[Federal Register Volume 68, Number 115 (Monday, June 16, 2003)]
[Notices]
[Pages 35748-35770]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-14635]


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SMALL BUSINESS ADMINISTRATION

RIN 3245-AE96


Small Business Technology Transfer Program Policy Directive

AGENCY: Small Business Administration.

ACTION: Notice of proposed policy directive.

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SUMMARY: This document proposes revisions to the Small Business 
Technology Transfer (STTR) Program Policy Directive. The purpose of the 
Policy Directive is to provide guidance to participating Federal 
agencies for the general conduct of the STTR Program. This proposed 
Policy Directive reflects statutory amendments to the program. In 
addition, SBA proposes amendments to streamline and enhance the 
program.

DATES: Public comments on this proposed Policy Directive must be 
received on or before July 16, 2003.

ADDRESSES: Address all comments concerning this proposed Policy 
Directive to Maurice Swinton, Assistant Administrator for Technology, 
Office of Technology, Office of Government Contracting/Business 
Development, U.S. Small Business Administration, 409 3rd Street, SW., 
Washington, DC 20416 or via email to [email protected].

FOR FURTHER INFORMATION CONTACT: Maurice Swinton, Assistant 
Administrator for the Office of Technology, at (202) 205-6450. You may 
also e-mail [email protected].

SUPPLEMENTARY INFORMATION: In 1992, Congress enacted the Small Business 
Technology Transfer Act of 1992 (STTR Act), Pub. L. 102-564 (codified 
at 15 U.S.C. 638). The STTR Act established the Small Business 
Technology Transfer Program (STTR Program) as a pilot

[[Page 35749]]

program that requires Federal agencies with extramural budgets for 
research or research and development (R/R&D) in excess of $1 billion 
per fiscal year to enter into funding agreements with small business 
concerns (SBCs) that engage in a collaborative relationship with a 
research institution. The purpose of the STTR Program is to stimulate a 
partnership of ideas and technologies between innovative SBCs and 
research institutions. The program assists the small business and 
research communities by developing commercially-viable technologies. 
The STTR Program is a phased process, uniform throughout the Federal 
government, of soliciting proposals and awarding funding agreements for 
R/R&D to meet stated agency needs or missions.
    The STTR Act requires the U.S. Small Business Administration (SBA) 
to ``issue a policy directive for the general conduct of the STTR 
Programs within the Federal government.'' 15 U.S.C. 638(p)(1). SBA 
published its first STTR Policy Directive in 1993 (58 FR 42607-42620, 
Aug. 10, 1993).
    Congress has since amended the STTR Act, most recently with the 
enactment of the Small Business Technology Transfer Program 
Reauthorization Act of 2001 (Reauthorization Act), Pub. L. 107-50. The 
Reauthorization Act extends the STTR Program through September 30, 
2009, and changes its status from a pilot program to a permanent one. 
In addition, the Reauthorization Act: clarifies STTR data rights 
pertaining to STTR Phase I, II, and III awards (see proposed Policy 
Directive, sections 4(c)(2), 8(b) and App. I, Instructions, section 
5(d)(1)(iii)); requires the establishment of an STTR Program 
Government-accessible and a public-accessible database (see proposed 
Policy Directive, section 11(e)); requires participating agencies, 
beginning October 1, 2003, to increase the amount of their extramural 
budget to be reserved for the STTR Program from 0.15 percent to 0.3 
percent (see proposed Policy Directive, section 2(d)); permits 
agencies, beginning October 1, 2003, to increase the dollar value of 
STTR Phase II awards from $500,000 to $750,000 (see proposed Policy 
Directive, section 7(i)(1)); and permits agencies to approve a shorter 
or longer duration of time for award performance, where appropriate for 
a particular project (see proposed Policy Directive, section 7(h)).
    The Reauthorization Act also requires SBA to report to the Senate 
Committee on Small Business and Entrepreneurship and to the House 
Committees on Science and Small Business on the STTR Programs of the 
Federal agencies and to specifically address the number of proposals 
received from, and the number and total amount of awards to, 
Historically Underutilized Business Zones (HUBZones) SBCs under the 
STTR Program. Further, the Reauthorization Act requires agencies to 
implement an outreach program to research institutions and SBCs for the 
purpose of enhancing its STTR Program, in conjunction with any such 
outreach done for purposes of the SBIR Program. The proposed Policy 
Directive addresses these requirements in sections 10(b)(5) and 
9(a)(15), respectively.
    In addition, the Reauthorization Act requires SBA to promulgate 
regulations establishing a single model agreement that allocates 
between SBCs and research institutions intellectual property rights and 
rights, if any, to carry out follow-on research, development, or 
commercialization. SBA notes that it plans to issue proposed 
regulations implementing a model agreement for the STTR Program in the 
near future. The Reauthorization Act requires agencies to adopt this 
model agreement. This requirement is noted in the proposed Policy 
Directive at section 9(a)(13).
    Further, the Reauthorization Act amends the Federal and State 
Technology Partnership (FAST) Program to require the Administrator and 
the Small Business Innovation Research (SBIR) Program Managers to 
consider whether proposals submitted address the needs of SBCs owned 
and controlled by women, SBCs owned and controlled by minorities, and 
located in areas that have historically not participated in the SBIR 
and STTR Programs. SBA notes that section 12 of the SBIR Policy 
Directive (67 FR 60072, September 24, 2002) (also available at http://www.sba.gov/sbir/indexsbir-sttr.html) establishes guidance for the FAST 
Program as does the FAST Program Announcement, which can be found at 
http://www.sba.gov/sbir/indexprograms.html. Further, the 
Reauthorization Act requires SBA to promulgate regulations establishing 
standards for the consideration of proposals under FAST, including the 
standards previously listed. SBA is currently drafting these 
regulations. These regulations are being drafted and are not addressed 
in this proposed Policy Directive. However, it will be addressed in a 
separate rulemaking.
    As previously discussed, SBA proposes amendments to the Policy 
Directive that address the Reauthorization Act's amendments. Further, 
SBA proposes several changes in this Policy Directive to simplify and 
enhance the program. For example, SBA has organized the proposed Policy 
Directive into 11 self-explanatory sections: (1) Purpose; (2) Summary 
of Legislative Provisions; (3) Definitions; (4) Competitively Phased 
Structure of the Program; (5) Program Solicitation Process; (6) 
Eligibility and Application (Proposal) Requirements; (7) STTR Funding 
Process; (8) Terms of Agreement Under STTR Awards; (9) Responsibilities 
of STTR Participating Agencies and Departments; (10) Annual Report to 
SBA; and (11) Responsibilities of SBA. Two appendices are also 
included: (1) Instructions for STTR Program Solicitation Preparation; 
and (2) Tech-Net Data Fields for Public Database. In addition, SBA 
proposes the following substantive changes.

Section-by-Section Analysis

    Section 1 of the Policy Directive sets forth the purpose of the 
program. SBA made only minor changes to this section.
    Section 2 of the Policy Directive is a summary of legislative 
provisions. SBA proposes to set forth the Reauthorization Act's 
amendments, which are described in detail above. In addition, SBA 
proposes changes to address the use of the government-wide point of 
entry (GPE) for synopses of business opportunities. GPE has recently 
replaced the Commerce Business Daily as a means of synopses for 
business opportunities. The GPE, located at http://www.fedbizopps.gov, 
is the single point where government business opportunities greater 
than $25,000, including synopses of proposed contract actions, 
solicitations, and associated information, can be accessed 
electronically by the public. In addition, no agency must issue its 
solicitation for at least 15 days from the date of the publication of 
the GPE. The agency may not establish a deadline for submission of 
proposals in response to a solicitation earlier than 30 days after the 
date on which the solicitation was issued.
    Section 3 of the proposed Policy Directive sets forth definitions 
pertinent to the program. SBA proposes several new definitions.
    SBA proposes to define the term ``essentially equivalent work'' to 
occur when substantially the same research is proposed for funding in 
more than one application or to more than one agency, or a research 
objective and design for accomplishing an objective are the same or 
closely related in two or more proposals. SBA understands that STTR 
Participants often submit duplicate proposals to more than one agency. 
However, the proposed Policy Directive precludes agencies from funding

[[Page 35750]]

essentially equivalent work in the STTR Program.
    In addition, SBA proposes to define the term ``feasibility'' 
because it is used when discussing Phase I of the program. 
Specifically, the purpose of Phase I is to determine the scientific and 
technical merit and feasibility of a proposed effort and the quality of 
performance of the SBC with a relatively small agency investment before 
consideration of further Federal support in Phase II. SBA proposes to 
define ``feasibility'' to mean the practical extent to which a project 
can be performed successfully.
    SBA also proposes a definition for the term ``innovation'' because 
the term is used throughout the Policy Directive. SBA proposes 
``innovation'' to mean something new or improved, having marketable 
potential, including (1) development of new technologies, (2) 
refinement of existing technologies, or (3) development of new 
applications for existing technologies.
    SBA proposes to define the term ``intellectual property'' to 
incorporate all of the separate and distinct types of intangible 
property, such as patents and trademarks. The proposed definition would 
also specifically include STTR technical data and all types of 
intangible assets either proposed or generated by an SBC as a result of 
its participation in the STTR Program. SBA proposes this definition 
because the term is used throughout the Policy Directive and is 
important to SBCs in terms of their rights in intellectual property 
developed pursuant to the STTR Program.
    SBA proposes to define the term ``joint venture'' to mean an 
association of concerns with interests in any degree or proportion by 
way of contract, express or implied, consorting to engage in and carry 
out a single specific business venture for joint profit, for which 
purpose they combine their efforts, property, money, skill, or 
knowledge, but not on a continuing or permanent basis for conducting 
business generally. Further, for purposes of the STTR Program, a joint 
venture would be viewed as a business entity in determining power to 
control its management and would be eligible under the STTR Program 
provided that the entity created is small and each concern that is part 
of the joint venture qualifies as a SBC. SBA proposes this definition 
of joint venture because it is consistent with the definition of joint 
venture in the Federal Acquisition Regulations (FAR) and is appropriate 
for the program.
    SBA proposes to define the terms ``outcomes'' and ``outputs'' 
because SBCs will report on such measures when describing their Phase 
II awards. This information will be utilized in the government's Tech-
Net database to help SBA and the Federal agencies assess the STTR 
Program. SBA proposes to define ``outcomes'' as the measures of long-
term, eventual, program impact and the term ``output'' as the measures 
of near-term program impact.
    SBA proposes to define the term ``principal investigator/project 
manager'' as the individual designated by the applicant to provide the 
scientific and technical direction to a project supported by the 
funding agreement. The principal investigator/project manager is a key 
person to the project and the Policy Directive sets forth several 
requirements for this person, i.e., they must be identified in the 
proposal and may have employment with the SBC or collaborative research 
partner at the time of award and during the period of performance.
    SBA proposes to define the term ``prototype'' to mean a model of 
something to be further developed, which includes designs, protocols, 
questionnaires, software, and devices. The term ``prototype'' is used 
in the definition of R/R&D, which provides that R/R&D includes a 
systematic application of knowledge toward the production of useful 
materials, devices, and systems or methods, including design, 
development, and improvement of prototypes and new processes to meet 
specific requirements.
    SBA proposes revising the definition of ``research institution.'' 
Currently, the definition provides that the institution must meet the 
requirements of a United States research organization. In the proposed 
definition, SBA further clarifies this requirement to mean that it must 
have a place of business located in the United States, and 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. SBA proposes 
this definition because SBCs have always been required to meet these 
requirements to receive the benefits of this program, and thus the same 
should apply to research institutions receiving STTR benefits.
    SBA adds definitions for the terms ``STTR Technical Data'' and 
``STTR Technical Data Rights'' and deletes the term ``data rights.'' 
SBA proposes these definitions because the Reauthorization Act requires 
SBA to clarify data rights under the program. In addition, SBA has 
received many inquires from SBCs concerning what data is actually 
protected under the STTR Program, and what rights business concerns 
have regarding their STTR developed technologies. The proposed 
definition defines ``STTR Technical Data'' to include all data 
generated during the performance of an STTR award. The proposed 
definition defines ``STTR Technical Data rights'' as those rights 
obtained in data generated during the performance of any STTR Phase I, 
II, or III award that an awardee delivers to the Government during or 
upon completion of a Federally-funded project, and to which the 
Government receives a license.
    Section 4 of the proposed Policy Directive sets forth information 
pertaining to Phases I, II and III of the STTR Program. SBA has amended 
the Policy Directive to state, at section 4(a)(2), that ``proposals 
will be evaluated on a competitive basis and that agencies must give 
consideration to the scientific and technical merit and feasibility of 
the proposal along with its potential for commercialization. The Policy 
Directive also allows agencies to consider program balance or critical 
agency requirements.
    In section 4(b), SBA proposes a provision relating to novation and 
successor-in-interests for Phase II. Specifically, the proposed 
provision would allow STTR awardees in Phase I, including those 
identified via a novated or successor in interest agreement, to 
participate in Phases II and III. SBA proposes this change because it 
understands that many agencies already allow this to occur and agrees 
with the concept. However, SBA is also proposing to permit agencies 
``to require the original awardee to relinquish its rights and 
interests in an STTR project in favor of another applicant as a 
condition for that applicant's eligibility to participate in the STTR 
Program for that project.'' In addition, all applicants and their 
proposed personnel and key supporting staff, must meet the eligibility 
and scientific and technical qualifications attendant to the STTR 
Program. Furthermore, SBA notes that it amends section 6(a)(4) to 
permit agencies to approve a change in principal investigator. Finally, 
although novated funding agreements are discussed in the proposed 
Policy Directive in the context of Phase II, the same applies to 
situations involving Phase I and III awards.
    SBA proposes several amendments to the Policy Directive, set forth 
in section 4(c), which clarify the scope of Phase III. It is SBA's 
understanding that many agencies do not treat Phase III awards as STTR 
awards. Therefore, SBA proposes to further define a Phase III award as 
one that derives from, extends, or logically concludes efforts 
performed under prior STTR funding agreements,

