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7/6/2017 1 Developing the Business of Technology Copyright © BBC Entrepreneurial Training & Consulting, LLC DEVELOPING THE BUSINESS OF TECHNOLOGY Proposal & Budget Prep June 2017 Presenter: Becky Aistrup Managing Partner 734.930.9741 [email protected] BBCetc.com / @BBC_etc DOD SBIR/STTR

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7/6/2017

1

Developing the Business of Technology

Copyright © BBC Entrepreneurial Training & Consulting, LLC

DEVELOPING THE BUSINESS OF TECHNOLOGY

Proposal & Budget Prep

June 2017

Presenter:Becky AistrupManaging [email protected] / @BBC_etc

DOD SBIR/STTR

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2

Outline

Review of Grant vs. Contract Agencies

DoD Program Overview

Contacting the TPOC (Technical Point of Contact)

Preparing the Proposal

Budget Development

DoD Review Process

Grants vs. Contracts….

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Agency Differences -- Grants vs. Contracts

Grants – Investigator Initiated TopicsHHS (95% $$), NSF, USDA, DOE, ED

Some agencies might have topic areas (aka “buckets”)

Open communications

External peer review

Contracts – Agency-specified topicsDoD, NASA, DHS, EPA, DOT, DOC, ED, HHS (5% $$)

Must respond to a topic

Limited time to prepare ( 8-12 weeks)

Limited communications during open solicitation

Internal review

Agency Differences

Receipt dates, number & timing of solicitations

Type of award (grant or contract)

Proposal review process

R&D topic areas

$ of award (both Phase I and II’s)

Proposal success rates

Profit or fee allowed

Gap funding provided (competing continuation grants)

Payment types & schedules

6

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DoD SBIR BAA** Proposal Prep

7 **Solicitations are now called BAAs by DoD beginning with 2016.3

Registrations Required

Registration Type Agency

NIHDoD

NSF NASA DoE

USDA DoT EPA

DoC DoEd DHS

EIN X X X X X X X X X X XDUNS X X X X X X X X X X XSBIR.gov (company registration)* X X X X X X X X X X XSAM (System of Award Management) X X** X X X X X X X X XGrants.gov X X X XeCommons XFastLane Xsbir.defensebusiness.org XPAMS (DOE Office of Science Portfolio Analysis & Mgmt System) XASAP XFedConnect XEHB (Electronic Handbook) X

*SAM registration is not required to complete SBIR.gov registration**DoD does not require SAM registration until time of award but encourages it before submission

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DoD’s SBIR/STTR focus

Primary focus on the warfighter

Some additional service requirements

Topics across many technologies & products

Topics and rules are Component-Specific

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DoD’s 7 S&T Cross-cutting priorities

Autonomy

Counter Weapons of Mass Destruction

Cyber Science & Technology

Data-to-Decisions

Electronic Warfare and Protection

Human Systems

Engineered Resilient Systems

11

DoD Solicitation Topics

Only proposals submitted in response to topics in solicitation accepted!

DoD scientists and engineers author solicitation topics

Awarding Component

Component-specific instructions

Unique topics

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DoD Three-Phase Program

Phase I awardsTotal $100,000 - $150,000

$80-150K Base + (if applicable) $50-70K OptionTotal 6 to 18 months

6-7 mo. Base + (if applicable) 4-6 mo. OptionPhase I Option (not used by all components)

May be exercised to fund interim Phase I activities while a Phase II contract is being negotiatedOnly Phase I efforts selected for Phase II awards are eligible to have the Phase I Option exercisedTechnical proposal, Cost proposal & Timeline must separate the Base and Option periodsIt is VITAL to demonstrate feasibility within the Base period

Each component has unique guidelines and rules

13

DoD Three-Phase Program

Phase II awards

Awarded on the basis of

results of Phase I

scientific, technical, and commercial merit of Phase II proposal

Typically $1,000,000

Generally ~ 24 months (subject to negotiation)

Expected to produce well-defined deliverable prototype

No more Direct to Phase II

Each component has unique guidelines and rules

14

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DoD Three-Phase Program

Phase II continuation funding is to encourage transition of SBIR research into DoD acquisition programs Phase II Enhancement/Phase II Plus

