DoD will be asked to provide updates on an annual basis after the completion of Phase II.

Reportable activities include: sales revenue from new products and non-R&D services resulting from the Phase I-II project; additional investment from sources other than the federal SBIR program in activities that further the development and/or the commercialization of the Phase II technology; the portion of additional investment representing clear and verifiable investment in the future commercialization of the technology (i.e. "hard investment"); whether the Phase II technology has been used in a fielded DoD system or acquisition program and, if so, which system or program; the number of patents resulting from the contractor's participation in the SBIR/STTR program; growth in number of firm employees, and; whether the firm completed an initial public offering (IPO) of stock resulting in part from the Phase II project.

Specific questions pertaining to the Army SBIR program should be submitted to:

John Pucci
Acting Program Manager, Army SBIR
army.sbir@us.army.mil

US Army Research, Development, and Engineering Command (RDECOM) 
ATTN: AMSRD-SS-SBIR
6000 6th Street, Suite 100
Fort Belvoir, VA 22060-5608
TEL: (703) 806-2085
FAX: (703) 806-0675