FY24 SBIR CHIPS NOFO_Metrology.pdf

FY 2024 SMALL BUSINESS INNOVATION RESEARCH (SBIR) PROGRAM

FOR CHIPS FOR AMERICA – CHIPS METROLOGY

NOTICE OF FUNDING OPPORTUNITY No. 2024-SBIR-CHIPS-01

April 16, 2024

NOTICE OF FUNDING OPPORTUNITY (NOFO)

Small Business Innovation Research (SBIR) Program for CHIPS for America –

CHIPS Metrology

EXECUTIVE SUMMARY

• Federal Agency Name: National Institute of Standards and Technology (NIST), United States Department of Commerce (DoC)

• Funding Opportunity Title: Small Business Innovation Research (SBIR) Program for CHIPS For America – CHIPS Metrology

• Announcement Type: Initial

• Funding Opportunity Number: 2024-SBIR-CHIPS-01

• Assistance Listing (CFDA Number): 11.620, Science, Technology, Business and/or Education Outreach; 11.042, CHIPS Research and Development

• Dates: Full Applications must be received at Grants.gov no later than 11:59 p.m.

Eastern Time, June 14, 2024. Applications received after this deadline will not be reviewed or considered.

Applicants should be aware, and factor in their application submission planning, that the Grants.gov system closes periodically for routine maintenance. Applicants should visit Grants.gov for information on any scheduled closures.

NIST expects to complete its review, selection of successful applicants, and award processing by August 2024. NIST expects the earliest start date for awards under this NOFO to be September 2024.

• Application Submission Address: Applications must be submitted using

Grants.gov. Paper applications will not be accepted.

• Funding Opportunity Description: The Small Business Innovation Research

(SBIR) program for CHIPS for America – CHIPS Metrology is seeking applications from eligible applicants to explore the technical merit or feasibility of an innovative idea or technology with the aim of developing a viable product or service that will be introduced to the commercial microelectronics marketplace.

• Anticipated Amounts: NIST anticipates funding approximately twenty-four (24) awards. Of these, approximately fourteen (14) awards are anticipated to be Open https://www.grants.gov/ https://www.grants.gov/web/grants/support/calendar.html

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Topics awards and ten (10) Closed Topics awards (see Section I.01). These awards will have a period of performance of up to six (6) months for Phase I awards and up to (24) months for Phase II awards. A period of one month is allotted after the six (6) month Phase I award for the recipient to prepare and submit a final report.

Individual award amounts for Phase I awards may be up to $283,500 with up to an additional $6,500 for Technical and Business Assistance (TABA), see section 5.12 for TABA information. Individual award amounts for Phase II awards may be up to

$1,910,000 with up to $50,000 for Technical and Business Assistance (TABA), see section 5.12 for TABA information.

• Funding Instrument: Cooperative Agreement.

• Eligibility: Applicants must qualify as a Small Business Concern for

Research/Research and Development (R/R&D) purposes, as defined in Section 1.05 of this NOFO, at the time of award. In addition, the primary employment of the principal investigator must be with the small business at the time of the award and during the conduct of the proposed research. Primary employment means that more than one-half of the principal investigator's time is spent working with the small business. Primary employment with a small business precludes full-time employment with another organization.

• Cost Sharing Requirements: Non-federal cost share is not required for awards issued pursuant to this NOFO.

Table of Contents

1.0 PROGRAM DESCRIPTION AND FEDERAL AWARD INFORMATION……………………………………………………….4

1.01 Introduction………………………………………………………………………………………………………………………………4

1.02 Three-Phase Program………………………………………………………………………………………………………………..7

1.03 SBIR Applicant Eligibility and Limitations…………………………………………………………………………………10

1.04 Contact with NIST……………………………………………………………………………………….……………………………17

1.05 Definitions…………………………………………………………………………………………………….…………………………18

1.06 Fraud, Waste and Abuse…………………………………………………………………………………………………………27

1.07 Other Information……………………………………………………………………………………………………………………29

2.0 CERTIFICATIONS AND RESEARCH INVOLVING HUMANS AND ANIMALS……………………………………………29

2.01 Due Diligence Certification and Current and Pending Support Form………………………………………..29

2.02 Prohibition Against Awards to a Foreign Entity of Concern……………………………………………………..31

2.03 Cyber Security Education and Training Requirements for Phase I and Phase II Awardees………………………………………………………………………………………………………………………………………..31

2.04 Due Diligence/Research Security Review and Risk Determination ………………………………………….32

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2.05 Funding Agreement Certification………………………………………………………………….……………………..….32

2.06 Research Activities Involving Human Subjects, Human Tissue, Data or Recording Involving Human Subjects Including Software Testing……………………………….…………………….…………………………….33

2.07 Research Activities Involving Live Vertebrate Animals or Pre-Existing Cell Lines/Tissues From Vertebrate Animals…………………………………………………………………….……………………..……………………………35

2.08 Certifications Regarding Federal Felony and Federal Criminal Tax Convictions, Unpaid Federal Tax Assessments and Delinquent Federal Tax Returns…………………………………………………………………….36

