CONSIDERATION OF OTHER FACTORS, INCLUDING POSSIBLE DUPLICATION BY OTHER ONGOING WORK AND THE OVERALL R&D PROGRAM BALANCE. CONTRACT NEGOTIATION FOR A SUCCESSFUL PROPOSAL IS CARRIED OUT BY THE LOCAL CONTRACTING OFFICE NORMALLY USED BY THE DOD ORGANIZATION WHICH PERFORMED THE TECHNICAL EVALUATION.

THIS IS THE FIRST YEAR IN WHICH PHASE II PROPOSALS WILL BE CONSIDERED IN THE DOD SBIR PROGRAM.

PHASE II PROPOSALS ARE

SUBMITTED ONLY BY WINNERS OF PHASE I AWARDS; THERE IS NO PHASE II SOLICITATION. ALSO, PHASE I WINNERS ARE NOT GUARANTEED PHASE II AWARDS. DETAILED INSTRUCTIONS REGARDING PHASE II PROPOSAL SUBMISSION WERE SENT BY DOD COMPONENTS TO ALL OF THEIR FY 1983 PHASE I AWARD WINNERS.

ONLY A FEW PHASE II PROPOSALS HAVE THUS

FAR BEEN RECEIVED SINCE MOST OF THE PHASE I CONTRACTS ARE STILL

UNDERWAY.

PHASE II PROPOSALS WILL BE SUBJECT TO A TECHNICAL REVIEW PROCESS SIMILAR TO THAT FOR PHASE I. FINAL DECISIONS WILL BE MADE

BY DOD COMPONENTS BASED UPON THE SCIENTIFIC AND TECHNICAL
EVALUATIONS AND OTHER FACTORS, INCLUDING A COMMITMENT FOR PHASE
III FOLLOW-ON FUNDING (NON-SBIR FUNDING), THE POSSIBLE DUPLICATION
WITH OTHER RESEARCH AND DEVELOPMENT, AND PROGRAM BALANCE.
MERIT OF PHASE II PROPOSALS WILL BE JUDGED RELATIVE TO SUCH

CRITERIA AS:

THE

(1) SCIENTIFIC/TECHNICAL QUALITY OF THE PROPOSAL, WITH
SPECIAL EMPHASIS ON ITS INNOVATION AND ORIGINALITY.

(2) QUALIFICATIONS OF THE PRINCIPAL INVESTIGATOR AND OTHER

KEY PERSONNEL TO CARRY OUT THE PROPOSED WORK.

(3) ANTICIPATED BENEFITS OF THE RESEARCH OR DEVELOPMENT TO THE TOTAL DOD RESEARCH AND DEVELOPMENT EFFORT.

(4) DEGREE TO WHICH THE PHASE I OBJECTIVES WERE MET AT THE TIME OF PHASE II PROPOSAL SUBMISSION.

(5) ADEQUACY OF THE PHASE II OBJECTIVES TO MEET THE PROBLEM OR OPPORTUNITY.

(6) PROVISION OF A FOLLOW-ON PHASE III FUNDING COMMITMENT FOR CONTINUED DEVELOPMENT FROM NON-SBIR FUNDING SOURCES.

THE FUNDING PROCESS FOR PHASE II PROPOSALS IN THE DOD SBIR PROGRAM WILL TAKE INTO ACCOUNT POTENTIAL CASH FLOW PROBLEMS WHICH CAN OCCUR WITH SMALL FIRMS. NO GAP IN FUNDING BETWEEN PHASE I AND PHASE II AWARDS WILL OCCUR FOR SUCCESSFUL PHASE II PROPOSALS WHICH ARE SUBMITTED AT LEAST 30 DAYS BEFORE THE END OF THE PHASE I SUPPORT PERIOD AND WHICH IDENTIFY THE WORK TO BE PERFORMED (AND ASSOCIATED COSTS) FOR THE INITIAL FOUR MONTH PERIOD OF PHASE II. THE SPECIAL CONTRACTING ARRANGEMENT INVOLVES A FOUR-MONTH

EXTENSION TO THE PHASE I CONTRACT TO ALLOW TIME TO NEGOTIATE THE

PHASE II CONTRACT.

FOR THE INITIAL YEAR OF THE DOD SBIR PROGRAM, FY 1983, THE SERVICES, DNA AND DARPA SELECTED 400 RESEARCH AND DEVELOPMENT TOPICS WHICH WERE INCLUDED IN THE SBIR SOLICITATION BROCHURE.

THE

FOLLOWING SHOWS THE BREAKOUT OF THE PROPOSALS RECEIVED, SELECTED, AND ASSOCIATED FUNDING LEVELS:

IN ADDITION, THE CONGRESS AUTHORIZED DOD TO CREDIT PHASE II DESAT AWARDS TO THE FY 1983 SBIR PROGRAM. THESE AWARDS AMOUNTED TO $4.787 MILLION, MAKING OUR TOTAL AWARDS CREDITED TO THE FY 1983 PROGRAM $20.582 MILLION. THESE AWARDS SUBSTANTIALLY EXCEEDED QUR ESTIMATED, MANDATORY FUNDING LEVEL OF $16.7 MILLION.

