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United States Department of Transportation United States Department of Transportation

SBIR FAQs

The Small Business Innovation Research (SBIR) Program is a highly competitive award system that provides qualified domestic small businesses with opportunities to pursue research on and develop innovative solutions to our nation’s transportation challenges. To learn more about the program, read our Overview page and visit SBIR.gov for more information.

Below are frequently asked questions regarding eligibility requirements, proposal submission steps, and additional resources for small businesses. Jump to a section below for more information.

General Questions

Q: What is the U.S. DOT SBIR program?

A: Small Business Innovation Research (SBIR) is a congressionally mandated program signed into law by the President on July 22, 1982, and reauthorized on December 23, 2016, as part of the National Defense Authorization Act for Fiscal Year 2017. Section 1834 contains the extension of SBIR and STTR programs through September 30, 2022. SBIR seeks to encourage the initiative of the private sector and to use small businesses as effectively as possible in meeting federal research and development objectives.

In the U.S. Department of Transportation (U.S. DOT), these initiatives are directed towards high-priority transportation research and development requirements of the operating administrations.

Q: What is the purpose of the U.S. DOT SBIR program?

A: The U.S. DOT SBIR program's purpose is to stimulate technological innovations in departmental programs utilizing, to the degree possible, the valuable resources and creative capabilities of the small business community in the United States.

Q: Which DOT agencies participate in SBIR projects?

A: Eight operating administrations within the U.S. DOT participate in SBIR projects:

More information about these agencies can be found here.

Q: How is the program funded?

A: Public Law 112-81, Section 5012 requires that a specific percentage of U.S. DOT’s extramural research and development (R&D) budget be allocated for SBIR. In fiscal year 2017 through 2022, each U.S. DOT operating administration contributed at least 3.2% of its extramural R&D budget to the program.

Q: I have an idea that doesn't match any topics in the U.S. DOT SBIR solicitation. What should I do?

A: All proposals must respond to a specific topic in an open solicitation in order to be considered for an award through U.S.DOT’s SBIR program. However there are other ways to do business with U.S.DOT and the Federal Government. Visit the U.S. DOT Small Business web page and beta.SAM.gov to search for contract opportunities which match your idea and/or your capabilities. Beta.SAM.gov is the primary location to learn about U.S. DOT contract opportunities. Information about additional federal government funding opportunities can be found on the Additional Resources page.

You can also suggest a topic for consideration. All submissions will be reviewed; however, not all topics will be included in future solicitations. If your topic is included in a future solicitation, then all qualified small businesses will have the opportunity to submit a proposal for that topic.

Q: What is the difference between an offer and a proposal?

A: According to Federal Acquisition Regulation (FAR), “offer” means a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. Responses to requests for proposals (negotiation) are offers called “proposals.” For the purpose of the U.S. DOT SBIR program, Phase I submissions are referred to as offers, while Phase II and IIB submissions are referred to as proposals.

Q: How can I learn more about the U.S. DOT SBIR program?

A: There are many ways to learn more about the SBIR program:

Q: How does the U.S. DOT’s SBIR program encourage innovation in manufacturing?

A: Every year the U.S DOT provides a report to the Small Business Administration on Encouraging Innovation in Manufacturing, as required by Executive Order 13329. For FY 2016 we reported the following activities:

FY 2016 Outreach: The U.S. DOT SBIR Program Office discussed manufacturing topics during briefings and one-on-one meetings conducted at the National and Regional SBIR conferences. The SBIR Program Office also informs prospective DOT awardees of the assistance available through NIST’s Manufacturing Extension Partnership (MEP) Program and the USA National Innovation Marketplace. On the USDOT’s SBIR website we have a section entitled “Manufacturing-Related R&D Emphasis in SBIR.”

FY2016 Award Selection: In FY 2016, DOT awarded a manufacturing-related SBIR Phase IIB contract to Solar Roadways for “Self-Sustaining, Intelligent Pavement Systems” which involves the design and manufacture of solar panels to be installed in place of traditional pavement.

FY2016 Tracking and Reporting of manufacturing-related SBIR awards: USDOT asks every offeror if their proposal is manufacturing related and also asks every topic author if their topic is manufacturing related. We track these responses in our online proposal system and our award tracking system.

