Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Implementation Procedure

This Duke University SBIR/STTR Implementation Procedure is to be applied in concert with the University’s other policies and procedures, including but not limited to Financial Conflicts of Interest in Research Policy, Institutional Conflicts of Interest in Research Policy, and other policies related to sponsored research. 

Program Overview  

The federally-funded SBIR and STTR programs stimulate innovations that encourage domestic small business concerns (SBC) to engage in research and development that has the potential for commercialization.  SBIRs and STTRs are awarded directly to an SBC, which may issue a subcontract to Duke. 

Currently, eleven separate agencies participate in the SBIR program, and five in the STTR program, and the standards can differ from program to program.  Generally, the key differences between the two programs are as follows: 


Lead PI must be primarily employed by the SBC (e.g. 51% of full-time effort) at the time of award and for the duration of the award. 

This means Duke faculty are not eligible to be lead PI on a SBIR 

Primary employment of lead PI is not stipulated (can be a Duke employee) 

Duke faculty or employee must have at least 10% effort on the award, which must be limited to either Duke or the SBC (NOT BOTH) 


Phase I: up to 6 months 

Phase II: up to 2 years 

Phase I: up to 1 year 

Phase II: up to 2 years 

IS COLLABORATION REQUIRED? Allowed, but not required Requires collaboration with a non-profit research institution 

Phase I - a maximum of 33% of the work may be subcontracted to third party  

Phase II, a maximum of 50% of the work may be subcontracted to a third party 

Phase I and Phase II— a minimum of 30% of the work (maximum of 60%) must be subcontracted to a non-profit research institution (i.e., must be a formal collaboration) 

*A Duke faculty member may participate on one side of the project or the other, but cannot participate on both the company and the Duke side (even if the effort is unpaid on one side). Please contact ORA if you have any questions about this requirement. 


Conflict of interest

Personal COI:  If anyone on the proposal for Duke (faculty, student, fellow, staff, contractor, consultant, etc.) has a financial interest in the SBC (e.g., equity, options, compensation, rights to IP that the SBC acquired, etc.), the Duke PI and/or the potentially conflicted individual(s) must consult with the Duke Office of Scientific Integrity COI (DOSI-COI) to determine if any perceived, potential, or actual COI exists 

Institutional COI:  The Duke PI and/or the potentially conflicted individual(s) also must consult DOSI-COI if Duke has its own financial interest in the SBC (e.g., equity, options, rights to royalties or other payments through a license) 

Pre-Award Review

Review of SBC’s Application. The Office of Research Support (ORS) or the School of Medicine Research Administration (SOM-RA) will request a copy of the SBC’s proposal prior to the SBC submitting it to the agency.  If a copy is not available at that time, the pre-award office will require a copy of the SBC’s full proposal prior to finalizing any contract with the SBC

Proposal Cover LetterThe pre-award central office will prepare a proposal cover letter detailing Duke’s general and SBIR/STTR specific standards, which will be submitted to the SBC with Duke’s proposal

Unit Review.  Proposals to conduct research at Duke for SBIR/STTR funding should be reviewed by the Department Chair or Institute/Center Director (or designee, to include Vice Chair or Business Manager) to ensure the proposal is in accord with Duke’s policies and procedures for sponsored research:

  • Uses Duke research facilities (labs, IACUC, IRB, etc.) only for Duke’s portion of the project
  • Has approval for use of Duke research facilities (labs, IACUC, IRB, etc.) and any use of Duke facilities is solely for Duke’s portion of the project
  • Reflects full cost recovery of direct and indirect costs

Intellectual Property.  A request for proposals for a SBIR/STTR sometimes requires that the SBC and Duke agree to terms on ownership and licensing of intellectual property before the agency issues its award to the SBC.  If so, contact the appropriate pre-award office as soon as possible to begin that process, as the negotiation may take time and requires input from the Office of Translation & Commercialization.

Private Benefit.  The pre-award office will review to ensure that the SBC does not use Duke’s resources to benefit the SBC’s interest at the expense of Duke’s non-profit status.  The following are examples of prohibited activities:

  • Using Duke’s personnel (e.g., departmental research administration staff) to prepare or submit the SBC’s proposal, to administer the award
  • Using Duke’s resources (e.g., personnel, equipment, space, etc.) to operate its business or to complete any portion of the SBC’s work

Final Contract.  Once the SBC’s proposal is awarded, the SBC and Duke must finalize and execute a subcontract or other agreement

Phase I

The “proof of concept” stage is intended to establish the technical merit and feasibility of the proposed research and development and to determine if the small business organization is qualified to conduct quality, promising research in the project area.  The term of Phase I award generally is for 6-12 months, and the funding level is  between $70,000 and $100,000.

Phase II

This phase expands on the results and continues the efforts in Phase I toward prototype development.  The term of a Phase II SBIR and STTR award is 1 to 2 years, and the funding level generally does not exceed $750,000.

Phase III

There is no SBIR/STTR funding in Phase III.  The goal is the commercialization of the work begun in Phases I and II.  The funding is expected to come from private sector or non-SBIR/STTR federal sources.