Post Phase II Initiatives and Opportunities

The NASA SBIR/STTR program currently has in place several initiatives for supporting its small business partners past the basic Phase I and Phase II elements of the program that emphasize opportunities for commercialization.

Detailed information on each of these initiatives is provided below.

Note: Only awardees from the PY 2015 Phase II solicitation are eligible for this Option. All other Awardees should review the Phase II Extended option to see if it is applicable

The objective of the Phase II-E is to further encourage the advancement of innovations developed under Phase II via an option of R/R&D efforts underway on current Phase II contracts. Eligible firms shall secure an external investor to partner with and invest in enhancing their technology for further research, infusion, and/or commercialization. Under this option, NASA will match external investor funds with SBIR/STTR funds to extend an existing Phase II project for a minimum of 4 months to perform additional R/R&D.

SBIR/STTR Phase II Enhancement

Applicable Period / SolicitationMinimum non-SBIR/STTR Funding RequiredCorresponding SBIR/STTR Program ContributionMaximum cumulative award ( Phase II + Phase II-E match )Phase II-E submission PeriodAnticipated Period of Additional Performance
2015 Solicitation$25,000.001:1 match to a maximum of $150,000

$900,000.00 (SBIR and STTR)

$1,650,000.00 (SBIR Select)

Starts after the 12th month of performance and ends 60 days before contract end date6-12 Months
2014 Solicitation$25,000.001:1 match to a maximum of $150,000

$900,000.00 (SBIR and STTR)

$1,650,000.00 (SBIR Select)

Starts after the 12th month of performance and ends 60 days before contract end date6-12 Months
2012 Solicitation$25,000.001:1 match to a maximum of $125,000

$875,000.00 (SBIR and STTR)

$1,625,000.00 (SBIR Select)

Starts after the 12th month of performance and ends 60 days before contract end date6-12 Months
2011 Solicitation--1:1 match to a maximum of $250,000$1,000,000.00Starts after the 12th month of performance and ends 60 days before contract end date6-12 Months

1.0 Phase II Enhancement Guidelines

NASA has developed the Phase II Enhancement Option (Phase II-E) to further encourage the transition of SBIR/STTR technologies into NASA acquisition programs, other Agency's programs, as well as the private sector. Under this initiative, the Program will provide an eligible Phase II small business with additional Phase II SBIR or STTR funds matching the investment funds the small business obtains from non-SBIR/STTR sources such as, NASA acquisition programs, other Agencies or the private sector.

1.1 General Phase II Enhancement Information

The objective of the Phase II-E is to further encourage the advancement of innovations developed under Phase II via an option of R/R&D efforts underway on current Phase II contracts. Eligible firms shall secure an external investor to partner with and invest in enhancing their technology for further research, infusion, and/or commercialization.

1.2 Matching Levels

Under this option, NASA will match external investor funds with SBIR/STTR funds to extend an existing Phase II project for a minimum of 4 months to perform additional R/R&D. The matching levels SBIR/STTR will provide will depend on matching levels offered at time of proposal; please refer to http://sbir.nasa.gov/content/post-phase-ii-initiatives for matching levels and other related information.

The non-SBIR or non-STTR contribution is not limited. Please refer to Definition of External Investor section for clarification of external investor.

1.3 Period of Performance

NASA expects the period of performance to be commensurate with the total NASA and external investor funding received. A Phase II period of performance of less than 18 months will preclude the Phase II from eligibility for a Phase II-E option.

1.4 Definition of External Investor

Investor(s) must be external to the NASA SBIR/STTR Program, which may include such entities as another company, a venture capital firm, an individual "angel" investor, a non-SBIR/STTR government program, or any combination of the above. An external investor cannot include the owners of the small business, their family members, and/or "affiliates" of the small business, as defined in Title 13 of the Code of Federal Regulations (C.F.R.), Section 121.103.

1.5 Government Investments

If NASA or another Government Agency is the investment-funding source, the NASA SBIR/STTR Program will initiate negotiations to exercise the Phase II-E option and will provide matching funds dollar per dollar up to the applicable matching level at time of proposal, if the Phase II-E option is exercised. Refer to http://sbir.nasa.gov/content/post-phase-ii-initiatives for matching levels.

For NASA to successfully exercise the Phase II-E contract option the entire intended investment funding payment from the organization should be made in full to the firm within 45 days after receipt of notification that the Phase II-E proposal/application has been selected. The funding to the firm shall be in a funding vehicle separate from the existing NASA Phase II contract, and must be fully funded. The NASA SBIR/STTR Program will not add your investment funding to the existing Phase II contract.

The NASA SBIR Phase III contracting handbook and basic information have the legal statutes that pertain to award of an SBIR Phase III contract. If necessary, please provide this documentation to your procurement office. These documents are available from download from the NASA SBIR/STTR website (http://sbir.nasa.gov).

If you or the Agency official has further questions on how to do a Phase III contract, please contact:

Mr. Carlos Torrez

SBIR/STTR Business Manager

MS 202A-3/Ames Research Center

Moffett Field, CA 94035-1000

Telephone: 650-604-5797

Email: Carlos.Torrez@nasa.gov

2.0 General Guidance on What Qualifies As Investment

The investment must be used to fund work that directly extends the work done in the Phase II.

NASA considers factors such as ownership, management, previous relationships with or ties to another concern and contractual relationships, in determining whether affiliation exists. Individuals or firms that have identical or substantially identical business or economic interests, such as family members, persons with common investments, or firms that are economically dependent through contractual or other relationships, may be treated as one party with such interests aggregated. Although NASA is guided by this definition of affiliation in 13 C.F.R. Sec. 121.103, we also exercise our own discretion in determining whether a particular entity qualifies as an "external investor."

The investment must be an arrangement in which the external party provides funding to the small business in return for such items as: equity, a share of royalties, rights in the technology, a percentage of profit, or any combination of the above. Commitment must be made prior to the award, but the expenditure must be concurrent with the Phase II-E performance. The investor's funds must pay for activities that further the development and/or commercialization of the company's SBIR/STTR technology beyond the Phase II work (e.g., further R&D, manufacturing, marketing, etc.).

2.1 Specific Examples of What Does and Does Not Qualify As Investment

This section contains questions and answers regarding NASA's guidance for the types of investment from external investors that qualify as an investment under the Phase II-E program. The following includes specific examples of company-investor relationships and whether these relationships qualify as a Phase II-E investment or not. If you have questions about whether a particular company-investor relationship qualifies, please contact the NASA SBIR/STTR Help Desk at sbir@reisys.com or (301) 937-0888. The Help Desk will refer any policy or substantive questions to appropriate NASA personnel for an official response.

