United States       Office of Exploratory
        Environmental Protection   Research
        Agency         Washington, DC 20460

        Researcn and Development  EPA/600/9-90/008 Feb. 1990
SEPA   Small Business
        Innovation Research
        Program
    Do not remove. This document
    should be retained in the EPA
    Region 5 Library Collection.
              SBIR

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             U.S. ENVIRONMENTAL PROTECTION  AGENCY


':            Small Business Innovation Research  Program

       Overview

?          This publication is printed  to give all small businesses a broad overview of
4      the Small  Business Innovation Research Program operating as a part of the
^      Office of Exploratory  Research, Office of  Research and Development,  U.S
       Environmental Protection Agency.
^ i          The contents of this publication are not  all inclusive.  More specific and
iC*      detailed information is provided when the Agency releases the yearly program
       solicitations for Phases I and II of the program in  November  and  February
       respectively. Phase II solicitations are sent only to Phase I awardees.
           Information about the  SBIR Program can be obtained by contacting the
       appropriate person listed below.

       SBIR Contacts

       Administrative, Technical  Inquiries, Program Operational  Procedures  and
       General Information

       •   Mr. Donald F. Carey
           SBIR Program Manager
           Office of Exploratory Research (RD-675)
           Office of Research and Development
           U S. Environmehtal Protection Agency
           401 M Street, S W.
           Washington, DC 20460
           Phone: (202)382-7445

       Contractual Inquiries and Solicitations

       •   Ms Dana G. Lloyd
           Contracts Management Division (MD-33)
           U S. Environmental Protection Agency
           Research Triangle Park, NC 27711
           Phone: (919)541-3113

       Program Description

           The  Environmental  Protection Agency's (EPA)  Office of Research and
       Development  (ORD) administers the Small  Business  Innovation Research
       (SBIR) Program.  The SBIR Program represents  a  new approach to funding
       Federal research and development (R&D). Although government funds are
       spent for research on Federal agency R&D needs, the SBIR  Program  also
       provides  incentives  for  the  conversion of this  research  into potential
       commercial applications and technological innovations.  At no additional cost

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to the  government,  SBIR increases the return on investment from Federal
R&D.
    The Small Business Development Act of 1982 (P.L. 97-219) requires the
EPA and certain other Federal agencies with extramural budgets for research
in excess of $100 million per year to establish SBIR  Programs.  Funding for
the program is derived from a fixed percentage (1.25%) of the extramural EPA
R&D budget. The purpose of the legislation is to:

•   Stimulate technological innovation.
•   Use small businesses to meet Federal Research and Development needs.

•   Increase private sector commercialization  of  innovations derived  from
    Federal research and development.

•   Foster  and encourage participation by  minority and  disadvantaged
    persons in technological innovation.
    Under the SBIR Act, Federal agencies solicit proposals on R&D research
from science and technology-based firms.
    Conducted in eleven Federal  R&D agencies,  SBIR  is one of the  most
competitive  R&D  programs in government.   About one  proposal out of ten
received is funded in Phase I. Generally about half of  these receive support in
Phase  II.   For example, In  1989, the  seventh year  of the program,  EPA
received 300 Phase I proposals which resulted in 27  awards, and 12 Phase II
projects were funded from 24 of the 1988 Phase I awardees.
    In  Phase I of this three-phase program, the EPA makes awards of up  to
$50,000 for six months of investigative research to determine whether the
research idea, often  on  high-risk advanced concepts, is technically  feasible,
whether the firm can  do high quality research, and whether sufficient progress
has been made to justify a larger Phase II effort.  The Phase I  report also
serves as a base for follow-on commitment discussions.  Phase II is the
principal research effort. At EPA,  Phase II projects are presently limited to a
maximum of $150,000 for up to two years.
    The  SBIR design involves a  third  phase,  which  is to  pursue  potential
commercial  applications of the research funded under the first two phases.
Phase  III, however, is supported solely by non- Federal funding, usually from
third party,  venture capital or large  industrial firms.
    Phase  I and Phase II  proposals  are  peer reviewed principally  by
consultants  from  universities  and private companies.  The  best proposals
receive full  EPA  research  support.  Awards are based primarily  on EPA
evaluation of technical merit.

Eligibility  Requirements to Participate in the SBIR Program

Small Business

    A  small business concern is one that,  at the time of award of the  SBIR
Phase  I and Phase II funding agreements meets the following criteria.