3.0 APPLICATION PREPARATION INSTRUCTIONS AND REQUIREMENTS………………………………………………….36

3.01 Open Topics - Fast Track Application Requirements: Phase I and Phase II…………………………….…36

3.02 Closed Topics- Fast-Track or Phase II Application Requirements……………………………………………..37

3.03 SBA Data Collection Requirement ………………………………………………………………………………….………38

3.04 Technical Proposal Application……………………………………………….……………………………………………….39

4.0 METHOD OF SELECTION AND EVALUATION CRITERIA………………………………………………………………………44

4.01 Introduction…………………………………………………………………………………………………………………………….44

4.02 Fast-Track or Phase II Screening Criteria……………………………………………………………..…………………..44

4.03 Evaluation Criteria……………………………………………………………………………………………………….………….46

4.04 Award Selections………………………………………..……………….………………………………………………………….47

5.0 CONSIDERATIONS…………………………………………………………………………………………………………………………….49

5.01 Awards………………………………………………………………………………………………………………………………………49

5.02 Reporting Requirements: : Research Performance Progress Reports and the Commercial Viability and Domestic Production (CVDP) Plan………………………………………..……………………………………….……51

5.03 Payment Schedule…………………………………………………………………………………………………………………….53

5.04 Innovations, Inventions and Patents………………………………………………………………………………………...53

5.05 Cost Sharing………………………………………………………………………………………………………………………………62

5.06 Profit or Fee……………………………………………………………………………………………………………………………...62

5.07 Joint Ventures or Limited Partnerships…………………………………………………………………………………..…62

5.08 Research and Analytical Work……………………………………………………….………………………………………….63

5.09 Awardee Commitments…………………………………………………………………………………………………………….63

5.10 Summary Statements……………………………………………………………………………………………………………..…63

5.11 Additional Information………………………………………………………………………………………………………………65

5.12 Technical and Business Assistance (TABA)………………………………………………………………………………...65

5.13 Technical Assistance for Application Preparation and Project Conduct……………………………………..66

6.0 SUBMISSION OF APPLICATIONS……………………………………………………………………………………………………….66

6.01 Deadline of Applications……………………………………………………………………………………………………………67

6.02 Standard Application Package…………………………………………………………………………………………………..67

6.03 Application Submission……………………………………………………………………………………………………………..68

7.0 SCIENTIFIC AND TECHNICAL INFORMATION SOURCES……………………………………………………………………..70

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8.0 SUBMISSION FORMS AND CERTIFICATIONS……………………………………………………………………………………..70

8.01 Required Forms and Documents……………………………………………………………………………………….………70

8.02 Attachment of Required Application Documents………………………………………………………………………77

8.03 Verifying the Submission and Tracking the Application…………………………………………………………..…78

8.04 Unique Entity Identifier and System for Award Management (SAM)…………………………………………79

9.0 RESEARCH AREAS…………………………………………………………………………………………………………………………….80

9.01 FY24 CHIPS SBIR Open Topics ………………………………………………………………………………….…………….…80

9.02 FY24 CHIPS SBIR Closed Topics…………………………….…………………………………………………………………...85

Appendix A COVER SHEET…………………………………………………………………………………………………………………..100 Appendix B. SBIR Certifications…………………………………………………………………………………………………………..103 SBIR Funding Agreement Certification (at time of award) ………………………………………………………………….103 SBIR Funding Agreement Certification (Life-Cycle Certifications) ……………………………………………………….108 Appendix C. Required Disclosures of Foreign Affiliations or Relationships………………………………………….111

1.0 PROGRAM DESCRIPTION AND FEDERAL AWARD INFORMATION

1.01 Introduction

The CHIPS Research and Development Office (CHIPS R&D), National Institute of Standards and Technology (NIST), Department of Commerce, invites small businesses to submit research applications under this Notice of Funding Opportunity (NOFO). Science and technology-based firms with strong research capabilities in any of the areas listed in Section 9.0 of this NOFO are encouraged to participate.

Applications must sufficiently identify and clearly address a specific CHIPS Metrology Open Topic area that falls within one of the research areas described in Section 9.0 (see Section 9.01) or address a closed topic area in Section 9.0 (see Section 9.02).

The CHIPS and Science Act appropriated approximately $50 billion to the Department of Commerce—$39 billion in incentives to onshore semiconductor manufacturing and $11 billion to advance U.S. leadership in semiconductor R&D.

Within CHIPS for America, the mission of CHIPS R&D is to accelerate the development and commercial deployment of foundational semiconductor technologies by establishing, connecting, and providing access to domestic research efforts, tools, resources, workers, and facilities. CHIPS R&D aims to achieve the following goals by 2030:

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• U.S. Technology Leadership: The United States improves its capacity to invent, develop, prototype, manufacture, and deploy the foundational semiconductor technologies of the future.

• Accelerated Ideas to Market: The best ideas achieve commercial scale as quickly and cost effectively as possible.

• Robust Semiconductor Workforce: Inventors, designers, researchers, developers, engineers, technicians, and staff sustainably meet evolving domestic government and commercial sector needs.

Metrology plays a key role in semiconductor manufacturing. As devices become more complex, smaller, and multi-layered, the ability to measure, monitor, predict, and ensure quality in manufacturing becomes much more difficult and uncertain.

Today, the domestic semiconductor industry faces some of these metrology challenges with workarounds and inadequate tools, limiting production yields, impacting quality, and increasing costs. As greater demands are put on semiconductor device performance and material requirements, these challenges will continue to intensify. The metrology challenges impacting the U.S. semiconductor industry are at a critical stage and urgently need to be addressed (for more information, see the seven Grand Challenges, outlined in the Strategic Opportunities for U.S. Semiconductor Manufacturing publication).

NIST has been a crucial partner in helping the U.S. microelectronics industry in the development and manufacturing of next-generation devices. Breakthroughs in measurement science, standards, material characterization, instrumentation, testing, and manufacturing capabilities are necessary to realize the potential of emerging 3D devices and 3D heterogeneous integration. As devices become more complex, highly integrated, and smaller, ensuring performance becomes more challenging.

Meeting dimensional tolerances, performance, and reliability over a range of environments becomes increasingly difficult.

Metrology, one of multiple CHIPS R&D initiatives, emphasizes measurements that are accurate, precise, and fit-for-purpose for the production of microelectronic materials, devices, circuits, and systems. This SBIR NOFO will advance key technologies defined within one of the open topic research areas described in Section 9.0 (see Section 9.01) or address a closed topic area in Section 9.0 (see Section 9.02). Through targeted investments in metrology capabilities, NIST is working to:

• Advance U.S. leadership in documentary standards development.

• Develop and deploy critically needed measurement services.

• Develop and deploy innovative manufacturing metrologies.

https://nvlpubs.nist.gov/nistpubs/CHIPS/NIST.CHIPS.1000.pdf https://nvlpubs.nist.gov/nistpubs/CHIPS/NIST.CHIPS.1000.pdf

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• Develop and deploy novel assurance and provenance technologies.

• Establish advanced metrology R&D testbeds.

• Build and sustain collaborative partnerships with industry.

NIST will be conducting this competition as a Fast-Track program for open topics.

For the closed topics, the competition is available as Fast-Track Program or a Phase

II program for applicants that have received and successfully completed a related

SBIR Phase I from NIST or another federal agency. The Fast-Track competition is seeking scientifically meritorious applications that have expressly high potential for near-term commercialization. The NIST Fast-Track program consists of a submission and review process in which both Phase I and Phase II applications are submitted together as one application to reduce or eliminate the funding gap between phases. For the closed topics, applications for just the Phase II award will be considered from entities that have received and successfully completed a related

SBIR Phase I from NIST or another federal agency.

Only FY 2024 Fast-Track applications covering both Phase I and Phase II (hereinafter referred to as “Fast-Track”) or Phase II applications should be submitted in response to this NOFO. NIST will not publish a separate Phase II NOFO to separately request Phase II applications from the Phase I awardees.

Nor will NIST publish a NOFO for Phase I under the CHIPS Metrology program.

The Small Business Innovation Research (SBIR) program was originally established in 1982 by the Small Business Innovation Development Act (P.L. 97-219), codified at 15 U.S.C. § 638. It was then expanded and extended by the Small Business Research and Development (R&D) Enhancement Act of 1992 (P.L. 102-564), and received subsequent reauthorization and extensions, the most recent of which extends the SBIR program through 2025 (P.L. 117-183).

Eleven Federal agencies implement SBIR by setting aside a portion of their external research and development budget each year to fund research applications from small science and technology-based firms. The statutory purpose of the SBIR Program is to strengthen the role of innovative small business concerns (SBCs) in Federally-funded research or research and development (R/R&D). Specific program goals are to: (1) stimulate technological innovation; (2) use small business to meet Federal R/R&D needs; (3) foster and encourage participation by socially and economically disadvantaged small businesses and by women-owned small businesses in technological innovation; and (4) increase private sector commercialization of innovations derived from Federal R/R&D, thereby increasing competition, productivity, and economic growth.

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The CHIPS R&D FY 2024 SBIR Program identifies and solicits applications in topics that fall within CHIPS Metrology’s research and development areas, as described in Section 9.0 of this NOFO, and allow collaboration between CHIPS R&D staff, NIST scientists and the SBIR awardees whenever possible.

For any SBIR award that requires a license to use a NIST-owned invention covered by a patent or patent application, the SBIR awardee must contact NIST’s Technology Partnerships Office for a license to use the NIST-owned invention. Such awardees will be granted a non-exclusive research license and will be given the opportunity to negotiate a non-exclusive or an exclusive commercialization license to the NIST-owned invention, in accordance with the Federal patent licensing regulations, set forth in 37 C.F.R. Part 404, and to the extent that such NIST-owned invention is available for licensing and has not otherwise been exclusively licensed to another party. It is the goal of this program to position the SBIR awardee to use and build upon such licensed NIST-owned invention with the awardee’s own innovation to develop a commercially viable product based on the NIST-owned invention.

1.02 Three-Phase Program

The SBIR statute (15 U.S.C. § 638) requires the Department of Commerce to establish a three-phase SBIR program by reserving a percentage of its extramural R&D budget to be awarded to SBCs for innovation research. SBIR policy is provided by the SBA through the SBIR/STTR Policy Directive.

The funding vehicles for NIST’s SBIR program in both Phase I and Phase II are cooperative agreements. NIST’s authority to implement its SBIR programs through cooperative agreements is 15 U.S.C. § 272(b)(4). NIST’s programmatic authorities for the research areas listed in this NOFO are found at 15 U.S.C. §§ 272(b) and (c).

The nature of NIST’s “substantial involvement” will generally be collaboration with the awardees in carrying out the project’s approved scope of work. Administrative requirements for grants and cooperative agreements, set forth at 2 C.F.R. Part 200, will apply to NIST SBIR awards.