SBIR/STTR matching investment funds the company obtains from non-SBIR/non-STTR sources such as DoDacquisition programs or private sectorCan extend Phase II contract up to 1 yr. and match up to $500K of non-SBIR/non-STTR fundsFastTrack no longer available after 2013.1/2013.A

Sequential Phase IIPhase II contractor may receive up to one additional, sequential Phase II award for continued work on the project, up to $500K

TALK TO YOUR TPOC DURING Phase II

15

DoD Three-Phase Program (cont’d)

Commercialization phase

“Derives from, extends or logically concludes efforts performed under” prior SBIR/STTR funding agreements from any agency

Must be funded by sources outside of SBIR/STTR (private sector and/or non-SBIR Government)

Develop prototype into viable product/service for sale in military and/or private sector markets

Within DoD, often initial customer is prime contractor for a major weapon system or program of record”, not DoD directly

Phase III

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13 DoD Components Participate

Air ForceNavyArmyMissile Defense Agency (MDA)DARPADefense Microelectronics Activity (DMEA)Defense Health Program (DHP)Office of the Secretary of Defense (OSD)Chemical & Biological Defense (CBD)Special Operations Command (SOCOM)Defense Threat Reduction Agency (DTRA)Defense Logistics Agency (DLA)National Geospatial Intelligence Agency (NGA)

17

DoD SBIR/STTR by Component

18

DoD Budgets FY14

SBIR $925 M

STTR $123 M

Total $1,048 M

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DoD SBIR/STTR by the Numbers (2015)

A selection of training videos and related pdf’s are posted on the DoD website. https://sbir.defensebusiness.org/training

FAQs have been updated to include sections for Fraud, Waste and Abuse, Phase II Enhancements, and About the Program of Record Commercialization Reporting System (PCRS). https://sbir.defensebusiness.org/faqs

Note that Direct to Phase II Pilot is discontinued after the 2017.1 solicitation

New additions to DoD SBIR website

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DoD 2017/18 SBIR/STTR Solicitation Schedules*

You may communicate directly with the TPOC (Technical Point of Contact) ONLY between Presolicitation & Solicitation Open dates. After that, questions must be posted to DoD’s SBIR/STTR Interactive Topic Information System (SITIS). sbir.defensebusiness.org/topics

Program--SBIR & STTR

Topics/Presolicitation

Solicitation Open Solicitation Close

2017.3 & 2017.C Aug. 25, 2017 Sept. 26, 2017 Oct. 25, 2017

2018.1 & 2018.A Nov. 29, 2017 Jan. 8, 2018 Feb. 7, 2018

2018.2 & 2018.B Apr. 20, 2018 May 22, 2018 June 20, 2018

2018.3 & 2018.C Aug. 24, 2018 Sept. 24, 2018 Oct. 24, 2018

*Dates subject to change

Overall DoDSBIR Instructions

Component Specific Topics & Instructions

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Overall DoD STTR Instructions

Component Specific Topics & Instructions

Responsible for monitoring the technical performance of a contract

Often the author of the topics that appear in solicitations; Topic Author is synonymous with TPOC

Can be an excellent champion for the small business and can answer technical questions during the “open” period

TPOC

Technical Point of Contact

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Each DOD SBIR/STTR topic contains:

Topic Number

Title

Research & Technical Area

Topic Author (TPOC)

Acquisition Program

Special Considerations

ITAR Restrictions

Objective

Description

Phase I Requirements

Phase II Requirements

Phase III / Dual Use Military and Commercial Applications

References

Keywords

DoD SBIR 14.2 Solicitation Topic Example

Contact

None listed for this topic

Special considerations

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Topic Example: SB142-003

Look for key concepts and

words to include in your proposal

Topic Example: SB142-003

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DoD Homework

Look for topics

Look for background from past solicitations and awards

Understand the component(s) of interest

Prepare for your conversation with the TPOC in the open period

Keep track of questions and revisions posted at SITIS

Influencing future topics

sbir.defensebusiness.org/awards

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sbir.defensebusiness.org/selections

Identify TPOC

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Talking to the TPOC in the “open” period

Understand the DoD and component needs stated in the solicitation

Do your research before you callDevelop a quad chart or white paper to summarize how your technology addresses the needEmail the TPOC and request a phone discussion

Attach the brief you’ve preparedQuestions to ask

Any clarifying technical questionsIs our approach to your problem responsive to the topic solicitation?Is there an identified acquisition program?