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    (1)  Is independently owned and operated, is not dominant in the field of
        operation in which it is proposing, has its principal place of business
        located in the United States and is organized for profit.
    (2)  Is at least 51 % owned, or in the case of a publicly owned business, at
        least 51% of  its voting stock  is owned by United States  citizens or
        lawfully admitted permanent resident aliens.
    (3)  Has, including its affiliates, a number of  employees not  exceeding
        500, and meets the other  regulatory  requirements found  in 13 CFR
        Part 121.   Business concerns,  other than  investment companies
        licensed, or state development companies qualifying  under the Small
        Business Investment Act of 1958, 15 U.S.C. 661, et seq., are affiliates
        of  one another when either directly or indirectly (A)  one  concern
        controls or has the power to control the other; or (B) a third party or
        parties controls or has the power to control both.  Control can be
        exercised through  common ownership, common management,  and
        contractual  relationships.  The term "affiliates"  is defined in greater
        detail in  13 CFR  121. The  term  "number of employees" is  also
        defined  in  13 CFR  121.  Business concerns  include,  but  are not
        limited to,  any individual, partnership, corporation, joint  venture,
        association or cooperative.

SB/ft Solicitations-Proposals

    SBIR Program Solicitations contain detailed information on:

        Research Topics
        Instructions for the preparation of SBIR proposals
        Release and closing dates
    To obtain sufficient information on  which to submit an SBIR proposal, you
must contact Ms. Dana Lloyd  (listed above) to obtain a copy of the applicable
solicitation. Copies of these  solicitations are not  available  until their stated
release date.

Definitions
•   A "small business"  -- Previously defined  under  "Eligibility Requirements
    to Participate in the SBIR  Program."
•   A "minority and disadvantaged small business" concern is one  that is:

    (1)  at  least 51% owned by  one  or  more minority and disadvantaged
        individuals or, in the case of  any publicly owned business, at  least
        51% of the voting stock of which is owned  by  one or more minority
        and disadvantaged individuals; and
    (2)  whose management and daily business operations are  controlled by
        one or more of such individuals.

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•   A minority and disadvantaged individual is defined as a member of any of
    the following groups:

    (1) Black Americans         (4) Asian-Pacific Americans
    (2) Hispanic Americans      (5) Subcontinent Asian Americans
    (3) Native Americans

•   A "woman-owned small  business"  is a small business which is  at least
    51%  owned, controlled and operated by a woman or women.  "Control" is
    defined as  exercising the power to  make policy decisions; "operate" is
    defined as being actively involved in the day-to-day management.

•   "Research" (R) or "research and development" (R&D) is defined as any
    activity which is: (A) a systematic, intensive study directed toward greater
    knowledge or understanding of the subject studied; (B) a systematic study
    directed  specifically  toward  applying  new  knowledge to  meet a
    recognized  need; or (C) a systematic application of knowledge toward the
    production  of useful  materials, devices,  and systems or  methods,
    including  design, development  and improvement of prototypes and  new
    processes to meet specific requirements.

•   A  "contract"  is an  award instrument establishing a binding legal
    procurement relationship  between the awarding  agency and  the
    performer, obligating the latter  to furnish an end product or service and
    binding the agency to provide payment therefor.
•   A "subcontract" is any agreement, other than one involving an employer-
    employee relationship, entered  into by a Federal Government contractor
    calling for supplies or services required solely for the performance of the
    basic contract.

Innovations, Inventions and Patents

Proprietary Information

    a.  Information contained in  unsuccessful  proposals will remain  the
property  of the  offerer.  The government, may, however, retain copies of all
proposals.  Public release of information in any proposal submitted will be
subject to existing statutory and regulatory requirements.
    If proprietary information  is provided by an offerer in a  proposal which
constitutes  a  trade  secret,  proprietary  commercial or  financial  information,
confidential personal information or  data affecting the national security, it will
be  treated  in  confidence  to  the  extent permitted  by  law, provided  this
information  if clearly  marked  by  the offerer  with the term "confidential
proprietary information" and provided the following legend which appears on
the title page of the proposal is completed:
    "For  any purpose other than to evaluate the proposal, this data shall not
    be disclosed outside the Government and shall not be duplicated, used,

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    or disclosed in whole or in  part, provided that if a funding agreement is
    awarded to this offerer as a  result of or in connection with the submission
    of this data, the Government shall have the right to duplicate, use,  or
    disclose the data to the  extent provided in  the funding agreement.  This
    restriction  does not  limit the  Government's  right to use information
    contained  in  the  data  if it  is obtained from  another source without
    restriction.   The  data  subject to this  restriction  is  contained  in
    pages	."
    Any  other legend  may  be  unacceptable to the Government and  may
constitute grounds for removing the proposal from further consideration and
without assuming any liability for inadvertent disclosure.  The Government will
limit dissemination of  such  information to its employees and to external
reviewers for evaluation of the proposal.
    b.  Offerers shall  limit  proprietary information  to  only  that absolutely
essential to their proposal.