Eligibility and Requirements

Q: What types of companies are eligible to submit proposals to U.S.DOT’s SBIR solicitations?

A: Only United States small businesses are eligible to participate in the SBIR program. Businesses must meet all of the following criteria at the time of Phase I and II awards:

  • Organized for profit, with a place of business located in the United States
  • 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 at least 51 percent owned and controlled by another for-profit business concern that 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
  • No more than 500 employees, including affiliates
  • The principal investigator must have primary employment with the small business
  • Registered on the SBA’s SBIR website with an SBC Control ID

Q: Are firms that are majority owned by venture capital operating companies (VCOCs), hedge funds, or private equity firms eligible to submit a Phase I offer?

A: The U.S. DOT elects at this time not to use the authority that would allow VCOCs, hedge funds, or private equity firms to participate in the SBIR Program. Proposals submitted by these parties will not be considered for award.

Q: Can the Principal Investigator be employed full time by an organization other than the small business submitting the proposal?

A: The principal investigator cannot have full-time employment outside of the small business contracted for the award. According to the solicitation, “The primary employment of the principal investigator must be with the small business firm at the time of contract award and during the conduct of the proposed research. Primary employment means that more than one-half of the principal investigator’s time is spent working for the small business. This precludes full-time employment with another organization.”

Q: Are firms that are headquartered outside of the U.S. but with offices in the U.S. eligible to participate?

A: It depends. In order to be eligible, a firm must be at least 51 percent owned and controlled by one or more individuals who are either citizens of the U.S. or permanent resident aliens in the U.S. All work must be conducted in the U.S.

Q: Can a subcontractor do work on a Phase I project?

A: Yes; however, according to the solicitation and the SBIR Policy Directive, at least 2/3 of the work, measured in total contract dollars, must be performed by the small business awarded the contract for a Phase I award.

Q: Do I need to register in the System for Award Management (SAM) on SAM.gov in order to submit a proposal for a U.S. DOT SBIR solicitation?

A: No. However, it is federally mandated that any business wishing to do business with the federal government under a Federal Acquisition Regulation (FAR)-based contract must be registered in SAM before being awarded a contract. The SAM website provides information on registering. You can register online by following the prompts if you already have a DUNS number. If you need a DUNS number, you can find instructions at http://fedgov.dnb.com/webform/displayHomePage.do.

Q: What is the Small Business Administrations (SBA) Company Database and how do I register?

A: SBA’s Company Database registration is meant for small businesses to register and gain access to the SBIR.gov system. Completed registrations will receive a unique Small Business Concern (SBC) Control ID to be used for proposal submissions to U.S. DOT and at any of the other 10 participating agencies in the SBIR programs. Each SBC applying to the program is required to complete its registration in the SBA's Company Registry prior to submitting its application.

If you have not already registered you can do so on the SBIR website. Registration requires at least a Data Universal Numbering System (DUNS) identification number or Tax Identification Number (TIN). Completed registrations will receive a unique SBC Control ID and PDF file to be submitted as the first page of the Technical Proposal.

Solicitation Instructions

Q: Can U.S. DOT provide a sample Phase I technical section?

A: We do not have a sample technical section. Please review section III of the Phase I solicitation: Offer Preparation Instructions and Requirements.

Q: U.S. DOT's Phase I Solicitations require a section entitled “Key Personnel and Bibliography of Directly Related Work.” Does the bibliography only refer to the work done by the key personnel? If so, is a bibliography allowed at the end of the offer to provide key resources used in the preparation of the offer? Would this count towards the page limit?

A: The bibliography should reflect work done by key personnel. Place the bibliography as heading number 5 of the technical section. Any bibliography of key resources used in the preparation of the offer can be added to the end of the technical section. Yes, these do count towards the page limit.

Q: Are letters of support allowed in a Phase I offer? Do they count towards the page limit?

A: Letters of support are allowed; however, they do count towards the page limit.

Q: Is there the opportunity to contact the technical sponsor of a topic directly to understand more about an individual topic's requirements?

A. U.S. DOT does not provide information on Technical Points of Contact for the topics in a solicitation. Your only contact with U.S. DOT relative to an open solicitation during the Phase I offer preparation and evaluation period is with DOT's SBIR Program Office. You must submit all technical and administrative questions relative to a specific solicitation via email to dotsbir@dot.gov.