[[Page 35751]]

but is funded by sources other than the STTR Program. In addition, SBA 
proposes to clarify that a Phase III award is by its nature an STTR 
award and therefore the awardee must be accorded STTR data rights. In 
addition, SBA proposes to clarify that even if a competition is held, 
if the awardee was a Phase II STTR awardee and the contract is for work 
that derives from, extends, or logically concludes that concern's work, 
the contract has STTR Phase III status and must provide for STTR data 
rights.
    SBA proposes amending section 4(c)(1)(i) of the Policy Directive to 
clarify the issue of the practical impact a Phase III designation would 
have in cases where no Federal funding is expended. SBA has proposed a 
revision that would explain that the guidance in this Policy Directive 
regarding STTR Phase III pertains to non-STTR federally-funded work 
described and does not address the nature of private agreements the 
STTR firm may make in the commercialization of its technology.
    SBA has proposed clarification in the Policy Directive (at section 
4(c)(2)), which provides that an agency official may determine, using 
the criteria set forth in the Policy Directive as guidance, whether a 
contract or agreement is a Phase III award. SBA understands that it is 
currently not clear whether such officials have his authority.
    In section 4(c)(3), SBA proposes clarification of whether and when 
a Justification and Approval (J&A) should be issued during Phase III. 
SBA believes that a procuring agency may restrict competition under the 
STTR Program to small businesses or a small business (if that is all 
that can perform the award) and is not required by statute to prepare a 
J&A. Consequently, SBA proposes that a J&A is not required to fund an 
STTR Phase III project, but if an agency wishes to prepare one, ``it is 
sufficient to state for purposes of a Justification and Approval 
pursuant to FAR 6.302-5, that the project is a STTR Phase III award 
that is derived from, extends, or logically concludes efforts performed 
under prior STTR funding agreements and is authorized under 10 U.S.C. 
2304(b)(2) or 41 U.S.C. 253(b)(2).''
    Further, in section 4(c)(6), SBA proposes clarification that the 
small business size limits for Phase I and Phase II awards do not apply 
to Phase III awards. SBA believes that the intent of Congress and 
purpose of the program is that STTR firms should be encouraged, in 
Phase III, to develop and expand business applications of their STTR 
research with the desired outcome that new employment and income are 
generated. The purpose of Phase III is to commercialize the innovation 
and help the SBC grow. Restricting Phase III to only SBCs might hinder 
the growth of STTR participants.
    Section 5 of the proposed Policy Directive provides guidance on the 
program solicitation process and section 6 sets forth the eligibility 
and application requirements. SBA did not propose substantive changes 
to these sections.
    Section 7 of the proposed Policy Directive outlines the SBIR 
funding process. The Reauthorization Act requires SBA to amend the 
Policy Directive and provide that beginning with Fiscal year 2004, 
agencies may approve a shorter or longer duration of time for award 
performance, where appropriate for a particular project. SBA's Policy 
Directive has always provided flexibility to the participating agencies 
and therefore the proposed Policy Directive still provides for this 
policy at section 7(h).
    In section 7(i), SBA proposes a clarification to identify $100,000 
in Phase I and $500,000 in Phase II as award amounts that generally may 
not be exceeded. SBA proposes that agencies may exceed these dollar 
levels where appropriate for a particular project, but must provide 
justification to SBA for doing so. SBA believes that this is consistent 
with the statute and legislative history and that flexibility is 
necessary to achieve success in projects that most likely would not be 
successful otherwise, such as drug discovery.
    In that same section, SBA also proposes addressing a change made by 
the Reauthorization Act, which provides that beginning October 1, 2003, 
a Phase II award may not generally exceed $750,000.
    Section 8 of the proposed Policy Directive sets forth the terms of 
agreement under STTR awards. The Reauthorization Act specifically 
requires SBA to clarify the rights in data that apply in Phases I, II, 
and III. Thus, in section 8(b), SBA proposes clarification that 
agencies are required by statute to protect STTR data rights developed 
from Phases I, II, and III awards, including subcontracts to such 
awards, for a period of at least 4 years from the last deliverable 
under that award. In addition, SBA proposes a provision that agencies 
can not condition a Phase III award on a concern giving up its STTR 
data rights. Likewise, the proposed Policy Directive clarifies that 
STTR data rights can not be negotiated or diminished by the funding 
agency. Further, the proposed Policy Directive prohibits the 
negotiation for STTR data rights before awarding an STTR funding 
agreement. SBA proposes that negotiations with the STTR awardee 
regarding intellectual property rights must be via a separate 
agreement, made without pressure or coercion by the agency or any other 
party.
    SBA added clarifying sentences to section 8(b)(2) of the Policy 
Directive that state: ``For example, if a Phase III award is issued 
within or after the Phase II data rights protection period and the 
Phase III award refers to and protects data developed and protected 
under the Phase II award, then that data must continue to be protected 
through the Phase III protection period. Agencies have discretion to 
adopt a protection period longer than 4 years. The government retains a 
royalty-free license for government use of any technical data delivered 
under an STTR award, whether patented or not. This section does not 
apply to program evaluation.''
    SBA also proposes clarifying that any data developed under a Phase 
III funding agreement must be protected by STTR data rights. Any data 
developed under Phase I, II, or III continues to be protected for a 
period of at least 4 years from delivery of the last deliverable under 
that award. The Policy Directive clarifies that although agencies are 
released from obligation to protect STTR data upon expiration of the 
protection period, any such data that is also protected and referenced 
under a subsequent STTR award agreement must remain protected through 
the protection period of that subsequent STTR award agreement. For 
example, if a Phase III award that is issued within the Phase II data 
rights protection period refers to and protects the data developed and 
protected under the Phase II award, then that data must continue to be 
protected through the Phase III protection period.
    Section 9 of the proposed Policy Directive outlines the 
responsibilities of SBIR Participating Agencies and Departments. In 
section 9(a)(5), SBA proposes that agencies must collect and maintain 
information from awardees and provide it to SBA so that SBA may develop 
and maintain the Technology Resources Network (Tech-Net) Database, 
which is described in detail in section 11(e) of this proposed Policy 
Directive. The Tech-Net Database is a requirement of the 
Reauthorization Act.
    In section 9(a)(11), SBA also proposes that agencies must report 
those instances where a follow-on award with non-STTR funds was issued 
to a concern other than the STTR awardee that developed the technology 
to be pursued under the follow-on award. The statute and legislative 
history evidence

[[Page 35752]]

that the intent of the program is to help small businesses grow through 
commercialization in Phase III. Therefore, when agencies make follow-on 
awards to a concern other than the one that received the Phase I and II 
award, this should be reported to Congress.
    The Reauthorization Act amended the STTR Program to require that 
agencies adopt the model agreement developed by SBA for allocating 
intellectual property between STTR awardees and research institutions 
to carry out follow-on research, development or commercialization. SBA 
proposes this requirement in the Policy Directive at section 9(a)(13).
    The Small Business Act requires that agencies develop, in 
consultation with the Office of Federal Procurement Policy and the 
Office of Government Ethics, procedures to ensure that Federally-funded 
research and development centers that participate in STTR agreements 
are free from organizational conflicts of interests relative to the 
STTR Program; do not use privileged information gained through work 
performed for an STTR agency or private access to STTR agency personnel 
in the development of an STTR proposal; and use outside peer review as 
appropriate. SBA proposes these requirements in the proposed Policy 
Directive at section 9(a)(14).
    The Reauthorization Act amended the STTR Program to require 
agencies to implement an outreach program to research institutions and 
SBCs in conjunction with any such outreach done for purposes of the 
SBIR Program to increase participation in and enhance the STTR Program. 
SBA has set forth this requirement in the proposed Policy Directive at 
section 9(a)(15).
    In section 9(c)(2), SBA proposes to preclude agencies from allowing 
the funding agreement to include a provision subcontracting any portion 
of the STTR award back to the issuing agency or to any other Federal 
governmental unit. This mirrors a similar provision for the SBIR 
program that has been in effect since 1997. SBA believes that this 
restriction is necessary to avoid real and apparent conflicts of 
interest in STTR proposal evaluation and selection. SBA notes that this 
proposal will not restrict the use of Federal laboratory facilities by 
STTR awardees for STTR project work. It may only prohibit the use of 
STTR award funds to pay for Federal laboratory resources. In addition, 
SBA proposes a case-by-case waiver to this provision.
    Section 10 of the proposed Policy Directive addresses each 
participating agency's annual report to SBA. The proposed Policy 
Directive outlines the substance of the report, and explains when it is 
due and to whom. The Reauthorization Act amended the STTR Program to 
require that agencies identify, for both Phase I and Phase II, the 
number of proposals received from, and the number and total amount of 
awards to, HUBZone SBCs. HUBZones are specifically defined as areas of 
high unemployment and low income. Therefore, these locations would 
benefit economically from technology growth in the community. In 
addition, Congress believes that tracking awards to these businesses 
will aid in evaluating the FAST Program. The proposed Policy Directive 
addresses this requirement at section 10(b)(5).
    Section 11 of the proposed Policy Directive addresses SBA's 
responsibilities. Section 11(e) contains several proposals addressing 
the Reauthorization Act's Tech-Net Databases. The SBA's Office of 
Technology, as functional program manager for the STTR and the SBIR 
Programs, is required to collect and report to the Congress information 
regarding awards made to SBCs by each Federal agency participating in 
these programs. SBA will maintain two databases to meet this 
requirement.
    SBA proposes a public Tech-Net Database that is a searchable, up-
to-date, electronic database, which includes information on each SBC 
that has received an STTR or SBIR Phase I or Phase II award from a 
Federal agency. Specifically, it will include a description of the 
Phase I or II award; identification of any business concern or 
subsidiary established for the commercial application of a product or 
service for which an STTR award is made; and information regarding 
mentors and mentoring networks.
    In addition, the Reauthorization Act specifically requires 
information pertaining to: whether the SBC or the research institution 
initiated their collaboration on the project; whether the SBC or the 
research institution originated any technology relating to the project; 
the length of time it took to negotiate any licensing agreement between 
the SBC and the research institution; and the percentage allocated 
between the SBC and the research institution of the proceeds from 
commercialization, marketing, or sale of technology resulting from the 
project. The collection of this information is set forth in section 
11(e)(9)(v) of the proposed Policy Directive.
    SBA also proposes a government Tech-Net Database that SBA, in 
consultation with the Federal agencies participating in the STTR and 
the SBIR Programs, will develop and maintain. The purpose of the 
government Tech-Net Database is to maintain information useful for 
evaluating the program. SBA proposes that for each Phase II award, the 
database contains: information on revenue from the sale of new products 
or services resulting from the research conducted under each Phase II 
award; information on additional investment from any source, other than 
Phase I or Phase II STTR or SBIR awards, to further the research and 
development conducted under each Phase II award; and any other 
information received in connection with the award that the 
Administrator, in conjunction with the STTR Program Managers of the 
participating agencies, considers relevant and appropriate. Pursuant to 
an amendment made by the Reauthorization Act, SBA also proposes a 
paragraph stating that information provided to this government Tech-Net 
Database is privileged and confidential and not subject to disclosure 
pursuant to 5 U.S.C. 552 and shall not be considered to be publication 
for purposes of 35 U.S.C. 102 (a) or (b).
    SBA proposes revisions to its ``Instructions for STTR Program 
Solicitation Preparation,'' which are set forth in Appendix I. 
Currently, the Policy Directive requires that for both Phase I and 
Phase II, the R/R&D work must be performed in the United States. SBA 
proposes that based on a rare and unique circumstance, for example, a 
supply or material or other item or project requirement that is not 
available in the United States, agencies may allow that particular 
portion of the R/R&D work to be performed or obtained in a country 
outside of the United States. The proposal requires approval by the 
funding agreement officer for such specific conditions to be in 
writing.
    Finally, SBA proposes to list the data fields for the public Tech-
Net Database in Appendix II.

Paperwork Reduction Act

    SBA has determined that this rule imposes additional reporting or 
recordkeeping requirements under the Paperwork Reduction Act, 44 
U.S.C., chapter 35. Specifically, the Reauthorization Act amended the 
Small Business Act to require the creation of a public and Government 
database on the SBIR and STTR Programs. According to the statute, the 
public database will include the name, size, location and an 
identifying number of each SBC that has received a Phase I or II STTR 
award from a Federal agency; a description of each Phase I or II award 
received by that SBC, including an abstract, the name of the Federal 
agency

[[Page 35753]]

making the award, and the date and amount of the award; the 
identification of any business concern or subsidiary established for 
the commercial application of a product or service for which an STTR 
award is made; and information regarding mentors and mentoring 
networks.
    For purposes of the STTR Program, the public database will also 
include: Whether the SBC or research institution initiated the 
collaboration; whether the SBC or research institution originated any 
technology relating to the STTR project; the length of time it took to 
negotiate any licensing agreement between the SBC and research 
institution; and how the proceeds from commercialization, marketing, or 
sale of technology resulting from each STTR project were allocated 
between the SBC and research institution. In addition, the Small 
Business Act now requires the creation of a government database that 
will contain the following information for each Phase II award: 
Information on revenue from the sale of new products or services 
resulting from the research conducted under the award; information on 
additional investment from any source, other than Phase I or II STTR 
awards, to further the research and development conducted under the 
award; and any other information received in connection with the award 
that the Administrator and STTR Program managers consider relevant and 
appropriate. The government database will also include narrative 
information that a SBC receiving a Phase II award voluntarily submits 
to further describe the outputs and outcomes of its awards and for each 
applicant that does not receive a Phase II award, the name, size and 
location of the applicant, an abstract of the project and the Federal 
agency to which the application was made. Finally, the government 
database may also include any other data collected by or available to 
any Federal agency that such agency considers useful for SBIR program 
evaluation purposes.
    In response to this statutory requirement, in section 9(a)(6), the 
Policy Directive proposes that Federal agencies to collect or maintain 
this information from awardees and provide it to SBA. In addition, as 
required by the statute, the Policy Directive proposes that a SBC 
receiving a Phase II award to update information in the database 
concerning that award. Further, as also required by statute, the SBC 
receiving a Phase II award shall be requested to voluntarily update 
such information annually for a period of five years.
    Thus, the Policy Directive outlines the information SBA is required 
to collect from the STTR agencies, who in turn collect some of this 
data from Phase I and II awardees (some of the data is already 
available to the agencies). Although the statute requires the 
collection of certain information from the agencies and STTR Phase I 
and II awardees, it also provides discretion to collect data SBA and 
the agencies deem relevant. SBA is currently in the process of 
developing the Tech-Net databases, which will house this information, 
and determining what information not prescribed specifically by statute 
may be relevant to the program.
    SBA welcomes comments on this proposed Policy Directive and will 
revise the Policy Directive as necessary to improve the general conduct 
of the STTR Program based upon comments received. Specifically, we 
request comments on two sections of the proposed Policy Directive 
implementing the new statute: (1) The requirement in section 
11(e)(9)(v) for certain additional data to the STTR public-accessible 
database regarding the SBC and its cooperative research institution, 
and (2) the requirement in section 11(e)(11)(iii) that information 
provided to the STTR government-accessible database is privileged, 
confidential, and not subject to the Freedom of Information Act.
    Title: Technology Resources Network (Tech-Net) (No SBA Form 
Number).
    Summary: The Tech-Net database is a searchable, up-to-date, 
electronic database that includes the name, size, location, funding 
agreement number and identification number assigned by the 
Administrator of each Small Business Concern (SBC) that has received an 
STTR Phase I or Phase II award from a Federal agency. A description of 
each STTR Phase I or Phase II award received by the SBC including an 
abstract of the project funded by the award, excluding any proprietary 
information so identified by the awardee, the Federal agency making the 
award and the date and amount of the award. An identification of any 
business concern or subsidiary established for the commercial 
application of a product or service for which an STTR award is made, 
and information regarding mentors and mentoring networks, as required 
in the Federal and State Technology (FAST) Partnership Program 
established under section 35(d) of the Act and described on the SBA's 
Internet site at http://www.sba.gov/sbir/indexfast.html. With respect 
to assistance under the STTR Program (as required under section 9(k)(1) 
of the Act) the database will also contain information on whether the 
SBC or the research institution initiated their collaboration on each 
assisted STTR project; whether the SBC or the research institution 
originated any technology relating to the assisted STTR project; the 
length of time it took to negotiate any licensing agreement between the 
SBC and the research institution under each assisted STTR project, and 
the percentage allocated between the SBC and the research institution 
of the proceeds from commercialization, marketing, or sale of 
technology resulting from each assisted STTR project. Furthermore, the 
SBA, in consultation with the Federal agencies participating in the 
STTR Program, has developed and maintains a secure database that 
contains for each Phase II award, information on revenue from the sale 
of new products or services resulting from the research conducted under 
each Phase II award; information on additional investment from any 
source, other than Phase I or Phase II STTR or SBIR awards, to further 
the research and development conducted under each Phase II award; and 
any other information received in connection with the award that the 
Administrator, in conjunction with the STTR Program managers of the 
participating agencies, considers relevant and appropriate.
    Need and Purpose: The database information will be used solely for 
program evaluation purposes by the Federal government or, in accordance 
with the Policy Directive issued by SBA, by other authorized persons 
who are subject to a use and nondisclosure agreement with the Federal 
government covering the use of the database. This collection of 
information pertains to the creation of a public and a government 
database for the STTR Program, as required by Pub. L. 107-50. SBA has 
determined that this law imposes additional reporting or recordkeeping 
requirements under the Paperwork Reduction Act, 44 U.S.C., chapter 35. 
The continued need to have current information on the STTR awards will 
have a tremendous impact on the periodic program evaluation. Therefore, 
voluntary update by the SBC on all completed STTR Phase II awards for a 
period of five years will assist the Federal government in maintaining 
current and accurate information on each award, as well as any other 
data collected by or available to any Federal agency that such agency 
considers useful for STTR Program evaluation purposes.
    Description of Respondents: All SBCs receiving a STTR Phase I or II 
award as outlined in Pub. L. 107-50, which states that any small 
business receiving a STTR award from any of the participating STTR 
Federal agencies

[[Page 35754]]

must be included in the database data collection effort.
    SBA estimates the burden of this collection of information as 
follows:
    (i) Approximately 300 concerns receive STTR Phase I and II awards 
each year. Each concern will be asked to complete the survey and 
voluntarily update such information annually for a period of 5 years.
    (ii) SBA estimates that each respondent will require approximately 
.5 hour to complete the survey, for a total annual hour burden of 150 
(300 times .5 equals 150).
    (iii) The estimated annualized cost to respondents for the hour 
burden for collection of information should not be large as the 
information requested is kept in the ordinary course of business. A 
financial officer of the small business concern will likely input this 
information. SBA has assumed that the officer's pay is equal to a GS-
14, step 1 in the Washington, DC area, which makes $37.50/hour. 
Assuming this survey takes .5 hours to complete, then the estimated 
annualized cost to respondents is $18.75 ($37.50 times .5 equals 
$18.75).
    (iv) The total annual estimated cost includes the data that will be 
collected for the Government database.
    SBA invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of SBA's 
responsibilities and functions under the STTR Program, including 
whether the information will have a practical utility; (2) the accuracy 
of SBA's estimate of the burden of the proposed collections of 
information, including the validity of the methodology and assumptions 
used; (3) ways to enhance the quality, utility, and clarity of the 
information to be collected; and (4) ways to minimize the burden of the 
collection of information on respondents, including through the use of 
automated collection techniques, when appropriate, and other forms of 
information technology.