Item Number:Question:Answer:
1Can a small business contribute its own internal funds to qualify for the Phase II Enhancement?No. NASA is seeking external, third party validation of the technology, and requires that the funds come from an external investor. Please note that a subcontractor of the SBIR/STTR project will not qualify as an external investor.
2Company A spins off company B, which wins a SBIR award. Company A then wants to contribute matching funds to qualify company B for the Phase II Enhancement. Can A be considered an external investor for purposes of the Phase II Enhancement?In making our determination of whether company A is an external investor, we would be guided by the definition of "affiliates" in 13 C.F.R. Sec. 121.103, discussed above. Our presumption is that in this example A and B would be considered "affiliates," and that A would therefore not be an external investor for purposes of the Phase II Enhancement.
3Small business S wins a SBIR award. The president of S is a major shareholder in another company Y, which wants to contribute matching funds to qualify S for the Phase II Enhancement. Can Y be considered an external investor?Our presumption is that Y would not be considered an external investor. Our determination would be guided by whether the president's stake in Y is large enough that S and Y would be considered "affiliates" under 13 C.F.R. Sec. 121.103. Subsection (c) of Section 121.103 specifically discusses affiliation based on stock ownership: c. Affiliation based on stock ownership. A person is an affiliate of a concern if the person owns or controls, or has the power to control 50 percent or more of its voting stock, or a block of stock which affords control because it is large compared to other outstanding blocks of stock. If two or more persons each owns, controls or has the power to control less than 50 percent of the voting stock of a concern, with minority holdings that are equal or approximately equal in size, but the aggregate of these minority holdings is large as compared with any other stock holding, each such person is presumed to be an affiliate of the concern. If S and Y are found to be affiliates, we would determine that Y is not an external investor.
4Does the external investor have to be a single entity (e.g., a single venture capital firm) or can it be more than one entity (e.g., two angel investors and a venture capital firm)?It can be more than one entity.
5Small business A contributes matching funds to small company B in order to qualify B for the Phase II Enhancement, and, at the same time, B contributes matching funds to A in order to qualify A for the Phase II Enhancement. Do A and B qualify as external investors under the Phase II Enhancement?No. A and B's relationship is such that their investment in each other would not provide external validation of the commercial potential of their respective SBIR projects. We would therefore not consider them to be external investors for purposes of the Phase II Enhancement.
6Can a family member of an employee of small business S contribute funds to qualify S for the Phase II Enhancement?No, except under rare circumstances. Again, we would be guided by the definition of "affiliates" in 13 C.F.R. Sec. 121.103. The family member presumptively would be an affiliate of company S and not an external investor.
7Venture capital firm V currently is a 22 percent shareholder in small company S. Can V invest additional funds in S to qualify S for the Phase II Enhancement?Our presumption is yes. In making our determination, we would be guided by whether V and S are "affiliates," as defined in 13 C.F.R. Sec. 121.103. Section 121.103 provides (in subsection (b)(5)) that a venture capital firm is not affiliated with a company if the venture capital firm does not control the company -- e.g., by owning more than 50 percent of the stock of a small company (prior to its investment under the Phase II Enhancement), as described in 13 C.F.R. 107.865.
8Large company L makes a cash investment in small company S, and then serves as a subcontractor to S on an SBIR project. Can L's investment in S count as a matching contribution for purposes of the Phase II Enhancement?Only L's cash investment net of its subcontracting effort can count as matching funds for purposes of Phase II Enhancement. For example, if L invests $750,000 in S and subcontracts with S for $250,000, only L's net contribution ($500,000) can count as matching funds for purposes of the Phase II Enhancement.
9Company Y makes a cash investment in small company S for purposes of Phase II Enhancement, and also enters into a separate contract with S under which Y provides certain goods/services to S in return for $500,000. Can Y's cash investment in S count as a matching contribution for purposes of the Phase II Enhancement?As in the previous example, only Y's cash investment net of the $500,000 it receives from S can count as matching funds for purposes of the Phase II Enhancement.
10A group of investors wishes to invest funds in small company S to qualify S for the Phase II Enhancement. One of the investors is a family member of S's president, who wants to contribute $50,000 toward the effort. Can the group's investment in S count as a matching contribution to qualify S for the Phase II Enhancement?The family member's investment of $50,000 does not count, as the family member is not an external investor (see item (6) above). Contributions of the other investors can count provided that they meet the other conditions for the Phase II Enhancement (e.g., each must be an external investor).
11Can a loan from an external party qualify as an "investment" for purposes of the Phase II Enhancement?No. The rationale behind the Phase II Enhancement is that an external party is betting on the company's success in bringing the technology to market as an investor -- not just its ability to recover a loan as a lender.
12How about a loan that is convertible to equity?A loan that is convertible to equity at the company's discretion would count as an investment under the following circumstances: (1) the loan is provided by a public entity (e.g., a state agency), or (2) the loan is provided by a private entity, and the SBIR company actually converts the loan to equity before the Phase II-E option contract is exercised.
13Can in-kind contributions from an external investor count as matching funds under the Phase II Enhancement?No. The matching contribution must be in funds, regardless of source. A cash contribution is a stronger signal of the external investor's interest in the technology, and can be readily verified.
14Can purchases of a purchase order from an external investor count as a matching contribution under the Phase II Enhancement?No. Purchases will not be considered an investment, since a purchase may only represent a procurement need, not a desire to further the technology. Refer to question 15.
15If large company L pays small company S for work related to S's SBIR project and expects a deliverable (goods or services) from S in return, would that qualify as an "investment"?This arrangement would not qualify as an investment, for the same reason a loan does not qualify. Specifically, in this situation the large company is not betting on the small company's success in bringing the technology to market, but merely is looking to purchase a deliverable. Refer to item 14.
16Can entity E's investment in small company S during the first month of S's Phase I SBIR project count as a matching contribution to qualify S for the Phase II-E?No. The investment must occur within 45 days of the company's notification of selection, without constraints.
17Small company S is collaborating with a university on an STTR project. Investor I wishes to provide funds to the university in order to qualify S for the STTR Phase II Enhancement. Can I's investment in the university count as a matching contribution to qualify S for the Phase II Enhancement?In order to qualify S for the STTR Phase II Enhancement, I's investment of funds must be in small company S, not in the university. S can then subcontract some of the funds to the university.
18Must the activities funded by the investor be explained in the proposal's statement of work for the small company's Phase II-E option?Yes. The external investor's funds must pay for activities that further the development and/or commercialization of the company's Phase II work. Including this information in the proposal assists with verification.
19Our small business has existing contracts and/or grants. Can these count as matching investments?Yes, if the existing contract or grant is directly related to the Phase II-E work proposed, e.g., a Phase III contract for the same technology or a modification and funding for another contract that specifically relates to the technology. Both of these must be awarded after the Phase II-E proposal is submitted to be considered a matching investment.

3.0 Phase II Enhancement Application Requirements

Only active NASA SBIR/STTR Phase II contracts can apply for participation in the Phase II-E option.

A Phase II-E application may be submitted anytime starting the 12th month of performance of this contract and ending 60 days before contract end date. Applications received after this timeframe will be deemed late and not considered. Please note there is no guarantee that the Government will exercise a Phase II-E option based on the fact that there are limited funds designated for the options.

Since the Phase II-E is a contract option, there will be no debriefings as defined by Part 15 of the FAR as to why the option was not exercised.

Phase II-E funding shall not be used to cover work that was part of the Phase II contract, e.g., incomplete or unsuccessful R&D.

During the Phase II effort, the small business shall submit a Phase II Enhancement application through the NASA SBIR/STTR Contract Administration and Closeout EHB. It should be noted that all contractual rules and regulations that are applicable to the Phase II contract also apply to the Phase II-E since it is a continuation of the work.

3.1 Phase II Enhancement Application

A Phase II-E application package consists of the items listed below, and shall be submitted through the NASA EHB Submission website.

3.1.1 Phase II Enhancement Application Form

The application form must be submitted electronically, in its entirety, and requires the following:

  • Anticipated SBIR/STTR Contribution: List the anticipated SBIR/STTR Program contribution to be matched. This value cannot be greater than the current offered level at time of Phase II-E proposal
  • External Investment: List the total amount of investment funds from the investor(s). There is no maximum amount of external investor funds a firm can receive. The current applicable minimum investment must be proposed in order for the SBIR/STTR Program to match the invested funds. Refer to http://sbir.nasa.gov/content/post-phase-ii-initiatives for details.
  • Proposed Start Date and End Date: List the proposed start and end date for the Phase II-E proposed work.
  • Justification for period of performance: Required in application if a firm requires a Phase II-E period of performance longer than 12 months.
  • Is NASA the source of investment?: List "Yes" if NASA is the source of investment funds or "No" if NASA is not the source of investment funds.
    • Mission Directorate Supported: (If "Yes" above) list the mission directorate that is supporting the investment.
    • Program/Project/Application: List the program, project, or application for the mission directorate.
    • Non-NASA Investment Source: (If "No" above) List the investor(s).
  • Final TRL: Provide the estimated Technology Readiness Level (TRL) at the end of the Phase II-E.
  • Comments:Provide any additional comments, if needed.

3.1.2 Letter of Commitment

A letter of commitment from the external investor shall be provided during the application period (similar documentation without a corresponding commitment letter will not be accepted). The letter of commitment must contain the following information:

  • The investor contact information including their business address, title, email address, phone number, and be on official letterhead;
  • The investor's willingness to verify the commitment;
  • the total amount of the investment, accompanying an acknowledgment that the investment is being made in response to and referencing the company's specific Phase II R&D effort;
  • an acknowledgment that the entire amount of matching funds will be available for transfer within 45 days of the company's notification that it has been approved for a Phase II-E work, without constraints;
  • Statement of investment use
    • For an investment from a government program, it should include a brief statement of how the resulting Phase II-E technology will be integrated into the acquisition program's future activities and how they will provide funding to the SBC. For investment(s) from a private sector investor, it should include a brief statement of how the investment will further the technology originally proposed in the Phase II, or the commercialization of a product resulting from the Phase II.

For letter of commitment example, please see the EHB Document Library.

3.1.3 Statement of Work (SOW)

A concise statement of work for the Phase II Enhancement effort should be submitted as a PDF file.

The SOW must state the specific objectives of the Phase II-E effort and provide a detailed work plan defining specific tasks and the methods planned to achieve each task, performance schedules, project milestones, and deliverables. The SOW must address how it will significantly improve upon the work performed in the Phase II. The statement of work must show separately the work done for the Phase II-E SBIR/STTR portion from the portion funded by external investor matching funds.