Q: Is there a limit to the amount of money that can be budgeted for overhead in the Cost and Pricing section?

A: There is no maximum overhead rate as long as the percentage can be justified in accordance with the Federal Acquisition Regulation and DCAA policy. A narrative should be included in Appendix C justifying the factors that are used to compile the rate (See DCAA Manual 7641.90, Information for Contractors).

Q: What is a reasonable range for profit/fee for Phase I?

A: Recently, the rate of profit for successful Phase I offerors has averaged approximately 7%. Offerors may propose a higher or lower profit based upon the offeror's assessment of risk. Profit/fee, whether proposed higher or lower than the average, must be supported by narrative. The narrative needs to state which cost elements profit/fee was applied to and why it is reasonable.

Please note: for Phase II and IIB awards issued as a cost-plus-fixed-fee type award, the maximum fee is set by statute at 15 percent.

Q: Should my cost estimate include travel for a kick-off meeting with the COR?

A: No. Travel for a kick-off meeting is not anticipated for Phase I projects, so it should not be included in the cost estimate. Other travel, such as travel to a testing site, is allowable, however, unusual for Phase I projects. 

Q: How should I determine the indirect rates for use in Appendix C (Contract Pricing Worksheet)?

A: The indirect rate structure embedded in the formula under Schedule A in Appendix C is:

  1. Fringe benefits—allocated on labor;
  2. Overhead—allocated on direct labor and fringe benefits; and
  3. General and administrative expense (G&A)—allocated on total cost input (TCI).

These indirect rates and formulas represent typical calculations, however, please complete using your firm's standard business practices; you may edit the gray cells in the spreadsheet accordingly. Please include a narrative explanation of your proposed rates in the narrative section of Appendix C.

In addition, please consider the following guidelines and include this information as attachments to Appendix C when appropriate:

  • The rates should be based on a full accounting year.
  • If this is the company’s first year of doing business, the rate should be based on projected costs that include all of the company’s other work.
  • If the company has previously performed other Government contracts, please provide the last year’s historical indirect rates.
  • An Excel spreadsheet (saved as a PDF and attached to Appendix C) may be submitted to show the detailed indirect rate calculation.
  • Include what the base is for the indirect costs. (In other words, what the rate will be consistently applied to.)
  • All direct and indirect costs must comply with the Federal Acquisitions Regulation (FAR) 31.205. The offeror must ensure that that all unallowable costs as listed in the FAR are not included in any calculations.

    *Examples of Unallowable Costs are: advertising, alcohol, bad debts, charitable gifts/donations, entertainment, fines and penalties, interest, lobbying, federal taxes, and travel costs over government per diem rates. See FAR 31.205 for the complete list.

Q: What type of supporting documentation should I provide for the indirect rates I propose?

A: If you have an approved provisional indirect rate proposal from DCAA, include the approved rate documentation and use those rates in your cost proposal. If you have an approved accounting system from DCAA, include a copy of the audit. Even if DCAA has not reviewed your indirect rates recently, if your company has an approved accounting system, it will provide additional support to your proposed rates.

Please also provide:

  • Your provisional and any available actual indirect rate history for the last three years. This will provide support for the rates you submit in Appendix C.
  • Your company’s financial statement showing the direct and indirect costs and indirect rate calculations, if available.

If your company does not have approved indirect rates nor an approved accounting system, you must provide detailed costs showing your companies direct and indirect costs. Include the calculations showing how you came to the indirect rates you used in the cost proposal.

Q: What NAICS code do I need to use when registering in SAM?

A: Before an SBIR contract can be awarded, the small business concern shall complete an Online Representations and Certifications Application in SAM. Use the code noted in the solicitation (541715) when registering in SAM.

Q: Does the U.S. DOT SBIR Program Office offer Technical and Business Assistance as described in the SBIR Policy Directive?

A: Yes, the U.S. DOT SBIR Program Office began offering this service with Solicitation 15.1. The purpose of the Technical and Business Assistance, according to the SBIR Policy Directive, is to assist SBIR awardees in: (1) making better technical decisions on SBIR projects; (2) solving technical problems that arise during SBIR projects; (3) minimizing technical risks associated with SBIR projects; and (4) commercializing the SBIR products or processes. More information on TABA will be provided in Section II(C)(3) of the Solicitation.

Q: How do I request the funding for technical and business assistance?