Notice of Proposed Policy Directive; Small Business Technology Transfer 
Program

    To: The Small Business Technology Transfer Program Directors.
    Subject: Small Business Technology Transfer Program Reauthorization 
Act of 2001--Amendments to the Small Business Technology Transfer 
(STTR) Program.
    1. Purpose. Section 9(p) of the Small Business Act (15 U.S.C. 638) 
(as amended by Public Law 107-50) requires the Administrator of the 
U.S. Small Business Administration (SBA) to modify its Small Business 
Technology Transfer (STTR) Program Policy Directive, issued for the 
general conduct of the STTR Program.
    2. Authority. This Policy Directive is issued pursuant to 15 U.S.C. 
638(p).
    3. Procurement Regulations. It is recognized that the Federal 
Acquisition Regulations may need to be modified to conform to the 
requirements of the Reauthorization Act and the final Policy Directive. 
SBA's Administrator or designee must review and concur with any 
regulatory provisions that pertain to areas of SBA responsibility. 
SBA's Office of Technology coordinates such regulatory actions.
    4. Personnel Concerned. This Policy Directive serves as guidance 
for all Federal government personnel who are involved in the 
administration of the STTR Program, issuance and management of funding 
agreements or contracts pursuant to the STTR Program, and the 
establishment of goals for small business concerns in research or 
research and development acquisition or grants.
    5. Originator. SBA's Office of Technology, Office of Government 
Contracting, Office of Government Contracting and Business Development.
    6. Date. A final Policy Directive will be effective when published 
in the Federal Register.

Fred C. Armendariz,
Associate Deputy Administrator, Government Contracting/Business 
Development, Small Business Administration.
Hector V. Barreto,
Administrator, Small Business Administration.

Small Business Technology Transfer (STTR) Program; Draft Policy 
Directive

Contents

Section

1. Purpose
2. Summary of Legislative Provisions
3. Definitions
4. Competitively Phased Structure of the Program
5. Program Solicitation Process
6. Eligibility and Application (Proposal) Requirements
7. STTR Funding Process
8. Terms of Agreement under STTR Awards
9. Responsibilities of STTR Participating Agencies and Departments
10. Annual Report to the Small Business Administration
11. Responsibilities of SBA
Appendix I: Instructions for STTR Program Solicitation Preparation
Appendix II: Tech-Net Data Fields for Public Database

1. Purpose

    (a) Section 9(p) of the Small Business Act (Act) requires that the 
Small Business Administration (SBA) issue an STTR Program Policy 
Directive for the general conduct of the STTR Program within the 
Federal government.
    (b) This Policy Directive fulfills SBA's statutory obligation to 
provide guidance to the participating Federal agencies for the general 
operation of the STTR Program. Additional or modified instructions may 
be issued by the SBA as a result of public comment or experience.
    (c) The purpose of the STTR Program is to stimulate a partnership 
of ideas and technologies between innovative small business concerns 
(SBCs) and research institutions through Federally-funded research or 
research and development (R/R&D). By providing awards to SBCs for 
cooperative R/R&D efforts with research institutions, the STTR Program 
assists the small business and research communities by commercializing 
innovative technologies.
    (d) Federal agencies participating in the STTR Program (STTR 
agencies) are obligated to follow the guidance provided by this Policy 
Directive. Each agency is required to review its rules, policies, and 
guidance on the STTR Program to ensure consistency with this Policy 
Directive and to make any necessary changes in accordance with each 
agency's normal procedures. This is consistent with the statutory 
authority provided to the SBA concerning the STTR Program.

2. Summary of Legislative Provisions

    (a) The Small Business Technology Transfer Program Reauthorization 
Act of 2001, Public Law 107-50, amended section 9 of the Act (15 U.S.C. 
638).
    (1) The amendments:
    (i) Continue the STTR Program through September 30, 2009;
    (ii) Clarify data rights pertaining to STTR Phase I, Phase II, and 
Federally-funded Phase III awards.
    (iii) Establish databases--one for the public and one for 
government use--to collect and maintain in a common format information 
that is necessary to assist SBCs and assess the STTR Program.
    (b) Each Federal agency with an extramural budget for R/R&D in 
excess of $1,000,000,000 must participate in the STTR Program.
    (c) The statutory requirements establish a uniform, simplified 
process for the operation of the STTR Program while allowing the STTR 
agencies flexibility in the operation of their individual STTR Program. 
This Policy Directive fulfills the Congressional intent to minimize 
regulatory burden in the conduct of this program.

[[Page 35755]]

    (d) Each STTR agency must establish an STTR Program by reserving, 
through September 30, 2003, not less than 0.15 percent of its 
extramural budget, and beginning October 1, 2003, reserving not less 
than 0.3 percent of such budget, for awards to SBCs for cooperative R/
R&D through the following uniform, three-phase process:
    (1) Phases I and II: These phases help STTR agencies meet R/R&D and 
commercialization objectives through funding agreements.
    (2) Phase III. This phase, where appropriate, helps Federal 
agencies participating in the STTR Program by:
    (i) Providing Federal agencies the benefits of commercial 
applications derived from the cooperative conduct of Government-funded 
R/R&D which stimulates technological innovation and enhances the 
national return on investment from R/R&D,
    (ii) Providing STTR awardees access to the Federal market through 
non-STTR funding agreements; and
    (iii) Providing STTR awardees access to private sector markets to 
stimulate economic growth and create jobs.
    (e) The Act directs each STTR agency to report annually to SBA. The 
Act also requires SBA to obtain annual reports and monitor each 
agency's STTR Program and to report these findings annually to the 
Senate Committee on Small Business and Entrepreneurship and to the 
House Committees on Science and Small Business.
    (f) The competition requirements of the Armed Services Procurement 
Act of 1947 (10 U.S.C. 2302 et seq.) and the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) must be 
read in conjunction with the procurement notice publication 
requirements of section 8(e) of the Small Business Act (15 U.S.C. 
637(e)). The following notice publication requirements of section 8(e) 
of the Small Business Act apply to STTR agencies using contracts as a 
STTR funding agreement:
    (1) Any Federal executive agency intending to solicit a proposal to 
contract for property or services valued above $25,000 must transmit a 
notice of the impending solicitation to the government-wide point of 
entry (GPE) for access by interested sources. See FAR 5.201. The GPE, 
located at http://www.fedbizopps.gov, is the single point where 
government business opportunities greater than $25,000, including 
synopses of proposed contract actions, solicitations, and associated 
information, can be accessed electronically by the public. In addition, 
no agency must issue its solicitation for at least 15 days from the 
date of the publication of the GPE. The agency may not establish a 
deadline for submission of proposals in response to a solicitation 
earlier than 30 days after the date on which the solicitation was 
issued.
    (2) The contracting officer must generally make available through 
the GPE those solicitations synopsized through the GPE, including 
specifications and other pertinent information determined necessary by 
the contracting officer. See FAR 5.102.
    (3) Any executive agency awarding a contract for property or 
services valued at more than $25,000 must submit a synopsis of the 
award through the GPE if a subcontract is likely to result from such 
contract. See FAR 5.301.
    (4) The following are exemptions from the notice publication 
requirements:
    (i) In the case of agencies intending to solicit Phase I proposals 
for contracts in excess of $25,000, the head of the agency may exempt a 
particular solicitation from the notice publication requirements if 
that official makes a written determination, after consulting with the 
Administrator of the Office of Federal Procurement Policy and the SBA 
Administrator, that it is inappropriate or unreasonable to publish a 
notice before issuing a solicitation.
    (ii) The STTR Phase II award process is exempt.
    (iii) The STTR Phase III award process is exempt.

3. Definitions

    (a) Act. The Small Business Act (15 U.S.C. 631 et seq.), as 
amended.
    (b) Applicant. The organizational entity that, at the time of 
award, will qualify as a SBC and that submits a contract proposal or a 
grant application for a funding agreement under the STTR Program.
    (c) Affiliate. This term has the same meaning as set forth in 13 
CFR part 121--Small Business Size Regulations, Sec.  121.103, What is 
affiliation?
    (d) Awardee. The organizational entity receiving an STTR Phase I, 
Phase II, or Phase III award.
    (e) Commercialization. The process of developing marketable 
products or services and producing and delivering products or services 
for sale (whether by the originating party or by others) to government 
or commercial markets.
    (f) Cooperative Agreement. A financial assistance mechanism used 
when substantial Federal programmatic involvement with the awardee 
during performance is anticipated by the issuing agency. The 
Cooperative Agreement contains the responsibilities and respective 
obligations of the parties.
    (g) Cooperative Research and Development. R/R&D conducted jointly 
by a SBC and a research institution in which not less than 40 percent 
of the work is performed by the SBC, and not less than 30 percent of 
the work is performed by the single, partnering research institution.
    (h) Essentially Equivalent Work. This occurs when (1) substantially 
the same research is proposed for funding in more than one contract 
proposal or grant application submitted to the same Federal agency; (2) 
substantially the same research is submitted to two or more different 
Federal agencies for review and funding consideration; or (3) a 
specific research objective and the research design for accomplishing 
an objective are the same or closely related in two or more proposals 
or awards, regardless of the funding source.
    (i) Extramural Budget. The sum of the total obligations for R/R&D 
minus amounts obligated for R/R&D activities by employees of a Federal 
agency in or through government-owned, government-operated facilities. 
For the Agency for International Development, the ``extramural budget'' 
must not include amounts obligated solely for general institutional 
support of international research centers or for grants to foreign 
countries. For the Department of Energy, the ``extramural budget'' must 
not include amounts obligated for atomic energy defense programs solely 
for weapons activities or for naval reactor programs.
    (j) Feasibility. The practical extent to which a project can be 
performed successfully.
    (k) Federal Agency. An executive agency as defined in 5 U.S.C. 105, 
or a military department as defined in 5 U.S.C. 102, except that it 
does not include any agency within the Intelligence Community as 
defined in Executive Order 12333, Section 3.4(f), or its successor 
orders.
    (l) Funding Agreement. Any contract, grant, or cooperative 
agreement entered into between any Federal agency and any SBC for the 
performance of experimental, developmental, or research work, including 
products or services, funded in whole or in part by the Federal 
government.
    (m) Funding Agreement Officer. A contracting officer, a grants 
officer, or a cooperative agreement officer.
    (n) Grant. A financial assistance mechanism providing money, 
property, or both to an eligible entity to carry out an approved 
project or activity. A grant is used whenever the Federal agency 
anticipates no substantial programmatic involvement with the awardee 
during performance.

[[Page 35756]]

    (o) Innovation. Something new or improved, having marketable 
potential, including (1) development of new technologies, (2) 
refinement of existing technologies, or (3) development of new 
applications for existing technologies.
    (p) Intellectual Property. The separate and distinct types of 
intangible property that are referred to collectively as ``intellectual 
property,'' including but not limited to: patents, trademarks, 
copyrights, trade secrets, STTR technical data (as defined in this 
section), ideas, designs, know-how, business, technical and research 
methods, other types of intangible business assets, and all types of 
intangible assets either proposed or generated by an SBC as a result of 
its participation in the STTR Program.
    (q) Joint Venture. An association of concerns with interests in any 
degree or proportion by way of contract, express or implied, consorting 
to engage in and carry out a single specific business venture for joint 
profit, for which purpose they combine their efforts, property, money, 
skill, or knowledge, but not on a continuing or permanent basis for 
conducting business generally. A joint venture is viewed as a business 
entity in determining power to control its management.
    (r) Outcomes. The measures of long-term, eventual, program impact.
    (s) Outputs. The measures of near-term program impact.
    (t) Principal Investigator/Project Manager. The one individual 
designated by the applicant to provide the scientific and technical 
direction to a project supported by the funding agreement.
    (u) Program Solicitation. A formal solicitation for proposals 
whereby a Federal agency notifies the small business community of its 
R/R&D needs and interests in broad and selected areas, as appropriate 
to the agency, and requests proposals from SBCs in response to these 
needs and interests. Announcements in the Federal Register or the GPE 
are not considered an STTR Program solicitation.
    (v) Prototype. A model of something to be further developed, which 
includes designs, protocols, questionnaires, software, and devices.
    (w) Research or Research and Development (R/R&D). Any activity that 
is:
    (l) A systematic, intensive study directed toward greater knowledge 
or understanding of the subject studied;
    (2) A systematic study directed specifically toward applying new 
knowledge to meet a recognized need; or
    (3) A systematic application of knowledge toward the production of 
useful materials, devices, and systems or methods, including design, 
development, and improvement of prototypes and new processes to meet 
specific requirements.
    (x) Research Institution. One that has a place of business located 
in the United States, which operates primarily within the United States 
or which makes a significant contribution to the U.S. economy through 
payment of taxes or use of American products, materials or labor, and 
is:
    (l) A non-profit institution as defined in section 4(5) of the 
Stevenson-Wydler Technology Innovation Act of 1980 (that is, an 
organization that is owned and operated exclusively for scientific or 
educational purposes, no part of the net earnings of which inures to 
the benefit of any private shareholder or individual) and includes non-
profit medical and surgical hospitals; or
    (2) A Federally-funded R&D center as identified by the National 
Science Foundation in accordance with the government-wide Federal 
Acquisition Regulation issued in accordance with section 35(c)(1) of 
the Office of Federal Procurement Policy Act (or any successor 
regulation thereto).
    (y) Small Business Concern. A concern that, on the date of award 
for both Phase I and Phase II funding agreements:
    (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, 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.
    (z) Socially and Economically Disadvantaged SBC. See 13 CFR part 
124--8(A) Business Development/Small Disadvantaged Business Status 
Determinations, Sec. Sec.  124.103 (Who is socially disadvantaged?) and 
124.104 (Who is economically disadvantaged?).
    (aa) STTR Participants. Business concerns that have received STTR 
awards or that have submitted STTR proposals/applications.
    (bb) STTR Technical Data. All data generated during the performance 
of an STTR award.
    (cc) STTR Technical Data Rights. The rights an SBC obtains in data 
generated during the performance of any STTR Phase I, Phase II, or 
Phase III award that an awardee delivers to the government during or 
upon completion of a Federally-funded project, and to which the 
government receives a license.
    (dd) Subcontract. Any agreement, other than one involving an 
employer-employee relationship, entered into by an awardee of a funding 
agreement calling for supplies or services for the performance of the 
original funding agreement.
    (ee) United States. The 50 states, the territories and possessions 
of the Federal government, the Commonwealth of Puerto Rico, the 
District of Columbia, the Republic of the Marshall Islands, the 
Federated States of Micronesia, and the Republic of Palau.
    (ff) Women-Owned SBC. A SBC that is at least 51 percent owned by 
one or more women, or in the case of any publicly owned business, at 
least 51 percent of the stock is owned by women, and women control the 
management and daily business operations.

