DoD/Navy SBIR/STTR Overview

DoD/Navy SBIR/STTR Overview Small Business Innovation Research (SBIR) Small Business Technology Transfer (STTR) John R Williams Director, Navy SBIR & STTR John.Williams6@navy.mil 24 August 2011

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The SBIR Process $148 billion Social and Government Needs Private Sector Investment R&D Investment PHASE I Feasibility Research PHASE II Research towards Prototype PHASE III Product Development for Gov t or Commercial Market $150K $1M Non-SBIR Government Investment Federal Investment About $2.3B in FY10 Tax Revenue

The Early Stage Valley of Death Pre-Seed Founders, Friends, Family & Fools Seed/Start- Up Early SBIR AWARDS /Angel Investors/ Angel Groups Later Venture Funds* $25,000 $100,000 $1 to 2 million $5 million VALLEY OF DEATH Adapted from: Richard Bendis and Ethan Blyer, Creating a National Innovation Framework, Science Progress, 2009 Funding Gap * Average Venture Investment is $8.3 million

Why would a Small Business Want to Participate in the SBIR/STTR Program? Largest source early stage R&D funds for Small Business Fed wide ~$2.5B Navy >$325M No dilution of ownership; owners retain control and retains data rights for 4 years or more (5 for DoD) Follow-on awards are contracted non-competitively Strong commercialization support No repayment is required Government recoupment is through the tax system Certification effect draws in additional investment Signal to private investors of technological validity and commercial promise of the innovation

SBIR s Advantages for Government A low-cost technological probe Enables government to explore more cheaply ideas that may hold promise Identifies dead-ends before substantial investments are made Quick reaction capability Solicitations topics can respond rapidly to urgent national needs Anthrax attacks led NIH to seek and get innovative biodefense technologies Diversifies the Government Supplier-base Brings in competition, low-cost solutions, new approaches to address mission needs

Over Two Decades of Consolidation: What was over 100 name plate primes in the 80s is now five firms The SYTEX Group, Inc. STASYS Ltd. (UK) Sippican Holdings, Inc. Affiliated Computer Services, Inc. (ACS) OAO Corp. COMSAT Corp. General Dynamics Ft. Worth MEL Lockheed Martin Marietta Corp. GE Aerospace Space Systems Division (General Dynamics) LTV Missile Business Librascope Ford Aerospace Fairchild Weston Systems Inc. Honeywell-Electro-Optics Loral Corp. IBM Federal Systems Unisys Corp Defense Systems XonTech, Inc. Telos Corp. Technical and Management Assistance, Inc. R.O.W. Sciences, Inc. Tisoft, Inc. Sylvest Management Systems NYMA, Corp. Inc. Federal Sys Grp (Sterling Federal Software, Data Corp. Inc.) Lockheed Martin Comptek Research, Inc. Inter-National DPC Research Technologies, Institute (INRI) Inc. Logicon, Inc. Syscon Corp. Applied Technology Associates Geodynamics Corp. General Dynamics Space Business LTV Aircraft Operations Northrop Westinghouse El. Grumman Defense Ryan Aeronautical Alvis Logistics EDD Kistler Aerospace Business Corp. Teledyne Ryan Aeronautical Taratin TASC (Primark) PRC (Black & Decker) General Varian Solid Instruments Defense State Devices Litton Industries Avandale Industries Newport News Shipbuilding TRW BDM International Inc. GM Defense Motorola Integrated Info Sys Galaxy Aerospace Primex Technologies Santa Barbara GTE Government Systems Corp. Units Gulfstream Aerospace NASSCO Holdings, Inc. Computing Devices International, Inc Lucent Advanced Technology Systems Lockheed Martin Defense Sys, Armament Sys Bath Iron Works General Dynamics SIGNAL Corp. Trident Data Systems MRJ Technology Solutions ERIM International, Inc. Pacific-Sierra Research Corp. DatumCom Corp. Veridian Corp. Digital System Resources, Inc. Spectrum Astro, Inc. Tripoint Global Communications, Inc. Engineering Technology, Inc. Honeywell International Corp. (Australia) Boeing Australia Ltd. Aerospace Group (Australia) Allied Signal, Inc. (Comm Systems) Hughes Electronics BET PLC's Rediffusion Simulation General Dynamics Missile Division Magnavox REMCO SA Raytheon STC PLC Navigation Systems TRW-LSI Products Inc. Corporate Jets E-Systems HRB Systems Inc. Chrysler Techn. Airborne Texas Instr. El. Defense JPS Communications, Inc. Solipsys Photon Research Associates, Inc. Conquest, Inc. Jeppesen Sanderson, Inc. Autometric, Inc. Hughes Electronics Satellite Rockwell Boeing Co. Litton Precision Gear McDonnell Douglas SVS, Inc. Continental Graphics Corp. Hawker de Havilland Ltd. (Australia) Frontier Systems, Inc. 7 :> Northrop Grumman General Dynamics Raytheon Boeing 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 6 Sources: DM&A, Washington Technology, Company reports, and CSIS Analysis. Federal Services Defense Hardware Commercial IT

