EPAs Small Business Innovation Research (SBIR) Program

SBIR awards are limited to small businesses. To be eligible for an SBIR award, a small business must meet the following criteria:
  • Is independently owned and operated and has its principal place of business located in the United States;
  • Has no more than 500 employees, including its affiliates;
  • Is not the dominant firm in the field in which they are proposing to carry out SBIR projects;
  • Is organized for profit; and
  • Is at least 51 percent owned by U.S. citizens or lawfully admitted permanent resident aliens.

SBIR Program Phases

All federal SBIR Programs have three phases, ranging from "proof of concept" to commercialization. Each phase is described below.

Phase I—The objective of this phase is to determine the scientific merit and technical feasibility of the proposed effort and the quality of performance of the small concern. Under Phase I, EPA awards firm-fixed-price contracts of approximately $65,000. The period of performance of Phase I contracts is typically 6 months.

    Phase II—Phase II is the principal research or R&D effort. Only firms successfully completing Phase I are eligible for Phase II awards. Competitive awards are based on the results of Phase I and the scientific and technical merit and commercial potential of the Phase II proposal. Under Phase II, EPA awards firm-fixed-price contracts of approximately $220,000. The period of performance of Phase II projects is typically 1 to 2 years.

    Phase III—This phase focuses on commercial development and application of the results of Phase II. Funds from the mandated SBIR set aside cannot be used for Phase III awards. Agencies may fund Phase III from other sources of funds, but developers normally must find non-federal sources of capital for commercial applications of SBIR funded research or R&D. For the first time in the history of its SBIR Program, EPA provided Phase III funding for five highly promising projects in FY1995. Funding for this Phase III pilot was provided through the Environmental Technology Initiative (ETI). ETI is a Presidential program headed by EPA to expand the development and use of innovative environmental technologies. The number of Phase I, Phase II, and Phase III SBIR contracts awarded by EPA from FY1990 through FY1995 is provided in the table on the following page.

    The SBIR Proposal Peer Review Process

    All SBIR Phase I and Phase II proposals received by EPA are subjected to a rigorous external peer review process. EPA selects awardees based on the scientific and technical merit of the proposal with respect to the selection criteria published in the SBIR solicitation.

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Last Updated: March 24, 1997