3.1.4 Cost Proposal

Detailed cost proposals are required and should be submitted as a PDF file.

The cost proposal should be broken into two sections, containing first the budget summary for the work being done with the SBIR/STTR Program matching funds and second the budget summary for the work being done with the external investment funds. The Cost Proposal should contain estimated costs with detailed information for each cost element, consistent with the offeror's cost accounting system.

3.1.5 Briefing Chart

An updated briefing chart with non-proprietary information for the Phase II-E work proposed shall be provided with the application; this briefing chart may be freely distributed by the Government.

3.1.6 Commercialization Plan

Per the guidelines outlined in the Solicitation, an updated plan for commercialization (Phase III) of the proposed innovation must be provided. The commercialization plan should be submitted as a PDF file and at a minimum, shall address the following areas:

  • Market Feasibility and Competition: Describe (a) the target market(s) of the innovation and the associated product or service, (b) the competitive advantage(s) of the product or service; (c) key potential customers, including NASA mission programs and prime contractors; (d) projected market size (NASA, other Government and/or non-Government); (e) the projected time to market and estimated market share within five years from market-entry; and (f) anticipated competition from alternative technologies, products and services and/or competing domestic or foreign entities.
  • Commercialization Strategy and Relevance to the Offeror: Present the commercialization strategy for the innovation and associated product or service and its relationship to the SBC's business plans for the next five years. Infusion into NASA missions and projects is an option for commercialization strategy.
  • Key Management, Technical Personnel and Organizational Structure: Describe: (a) the skills and experiences of key management and technical personnel in technology commercialization; (b) current organizational structure; and (c) plans and timelines for obtaining expertise and personnel necessary for commercialization.
  • Production and Operations: Describe product development to date as well as milestones and plans for reaching production level, including plans for obtaining necessary physical resources.
  • Financial Planning: Delineate private financial resources committed to the development and transition of the innovation into market-ready product or service. Describe the projected financial requirements and the expected or committed capital and funding sources necessary to support the planned commercialization of the innovation. Provide evidence of current financial condition (e.g., standard financial statements including a current cash flow statement).
  • Intellectual Property: Describe plans and current status of efforts to secure intellectual property rights (e.g., patents, copyrights, trade secrets) necessary to obtain investment, attain at least a temporal competitive advantage, and achieve planned commercialization.

4.0 General Information on Exercising the Phase II Enhancement Contract Option

4.1 Exercising the Phase II Enhancement Contract Option

If it is decided that the contract option should be exercised, the firm will receive a "Notice of Intent" from the NASA Shared Services Center (NSSC). The letter will notify the firm of the Government's intent, in accordance with FAR Clause 52.217-9 entitled, "Option to Extend the Term of the Contract", to exercise the Phase II-E Option.

This notification does not commit the Government to exercise the pre-priced Option nor does it in any manner obligate Government funds against the subject contract. The firm must show proof of funds transferred from the external investor to the small business 45 days after receipt of notification that the Phase II-E proposal/application has been selected. If proof of receipt of the investment funds is not received by NASA within the 45 days, the option for Phase II-E matching funds will expire.

If the SBIR/STTR Program exercises the Option, it will be accomplished via a bilateral modification. The modification will specifically identify the Option period of performance and contract amount. NSSC is responsible for executing the Phase II-E modifications to the contract. Please note that the firm is not authorized to commence work or incur any costs under the Phase II-E option until the Phase II-E modification to contract has been executed.

4.2 Not Exercising the Phase II Enhancement Contract Option

If it is decided that the contract option should be not exercised, the firm will receive a notice from NSSC. Since the Phase II-E is a contract option, there will be no debriefings or explanation as to why the option was not exercised.

5.0 Time to Remedy Deficiencies

If a deficiency in the Phase II-E application or proposal is noted to the SBIR/STTR small business, the small business will have 45 calendar days to remedy this deficiency from the first time it is notified of a deficiency; otherwise the proposal will not be selected.

Note: Only awardees from PY 2016 onwards are eligible for this Option

The objective of the Phase II-E Option is to further encourage the advancement of innovations developed under Phase II via an option to further R/R&D efforts underway on active Phase II contracts that are in good standing with NASA. Eligible firms shall secure a non-SBIR/STTR investor to contribute funding towards further enhancing the research to qualify for this option. The investor may be a non-SBIR/STTR NASA or NASA program; or may be an investor external to NASA, from another government agency or the private sector, depending on the strategy being pursued for enhancing the technology for further research, infusion, and/or commercialization.

SBIR/STTR Phase II Extended

Applicable Period / SolicitationMinimum non-SBIR/STTR Funding RequiredCorresponding SBIR/STTR Program ContributionMaximum cumulative award ( Phase II + Phase II-E match )Phase II-E submission PeriodAnticipated Period of Additional Performance
2016 Solicitation - onwards$25,000.001:1 match to a maximum of $375,000$1,125,000.00 (SBIR and STTR)Starts after the 12th month of performance and ends 60 days before contract end date6-12 Months

1.0 Phase II Extended Guidelines

NASA has developed the Phase II Extended Option (Phase II-E) to further encourage the transition of SBIR/STTR technologies into NASA programs and missions; NASA acquisition programs, other Agency’s programs, as well as the private sector.  Under this initiative, the Program will provide an eligible Phase II small business with additional Program funds matching the investment funds secured by the small business from non-Program sources, other NASA programs, other Agencies or the private sector.   

1.1 General Phase II Extended Information

The objective of the Phase II-E Option is to further encourage the advancement of innovations developed under Phase II via an option to further R/R&D efforts underway on active Phase II contracts that are in good standing with NASA.  Eligible firms shall secure a non-SBIR/STTR investor to contribute funding towards further enhancing the research to qualify for this option. The investor may be a non-SBIR/STTR NASA or NASA program; or may be an investor external to NASA, from another government agency or the private sector, depending on the strategy being pursued for enhancing the technology for further research, infusion, and/or commercialization.

1.2 Matching Levels

Under this option, the NASA SBIR/STTR Program will match the investment funds with SBIR/STTR funds, on a 1-for-1 basis, to extend an existing Phase II project for a minimum of 4 months to perform additional R/R&D.  The fund matching levels SBIR/STTR will provide will depend on matching levels offered at time of the Phase II-E proposal and availability of funds; please refer to http://sbir.nasa.gov/content/post-phase-ii-initiatives for matching levels and other related information.

The non-SBIR or non-STTR investment contribution is not limited.  Please refer to Definition of  section for clarification of external investor.

1.3 Period of Performance

NASA expects the period of performance to be commensurate with the total SBIR/STTR and NASA internal investor funding received. A Phase II period of performance of less than 18 months will preclude the Phase II from eligibility for a Phase II-E option.

1.4 Definition of an Investor

Investor(s) must be external to NASA’ s SBIR/STTR Program, but includes entities such as a NASA entity (e.g., program, initiative, or center) other than the NASA SBIR/STTR Program, a non-SBIR/non-STTR government program, another company, a venture capital firm, an individual "angel" investor, or any combination of the above. An investor cannot include the owners of the small business, their family members, and/or "affiliates" of the small business, as defined in Title 13 of the Code of Federal Regulations (C.F.R.), Section 121.103.

Note: Only awardees from the PY 2015 Phase II solicitation are eligible for this Option. All other Awardees should review the Phase II Extended option to see if it is applicable

The purpose of the Phase II-X Option is to establish a strong and direct partnership between the NASA SBIR/STTR Program and other NASA projects undertaking the development of new technologies of innovations for future use. Under a Phase II-X option, innovations developed in Phase II are to be advanced via an extension of R/R&D efforts to the current Phase II contract.

SBIR/STTR Phase II Expanded

Applicable Period / SolicitationMinimum NASA non-SBIR/STTR Funding RequiredCorresponding SBIR/STTR Program ContributionMaximum cumulative award ( Phase II + Phase II-X match )Phase II-X submission PeriodAnticipated Period of Additional Performance
2015 Solicitation$75,000.002:1 match to a maximum of $500,000

$1,250,000.00 (SBIR and STTR)

$2,000,000.00 (SBIR Select)

Starts after the 12th month of performance and ends 60 days before contract end date6-12 Months
2014 Solicitation$75,000.002:1 match to a maximum of $500,000

$1,250,000.00 (SBIR and STTR)

$2,000,000.00 (SBIR Select)

Starts after the 12th month of performance and ends 60 days before contract end date6-12 Months

1.0 Phase II Expanded Guidelines

NASA has developed the Phase II Expanded Option (Phase II-X) to further encourage the transition of SBIR/STTR technologies into NASA programs and missions. Under this initiative, the Program will provide an eligible Phase II small business with additional Phase II SBIR or STTR funds matching the investment funds the small business obtains from non-SBIR/non-STTR NASA sources.

Note that investments from the private sector or other Government agencies are not eligible for Phase II-X matching fund options.

1.1 General Phase II Expanded Information

The objective of the Phase II-X Option is to establish a strong and direct partnership between the NASA SBIR/STTR Program and other NASA projects undertaking the development of new technologies and innovations for future use. Eligible firms shall secure a NASA internal investor to partner with, which will invest in enhancing the firm's technology for further research, infusion, and/or commercialization.

1.2 Matching Levels

Under this option, the NASA SBIR/STTR Program will match non-SBIR/STTR NASA funds with SBIR/STTR funds, on a 2-for-1 basis, to extend an existing Phase II project for a minimum of 4 months to perform additional R/R&D. The fund matching levels SBIR/STTR will provide will depend on matching levels offered at time of the Phase II-X proposal; please refer to http://sbir.nasa.gov/content/post-phase-ii-initiatives for matching levels and other related information.

The non-SBIR or non-STTR contribution is not limited. Please refer to Definition of NASA Internal InvestorDefinition of NASA Internal Investor section for clarification of what qualifies as a NASA internal investor.

1.3 Period of Performance

NASA expects the period of performance to be commensurate with the total SBIR/STTR and NASA internal investor funding received. A Phase II period of performance of less than 18 months will preclude the Phase II from eligibility for a Phase II-X option.

1.4 Definition of NASA Internal Investor

A NASA internal investor for a Phase II-X must be a NASA entity (e.g., program, initiative, or center) other than the NASA SBIR/STTR Program. This shall not include such entities as another company, a venture capital firm, an individual "angel" investor, owners or relatives of the company as defined in Title 13 of the Code of Federal Regulations (C.F.R.), Section 121.103, a non-SBIR/non-STTR government program other than NASA, or any combination of the above.

1.5 NASA Investments

The NASA SBIR/STTR Program will initiate negotiations to exercise the Phase II-X option and will provide matching funds on a 2-for-1 basis up to the applicable matching level at time of proposal, if the Phase II-X option is exercised. Refer to http://sbir.nasa.gov/content/post-phase-ii-initiatives for matching levels.

For NASA to successfully exercise the Phase II-X contract option the entire intended investment funding payment from the NASA internal investor should be made in full to the firm within 45 days after receipt of notification that the Phase II-X proposal/application has been selected. The funding to the firm shall be in a funding vehicle separate from the existing NASA Phase II contract, and must be fully funded. The NASA SBIR/STTR Program will not add NASA internal investment funding to the existing Phase II contract.

The NASA SBIR Phase III contracting handbook and basic information have the legal statutes that pertain to award of an SBIR Phase III contract. If necessary, please provide this documentation to your procurement office. These documents are available from download from the NASA SBIR/STTR website (http://sbir.nasa.gov).

If you or the Agency official has further questions on how to do a Phase III contract, please contact:

Mr. Carlos Torrez

SBIR/STTR Business Manager

MS 202A-3/Ames Research Center

Moffett Field, CA 94035-1000

Telephone: 650-604-5797

Email: Carlos.Torrez@nasa.gov

2.0 General Guidance on What Qualifies As Investment

The investment must be used to fund work that directly extends the work done in the Phase II.

Commitment must be made prior to the award, but the expenditure must be concurrent with the Phase II-X performance. The NASA internal investor's funds must pay for activities that further the development and/or commercialization of the company's SBIR/STTR technology beyond the Phase II work (e.g., further R&D, manufacturing, marketing, etc.).

2.1 Specific Examples of What Does and Does Not Qualify As Investment

This section contains questions and answers regarding NASA's guidance for the types of investment from NASA internal investors that qualify as an investment under the Phase II-X program. The following includes specific examples of company-investor relationships and whether these relationships qualify as a Phase II-X investment or not. If you have questions about whether a particular company-investor relationship qualifies, please contact the NASA SBIR/STTR Help Desk at sbir@reisys.com or (301) 937-0888. The Help Desk will refer any policy or substantive questions to appropriate NASA personnel for an official response.

Item Number:Question:Answer:
1Can a small business contribute its own internal funds to qualify for the Phase II Expanded?No. For Phase II-X the funds must come directly from NASA sources, other than the SBIR/STTR Program, to the small business. Please note that a subcontractor of the SBIR/STTR project or another NASA contractor will not qualify as a NASA internal investor.
2Company A spins off company B, which wins a SBIR award. Company A then wants to contribute matching funds to qualify company B for the Phase II Expanded. Can A be considered an investor for purposes of the Phase II Expanded?No, This may be suitable for a Phase II-E, but not for a Phase II-X.
3Small business S wins a SBIR award. The president of S is a major shareholder in another company Y, which wants to contribute matching funds to qualify S for the Phase II Expanded. Can Y be considered an investor for the purposes of the Phase II Expanded?No, This may be suitable for a Phase II-E, but not for a Phase II-X.
4Does the NASA internal investor have to be a single entity (i.e., a single NASA mission or program)?No, it can be more than one NASA source.
5Can a family member of an employee of small business S contribute funds to qualify S for the Phase II Expanded?No.
6Venture capital firm V currently is a 22 percent shareholder in small company S. Can V invest additional funds in S to qualify S for the Phase II Expanded?No, this may be suitable for a Phase II-E, but not for a Phase II-X.
7Large company L makes a cash investment in small company S, and then serves as a subcontractor to S on an SBIR project. Can L's investment in S count as a matching contribution for purposes of the Phase II Expanded?No, this may be suitable for a Phase II-E, but not for a Phase II-X.
8Company Y makes a cash investment in small company S for purposes of Phase II Expanded, and also enters into a separate contract with S under which Y provides certain goods/services to S in return for $500,000. Can Y's cash investment in S count as a matching contribution for purposes of the Phase II Enhancement?No, this may be suitable for a Phase II-E, but not for a Phase II-X.
9Can a loan from an external party qualify as an "investment" for purposes of the Phase II Expanded?No.
10How about a loan that is convertible to equity?No, this may be suitable for a Phase II-E, but not for a Phase II-X.
11Can in-kind contributions from a NASA internal investor count as matching funds under the Phase II Expanded?No. The matching contribution must be in funds.
12Can purchases of a purchase order from a NASA internal investor count as a matching contribution under the Phase II Expanded?No. Purchases will not be considered an investment, since a purchase may only represent a procurement need, not a desire to further the technology. Refer to question 13.
13If a valid NASA internal investor pays small company S for work related to S's SBIR project and expects a deliverable (goods or services) from S in return, would that qualify as an "investment"?No. This arrangement would not qualify as an investment. Specifically, in this situation the NASA internal investor is not betting on the small company's success in bringing the technology to market, but merely is looking to purchase a deliverable. Refer to item 12.
14Can the NASA internal investor investment in small company S during the first month of S's Phase I SBIR project count as a matching contribution to qualify S for the Phase II-X?No. The investment must occur within 45 days of the company's notification of selection, without constraints.
15Must the activities funded by the NASA internal investor be explained in the proposal statement of work for the small company's phase II-X option?Yes. The NASA internal investor's funds must pay for activities that further the development and/or commercialization of the company's Phase II work. Including this information in the proposal assists with verification.
16Our small business has existing NASA contracts and/or grants. Can these count as matching investments?Yes, if the existing contract or grant is directly related to the Phase II-X work proposed, e.g., a Phase III contract for the same technology or a modification and funding for another contract that specifically relates to the technology. Both of these must be awarded after the Phase II-E proposal is submitted to be considered a matching investment.

3.0 Phase II Expanded Application Requirements

Only active NASA SBIR/STTR Phase II contracts can apply for participation in the Phase II-X option.

A Phase II-X application may be submitted anytime starting the 12th month of performance of this contract and ending 60 days before contract end date. Applications received after this timeframe will be deemed late and not considered, unless your firm explicitly requests an option to extend the term of the contract to secure matching funds. Please note there is no guarantee that the Government will exercise a Phase II-X option based on the fact that there are limited funds designated for the options.

Since the Phase II-X is a contract option, there will be no debriefings as defined by Part 15 of the FAR as to why the option was not exercised.

Phase II-X funding shall not be used to cover work that was part of the Phase II contract, e.g., incomplete or unsuccessful R&D.

During the Phase II effort, the small business shall submit a Phase II Expanded application through the NASA SBIR/STTR Contract Administration and Closeout EHB. It should be noted that all contractual rules and regulations that are applicable to the Phase II contract also apply to the Phase II-X since it is a continuation of the work.

3.1 Phase II Expanded Application

A Phase II-X application package consists of the items listed below, and shall be submitted through the NASA EHB Submission website.

3.1.1 Phase II Expanded Application Form

The application form must be submitted electronically, in its entirety, and requires the following:

  • Anticipated SBIR/STTR Contribution: List the anticipated SBIR/STTR Program contribution to be matched. This value cannot be greater than the current offered level at time of Phase II-X proposal
  • NASA Internal Investment: List the total amount of investment funds from the NASA internal investor(s). There is no maximum amount of NASA internal investor funds a firm can receive. The current applicable minimum investment must be proposed in order for the SBIR/STTR Program to match the invested funds. Refer to http://sbir.nasa.gov/content/post-phase-ii-initiatives for details.
  • Proposed Start Date and End Date: List the proposed start and end date for the Phase II-X proposed work.
  • Justification for period of performance: Required in application ifa firm requires a period of performance longer than 12 months.
  • Is NASA the source of investment?: List "Yes"; NASA must be the source of investment funds.
  • Mission Directorate Supported: (If "Yes" above) list the mission directorate that is supporting the investment.
  • Program/Project/Application: List the program, project, or application for the mission directorate.
  • Final TRL: Provide the estimated Technology Readiness Level (TRL) at the end of the Phase II-X.
  • Comments: Provide any additional comments, if needed.

3.1.2 Letter of Commitment

A letter of commitment from the NASA internal investor shall be provided during the application period (similar documentation without a corresponding commitment letter will not be accepted). The letter of commitment must contain the following information:

  • The NASA internal investor contact information including their business address, title, email address, phone number, and be on official letterhead;
  • The NASA internal investor's willingness to verify the commitment;
  • The total amount of the investment, accompanying an acknowledgment that the investment is being made in response to and referencing the company's specific Phase II R&D effort;
  • An acknowledgment that the entire amount of matching funds will be available for transfer within 45 days of the company's notification that it has been approved for a Phase II-X work, without constraints; and
  • Statement of investment use for a NASA program
  • The statement shall include a brief statement of how the resulting Phase II-X technology will be integrated into the acquisition program's future activities and how they will provide funding to the SBC.

For letter of commitment example, please see the EHB Document Library.

3.1.3 Statement of Work (SOW)

A concise statement of work for the Phase II Expanded effort should be submitted as a PDF file.

The SOW must state the specific objectives of the Phase II-X effort and provide a detailed work plan defining specific tasks and the methods planned to achieve each task, performance schedules, project milestones, and deliverables. The SOW must address how it will significantly improve upon the work performed in the Phase II. The statement of work must show separately the work done for the Phase II-X SBIR/STTR portion from the portion funded by NASA internal investor matching funds.

3.1.4 Cost Proposal

Detailed cost proposals are required and should be submitted as a PDF file.

The cost proposal should be broken into two sections, containing first the budget summary for the work being done with the SBIR/STTR Program matching funds and second the budget summary for the work being done with the NASA internal investment funds. The Cost Proposal should contain estimated costs with detailed information for each cost element, consistent with the offeror's cost accounting system.

3.1.5 Briefing Chart

An updated briefing chart with non-proprietary information for the Phase II-E work proposed shall be provided with the application; this briefing chart may be freely distributed by the Government.

3.1.6 Commercialization Plan

Per the guidelines outlined in the Solicitation, an updated plan for commercialization (Phase III) of the proposed innovation must be provided. The commercialization plan should be submitted as a PDF file and at a minimum, shall address the following areas:

  • Market Feasibility and Competition: Describe (a) the target market(s) of the innovation and the associated product or service, (b) the competitive advantage(s) of the product or service; (c) key potential customers, including NASA mission programs and prime contractors; (d) projected market size (NASA, other Government and/or non-Government); (e) the projected time to market and estimated market share within five years from market-entry; and (f) anticipated competition from alternative technologies, products and services and/or competing domestic or foreign entities.
  • Commercialization Strategy and Relevance to the Offeror: Present the commercialization strategy for the innovation and associated product or service and its relationship to the SBC's business plans for the next five years. Infusion into NASA missions and projects is an option for commercialization strategy.
  • Key Management, Technical Personnel and Organizational Structure: Describe: (a) the skills and experiences of key management and technical personnel in technology commercialization; (b) current organizational structure; and (c) plans and timelines for obtaining expertise and personnel necessary for commercialization.
  • Production and Operations: Describe product development to date as well as milestones and plans for reaching production level, including plans for obtaining necessary physical resources.
  • Financial Planning: Delineate private financial resources committed to the development and transition of the innovation into market-ready product or service. Describe the projected financial requirements and the expected or committed capital and funding sources necessary to support the planned commercialization of the innovation. Provide evidence of current financial condition (e.g., standard financial statements including a current cash flow statement).
  • Intellectual Property: Describe plans and current status of efforts to secure intellectual property rights (e.g., patents, copyrights, trade secrets) necessary to obtain investment, attain at least a temporal competitive advantage, and achieve planned commercialization.

4.0 General Information on Exercising the Phase II Expanded Contract Option

4.1 Exercising the Phase II Expanded Contract Option

If it is decided that the contract option should be exercised, the firm will receive a "Notice of Intent" from the NASA Shared Services Center (NSSC). The letter will notify the firm of the Government's intent, in accordance with FAR Clause 52.217-9 entitled, "Option to Extend the Term of the Contract", to exercise the Phase II-X Option.

This notification does not commit the NASA SBIR/STTR Program to exercise the pre-priced Option nor does it in any manner obligate NASA SBIR/STTR funds against the subject contract. The firm must show proof of funds transferred from the NASA internal investor to the small business 45 days after receipt of notification that the Phase II-X proposal/application has been selected. If proof of receipt of the investment funds is not received by the NASA SBIR/STTR Program within the 45 days, the option for Phase II-X matching funds will expire.

If the SBIR/STTR Program exercises the Option, it will be accomplished via a bilateral modification. The modification will specifically identify the Option period of performance and contract amount. NSSC is responsible for executing the Phase II-X modifications to the contract. Please note that the firm is not authorized to commence work or incur any SBIR/STTR Program costs under the Phase II-X option until the Phase II-X modification to contract has been executed.

4.2 Not Exercising the Phase II Expanded Contract Option

If it is decided that the contract option should be not exercised, the firm will receive a notice from NSSC. Since the Phase II-X is a contract option, there will be no debriefings or explanation as to why the option was not exercised.

5.0 Time to Remedy Deficiencies

If a deficiency in the Phase II-X application or proposal is noted to the SBIR/STTR small business, the small business will have 45 calendar days to remedy this deficiency from the first time it is notified of a deficiency; otherwise the proposal will not be selected.

CCRPP Program on Hold for 2018

The NASA SBIR/STTR Program is putting its Civilian Commercialization Readiness Pilot Program (CCRPP) on hold for 2018 in order to thoroughly assess feedback received from participants and stakeholders. Our goal is to identify beneficial changes to make the CCRPP program more user friendly and effective at helping small business achieve their technology commercialization objectives.

Companies with an interest in additional innovation opportunities in 2018 are strongly encouraged to consider participating in Space Technology’s Tipping Point program. This NASA program also looks at funding early innovations and is open for proposals until January 30, 2018. For more information please see:

https://www.nasa.gov/directorates/spacetech/feature/Tipping_Point_Solicitation_2017
https://nspires.nasaprs.com/external/solicitations/summary!init.do?solId=%7b2526CB35-BBC9-BE00-E54A-F965B85401FE%7d

CCRPP Program Information

The SBIR/STTR Program is interested in advancing SBIR/STTR‐developed technology through a combination of further SBIR/STTR program investment and non-SBIR/STTR program investor funds. The primary objective of the NASA Civilian Commercialization Readiness Pilot Program (CCRPP) is an infusion or commercialization, not an incremental improvement in technology maturation alone. Technology maturation without infusion or commercialization is not acceptable for CCRPP. NASA plans to accomplish this through its CCRPP. The CCRPP was created as part of the SBIR and STTR Reauthorization Act of 2012 (P. L. 112-81, Section 5001) with the purpose of accelerating the transition of SBIR and STTR funded technologies to commercialization.

Applicable Period / SolicitationMinimum Investor Funding RequiredCorresponding SBIR/STTR Program ContributionCCRPP Application PeriodAnticipated Period of Additional Performance
Phase II awards made from the Program Year 2010 – 2014 Solicitations are eligible to apply for the 2017 CCRPP application period $125,000.001:1 match to a maximum of $2,000,000.00March 1, 2017 through March 31, 201724 Months as a general guideline

1.0 CCRPP Guidelines

The NASA SBIR/STTR CCRPP seeks opportunities to support technology development that either require more funds than would be available through a Phase II-E contract option, or where the SBIR/STTR Phase II project has moved beyond the time window to enable those contract options (which expire once the Phase II contract is complete). The technology proposed for advancement toward commercialization should have a strong relevance to NASA’s missions, as well as a strong potential use by NASA and/or markets outside of NASA beyond the CCRPP investment.

1.1 Technology Development

The technologies used by NASA require significant iterations between design, development, and testing, both at the component level and as integrated systems, before they can be used in NASA missions or applications. The iterative process between concept, design, testing, and evaluation matures technology on the Technology Readiness Level (TRL). The TRL scale is used to describe the stage of maturity in the development process from observation of basic principles through final product operation. See Table 1 for TRL descriptions.

The NASA SBIR/STTR Program funds projects to advance technologies for future NASA applications by starting from a relatively nascent stage in Phase 1, typically TRL 3. Successful Phase I projects that receive Phase II funds will often complete Phase II at TRL 5.

Many companies working on NASA SBIR or STTR projects typically face three problems:

  • Maturing their component technologies to higher TRLs
  • Integrating those technologies into more complex systems
  • Understanding a variety of customers beyond a potential NASA customer.

NASA’s CCRPP expands opportunities for companies that work with NASA’s SBIR/STTR Program by providing additional resources to address these challenges.

1.2 Matching Funds

NASA will match the investments with SBIR/STTR program funds between $125,000-$2M for each CCRPP award. Eligible firms must identify and obtain commitment from an investor to provide matching funds prior to submission of the CCRPP application.

1.3 Anticipated Budget and Number of Awards

The anticipated budget, award number and award value are as follows:

  • Maximum NASA SBIR/STTR CCRPP expenditure for FY17 is $12M
  • Quantity of Awards will depend on budget, demand, quality of applications, and non-SBIR/STTR matching amounts
  • Amount of award is a maximum of $4M per award ($2M from SBIR/STTR Program funds and $2M from non-SBIR/STTR government funds). If the matching funds are from a non-government source, an external arrangement between the SBC and the investor must be provided to the government for confirmation

1.4 Who May Apply for a CCRPP Award

NASA’s CCRPP is available to Small Business Concerns that:

  • Have a completed SBIR/STTR Phase II award (from any federal Agency) selected from solicitations issued from fiscal year 2010 and through 2014. However, for a NASA SBIR/STTR Phase II award from the 2014 solicitation, NASA will not require completed performance and NASA will not require completed performance of Phase II-E or Phase II-X options associated with a NASA SBIR/STTR Phase II award
  • Have not yet received a CCRPP award (or its equivalent) or a sequential Phase II award from any federal Agency for the Phase II technology associated with the Phase II award
  • Have secured an investor(s) willing to contribute matching funding to the maturation of the technology detailed in the application of research related to NASA interests

To be eligible, applicants must demonstrate maturation of the Phase II technology that aligns with NASA interests. The technology proposed for advancement toward commercialization should have a strong relevance to NASA, as well as a strong potential use by NASA and/or markets outside of NASA beyond the CCRPP investment.

1.5 Definition of an Investor

Investor(s) must be external to the NASA SBIR/STTR Program, which may include such entities as another company, a venture capital firm, an individual investor, a non-SBIR/STTR government program, or any combination of the above. An external investor cannot include the owners of the small business, their family members, and/or "affiliates" of the small business, as defined in Title 13 of the Code of Federal Regulations (C.F.R.), Section 121.103.

1.5.1 Specific Examples of What Does and Does Not Qualify As Investment

This section contains questions and answers regarding NASA's guidance for the types of investment from external investors that qualify as an investment under the CCRPP program. The following includes specific examples of company-investor relationships and whether these relationships qualify as a CCRPP investment or not. If you have questions about whether a particular company-investor relationship qualifies, please contact the NASA SBIR/STTR Help Desk at sbir@reisys.com or (301) 937-0888. The Help Desk will refer any policy or substantive questions to appropriate NASA personnel for an official response.

Item Number:Question:Answer:
1Can a small business contribute its own internal funds to qualify for the CCRPP?No. NASA is seeking external, third party validation of the technology, and requires that the funds come from an external investor. Please note that a subcontractor of the SBIR/STTR project will not qualify as an external investor.
2Company A spins off company B, which wins a SBIR award. Company A then wants to contribute matching funds to qualify company B for the CCRPP. Can A be considered an external investor for purposes of the CCRPP?In making our determination of whether company A is an external investor, we would be guided by the definition of "affiliates" in 13 C.F.R. Sec. 121.103, discussed above. Our presumption is that in this example A and B would be considered "affiliates," and that A would therefore not be an external investor for purposes of the CCRPP.
3Small business A wins a SBIR award. The president of A is a major shareholder in another company B, which wants to contribute matching funds to qualify S for the CCRPP. Can B be considered an external investor?Our presumption is that B would not be considered an external investor. Our determination would be guided by whether the president's stake in B is large enough that A and B would be considered "affiliates" under 13 C.F.R. Sec. 121.103 (link is external). Subsection (c) of Section 121.103 specifically discusses affiliation based on stock ownership:

c. Affiliation based on stock ownership.

A person is an affiliate of a concern if the person owns or controls, or has the power to control 50 percent or more of its voting stock, or a block of stock which affords control because it is large compared to other outstanding blocks of stock.

If two or more persons each owns, controls or has the power to control less than 50 percent of the voting stock of a concern, with minority holdings that are equal or approximately equal in size, but the aggregate of these minority holdings is large as compared with any other stock holding, each such person is presumed to be an affiliate of the concern. If A and B are found to be affiliates, we would determine that B is not an external investor.

4Does the external investor have to be a single entity (e.g., a single venture capital firm) or can it be more than one entity (e.g., two angel investors and a venture capital firm)?It can be more than one entity.
5Small business A contributes matching funds to small company B in order to qualify B for the CCRPP, and, at the same time, B contributes matching funds to A in order to qualify A for the CCRPP. Do A and B qualify as external investors under the CCRPP?No. A and B's relationship is such that their investment in each other would not provide external validation of the commercial potential of their respective SBIR projects. We would therefore not consider them to be external investors for purposes of the CCRPP.
6Can a family member of an employee of small business A contribute funds to qualify A for the CCRPP?No, except under rare circumstances. Again, we would be guided by the definition of "affiliates" in 13 C.F.R. Sec. 121.103 (link is external). The family member presumptively would be an affiliate of company A and not an external investor.
7Venture capital firm A currently is a 22 percent shareholder in small company B. Can A invest additional funds in B to qualify B for the CCRPP?Our presumption is yes. In making our determination, we would be guided by whether A and B are "affiliates," as defined in 13 C.F.R. Sec. 121.103 (link is external). Section 121.103 provides (in subsection (b)(5)) that a venture capital firm is not affiliated with a company if the venture capital firm does not control the company -- e.g., by owning more than 50 percent of the stock of a small company (prior to its investment under the CCRPP), as described in 13 C.F.R. 107.865 (link is external).
8Large company A makes a cash investment in small company B, and then serves as a subcontractor to B on an SBIR project. Can A's investment in B count as a matching contribution for purposes of the CCRPP?Only A's cash investment net of its subcontracting effort can count as matching funds for purposes of CCRPP. For example, if A invests $750,000 in B and subcontracts with B for $250,000, only A's net contribution ($500,000) can count as matching funds for purposes of the CCRPP.
9Company A makes a cash investment in small company B for purposes of CCRPP, and also enters into a separate contract with B under which A provides certain goods/services to B in return for $500,000. Can A's cash investment in B count as a matching contribution for purposes of the CCRPP?As in the previous example, only A's cash investment net of the $500,000 it receives from B can count as matching funds for purposes of the CCRPP.
10A group of investors wishes to invest funds in small company A to qualify A for the CCRPP. One of the investors is a family member of A's president, who wants to contribute $50,000 toward the effort. Can the group's investment in A count as a matching contribution to qualify A for the CCRPP?The family member's investment of $50,000 does not count, as the family member is not an external investor (see item (6) above). Contributions of the other investors can count provided that they meet the other conditions for the CCRPP (e.g., each must be an external investor).
11Can a loan from an external party qualify as an "investment" for purposes of the CCRPP?No. The rationale behind the CCRPP is that an external party is betting on the company's success in bringing the technology to market as an investor, not just its ability to recover a loan as a lender.
12How about a loan that is convertible to equity?A loan that is convertible to equity at the company's discretion would count as an investment under the following circumstances: (1) the loan is provided by a public entity (e.g., a state agency), or (2) the loan is provided by a private entity, and the SBIR company actually converts the loan to equity before the CCRPP contract is executed.
13Can in-kind contributions from an external investor count as matching funds under the CCRPP?No. The matching contribution must be in funds, regardless of source. A cash contribution is a stronger signal of the external investor's interest in the technology, and can be readily verified.
14Can purchases of a purchase order from an external investor count as a matching contribution under the CCRPP? No. Purchases will not be considered an investment, since a purchase may only represent a procurement need, not a desire to further the technology. Refer to question 15.
15If large company A pays small company B for work related to B's SBIR project and expects a deliverable (goods or services) from B in return, would that qualify as an "investment"?This arrangement would not qualify as an investment for the same reason a loan does not qualify. Specifically, in this situation the large company is not betting on the small company's success in bringing the technology to market, but merely is looking to purchase a deliverable. Refer to item 14.
16Can entity A's investment in small company B during the first month of B's Phase I SBIR project count as a matching contribution to qualify B for the CCRPP?No. The investment must occur within 45 days of the company's notification of selection, without constraints.
17Small company A is collaborating with a university on an STTR project. Investor B wishes to provide funds to the university in order to qualify A for the STTR CCRPP. Can B's investment in the university count as a matching contribution to qualify A for the CCRPP?In order to qualify A for the STTR CCRPP, B's investment of funds must be in small company A, not in the university. A can then subcontract some of the funds to the university.
18Must the activities funded by the investor be explained in the application’s statement of work for the small company's CCRPP?Yes. The external investor's funds must pay for activities that further the development and/or commercialization of the company's Phase II work. Including this information in the application assists with verification.
19Our small business has existing contracts and/or grants. Can these count as matching investments?Yes, if the existing contract or grant is directly related to the CCRPP work proposed, e.g., a Phase III contract for the same technology or a modification and funding for another contract that specifically relates to the technology. Generally these must be awarded after the CCRPP application is submitted to be considered a matching investment.

2.0 General Guidance on What Qualifies As Investment

The investment must be used to fund work that directly furthers the work done in the Phase II.

Commitment must be made prior to the award, but the expenditure must be concurrent with the CCRPP performance. The Federal Agency or NASA internal investor's funds must pay for activities that further the development and/or commercialization of the company's SBIR/STTR technology beyond the Phase II work (e.g., further R&D, manufacturing, marketing, etc.).

Non-Federal agency investments must be an arrangement in which the external investor provides funding to the small business in return for such items as: equity, a share of royalties, rights in the technology, a percentage of profit, or any combination of the above. Additional funding associated with CCRPP shall further the technology of the original SBIR Phase II contract.

For investments from sources external to the Federal Government, NASA considers factors such as ownership, management, previous relationships with or ties to another concern and contractual relationships, in determining whether affiliation exists. Individuals or firms that have identical or substantially identical business or economic interests, such as family members, persons with common investments, or firms that are economically dependent through contractual or other relationships, may be treated as one party with such interests aggregated.

2.1 Investor Letter Guidelines

A letter of commitment from the investor shall be provided during the application period (similar documentation without a corresponding commitment letter will not be accepted). Please use this document as a template.

The letter of commitment must contain the following information:

  • The investor contact information including their business address, title, email address, phone number, signature, and be on official letterhead
  • The investor’s willingness to verify the commitment
  • The total amount of the investment, accompanying an acknowledgment that the investment is being made in response to and referencing the company’s specific Phase II R&D effort
  • An acknowledgment that the entire amount of unencumbered matching funds will be available and transferred within 45 days of the small business notification that it has been selected for a CCRPP Contract without constraints
  • Indicate if the investor is also the customer for this CCRPP project as described in the B2 application form
    • Describe how the investor/customer plans to use or deploy the technology
  • Descriptive statement of Minimum Acceptable Readiness level, broken out by Technology Readiness Level (TRL) and Manufacturing Readiness Level (MRL) at end of CCRPP effort. See Table 1 for TRL descriptions and Table 2 for MRL descriptions
  • Statement of investment use and timeline of need
    • For an investment from NASA or other Government agency, the statement shall include a brief statement of how the resulting CCRPP technology will be integrated into the program's or agency’s future activities, and if future funding to the Small Business Concern is planned or expected above and beyond the CCRPP effort. Include a brief statement of the impact of this project on the Agency
    • For investment(s) from a private sector investor, it should include a brief statement of how the investment will further the technology originally proposed in the Phase II, or the commercialization of a product resulting from the Phase II. Include a brief statement of the anticipated impact of this project
    • Timeline on dates when the investor or identified customer needs the resulting technology or product

3.0 Application Requirements

What needs to be submitted online for a CCRPP Application?

The following items must be submitted electronically:

  • Certifications: Provide information about the Firm. Certification is collected at a Firm level and is applicable to all applications.
  • Commercial Metrics Survey: Provide information about Phase I/II awards, Phase II project commercialization information, a brief commercialization narrative, and a POC to verify/maintain the commercialization information.
  • Form A: Provide application title and ACN (Authorized Contract Negotiator) information
  • Form B: Provide brief summary of the application, Principal Investigator, and Investor information
  • Form B2: Provide the rationale, strategy, actions, roles and responsibilities of participants to mature the identified SBIR/STTR technology product and/or service for the specified application and customer. Note: This form must be completed offline and uploaded as part of the application. Please use this document as a template
  • Form C: Provide budget summary including estimated costs with detailed information for Direct Labor, Overhead, ODCs, Subcontractors/Consultants, G&A, Profit/Cost Sharing, and Additional Information
  • Briefing Chart: Provide brief information on Identification and Significance of Innovation, Technical Objectives and Work Plan, NASA Applications, Non-NASA Applications, and Firm Contact
  • Letter of Investment: Provide a letter of commitment from an investor. This is an agreement between the applicant and the investor that the SBIR/STTR project has demonstrated sufficient results and that expansion and acceleration of project efforts in line with NASA interests are justified.

Application Format Requirements

A CCRPP application shall not exceed a total of 33 standard 8 1/2 x 11 inch (21.6 x 27.9 cm) pages, inclusive of the technical content and the required forms. Forms A, B, and C count as one page each, regardless of whether the completed forms print as more than one page. Each page shall be numbered consecutively at the bottom. Margins shall be 1.0 inch (2.5 cm). All required items of information must be covered in the application and will count towards the total page count. The space allocated to each part of the technical content will depend on the project chosen and the applicants approach.

Note: The Government administratively screens all applications and reserves the right to reject any application that does not conform to following formatting requirements

3.1 Definitions

Brassboard: A medium fidelity functional unit that typically tries to make use of as much operational hardware/software as possible and begins to address scaling issues associated with the operational system. It does not have the engineering pedigree in all aspects, but is structured to be able to operate in simulated operational environments in order to assess performance of critical functions

Breadboard: A low fidelity unit that demonstrates function only, without respect to form or fit in the case of hardware, or platform in the case of software. It often uses commercial and/or ad hoc components and is not intended to provide definitive information regarding operational performance

Engineering Unit: A high fidelity unit that demonstrates critical aspects of the engineering processes involved in the development of the operational unit. Engineering test units are intended to closely resemble the final product (hardware/software) to the maximum extent possible and are built and tested so as to establish confidence that the design will function in the expected environments. In some cases, the engineering unit will become the final product, assuming proper traceability has been exercised over the components and hardware handling

Laboratory Environment: An environment that does not address in any manner the environment to be encountered by the system, subsystem, or component (hardware or software) during its intended operation. Tests in a laboratory environment are solely for the purpose of demonstrating the underlying principles of technical performance (functions), without respect to the impact of environment

Manufacturability: Extent to which a good can be manufactured with relative ease at minimum cost and maximum reliability. The general engineering art of designing products in such a way that they are easy to manufacture

Mission Configuration: The final architecture/system design of the product that will be used in the operational environment. If the product is a subsystem/component, then it is embedded in the actual system in the actual configuration used in operation

Operational Environment: The environment in which the final product will be operated. In the case of space flight hardware/software, it is space. In the case of ground-based or airborne systems that are not directed toward space flight, it will be the environments defined by the scope of operations. For software, the environment will be defined by the operational platform

Proof of Concept: Analytical and experimental demonstration of hardware/software concepts that may or may not be incorporated into subsequent development and/or operational units

Proto-type Unit: The prototype unit demonstrates form, fit, and function at a scale deemed to be representative of the final product operating in its operational environment. A subscale test article provides fidelity sufficient to permit validation of analytical models capable of predicting the behavior of full-scale systems in an operational environment

Relevant Environment: Not all systems, subsystems, and/or components need to be operated in the operational environment in order to satisfactorily address performance margin requirements. Consequently, the relevant environment is the specific subset of the operational environment that is required to demonstrate critical "at risk" aspects of the final product performance in an operational environment. It is an environment that focuses specifically on "stressing" the technology advance in question

3.2 Technology Readiness Level (TRL) Descriptions

The TRL describes the stage of maturity in the development process from observation of basic principles through final product operation. Exit criteria, documenting principles and concepts, determine when applications or performance have been satisfactorily demonstrated in the appropriate environment required for that level, as shown in the table below.

