ISSUE
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COMMENTS AND QUESTIONS dawnbreaker.com phase3editor@dawnbreaker.com
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EXECUTIVE EDITOR
MANAGING EDITOR
DESIGNER
Jenny Servo, Ph.D.
Julie S. Krull
Danielle Palumbo
@Dawnbreaker
This mini-mag is a companion to the Phase III magazine that Dawnbreaker has produced since 2008. Dawnbreaker feels that another publication which shares information regarding the Small Business Innovation Research (SBIR) program will help those who aspire to reach Phase III commercialization success. As commercialization is also a metric of success for organizations involved with technology transfer, topics of interest to universities and federal labs are also included. FEATURES
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Technology Readiness Levels: Why Are They important?
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Phase II Variations: There’s A Lot You Should Know!
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OTA: Other Transaction Authority
Underserved States
CURRENT/FUTURE SOLICITATIONS
DoD
DOT
ED
NASA
Department of Defense
Department of Transportation
Department of Education 2019 Phase I ED/IES SBIR Program Solicitation
National Aeronautics and Space Administration Topics Released
Current Announcements
2019 SBIR Solicitation
DAWNBREAKER®
Photo credit: Michael Carroll, NASA
TECHNOLOGY READINESS LEVELS
WHY ARE THEY IMPORTANT? BY JENNY C. SERVO, Ph.D. Technology Readiness Levels (TRLs) have been around since the 1970’s when first developed by Stanley Sadin who suggested their use to Ray Chase, the JPL Propulsion Division representative on the Jupiter Orbiter spacecraft design team. Readiness Levels are used to describe the maturity of a Critical Technology Element (CTE) during the acquisition process. To put this in context, imagine the thousands of components and systems that go into the development of a spacecraft. Before adding a new CTE to a system a method was needed to assess the ability of the technology to interface with the system, thereby minimizing risk. TRLs emerged as a method to assess the maturity of a technology prior to incorporating it into a larger system or subsystem. For scientists and en-
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gineers working on a critical technology element, TRLs are an important way of communicating the maturity of the technology and perceived risk. The Department of Defense was the next organization to embrace the use of Technology Readiness Levels with the Air Force taking the lead and developing a TRL Calculator. In 1999 the General Accounting Office (GAO) prepared a report entitled “Better Management of Technology Development Can Improve Weapon System Outcomes” in which GAO contrasted the impact of 23 different technologies of varying TRLs inserted into new commercial products and DoD weapon systems. The GAO concluded that “The experience of DoD and [the] commercial tech-
nology development cases GAO reviewed indicate that demonstrating a high level of maturity before new technologies are incorporated into product development programs puts those programs in a better position to succeed.” A major purpose served by the TRLs is to reveal the gap between a technology’s maturity and the maturity demanded for successful inclusion into the intended product. In order to reduce the gap, product launch could be delayed until a technology is sufficiently mature or the product’s requirements can be changed so that less advanced and more mature technologies can be included. The following figure taken from the 1999 GAO report showing the relationship between product requirements, TRLs and risk [cost and schedule].
Using TRLs to Match Technology with Product Launch Requirements High risk for product launch
Credit: 1999 GAO report
Low risk for product launch
Product Requirements 8 6
9
7
Risks or unknowns
4
5
TRL 1
2
3
The Air Force concluded that TRL 6 usually demonstrated a sufficient level of maturity to begin the hand-off of a technology between the Science and Technology program managers and those responsible for Product Development. However, the maturity of the technology needs to be independently assessed. It is
insufficient for a small business that is developing a new technology to claim that a specific TRL has been achieved. To that end, within DoD before integration of a new technology into a subsystem, system, or platform can begin a Technology Readiness Assessment (TRA) must be conducted which examines the technology readiness levels of the critical technology element. As noted in
the DoD Technology Readiness Assessment (TRA) Handbook the TRA is “a formal, systematic, metrics-based process and accompanying report that assess the maturity of critical hardware and software technologies (referred to as Critical Technology Elements) to be used in systems. The TRA is conducted by an Independent Review Team (IRT) of subject matter experts (SME). All Department of Defense (DoD) acquisition programs must have a formal TRL at Milestone B and at Milestone C of the Defense Acquisition System.” DoD defines a CTE in the following way: “A Technology element is “critical” if the system being acquired depends on the technology element to meet operational requirements (within acceptable cost and schedule limits) and if the technology element or its application is either new or novel or in an area that poses major technological risk during detailed design or demonstration.” The TRA process highlights areas of risk that require a Program Manager attention. The process helps to identify immature components and track their development.
