Structure Of The Sbir Grant Proposal Phase I Application

The SBIR grant application process proceeds in two steps. The initial step is the phase I application. The application is (relatively) small and uncomplicated. The 15-page work plan introduces the overall research goal of the project, provides a rationale for doing the research, suggests feasibility, and outlines a series of experiments that (if successful) will support feasibility. Phase I funding provides up to $100,000 to demonstrate the merit of the investigation proposed. The length of support for the typical phase I application is usually six to 12 months.

The phase I grant application must provide a rationale for the study and a work plan that describes experiments that, if successful, would provide evidence of feasibility. The rationale is critical. If the reviewers are not convinced that the study is worth funding (regardless of outcome), their will be no enthusiasm for the application. Preliminary data are not required for a phase I application. Although this may be technically correct, it is very difficult to argue convincingly that the undertaking is feasible without some preliminary data. Thus, virtually all applications contain some evidence to suggest that the approaches proposed will be successful. Regarding the work plan itself, this must include criteria that define success. The criteria need to be spelled out in such a way that at the end of the phase I studies, it will be possible to justify the investment in phase II.

A detailed plan for commercialization is not required for the phase I application. However, if the reviewers of the application cannot see how the novel technology or product being developed can be commercialized, the grant will not receive a fundable score. Therefore, it behooves the investigator to link the proposed studies directly to the tangible outcomes.

After introducing the subject and providing background information, a strong rationale for the work, and whatever preliminary data are available, the detailed experimental design and methods are presented. This section needs to be concise (since probably only six to nine pages will be available), but more important, a longer work plan will stray from the mission, which is to convince review panel members that the studies proposed will (if successful) demonstrate feasibility. It is generally acknowledged that a detailed work plan, no matter how well written and how logical, cannot rescue an application with a weak rationale. On the other hand, if the rationale for the project is solid, the investigator can still "shoot himself in the foot" by failing to provide an adequate research plan.

Phase II Application

At the end of the phase I period of support (normally six to 12 months, or when the investigator believes that feasibility has been demonstrated), a phase II application is submitted for a substantially larger amount of money (up to $1,000,000 or more). The phase II application has a work plan that is up to 25 pages in length. The phase II application has several important differences from the phase I application, in addition to size.

A successful phase II application has several critical elements. First, the value of the project goal has to be convincing. If the review panel feels that the value of the technology being developed will, ultimately, have little scientific or economic impact, there is no chance of redeeming the project, regardless of how well written and convincing the rest of the application. Often, investigators will assume that the project's value is already accepted, based on the fact that "they funded the phase I studies." The reality is that review panel members are less likely to be concerned with the overall project's value during phase I review since the amount of money awarded is small. Not so for phase II. Most reviewers are acutely aware of fund limitations and will do their best not to fund projects that seem to have no long-term payoff. Therefore, although it is critical that the project be justified at phase I, it is even more important to justify it in the phase II application. It goes almost without saying that demonstrating boih scientific and economic merit is critical. The successful grant has both. The "Background and Significance" section is the place to provide this information.

The "Progress Report and Preliminary Studies" section is next. It is critical that the progress report justify the continued investment. Some investigators assume incorrectly that completing the experiments precisely as outlined in the initial phase I application and obtaining the hoped-tor results in these studies are sufficient. The reality is that regardless of what was proposed in the initial application, the reviewers of the phase II proposal will want to be convinced that the project has merit (as assessed by them independently) and that data presented in the "Preliminary Studies" section strongly support the phase II work plan. Often, this means including a large amount of information that is above and beyond that proposed originally. The reviewers of the phase II application will not care what was proposed in phase I per se. What they will care about is the likelihood of success in phase II. Undoubtedly, much of the data that ends up in the progress report for the phase II application will have been generated with funds over and above what was allocated in the phase I grant.

The "Experimental Design and Methods" section follows. Exactly as in phase I, this is where the investigator lays out the approaches that will be used, the rationale for the approaches, and a brief description of experimental procedures. As with other grants, the rationale for the approaches to be used is more important than the actual methods. The reviewers will not want to see methodological detail unless the methods proposed are, themselves, novel. Remember—only so many pages are allowed. Pages spent describing routine

TABLE 1 Typical Phase I and Phase II SBIR Application


Phase I

Phase II

Specific Aims

Background and Significance Preliminary Studies (Progress Report) Experimental Design and Methods

2-3 pages

3-5 pages 6-9 pages

1 page

1 page 3-5 pages 7-8 pages 11-14 pages

"The maximum length for a phase I work plan is 15 pages and for a phase II work plan is 25 pages.

procedures are pages not available for convincing the reviewers that this proposal will provide critical answers to important questions. Table 1 lays out what is typically seen in the workplan of an SBIR application (phases I and II) submitted to NIH.