4. Competitively Phased Structure of the Program

    The STTR Program is a phased process, uniform throughout the 
Federal government, of soliciting proposals and awarding funding 
agreements for R/R&D, production, services, or any combination, to meet 
stated agency needs or missions. In order to stimulate and foster 
scientific and technological innovation, including increasing 
commercialization of Federal R/R&D, the program must follow a uniform 
competitive process of the following three phases:
    (a) Phase I. Phase I involves a solicitation of contract proposals 
or grant applications (hereinafter referred to as proposals) to conduct 
feasibility-related experimental or theoretical R/R&D related to 
described agency requirements. These requirements, as defined by agency 
topics contained in a solicitation, may be general or narrow in scope, 
depending on the needs of the agency. The object of this phase is to 
determine the scientific and technical merit and feasibility of the 
proposed effort and the quality of performance of

[[Page 35757]]

the SBC with a relatively small agency investment before consideration 
of further Federal support in Phase II.
    (1) Several different proposed solutions to a given problem may be 
funded.
    (2) Proposals will be evaluated on a competitive basis. Agency 
criteria used to evaluate STTR proposals must give consideration to the 
scientific and technical merit and feasibility of the proposal along 
with its potential for commercialization. Considerations may also 
include program balance or critical agency requirements.
    (3) Agencies may require the submission of a Phase II proposal as a 
deliverable item under Phase I.
    (b) Phase II. The object of Phase II is to continue the R/R&D 
effort from the completed Phase I. Only STTR awardees in Phase I are 
eligible to participate in Phases II and III. This includes those 
awardees identified via a ``novated'' or ``successor in interest'' or 
similarly-revised funding agreement, or those that have reorganized 
with the same key staff, regardless of whether they have been assigned 
a different tax identification number. Agencies may require the 
original awardee to relinquish its rights and interests in an STTR 
project in favor of another applicant as a condition for that 
applicant's eligibility to participate in the STTR Program for that 
project.
    (1) Funding shall be based upon the results of Phase I and the 
scientific and technical merit and commercial potential of the Phase II 
proposal. Phase II awards may not necessarily complete the total 
research and development that may be required to satisfy commercial or 
Federal needs beyond the STTR Program. The Phase II funding agreement 
with the awardee may, at the discretion of the awarding agency, 
establish the procedures applicable to Phase III agreements. The 
government is not obligated to fund any specific Phase II proposal.
    (2) The STTR Phase II award decision process requires, among other 
things, consideration of a proposal's commercial potential. Commercial 
potential includes the potential to transition the technology to 
private sector applications, government applications, or government 
contractor applications. Commercial potential in a Phase II proposal 
may be evidenced by:
    (i) The SBC's record of successfully commercializing STTR or other 
research;
    (ii) The existence of Phase II funding commitments from private 
sector or other non-STTR funding sources;
    (iii) The existence of Phase III, follow-on commitments for the 
subject of the research; and
    (iv) Other indicators of commercial potential of the idea.
    (c) Phase III. STTR Phase III refers to work that derives from, 
extends, or logically concludes effort(s) performed under prior STTR 
funding agreements, but is funded by sources other than the STTR 
Program. Phase III work is typically oriented towards commercialization 
of STTR research or technology.
    (1) Each of the following types of activity constitutes STTR Phase 
III work:
    (i) Commercial application of STTR-funded R/R&D financed by non-
Federal sources of capital (Note: The guidance in this Policy Directive 
regarding STTR Phase III pertains to the non-STTR federally-funded work 
described in (ii) and (iii) below. It does not address the nature of 
private agreements the STTR firm may make in the commercialization of 
its technology.);
    (ii) STTR-derived products or services intended for use by the 
Federal government, funded by non-STTR sources of Federal funding;
    (iii) Continuation of R/R&D that has been competitively selected 
using peer review or scientific review criteria, funded by non-STTR 
Federal funding sources.
    (2) A Phase III award is, by its nature, an STTR award, has STTR 
status, and must be accorded STTR data rights. (See section 8(b)(2) 
regarding the protection period for data rights.) If an STTR awardee 
wins a competition for work that derives from, extends, or logically 
concludes that firm's work under a prior STTR funding agreement, then 
the funding agreement for the new, competed, work must have all STTR 
Phase III status and data rights. A Federal agency may enter into a 
Phase III STTR agreement at any time with a Phase II awardee. 
Similarly, a Federal agency may enter into a Phase III STTR agreement 
at any time with a Phase I awardee. An agency official may determine, 
using the criteria set forth in the Directive as guidance, whether a 
contract or agreement is a Phase III award.
    (3) The competition for STTR Phase I and Phase II awards satisfies 
any competition requirement of the Armed Services Procurement Act, the 
Federal Property and Administrative Services Act, and the Competition 
in Contracting Act. Therefore, an agency that wishes to fund an STTR 
Phase III project is not required to conduct another competition in 
order to satisfy those statutory provisions. As a result, in conducting 
actions relative to a Phase III STTR award, it is sufficient to state 
for purposes of a Justification and Approval pursuant to FAR 6.302-5, 
that the project is a STTR Phase III award that is derived from, 
extends, or logically concludes efforts performed under prior STTR 
funding agreements and is authorized under 10 U.S.C. 2304(b)(2) or 41 
U.S.C. 253(b)(2).
    (4) The Phase III work may be for products, production, services, 
R/R&D, or any combination thereof.
    (5) There is no limit on the number, duration, type, or dollar 
value of Phase III awards made to a business concern. There is no limit 
on the time that may elapse between a Phase I or Phase II award and 
Phase III award, or between a Phase III award and any subsequent Phase 
III award.
    (6) The small business size limits for Phase I and Phase II awards 
do not apply to Phase III awards.
    (7) For Phase III, Congress intends that agencies or their 
government-owned, contractor-operated facilities, Federally-funded 
research and development centers, or government prime contractors that 
pursue R/R&D or production developed under the STTR Program, give 
preference, including sole source awards, to the awardee that developed 
the technology. In fact, the Act requires reporting to SBA of all 
instances in which the agency pursues research, development, or 
production of a technology developed by an STTR awardee, with a concern 
other than the one that developed the STTR technology. (See section 
4(c)(8) immediately below for agency notification to SBA prior to award 
of such a funding agreement and section 9(a)(11) regarding agency 
reporting of the issuance of such award.) SBA will report such 
instances, including those discovered independently by SBA, to 
Congress.
    (8) For Phase III, agencies, their government-owned, contractor-
operated facilities, or Federally-funded research and development 
centers, that intend to pursue R/R&D, production, services or any 
combination thereof of a technology developed by an STTR awardee of 
that agency, with an entity other than that STTR awardee, must notify 
SBA in writing prior to such an award. This notice requirement also 
applies to technologies of STTR awardees with STTR funding from two or 
more agencies where one of the agencies determines to pursue the 
technology with an entity other than that awardee. This notification 
must include, at a minimum: (a) The reasons why the follow-on award 
with the STTR awardee is not practicable; (b) the identity of the

[[Page 35758]]

entity with which the agency intends to make an award to perform 
research, development, or production; and (c) a description of the type 
of funding award under which the research, development, or production 
will be obtained. SBA may appeal the decision to the head of the 
contracting activity. If SBA decides to appeal the decision, it must 
file a notice of intent to appeal with the contracting officer no later 
than 5 business days after receiving the agency's notice of intent to 
make award. Upon receipt of SBA's notice of intent to appeal, the 
contracting officer must suspend further action on the acquisition 
until the head of the contracting activity issues a written decision on 
the appeal. The contracting officer may proceed with award if he or she 
determines in writing that the award must be made to protect the public 
interest. The contracting officer must include a statement of the facts 
justifying that determination and provide a copy of its determination 
to SBA. Within 30 days of receiving SBA's appeal, the head of the 
contracting activity must render a written decision setting forth the 
basis of his or her determination.

5. Program Solicitation Process

    (a) At least annually, each agency must issue a program 
solicitation that sets forth a substantial number of R/R&D topics and 
subtopic areas consistent with stated agency needs or missions. Both 
the list of topics and the description of the topics and subtopics must 
be sufficiently comprehensive to provide a wide range of opportunities 
for SBCs to participate in the agency R/R&D programs. Topics and 
subtopics must emphasize the need for proposals with advanced concepts 
to meet specific agency R/R&D needs. Each topic and subtopic must 
describe the needs in sufficient detail to assist in providing on-
target responses, but cannot involve detailed specifications to 
prescribed solutions of the problems.
    (b) The Act requires issuance of STTR (Phase I) Program 
solicitations in accordance with a Master Schedule coordinated between 
SBA and the STTR agency. The SBA office responsible for coordination 
is: Office of Technology, Office of Government Contracting, Office of 
Government Contracting and Business Development, U.S. Small Business 
Administration, 409 Third Street, SW., Washington, DC 20416. Phone: 
(202) 205-6450. Fax: (202) 205-7754. Email: [email protected]. 
Internet site: http://www.sba.gov/sbir.
    (c) For maximum participation by interested SBCs, it is important 
that the planning, scheduling and coordination of agency program 
solicitation release dates be completed as early as practicable to 
coincide with the commencement of the fiscal year on October 1. 
Bunching of agency program solicitation release and closing dates may 
prohibit SBCs from preparation and timely submission of proposals for 
more than one STTR project. SBA's coordination of agency schedules 
minimizes the bunching of proposed release and closing dates. 
Participating agencies may elect to publish multiple program 
solicitations within a given fiscal year to facilitate in-house agency 
proposal review and evaluation scheduling.
    (d) Master Schedule. SBA posts an electronic Master Schedule of 
release dates of program solicitations with links to Internet Web sites 
of agency solicitations. Agencies must post on their Internet Web sites 
the following information regarding each program solicitation:
    (1) The list of topics upon which R/R&D proposals will be sought.
    (2) Agency address, phone number, or email address from which STTR 
Program solicitations can be requested or obtained, especially through 
electronic means.
    (3) Names, addresses, and phone numbers of agency contact points 
where STTR-related inquiries may be directed.
    (4) Release date(s) of program solicitation(s).
    (5) Closing date(s) for receipt of proposals.
    (6) Estimated number and average dollar amounts of Phase I awards 
to be made under the solicitation.
    (e) On or before August 1, each agency representative must notify 
SBA in writing or by e-mail of its proposed program solicitation 
release and proposal due dates for the next fiscal year. SBA and the 
agency representatives will coordinate the resolution of any 
conflicting agency solicitation dates by the second week of August. In 
all cases, SBA will make final decisions.
    (f) For those agencies that use both general topic and more 
specific subtopic designations in their STTR solicitations, the topic 
data should accurately describe the research solicited. For example, 
rather than just announcing topic information characterized as 
``Chemistry'' or ``Aerodynamics,'' the STTR agency should summarize the 
subtopic statements and, where appropriate, utilize National Critical 
Technologies.
    (g) Simplified, Standardized, and Timely STTR Program 
Solicitations.
    (1) The Act requires ``* * * simplified, standardized and timely 
STTR solicitations'' and for STTR agencies to use a ``uniform process'' 
minimizing the regulatory burden for SBCs. Therefore, the instructions 
in Appendix I to this Policy Directive purposely depart from normal 
government solicitation format and requirements. STTR Program 
solicitations must be prepared according to Appendix I.
    (2) Agencies must provide SBA's Office of Technology with two hard 
copies or an e-mail version of each solicitation and any modifications 
no later than the date of release of the solicitation or modification 
to the public. Agencies that issue program solicitations in electronic 
format only must provide the Internet site at which the program 
solicitation may be accessed no later than the date of posting at that 
site of the program solicitation.
    (3) SBA does not intend that the STTR Program solicitation replace 
or be used as a substitute for unsolicited proposals for R/R&D awards 
to SBCs. In addition, the STTR Program solicitation procedures do not 
prohibit other agency R/R&D actions with SBCs that are carried on in 
accordance with applicable statutory or regulatory authorizations.

6. Eligibility and Application (Proposal) Requirements

    (a) Eligibility Requirements:
    (1) To receive STTR funds, each awardee of a STTR Phase I or Phase 
II award must qualify as an SBC.
    (2) For both Phase I and Phase II, not less than 40 percent of the 
R/R&D work must be performed by the SBC, and not less than 30 percent 
of the R/R&D work must be performed by the single, partnering research 
institution.
    (3) For both Phase I and Phase II, 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.
    (4) For both Phase I and Phase II, the principal investigator can 
be with the SBC or the collaborative partner at the time of award and 
during the conduct of the proposed project. An SBC may replace the 
principal investigator on an STTR Phase I or Phase II award, subject to 
approval in writing by the funding agreement officer. For purposes of 
the STTR Program, personnel obtained

[[Page 35759]]

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.
    (b) Proposal Requirements:
    (1) Commercialization Plan. A succinct commercialization plan must 
be included with each proposal for an STTR Phase II award moving toward 
commercialization. Elements of a commercialization plan may include the 
following:
    (i) Company information: Focused objectives/core competencies; 
size; specialization area(s); products with significant sales; and 
history of previous Federal and non-Federal funding, regulatory 
experience, and subsequent commercialization.
    (ii) Customer and Competition: Clear description of key technology 
objectives, current competition, and advantages compared to competing 
products or services; description of hurdles to acceptance of the 
innovation.
    (iii) Market: Milestones, target dates, analyses of market size, 
and estimated market share after first year sales and after 5 years; 
explanation of plan to obtain market share.
    (iv) Intellectual Property: Patent status, technology lead, trade 
secrets or other demonstration of a plan to achieve sufficient 
protection to realize the commercialization stage and attain at least a 
temporal competitive advantage.
    (v) Financing: Plans for securing necessary funding in Phase III.
    (vi) Assistance and mentoring: Plans for securing needed technical 
or business assistance through mentoring, partnering, or through 
arrangements with state assistance programs, SBDCs, Federally-funded 
research laboratories, Manufacturing Extension Partnership Centers, or 
other assistance providers.
    (2) Data Collection: Each Phase II applicant will be required to 
provide information to the Tech-Net Database System (http://technet.sba.gov). See Appendix I, section 3(c), ``Data Collection 
Requirement,'' for additional information.

7. STTR Funding Process

    Because the Act requires a ``simplified, standardized funding 
process,'' specific attention must be given to the following areas of 
STTR Program administration:
    (a) Timely Receipt and Review of Proposals.
    (1) Participating agencies must establish appropriate dates and 
formats for review of proposals.
    (i) All activities related to Phase I proposal reviews must 
normally be completed and awards made within 6 months from the closing 
date of the program solicitation. However, agencies may extend that 
period up to 12 months based on agency needs.
    (ii) Program solicitations must establish proposal submission dates 
for Phase I and may establish proposal submission dates for Phase II. 
However, agencies may also negotiate mutually acceptable Phase II 
proposal submission dates with individual Phase I awardees, accomplish 
proposal reviews expeditiously, and proceed with Phase II awards. While 
recognizing that Phase II arrangements between the agency and applicant 
may require more detailed negotiation to establish terms acceptable to 
both parties, agencies must not sacrifice the R/R&D momentum created 
under Phase I by engaging in unnecessarily protracted Phase II 
proceedings.
    (iii) STTR participants often submit duplicate or similar proposals 
to more than one soliciting agency when the work projects appear to 
involve similar topics or requirements, which are within the expertise 
and capability levels of the applicant. To the extent feasible, more 
than one agency should not fund ``essentially equivalent work'' under 
the STTR or other Federal programs. For this purpose, the standardized 
program solicitation requires applicants to indicate the name and 
address of the agencies to which essentially equivalent work proposals 
were made, or anticipated to be made, and to identify by subject the 
projects for which the proposal was submitted and the dates submitted. 
The same information will be required for any previous Federal 
government awards. To assist in avoiding duplicate funding, each agency 
must provide to SBA and to each STTR agency a listing of Phase I and 
Phase II awardees, their complete address, and the title of each STTR 
project. This information should be distributed no later than release 
of the funding agreement award information to the public.
    (b) Review of STTR Proposals. SBA encourages STTR agencies to use 
their routine review processes for STTR proposals whether internal or 
external evaluation is used. A more limited review process may be used 
for Phase I due to the larger number of proposals anticipated. Where 
appropriate, ``peer'' reviews external to the agency are authorized by 
the Act. SBA cautions STTR agencies that all review procedures must be 
designed to minimize any possible conflict of interest as it pertains 
to applicant proprietary data. The standardized STTR solicitation 
advises potential applicants that proposals may be subject to an 
established external review process and that the applicant may include 
company designated proprietary information in its proposal.
    (c) Selection of Awardees. Normally, STTR agencies must establish a 
proposal review cycle wherein successful and unsuccessful applicants 
will be notified of final award decisions within 6 months of the 
agency's Phase I proposal closing date. However, agencies may extend 
that period up to 12 months based on agency needs.
    (1) The standardized STTR Program solicitation must:
    (i) Advise Phase I applicants that additional information may be 
requested by the awarding agency to evidence awardee responsibility for 
project completion.
    (ii) Advise applicants of the proposal evaluation criteria for 
Phase I and Phase II.
    (2) The STTR agency and each Phase I awardee considered for a Phase 
II award must arrange to manage Phase II proposal submissions, reviews, 
and selections.
    (d) Management of the STTR Project. The SBC, and not the single, 
partnering research institution, is to provide satisfactory evidence 
that it will exercise management direction and control of the 
performance of the STTR funding agreement. Regardless of the proportion 
of the work or funding allocated to each of the performers under the 
funding agreement, the SBC is to be the primary party with overall 
responsibility for performance of the project. All agreements between 
the SBC and the research institution cooperating in the STTR funding 
agreement, or any business plans reflecting agreements and 
responsibilities between the parties during performance of STTR Phase I 
or Phase II funding agreement, or for the commercialization of the 
resulting technology, should reflect the controlling position of the 
SBC.
    (e) Cost Sharing. Cost sharing can serve the mutual interests of 
the STTR agencies and certain STTR awardees by assuring the efficient 
use of available resources. However, cost sharing on STTR projects is 
not required, although it may be encouraged. Therefore, cost sharing 
cannot be an evaluation factor in the review of proposals. The 
standardized STTR Program solicitation (Appendix I) will provide 
information to prospective STTR applicants concerning cost sharing.
    (f) Payment Schedules and Cost Principles.