Technology Maturity | Technology Readiness Levels (TRL)
System Test, Launch & Operations System/Subsystem Development Technology Demonstration Technology Development Research to Prove Feasibility Basic Technology Research
Credit: From a presentation made by Thomas Fritz 23 May 2011
TRL 9
Actual system “flight proven” through successful mission operations
TRL 8
Actual system completed and “flight qualified” through test and demonstration (Full-Rate Production Decision)
TRL 7
System prototype demonstration in an operational environment (Milestone C)
TRL 6
System/subsystem model or prototype demonstration in a “relevant environment” (2366b certification item - Milestone B)
TRL 5
Component and/or breadboard validation in relevant environment
TRL 4
Component and/or breadboard validation in laboratory environment (Milestone A - TRA Deskbook Table I-3)
TRL 3
Analytical and experimental critical function and/or characteristic proofof-concept
TRL 2
Technology concept and/or application formulated
TRL 1
Basic principles observed and reported
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If immature technologies at lower TRLs are integrated into a system, the probability increases that there will be cost overruns and schedule slippage. For this reason, in DoD before Milestone B approval is given, the CTE must be at TRL6 – demonstrated in a relevant environment. Milestone C approval requires that TRL 7 or higher has been achieved. Today most government Agencies that conduct research and development to fulfill their mission utilize the concept of TRLs. The bibliography contains pertinent information on TRLs published by the Department of Defense, Department of Energy, the Depart-
ment of Homeland Security, the Department of Transportation, the National Aeronautics and Space Administration and the National Oceanic and Atmospheric Administration. For small businesses developing technologies to be used by a federal Agency or in a product that they are developing to commercialize themselves, it is beneficial to review the metrics that each Agency provides for TRLs used in their programs.
REFERENCES Department of Defense. Technology Readiness Assessment (TRA) Deskbook, 2011
Department of Energy. Technology Readiness Assessment DOE G 413.3-4A, 2011 Department of Homeland Security Science and Technology Readiness Level Calculator (ver 1.1) 2009 Department of Transportation, Federal Highway Administration. Technology Readiness Level Guidebook, 2017 National Aeronautics and Space Administration. Final Report of the NASA Technology Readiness Assessment (TRA) Study Team, March 2016 National Oceanic and Atmospheric Administration. Policy on Research and Development Transition – Procedural Handbook, 2017
A free copy of TRL wall chart comparing hardware and software criteria for TRLs is available from Dawnbreaker.
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PHASE II VARIATIONS There’s A Lot You Should Know! BY JENNY C. SERVO, Ph.D.
Since the Small Business Innovation Research (SBIR) program began over 30 years ago,
there have been many accommodations made to address different ways that eligible small business can meet the objectives of the SBIR program. Most of these variations are associated with Phase II and many, but not all of the variations are implemented by Agencies with the largest SBIR programs. The variations that we will discuss in this article are referred to as (1) Sequential Phase II awards, (2) Cross-Agency awards, (3) Cross-Program awards, (4) Direct to Phase II awards and (5) Award caps. These changes were ushered in by the SBIR/STTR Reauthorization Act of 2011 and codified by the Small Business Administration in the Small Business Innovation Research (SBIR) Policy Directive of 2014. As these changes are relatively recent – it’s possible that many SBIR awardees may be unfamiliar with these terms. In reading ahead, keep in mind that every Agency operates in a very distinct fashion and has the option to implement program variations, but are not required to do so.
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SEQUENTIAL PHASE II AWARDS Sequential Phase II awards, sometimes referred to as Second Phase II awards or Phase IIB awards provide additional funding to an awardee to continue the maturation of the technology. According to the SBA Policy Directive,
“ ”
A Phase II awardee may receive one additional sequential Phase II award to continue the work of an initial Phase II award. The additional sequential Phase II award has the same guideline amount and limits as an initial Phase II award.
The best way to determine if an Agency provides a Sequential Phase II award is to conduct a key word search in the most recent solicitation, using any of these terms: Sequential, Second or Phase IIB. The following Agencies currently provide Sequential Phase II awards. In order to learn more about the purpose and guidelines for applying for a Sequential Phase II award, read the details provided in the solicitation and then speak with your technical monitor or the SBIR program manager for more information. Sequential Phase II awards are highly competitive and limited in number.