The experimental design section of a phase II SBIR application being submitted to NIH is similar to that of an investigator-initiated NIH application (R01). The most important piece of the application is the significance. If the reviewers are not convinced that the project is worthwhile, it will be virtually impossible to resurrect the application in later sections. The second most important section is the progress report and preliminary studies section. If the reviewers are not convinced that the data support the studies proposed, they will not score the application as competitive. The experimental design section is therefore the least important of the three. Having said that, however, if the experimental design section is not well laid out, the reviewers will conclude that carrying out the studies as proposed will not answer the critical questions. An application with such a work plan will not be funded. To reiterate, it is axiomatic that the experimental design section cannot save a noncompetitive application but can sink a grant that is otherwise competitive.

Everything stated above for the typical SBIR grant application can be applied to other, more traditional grant applications. Grant reviewers, particularly those who review applications for NIH, are attuned to this format. Nothing in the work plan will clearly designate this as being an SBIR application. What does distinguish an SBIR application from other grants is the business plan. Technically speaking, there is no need for a detailed business plan for a phase I application. However, somewhere in the grant, it is important to convey to the reviewers how success in the endeavor will be commercialized. Although not a major part of the phase I application, the well-developed business plan is an integral part of the phase II application. It is critical that the application describe in detail how the technology or product being developed will be brought to the marketplace. It is not a question of details but, rather, that the relevant issues have been thought through: identification of the target market, how large the market is, what actually comes to market, some idea of what it will cost to accomplish this, and so on.

For example, one recently funded application had the goal of replacing an animal-derived protein with a fully synthetic counterpart in vaccine manufacturing protocols. Key information in the business plan included an estimate of the size of the target market (i.e., how many vaccine protocols could make use of the synthetic product, how many units of vaccine this would entail, the percentage of that market that could be expected to utilize the animal-free alternative), how much of the synthetic product would be needed to meet the market need, what regulatory challenges need to be addressed, and most important, what the projected cost would be for bringing the replacement moiety to market. Estimates for each had to be convincing (not necessarily accurate or precise). If any of these were not convincing, it would not matter how interesting the science was. The project would not generate strong enthusiasm from reviewers.

In addition to addressing the specifics of any project, the reviewers want to see that the company has the necessary infrastructure to carry the project successfully beyond the end of phase II. No matter how good the technology is, there has to be a plan for commercializing it and the company requesting support must be capable not only of formulating such a plan but also for carrying it out successfully. While each business plan is unique, there are several features that most successful applications include. Some of the most important issues to address in the business plan are:

• About the project

• Business opportunity (who or what the market is for the technology)

• Magnitude of the market

• Final product or service (what the commercialized product or service will look like)

• Additional research (toxicology/clinical trials, etc.)

• Other regulatory hurdles

• Manufacturing cost estimate

• Cost of delivering the service

• Where the money will come from [plan for phase III funding (private sector)]

• Pricing and sales

• Company commitment to project

• About the company

• Company structure

• Business experience and qualifications of principals

• Capitalization

• Strategic vision

• Current products and markets

• Strategic alliances

• Investment strategies

• Intellectual property

In summary, virtually all (open competition) grant applications to federal government agencies are highly competitive. Although it might have been thought at one time that seeking funds through the SBIR program provided a less competitive route, this is no longer the case. Only high-quality applications are funded in today's climate. Even when the application is of the highest quality, there is a strong possibility that it will not be funded. There are many reasons for this. Needless to say, a certain percentage of the grant applications reviewed in any study section have been reviewed at least once previously.

Revised Applications

In today' s funding climate, very few applications of any kind are funded on the first submission. Anyone seeking support from the SBIR program faces the strong likelihood of having to rewrite and resubmit his or her proposal. Very soon after review of the initial grant is complete, the applicant is given a score. At this point, the applicant will know whether she or he is "in, out, or on the fence." If the score is definitely not fundable, the process of restructuring the grant begins. Most applicants will think about the resubmission even if they are in that large gray area containing the grants that may or may not be funded. The strategy is to prepare for resubmission and happily drop the project if funding comes through. In any event, there is not much in the way of concrete changes that can be made until the critique sheet arrives. In the old days, this was the infamous "pink sheet." The paper on which the critique was written was, in fact, pink. Now, like everything else, it is electronic. The critique sheet summarizes the comments of the primary and secondary reviewers and any discussion of the project in the study section. This may arrive as much as six to eight weeks after the review.

The resubmission differs from the initial application in that it contains an additional section: "Introduction to Revised Application" (one page for revised phase I proposals and up to three pages for revised phase II proposals). The Introduction summarizes the major criticisms and indicates how the investigators have altered the proposal in response. It goes without saying that responding fully to the issues raised (even if they seem trivial or incorrect) is absolutely essential. One can point out (hopefully, politely) where the reviewers are incorrect and not change the grant application's content. This may be a workable strategy in some cases. Most of the time, however, altering the application is the better choice.

The introduction summarizes how the revised application has been altered as a result of the initial review. The major changes come in the appropriate sections of the grant itself. Rewriting the background and significance section may be necessary if the reviewers do not appreciate the significance of the work. Additional preliminary data may be added if the reviewers are not convinced that the work is feasible. New methodology is included to bolster a challenge to the approach. These changes aside, the revised application, like the initial version, has the same goal: convincing the review panel members that the proposed research has the potential of providing a novel technical solution to a pressing problem.

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