Small Business Winners Small hi-tech firms from across the country Many are firms 0 to 3 years old and SBIR funding first major source of funds 30% 27% 25% 22% 20% 15% 16% 18% 13% 10% 5% 2% 3% 0% 1 2-9 10-24 25-49 50-99 100-249 250-499 Number of Employees

What is unique about the DoD SBIR/STTR Program? Focused on the WARFIGHTER BIGGEST of the Agencies Both an investor and a small business ADVOCATE to the customer

DoD SBIR/STTR Investment Key Technology Areas Number of Topics 3000 2500 2000 1500 1000 500 0 63% 11% Largest % Growth of Topics from 2004-2009 93% 65% 25% Source: SBIR & STTR solicitations, FY99-FY09

DoD Component Participation The SBIR and STTR programs are executed by 12 and 6 participating DoD Components, respectively. SBIR + STTR Programs Navy Air Force Army Missile Defense Agency Office of Secretary of Defense Defense Advanced Research Projects Agency SBIR Program Only Joint S&T Office for Chemical and Biological Defense Defense Logis5cs Agency Special Opera5ons Command Defense Microelectronics Ac5vity Defense Threat Reduc5on Agency Na5onal Geospa5al Intelligence Agency

Historical SBIR Conversion Rates, by Program Phase Based on all Phase I and Phase II contracts derived from 1996-2005 solicita5ons. Commercializa5on data taken from January 2010 DoD SBIR Commercializa5on Database.

Collaboration during the Solicitation Period Topic Authors Q&A direct during pre-release Q&A electronic bulletin board (SITIS) from pre-release to close Administrative Help Desk Telephone 8am-5pm EST @ 866-724-7457 Email 24 hours a day at www.dodsbir.net/ helpdesk

SBIR Award Recipient Distribution by Firm Size 40% 35% 30% 25% 20% 15% 10% 5% 0% 2% 2% 38% 33% 31% 29% 15% 13% 11% 10% 6% 6% 2% 2% 1 2-9 10-24 25-49 50-99 100-249 250-500 Number of Employees Phase I Phase 2 Based on FY09 Annual Report; Firm Data taken from Company Commercializa>on Report

SBIR Award Recipient Distribution by Prior Experience Phase I Phase II Based on FY09 SBIR Annual Report Data

Two main goals of Navy SBIR/STTR Program: Use small business to develop innovative R&D that addresses a Navy need Commercialize (Phase III) that technology into a Navy platform or weapons system

Navy by the Numbers Metric FY08 FY09 FY10 Total Funding per FY $274M $328M $342M Navy SBIR Topics issued that FY 219 224 233 Number Of Phase I Proposals 2708 3555 4098 Navy Phase I Awards from FY Solicitations 555 597 658* Avg time to award Navy Phase I contracts 4.5 mo 4.8 mo 4.3 mo* Navy Phase II Awards during FY 272 240 296* Avg time w/o funding between Phase I & II 8.2 mo 7.5 mo 8.6 mo* # Phase II.5 s (>$1M) ending in FY 43 45 63 Navy Phase III Awards during FY 90 126 131 Amount of Navy Phase III Awards that FY $307M $362M $566M SBIR/STTR Projects presented at Forum 172 177 205 Attendees at Navy Opportunity Forum 1,252 1,448 1,367 * Awards still being made On Average 1500 SBIR and 200 STTR Open Contracts to manage

Navy SBIR Organization Program Administered by the Office of Naval Research Program Participants Naval Sea Systems Command (NAVSEA): Warfare Centers, PEO s and Program Managers Naval Air Systems Command (NAVAIR): Warfare Centers, PEO s and Program Managers Office of Naval Research (ONR): Science & Technology Directorates and Naval Research Laboratory Space & Warfare Sys. Command (SPAWAR): Warfare Centers, PEO s and Program Managers Marine Corps Systems Command (MARCOR): Direct Reporting Program Managers Naval Supply Systems Command (NAVSUP) Naval Facilities Systems Command (NAVFAC)

Navy follows TECHNOLOGY PULL APPROACH Over 80% of Navy Topics are selected by PEO/ PM/FNC office and address one of their specific needs -- not just sponsored by Topics and awards based on their R&D priorities and SBIR funding allocation. The PEO gets back 90% of their tax Many contracts awarded/monitored by lab employees with Acquisition Office POC involved

ACTIVITY - NAVY SBIR/STTR Award Structure and Phase II.5 Transition Strategies Technology Prototype Testing & Evaluation Feasibility Development and Prototype Demo. Technology Demonstration & Validation Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Opt. ~ 9 mo. $ 250k SBIR Enhancement* ~ 12 mo. Phase 1 6 mo. Option 6 mo. Phase 2 18-24 mo. $ 750k SBIR Phase III $80k $70k Base up to $750K Some Require TTP Cont. Dev. 12 18 mo. $ 750k SBIR TTA Required Non-SBIR $ variable SBIR FUNDS - CONTRACT TYPE - FFP Contract CPFF or FFP Contract TP (Transition Project)* 2 yr. $ 1.50M SBIR TTA Required NTE $150K NTE $1M NTE $1.5M NTE $2.65M CPFF or FFP Contract TRL - 0-3 2-5 4 7 6-9 Any

Navy SBIR/STTR Website www.navysbir.com Navy SBIR I STTR Home The 2010 Navy Opportunity Forum June 7-9, 2010 Hyatt Regency* Crystal City, VA Upcoming Navy SBIR/ STTR solicitations The Navy SBIR/STTR solicitations are released as part of the DoD SBIR/STTR solicitat ion process. On average, the Navy and DoD release 3 SBIR solicitations per fiscal year. The Navy STTR program generally part icipates in only 1 solicitation per year, normally released in January. Browse Phase I Sel ections I SOIA 2010.1 ::::J ~ Quick Search Recent Abstracts I FY-GG.I bad< to FY.()4 ::!J ~ estvargd StJ!"d!

Tips for Succeeding w/navy Just Getting Started? Research topics consistent with your business strategy. Current and past solicitations identify Navy technology needs. Know Navy structure. Submit proposals for solicitations your company can solve. Prepare to be innovative. Already have a Phase I? Know your target platform/system for insertion. Build strategic partnerships (Primes, Universities, Acquisition Managers, Program Managers). Plan commercialization path early with TPOC.

How To Search Current SBIR/STTR Solicitations Federal Wide www.zyn.com/sbir DoD Only www.dodsbir.net Good for get list of all topic titles but ZYN is better as topic search tool

Search project inventory www.navysbirsearch.com Search General Search DTIC Categories Enter Query Text: microbial fu el cell New Query Query Refinement: > mi crobial fu el cell Show Hell> >> Advanced Options Information So..-<:es: 0 Nayy A ward s 0 Army Awa rd s 0 Air Fo rce Award s 0 Othe r DoD Awa r ds O v irtu al S h o wcase A ward s 0 Succe s s Stories 0 Summary Reports Phase: Firm 0011$ Firmllame Topic Uunlber AwardTPOC Fiscal Year Contract llo If uns ure of spelling, cheek to perfornl fuzzy word search 0 llumbe r of Resuks: ~ Dat a Sou rce s --~ pt Cloud Display Type: Cl oud I Cluslers All Data Sources Navy Awards (2560) Army Awards (81) Air f orce Aw ards (93) Other OoO Awards (58) addition to this important. civilian markets cost effective directed energy. electrical power. eleclroactive polymers. military and commercial. novel material oxidatio n process. Physical Sciences. potential commerc ial. service life shipboard w astewater significant market for the resultant. surface ships 1..11dersea vehicles waste disposal wastewater treatment. Water Contaminants Displaying 1-15 out of 2792 Total Results Next > > 96.62% Benthic 1\'licrobial Fuel Cells Engineered for High Power Density Summary: Benthic Microbial Fuel Cels Engi'leered for High Power Density. This vvill be accomplished by selective preemptive colonization of electrodes with natl..l'aly-derived marine or s ecimentary microbial popuk:rtions that most effectively gener ate electrical current. Anti~ated benefits of the benthic fuel cell-based power device as c ompared to existi"lg marine power s oisces, such as s ea water batteries.. Topic llumber: NOS-T028 Firm tlame: Scribner Associates Incorporated Phase: I Award Start Date: 06!23!2008 Award End Mod Oo1c: 0 710812000 Source: Navy Awards 96.62% High Power Density Sediment Microbial Fuel Cell for Powering Seafloor Sensors Summary: High Power Density Sediment Microbial Fuel Cell for Pow ering Seafloor Sensors. To reach the Navys target power density for sedime~ary fuel eels a dramatic iftl)rovement in rrjcrobial fuel eel electrode currert densiy must be actjeved. Lynntech, in collaboration w ith Texas A&M universiy, proposes to solve these problems l.tilizing novel materials and unique biomimetic electrode designs to great.. Topic llumber: NOS-T028 Firm tlame: l ynntech, lnc. Phase: I Award Start Date: 06!23!2008 Award End Mod Date: 0412412009 Source: Navy Awards 96.62% Rapid Bioelectrochemical Monitoring Shipboard Effluent Summary: Rapid Bioelectrochemical Monitoring Shipboard Effluent. To address the Navys need for real time monitoring of orgarjcs in wastewater tr eatment systems, Lynntech proposes a rricrobial fuel eel based sens or for monitoring Biological Oxygen Demand ( BOD) of shipboard effk.lents. By providing near real-time feedback about the performance of marine saniation devices, crew members can adjust the

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