1.02.01 Phase I – Feasibility Research

The purpose of Phase I is for NIST to determine the technical feasibility of the research, preliminary commercialization merit of the proposed effort, and the quality of the awardee’s performance. The application should concentrate on describing research that will significantly contribute to proving the feasibility of the proposed https://www.sbir.gov/sites/default/files/SBA%20SBIR_STTR_POLICY_DIRECTIVE_May2023.pdf

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Phase II research and commercialization potential, prerequisites to receiving further support in Phase II. Each Phase I award is for up to $283,500 and up to a six (6) month period of performance. Up to an additional $6,500 may be requested for Technical and Business Assistance (TABA); see section 5.12 for more information about TABA. NIST’s inclusion of TABA funds in the award will be subject to the availability of NIST funding.

1.02.02 Phase II – Research and Development

All applicants under this NOFO are also required to submit a Phase II application.

In Phase II, work from Phase I that exhibits potential for commercial application is further developed. Phase II is the R&D or prototype development phase. The Phase II application must include detailed information outlining the proposed research and a detailed plan to commercialize the final product. Each NIST Phase II award is for up to $1,910,000 and up to a 24-month period of performance. Up to $50,000 may be requested for Technical and Business Assistance (TABA); see section 5.12 for more information about TABA. One year after completing the Phase II R&D activity, the awardee shall be required to report on its commercialization activities.

Applicants for the Closed Topics discussed under this NOFO that have successfully obtained and completed an SBIR Phase I for a related topic may be considered and awarded a Phase II award. Phase II applicants shall provide sufficient information in their proposal to persuade NIST that their successful SBIR Phase I completion addresses the requirements outlined in the Closed Topic area in Section 9.

1.02.03 Phase III – Commercialization

Phase III refers to work that derives from, extends, or completes an effort made under prior SBIR funding agreements, but is funded by sources other than the SBIR Program. Phase III may be for products, production, services, R/R&D, or a combination thereof.

1.02.04 Commercialization Readiness Pilot Program

15 U.S.C. § 638(gg) authorizes agencies to establish a Commercial Readiness Pilot Program (CRPP). Under a CRPP, follow-on funding (up to an additional $100,000) may be provided to selected awardees after competition of Phase II. The funding would be used to support advancement toward Phase III and to increase the likelihood of commercialization. NIST is under no obligation to make any CRPP awards.

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1.02.05 Domestic Production and Control of Intellectual Property

As set forth in 15 U.S.C. §4656(g), the Department of Commerce must develop policies for the domestic production, to the extent possible, of intellectual property resulting from R&D conducted under this NOFO. Further, 15 U.S.C. §4656(g) requires CHIPS R&D to develop domestic control requirements to protect such intellectual property from foreign adversaries. For the purposes of 15 U.S.C.

§4656(g), “intellectual property” means any invention that is or may be patentable under U.S. law; and “foreign adversaries” include but are not necessarily limited to any “foreign entity of concern” and “foreign country of concern,” as those terms are defined in 15 U.S.C. §4651(7)-(8) and 15 C.F.R.§231.102, §231.104.

Consistent with the domestic production requirements, a recipient must submit a Commercial Viability and Domestic Production (CVDP) with their Phase I final report (See Section 5.02).

CHIPS R&D will include specific award terms and conditions related to intellectual property and domestic production and control, to meet the requirements of 15 U.S.C.

§4656(g). At Phases I and II, the relevant terms and conditions will include, at a minimum, the following:

I. At least one domestic entity must own or co-own any intellectual property resulting from R&D (“resulting intellectual property”) and must have full rights to enforce the applicable intellectual property rights, for no less than a period of years to be determined prior to the final awards.

II. At the conclusion of the period of years, ownership of the resulting intellectual property may generally be sold, transferred, or assigned to a foreign entity that is not a foreign adversary.

III. In the event a domestic entity sells, transfers, or assigns ownership of the resulting intellectual property, the entity must promptly disclose such transaction to NIST prior to such transaction.

IV. Any owner or co-owner of the resulting intellectual property (including successors in interest) may not sell, transfer, or assign ownership of such intellectual property to a foreign adversary.

V. Any owner of the resulting intellectual property may not license such intellectual property to a foreign adversary, subject to the following specific exceptions.

a. This restriction is not applicable to the following specific exceptions, provided that an owner or co-owner of any patent or patent application resulting from R&D conducted under this NOFO satisfies the notification requirement specified in V.a.iii below.

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i. This restriction is not applicable to any patent(s) or published patent application(s) (i) declared and/or determined to be essential to a technical standard and (ii) under an obligation that the owner of the patent or published patent application license such rights pursuant to the terms of a standards development organization’s Intellectual

Property Rights policy.

ii. This restriction is not applicable to any license(s) of patent(s) or published patent application(s), including cross-licenses, resulting from settling an actual case or controversy, including patent infringement or validity disputes, whether part of a formal proceeding or not.

iii. In the event an owner or co-owner of the patent(s) resulting from R&D conducted under this NOFO determines that any of the specific exceptions above applies and plans to license such patent(s) to a foreign adversary pursuant to the exception(s), the owner or co-owner must promptly disclose such action for NIST review.

b. This restriction is not applicable to the sale of a product by a funding recipient (or any other lawful owner, assignee, transferee, or licensee of

IP) and any accompanying implied or explicit intellectual property license relating to the use of the product that is sold.

