SBIR Proposal Writing Basics: Principal Investigator Math
Gail
& Jim Greenwood,
Copyright © 2009 by
“I
will be the Principal Investigator on our SBIR/STTR projects. As the PI, I have
to spend at least half time on each project. So how can I be the PI on more than
2 SBIR/STTR awards at once?”
We
hear that question quite frequently in our SBIR/STTR work.
There are several fallacies contained therein which makes the question
irrelevant or (at least) not as important as other things one should be asking
about using SBIR/STTR to further their company.
Let’s address some of those fallacies.
First,
there is an implicit assumption that the proposing company is going to win lots
of SBIR/STTR awards, and they will all occur at the same time.
With the odds of a Phase I award being about 1 in 6 (i.e., for every 6
Phase I SBIR proposals that are submitted, only one will be awarded),
there’s no certainty that a company that submits 2 or 3 or even 7
proposals will win more than one of them. And,
with the agencies having proposal deadlines (and therefore award dates) all over
the calendar, a company fortunate enough to win multiple SBIR/STTR projects
likely will not be working on them at the same exact time. So have an idea how
you would deal with this “problem,” (and the agency may want to know your
plan), but the chances are it will not occur.
Second,
the questioner seems to think that the PI could devote all of their time
on project work, and not spend any on the time required to build and run a small
business. You might be familiar with the government’s terminology of
“direct” versus “indirect” activities or costs: a direct cost is one
associated with work done for a client, while indirect is something you
generally incur because you are in business.
No one can spend 100% of their time doing direct work: everyone spends
some time doing general correspondence, marketing, proposal writing, filing, and
the other indirect activities common in a business.
“Oh, but I do that ‘after hours:’ I spend 8 hours a day doing
direct work, then do the indirect work afterwards.”
Well, the direct versus indirect determination is not made on the nominal
8 hours, but on the total sum of time you spend on your business.
Third
(and this is the most important of the fallacies in the question about being a
PI on more than two projects at one time), there is no requirement that a PI
spend at least 50% of his or her time on an SBIR/STTR project.
What is required of the PI is that he or she be “primarily employed”
by the award receiving small company during the conduct of the SBIR/STTR
project. That means that the PI
cannot work full time for any other employer.
Some agencies put greater restrictions on their definition of
“primarily employed,” so you need to do a careful reading of that part of
the agency’s solicitation or funding opportunity announcement: perhaps they
define it to mean that the PI cannot work more than ¾ or ½ time at another
employer. And notice that this
“primarily employed” criterion looks at the time spent by the PI at the
proposing company versus elsewhere, not at how many hours the PI puts into a
particular SBIR or STTR project.
Finally,
you should also look at that definition of the PI in the agency’s instructions
to see if they put any additional limitations on the PI.
The US Department of Energy, for example, requires a PI on a 9-month
Phase I SBIR award to devote at least 117 hours to the project (520 hours for a
Phase II). And some agencies require
that a PI on a Phase I STTR to spend at least 10% of their time on the project.
A
few final thoughts about the restrictions put on SBIR/STTR PIs: