SBIR Proposal Writing Basics: Emphasizing
America
Gail
& Jim Greenwood,
Greenwood
Consulting Group, Inc.
Copyright © 2005 by
Greenwood
Consulting Group, Inc.
You
probably know that the Small Business Innovation Research (SBIR) and Small
Business Technology Transfer (STTR) programs are reserved for American
businesses. But do you know how
“American” is defined? Or how
“American” impacts where the SBIR/STTR work is done, where materials are
purchased and where Phase III products/services are sold?
If not, then read on…
SBIR/STTR
funding is reserved for American-owned businesses.
However, the definition is pretty lenient:
simply majority ownership in the company of 51% or more by
United
States
citizens and/or permanent resident aliens is all that is required.
This provides some flexibility for companies, say, that are owned by
three buddies, two of whom are U.S. citizens and one who is not—as long as the
two U.S. citizens own at least 51% of the company, their firm can compete for
SBIR/STTR awards.
So
that was simple: now how about that
second question about where the work has to be performed?
The restriction is tougher here: ALL
work on an SBIR/STTR Phase I or II project must be performed within the
United
States
.
There are only two exceptions here. First,
the definition of “
U.S.
”
has been broadened to include
Puerto
Rico
,
various territories in the Pacific, and even
Washington
DC
!
Second, read carefully the solicitation of the agency to which you are
applying for SBIR/STTR: some
indicate that exceptions to this “all work done
in the
U.S.
”
position will be considered, while others do not.
What
about the citizenship of folks working on your SBIR/STTR project?
Workers can have citizenship in whatever country they come from.
Again, there are several considerations here.
First, see the prior statement about all work must be done in the
U.S.
Therefore, it is okay to have a Russian scientist working on your
SBIR/STTR, but he/she must travel to the
U.S.
to perform the work (again read your agency’s solicitation carefully to see if
any exceptions will be considered). Second,
be practical: a proposal to develop
a low cost nuclear reactor that features foreign scientists from
North
Korea
or
Iran
probably won’t be given favorable consideration even if they agree to do the
research in the
U.S.
Third, you will still need to ensure that any foreign workers on your
SBIR/STTR project meet
U.S.
government employment restrictions, which have become stricter after September
11th.
As
you might expect, the SBIR/STTR programs emphasize “buy American” when it
comes to goods, materials, and equipment that you are purchasing for your
project. But the world isn’t so
black and white anymore: for
example, with Hondas built in
Alabama
and Fords built in
Canada
,
what really is an “American car?” Unless
quality, features, or other important considerations suggest the need to go with
a foreign-made product, then give preference to what is (or at least as best as
you can tell is) American made. You
may want to discuss this further with the agency to which you are submitting
your proposal to make sure they don’t have strong feelings about what is okay
or not.
So
we need to be an American company doing all the Phase I and II work in
America
using primarily American parts and equipment.
But what happens when it comes to selling the Phase III
products/services? Some companies
assume that, with all of this American emphasis, the sales need to be in the
U.S.
This is not correct. Barring
situations of national security or other sensitivity, you can sell
internationally. In fact, imagine
the great story you can weave into the commercialization plan of your SBIR/STTR
proposal: your product/service will
be sold abroad, and thus help balance that pesky
U.S.
trade deficit. If there is a chance
of a national security or similar issue arising, you may want to discuss foreign
sales limitations with the SBIR/STTR agency to which you are applying.
Only
one
America
vs. abroad issue remains: what about
manufacturing “off shore” in Phase III?
With the flow of
U.S.
jobs abroad in the manufacturing sector, this is a touchy subject.
Here’s our advice: be
thinking early on in your project whether manufacturing will be part of your
Phase III strategy. If so, then give
further thought whether you are likely in a situation in which manufacturing
abroad may be necessary for competitive reasons (such as when you are entering a
highly competitive market in which price is a major factor).
If so, continue to ponder whether there might be a compromise, such as
importing components that can be assembled by
U.S.
workers. Finally, given the
political sensitivity of the off shore issue, we recommend that you play down
this aspect of commercialization in your SBIR/STTR proposals—unless, of
course, you have found a way to create U.S. manufacturing jobs while competitors
are doing everything off shore, in which case you may want to tout your Made in
the U.S.A. advantage.