1.03 SBIR Applicant Eligibility and Limitation

1.03.01 Applicant Qualifications

Each applicant must qualify as an SBC for R/R&D purposes, as defined in Section

1.05 of this NOFO, at the time of the award. In addition, the primary employment of the principal investigator must be with the small business at the time of the award and during the conduct of the proposed research. Primary employment means that more than one-half of the principal’s investigator’s time is spent working with small business. Primary employment with a small business precludes full-time employment with another organization. Occasionally, deviations from this requirement may occur, which must be approved in writing by the NIST Grants Officer after consultation with the SBIR Program Manager. Further, a small business may only replace the principal investigator on an SBIR Phase I award if the NIST Grants Officer provides prior written approval. Personnel obtained through a Professional Employer Organization or other similar personnel leasing company may be considered employees of the awardee.

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The R/R&D work must be performed in the United States. Requests for an exemption must be submitted in writing at the time of application submission. Only rare and unique circumstances will be considered for an exemption. The NIST Grants Officer must approve each exemption and its terms in writing.

NIST has elected to not use the authority that would allow venture capital operating companies (VCOCs), hedge funds or private equity firms to participate in the SBIR Program. Therefore, applications in which work is performed by VCOCs will not be considered for award.

For Phase I, a minimum of two-thirds of the research and/or analytical effort must be performed by the awardee. The total cost for all consultant fees, facility leases, usage fees, and other subcontract/subaward or purchase agreements may not exceed one-third of the total award. For Phase II, a minimum of one-half of the research and/or analytical effort and usage fees, and other subcontract/subaward or purchase agreements may not exceed one-half of the total award.

Each applicant will be required to provide certain information via www.sbir.gov, as well as information required by the SBIR/STTR Policy Directive (see Appendices V- VI). Each SBC applying for an award is required to update the appropriate information in the SBA database on SBIR.gov for any of its existing and prior Phase II awards.

Applicants may not participate in the review of applications.

The statement of work of an SBIR award made under this NOFO cannot overlap with the statement of work of an existing NIST Cooperative Research and Development Agreement (CRADA) with the awardee. NIST will consider the issue of any potential overlap on a case-by-case basis.

1.03.02 Company Registry Requirements

SBA maintains a Company Registry to track ownership and affiliation requirements for all companies applying to the SBIR Program. Each Phase I applicant must register in the Company Registry prior to submitting an application. The applicant must save its information from the registration in a .pdf document and append this document to the SF-424 (R&R) form as described in Section

8.02 of this NOFO. All applicants are required to report and/or update their registration information in the SBA Company Registry prior to each SBIR application submission or if any information changes prior to an award.

http://www.sbir.gov/ https://www.sbir.gov/sites/default/files/SBA%20SBIR_STTR_FINAL_APPENDICES_MAY2023.pdf https://www.sbir.gov/registration

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1.03.03 Performance Benchmark Ratings Requirements

Performance Benchmark Requirements

Companies with multiple SBIR/STTR awards must meet minimum performance benchmark requirements to be eligible to apply for a new Phase I or Direct-to-Phase II award. The performance benchmark requirements address the extent to which an awardee progresses a project from Phase I to Phase II (i.e., Phase I to Phase II Transition Rate Benchmark) and the extent to which an awardee progresses a project from Phase II towards commercialization (i.e., Commercialization Rate Benchmark). The purpose of these benchmarks is to ensure that Phase I applicants that have won multiple prior SBIR/STTR awards are progressing towards commercialization. The benchmarks were published in the Federal Register for public comment and agreed upon by all 11 SBIR agencies. The Phase I to Phase II Transition Rate Benchmark was published at 78 FR 30951 in May 2013, and the Commercialization Rate Benchmark was published at 78 FR 59410 in September 2013. The SBIR and STTR Extension Act of 2022 (Public Law 117-183) amended the application of these benchmarks for more experienced firms. This NOFO reflects those statutory changes.

Phase I to Phase II Transition Rate Benchmark

The Phase I to Phase II Transition Rate Benchmark only applies when a company has received 21 or more Phase I awards during the past five fiscal years, excluding the most recently completed fiscal year. It requires the company to average a ratio of Phase II to Phase I awards of at least 0.25, meaning the company must average one Phase II for every four Phase I awards received during the measurement period.

To calculate the Phase I to Phase II Transition Rate, SBA divides the total number of SBIR and STTR Phase II awards a company received from all agencies during the past five fiscal years by the total number of SBIR and STTR Phase I awards the company received from all agencies during the past five fiscal years, excluding the most recently completed year. The Phase II period begins one year later because Phase II awards rarely occur during the same year as the Phase I.

Below is an example of the Phase I to Phase II Transition Rate Benchmark assessment for three hypothetical companies conducted in Fiscal Year 2023.

Company Phase I Awards (2017-2021)

Phase II Awards (2018-2022)

Transition Rate Calculation (Phase II

Awards / Phase I Awards)

Assessment Outcome

Company A 21 7 0.33 Pass, ratio is equal or greater than 0.25 https://www.federalregister.gov/d/2013-12312 https://www.federalregister.gov/documents/2013/09/26/2013-23492/small-business-innovation-research-and-small-business-technology-transfer-programs-commercialization

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Company B 21 3 0.14 Fail, ratio is less than 0.25.

Company C 20 3 N/A N/A –benchmark does not apply, firm has less than 21 Phase I Awards.

