How to find that pathway to success through the SBIR program

Colvin Run Networks CEO Nikhil Shenoy shares how his company used the SBIR program and the lessons learned that can help other small businesses succeed.

There are multiple avenues to break into the federal market space. Colvin Run began its journey through the Small Business Innovation Research (SBIR) – SBIR -- a U.S .government program coordinated by the Small Business Administration to help small businesses conduct research & Development for mission driven endeavors.

There are three phases of funding:

Phases I & II funding is sourced in the form of contracts and grants. There are 11 federal agencies that make $3.2 billion in awards annually. The value of awards can range from $75,000 to $250,000 to $1 million.  These are prime contracts that are recorded in the Federal Procurement Database System (FPDS). These provide a non-traditional business with a past performance portfolio to compete in more traditional contracts where past performance is a main key to success.

Phase Objectives

Phase I is the feasibility study phase. The objective is to establish technical merit, feasibility and commercial potential of proposed research and development. The dollar amount for this phase ranges between $75,000 - $150,000 and are for a 6-month duration. In this phase, the business is proving its worth in concept, delivery and marketability to receive further federal support for a Phase II contract. Communication is key in this phase. To move forward, there needs to be a government and industry champion to fit the solution with a mission need.

Phase II is the prototype development phase. Normally, awards are typically under $1 million for a two-year duration. The keys to success in this phase are customer endorsements along with customers who have R&D money to spend.

With each phase, a company needs to be focused on the product’s commercial transition. Relationships with government customers along with vendors with customer intimacy and access play a pivotable role in migrating to Phase III.

It’s important to distinguish between Phase I, II and Phase III. SBA funds Phases I and II. Phase III is funded by the customer. Where there are award ceilings assigned to Phases I & II; there are no award ceilings when using a Phase III contract.

Phase III: Additionally, a phase III contract is not limited to the agency or customer who endorsed the phase I or phase II award. In essence, the Phase III award becomes a sole-source vehicle that has already satisfied the FAR’s fair competition requirements competition from Phase I & Phase II and can be used in multiple instances for multiple agencies simultaneously.

Pathways to Success:

The SBIR community is its own unique ecosystem that takes time to learn, cultivate and re-coop the return on investment. Some tips for success:

  1. Attending Instructional Seminars. The first thing I did was enroll in what is now called: Virginia’s VIPC | Virginia Innovation Partnership Corporation. This provided the foundation of knowledge needed to begin the SBIR journey – the people, players, and processes.
  2. Submitting a lot of proposals. Since 2019, Colvin Run has been awarded over $9M in SBIR Phase I & Phase II contracts.
  3. Using Smart Tags. Marketing is a key component to pushing your Phase I award to Phases II & III. The SBIR directory showcases vendors SBIR awards and is available for customers and potential industry partners to leverage. We take a lot of time naming our SBIR proposals, writing a compelling company profile and leveraging smart tags so that Colvin Run will show up in multiple search results.
  4. Industry Partnerships Matter. Colvin Run is a small business without direct ties to the federal government. Our technology is leading edge, but our understanding of the mission is not from direct experience. We focus on building trusted relationships with industry partners who have these connections. We focus on creating win/win opportunities to build strategic partnerships.
  5. Attending Conferences Matter. Be where the customers are. Colvin Run incorporates a generous travel and conference budget in its G&A to ensure we can meet those with the mission, money and means to execute a contract.

Extend. Adapt. Complete.

In the context of DoD’s SBIR program, keep three words on the front burner: Extend. Adapt. Complete. Our goals are to:

  1. Extend or expand our research efforts beyond the initial proof-of-concept (Phase I).
  2. Adapt our technology to identify specific challenges and meet end-user needs. (Phase II).
  3. Complete a solution that has been tested, validated, and documented for commercialization. (Phase III).

It’s all about Building Relationships.

The secret sauce in being successful in the SBIR ecosystem is the understanding that it’s all about building relationships with program managers, systems integrators, and end users to build solutions that impact mission readiness. Those who are in the SBIR market as a solo act will remain in the Phase 1 quicksand of untapped potential.

Nikhil Shenoy is CEO and co-founder of Colvin Run Networks. Website: Follow Colvin Run on LinkedIn.