Guidance on SBIR and STTR Grants for UC Berkeley Researchers

Often a small business applying for an SBIR or STTR award does not have all of the skills and capabilities in house that it needs and therefore may look for a subcontractor. Including a subcontractor with research expertise that supplements the small business' capabilities and qualifications can strengthen a grant proposal and may be particularly helpful to small businesses that have not previously received federal research awards.

A subcontract is an agreement between the small business applying for an SBIR or STTR award, and a third party that will help perform the research. Federal agencies encourage small businesses to take advantage of research expertise and facilities that may be available to them at universities and national laboratories.

When it comes to the STTR program, subcontracting is mandatory. An STTR is defined as a collaboration between the small business applicant and a nonprofit research entity, typically a university or federal laboratory.

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Contact the UC Berkeley Industry Alliances Office (IAO) for assistance with becoming a subcontractor on a company’s SBIR/STTR grant. An IAO contracting officer can:

1. review and officially submit the subcontract proposal to the company.
2. help shape, interpret, and implement the contract in compliance with UC procedures and policies.
3. negotiate the subcontract with the company if the proposal is accepted.

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Small, for-profit, U.S.-based businesses are eligible to apply for SBIR/STTR grants and contracts. The small business is always the applicant and awardee.

So how can university researchers access the funding? The company can subcontract some of the work to researchers at a university or other non-profit institution.

• In the SBIR program, the company awarded the grant is permitted to subcontract a portion of the R&D to faculty at a research institution.
• The STTR program requires the small business to formally collaborate with a research institution.

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By working with a company on SBIR- or STTR-funded R&D, UC Berkeley researchers are able to move innovations that will benefit society toward commercialization.

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UC Berkeley employees can conduct research under a subcontract from a small business that has received an SBIR or STTR award. Industry Alliances Office (IAO) contracting officers can assist PIs in initiating the subaward process. The department chair and academic dean should review the proposed research plans to ensure that the work:

1. has scientific merit,
2. constitutes a good use of UC Berkeley research facilities,
3. will not compromise the PI’s academic responsibilities,
4. is for a unique and specific scope of work distinct from research funded by other outside entities,
5. is for work that does not overlap with the investigator’s other research responsibilities, and
6. reflects full cost recovery (direct and indirect), including the PI’s time, in the project budget.

As an alternative a subcontracting agreement, companies can hire UC Berkeley researchers as consultants. A PI can work with a company as a consultant on grant-related activities, or under a subcontracting agreement the comnpany has signed with UC Berkeley, but not both.

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Eleven federal agencies currently award SBIR grants, and five award STTR grants. Federal agencies with research and development budgets exceeding $100 million are required to allocate a certain percentage to the SBIR program. Federal agencies with R&D budgets that exceed $1 billion are also required to reserve a certain percentage for STTR awards.

• Department of Agriculture
• Department of Commerce - National Institute of Standards and Technology
• Department of Commerce - National Oceanic and Atmospheric Administration
• Department of Defense (both SBIR and STTR)
• Department of Education
• Department of Energy (both SBIR and STTR)
• Department of Health and Human Services (both SBIR and STTR)
• Department of Homeland Security
• Department of Transportation
• Environmental Protection Agency
• National Aeronautics and Space Administration (both SBIR and STTR)
• National Science Foundation (both SBIR and STTR)

Although the federal regulations for these programs do not prohibit faculty from being both a principal in the company and the Principal Investigator (PI) for the campus subcontract, California State law and University of California policies restrict such a relationship, requiring stricter guidelines. The PI tor for the small business SBIR/STTR application and the PIO for the subcontract to Berkeley must be different individuals. Visit the UC Berkeley conflict of interest office website for more guidance.

• UC Berkeley conflict of interest disclosure requirements

• Bay Area NSF Innovation Corps (I-Corps) trains faculty, researchers, and students in commercializing university research, and will help you position your startup company for a successful SBIR/STTR grant application.
• QB3 SBIR/STTR grant writing support

Errol Arkilic is a Founder of M34 Capital. M34 is an investment company that focuses on seed and early-stage projects being spun out of academic and corporate research labs. Typical investments range from $50,000 to $250,000 and usually represent the first outside capital deployed. M34 focuses on turning science projects into companies across a broad spectrum of technologies and geographic distributions. He is also a Founder of USRCA.org, a nonprofit with a focus on entrepreneurial education for science and engineering graduates.

Location: 2150 Shattuck Avenue, Berkeley

Dates: Flexible

To sign up, email errol@m34capital.com

Leveraging his 15-year career centered around Department of Defense (DoD) procurement, Chris Fotiadis founded CWF Solutions, a DoD proposal consulting firm that provides strategic guidance during all phases of the bid and negotiation process. With expertise in both Other Transaction Authority and traditional Federal Acquisition Regulation procedures, Chris currently works as a support arm to DoD, where his skill set is utilized to guide small businesses and non-traditional defense contractors to securing government contracts.

Dates: First and Third Tuesday, 2-4pm PT. Inquire to schedule an off-hour consultation.

To sign up, email chris@cwfconsults.com

One of the goals of the SBIR and STTR programs is to encourage participation in innovation and entrepreneurship by socially and economically disadvantaged small businesses and women-owned small businesses. IPIRA supports entrepreneurs from all backgrounds, especially people of color, women, and other groups that have been historically underrepresented in tech. We believe that diverse and inclusive teams identify and solve challenges that may otherwise get overlooked and a multitude of perspectives and experiences create more innovative and informed technology solutions.