Commercialization Rate Benchmark

The Commercialization Rate Benchmark only applies when a company has received 16 or more Phase II awards during the past ten fiscal years, excluding the two most recently completed fiscal years. It requires the company to average at least $100,000 of sales and/or investments per Phase II award received during the period;

or have received a number of patents equal to or greater than 15% of the number of Phase II awards received during the period. The Commercialization Rate Benchmark calculation is based on data submitted through the SBIR.gov Company Commercialization Report. SBA utilizes reported total sales or revenues—including government designated Phase III awards, total dollars invested, or the number of patents, that resulted at least in part, from work performed under Phase II awards received during the 10-year period to calculate the Commercialization Rate Benchmark. A complete guide with additional details on what should and should not be reported is available here: Guide_for_completing_commercialization_Report_SBIR_Gov_09_15_20.pdf.

To calculate the Commercialization Rate Benchmark, SBA sums the countable commercialization resulting from the specific Phase II awards received during the 10-year period and divides that number by the total number of Phase II awards received during the 10-year period. For determining the Commercialization Rate Benchmark based on patents, SBA divides the number of patents reported from the specific Phase II awards received during the 10-year period by the total number of Phase II awards received during the period.

Below is an example of a Commercialization Rate Benchmark assessment for four hypothetical companies conducted in Fiscal Year 2023.

Company Phase II Awards (2011- 2020)

Commercialization ($) Resulting from Phase II Awards received between 2011-2020

Patents Resulting from Phase II Awards received

Commercialization Rate

(Commercialization $ / # of Phase II

Awards)

Patent Rate (# of Patents /

# of Phase II Awards)

Assessment Outcome https://www.sbir.gov/sites/default/files/Guide_for_completing_commercialization_Report_SBIR_Gov_09_15_20.pdf

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between 2011-2020

Company A 16 $3,200,000 1 $200,000 .06 Pass.

Commercialization rate meets or exceeds a

$100,000 average.

It does not matter that the patent rate is below the threshold.

Company B 20 $1,900,000 3 $95,000 .15 Pass. Patent rate is at least 15%. It does not matter that the commercialization rate is below the threshold.

Company C 30 $2,500,000 3 $83,333 .10 Fail. Both the commercialization and patent rates are below the minimums.

Company D 15 $3,000,000 0 $200,000 .0 N/A –benchmark does not apply, firm has less than 16 Phase II Awards.

Commercialization Reporting

SBIR and STTR awardees are required to update and maintain their organization’s Company Commercialization Report via SBIR.gov. The reporting is accessible when an authorized user (user is SAM.gov verified) accesses its SBIR.gov profile under the “My Dashboard” section. SBIR and STTR Phase II awardees are required to update its commercialization record when applying for new Phase II awards, at the conclusion of a Phase II award, and then voluntarily update the information in the database annually thereafter for a minimum period of 5 years (15 U.S.C. § 638(k)).

Increased Performance Standards for More Experienced Firms

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The SBIR and STTR Extension Act of 2022 (Pub. Law 117-183) established increased performance standards for more experienced firms. Effective as of April 1, 2023, the statute modifies the Phase I to Phase II Transition Rate Benchmark and the Commercialization Rate Benchmark based on a higher threshold of received awards.

Increased Performance Standard for the Phase I to Phase II Transition Rate Benchmark

The Increased Performance Standard for the Phase I to Phase II Transition Rate Benchmark only applies when a company has received or receives 51 or more Phase I awards during the past five fiscal years, excluding the most recently completed fiscal year. It requires the company to average a ratio of Phase II to Phase I awards of at least 0.50, meaning they must average one Phase II for every two Phase I awards received during the measurement period.

Increased Performance Standard for the Commercialization Rate Benchmark

The Increased Performance Standard for the Commercialization Rate Benchmark establishes two additional tiers, with each tier requiring an elevated performance requirement.

Tier 1 applies when a company has received or receives 51 or more Phase II awards during the past ten fiscal years, excluding the two most recently completed fiscal years.

It requires the company to average at least $250,000 in aggregate sales and investments per Phase II award received during the period.

Tier 2 applies when a company has received or receives 101 or more Phase II awards during the past ten fiscal years, excluding the two most recently completed fiscal years.

It requires the company to average at least $450,000 in aggregate sales and investments per Phase II award received during the period.

Please note, patents cannot be used to pass the Increased Performance Standards for the Commercialization Rate Benchmark.

Increased Performance Standards Documentation Requirement

The SBIR and STTR Extension Act of 2022 requires companies subject to the increased performance standard for the Commercialization Rate Benchmark to submit to SBA supporting documentation to support reported covered sales. The act defines covered sales as follows (15 U.S.C. § 638(qq)(3)(B)(iii)(II)):

In this clause, the term "covered sale" means a sale by a small business concern-

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• that the small business concern claims to be attributable to an SBIR or STTR award;

• for which no amount of the payment was or is made using Federal funds;

• which the small business concern uses to meet an applicable increased minimum performance standard under clause (i) [i.e., Increased Performance Standard for the Commercialization Rate Benchmark]; and

• that was or is received during the 5 fiscal years immediately preceding the fiscal year in which the small business concern uses the sale to meet the increased minimum performance standard.

Please note that government awards received as a prime or subcontractor that satisfy the definition of Phase III and result, at least in-part, from Phase II award(s) received during the measurement period are not considered covered sales because the payment was or is made using Federal funds.

Note: For the Fiscal Year 2023 assessment, SBA will provide guidance directly to firms triggering the increased performance standards with instructions for providing the covered sales documentation. SBA anticipates company commercialization reporting system modifications to allow for uploading required documentation will be complete prior to the Fiscal Year 2024 assessment.

