GET SMART: GOVERNMENT GRANTS - HOW TO FIND

THEM, GET THEM AND ACCOUNT FOR THEM

Date: Thursday, June 11th, 2009Time: 6:00 - 7:30 PM Location: Accounting Management Solutions , Waltham, MA

George Andyns, Sr. Consultant, CPA - Accounting Management Solutions Kyle Meetze, Sr. Business Strategist – Partners/MGH; Res. Ventures & LicensingDawn Fitzgerald, Entrepreneur, Exec. Mgr., EngineerIan Carver, Director Business Development - Accounting Management Solutions

Our Aim

Provide background on SBIR and STTR grants and tools for you to go forward;

Help you to locate and apply for opportunities that will further your business goals;

Inform you of some of the accounting peculiarities with grants.

Overview of Govt. Grants Grants and Contracts Many types of grants

SBIR STTR Stimulus Multi-year grants

i.e. NIH R01

Grants vs. Contracts Contracts

Conform to Federal Acquisition Regulations (FAR) Competition In Contracts Act applies – no one-on-one

discussions after the solicitation is “open”. Traditionally are used when the Government is the

direct beneficiary of the effort Primarily DoD, NASA

Grants Conform to and guided by individual CFRs for each

agency CICA does not apply Traditionally are used where a third party benefits

from the effort. NIH, DOE, NSF

What is the SBIR/STTR Program

A “set-aside” funding program for all federal agencies with extramural research budgets in excess of $100 million. SBIR – 2.5% of extramural budget STTR – 0.3% of extramural budget

SBIR: Small Business Innovative Research Set-aside program for small business concerns to

engage in federal R&D -- with potential for commercialization.

STTR: Small Business Technology Transfer Set-aside program to facilitate cooperative R&D between

small business concerns and U.S. research institutions -- with potential for commercialization.

3 Phase SystemThree Phases Phase 1 – Proof of

Concept/Feasibility Typically $80 - $100k (NIH is the

exception) 6 months (12 months for STTR)

Phase 2 – Research and Development Up to $750k for SBIR and $500k for

STTR 2 years and requires successful

Phase 1

Phase 3 – Commercialization Your money

Eligibility1.A. Eligible Institutions

Only United States small business concerns (SBCs) are eligible to submit SBIR applications. A small business concern is one that, at the time of award of SBIR Phase I and Phase II, meets all of the following criteria:

1.  Is organized for profit, with a place of business located in the United States, which operates primarily within the United States or which makes a significant contribution to the United States economy through payment of taxes or use of American products, materials or labor;

2.  Is in the legal form of an individual proprietorship, partnership, limited liability company, corporation, joint venture, association, trust or cooperative, except that where the form is a joint venture, there can be no more than 49 percent participation by foreign business entities in the joint venture;

3.  Is at least 51 percent owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States, or it must be a for-profit business concern that is at least 51% owned and controlled by another for-profit business concern that is at least 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States, except in the case of a joint venture, where each entity to the venture must be 51 percent owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States; and;

4.  Has, including its affiliates, not more than 500 employees.SBCs must also meet the other regulatory requirements found in 13 C.F.R. Part 121. Business concerns, other than investment companies licensed, or

state development companies qualifying under the Small Business Investment Act of 1958, 15 U.S.C. 661, et seq., are affiliates of one another when either directly or indirectly, (a) one concern controls or has the power to control the other; or (b) a third-party/parties controls or has the power to control both.

Control can be exercised through common ownership, common management, and contractual relationships. The term "affiliates" is defined in greater detail in 13 C.F.R. 121.3-2(a). The term "number of employees" is defined in 13 C.F.R. 121.3-2(t).

Business concerns include, but are not limited to, any individual (sole proprietorship), partnership, corporation, joint venture, association, or cooperative. Further information may be obtained by contacting the Small Business Administration Office of Size Standards (http://sba.gov/size).

One of the circumstances that would lead to a finding that an organization is controlling or has the power to control another organization involves sharing common office space and/or employees and/or other facilities (e.g., laboratory space). Access to special facilities or equipment in another organization is permitted (as in cases where the awardee organization has entered into a subcontractual agreement with another organization for a specific, limited portion of the research project). However, research space occupied by an SBIR awardee organization must be space that is available to and under the control of the SBIR awardee for the conduct of its portion of the proposed project.

Title 13 CFR 121.3 also states that control or the power to control exists when “key employees of one concern organize a new concern ... and serve as its officers, directors, principal stockholders, and/or key employees, and one concern is furnishing or will furnish the other concern with subcontracts, financial or technical assistance, and/or other facilities, whether for a fee or otherwise.” Where there is indication of sharing of common employees, a determination will be made on a case-by-case basis of whether such sharing constitutes control or the power to control.

For purposes of the SBIR program, personnel obtained through a Professional Employer Organization or other similar personnel leasing company may be considered employees of the awardee. This is consistent with SBA’s size regulations, 13 CFR 121.106 – Small Business Size Regulations.

Note regarding affiliation arising under stock options, convertible securities, and agreements to merge: In determining size, SBA considers stock options, convertible securities, and agreements to merge (including agreements in principle) to have a present effect on the power to control a concern. SBA treats such options, convertible securities, and agreements as though the rights granted have been exercised. See http://edocket.access.gpo.gov/cfr_2005/janqtr/pdf/13cfr121.103.pdf.

All SBIR grant applications will be examined with the above eligibility considerations in mind. If it appears that an applicant organization does not meet the eligibility requirements, NIH will request a size determination by the SBA. If eligibility is unclear, NIH will not make an SBIR award until the SBA provides a determination.