If not, how do you see this project transitioning to Phase III?

Topic: Blast Distribution Modeling for Buildings & Confined Spaces, N151-047PI: Jane DoeCompany: Acme Inc.

Technical Approach

Project Objectives and Scope:• Phase I: Develop model that provides

estimates for size and mass (± 0.1 m accuracy) in operational environment

• Phase II: Refine model to include velocity and distribution (± x% accuracy) & to operate on Navy’s proprietary XYZ platform

Major Activities/Milestones:• Month 4: accuracy demonstration• Month 6: software prototype proven to TRL

4

Deliverables:• Technical report on debris data sources• Software model for rapid distribution• Phase II: User manuals & handheld platform

software

Contribution to the Requirement

Description of technology:• Empirical model that will predict size, mass,

velocity & distribution of debris produced inside of buildings by IEDs

• Considers windows, walls, utility systems, office equipment and furnishings as sources

• Uses charge weight, location, building characteristics & equipment as input data

Need and Value to DoD Requirement:• Compiles database of blast debris

generated from actual events and field tests• User friendly Windows version of model will

add credibility to force protection vulnerability assessments

• Shows detailed benefits of facilities upgrades

Cost and Schedule

Estimated PhI Cost: $149,997

TRL: Current = 2 End of Ph I = 4

Company/Team Capabilities

• 5 years prior work with Prime Contractor X on distribution blast system design

• X, Y and Z testing capabilities in-house; specialized testing on mass distribution with subcontractors Naval Research Lab & University of Knowledge

• PI offers specific expertise in A and B system development for a battlefield environment

POINT OF CONTACT: Jane Doe ACME Inc., Boston, MA USADate: 08/12/2015 Phone: xxx-xxx-xxxx Email: [email protected]

www.acme.com

ACME

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Defense Technology Quad Chart

35

Keep Track of Your Topic on SITIS

https://sbir.defensebusiness.org/sitis

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Keep Track of Your Topic on SITIS

DoD – Influencing Topics

Search past solicitation topics

www.zynsys.com

Locate topics in your space

Call the topic author

Discuss your idea

Gauge DoD interest

Ask if accepting topic suggestions

Some awarding components have web links to submit ideas online

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Proposal Preparation

Follow DoD’s Rules!

1. Follow the rules in the DoD SBIR solicitation2. Follow specific instructions of DoD Awarding

Component (Navy, Air Force, etc.) to which you are applying

Instructions found in Solicitation Topics of each Award ComponentEach Award Component has unique rules/guidelines!

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The Entire Package - DoD

Volume 1: Cover SheetVolume 2: Technical Proposal

Sections 1 – 11Volume 3: Cost VolumeVolume 4: Company Commercialization Report

Completed onlineRequired of all proposers

Volume 2: Technical Volume Outline

1. Identification and Significance of the Problem or Opportunity 2. Phase I Technical Objectives 3. Phase I Statement of Work (including Subcontractors’ Efforts)4. Related Work 5. Relationship with Future Research or R&D 6. Commercialization Strategy 7. Key Personnel 8. Foreign Citizens9. Facilities/Equipment 10. Subcontractors/Consultants 11. Prior, Current, or Pending Support of Similar Proposals or

Awards

20 Pages maximum, to include:

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1. Identification/Significance

1-2 Pages

Statement of the problem (as they describe it)

Proposed Innovation (brief)

Current State-of-the-Art and why it’s deficient

What it the technical challenge?

What barriers exist to a solution?

Describe Your Innovation: What will you do to meet this challenge that has not been done before?

What difference will your efforts make?

What will the products of your efforts be?

1. Identification/Significance--OUTLINE

Statement of the problem

Technical challenge and barriers to solution

What you will do that has not been done before

What aspect of the problem are you addressing?

Why is your approach unique?

Why is it better than prior efforts?

How does it build on the state of the art?

What is your technological innovation?

Significance

What will your technology enable that is not present now?

What are the end products/services and why are they important to the DoD Component? To other government agencies? To the commercial market?

What are the social and economic impacts and benefits?