Consequences of Failure to Meet the Benchmarks

SBA will identify, on June 1 of each year, the companies that fail to meet the Phase I to Phase II Transition Benchmark, the Commercialization Rate Benchmark, or the Increased Performance Benchmarks for More Experienced Firms.

Companies that fail to meet either the Phase I to Phase II Transition Benchmark or the Commercialization Rate Benchmark will not be eligible to submit a proposal for a Phase I (or Direct-to-Phase II) award for a period of one year, beginning from the determination date (June 1).

Companies that fail to meet either of the benchmarks under the Increased Performance Standards for more Experienced Firms may not receive more than 20 total Phase I awards and Direct-to-Phase II awards from each Federal agency during the 1-year period beginning on the date of determination (June 1).

Section 3 of the SBIR/STTR Policy Directive defines a Federal Agency as follows:

(o) Federal Agency. An executive agency as defined in 5 U.S.C. § 105, and a military department as defined in 5 U.S.C. 102 (Department of the Army, Department of the Navy, Department of the Air Force), except that it does not

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include any agency within the Intelligence Community as defined in Executive Order 12333, § 3.4(f), or its successor orders.

Notification

SBA will notify companies failing either of the benchmarks and the relevant officials at the participating agencies. The information on the companies will not be available to the public, but a confidential list of companies failing the benchmarks are required to be submitted to Congress.

To provide companies with advance warning, SBA notifies companies on April 1 if they are failing any of the benchmark(s). This notification also instructs companies to review the information available on SBIR.gov and to create or update its company commercialization report to ensure SBA utilizes the most complete and accurate data prior to the official assessment date. Companies identifying inaccuracies may provide feedback through the SBIR.gov helpdesk https://www.sbir.gov/feedback. Companies should review and provide any feedback early, to ensure modifications are able to be addressed well in advance of the June 14th deadline.

Because the performance benchmark requirements only affect a company’s eligibility for new Phase I (or Direct-to-Phase II) awards, a company that fails to meet any of the required benchmarks may continue working on its current or ongoing SBIR/STTR awards and may apply for and receive new Phase II and Phase III awards.

Performance Benchmarks: General information on the Performance Benchmark requirements is available at https://www.sbir.gov/performance-benchmarks.

1.04 Contact with NIST

For general programmatic, electronic submission or grants questions, please contact the appropriate individual:

Subject Area

Point of Contact

Programmatic Questions Sarah Hughes

Phone: (303) 358-0937 E-mail: sarah.hughes@chips.gov or Tracey Smith

Phone: (240) 309-8835 E-mail: tracey.smith@chips.gov https://www.sbir.gov/feedback https://www.sbir.gov/performance-benchmarks mailto:sarah.hughes@chips.gov mailto:tracey.smith@chips.gov

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Electronic Application Submission through Grants.gov

Grants.gov

(800) 518-4726 E-mail: support@grants.gov

Grant Rules and Regulations Dean Iwasaki Phone: (301) 975-8449 E-mail: dean.iwasaki@nist.gov

Applicants may also contact the NIST Hollings Manufacturing Extension Partnership

(MEP) for technical assistance with application preparation. More information on obtaining technical assistance from MEP Centers for application preparation can be found in Section 5.13 of this NOFO.

1.05 Definitions

(a) General Definitions

Except as specifically noted by citation or reference, all definitions below are excerpted from the SBA SBIR/STTR Policy Directive.

Applicant – The organizational entity that qualifies as an SBC at all pertinent times and that submits a contract proposal or a grant application for a funding agreement under the SBIR/STTR Programs.

Awardee – The organizational entity that receives an SBIR or STTR Phase I, Phase II, or Phase III award. An “SBIR/STTR Awardee.”

Commercialization – The process of developing products, processes, technologies, or services and the production and delivery (whether by the originating party or others) of the products, processes, technologies, or services for sale to or use by the Federal government or commercial markets.

Contract, see 2 C.F.R. § 200.1 – For the purpose of Federal financial assistance, a legal instrument by which a recipient or subrecipient purchases property or services needed to carry out the project or program under a Federal award. For additional information on subrecipient and contractor determinations, see 2 C.F.R. § 200.331.

mailto:support@grants.gov mailto:dean.iwasaki@nist.gov https://www.sbir.gov/sites/default/files/SBA%20SBIR_STTR_POLICY_DIRECTIVE_May2023.pdf https://www.ecfr.gov/current/title-2/section-200.331

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Cooperative Agreement, see 31 CFR §§ 6302 and 6305 – A legal instrument of financial assistance between a Federal awarding agency and a recipient or a pass-through entity and a subrecipient that is consistent with 31 U.S.C. §§ 6302, 6305:

(1) Is used to enter into a relationship the principal purpose of which is to transfer anything of value to carry out a public purpose of support or stimulation authorized by a law of the United States (see 31 U.S.C. § 6101(3)); and not to acquire property or services for the Federal Government or pass- through entity's direct benefit or use;

(2) Is distinguished from a grant in that it provides for substantial involvement of the

Federal awarding agency in carrying out the activity contemplated by the Federal award.

Covered Individual, see 15 U.S.C. § 638(e)(15) – An individual who—

(1) contributes in a substantive, meaningful way to the scientific development or execution of a research and development project proposed to be carried out with a research and development award from a Federal research agency;

and

(2) is designated as a covered individual by the Federal research agency concerned.