[[Page 35760]]

    (1) STTR awardees may be paid under an applicable, authorized 
progress payment procedure or in accordance with a negotiated/
definitized price and payment schedule. Advance payments are optional 
and may be made under appropriate law. In all cases, agencies must make 
payment to recipients under STTR funding agreements in full, subject to 
audit, on or before the last day of the 12-month period beginning on 
the date of completion of the funding agreement requirements.
    (2) All STTR funding agreements must use, as appropriate, current 
cost principles and procedures authorized for use by the STTR agencies. 
At the time of award, agencies shall inform each STTR awardee, to the 
extent possible, of the applicable Federal regulations and procedures 
that refer to the costs that, generally, are allowable under funding 
agreements.
    (g) Funding Agreement Types and Fee or Profit. Statutory 
requirements for uniformity and standardization require consistency in 
application of STTR Program provisions among STTR agencies. However, 
consistency must allow for flexibility by the various agencies in 
missions and needs as well as the wide variance in funds required to be 
devoted to STTR Programs in the agencies. The following instructions 
meet all of these requirements:
    (1) Funding Agreement. The type of funding agreement (contract, 
grant, or cooperative agreement) is determined by the awarding agency, 
but must be consistent with 31 U.S.C. 6301-6308.
    (2) Fee or Profit. Except as expressly excluded or limited by 
statute, awarding agencies must provide for a reasonable fee or profit 
on STTR funding agreements, consistent with normal profit margins 
provided to profit-making firms for R/R&D work.
    (h) Periods of Performance and Extensions.
    (1) In keeping with the legislative intent to make the largest 
possible number of STTR awards, modification of funding agreements to 
extend periods of performance, to increase the scope of work, or to 
increase the dollar amount should be kept to a minimum, except for 
options in original Phase I or II awards.
    (2) Phase I. Period of performance normally should not exceed 1 
year. However, agencies may provide a longer performance period where 
appropriate for a particular project. Beginning with FY 2004, agencies 
may approve a shorter or longer period of time, when appropriate for a 
particular project.
    (3) Phase II. Period of performance under Phase II is a subject of 
negotiation between the awardee and the issuing agency. The duration of 
Phase II normally should not exceed 2 years. However, agencies may 
provide a longer performance period where appropriate for a particular 
project. Beginning with FY 2004, agencies may approve a shorter or 
longer period of time, when appropriate for a particular project.
    (i) Dollar Value of Awards.
    (1) Generally, a Phase I award may not exceed $100,000 and a Phase 
II award may not exceed $500,000. Beginning October 1, 2003, a Phase II 
award may not generally exceed $750,000. SBA may adjust these amounts 
once every 5 years to reflect economic adjustments and programmatic 
considerations. There is no dollar level associated with Phase III STTR 
awards.
    (2) An awarding agency may exceed those award values where 
appropriate for a particular project. After award of any funding 
agreement exceeding $100,000 for Phase I or $500,000 for Phase II 
($750,000 beginning October 1, 2003), the agency's STTR representative 
must provide SBA with written justification of such action. This 
justification must be submitted with the agency's Annual Report data. 
Similar justification is required for any modification of a funding 
agreement that would bring the cumulative dollar amount to a total in 
excess of the amounts set forth above.

8. Terms of Agreement Under STTR Awards

    (a) Proprietary Information Contained in Proposals. The 
standardized STTR Program solicitation will include provisions 
requiring the confidential treatment of any proprietary information to 
the extent permitted by law. Agencies will discourage SBCs from 
submitting information considered proprietary unless the information is 
deemed essential for proper evaluation of the proposal. The 
solicitation will require that all proprietary information be 
identified clearly and marked with a prescribed legend. Agencies may 
elect to require SBCs to limit proprietary information to that 
essential to the proposal and to have such information submitted on a 
separate page or pages keyed to the text. The government, except for 
proposal review purposes, protects all proprietary information, 
regardless of type, submitted in a contract proposal or grant 
application for a funding agreement under the STTR Program, from 
disclosure.
    (b) Rights in Data Developed Under STTR Funding Agreement. The Act 
provides for ``retention by an SBC of the rights to data generated by 
the concern in the performance of an STTR award.''
    (1) Each agency must refrain from disclosing STTR technical data to 
outside the government (except reviewers) and especially to competitors 
of the SBC, or from using the information to produce future technical 
procurement specifications that could harm the SBC that discovered and 
developed the innovation.
    (2) STTR agencies must protect from disclosure and non-governmental 
use all STTR technical data developed from work performed under an STTR 
funding agreement for a period of not less than 4 years from delivery 
of the last deliverable under that agreement (either Phase I, Phase II, 
or Federally-funded STTR Phase III) unless, subject to (b)(3) of this 
section, the agency obtains permission to disclose such STTR technical 
data from the awardee or STTR applicant. Agencies are released from 
obligation to protect STTR data upon expiration of the protection 
period except that any such data that is also protected and referenced 
under a subsequent STTR award must remain protected through the 
protection period of that subsequent STTR award. For example, if a 
Phase III award is issued within or after the Phase II data rights 
protection period and the Phase III award refers to and protects data 
developed and protected under the Phase II award, then that data must 
continue to be protected through the Phase III protection period. 
Agencies have discretion to adopt a protection period longer than four 
years. The government retains a royalty-free license for government use 
of any technical data delivered under an STTR award, whether patented 
or not. This section does not apply to program evaluation.
    (3) STTR technical data rights apply to all STTR awards, including 
subcontracts to such awards, that fall within the statutory definition 
of Phase I, II, or III of the STTR Program, as described in Section 4 
of this Policy Directive. The scope and extent of the STTR technical 
data rights applicable to Federally-funded Phase III awards is 
identical to the STTR data rights applicable to Phases I and II STTR 
awards. The data rights protection period lapses only: (i) upon 
expiration of the protection period applicable to the STTR award, or 
(ii) by agreement between the awardee and the agency.
    (4) Agencies must insert the provisions of (b)(1), (2), and (3) 
immediately above as STTR data rights clauses into all STTR Phase I, 
Phase II, and Phase III awards. These data rights clauses are non-
negotiable and must not be the subject of negotiations pertaining to an 
STTR Phase III award, or diminished or removed during award 
administration. An agency must not, in any way, make issuance of an 
STTR

[[Page 35761]]

Phase III award conditional on data rights. If the STTR awardee wishes 
to transfer its STTR data rights to the awarding agency or to a third 
party, it must do so in writing under a separate agreement. A decision 
by the awardee to relinquish, transfer, or modify in any way its STTR 
data rights must be made without pressure or coercion by the agency or 
any other party. Following issuance of an STTR Phase III award, the 
awardee may enter into an agreement with the awarding agency to 
transfer or modify the data rights contained in that STTR Phase III 
award. Such a bilateral data rights agreement must be entered into only 
after the STTR Phase III award, which includes the appropriate STTR 
data rights clause, has been signed. SBA must immediately report to the 
Congress any attempt or action by an agency to condition an STTR award 
on data rights, to exclude the appropriate data rights clause from the 
award, or to diminish such rights.
    (c) Allocation of Rights.
    (1) An SBC, before receiving an STTR award, must negotiate a 
written agreement between the SBC and the single, partnering research 
institution, allocating intellectual property rights and rights, if 
any, to carry out follow-on research, development, or 
commercialization. The SBC must submit this agreement to the awarding 
agency upon request--either with the proposal or any time thereafter. 
The SBC must certify in all proposals that the agreement is 
satisfactory to the SBC.
    (2) The awarding agency may accept an existing agreement between 
the two parties if the SBC certifies its satisfaction with the 
agreement, and such agreement does not conflict with the interests of 
the Government. Each agency participating in the STTR Program shall 
provide a model agreement to be used as guidance by the SBC in the 
development of an agreement with the research institution. The model 
agreement should direct the parties to, at a minimum:
    (i) State specifically the degree of responsibility, and ownership 
of any product, process, or other invention or innovation resulting 
from the cooperative research. The degree of responsibility shall 
include responsibility for expenses and liability, and the degree of 
ownership shall also include the specific rights to revenues and 
profits.
    (ii) State which party may obtain United States or foreign patents 
or otherwise protect any inventions resulting from the cooperative 
research.
    (iii) State which party has the right to any continuation of 
research, including non-STTR follow-on awards.
    The Government will not normally be a party to any agreement 
between the SBC and the research institution. Nothing in the agreement 
is to conflict with any provisions setting forth the respective rights 
of the United States and the SBC with respect to intellectual property 
rights and with respect to any right to carry out follow-on research.
    (3) Pursuant to the Act, SBA will establish a single model 
agreement for use in the STTR Program that allocates between SBCs and 
research institutions intellectual property rights and rights, if any, 
to carry out follow-on research, development, or commercialization. 
Written comments from affected Federal agencies, SBCs, research 
institutions, and other interested parties will be solicited in the 
development of the model agreement. Each agency participating in the 
STTR Program will adopt the agreement developed by SBA as the agency's 
model agreement.
    (d) Title Transfer of Agency Provided Property. Under the Act, the 
Government may transfer title to equipment provided by the STTR agency 
to the awardee where such transfer would be more cost effective than 
recovery of the property.
    (e) Continued Use of Government Equipment. The Act directs that an 
agency allow an STTR awardee participating in the third phase of the 
STTR Program continued use, as a directed bailment, of any property 
transferred by the agency to the Phase II awardee. The Phase II awardee 
may use the property for a period of not less than 2 years, beginning 
on the initial date of the concern's participation in the third phase 
of the STTR Program.
    (f) Grant Authority. The Act does not, in and of itself, convey 
grant authority. Each agency must secure grant authority in accordance 
with its normal procedures.
    (g) Conflicts of Interest. SBA cautions STTR agencies that awards 
made to SBCs owned by or employing current or previous Federal 
government employees may create conflicts of interest in violation of 
FAR part 3 and the Ethics in Government Act of 1978, as amended. Each 
STTR agency should refer to the standards of conduct review procedures 
currently in effect for its agency to ensure that such conflicts of 
interest do not arise.
    (h) American-made Equipment and Products. Congress intends that the 
awardee of a funding agreement under the STTR Program should, when 
purchasing any equipment or a product with funds provided through the 
funding agreement, purchase only American-made equipment and products, 
to the extent possible, in keeping with the overall purposes of this 
program. Each STTR agency must provide to each awardee a notice of this 
requirement.

9. Responsibilities of STTR Participating Agencies and Departments

    (a) The Act requires each agency participating in the STTR Program 
to:
    (1) Unilaterally determine the categories of projects to be 
included in its STTR Program, giving special consideration to broad 
research topics and to topics that further one or more critical 
technologies, as identified by:
    (i) The National Critical Technologies panel (or its successor) in 
reports required under 42 U.S.C. 6683, or
    (ii) The Secretary of Defense in accordance with 10 U.S.C. 2522.
    (2) Release STTR solicitations in accordance with the SBA master 
schedule.
    (3) Unilaterally receive and evaluate proposals resulting from 
program solicitations, select awardees, issue funding agreements, and 
inform each awardee under such agreement, to the extent possible, of 
the expenses of the awardee that will be allowable under the funding 
agreement.
    (4) Require a succinct commercialization plan with each proposal 
submitted for a Phase II award.
    (5) Collect and maintain information from awardees and provide it 
to SBA to develop and maintain the Tech-Net Database, as identified in 
section 11(e) of this Policy Directive.
    (6) Administer its own STTR funding agreements or delegate such 
administration to another agency.
    (7) Include provisions in each STTR funding agreement setting forth 
the respective rights of the United States and the awardee with respect 
to intellectual property rights and with respect to any right to carry 
out follow-on research.
    (8) Ensure that the rights in data developed under each Federally-
funded STTR Phase I, Phase II, and Phase III award are protected 
properly.
    (9) Make payments to awardees of STTR funding agreements on the 
basis of progress toward or completion of the funding agreement 
requirements and in all cases make payment to awardees under such 
agreements in full, subject to audit, on or before the last day of the 
12-month period beginning on the date of completion of such 
requirements.
    (10) Provide an annual report on the STTR Program to SBA. See 
section 10 of this Policy Directive.
    (11) Report at least annually to SBA's Office of Technology all 
instances in which an agency pursued research,