CROSS-AGENCY AWARDS For many years the Department of Defense (DoD) allowed a company that won a Phase I award to potentially seek a Phase II from another DoD Service or Component should the original funding source not have the funds available to pay for the Phase II award. In 2011, this practice was formally extended to all Agencies as an option. According to SBA, “A Phase I awardee may receive a Phase II award from an Agency other than the one that awarded the related Phase I.” Smaller programs frequently take advantage of Cross-Agency solutions. The Department of Homeland Security (DHS) for example,
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AgencY
SEQUENTIAL PHASE II
SOURCE
DoD
Yes
SBIR 19.1 BAA, page 5
DOE
Yes
FY 2019 Phase II, Release 1, page 5
DOT
Yes
FY 2018 Phase I, page 8
NIH
Yes
SBA Policy Directive, page 12
has an initiative called OATS (Other Agency Technology Solutions) which leverages SBIR investments made by other Agencies that can fill DHS capability gaps and requirements. The United States Special Operations Command (USSOCOM) also makes frequent use of this Cross-Agency capabilities for similar reasons.
CROSS PROGRAM AWARDS The Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs each has a unique set of guidelines. For example, although the small business is always the applicant, with an STTR award a Research Institution must always be included and conduct a minimum of 30% of the work. This is not the case for SBIR awards which do not require the involvement of a research institution. A Cross-program award allows the awardee to switch between the SBIR and STTR programs. As SBA notes,
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Agencies have the option to allow STTR Phase I awardee to receive SBIR Phase II award and SBIR Phase I awardee to receive STTR Phase II award. Implementation is at Agency discretion.
The reason that one may switch from an STTR to an SBIR award is that as one advances through higher Technology Readiness Levels (TRL) more applied and less basic work is
required. Therefore, it may make more sense for the small business to retain a much larger share of the work in Phase II.
DIRECT TO PHASE II Direct to Phase II (DP2) awards were designed for small business concerns (SBCs) that had completed Phase I milestones using non-SBIR funds. From 2011 to 2017 this option was made available to DoD, NIH, and the Department of Education at their discretion on a pilot basis. The Defense Advanced Research Projects Agency, or DARPA, was the first to implement DP2, followed by the National Institutes of Health (NIH) and the Air Force. In FY17 when the SBIR/ STTR programs were reauthorized, the pilot programs were not addressed and therefore expired. However, through the National Defense Authorization Act authorized as of August 2018, Direct to Phase II was reauthorized. In the current DoD Broad Agency Announcement there are two Direct to Phase II opportunities – one through the Air Force and another through the Office of the Secretary of Defense (OSD). Both have a limited number of topics found in solicitations that call out Direct to Phase II in the title. The National Institutes of Health has reinstated the Direct to Phase II program.
AWARD CAPS – AWARDS OVER STATUTORY BUDGET LEVEL With the passage of the SBIR/STTR Reauthorization Act of 2011, STTR awards (guideline amounts) were increased to match SBIR
amounts: $150,000 for Phase I and $1 million for Phase II. Agencies had the option of increasing awards by up to 50% ($225,000 for Phase I and $1.5 million for Phase II). However, there are situations where larger awards are merited – especially when funded by the National Institutes of Health (NIH). For this reason, a provision was included which allowed Agencies to seek a special waiver from SBA to provide larger awards. Small businesses that are applying for SBIR/ STTR awards from NIH should look carefully at the document entitled “National Institutes of Health SBA-Approved SBIR/STTR Topics
for Awards over Statutory Budget Limitations”. For each of the institutes there is a list of research topics for which larger awards can be granted. One should discuss with the appropriate Program Director what the ceiling or cap is on research that falls within the guidelines articulated in this document. As you look to reduce technology risk, be sure to explore these Phase II options as a means of advancing your technology. The higher the technology readiness level (TRL) when your work exits the SBIR/STTR programs, the more successful you will be in securing Phase III sources of funding.
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OTHER TRANSACTION AUTHORITY:
An Alternative Vehicle for Partnering
with the
Federal Government
BY JULIE S. KRULL
Those
who regularly do business with the federal government know all too well the hurdles involved with traditional procurement practices. Contracts, grants, and cooperative agreements many times have rigid guidelines and extended wait periods which draw out the end goal of solving a government need with your R&D efforts. Other Transaction Authority (OTA) refers to a method of expedited procedures that enable the Department of Defense and several other Agencies to acquire technologies from eligible small businesses, without the constraints of traditional contracts. Also referred to as an “Other Transaction Agreement” or even more simply, an “OT,” it is an alternative to the Federal Acquisition Regulation (FAR) system and provides Agencies a flexible way of purchasing advanced technologies through a rapid and efficient acquisition instrument. For the DoD, this means getting cutting edge technologies into the hands of the Warfighter, quickly and cost-effectively.
