1. Office of Naval Research1/24 Navy SBIR and STTR Programs Mr. John Williams Director - Navy SBIR, STTR & Technology Transfer (T2) at the Office of Naval Research John.williams6@navy.mil May 2010

2. Office of Naval Research2/24 Navy SBIR/STTR Program Goals Two main goals of Navy SBIR/STTR Program: -Use small business to develop innovative technology that addresses a Navy need -Commercialize that technology – i.e, transition it into a Navy platform or weapons system

3. Office of Naval Research3/24 Acquisition Driven Process 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 its SBIR/STTR tax Many contracts awarded/monitored by lab employees with Acquisition Office POC involved

4. Office of Naval Research4/24 FPDS Report Data on DOD-funded Phase III Contracts During FY99-FY09 Total FY09 Navy Phase III funding was $374M Total Navy funding obligated on Phase IIIs has exceeded SBIR Phase I and II budget since 2002 FPDS data shows Navy FY09 Phase III funding came from 134 separate contracts to 112 individual firms In Millions

5. Office of Naval Research5/24 Organizational Structure Program is Administered by the Office of Naval ResearchProgram is Administered by the Office of Naval Research Program ParticipantsProgram Participants -Naval Sea Systems Command (NAVSEA): -Naval Sea Systems Command (NAVSEA): Warfare Centers, PEO’s and Program Managers -Naval Air Systems Command (NAVAIR): -Naval Air Systems Command (NAVAIR): Warfare Centers, PEO’s and Program Managers -Office of Naval Research (ONR): -Office of Naval Research (ONR): Science & Technology Directorates and Naval Research Laboratory -Space & Warfare Sys. Command (SPAWAR): -Space & Warfare Sys. Command (SPAWAR): Warfare Centers, PEO’s and Program Managers -Marine Corps Systems Command (MARCOR): -Marine Corps Systems Command (MARCOR): Direct Reporting Program Managers -Naval Supply Systems Command (NAVSUP) -Naval Facilities Systems Command (NAVFAC)

6. Office of Naval Research6/24 SBIR Program Director SBIR SYSCOM Program Managers PEO SBIR Technology Managers SBIR Field Offices John Williams, Director Dr. Peter Majumdar, Deputy (Office of Naval Research) Dean Putnam SBIR, Program Manager NAVSEA Janet McGovern SBIR, Program Manager NAVAIR Paul Lambert SBIR, Program Manager MARCOR Tracy Frost SBIR, Program Manager ONR Summer Jones SBIR, Program Manager SPAWAR Eric Pitt SBIR, Technical Liaison PEO Carriers Glen Sturtevant SBIR, Technical Liaison PEO Ships Douglas Marker SBIR, Technical Liaison PEO IWS Victor Gavin SBIR, Technical Liaison PEO LMW Jack Evans SBIR, Technical Liaison PEO Subs James Wood Sub-Administrating Officer NSWC Carderock John Dement Sub-Administrating Officer NSWC Crane Joe Garcia Sub-Administrating Officer NSWC Dahlgren Nancy Johnson Sub-Administrating Officer NSWC Indian Head Jack Griffin Sub-Administrating Officer NUWC Newport Kamala Massary SBIR, Technical Liaison PEO (A) Jim Alper SBIR, Technical Liaison PEO (T) Edmund Anderson SBIR, Technical Liaison PEO (W) David Park SBIR, Technical Liaison PEO (JSF) Jamie Guerrero SBIR, Technical Liaison NAVAIR (1.0) Dr. Mark Husni Sub-Administrating Officer NAVAIR Lakehurst Dr. Michael Seltzer Sub-Administrating Officer NAWC- WD China Lake Jerry Rubinsky Sub-Administrating Officer NAWC- AD Patuxent River Clifton Phillips SBIR, Technical Liaison PEO Space Butch Wren Sub-Administrating Officer Avionics & Sensors NAWC-AD Patuxent River Vacant Sub-Administrating Officer Naval Research Lab Paul Halloran SBIR, Technical Liaison PEO Land Systems Reggie Williams Sub-Administrating Officer Propulsion and Power NAWC-AD Patuxent River Dr. Thomas Franz Sub-Administrating Officer NAWC- TSD Orland Kimberly Berche Sub-Administrating Officer CPP Program Manager NAWC- AD Patuxent River Steve Sullivan STTR Program Manager Navy Michelle Willis CPP Program Manager June Chan STTR Program Manager Lee Ann Boyer CPP Program Manager John McDonnell SBIR, Technical Liaison PEO C4I Al Sweeny SBIR, Technical Liaison JPEO JTRS

7. Office of Naval Research7/24 SBIR vs. STTR Small Business Innovation Research (SBIR)Small Business Innovation Research (SBIR) -Federally mandated 2.5% assessment of extramural research dollars provided to small research firms (<500 employees) -Must be 51% owned by U.S. Citizen -Contract firm must conduct at least 51% of research Small Business Technology Transfer (STTR)Small Business Technology Transfer (STTR) -Similar to SBIR -Requires: 30% funding to go to a University or Federally Funded Research & Development Centers (FFRDC) 40% remain with contracted small business concern 30% balance to be split or subcontracted as needed