[[Page 35762]]

development, production, or any such combination of a technology 
developed by an SBC using an award made under the STTR Program of that 
agency, where the agency determined that it was not practicable to 
enter into a follow-on non-STTR Program funding agreement with that 
concern. The report shall include, at a minimum:
    (i) The reasons why the follow-on funding agreement with the 
concern was not practicable;
    (ii) The identity of the entity with which the agency contracted to 
perform the research, development, or production; and
    (iii) A description of the type of funding agreement under which 
the research, development, or production was obtained.
    (12) Include in its annual performance plan required by 31 U.S.C. 
1115(a) and (b) a section on its STTR Program, and submit such section 
to the Senate Committee on Small Business and Entrepreneurship and to 
the House Committees on Science and Small Business.
    (13) Adopt the model agreement to be developed by SBA for use in 
the STTR Program that allocates between SBCs and research institutions 
intellectual property rights and rights, if any, to carry out follow-on 
research, development, or commercialization.
    (14) Develop, in consultation with the Office of Federal 
Procurement Policy and the Office of Government Ethics, procedures to 
ensure that Federally-funded research and development centers that 
participate in STTR agreements:
    (i) Are free from organizational conflicts of interests relative to 
the STTR Program;
    (ii) Do not use privileged information gained through work 
performed for an STTR agency or private access to STTR agency personnel 
in the development of an STTR proposal; and
    (iii) Use outside peer review as appropriate.
    (15) Implement an outreach program to research institutions and 
SBCs for the purpose of enhancing its STTR Program, in conjunction with 
any such outreach done for purposes of the Small Business Innovation 
Research (SBIR) Program.
    (b) Interagency actions.
    (1) Joint funding. An STTR project may be financed by more than one 
Federal agency. Joint funding is not required but can be an effective 
arrangement for some projects.
    (2) Phase II awards. An STTR Phase II award may be issued by a 
Federal agency other than the one that made the Phase I award. The 
Phase I and Phase II agencies should document their files 
appropriately, providing clear rationale for the transfer of the Phase 
II proposal to, and award by, the funding Federal agency.
    (3) Timely notification of awards. In order to avoid duplicate 
funding of an STTR project, agencies shall promptly search the Tech-Net 
Database System for awards for essentially equivalent work. Discussion 
among agencies receiving similar proposals is strongly encouraged 
before an STTR award is made.
    (4) Participation by women-owned SBCs and socially and economically 
disadvantaged SBCs in the STTR Program. In order to meet statutory 
requirements for greater inclusion, SBA and the Federal participating 
agencies must conduct outreach efforts to find and place innovative 
women-owned SBCs and socially and economically disadvantaged SBCs in 
the STTR Program information system. These SBCs will be required to 
compete for STTR awards on the same basis as all other SBCs. However, 
participating agencies are encouraged to work independently and 
cooperatively with SBA to develop methods to encourage qualified women-
owned SBCs and socially and economically disadvantaged SBCs to 
participate in the STTR Program.
    (c) Limitation of participation and use of funds.
    (1) An agency must not use any of its STTR budget for the purpose 
of funding administrative costs of the program, including costs 
associated with program operations, employee salaries, and other 
associated expenses, or, in the case of a SBC or a research 
institution, costs associated with employee salaries and other 
associated expenses, including administrative overhead (other than 
those direct or indirect costs allowable under guidelines of the Office 
of Management and Budget and the Federal Acquisition Regulation).
    (2) A Federal agency must not issue an STTR funding agreement that 
includes a provision for subcontracting any portion of that agreement 
back to the issuing agency, to any other Federal government agency, or 
to other units of the Federal government. SBA may issue a case-by-case 
waiver to this provision after review of an agency's written 
justification that includes the following information:
    (i) An explanation of why the STTR research project requires the 
use of the Federal facility or personnel, including data that verifies 
the absence of non-Federal facilities or personnel capable of 
supporting the research effort.
    (ii) Why the Agency will not and can not fund the use of the 
Federal facility or personnel for the STTR project with non-STTR money.
    (iii) The concurrence of the SBC's chief business official to use 
the Federal facility or personnel.
    (3) No agency, at its own discretion, may unilaterally cease 
participation in the STTR Program. R/R&D agency budgets may cause 
fluctuations and trends that must be reviewed in light of STTR Program 
purposes. An agency may be considered by SBA for a phased withdrawal 
from participation in the STTR Program over a period of time sufficient 
in duration to minimize any adverse impact on SBCs. However, the SBA 
decision concerning such a withdrawal will be made on a case-by-case 
basis and will depend on significant changes to extramural R/R&D 3-year 
forecasts as found in the annual Budget of the United States Government 
and National Science Foundation breakdowns of total R/R&D obligations 
as published in the Federal Funds for Research and Development. Any 
withdrawal of an STTR Federal participating agency from the STTR 
Program will be accomplished in a standardized and orderly manner in 
compliance with these statutorily mandated procedures.
    (4) Federal agencies not otherwise qualified for the STTR Program 
may participate on a voluntary basis. Federal agencies seeking to 
participate in the STTR Program must first submit their written 
requests to SBA. Voluntary participation requires the written approval 
of SBA.
    (5) Agencies may not make available, for the purpose of meeting the 
required percentage of expenditure on SBCs for the STTR Program (see 
section 2(d) of this Policy Directive) an amount of its extramural 
budget for basic research that exceeds those percentages.
    (6) Funding agreements with SBCs for R/R&D that result from 
competitive or single source selections other than an STTR Program 
shall not be considered to meet any portion of the percentage 
requirements of section 2(d) set forth in this Policy Directive.

10. Annual Report to the Small Business Administration

    The Act requires a ``simplified, standardized and timely annual 
report'' from the STTR agencies. The following paragraphs explain more 
about this requirement, including the due date, the kinds of 
information to be included, and the number of copies to be submitted to 
SBA.
    (a) Annual Report Due Date and Number of Copies. Reporting must be 
on an annual basis and will be for the period ending September 30 of 
each

[[Page 35763]]

fiscal year. A single, hard copy report is due to SBA by March 15 of 
each year. For example, the report for FY 2002 (October 1, 2001-
September 30, 2002) must be submitted to SBA by March 15, 2003. SBA 
encourages agencies to submit their annual report before the March 15 
due date. The report should be sent to the address noted in section 
5(b). However, if agencies choose to send an electronic version, it 
should be sent to [email protected].
    (b) Annual Report Content.
    (1) Agency total fiscal year, extramural R/R&D total obligations as 
reported to the National Science Foundation pursuant to the annual 
Budget of the United States Government.
    (2) STTR Program total fiscal year dollars derived by applying the 
statutory percentum to the agency's extramural R/R&D total obligations.
    (3) STTR Program fiscal year dollars obligated through STTR Program 
funding agreements for Phase I and Phase II.
    (4) Number of topics and subtopics contained in each program 
solicitation.
    (5) Number of proposals received by the agency for each topic and 
subtopic in each program solicitation. Identify the number of proposals 
received from, and the number and total amount of awards to HUBZone 
SBCs.
    (6) For both Phase I and Phase II, the awardee's name and address, 
solicitation topic and subtopic, solicitation number, project title, 
and total dollar amount of funding agreement. Identify women-owned 
SBCs, economically and socially disadvantaged SBCs, HUBZone SBCs, and 
Phase II awardees with follow-on funding commitments.
    (7) Justification for the award of any funding agreement exceeding 
$100,000 for Phase I or $500,000 for Phase II ($750,000 beginning 
October 1, 2003).
    (8) The number of awardees for whom the Phase I process exceeded 6 
months starting from the closing date of the STTR solicitation to award 
of the funding agreement.
    (9) For an agency Phase III award using non-STTR Federal funds to 
continue a Phase II project, the agency must provide the name, address, 
project title, and dollar amount obligated.
    (10) Justification for awards made under a topic or subtopic where 
the agency received only one proposal. Agencies must also provide the 
awardee's name and address, the topic or subtopic, and dollar amount of 
award. Information must be collected quarterly but updated in the 
agency's annual report.
    (11) If applicable, report the number of National Critical 
Technology topic or subtopic funding agreements issued, including an 
identification of the specific critical technology topics, and the 
percentage by number and dollar amount of the agency's total STTR 
awards to such National Critical Technologies topics.
    (12) Report all instances in which an agency pursued R/R&D, 
services, production, or any such combination of a technology developed 
by an STTR awardee and determined that it was not practicable to enter 
into a follow-on funding agreement with non-STTR funds with that 
concern. See section 9(a)(11) for minimum reporting requirements.

11. Responsibilities of SBA

    (a) SBA's Office of Technology will annually obtain available 
information on the current critical technologies from the National 
Critical Technologies panel (or its successor) and the Secretary of 
Defense and provide such information to the STTR agencies.
    (b) SBA will request this information in June of each year. The 
data received will be submitted to each of the participating Federal 
agencies and will also be published in the September issue of the STTR 
Pre-Solicitation Announcement.
    (c) Examples of STTR Areas to be Monitored by SBA.
    (1) STTR Funding Allocations. The magnitude and source of each STTR 
agency's annual allocation reserved for STTR awards are critical to the 
success of the STTR Program. The Act defines the STTR effort (R/R&D), 
the source of the funds for financing the STTR Program (extramural 
budget), and the percentage of such funds to be reserved for the STTR 
Program (0.15 percent through 2003, 0.3 percent thereafter). The Act 
requires that SBA monitor these annual allocations.
    (2) STTR Program Solicitation and Award Status. The accomplishment 
of scheduled STTR events, such as STTR Program solicitation release and 
the issuance of funding agreements is critical to meeting statutory 
mandates and to operating an effective, useful program. SBA monitors 
these and other operational features of the STTR Program. SBA does not 
plan to monitor administration of the awards except in instances where 
SBA assistance is requested and is related to a specific STTR project 
or funding agreement.
    (3) Follow-on Funding Commitments. SBA will monitor whether follow-
on non-Federal funding commitments obtained by Phase II awardees for 
Phase III were considered in the evaluation of Phase II proposals as 
required by the Act.
    (4) Agency Rules and Regulations. It is essential that no policy, 
rule, regulation, or interpretation be promulgated by the STTR agencies 
that are inconsistent with the Act or this Policy Directive. SBA's 
monitoring activity will include review of policies, rules, 
regulations, interpretations, and procedures generated to facilitate 
intra-or interagency STTR Program implementation.
    (d) SBA develops, participates in, and, when appropriate and 
feasible, sponsors seminars for innovative women-owned SBCs and 
socially and economically disadvantaged SBCs to inform them of the STTR 
Program and Federal and commercial assistance and services available 
for STTR Program participants.
    (e) Standardized Collection of Data--``Technology Resources Access 
Network'' (Tech-Net) Database System Overview.
    (1) SBA's Office of Technology, as functional program manager for 
the STTR and the SBIR Programs, is required to collect and report to 
the Congress, information regarding awards made to SBCs by each Federal 
agency participating in these programs.
    (2) The Office of Technology maintains an internal database of 
awards and uses the system to report on technology and demographical 
statistics regarding the STTR and the SBIR Programs. The system also 
stores the 200-word technical abstract for each STTR and SBIR award 
that is prepared by the awardee summarizing the research effort that 
has been supported by the Federal Government. The system also provides 
the Office of Technology with the ability to perform keyword searches 
in many areas, including any part of the name, address, and technical 
abstract of the awardee. The system produces many reports that are used 
in the conduct of audits performed by the General Accounting Office 
(GAO) and to expose potential duplication of research and development 
efforts funded by the STTR agencies.
    (3) The Office of Technology, in a joint effort with SBA's Office 
of the Chief Information Officer, has redesigned the Office of 
Technology's internal awards database system to operate on the 
Internet. The Internet system is titled the ``Technology Resources 
Access Network,'' or Tech-Net.
    (4) Tech-Net offers a vast array of user-friendly capabilities, and 
is accessible by the public at no charge. Tech-Net allows for the 
online submission of STTR/SBIR awards data

[[Page 35764]]

from all STTR agencies. Tech-Net also allows any end-user to perform 
keyword searches and create formatted reports of STTR/SBIR awards 
information. Tech-Net will allow for potential research partners to 
view research and development efforts that are ongoing in the STTR and 
the SBIR Programs, increasing the investment opportunities of the STTR/
SBIR SBCs in the high tech arena. Tech-Net serves as an excellent 
marketing tool for the small, high tech business community, allowing 
investors to view first-hand the technical capabilities of STTR/SBIR 
awardees. This will ultimately produce investments, partnerships, and 
strategic alliances resulting in commercialization of STTR/SBIR 
research.
    (5) Tech-Net also houses legislatively mandated information on all 
STTR and SBIR awards, as well as confidential outcome and output 
information that will be relevant to measuring the effectiveness and 
success of the programs.
    (6) Awardees can update their information and add project 
commercialization and sales data with user names and passwords. 
Username and passwords will be assigned only to awardees to provide 
access to their respective awards information maintained in the Tech-
Net system. Award and commercialization data maintained in the Tech-Net 
database can be changed only by the awardee, SBA, or the awarding STTR 
/SBIR Federal agency.
    (7) Project commercialization and sales data can only be viewed by 
Congress, the General Accounting Office (GAO), agencies participating 
in the STTR and the SBIR Programs, Office of Management and Budget 
(OMB), Office of Science and Technology Policy (OSTP), Office of 
Federal Procurement Policy (OFPP), and other authorized persons (for 
example, authorized contractors) who are subject to a use and 
nondisclosure agreement with the Federal government covering the use of 
the database.
    (8) To use the Tech-Net database system, visit the Web site http://tech-net.sba.gov. Online help is available.
    (9) Public Tech-Net Database (See Appendix II for Data Fields). The 
public Tech-Net database is a searchable, up-to-date, electronic 
database that includes:
    (i) The name, size, location, funding agreement number, and 
identification number assigned by the Administrator of each SBC that 
has received an STTR or SBIR Phase I or Phase II award from a Federal 
agency;
    (ii) A description of each STTR or SBIR Phase I or Phase II award 
received by the SBC including:
    (A) An abstract of the project funded by the award, excluding any 
proprietary information so identified by the awardee;
    (B) The Federal agency making the award; and
    (C) The date and amount of the award.
    (iii) An identification of any business concern or subsidiary 
established for the commercial application of a product or service for 
which an STTR or SBIR award is made; and
    (iv) Information regarding mentors and Mentoring networks, as 
required in the Federal and State Technology (FAST) Partnership Program 
established under section 35(d) of the Act and described on the SBA's 
Internet site at http://www.sba.gov/sbir/indexfast.html.
    (v) With respect to assistance under the STTR Program (as required 
under section 9(k)(1) of the Act):
    (A) Whether the SBC or the research institution initiated their 
collaboration on each assisted STTR project;
    (B) Whether the SBC or the research institution originated any 
technology relating to the assisted STTR project;
    (C) The length of time it took to negotiate any licensing agreement 
between the SBC and the research institution under each assisted STTR 
project; and
    (D) The percentage allocated between the SBC and the research 
institution of the proceeds from commercialization, marketing, or sale 
of technology resulting from each assisted STTR project.
    (10) Government Tech-Net Database. SBA, in consultation with the 
Federal agencies participating in the STTR and the SBIR Programs, 
develops and maintains a secure database that:
    (i) Contains, for each Phase II award:
    (A) Information on revenue from the sale of new products or 
services resulting from the research conducted under each Phase II 
award;
    (B) Information on additional investment from any source, other 
than Phase I or Phase II STTR or SBIR awards, to further the research 
and development conducted under each Phase II award; and
    (C) Any other information received in connection with the award 
that the Administrator, in conjunction with the STTR Program managers 
of the participating agencies, considers relevant and appropriate;
    (ii) Includes any narrative information that a Phase II awardee 
voluntarily submits to further describe the outputs and outcomes of its 
awards;
    (iii) Includes for each applicant that does not receive a Phase I 
or Phase II award: (A) The name, size, location, and identifying number 
assigned by SBA, and identification number assigned by SBA; (B) an 
abstract of the project; and (C) the Federal agency to which the 
application was made;
    (iv) Includes any other data collected by or available to any 
Federal agency that such agency considers to be useful for STTR Program 
evaluation; and
    (v) Is available for use solely for program evaluation purposes by 
the Federal government or, in accordance with Policy Directives issued 
by SBA, by other authorized persons who are subject to a use and 
nondisclosure agreement with the Federal government covering the use of 
the database.
    (11) Data Collection for Government Tech-Net Database.
    (i) Each SBC applying for a Phase II award is required to update 
the appropriate information in the Tech-Net database for any of its 
prior Phase II awards. In meeting this requirement, the SBC may 
apportion sales or additional investment information relating to more 
than one Phase II award among those awards, if it notes the 
apportionment for each award.
    (ii) Each Phase II awardee is required to update the appropriate 
information in the Tech-Net database on that award upon completion of 
the last deliverable under the funding agreement. In addition, the 
awardee is requested to voluntarily update the appropriate information 
on that award in the Tech-Net database annually thereafter for a 
minimum period of 5 years.
    (iii) Pursuant to 15 U.S.C. 638(k)(4), information provided to the 
government Tech-Net Database is privileged and confidential and not 
subject to disclosure pursuant to 5 U.S.C. 552 (Government Organization 
and Employees); nor must it be considered to be publication for 
purposes of 35 U.S.C. 102 (a) or (b).
    (iv) SBA will minimize the data reporting requirements of SBCs, 
make updating available electronically, and provide standardized 
procedures.

Appendix I: Instructions for STTR Program Solicitation Preparation

1. General

    Section 9(p) of the Small Business Act (15 U.S.C. 638(p)) 
requires ``* * * simplified, standardized and timely STTR 
solicitations'' and for STTR agencies to utilize a ``uniform 
process'' minimizing the regulatory burden of participation. 
Therefore, the following instructions purposely depart from normal 
government solicitation formats and requirements. STTR solicitations 
must be prepared and issued as program solicitations in accordance 
with the following instructions.

[[Page 35765]]

2. Limitation in Size of Solicitation

    In the interest of meeting the requirement for simplified and 
standardized solicitations, while also recognizing that the Internet 
has become the main vehicle for distribution, each agency should 
structure its entire STTR solicitation to produce the least number 
of pages (electronic and printed), consistent with the procurement/
assistance standard operating procedures and statutory requirements 
of the participating Federal agencies.

3. Format

    STTR Program solicitations must be prepared in a simple, 
standardized, easy-to-read, and easy-to-understand format. It must 
include a cover sheet, a table of contents, and the following 
sections in the order listed:
    1. Program Description;
    2. Definitions;
    3. Proposal Preparation Instructions and Requirements;
    4. Method of Selection and Evaluation Criteria;
    5. Considerations;
    6. Submission of Proposals;
    7. Scientific and Technical Information Sources;
    8. Submission Forms and Certifications;
    9. Research Topics.