WHO CAN AWARD AN OTA AND HOW MUCH? In an effort to increase opportunities for government-industry partnerships, OTA powers have been extended by Congress to six federal Agencies. The Department of De-
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fense (DoD), Department of Energy (DOE), Department of Health and Human Services (HHS), Department of Homeland Security (DHS), Department of Transportation (DOT), and the National Aeronautics and Space Administration (NASA) all have the authority to grant OTAs to small businesses that meet certain criteria.
as well as prototypes of new technologies. In December 2018, the Department of Defense issued a revised Other Transactions (OT) Guide that replaces the January 2017 Other Transactions Guide for Prototype Projects. According to this document, there are three different types of DoD OT agreements: Research, Prototype and Production.
Amounts vary but most OTAs have a ceiling ranging between $100M to $500M and the statements of work (SOWs) can be in any amount below that ceiling. For example, if the OTA is for $100M, it can have 20 $5M SOWs, 2 $50M SOWs, or any combination of SOWs so long as the total amount of those combined SOWs does not exceed $100M.
WHO IS ELIGIBLE?
“This is key for small businesses to understand so they don’t get scared off by confusing the ceiling number for the project amount,” says Tim Greeff, Founder & CEO at National Security Technology Accelerator (NSTXL). “I find small businesses assume they will not be able to compete for a $100M project so they don’t bother. OTA SOW awards start at $250K and go all the way up to 8 and 9-figure SOWs.”
WHAT DO OTAs PURCHASE? The majority of recent OTAs have funded research and development (R&D) efforts,
While this answer varies by Agency, DoD requirements are as follows: 1. The awardee is a non-traditional defense contractor OR a small business: A “non-traditional defense contractor” is defined in this case as an entity that is not and has not, for the one-year period preceding the solicitation, engaged in a contract subject to full cost accounting standards (CAS) which typically applies to contracts worth more than $50M. This is to encourage companies to explore partnership opportunities that would normally not do business with the federal government. 2. The awardee is a traditional defense contractor, but at least one of the following applies: • At least one non-traditional contractor is participating to a “significant” extent
• The awardee provides a financial or in-kind cost share – typically, a 1/3 cost share is required. • The Service Acquisition Executive makes a written determination that exceptional circumstances justify use of OTA for the purpose of executing innovative business models or structures that would not be feasible or appropriate with a FAR-based contract. So, can a small business who has long done business with the government via the popular Small Business Innovation Research (SBIR) program utilize an OTA? “Yes,” says Greeff.
“
You do not have to choose between SBIR and OTA. They are complementary. Although many SBIR Phase IIs were excluded prior to the National Defense Authorization Act of 2016, now all SBIR firms, regardless of dollar amounts awarded, can use OTA as a contracting mechanism.
”
In fact, Greeff believes OTAs are one of the best vehicles for small businesses to connect with government. “Going from an SBIR Phase II to a Phase III is very difficult,” he explains. “It’s all about – how do we transition? How do we get this idea that the government has already been throwing money at, and get it in the hands of the Warfighter? OTAs provide a great vehicle to do that.” Dr. Reynolds Monach of Daniel H. Wagner Associates, who has long enjoyed success in the SBIR arena, has recently been exploring OTAs and feels the consortia model has benefits. “We do feel that consortium membership is helpful in terms of finding out what capabilities the Navy needs, and since the structure allows communication with the TPOCs, the approach has promise,” he says.
WHAT IS THE PROCESS? Although aligning with a consortium or accelerator isn’t the only path to an OTA, becoming a member is generally considered your best bet, both for staying in the know on current opportunities and being considered as part of the solution. There are over 15 existing OTA Consortia within DoD, and the government will release a Request for White Papers (RWP) through a specific OTA and its corresponding consortium. In the case of NSTXL, membership is not required to view the opportunities, so small
businesses can first see if there is a fit before signing up as a member, which costs $250 per year for small businesses. RWPs contain a Statement of Need, along with instructions and template to be used for White Paper submittals. Your White Papers should describe in detail your proposed solution to the Government’s requirement(s). After the White Papers are reviewed, the Agency will develop a Statement of Work and will issue a Request for Project Proposal to the selected recipients. The prospective awardee will then be asked to prepare and submit a proposal. Once those steps are complete, the award is given.