Rights in Data Developed under SBIR Funding Agreements

    Rights in technical  data,  including software  developed under the terms of
any funding agreement resulting from proposals submitted in response to this
solicitation shall remain with the  Contractor, except that the Government  shall
have the limited right to use such data for government purposes and shall not
release such data outside the government without permission of the Contractor
for a period of  2 years from completion of the project from which the data was
generated.  However, effective  at the conclusion  of the  2-year period, the
government shall retain a royalty-free  license for government use of any
technical data, whether patented  or not,  delivered  under  an SBIR funding
agreement.

Copyrights

    With prior written  permission of the  Contracting  Officer,  the  Awardee
normally may  copyright  and publish  (consistent  with  appropriate security
considerations, if any) material developed with EPA support.  EPA receives a
royalty-free license  for the  Federal  Government and requires that each
publication contain  an appropriate  acknowledgement and disclaimer
statement.

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Patents

    Small business firms normally may retain the principal worldwide  patent
rights  to  any  invention  developed  with Governmental  support. The
Government receives a royalty-free license for Federal  Government use,
reserves the right to require  the  patentholder to  license  others in certain
circumstances,  and  requires that  anyone  exclusively  licensed  to  sell the
invention in the United States must normally manufacture it domestically.  To
the extent authorized by 35  U.S.C.205, the Government will not make  public
any information disclosing a Government-supported invention for a  two-year
period to allow the Awardee a reasonable time to pursue a patent.

Joint Ventures or Limited Partnerships

    Joint ventures and limited partnerships are eligible provided the entity
created qualifies as a small business.

SBIR RESEARCH TOPICS

Overview

    Research is solicited in the ten topic areas  listed below. Notwithstanding
the relatively broad  definition of R or R&D above, awards are limited to
APPLIED forms of "Research" which does not include large demonstration
projects, surveys (including market state-of-the-art and/or literature surveys) or
the preparation of  materials or documents such as  process  designs or
instruction manuals. The work  must directly pertain to "Pollution Control."

    The principal object  of  the solicitation is to increase the  incentive and
opportunity for small firms to undertake cutting edge, high-risk or long term
research on  pollution control technology that has a high potential payoff if the
research is  successful.   Major technological innovations often  require high
front-end risk  investment which  effectively lowers  the risk  for follow-on
investors.  Federal support of the front-end research on new ideas, often the
highest risk part  of the  innovation  process, may provide  small  business
sufficient incentive to pursue such research.

    The proposed research must be responsive to the EPA program  interests
stated in the topic descriptions of the solicitation. However, the same  research
often can be the basis for technological innovation, new commercial products,
processes, or services which benefit the public.  This  is a desirable economic
objective, and such proposals are encouraged.

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    Proposals principally for the development  of proven  concepts  towards
commercialization or for market research should not be submitted, since such
efforts are not supported by this program and will be treated as technically
unacceptable.

    The Environmental Protection Agency's SBIR Program is concerned with
national pollution control in solid, liquid, and gaseous media.  Innovation in
emission reduction/control processes is sought which concerns, but is  not
limited to, industrial, municipal, drinking  water, hazardous  materials,  and
energy production sources.   Performance  and  cost  effective  approaches
featuring  conservation,  reuse,  recycle,  and  increased  efficiencies are  of
special interest.

    Research  in the development of environmental instrumentation  and
systems is also solicited, provided it is directly connected to pollution control
processes.

Selected EPA SBIR Topics • 1990

The following are current topics.  They may change from year to year.

A.  Drinking Water Treatment

B.  Municipal and Industrial Wastewater Treatment and Pollution
    Control

C.  Biological Sludge Treatment for Improved Handling and Disposal

D.  Solid and Hazardous Waste Disposal

E.  Mitigation of Environmental Pollution Problems at Superfund Sites

F.  Control of Acid Rain Precursors

G.  Process Instrumentation for Improved Pollution Control

H.  Air Pollution Control

I.   Waste Reduction and Pollution Prevention

J.  Oil Spill Prevention, Cleanup and Restoration Technology
                *US GOVERNMENT PRINTING OFFICE  1990-748-159/00413

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