Note: An applicant organization that has been determined previously by SBA to be “other than small” for a size standard of not more than 500 employees or for purposes of the SBIR/STTR program, must be recertified by the SBA prior to any future SBIR/STTR awards.

Eligibility

Organized for- profit U.S. business At least 51% U.S.-owned and

independently operated Small Business located in the U.S. P.I.’s primary employment with small

business during project 500 or fewer employees

Highlights

Eligibility is determined at time of award No appendices allowed in Phase I The PI is not required to have a Ph.D. The PI is required to have expertise to

oversee project scientifically and technically

Applications may be submitted to different agencies for similar work

Awards may not be accepted from different agencies for duplicative projects

Highlights SBIR Grants do not require a

partner or an academic collaborator Research Partnerships:

SBIR: Permits research institution partners [ ~ 33% Phase I and 50% Phase II R&D]

STTR: Requires research institution partners (e.g., universities) [ 40% small business and 30% research institution]

Principal Investigators SBIR: Primary (>50%) employment must be with

small business concern STTR: Primary employment not stipulated

Related SBIR Topics of Interest

Bayh-Dole Act Background by Stephen B. Rothman

March-in Rights by Stephen B. Rothman Preference for United States Manufactur

ing by Stephen B. Rothman

Which Govt. Dept. Participate? Dept. of Agriculture:

USDA SBIR Home Page Dept. of Commerce:

DOC-NOAA SBIR Page DOC-NIST Home Page

Dept. of Defense DOD SBIR Home Page Air Force SBIR/STTR Army SBIR/STTR DARPA SBIR Program Home Page DTIC-Defense Technical Information Ce

nter MDA SBIR Program Home Page DTRA-Defense Threat Reduction Agenc

y Navy SBIR/STTR NGA-National Geospatial Intelligence A

gency SOCOM-Special Operations Command

Dept. of Education: ED IES

ED OSERS / NIDDR Dept. of Energy:

DOE SBIR Home Page Department of Health & Human

Services NIH SBIR Home Page

Department of Homeland Security DHS S&T Directorate DHS DNDO

Dept. of Transportation: DOT SBIR Home Page

Environmental Protection Agency: EPA SBIR Home Page

National Aeronautics & Space Administration: NASA SBIR Home Page

National Science Foundation: NSF SBIR Home Page

Agency Differences

R&D Topic Areas Dollar Amount of Award (Phase I and II) Receipt Dates / Number and Timing of

Solicitations Proposal Review Process Proposal Success Rates Type of Award (Contract or Grant) Many other details:

Profit or fee allowed Phase I to Phase II gap funding Payment types and schedule

When to start looking and applying? Right now! Most 2009 deadlines have passed, but

they come at the same time every year. Some agencies solicit ideas before they put

out their RFPs

Differences: NIH Deadlines

SBIR and STTR

Submission Dates*

Phase I and Phase II

National Technical

Merit Review

Advisory Council/

Board Review

Estimated Award Date

April 5 June/July Sept/Oct November

August 5 Oct/Nov Jan/Feb March

December 5 Feb/March May/June July

* NIH, CDC and FDA now use the same three standard submission dates.CDC and FDA do not participate in the STTR program.

ORGANIZATIONS MUST REGISTER IN BOTH GRANTS.GOV and eRA COMMONS TO APPLY FOR MOST NIH GRANTS

Where to Start?

http://www.grants.gov

Additional Grants.gov info Tutorial on completing the online forms:http://www07.grants.gov/flash/AdobeReaderApplicationTutorial_skin.swf

While searching make note of: Funding Opportunity Number (FON) Catalog for Domestic Assistance (CFDA)

number

Planning the process. It is a long time horizon

Application deadline to funding is approximately 9 months.

If you have a business and/or project plan already, you should be able to respond within 1 month.

The information provided is not complicated, the process is.

Never, never, never, count on this money!

Where to go next? Dept. of Agriculture:

USDA SBIR Home Page Dept. of Commerce:

DOC-NOAA SBIR Page DOC-NIST Home Page

Dept. of Defense DOD SBIR Home Page Air Force SBIR/STTR Army SBIR/STTR DARPA SBIR Program Home Page DTIC-Defense Technical Information Ce

nter MDA SBIR Program Home Page DTRA-Defense Threat Reduction Agenc

y Navy SBIR/STTR NGA-National Geospatial Intelligence A

gency SOCOM-Special Operations Command

Dept. of Education: ED IES

ED OSERS / NIDDR Dept. of Energy:

DOE SBIR Home Page Department of Health & Human

Services NIH SBIR Home Page

Department of Homeland Security DHS S&T Directorate DHS DNDO

Dept. of Transportation: DOT SBIR Home Page

Environmental Protection Agency: EPA SBIR Home Page

National Aeronautics & Space Administration: NASA SBIR Home Page

National Science Foundation: NSF SBIR Home Page

Who to apply to?

It is not always obvious!

DOD funds healthcare and education USDA funds genetics NASA funds healthcare, materials,

electronics They all fund IT

The trick is to suit your idea to their need, or identify their need for your idea.

Who to apply to?

NIH is the only “Open Topic” agency

All others have guidelines for topic submissions This does require some legwork

You’ve found the right agency and opportunity, now what?

Call the program manager listed on the solicitation topic.

Don’t be afraid to let them know you are a rookie.

Tell them about your company before you tell them about your idea.

Treat them like an investor! Proposals are peer reviewed but they still

make the funding decisions