IN A FURTHER EFFORT TO STRENGTHEN THE PROGRAM, DTIC GAVE SUBSTANTIAL ASSISTANCE TO MORE THAN HALF OF THE FY 1983 PHASE I

AWARDEES BY PROVIDING TO THE PRINCIPAL INVESTIGATORS NARROWLY
TARGETED AND MORE COMPLETE TECHNICAL REPORT BIBLIOGRAPHIES AND ON-
GOING RESEARCH SUMMARIES ON THEIR PROJECT TOPICS. SUCH
INFORMATION SHOULD REDUCE THE CHANCE OF UNNECESSARY DUPLICATION OF
PRIOR OR ON-GOING RESEARCH AND DEVELOPMENT WORK AND HELP ESTABLISH
COMMUNICATION AMONG INVESTIGATORS WORKING ON RELATED PROJECTS. WE

INTEND TO CONTINUE THIS SERVICE FOR FUTURE PHASE I AWARD WINNERS.

THE SECOND DOD SBIR PHASE I SOLICITATION (FY 1984) CLOSED IN JANUARY THIS YEAR. THE SERVICES, DARPA AND DNA DEVELOPED 566 RESEARCH AND DEVELOPMENT TOPICS. A TOTAL OF 3032 PHASE I PROPOSALS HAVE BEEN RECEIVED AND ARE NOW IN PROCESS OF BEING EVALUATED. THE PARTICIPATING AGENCIES REPORT THAT ONLY A FEW PHASE II PROPOSALS HAVE BEEN RECEIVED THUS FAR.

IT IS TOO EARLY IN THE DOD SBIR PROGRAM TO MAKE DEFINITIVE

COMMENTS ON ITS EFFECTIVENESS.

THE RESULTS FROM THE INITIAL (FY

1983) PHASE I AWARDS ARE JUST NOW BECOMING AVAILABLE FOR

EVALUATION; CONSEQUENTLY, NO PHASE II AWARDS HAVE YET BEEN MADE.
AT THIS POINT, ONLY SOME GENERAL OBSERVATIONS CAN BE OFFERED ABOUT
THE DOD EXPERIENCE WITH THE PROGRAM.

CLEARLY, THE PROGRAM WILL INVOLVE A LEARNING PROCESS BOTH FOR MANY SMALL FIRMS WHICH HAVE NOT PREVIOUSLY ATTEMPTED TO ADDRESS DOD R&D REQUIREMENTS AND ALSO FOR DOD WHICH MUST STIMULATE FOCUSED PROPOSALS. IN THE FY 1984 SOLICITATION, GREAT CARE WAS TAKEN IN

DRAFTING THE R&D TOPIC DESCRIPTIONS. ALSO, THE TECHNICAL INFORMATION SUPPORT PROVIDED BY DTIC REACHED 52 PERCENT MORE FIRMS THAN THE PREVIOUS YEAR WITH AN ACCOMPANYING INCREASE OF 250 PERCENT IN THE NUMBER OF R&D TOPIC INFORMATION PACKAGES PROVIDED. THE CORRESPONDING DATA ON PROPOSALS RECEIVED SUGGESTS THE CORRECT TREND IN THE BALANCE BETWEEN NUMBER OF PROPOSALS AND NUMBER OF ADVERTIZED TOPICS. AS SHOWN PREVIOUSLY, A TOTAL OF 566 TOPICS WERE INCLUDED IN THE SOLICITATION BROCHURE RESULTING IN 3032 PROPOSALS. IN THE PREVIOUS YEAR, 400 TOPICS GENERATED 2900 PROPOSALS. THAT IS, AN INCREASE OF 42 PERCENT IN THE NUMBER OF TOPICS BETWEEN FY 1983 AND FY 1984 GENERATED 5 PERCENT MORE PROPOSALS. IT IS OUR BELIEF THAT WE ARE THUS REACHING MOST OF THE SMALL BUSINESSES WITH THE CAPABILITY AND INTEREST TO PARTICIPATE

IN DOD R&D PROGRAMS.

FEEDBACK FROM THE SERVICES AND DEFENSE AGENCIES ON THE QUALITY OF SBIR PROPOSALS IS STILL INCOMPLETE. HOWEVER, IT IS CLEAR THAT THE DOD PARTICIPATING AGENCIES BELIEVE THAT THE GROUP OF SUCCESSFUL PHASE I PROPOSALS FUNDED IN FY 1983 COMPARED WELL IN OVERALL QUALITY TO PROPOSALS FUNDED IN THE NORMAL R&D PROGRAMS. THE TRUE MEASURE OF SUCCESS OF SBIR WILL OF COURSE BE THE OUTCOME OF THE PHASE II EFFORTS; AND, IN PARTICULAR, THE NUMBER OF PHASE III EFFORTS WHICH ARE SPUN-OFF INTO INDUSTRY OR WHICH RESULT IN THE PRODUCTION OF INNOVATIVE PRODUCTS FOR DOD.

AS SMALL BUSINESS AND DOD LEARN MORE ABOUT THE SBIR PROGRAM