ARE THERE ANY PITFALLS? Although OTs have been around since 1958 when they were created in tandem with NASA via the National Aeronautics and Space Act, their recent surge in popularity have led some to wonder if this “faster” route to commercialization does in fact live up to the hype. One main criticism has to do with fairness. Since the Competition in Contracting Act (CICA) does not apply to OTs, some question whether competition and fairness are a consideration. Others assume that most large contracts automatically go to major defense contractors and small businesses don’t have a fighting chance. Another criticism focuses on the lack in structure. As Claire M. Grady, DHS Under Secretary for Management, warned in January 2017, “The flexibility to start from what is essentially a blank sheet of paper when drafting an OT eliminates the safeguards inherent in using the standard statutory and regulatory contract language and clauses. Individuals using this authority should have a level of responsibility, business acumen, and judgement that enables them to operate in this relatively unstructured environment.” It was in response to many of these queries that led Greeff to launch NSTXL in way that differed from the traditional consortium model. In addition to providing an all-inclusive platform and only posting solicitations that have funding already attached to it, the team at NSTXL chooses to focus on small businesses, helping them to navigate the murky waters of OTAs and working one-onone with DoD Program Managers to glean insight into the needs of the military. One of the things Greeff tries to emphasize is intimidation shouldn’t be a factor. “Don’t limit yourself to thinking you need to be the lead entity for an OTA project,” he explains. “Even if you feel you can be part of the solution, we encourage you to go after it as the govern-
ment uses OTAs to encourage teaming.”
THE FINAL WORD ON OTAs As Greeff concludes, “Finding a technology is only part of the solution. If you can’t get that technology on contract, it doesn’t do any good. OTAs are a vehicle; they are a tool to help the government and small business to connect, to bring technology to market.” We encourage SBIR firms who are thinking about exploring OTAs further to speak with their program managers, and explore the resources listed here.
RESOURCE LINKS CURRENT LIST OF DOD OTA CONSORTIA & ACCELERATORS
The System of Systems Consortium Consortium for Command, Control, and Communications in Cyberspace (C5) Consortium for Energy, Environment and Demilitarization (CEED) Countering Weapons of Mass Destruction Defense Mobility Enterprise Medical CBRN Defense Consortium Medical Technology Enterprise Consortium Department of Defense Ordnance Technology Consortium (DOTC) National Security Technology Accelerator (NSTXL) National Spectrum Consortium Sensors, Communications & Electronics Consortium Space Enterprise Consortium Vertical Lift Consortium Undersea Tech Innovation Consortium
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Update on
Underrepresented STATES & SBIR/STTR
The SBA has noted that more SBIR/STTR funding goes to states with the largest populations and those that have a record of receiving substantial R&D funding from Federal programs outside of the SBIR and STTR Programs. Here are a few key facts:
» Approximately 68% of SBIR award dollars were concentrated among the states of California, Massachusetts, Virginia, Colorado, Maryland, New York, Pennsylvania, Texas, Ohio, and Florida.
» Approximately 63% of total STTR award dollars were concentrated among the states of California, Massachusetts, Virginia, Maryland, New York, Ohio, Pennsylvania, Illinois, Texas, and North Carolina.
Agencies have been increasing outreach efforts in the most recent years, but there is still much more work to be done. There is a need to improve outreach to women, minorities, and the following 26 most underrepresented states as identified by the latest SBIR/STTR Annual Report:
» » » » » » » » » » » » »
Alaska Arkansas Delaware Hawaii Idaho Iowa Kansas Kentucky Louisiana Maine Mississippi Missouri Montana
» Nebraska » Nevada » North Dakota » Oklahoma » Puerto Rico » Rhode Island » South Carolina » South Dakota » Tennessee » Utah » Vermont » West Virginia » Wyoming
Key outreach efforts are conducted within these states and resources are available such as economic development Agencies, universities, accelerators, and state or local small business service providers to foster cross-collaboration, increase small business awareness, and encourage future participation in the SBIR/STTR Programs. If you are located in one of these underrepresented states and would like to learn more about your state’s specific resources, please visit: www.sbir.com and find “Local Resources” on the home page.
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