The SBIR appears to offer significant and clear benefits to all. The government receives numerous benefits:

1. The SBIR program has proven successful at improving the nation’s technology base, helping small business and creating many technology breakthroughs at a very low cost. For only $100,000 an agency may obtain six months of effort to investigate a possible solution and if no results are obtained, it can abandon the project.

2. Agencies are rarely second guessed by protest boards. The GAO, for example, is consistently unsympathetic to protests filed against Phase I and Phase II projects.

3. The government obtains technical data and computer software rights developed under the SBIR program. Except for DOD, FAR 52.227-20 “Rights in Data-SBIR Program” allows the government to use all rights for government purposes only and is not allowed to disclose such data outside the government without the contractor’s approval except to support contractors. After the four year period the government has a royalty-free license to use its rights and to disclose such data to anyone for competitive procurements. In DOD’s version, the government obtains restricted rights for two years followed by government purpose rights thereafter (see our primer on technical data and software rights in Vol. 2, No. 1 for a better understanding of these rights).

Benefits to contractors include:

1. Contractors can obtain funding that can result in a product with commercial potential that can be sold either in the public or private sector.
2. User friendly simplified contracting procedures are supposed to be followed. For example, Phase I contracts have contractual provisions that are described and summarized on one page.
3. Government agencies may award sole source contracts for Phase II work. The eleven participating agencies as well as the SBA are available for assistance. 

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