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Objectives vs. Activities

Objectives

Either achieved or not

Do not yield results/data

Have measurable, desired end points

Tasks = Activities of the Work Plan

Steps to achieve your objectives

Make up your work plan

They are performed or carried out

Yield results &/or data

2. Technical Objectives

REMEMBER, it’s all about themTheir objectives are your objectives

Objectives should be bounded by resources company can bring

StaffFacilities

Presentation:Begin by specifying objectives most clearly related to the solicitation topic and agency concerns. Proceed to objectives relating to "spin-off" benefits.

Must be secondary to topic related objectives. Keep objectives short, to-the-point & quantifiable

Pointers

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2. Technical Objectives--OUTLINE

List & explain the key objectives to be accomplished in Phase I

Objective 1…… Measurable criteria for acceptance

Objective 2…..(repeat for all Objectives) Measurable criteria for acceptance

How this leads to Phase IICommercial implications of achieving Objectives

Focus on the DoD problem

3. Phase I Statement of Work

~6-8 Pages

Describe exactly what work you and your subcontractors will conduct in order to accomplish your objectives and demonstrate feasibility

If you win, you will have to deliver what you state in your work plan

Don’t over-promise – You won’t be able to deliver on budget and on time

Don’t under-promise - Unchallenging plans are not competitive

Detailed Approach to the Problem

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3. Phase I Statement of Work--OUTLINE

For each objective:

<Objective Restated>

i. Rationale

ii. Experimental Design and Methods

iii. Data Analysis and Interpretation

iv. Potential Pitfalls/Alternative Approaches

v. Expected Outcomes

3. Phase I Statement of Work

Ensure Work Plan proceeds chronologically Include each task to be completed, how long it should take to complete the task, who is responsible, where work will be done and completion dateHighlight any decision- points or targets which might exist along the wayIndicate which targets are key starting points for Phase I Option work (if applicable) and Phase II work

Project Scheduling (Gantt) Charts

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Gantt Chart—Include Base & Option if neededTechnicalObjectives

Month

1 2 3 4 5 6 7 8 9 10

Technical Objective 1

PI/Chief Scientist, Ph.D.Chemist, M.S.

NewCo. Labs

Technical Objective 2

PI Chief Scientist, Ph.D.NewCo. Labs

Technical Objective 3

Engineer, M.S. MidWest University

Technical Objective 4

Scientist, Ph.D.Research Co.

2

BASE Period OPTION Period

4. Related Work

~1-2 PagesDescribe significant activities directly related to the proposed effortInclude discussion of relevant related R&D or publications by your firm, key project staff, consultants and subcontractorsEstablish your awareness of state-of-the-art in scientific/technical fields directly relevant to solicitation topic and specific approach. Literature references to support pointsBe certain to look at ALL references provided in the topic description

Awareness Enhances Credibility

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4. Related Work--OUTLINE

For key work conducted by team members:Short description and how relevantClient for whom work was doneCompletion dateReferences if relevant

Describe others’ work in the field and how your proposed work advances the state-of-the-art

Must include references

5. Relationship with Future R&D

DoD likes to fund work with a future!

Synthesize material presented earlier in the proposal.

Begin by summarizing expected outcomes.

Indicate how each anticipated result will facilitate your ability to conduct Phase II and III R&D

Identify any clearances, certifications, approvals needed to do Phase II or III and outline plan for completion

Research or Research and Development

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6. Commercialization Strategy

~1 page for Phase I

Strategy for commercializing this technology in DoD, other Federal Agencies, and/or private sector markets

Market need

Size of the market

Schedule showing the quantitative commercialization results from this SBIR project

amount of additional investment

sales revenue

NOT the same as Company Commercialization Report (Volume 4)!

6. Commercialization Strategy--OUTLINE

Product & Competition

First product/service

Value proposition enabled by your innovation

Main competition and why your solution is better

Market Opportunity

Anticipated target markets or market segments

Component, DoD, Government, Private sector

Estimated market sizes (include citations)

Business model/commercialization strategy to reach markets

Financing & Revenue Model

REQUIRED: Schedule of quantitative commercialization results

How you will finance your innovation to reach Phase III?