4. Cover Sheet

    The cover sheet of an STTR Program solicitation must clearly 
identify the solicitation as a STTR solicitation, identify the 
agency releasing the solicitation, specify date(s) on which contract 
proposals or grant applications (proposals) are due under the 
solicitation, and state the solicitation number or year.

Instructions for Preparation of STTR Program Solicitation; Sections 1 
through 9

1. Program Description

    (a) Summarize in narrative form the invitation to submit 
proposals and the objectives of the STTR Program.
    (b) Describe in narrative form the agency's STTR Program, 
including a description of the three phases. Note in your 
description that the solicitation is for Phase I proposals only.
    (c) Describe program eligibility, as follows:
    Eligibility. Each concern submitting a proposal must qualify as 
a SBC for R/R&D purposes at the time of award. The SBC will submit a 
proposal for ``cooperative research and development'' with a non-
profit ``research institution'' (terms as defined in this Policy 
Directive). Also, for both Phase I and Phase II, the R/R&D work must 
be performed in the United States. However, based on a rare and 
unique circumstance, for example, a supply or material or other item 
or project requirement that is not available in the United States, 
agencies may allow that particular portion of the research or R&D 
work to be performed or obtained in a country outside of the United 
States. Approval by the funding agreement officer for each such 
specific condition must be in writing. Phase II proposals may be 
submitted only by Phase I awardees.
    (d) List the name, address and telephone number of agency 
contacts for general information on the STTR Program solicitation.

2. Definitions

    Whenever terms are used that are unique to the STTR Program, a 
specific STTR solicitation or a portion of a solicitation, they will 
be defined in a separate section entitled ``Definitions.'' At a 
minimum, the definitions of ``R/R&D,'' ``cooperative research and 
development,'' ``funding agreement,'' ``research institution,'' 
``SBC,'' ``STTR technical data,'' ``STTR technical data rights,'' 
``subcontract, `` and ``women-owned SBC,'' as stated in this Policy 
Directive, must be included.

3. Proposal Preparation Instructions and Requirements

    The purpose of this section is to inform the applicant on what 
to include in the proposal and to set forth limits on what may be 
included. It should also provide guidance to assist applicants, 
particularly to firms that may not have previous Government 
experience, in improving the quality and acceptance of proposals.
    (a) Limitations on Length of Proposal. Include at least the 
following information:
    (1) STTR Phase I proposals must not exceed a total of 25 pages, 
including cover page, budget, and all enclosures or attachments, 
unless stated otherwise in the agency solicitation. Pages should be 
of standard size (8\1/2\'' x 11''; 21.6 cm x 27.9 cm) and should 
conform to the standard formatting instructions. Margins should be 
2.5 cm and the type at least 10 point font.
    An SBC, before receiving an STTR award, must negotiate a written 
agreement between the SBC and the single, partnering research 
institution, as discussed in section 8(c) of this Policy Directive. 
While an agency may require this agreement to be submitted at the 
time of the proposal (or at a later date), it is not considered to 
be part of the proposal and is not subject to the page limitation.
    (2) A notice that no additional attachments, appendices, or 
references beyond the 25-page limitation shall be considered in 
proposal evaluation (unless specifically solicited by an agency) and 
that proposals in excess of the page limitation shall not be 
considered for review or award.
    (b) Proposal Cover Sheet. Every applicant is required to include 
at least the following information on the first page of proposals. 
Items 8 and 9 are for statistical purposes only.
    (1) Agency and Solicitation Number or Year.
    (2) Topic Number or Letter.
    (3) Subtopic Number or Letter.
    (4) Topic Area.
    (5) Project Title.
    (6) Name and Complete Address of Firm.
    (7) Small Business Certifications (by statement or checkbox) as 
follows:
    (a) ``The above concern certifies that it is an SBC and meets 
the definition as stated in this solicitation or that it will meet 
that definition at time of award.''
    (b) ``The above concern certifies that at least 40 percent of 
the work under this project will be performed by the SBC and at 
least 30 percent of the work under this project will be performed by 
the research institution.''
    (8) Socially and Economically Disadvantaged SBC Certification 
(by statement or checkbox) as follows:
    ``The above concern certifies that it ----does---- does not 
qualify as a socially and economically disadvantaged SBC as defined 
in this solicitation.''
    (9) Women-owned SBC Certification (by statement or checkbox) as 
follows:
    ``The above concern certifies that it---- does----does not 
qualify as a women-owned SBC as defined in this solicitation.''
    (10) An information statement regarding duplicate research as 
follows:
    ``The applicant and/or Principal Investigator ----has---- has 
not submitted proposals for essentially equivalent work under other 
Federal program solicitations or ----has---- has not received other 
Federal awards for essentially equivalent work.'' (Identify 
proposals/awards in Section 3(e)10, ``Similar Proposals and 
Awards.'')
    (11) Disclosure permission (by statement or checkbox), such as 
follows, may be included at the discretion of the funding
    ``Will you permit the Government to disclose the title and 
technical abstract page of your proposed project, plus the name, 
address, and telephone number of the corporate official of your 
concern, if your proposal does not result in an award, to concerns 
that may be interested in contacting you for further information? 
Yes---- No----''
    (12) Signature of a company official of the proposing SBC and 
that individual's typed name, title, address, telephone number, and 
date of signature.
    (13) Signature of Principal Investigator or Project Manager and 
that individual's typed name, title, address, telephone number, and 
date of signature.
    (14) Legend for proprietary information as described in the 
``Considerations'' section of this program solicitation if 
appropriate. May also be noted by asterisks in the margins on 
proposal pages.
    (c) Data Collection Requirement. (1) Each Phase II applicant is 
required to provide information for the Tech-Net Database System 
(http://technet.sba.gov). The following are examples of the data to 
be entered by applicants into Tech-Net:
    (i) Any business concern or subsidiary established for the 
commercial application of a product or service for which an STTR 
award is made.
    (ii) Revenue from the sale of new products or services resulting 
from the research conducted under each Phase II award;
    (iii) Additional investment from any source, other than Phase I 
or Phase II awards, to further the research and development 
conducted under each Phase II award.
    (iv) Update the information in the Tech-Net database for any 
prior Phase II award received by the SBC. The SBC may apportion 
sales or additional investment information relating to more than one 
Phase II award among those awards, if it notes the apportionment for 
each award.
    (2) Each Phase II awardee is required to update the appropriate 
information on the award in the Tech-Net database upon completion of 
the last deliverable under the

[[Page 35766]]

funding agreement and is requested to voluntarily update the 
information in the Tech-Net database annually thereafter for a 
minimum period of 5 years.
    (d) Abstract or Summary. Applicants will be required to include 
a one-page project summary of the proposed R/R&D including at least 
the following:
    (1) Name and address of SBC.
    (2) Name and title of principal investigator or project manager.
    (3) Agency name, solicitation number, solicitation topic, and 
subtopic.
    (4) Title of project.
    (5) Technical abstract limited to two hundred words.
    (6) Summary of the anticipated results and implications of the 
approach (both Phases I and II) and the potential commercial 
applications of the research.
    (e) Technical Content. STTR Program solicitations must require 
as a minimum the following to be included in proposals submitted 
thereunder:
    (1) Identification and Significance of the Problem or 
Opportunity. A clear statement of the specific technical problem or 
opportunity addressed.
    (2) Phase I Technical Objectives. State the specific objectives 
of the Phase I research and development effort, including the 
technical questions it will try to answer to determine the 
feasibility of the proposed approach.
    (3) Phase I Work Plan. Include a detailed description of the 
Phase I R/R&D plan. The plan should indicate what will be done, 
where it will be done, and how the R/R&D will be carried out. Phase 
I R/R&D should address the objectives and the questions cited in 
(e)(2) immediately above. The methods planned to achieve each 
objective or task should be discussed in detail.
    (4) Related R/R&D. Describe significant R/R&D that is directly 
related to the proposal including any conducted by the project 
manager/principal investigator or by the proposing SBC. Describe how 
it relates to the proposed effort, and any planned coordination with 
outside sources. The applicant must persuade reviewers of his or her 
awareness of key, recent R/R&D conducted by others in the specific 
topic area.
    (5) Key Personnel and Bibliography of Directly Related Work. 
Identify key personnel involved in Phase I including their directly 
related education, experience, and bibliographic information. Where 
vitae are extensive, summaries that focus on the most relevant 
experience or publications are desired and may be necessary to meet 
proposal size limitation.
    (6) Relationship with Future R/R&D.
    (i) State the anticipated results of the proposed approach if 
the project is successful (Phase I and II).
    (ii) Discuss the significance of the Phase I effort in providing 
a foundation for the Phase II R/R&D effort.
    (7) Facilities. A detailed description, availability and 
location of instrumentation and physical facilities proposed for 
Phase I should be provided.
    (8) Consultants. Involvement of consultants in the planning and 
research stages of the project is permitted. If such involvement is 
intended, it should be described in detail.
    (9) Potential Post Applications. Briefly describe:
    (i) Whether and by what means the proposed project appears to 
have potential commercial application.
    (ii) Whether and by what means the proposed project appears to 
have potential use by the Federal government.
    (10) Similar Proposals or Awards. Warning--While it is 
permissible with proposal notification to submit identical proposals 
or proposals containing a significant amount of essentially 
equivalent work for consideration under numerous Federal program 
solicitations, it is unlawful to enter into funding agreements 
requiring essentially equivalent work. If there is any question 
concerning this, it must be disclosed to the soliciting agency or 
agencies before award. If an applicant elects to submit identical 
proposals or proposals containing a significant amount of 
essentially equivalent work under other Federal program 
solicitations, a statement must be included in each such proposal 
indicating:
    (i) The name and address of the agencies to which proposals were 
submitted or from which awards were received.
    (ii) Date of proposal submission or date of award.
    (iii) Title, number, and date of solicitations under which 
proposals were submitted or awards received.
    (iv) The specific applicable research topics for each proposal 
submitted or award received.
    (v) Titles of research projects.
    (vi) Name and title of principal investigator or project manager 
for each proposal submitted or award received.
    (f) Cost Breakdown/Proposed Budget. The solicitation will 
require the submission of simplified cost or budget data.

4. Method of Selection and Evaluation Criteria

    (a) Standard Statement. Essentially the following statement must 
be included in all STTR Program solicitations:
    ``All Phase I and II proposals will be evaluated and judged on a 
competitive basis. Proposals will be initially screened to determine 
responsiveness. Proposals passing this initial screening will be 
technically evaluated by engineers or scientists to determine the 
most promising technical and scientific approaches. Each proposal 
will be judged on its own merit. The Agency is under no obligation 
to fund any proposal or any specific number of proposals in a given 
topic. It also may elect to fund several or none of the proposed 
approaches to the same topic or subtopic.''
    (b) Evaluation Criteria.
    (1) The STTR agency must develop a standardized method in its 
evaluation process that will consider, at a minimum, the following 
factors:
    (i) The technical approach and the anticipated agency and 
commercial benefits that may be derived from the research.
    (ii) The adequacy of the proposed effort and its relationship to 
the fulfillment of requirements of the research topic or subtopics.
    (iii) The soundness and technical merit of the proposed approach 
and its incremental progress toward topic or subtopic solution.
    (iv) Qualifications of the proposed principal/key investigators, 
supporting staff, and consultants.
    (v) Evaluations of proposals require, among other things, 
consideration of a proposal's commercial potential as evidenced by:
    (A) The SBC's record of commercializing STTR or other research,
    (B) The existence of second phase funding commitments from 
private sector or non-STTR funding sources,
    (C) The existence of third phase follow-on commitments for the 
subject of the research, and,
    (D) The presence of other indicators of the commercial potential 
of the idea.
    (2) The factors in (b)(1) above and other appropriate evaluation 
criteria, if any, must be specified in the ``Method of Selection'' 
section of STTR Program solicitations.
    (c) Peer Review. The program solicitation must indicate if the 
STTR agency contemplates that as a part of the STTR proposal 
evaluation, it will use external peer review.
    (d) Release of Proposal Review Information. After final award 
decisions have been announced, the technical evaluations of the 
applicant's proposal may be provided to the applicant. The identity 
of the reviewer must not be disclosed.

5. Considerations

    This section must include, as a minimum, the following 
information:
    (a) Awards. Indicate the estimated number and type of awards 
anticipated under the particular STTR Program solicitation in 
question, including:
    (i) Approximate number of Phase I awards expected to be made.
    (ii) Type of funding agreement, that is, contract, grant or 
cooperative agreement.
    (iii) Whether fee or profit will be allowed.
    (iv) Cost basis of funding agreement, for example, firm-fixed-
price, cost reimbursement, or cost-plus-fixed fee.
    (v) Information on the approximate average dollar value of 
awards for Phase I and Phase II.
    (b) Reports. Describe the frequency and nature of reports that 
will be required under Phase I funding agreements. Interim reports 
should be brief letter reports.
    (c) Payment Schedule. Specify the method and frequency of 
progress and final payment under Phase I and II agreements.
    (d) Innovations, Inventions and Patents.
    (1) Limited Rights Information and Data.
    (i) Proprietary Information. Essentially the following statement 
must be included in all STTR solicitations:
    ``Information contained in unsuccessful proposals will remain 
the property of the applicant. The government may, however, retain 
copies of all proposals. Public release of information in any 
proposal submitted will be subject to existing statutory and 
regulatory requirements. If proprietary information is provided by 
an applicant in a proposal, which constitutes a trade secret, 
proprietary commercial or financial information, confidential 
personal

[[Page 35767]]

information or data affecting the national security, it will be 
treated in confidence, to the extent permitted by law. This 
information must be clearly marked by the applicant with the term 
``confidential proprietary information'' and the following legend 
must appear on the title page of the proposal:
    ``These data shall not be disclosed outside the government and 
shall not be duplicated, used, or disclosed in whole or in part for 
any purpose other than evaluation of this proposal. If a funding 
agreement is awarded to this applicant as a result of or in 
connection with the submission of these data, the government shall 
have the right to duplicate, use, or disclose the data to the extent 
provided in the funding agreement and pursuant to applicable law. 
This restriction does not limit the government's right to use 
information contained in the data if it is obtained from another 
source without restriction. The data subject to this restriction are 
contained on pages----of this proposal.'' Any other legend may be 
unacceptable to the government and may constitute grounds for 
removing the proposal from further consideration, without assuming 
any liability for inadvertent disclosure. The government will limit 
dissemination of such information to within official channels.''
    (ii) Alternative To Minimize Proprietary Information.
    Agencies may elect to instruct applicants to:
    (A) Limit proprietary information to only that absolutely 
essential to their proposal.
    (B) Provide proprietary information on a separate page with a 
numbering system to key it to the appropriate place in the proposal.
    (iii) Rights in Data Developed Under STTR Funding Agreements. 
Agencies should insert essentially the following statement in their 
STTR Program solicitations to notify SBCs of the necessity to mark 
STTR technical data before delivering it to the Agency:
    ``To preserve the STTR data rights of the awardee, the legend 
(or statements) used in the STTR Data Rights clause included in the 
STTR award must be affixed to any submissions of technical data 
developed under that STTR award. If no Data Rights clause is 
included in the STTR award, the following legend, at a minimum, 
should be affixed to any data submissions under that award.
    These STTR data are furnished with STTR rights under Funding 
Agreement No. ---- (and subcontract No. ---- if appropriate), 
Awardee Name ----------, Address, Expiration Period of STTR Data 
Rights ----------. The government may not use, modify, reproduce, 
release, perform, display, or disclose technical data or computer 
software marked with this legend for (choose four (4) or five (5) 
years). After expiration of the (4-or 5-year period), the government 
has a royalty-free license to use, and to authorize others to use on 
its behalf, these data for government purposes, and is relieved of 
all disclosure prohibitions and assumes no liability for 
unauthorized use of these data by third parties, except that any 
such data that is also protected and referenced under a subsequent 
STTR award shall remain protected through the protection period of 
that subsequent STTR award. Reproductions of these data or software 
must include this legend.''
    (iv) Copyrights. Include an appropriate statement concerning 
copyrights and publications; for example:
    ``With prior written permission of the funding agreement 
officer, the awardee normally may copyright and publish (consistent 
with appropriate national security considerations, if any) material 
developed with (agency name) support. (Agency name) receives a 
royalty-free license for the Federal government and requires that 
each publication contain an appropriate acknowledgement and 
disclaimer statement.''
    (v) Patents. Include an appropriate statement concerning 
patents. For example:
    ``Small business concerns normally may retain the principal 
worldwide patent rights to any invention developed with government 
support. The government receives a royalty-free license for Federal 
government use, reserves the right to require the patent holder to 
license others in certain circumstances, and requires that anyone 
exclusively licensed to sell the invention in the United States must 
normally manufacture it domestically. To the extent authorized by 35 
U.S.C. 205, the government will not make public any information 
disclosing a government-supported invention for a minimum 4-year 
period (that may be extended by subsequent STTR funding agreements) 
to allow the awardee a reasonable time to pursue a patent.''
    (vi) Invention Reporting. Include requirements for reporting 
inventions. Include appropriate information concerning the reporting 
of inventions, for example:
    ``STTR awardees must report inventions to the awarding agency 
within 2 months of the inventor's report to the awardee. The 
reporting of inventions may be accomplished by submitting paper 
documentation, including fax.''