Essentially Equivalent Work – Work that is substantially the same research, which is proposed for funding in more than one contract proposal or grant application submitted to the same Federal agency, or submitted to two or more different Federal agencies for review and funding consideration; or work where a specific research objective and the research design for accomplishing the objective are the same or closely related to another proposal or award, regardless of the funding source.

Federally Funded Award – A Phase I, Phase II (including a Phase II award under subsection (cc)), or Phase III SBIR or STTR award made using a funding agreement.

Foreign Affiliation, see 15 U.S.C. § 638(e)(16) – A funded or unfunded academic, professional, or institutional appointment or position with a foreign government or government-owned entity, whether full-time, part-time, or voluntary (including adjunct, visiting, or honorary).

http://uscode.house.gov/view.xhtml?req=(title:31%20section:6302%20edition:prelim)%20OR%20(granuleid:USC-prelim-title31-section6302)&f=treesort&edition=prelim&num=0&jumpTo=true http://uscode.house.gov/view.xhtml?hl=false&edition=prelim&req=granuleid%3AUSC-prelim-title31-section6305&f=treesort&num=0&saved=%7CKHRpdGxlOjMxIHNlY3Rpb246NjMwMiBlZGl0aW9uOnByZWxpbSkgT1IgKGdyYW51bGVpZDpVU0MtcHJlbGltLXRpdGxlMzEtc2VjdGlvbjYzMDIp%7CdHJlZXNvcnQ%3D%7C%7C0%7Cfalse%7Cprelim https://www.govinfo.gov/link/uscode/31/6101 https://www.govinfo.gov/link/uscode/31/6101

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Foreign Entity of Concern, The term “foreign entity of concern” has the meaning given to it under 15 U.S.C. § 4651(8) and 15 C.F.R. § 231.104 (see 88 Fed. Reg.

65,600, 65,616 (Sept. 25, 2023)). This meaning includes any foreign person or entity that is “owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country” that is a covered nation under 10 U.S.C. § 4872(d) (i.e., China, Iran, North Korea, and Russia), where:

• The person or entity is a citizen, national, or resident of a foreign country listed in 10 U.S.C. § 4872(d) and is located in a foreign country listed in 10 U.S.C. § 4872(d);

• The person or entity is organized under the laws of or has its principal place of business in a foreign country listed in 10 U.S.C. § 4872(d);

• At least 25 percent of the person or entity’s outstanding voting interest, board seats, or equity interest is held directly or indirectly by the government of a foreign country listed in 10 U.S.C. § 4872(d); or

• At least 25 percent of the person or entity’s outstanding voting interest, board seats, or equity interest is held directly or indirectly by any combination of the persons or entities who fall within subsections (1)-(3).

Foreign Country of Concern, see 15 U.S.C. § 638(e)(17) – The term “foreign country of concern” has the meaning given to it under 15 U.S.C. § 4651(7) and 15 C.F.R. §

231.102 (see 88 Fed. Reg. 65,600, 65,615 (Sept. 25, 2023)). Those provisions provide that a “foreign country of concern” means “a country that is a covered nation” under 10 U.S.C. §4872(d) (i.e., China, Iran, North Korea, and Russia) and “any country that the Secretary [of Commerce], in consultation with the Secretary of Defense, the Secretary of State, and the Director of National Intelligence, determines to be engaged in conduct that is detrimental to the national security or foreign policy of the United States.”

Funding Agreement – Any contract, grant, or cooperative agreement entered into between any Federal agency and any SBC for the performance of experimental, developmental, or research work, including products or services, funded in whole or in part by the Federal Government.

Joint Venture – See 13 C.F.R. § 121.103(h).

Malign Foreign Talent Recruitment Program, see 15 U.S.C. § 638(e)(18), citing 42 U.S.C. § 19237 – Is –

(1) Any program, position, or activity that includes compensation in the form of cash, in-kind compensation, including research funding, promised future https://www.ecfr.gov/current/title-13/chapter-I/part-121

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compensation, complimentary foreign travel, things of non de minimis value, honorific titles, career advancement opportunities, or other types of remuneration or consideration directly provided by a foreign country at any level (national, provincial, or local) or their designee, or an entity based in, funded by, or affiliated with a foreign country, whether or not directly sponsored by the foreign country, to the targeted individual, whether directly or indirectly stated in the arrangement, contract, or other documentation at issue, in exchange for the individual—

(i) engaging in the unauthorized transfer of intellectual property, materials, data products, or other nonpublic information owned by a United States entity or developed with a Federal research and development award to the government of a foreign country or an entity based in, funded by, or affiliated with a foreign country regardless of whether that government or entity provided support for the development of the intellectual property, materials, or data products;

(ii) being required to recruit trainees or researchers to enroll in such program, position, or activity;

(iii) establishing a laboratory or company, accepting a faculty position, or undertaking any other employment or appointment in a foreign country or with an entity based in, funded by, or affiliated with a foreign country if such activities are in violation of the standard terms and conditions of a Federal research and development award;

(iv) being unable to terminate the foreign talent recruitment program contract or agreement except in extraordinary circumstances;

(v) through funding or effort related to the foreign talent recruitment program, being limited in the capacity to carry out a research and development award or required to engage in work that would result in substantial overlap or duplication with a Federal research and development award;

(vi) being required to apply for and successfully receive funding from the sponsoring foreign government’s funding agencies with the sponsoring foreign organization as the recipient;

(vii) being required to omit acknowledgment of the…