Phase I (~1 page)

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7. Key Personnel

PI must have good R&D experience and technical expertise in the area of the project

Related work experience should indicate that the PI has successfully managed similar projects

Emphasize existence of a complete R&D project team

Company is important to DoD since they expect to acquire resulting technology

Management Team

Executive Officers

Scientific Advisory Board

Board of Directors

Business Advisors

Regulatory Experience

Recruiting Plans

58

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8. Foreign Citizens

Identify any foreign citizens you expect to be involved on this project as a direct employee, subcontractor or consultant

For these individuals, please specify their country of origin, the type of visa or work permit under which they are performing and an explanation of their anticipated level of involvement on this project

You may be asked to provide additional information during negotiations in order to verify the foreign citizen’s eligibility to participate on a SBIR contract

ITAR

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9. Facilities & Equipment

Briefly describe the key relevant facilities and equipment to be utilized

Include specifics on all laboratory or clinical, computing, and office facilities and equipment crucial for the project

10. Subcontractors/Consultants

Keep the crucial work in-house

Consultants and subcontractors should be used for clearly defined, support functions

Project review

Product testing

Specific experimental operations or data collection.

If you are farming everything out, why should the agency hire you in the first place?

Building a Team

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11. Prior, Current or Pending Support of Similar Proposals or Awards

(a) Name and address of the Federal Agency(s) or DoD Component to which a proposal was submitted, will be submitted, or from which an award is expected or has been received.

(b) Date of proposal submission or date of award.

(c) Title of proposal.

(d) Name and title of principal investigator for each proposal submitted or award received.

(e) Title, number, and date of solicitation(s) under which the proposal was submitted, will be submitted, or under which award is expected or has been received

(f) If award was received, state contract number.

(g) Specify the applicable topics for each SBIR proposal submitted or award received.

Note: If Section 3.5.b(11) does not apply, state in the proposal "No prior, current, or pending support for proposed work."

The Entire Package - DoD

Volume 1: Cover SheetVolume 2: Technical Proposal

Sections 1 – 11Volume 3: Cost VolumeVolume 4: Company Commercialization Report

Completed onlineRequired of all proposers

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Before You Begin…..

Direct

Indirect (F&A, Overhead)

Unallowable

48 CFR Subpart 31.2 (Code of Federal Regulations)

Get familiar with the costs considerations:

Before You Begin…

Employee salary limits

Budget caps or guidelines

Length of project

Be familiar with any limitations or guidelines specific to the solicitation.

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Direct Costs

Any item, service or labor that is used for the SOLE PURPOSE of any one particular project.

The item cannot be used on any other contract or corporate purposes.

Indirect costs

Any item, service or labor that is used to

“support or complete” the project but also

benefits other projects/activities.

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Unallowable Costs

Patent costs

Interest expense

Advertising/Marketing

www.acquisition.gov/far/html/subpart%2031_2.html

Costs necessary for a business BUT can not be paid with federal dollars.

Other Personnel

Administrative assistance cannot be paid out of SBIR/STTR direct costs.

Do not give ‘academic’ roles as they are not appropriate for a small company. i.e. no ‘Graduate Research Assistants.’

Instead they should be “technicians” or whatever their technical role on the project will be.

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Roles - Sub Award

An agreement between the prime awardee and another organization

Sub-awardee organization does a portion of the work

SBIR Phase I - SBC 67% of direct & indirect

SBIR – Phase II – SBC 50% of direct & indirect

STTR – Phase I - SBC at least 40%, Primary sub award at least 30% (phase I)

Roles - Fee for Service

A fee for service is an arrangement between the SBC and another organization

Vendor provides a routine service to the SBC

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Budget components

Direct costs

Indirect costs

Fees (profit)

What every SBIR/STTR budget should have:

Direct Costs

Salaries/Wages (senior key persons and other personnel)

Equipment (items that will have more than 1 year of life and more than $5k)

Travel

Materials/Supplies

Consultants

Sub Award/Consortium

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Indirect Costs (G & A/Overhead)

Fringe Benefits

Payroll taxes

Insurance – health, disability, workers compensation

Retirement plan contributions

Paid leave – vacation, sick, holiday

General & Administrative (overhead)

Office supplies

Rent

Phone

Technology – web, email

Administrative wages

Indirect Cost Rate

An indirect cost rate is a device for determining fairly and expeditiously the proportion of general (non-direct) expenses that each project/activity will bear.

It is the ratio between the total indirect costs and the direct cost base.

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Budget

77

Direct CostsIndirect Costs

FEES

DoD - Cost Proposal

Complete the cost proposal in the format shown in the Cost Breakdown Guidance

http://www.acq.osd.mil/osbp/sbir/docs/costbreakdown.pdfUse either (phase I only)

Online cost proposal form on the DoD Electronic Submission Web Site Last page(s) of your technical proposal IF specified in the component instructions.