    Note: Some agencies provide electronic reporting of inventions 
through the NIH Edison Invention Reporting System (Edison System). 
Use of the Edison System satisfies all invention reporting 
requirements mandated by 37 CFR part 401, with particular emphasis 
on the Standard Patent Rights Clauses, 37 CFR 401.14. Access to the 
system is through a secure interactive Internet site, http://www.iedison.gov, to ensure that all information submitted is 
protected. All agencies are encouraged to use the Edison System. In 
addition to fulfilling reporting requirements, the Edison System 
notifies the user of future time sensitive deadlines with enough 
lead-time to avoid the possibility of loss of patent rights due to 
administrative oversight.

    (e) Cost-Sharing. Include a statement essentially as follows:
    ``Cost-sharing is permitted for proposals under this program 
solicitation; however, cost-sharing is not required. Cost-sharing 
will not be an evaluation factor in consideration of your Phase I 
proposal.''
    (f) Profit or Fee. Include a statement on the payment of profit 
or fee on awards made under the STTR Program solicitation.
    (g) Joint Ventures or Limited Partnerships. Include essentially 
the following language:
    ``Joint ventures and limited partnerships are eligible provided 
the entity created qualifies as a small business concern as defined 
in this program solicitation.''
    (h) Research and Analytical Work. Include essentially the 
following statement:
    (1) ``For both Phase I and Phase II, not less than 40 percent of 
the R/R&D work must be performed by the SBC, and not less than 30 
percent of the R/R&D work must be performed by the single, 
partnering research institution, as defined in this solicitation.''
    (i) Awardee Commitments. To meet the legislative requirement 
that STTR solicitations be simplified, standardized and uniform, 
clauses expected to be in or required to be included in STTR funding 
agreements must not be included in full or by reference in STTR 
Program solicitations. Rather, applicants must be advised that they 
will be required to make certain legal commitments at the time of 
execution of funding agreements resulting from STTR Program 
solicitations. Essentially, the following statement must be included 
in the ``Considerations'' section of STTR Program solicitations:
    ``Upon award of a funding agreement, the awardee will be 
required to make certain legal commitments through acceptance of 
numerous clauses in Phase I funding agreements. The outline that 
follows is illustrative of the types of clauses to which the 
contractor would be committed. This list is not a complete list of 
clauses to be included in Phase I funding agreements, and is not the 
specific wording of such clauses. Copies of complete terms and 
conditions are available upon request.''
    (j) Summary Statements. The following are illustrative of the 
type of summary statements to be included immediately following the 
statement in subparagraph (i). These statements are examples only 
and may vary depending upon the type of funding agreement used.
    (1) Standards of Work. Work performed under the funding 
agreement must conform to high professional standards.
    (2) Inspection. Work performed under the funding agreement is 
subject to government inspection and evaluation at all times.
    (3) Examination of Records. The Comptroller General (or a duly 
authorized representative) must have the right to examine any 
pertinent records of the awardee involving transactions related to 
this funding agreement.
    (4) Default. The government may terminate the funding agreement 
if the contractor fails to perform the work contracted.
    (5) Termination for Convenience. The funding agreement may be 
terminated at any time by the government if it deems termination to 
be in its best interest, in which case the awardee will be 
compensated for work performed and for reasonable termination costs.
    (6) Disputes. Any dispute concerning the funding agreement that 
cannot be resolved by agreement must be decided by the contracting 
officer with right of appeal.
    (7) Contract Work Hours. The awardee may not require an employee 
to work more than 8 hours a day or 40 hours a week unless the 
employee is compensated accordingly (for example, overtime pay).
    (8) Equal Opportunity. The awardee will not discriminate against 
any employee or

[[Page 35768]]

applicant for employment because of race, color, religion, sex, or 
national origin.
    (9) Affirmative Action for Veterans. The awardee will not 
discriminate against any employee or application for employment 
because he or she is a disabled veteran or veteran of the Vietnam 
era.
    (10) Affirmative Action for Handicapped. The awardee will not 
discriminate against any employee or applicant for employment 
because he or she is physically or mentally handicapped.
    (11) Officials Not To Benefit. No government official must 
benefit personally from the STTR funding agreement.
    (12) Covenant Against Contingent Fees. No person or agency has 
been employed to solicit or secure the funding agreement upon an 
understanding for compensation except bonafide employees or 
commercial agencies maintained by the awardee for the purpose of 
securing business.
    (13) Gratuities. The funding agreement may be terminated by the 
government if any gratuities have been offered to any representative 
of the government to secure the award.
    (14) Patent Infringement. The awardee shall report each notice 
or claim of patent infringement based on the performance of the 
funding agreement.
    (15) American Made Equipment and Products. When purchasing 
equipment or a product under the STTR funding agreement, purchase 
only American-made items whenever possible.
    (k) Additional Information. Information pertinent to an 
understanding of the administration requirements of STTR proposals 
and funding agreements not included elsewhere must be included in 
this section. As a minimum, statements essentially as follows must 
be included under ``Additional Information'' in STTR Program 
solicitations:
    (1) This program solicitation is intended for informational 
purposes and reflects current planning. If there is any 
inconsistency between the information contained herein and the terms 
of any resulting STTR funding agreement, the terms of the funding 
agreement are controlling.
    (2) Before award of an STTR funding agreement, the government 
may request the applicant to submit certain organizational, 
management, personnel, and financial information to assure 
responsibility of the applicant.
    (3) The government is not responsible for any monies expended by 
the applicant before award of any funding agreement.
    (4) This program solicitation is not an offer by the government 
and does not obligate the government to make any specific number of 
awards. Also, awards under the STTR Program are contingent upon the 
availability of funds.
    (5) The STTR Program is not a substitute for existing 
unsolicited proposal mechanisms. Unsolicited proposals must not be 
accepted under the STTR Program in either Phase I or Phase II.
    (6) If an award is made pursuant to a proposal submitted under 
this STTR Program solicitation, a representative of the contractor 
or grantee or party to a cooperative agreement will be required to 
certify that the concern has not previously been, nor is currently 
being, paid for essentially equivalent work by any Federal agency.

6. Submission of Proposals

    (a) This section must clearly specify the closing date on which 
all proposals are due to be received.
    (b) This section must specify the number of copies of the 
proposal that are to be submitted.
    (c) This section must clearly set forth the complete mailing 
and/or delivery address(es) where proposals are to be submitted.
    (d) This section may include other instructions such as the 
following:
    (1) Bindings. Please do not use special bindings or covers. 
Staple the pages in the upper left corner of the cover sheet of each 
proposal.
    (2) Packaging. All copies of a proposal should be sent in the 
same package.

7. Scientific and Technical Information Sources

    Wherever descriptions of research topics or subtopics include 
reference to publications, information on where such publications 
will normally be available shall be included in a separate section 
of the solicitation entitled ``Scientific and Technical Information 
Sources.''

8. Research Topics

    Describe sufficiently the R/R&D topics and subtopics for which 
proposals are being solicited to inform the applicant of technical 
details of what is desired. Allow flexibility in order to obtain the 
greatest degree of creativity and innovation consistent with the 
overall objectives of the STTR Program.

9. Submission Forms and Certifications

    Multiple copies of proposal preparation forms necessary to the 
contracting and granting process may be required. This section may 
include Proposal Summary, Proposal Cover, Budget, Checklist, and 
other forms the sole purpose of which is to meet the mandate of law 
or regulation and simplify the submission of proposals.
    This section may also include certifying forms required by 
legislation, regulation or standard operating procedures, to be 
submitted by the applicant to the contracting or granting agency. 
This would include certifying forms such as those for the protection 
of human and animal subjects.

Appendix II: Tech-Net Data Fields for Public Database

    The following are the data fields for the Public Tech-Net 
Database described in section 11(e)(9) of this Policy Directive.

(a) For All Agency STTR/SBIR Annual Data Submissions to the SBA.

----------------------------------------------------------------------------------------------------------------
              Field name                             Type                 Width             Description
----------------------------------------------------------------------------------------------------------------
Program Identification................  Numeric.......................          1  STTR/SBIR Award Program
                                                                                    Identifier* (see below).
Company...............................  Char..........................         80  Company Name*.
Street1...............................  Char..........................         80  Street Address 1*.
Street2...............................  Char..........................         80  Street Address 2.
City..................................  Char..........................         40  City*.
State.................................  Char..........................          2  State*.
Zip...................................  Numeric.......................          5  Zip*.
Zip4..................................  Numeric.......................          4  Zip + 4.
Minority Code.........................  Numeric.......................          1  Minority code indicator 0=yes
                                                                                    1=no*.
Women.................................  Numeric.......................          1  Women-owned company indicator
                                                                                    0=yes 1=no*.
Contact First.........................  Char..........................         40  Company Official contact
                                                                                    first name.
Contact Last..........................  Char..........................         40  Contact last name.
Contact Middle Init...................  Char..........................          1  Contact middle initial.
Contact Title.........................  Char..........................         40  Contact Official title.
Contact Phone.........................  Char..........................         10  Contact Official phone.
Contact Email Address.................  Char..........................         50  Contact email address.
Employees.............................  Numeric.......................          5  Number of employees.
Agency Code...........................  Numeric.......................          2  Awarding agency name (ex.
                                                                                    DOD)* (see below).
Branch................................  Number........................          1  Awarding DOD branch name (ex.
                                                                                    Navy) (see below).
Phase.................................  Numeric.......................          1  Phase number 1 or 2*.
Award Year............................  Numeric.......................          4  Phase award year*.

[[Page 35769]]

 
Award Amount..........................  Numeric.......................         10  Phase award amount*.
PI First..............................  Char..........................         40  Principal Investigator First
                                                                                    Name*.
PI Last...............................  Char..........................         40  Principal Investigator Last
                                                                                    Name*.
PI Middle Init........................  Char..........................          1  Principal Investigator middle
                                                                                    initial.
PI Title..............................  Char..........................         40  Principal Investigator Title.
PI Phone..............................  Char..........................         10  Principal Investigator phone.
PI Email Address......................  Char..........................         50  Principal Investigator email
                                                                                    address.
Topic Code............................  Char..........................         15  Agency Solicitation Topic
                                                                                    Number*.
RI TYPE...............................  Numeric.......................          1  Type of research institution
                                                                                    (see below).
RI Name...............................  Char..........................         80  Research institution.
RI Street 1...........................  Char..........................         80  Research institution address.
RI Street 2...........................  Char..........................         80  Research institution address.
RI City...............................  Char..........................         40  Research institution city.
RI State..............................  Char..........................          2  Research institution State.
RI Zip................................  Numeric.......................          5  Research institution Zip.
RI Zip4...............................  Numeric.......................          4  Research institution Zip + 4.
RI Official First.....................  Char..........................         40  Research institution Official
                                                                                    First Name.
RI Official Last......................  Char..........................         40  Research institution Official
                                                                                    Last Name.
RI Official Initial...................  Char..........................          1  Research institution Official
                                                                                    Middle Initial.
RI Official Phone.....................  Char..........................         10
Tracking Number.......................  Char..........................         20  Agency key identifier
                                                                                    (Internal number scheme)*.
TIN/EIN...............................  Char..........................         10  Taxpayer/Employer
                                                                                    Identification number*.
                                                                                   Prefix with 1 for EIN 2 for
                                                                                    Social Security Number.
Contract/Grant Number.................  Char..........................         20  Agency award contract/grant
                                                                                    number.
Solicitation Number...................  Char..........................         20  Solicitation Number.
Solicitation Year.....................  Numeric.......................          4  Year of the Solicitation.
Project Initiator.....................  Char..........................          1  Initiator of STTR
                                                                                    collaborative effort.
Technology Used (Y/N).................  Char..........................          1  SBC or RI originate any
                                                                                    technology used in the STTR
                                                                                    project.
Time to establish license agreement     Numeric.......................          2  Time duration to establish
 (months).                                                                          any STTR license agreement.
STTR Proceeds Distribution to SBC (%).  Numeric.......................          3  Allocation of proceeds from
                                                                                    sale of STTR technology.
STTR Proceeds Distribution to RI (%)..  Numeric.......................          3  Allocation of proceeds from
                                                                                    sale of STTR technology.
---------------------------------------
                       From this point each data element should be sent as a separate file
----------------------------------------------------------------------------------------------------------------
TITLE.................................  Char..........................        800  Title of research project*.
Tracking Number.......................  Char..........................         20  Agency key identifier
                                                                                    (Internal number scheme)*.
Abstract..............................  Char..........................       1500  Technical abstract (500
                                                                                    words).
Tracking Number.......................  Char..........................         20  Agency key identifier
                                                                                    (Internal number scheme)*.
Abstract SeqNmb.......................  Numeric.......................          1  .............................
Results...............................  Char..........................       1000  --Project anticipated
                                                                                    results.
Tracking Number.......................  Char..........................         20  Agency key identifier
                                                                                    (Internal number scheme)*.
COMMENTS..............................  Char..........................       1000  --Project comments.
 
Tracking Number.......................  Char..........................         20  Agency key identifier
                                                                                    (Internal number scheme)*.
Industry Share Amount.................  Numeric.......................         10  ATP Program Cost Share
                                                                                    Amount.
Cost Share Tracking .........  Char..........................         20  ATP Cost Share Tracking
                                                                                    Number.
----------------------------------------------------------------------------------------------------------------

    Note: Those fields denoted with an asterisk are deemed mandatory 
in all agency submissions. It is understood that all agencies will 
not have data for each data field listed above. Each agency must 
ensure that data submissions to the SBA include all of the data 
fields above, even if they are empty.
Code Research Institution Types
    1 Nonprofit college or university
    2 Domestic nonprofit research organization
    3 Federally funded research and development center (FFDRC)

    (b) Codes

(1) Program Identification Code
    0 STTR (Small Business Technology Transfer)
    1 SBIR (Small Business Innovation Research)
    2 ATP (Advanced Technology Program)

(2) Agency Codes
    1 DOD (Department of Defense)
    2 DOE (Department of Energy)
    3 NASA (National Aeronautics and Space Administration)
    4 HHS (Health and Human Services)
    5 NSF (National Science Foundation)
    6 DOT (Department of Transportation)
    7 EPA (Environmental Protection Agency)
    8 ED (Department of Education)
    9 DOA (Department of Agriculture)
    10 DOC (Department of Commerce)
    11 NIST (National Institute of Standards and Technology)

(3) Branch Codes
    1 AF (Department of the Air Force)
    2 ARMY (Department of the Army)
    3 MDA (Missile Defense Agency)
    4 DARP (Defense Advanced Research Projects Agency)
    5 DSWA (Defense Special Weapons Agency)

[[Page 35770]]

    6 NAVY (Department of the Navy)
    7 OSD (Office of the Secretary of Defense)
    8 SOCO (Special Operations Command)
    9 NIMA (National Imaging and Mapping Agency)

    (4) If any new codes, please advise the Office of Technology.

[FR Doc. 03-14635 Filed 6-13-03; 8:45 am]
BILLING CODE 8025-01-P