8. Office of Naval Research8/24 Program Phases Funding Activity Phase I Feasibility Phase II Demonstration Phase III Commercialization ~ $70K Base ~ $30K Option ~ $80K Base ~ $70K Option ≤ $750K Base Varying Option > $1.5M Possible Any Non-SBIR Funding (Government or Private) ½ - 1 Person/yr 6 Mo duration Determine scientific or technical merit 2 - 5 Person/yr 2 Yr duration Prototype development Products Production Services Further R&D “Derives from, extends, or logically concludes efforts performed under prior SBIR contracts..” SBA

9. Office of Naval Research9/24 Why would a Small Business Want to Participate in the SBIR Program? Largest source of early stage R&D funds for small business; FY10 DoD SBIR budget = $1.25B, Navy = >$315M No strings attached – SBIR awardee retains data rights for 4 years or more (5 for DoD) Follow-on awards are contracted non-competitively Strong transition support focused on commercialization Company can maintain ownership of equipment purchased under Phase I and II Better alternative than Venture Capital or mortgaging the house….again

10. Office of Naval Research10/24 The Transition Assistance Program (TAP) is: -A unique Navy SBIR program offered exclusively to our SBIR and STTR Phase II award recipients -An intensive 11-month program that provides participants with a business consultant focused on helping the SBIR company transition its technology -Designed to help recipients conduct strategic planning and enhance their preparation for transition to Phase III -Training includes development of business plans, protection of intellectual property, license agreements, partnering, venture capital, etc. Enhancements include manufacturing assessment, strategic planning, commercial potential assessments Navy Opportunity Forum. -TAP ends with companies briefing PEOs, industry and VC communities at the Navy Opportunity Forum. Navy SBIR/STTR Transition Assistance Program (TAP) helps Small Business TAP increases Phase III commercialization success of participating Navy SBIR and STTR programs

11. Office of Naval Research11/24 Phase III impact of Navy TAP Forum Year # FinalistsTotal amount received (18 mo.) % Finalists 200159$62,214,94145% 200261$114,726,54062% 200354$177,411,41464% 200494$189,815,73375% 2005150$222,375,54155% 2006162$216,688,62264% 2007172 $254,471,907 53% 11 A finalist is a project that completes the program and presents at the Forum

12. Office of Naval Research12/24 Navy TAP results 2002 - 2007 693 projects completed the Navy Transition Assistance Program between 2001 and 2007. 61% (421) of those projects have successfully obtained Phase III (additional non-SBIR funding) within 18 Months of the Navy Opportunity Forum. Collectively, these 421 projects reported $1.15 billion in Phase III funding. These 421 projects have a per project Phase III average of $2.7M. 95% of projects going through the Navy TAP program would recommend the program to other small businesses. 12

13. Office of Naval Research13/24 CONTRACT TYPE - Non-SBIR $ FFP Contract CPFF or FFP Contract CPFF Contract Any TRL -0-33-55-77-9 NAVY SBIR/STTR Award Structure Feasibility Technology Development and Prototype Demo. ACTIVITY - Prototype Testing & Evaluation Technology Demonstration & Validation Phase III variable Enhancement ~ 12 mo. $≤ 750k SBIR Cont. Dev. 12 – 18 Mo CPP ≤ 2 Yr. CPP 12 – 18 Mo $≤ 750k SBIR Tech. Trans. Plan (TTP) Required Tech. Trans. Agreement (TTA) Required Opt Phase 1 Opt Phase 2 6 mo. 6 mo. ~ 18 + ~ 6 mo. Tech. Trans. Agreement (TTA) Required $80k $70k Base $500K to 750K Option $250K for$500K Base $≤ 1.50M SBIR

14. Office of Naval Research14/24 Navy SBIR/STTR statistics 2003 - 2009 Statistics for the SBIR programs:Statistics for the SBIR programs: # of Topic $M# of proposals# of Phase I # of Phase II -2003 222 196 3,088 551192 -2004 266 217 3,667 585 212 -2005 163 253 2,663 466290 -2006 187 309 2,499 446 234 -2007 214 311 2,620 618223 -2008 221 276 2,708 546273 -2009 228 333 3,555 490269 Statistics for STTR programs:Statistics for STTR programs: # of Topic $M# of proposals# of Phase I # of Phase II -2003 26 12.4 314 6920 -2004 34 25 404 9127 -2005 33 30 432 96 33 -2006 40 37 537 11642 -2007 39 37 417 9538 -2008 34 32 383 9251 -2009 39 39 689 11946 Awarded During Fiscal Year Last updated 2/24/10

15. Office of Naval Research15/24 Small Business Participation Small hi-tech firms from across the country Firms are typically small & new to the program

16. Office of Naval Research16/24 Annual DoD Solicitations Pre-Solicitation Open SBIRSTTR November April July Close December May August January June September January July February August March September 3/yr 2/yr

17. Office of Naval Research17/24 DoD SBIR/STTR Website www.dodsbir.com Click at the top

18. Office of Naval Research18/24 Navy SBIR/STTR Website www.navysbir.com

19. Office of Naval Research19/24 Search project inventory - navysbirsearch.com

20. Office of Naval Research20/24 How does Government Benefit from SBIR Program? Safe, effective way to scope out high-risk R&D Small businesses are often more cost effective and innovative than large primes (i.e. agile, niche) Helps new companies establish a track record with the government (test-drive) Allows program managers to establish second source/method for R&D/equipment and augment their ongoing programs (risk management)

21. Office of Naval Research21/24 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 (Resource Sponsors, Acquisition Managers, Program Managers). Plan commercialization path early with TPOC.