[Federal Register Volume 78, Number 153 (Thursday, August 8, 2013)]
[Notices]
[Pages 48537-48538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-19243]


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SMALL BUSINESS ADMINISTRATION

[Docket Number: 2013-0008]


Small Business Innovation Research and Small Business Technology 
Transfer Programs Commercialization Benchmark

AGENCY: Small Business Administration.

ACTION: Notice.

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SUMMARY: The Small Business Administration (SBA) is publishing the 
Small Business Innovation Research (SBIR) and Small Business Technology 
Transfer (STTR) program Commercialization Benchmark for the 11 
participating agencies for public comment. This benchmark establishes 
the commercialization results a Small Business Concern (SBC) that has 
been awarded multiple prior Phase II awards is required to achieve from 
work it performed under its prior Phase II awards in order to be 
eligible to receive a new Phase I award. This requirement is described 
in Section 4(a) of the SBIR Policy Directive and the STTR Policy 
Directive which implements section 5165 of the SBIR/STTR 
Reauthorization Act of 2011, Public Law 112-81, 125-Stat. 1298.

DATES: Effective Date: October 7, 2013 and when published on 
www.sbir.gov.
    Comment Date: Comments to this notice must be received on or before 
September 9, 2013.

[[Page 48538]]


ADDRESSES: You may submit comments, identified by Docket Number 2013-
0008 by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail/Hand Delivery/Courier: Edsel Brown, Jr., Assistant 
Director, Office of Innovation, Small Business Administration, 409 
Third Street SW., Washington, DC 20416.
    SBA will post all comments to this notice without change on 
www.regulations.gov. If you wish to submit confidential business 
information (CBI) as defined in the User Notice at www.regulations.gov, 
you must submit such information to Edsel Brown, Jr., Assistant 
Director, Office of Innovation, Small Business Administration, 409 
Third Street SW., Washington, DC 20416; or send an email to 
[email protected]. Highlight the information that you consider to be 
CBI and explain why you believe SBA should hold this information as 
confidential. SBA will review the information and make the final 
determination whether to publish it.

FOR FURTHER INFORMATION CONTACT: Edsel Brown, Jr., Assistant Director, 
Office of Innovation, Small Business Administration, 409 Third Street 
SW., Washington, DC 20416; telephone (202) 205-6450; email 
([email protected]).

SUPPLEMENTARY INFORMATION: On August 6, 2012, SBA published the SBIR 
and STTR Policy Directives at 77 FR 46806 and 77 FR 46855 respectively. 
Section 4(a)(3) of these Policy Directives requires each agency to 
establish an SBA-approved Commercialization Rate Benchmark for firms 
that have been awarded multiple prior Phase II awards. The benchmark 
establishes the level of commercialization results an SBC must have 
received from work it performed under prior Phase II awards in order to 
be eligible for a new Phase I award.
    The Commercialization Rate benchmark is the second of two 
requirements designed to ensure that SBCs that have previously won 
multiple Phase II awards demonstrate a minimum level of progress 
towards commercialization of their SBIR/STTR-funded research. The first 
requirement was described in the Transition Rate Benchmark notice 
published in the Federal Register on October 16, 2012 at 77 FR 63410. 
The Transition Rate benchmark sets the minimum ratio of Phase II to 
Phase I awards that must be met by firms that have been awarded over 20 
Phase I awards over the past 5 years (excluding the most recently 
completed fiscal year) in order to be eligible for a Phase I award. The 
Commercialization Rate benchmark establishes the level of Phase III 
commercialization results an SBA must have achieved from work it 
performed under prior Phase II awards.
    The Commercialization Benchmark requirement will apply only to 
firms that have received more than 15 Phase II awards during the last 
10 fiscal years, excluding the two most recently completed fiscal 
years.
    To implement the Commercialization Benchmark, the eleven SBIR/STTR-
participating agencies and the SBA have identified a measure of 
commercialization results that will be applied across all agencies. The 
SBA will use data it collects from awardees in its Company Registry on 
the SBIR.gov Web site to identify those companies that do not meet the 
required level of commercialization for their past Phase II work. To be 
consistent with the process used for the Transition to Phase II 
Benchmark requirement, and provided that the necessary data systems are 
available, SBA will generate, on June 1 of each year, a list of 
companies that fail to meet the Commercialization Benchmark rate. These 
companies will be ineligible to receive a Phase I award for a period of 
one year from that date. This list will be made available to officials 
at the participating agencies. It will not be available to the public. 
The firms on the list will be notified directly and will be able to 
view their status on the Company Registry at SBIR.gov. As the SBIR/STTR 
program data system develops, SBA may modify the date on which SBA 
identifies the firms that do not meet the benchmark requirements to 
earlier in the year.
    The purpose of the Commercialization Benchmark is to measure an 
SBC's progress from Phase II to Phase III. Phase III is defined in 
Section 4(c)(3) of the Policy Directives as ``work that derives from, 
extends, or completes an effort made under prior SBIR funding 
agreements, but is funded by sources other than the SBIR Program.''
    For the purposes of the Commercialization Benchmark, Phase III 
commercialization of a company's past Phase II work will be measured 
using both monetary and non-monetary results. The following data will 
be used for the benchmark:
     Total sales or revenues that resulted, at least in part, 
from work performed under Phase II awards received in the 10-year 
period.
     Total dollars invested to continue the work and move it 
towards commercial application.
     The number of patents that resulted, at least in part, 
from work performed under Phase II awards received in the 10-year 
period.
    The Commercialization Benchmark requirement will be expressed as 
follows: Each company that has won 16 or more Phase II awards during 
the past 10 years, excluding the most recently completed two fiscal 
years, must have received an average of at least $100,000 of sales and/
or investments per Phase II award received; or have received a number 
of patents equal to or greater than 15% of the number of Phase II 
awards received during the period. For example, if a company won 18 
Phase II awards during fiscal years 2007 through 2011, it would be 
required to meet the commercialization benchmark calculated on June 1st 
2014 because it had received more than 16 Phase II awards in the 5 year 
time period. On June 1st 2014, the company shows, through its reporting 
on these 18 awards, that it has achieved $1.7 million in sales and/or 
additional investment and 3 patents resulting directly from the work 
done under these awards. The sales and investment amount is not 
sufficient to meet the benchmark of $100,000 per award, however, with 3 
patents the company exceeds the patent requirement of 2.7 (15% of 18 
awards) and therefore meets the benchmark requirement.
    As the data system for the SBIR/STTR programs develops and is able 
to collect additional data for measuring commercialization results, the 
agencies and SBA may refine the Commercialization Benchmark to include 
other measures and/or adjust the required performance levels.
    SBA has reviewed and approved this benchmark. Section 5165 of the 
SBIR/STTR Reauthorization Act of 2011 requires SBA to publish, at least 
60 days before becoming effective, the system and performance standard 
to be used, and the approval by SBA. Therefore, SBA will review all 
comments received in response to this notice and issue the final 
commercialization benchmark requirement within 60 days of the date this 
notice is published. That notice will be made available at 
www.sbir.gov.
    For greater detail on the Commercialization Rate benchmark 
requirement, see Section 4(a)(3) of the SBIR Policy Directive (77 FR 
46806) and the STTR Policy Directive (77 FR 46855).

Pravina Raghavan,
Deputy Associate Administrator for Investments and Innovation.
[FR Doc. 2013-19243 Filed 8-7-13; 8:45 am]
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