On time and on schedule: Changes to the SBIR Size Rules

Post Date:
January 28, 2013
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SBA recently published the Final Rule for the SBIR Size Rules on December 27, 2012 in the Federal Register, just ahead of the deadline mandated by Congress.  The size rule update was a key component of the recent SBIR Reauthorization Legislation, and it will take effect on January 28, 2013.  Last spring SBA issued a proposed rule, and solicited public comment and feedback on the rule.  We received robust feedback, and incorporated that into the final rule. There are several major changes from the proposed rule to the final rule, including: timing of eligibility, VC Participation in STTR, ownership and affiliation.  For those interested in the details of the changes, the preamble to the final rule spells out the feedback we heard and all of the changes that we made.We know that it may take some time to digest these new changes. As we transition into implementing the rule and the reauthorization more broadly, we wanted to highlight some key things that everyone should know.

  • Going forward, each applicant will need to register with SBA prior to submitting their applicant.  The process will be straight forward and should take less than 10-15 minutes for most applicants.  Having one central registry will help coordinate data collection across agencies, and ultimately will save small businesses from having to input the same data across different agencies, across different years.
  • During the registration, small businesses will have the opportunity to review the basic rules on eligibility based on the new size rule.  We know that these issues can get complex.  As such, SBA is creating additional resources to help you understand the new size rules and company registry. For example, we’ve developed a checklist to help you quickly determine your eligibility and a FAQ with answers to your most popular questions. We also put together a compliance guide written in plain English to help you understand the necessary certifications needed and provides numerous examples on various ownership and control requirements. Lastly, for those that prefer a more interactive experience, SBA will be holding monthly webinars to discuss key changes with SBIR/STTR and upcoming announcements pertaining to our other high growth programs. In fact, we did a webinar on all the size rule updates which through step-by-step all the upcoming changes. The webinar, along with the resources mentioned will be made available on our website at http://www.sbir.gov starting January 28th.
  • Finally, at the same time we are implementing a new policy required by the statute.  The policy requires each agency to set a “benchmark”, that establishes a minimum level of successful transitions for frequent award winners.  For FY13, the focus is on demonstrating successful transition from Phase I to Phase II.  Each agency has set a minimum transition rate (Phase II awards divided by Phase I awards) over a specified time period. For those firms who do not meet that minimum rate, they will not be able to participate in the program for one year. Importantly, this policy applies only to firms who have received more than 20 awards over the specified time period.  More information can be found here.  Through a concerted effort, we made meaningful clarification to the SBIR/STTR size rules, with a specific goal of making them easier to understand.  We hope that you’ll find these resources useful.  As always, your feedback is critical and much appreciated.
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