Are You Ready for SBIR/STTR Phase II?

For most companies, the step after an SBIR/STTR Phase I, on the path toward a Phase III would be a Phase II. SBIR.gov identifies the objective of Phase II as “to continue the R/R&D efforts initiated in Phase I. Funding is based on the results achieved in Phase I and the scientific and technical merit and commercial potential of the project proposed in Phase I.”

In some cases, a technology or concept is further along in the development process, making a Phase I an unnecessary first step. In these cases, a company may pursue a Direct-to-Phase II (D2P2).

Phase II vs. D2P2

Phase II contracts with AFWERX can be acquired in two ways:

1. A subsequent Phase II, after a Phase I has been awarded and completed
2. A Direct-to-Phase II (D2P2), when a company has the funding and support needed to skip a Phase I altogether.

In both instances, a proposal requires a detailed and comprehensive submission of the proposal effort. AFWERX reports that small businesses should apply for a this contract if there is match between their company’s product and an Air Force end user.

How Much Is Typically Awarded in a Phase II?

An awarded Phase II effort usually runs up to 21 months with a maximum award of $1.25M.  

The period of performance (PoP) allows for 18 months of technical performance and three months to complete the final report.

What Is a Customer Memorandum, and Why Do I Need One?

For this proposal to be selected, it must have a signed accompanying customer memorandum. This will always require two signatures, one from the Air Force customer agreeing to test out the proposed product and one from the proposed Air Force end user.

The document itself covers who will use the product, why it is relevant, what the overall impact will be should this product become successful, and what the plan is to transition the technology for military use. In very few cases, the customer and the end user can be the same entity.

Open Topic Phase II/D2P2 Required Documents Checklist

fill out the form to get a copy of our checklist to make sure you have everything you need before you submit!

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Is Your Company Eligible for SBIR/STTR PII or D2P2?

Is your company…

• Located in the US?
• Organized for profit?
• No more than 500 employees (including affiliates)?
• More than 50% owned by one or more individuals who are citizens or permanent residents of the United States OR If you answered “yes” to all of these questions, then your company could be eligible for SBIR or STTR!

*one key factor to determining if you are ready for a Phase II if your Technology Readiness Level (TRL). Read more about that HERE

Is a D2P2 the Right Choice for Your Technology?

Every company is different, but our short answer:  If you have great commercial traction, then yes.

A D2P2 can be a great opportunity for any company that could use some non-dilutive funding to make a few tweaks to their technology to help it fit military use.

For software, an important component is authority to operate. Getting on the DoD network takes either time or money. SBIR can help with that.

For hardware, the issue may be that the technology needs a few modifications. For example, maybe you have a hardware solution that works fine in sunny California, but not so well in a different environment. SBIR can help to buy the time necessary to make changes so that your new technology can fit the use-case.