A: Your request for Technical and Business Assistance (TABA) funding is based on how you choose to receive it. When submitting your proposal via U.S. DOT’s secure proposal submission site, there is a question which asks:

“If selected for an award, is your firm interested in participating in the U.S. DOT's Technical and Business Assistance (TABA) Program? The program provides assistance to Phase I awardees in the area of commercialization planning and strategy (see Section II (C)(3) of the Solicitation). Firms selected for award can choose to receive assistance from (1) U.S. DOT's pre approved vendor, or (2) their own proposed subcontractor (and provide additional documentation for verification as determined by U.S. DOT's Acquisitions Office).

  1. Yes - I am interested in the TABA Program and plan to use U.S. DOT's approved vendor
  2. Yes - I am interested in the TABA Program and plan to propose to use a vendor of my choosing and will submit documentation as requested by U.S. DOT if selected for award
  3. No - I am not interested in the TABA Program
  4. I am undecided at this time"

If an offeror chooses (A) and their offer is recommended for award, the prospective awardees will receive notification from the U.S. DOT SBIR Program Office on what services are available and how to obtain these services at no cost to the small business using the vendor provided by U.S. DOT’s SBIR program.

If an offeror chooses (B) and their offer is recommended for award, the U.S. DOT SBIR Program Office and Contracting Officer will work with the awardee to request a revised cost proposal (Appendix C) that accounts for this cost. In addition, the awardee must provide at that time an outline of the specific technical assistance services to be provided, and the detailed qualifications and experience of the proposed subcontractor/consultant being requested.

If the offeror chooses (C) and their offer is recommended for award, no assistance will be provided.

If the offeror chooses (D) and their offer is recommended for award, the U.S. DOT SBIR Program Office and Contracting Officer will contact the offeror with more information on the TABA Program and request a decision within five business days.

Q: Can an SBIR/STTR Phase III follow-on funding contract be made, without competition, to the firm that successfully completes Phases I and II?

A: Yes. The firm may be given a sole source contract for further work or production that derives from, extends, or completes earlier SBIR work. Such follow-on work must be given Phase III status by the agency.

Q: Is the use of foreign subcontractors allowed?

A: Subcontractors must also be in the United States. In very rare circumstances, a Government Contracting Officer (CO) may approve the use of a foreign subcontractor, but it would have to be well documented as to why the foreign subcontractor is the only one capable of meeting a requirement, and requires pre-approval in writing from the CO. The SBIR Policy Directive states, "The R/R&D work must be performed in the United States. However, based on a rare and unique circumstance, agencies may approve a particular portion of the R/R&D work to be performed or obtained in a country outside of the United States, for example, if a supply or material or other item or project requirement is not available in the United States. The funding agreement officer must approve each such specific condition in writing."

An offer would not be declined due to proposing a foreign subcontractor, however, it should be thoroughly explained within the offer as to why a foreign subcontractor is proposed. If the particular offer is chosen for award based on the evaluation, then further details and approval by the CO to utilize the foreign subcontractor will be worked out during the negotiation/award process.

Q: Is research involving the use of human subjects allowed?

A: Research that involves human subjects may be subject to additional regulations found in 49 C.F.R. Part 11 (Part 11) as well as other applicable federal and state laws and regulations. Research will be considered to involve human subjects under Part 11 if the research obtains (1) data through intervention or interaction with an individual(s), and/or (2) identifiable private information. Unless exempt under 49 C.F.R. §11.101(b) or §11.101(i), human subject research must adhere to the regulations of Part 11, which includes review and approval of the research by a federally approved Institutional Review Board (IRB). Due to the short timeframe associated with Phase I of the SBIR process, the DOT does not recommend the submission of Phase I offers that require the use of Human Subjects Testing. For example, the ability to obtain IRB approval for offers that involve human subjects can take 6-12 months, and that lengthy process can be at odds with the Phase I goal for time to award. Before the DOT makes any award that involves an IRB or similar approval requirement, the offeror must demonstrate compliance with relevant regulatory approval requirements that pertain to offers involving human protocols. It will not impact the DOT’s evaluation, but requiring IRB approval may delay the start time of the Phase I award and if approvals are not obtained within two months of notification of selection, the decision to award may be rescinded. 

Last updated: Wednesday, March 14, 2018