Table 1: TRL Descriptions

TRL Definition Hardware Description Software Description Exit Criteria
1 Basic principles observed and reported Scientific knowledge generated underpinning hardware technology concepts/applications Scientific knowledge generated underpinning basic properties of software architecture and mathematical formulation Peer reviewed publication of research underlying the proposed concept/application
2 Technology concept and/or application formulated Invention begins, practical application is identified but is speculative, no experimental proof or detailed analysis is available to support the conjecture Practical application is identified but is speculative, no experimental proof or detailed analysis is available to support the conjecture. Basic properties of algorithms, representations and concepts defined. Basic principles coded. Experiments performed with synthetic data Documented description of the application/concept that addresses feasibility and benefit
3 Analytical and experimental critical function and/or characteristic proof of concept Analytical studies place the technology in an appropriate context and laboratory demonstrations, modeling and simulation validate analytical prediction Development of limited functionality to validate critical properties and predictions using non-integrated software components Documented analytical/experi-mental results validating predictions of key parameters
4 Component and/or breadboard validation in laboratory environment A low fidelity system/component breadboard is built and operated to demonstrate basic functionality and critical test environments, and associated performance predictions are defined relative to the final operating environment Key, functionally critical, software components are integrated, and functionally validated, to establish interoperability and begin architecture development. Relevant Environments defined and performance in this environment predicted. Documented test performance demonstrating agreement with analytical predictions. Documented definition of relevant environment.
5 Component and/or breadboard validation in relevant environment A medium fidelity system/component brassboard is built and operated to demonstrate overall performance in a simulated operational environment with realistic support elements that demonstrates overall performance in critical areas. Performance predictions are made for subsequent development phases. End-to-end software elements implemented and interfaced with existing systems/simulations conforming to target environment. End-to-end software system, tested in relevant environment, meeting predicted performance. Operational environment performance predicted. Prototype implementations developed. Documented test performance demonstrating agreement with analytical predictions. Documented definition of scaling requirements.
6 System/sub-system model or prototype demonstration in a relevant environment A high fidelity system/component prototype that adequately addresses all critical scaling issues is built and operated in a relevant environment to demonstrate operations under critical environmental conditions. Prototype implementations of the software demonstrated on full-scale realistic problems. Partially integrate with existing hardware/software systems. Limited documentation available. Engineering feasibility fully demonstrated. Documented test performance demonstrating agreement with analytical predictions
7 System prototype demonstration in an operational environment A high fidelity engineering unit that adequately addresses all critical scaling issues is built and operated in a relevant environment to demonstrate performance in the actual operational environment and platform (ground, airborne, or space) Prototype software exists having all key functionality available for demonstration and test. Well integrated with operational hardware/software systems demonstrating operational feasibility. Most software bugs removed. Limited documentation available. Documented test performance demonstrating agreement with analytical predictions
8 Actual system completed and "flight qualified" through test and demonstration All software has been thoroughly debugged and fully integrated with all operational hardware and software systems. All user documentation, training documentation, and maintenance documentation completed. All functionality successfully demonstrated in simulated operational scenarios. Verification and Validation (V&V) completed. Prototype software exists having all key functionality available for demonstration and test. Well integrated with operational hardware/software systems demonstrating operational feasibility. Most software bugs removed. Limited documentation available. Documented test performance demonstrating agreement with analytical predictions
9 Actual system flight proven through successful mission operations The final product is successfully operated in an actual mission All software has been thoroughly debugged and fully integrated with all operational hardware/software systems. All documentation has been completed. Sustaining software engineering support is in place. System has been successfully operated in the operational environment. Documented mission operational results

3.3 Manufacturing Readiness Level (MRL) Descriptions

Table 2: MRL Descriptions

Stage MRL Definition Description
Material Solutions Analysis 1 Basic manufacturing implications identified Basic research expands scientific principles that may have manufacturing implications. The focus is on a high level assessment of manufacturing opportunities. The research is unfettered.
2Manufacturing concepts identifiedInvention begins. Manufacturing science and/or concept described in application context. Identification of material and process approaches are limited to paper studies and analysis. Initial manufacturing feasibility and issues are emerging.
3Manufacturing proof of concept developedConduct analytical or laboratory experiments to validate paper studies. Experimental hardware or processes have been created, but are not yet integrated or representative. Materials and/or processes have been characterized for manufacturability and availability but further evaluation and demonstration is required.
4Capability to produce the technology in a laboratory environmentRequired investments, such as manufacturing technology development identified. Processes to ensure manufacturability and quality are in place and are sufficient to produce technology demonstrators. Manufacturing risks identified for prototype build. Manufacturing cost drivers identified. Manufacturability assessments of design concepts have been completed. Key design performance parameters identified. Special needs identified for tooling, facilities, material handling and skills.
Technology Development 5 Capability to produce prototype components in a production relevant environment Manufacturing strategy refined and integrated with Risk Management Plan. Identification of enabling/critical technologies and components is complete. Prototype materials, tooling and test equipment, as well as personnel skills, have been demonstrated on components in a production relevant environment, but many manufacturing processes and procedures are still in development. Manufacturing technology development efforts initiated or ongoing. Manufacturability assessments of key technologies and components ongoing. Cost model based upon detailed end-to-end value stream map.
6Capability to produce a prototype system or subsystem in a production relevant environmentInitial manufacturing approach developed. Majority of manufacturing processes have been defined and characterized, but there are still significant engineering/design changes. Preliminary design of critical components completed. Manufacturability assessments of key technologies complete. Prototype materials, tooling and test equipment, as well as personnel skills have been demonstrated on subsystems/ systems in a production relevant environment. Detailed cost analysis includes design trades. Cost targets allocated. Manufacturability considerations shape system development plans. Long lead and key supply chain elements identified. Industrial Capabilities Assessment for Milestone B completed.
Engineering and Manufacturing Development 7 Capability to produce systems, subsystems or components in a production representative environment Detailed design is underway. Material specifications are approved. Materials available to meet planned pilot line build schedule. Manufacturing processes and procedures demonstrated in a production representative environment. Detailed manufacturability trade studies and risk assessments underway. Cost models updated with detailed designs, rolled up to system level and tracked against targets. Unit cost reduction efforts underway. Supply chain and supplier Quality Assurance assessed. Long lead procurement plans in place. Production tooling and test equipment design and development initiated.
8Pilot line capability demonstrated. Ready to begin low rate production.Detailed system design essentially complete and sufficiently stable to enter low rate production. All materials are available to meet planned low rate production schedule. Manufacturing and quality processes and procedures proven in a pilot line environment, under control and ready for low rate production. Known manufacturability risks pose no significant risk for low rate production. Engineering cost model driven by detailed design and validated. Supply chain established and stable. Industrial Capabilities Assessment for Milestone C completed.
Production and Deployment9Low Rate Production demonstrated. Capability in place to begin full rate production. Major system design features are stable and proven in test and evaluation. Materials are available to meet planned rate production schedules. Manufacturing processes and procedures are established and controlled to three-sigma or some other appropriate quality level to meet design key characteristic tolerances in a low rate production environment. Production risk monitoring ongoing. LIRP cost goals met, learning curve validated. Actual cost model developed for Full Rate Production environment, with impact of Continuous improvement.
Operations and Support10Low Rate Production demonstrated. Capability in place to begin full rate production. This is the highest level of production readiness. Engineering/design changes are few and generally limited to quality and cost improvements. System, components or items are in rate production and meet all engineering, performance, quality and reliability requirements. All materials, manufacturing processes and procedures, inspection and test equipment are in production and controlled to six-sigma or some other appropriate quality level. Full Rate Production unit cost meets goal, and funding is sufficient for production at required rates. Lean practices well established and continuous process improvements ongoing.

Phase III is the commercialization of innovative technologies, products, and services resulting from either a Phase I or Phase II contract. This includes further development of technologies for transition into NASA programs, other Government agencies, or the private sector. Phase III contracts are funded from sources other than the SBIR and STTR programs and may be awarded without further competition.

For general information, procurement procedures, and frequently asked questions on Phase III contracts, view the pdf fileNASA SBIR/STTR Phase III Contracting Handbook.