January 01, 2024
"SBIR technology saved or avoided cost in Joint Strike Fighter over $500 million"
Christopher C Bogdan, Lieutenant General, USAF, F-35 PEO
Source: “F-35 Small Business Success Stories”
Recommended:
Important note: Phase III Small Business Innovation Research (SBIR) is not a contract vehicle. Phase III is just a normal contract. The contracting officer uses a Phase I or II SBIR or STTR to award a Phase III contract without further competition. Thus, a SBIR Phase III can be a stand alone contract or multiple award, Blanket Purchase Agreement, Basic Ordering Agreement, Indefinite Delivery/Indefinite Quantity (ID/IQ), Government Wide Acquisition Contract (GWAC), or any type of contract desired by the agency. A list of Forward Edge-AI's Phase III contract vehicles are available here.
The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I/II R/R&D activities. The SBIR/STTR programs do not fund Phase III. At some Federal agencies, Phase III may
involve follow on non SBIR/STTR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.
Each of the following types of activity constitutes SBIR/STTR Phase III work:
Commercial application (including R/R&D, testing and evaluation of products, services or technologies for use in technical or weapons systems) of SBIR/STTR funded R/R&D that is financed by non Federal sources of capital.
SBIR/STTR derived products or services intended for use by the Federal Government, funded by non SBIR/STTR sources of Federal funding.
Continuation of SBIR/STTR work, funded by non SBIR/STTR sources of Federal funding including R/R&D.
Data Rights
A Phase III award is, by its nature an SBIR/STTR award, has SBIR/STTR status, and must include SBIR/STTR Data Rights protection. If an SBIR/STTR Awardee receives a Funding Agreement (whether competed, direct award, sole sourced or a subcontract) for work that derives from, extends, or completes efforts made under prior SBIR/STTR Funding Agreements, then the Funding Agreement for the new work must have all SBIR/STTR Phase III status and SBIR/STTR Data Rights. More information about SBIR Data Rights is available here.
Competition Requirement
The competitions for SBIR/STTR Phase I and Phase II awards satisfy any competition requirement of the Armed Services Procurement Act, the Federal Property and Administrative Services Act, and the Competition in Contracting Act. An
agency that wishes to fund an SBIR/STTR Phase III award, which is an extension of prior Phase I and/or Phase II awards, is not required to conduct another competition for the Phase III award in order to satisfy those statutory provisions.
As a result, in conducting actions relative to a Phase III SBIR/STTR award, it is sufficient to state for purposes of a Justification and Approval, if o ne is deemed required by the agency, that the project is an SBIR/STTR Phase III award that is derived from, extends, or completes efforts made under prior SBIR/STTR Funding Agreements and is authorized pursuant to 15 U.S.C. 638 (r)(4). Further justification is not 4) Phase III work may be for products, production, services, R/R&D, or any such combination.
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. A Federal Agency may enter into a Phase III SBIR/STTR agreement at any time with a Phase II Awardee. Similarly, a Federal Agency may enter into a Phase III SBIR/STTR agreement at any time with a Phase I Awardee. A subcontract to a Federally funded prime contract may be a Phase III award.
Size
The small business size limits for Phase I and Phase II awards do not apply to Phase III. See relevant GAO bid protest decision here. According to the Federal Procurement Data Service (FPDS), the top three (3) SBIR III awardees in 2023 were General Dynamics, Northrop Grumman, and Frontier Technologies (large businesses).
Top SBIR Phase III Revenues from FY20 through FY23:
| Vendor | FY20 Annual SBIR Revenue | FY21 Annual SBIR Revenue | FY22 Annual SBIR Revenue | FY23* Annual SBIR Revenue | Grand Total ($K) |
1. | PARSONS CORPORATION (acquisition of Braxton Science & Technology Group, LLC) | $48,621 | $32,576 | $51,392 | $43,303 | $175,893 |
2. | AMERICAN SYSTEMS | $21,338 | $29,009 | $23,915 | $20,537 | $94,799 |
3. | ASSURED INFORMATION SECURITY INC | $225 | $16,003 | $38,617 | $34,790 | $89,635 |
4. | DIVERSIFIED TECHNOLOGIES INC | $18,372 | $37,916 | $2,605 |
| $58,893 |
5. | MONKTON, INC. | $8,169 | $6,969 | $15,801 | $24,540 | $55,479 |
6. | INNOVATIVE DEFENSE TECHNOLOGIES | $29,303 | $12,819 | $1,529 | $1,210 | $44,862 |
7. | TECHNOLOGY SERVICE CORPORATION |
| $6,011 | $29,747 |
| $35,758 |
8. | FRONTIER TECHNOLOGY INC | $1,248 | $12,970 | $9,922 | $4,694 | $28,833 |
9. | SEEMANN COMPOSITES INC | $9,278 | $3,908 | $11,543 | $4,045 | $28,774 |
10. | GOMEZ RESEARCH ASSOC, INC | $10,000 | $8,095 | $7,012 |
| $25,107 |
15. | KELLOGG BROWN & ROOT LLC (KBR) (acquisition of The Design Knowledge Company) | $3,227 | $10,529 | $2,293 | $4,767 | $20,816 |
Special acquisition requirement
Agencies or their Government owned, contractor operated (GOCO) facilities, Federally funded research and development centers (FFRDCs), or Government prime contractors that pursue R/R&D or production of technology developed under the SBIR/STTR program shall issue Phase III awards relating to the technology, including sole source awards, to the Awardee that developed the technology under an SBIR/STTR award, to the greatest extent practicable, consistent with an Agency ’s
mission and optimal small business participation.
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