Budget Justification – Budget DetailsEnough information provided to allow understanding of how the proposer plans to use requested funds.

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The Entire Package - DoD

Volume 1: Cover SheetVolume 2: Technical Proposal

Sections 1 – 11Volume 3: Cost VolumeVolume 4: Company Commercialization Report

Completed onlineRequired of all proposers

Company Commercialization Report

Submit through DoD Electronic Submission Web Site MUST be updated at least every 12 months for all Phase II awards

List the quantitative commercialization results of prior Phase II projects from ALL agencies (not just DoD)

Sales revenue (including additional funded research)Additional investment from non-SBIR sources Used in fielded DoD system or acquisition program? Patents and applicationsGrowth in number of firm employeesCompleted an IPO or private offering?

Comparison of results to historical averages Used to calculate a Commercialization Achievement Index (CAI) value.

Only firms with > 5 completed Phase II projects≤ 5th percentile receive ≤ 1/2 of the evaluation points available

REQUIRED for all applicants!

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DoD Proposal Submission

Submission Steps

Prepared as a word documentCovert to pdf before uploadHeader include: company name, proposal #, topic #10 pt font (no smaller) & 1 inch margins20 pages excluding the cover sheet, cost volume and commercialization reportUpload using the SUBMIT iconProcess for editing and deleting proposals is revised

Phase I proposals must be withdrawn to be modified after submission and then resubmitted

Delete a non-submitted proposal any time prior to close by withdrawing it, but once withdrawn, they cannot be recovered

No submitted proposals can be withdrawn or deleted after the Announcement closes

Technical Volume (Volume 2)

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Verification

Getting your DoD Reviews

Status of review process posted on websiteDebriefing provided upon written request by unsuccessful applicant

Must be requested 30 days post-notification (15 days for some components)Receive reviewer comments verbatim (no summaries)

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Grant Writing 101: The Review

Understand the Review Processa.k.a.- Think like a reviewer

85

What Happens to a Proposal?

ComponentReview

AWARDProposalDoD

PortalComponent

PortalProgram Manager

Database

Component SBIR Program Office

• 2nd QA

• Review Debrief

• Ensure Contract Award is On-track

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DoD Evaluation Criteria

Soundness, technical merit, and innovation of the proposed approach

Qualifications of the proposed/key investigators, supporting staff, and consultants

Potential for commercial (Gov. or private sector) application and benefits expected to accrue from this commercialization

PH I PH II

50 40

30 30

20 30

WEIGHT

Post Evaluation

A Select / Non-Select Award Notification will be sent out within 90 days of Proposal Submission

Ensure that your contact info is up to date to ensure receipt of notification

Winners will be notified to begin contract negotiations

Companies of Non-winning proposals are encouraged to request a debrief

Debrief will include the comments from the evaluators

You have 15 - 30 days after the release of the award notification to request a debrief

Winners are also permitted to request a debrief

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How to be Competitive in SBIR/STTR

Understand the philosophy of the Agency

Understand the review process

Understand the psychology of the reviewers

Develop and follow a strategic plan

Follow the rules

Complete your registrations at least 6-8 weeks ahead

Submit Early!

Remember Commercialization is why they’re funding you!

89

SBIR/STTR: Why?

Non-dilutive capital (‘free’ money)

Peer review

Validation of technology

Commercialization focus

Funds technology risk

Enables early transfer of technology and establishment of start-up companies

90

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www.bbcetc.com / 734-930-9741 / @BBC_etc

BBCetc works with technology-based entrepreneurs and

companies on strategies to advance R&D efforts to

commercialization. We are nationally recognized for our

success in helping clients win federal funding through the

SBIR/STTR programs and use it tactically to propel growth.

Services include training courses and one-on-one counseling in:

Commercialization Planning

SBIR/STTR and Other Research Grant Assistance

SBIR/STTR and Commercialization Training

Grants/Contracts Management

Tech-Based Economic Development Programs

What We Do

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Important Reminder

READ THE ENTIRE SOLICITATION!

Information provided by agencies is subject to

change without notification.

Skipping this step can have dire consequences!

Before you begin:

Developing the Business of Technology