Let’s now address the eligibility of the Principal Investigator or PI. Every DOE SBIR and STTR proposal must designate a single individual who will serve as the principal investigator (PI) on the proposed project. The PI has overall responsibility for the project, and therefore must be credible in terms of his/her educational, work and project management experience.

The PI has to meet certain eligibility requirements on a DOE SBIR/STTR proposal. For SBIR projects, the PI must be “primarily employed” by the applicant small business during the SBIR grant period. This means that he/she must work 20 or more hours per week for the applicant company, and can’t work more than 19 hours per week for any other employer, during the time that the DOE SBIR/STTR grant is active.

The rules for STTR are a little different at DOE: in an STTR project, the PI can be primarily employed by either the small business applicant or the non-profit organization with which the small firm is collaborating on the STTR project. If the STTR PI is primarily employed with the applicant company, he/she must work 20+ hours per week for that company and not more than 19 hours with another organization. If the PI is primarily employed by the non-profit collaborator on the STTR project, then the PI must work at least 20 hours per week at that institution.

PIs also must be able to dedicate a “considerable” amount of time on the DOE SBIR/STTR project. On Phase I projects, they must commit an average of at least 3 hours per week, or a minimum of 117 hours on a 9 month Phase I.

Now let’s examine Subcontractor eligibility. On a Phase I SBIR project, up to 33% of the research can be subcontracted to another entity. That entity can be anything from a non-profit research institution such as a university or Federal laboratory, to an individual consultant, or a large prime contractor. The 33% must be measured using DOE’s Level of Effort worksheet found on its website, and all of the research must be performed within the United States, unless DOE allows an exception.

On STTR projects, either Phase I or II, at least 30% of the research must be performed by a non-profit research institution or RI. The RI typically is a university (public or private) or a Federal Laboratory (provided it qualifies as a Federally Funded Research and Development Center or FFRDC). The applicant small business must perform at least 40% of the R&D on an STTR project, so the RI could do as much as 60% of the research. A single RI must provide at least 30% of the research, while either the same entity or other subcontractors and consultants could contribute additional amounts so that the total does not exceed 60%.

There are other DOE Eligibility Requirements. A small, for profit firm is not eligible to submit a Phase I SBIR or STTR proposal to DOE unless it has submitted a Letter of Intent (LOI). The LOI deadline typically precedes the full Phase I proposal submission deadline by about 6 weeks. For more information on Letter of Intent, please refer to the module on the Letter of Intent.

Small firms can have their DOE Phase I proposals considered for both the SBIR and STTR programs if they are subcontracting between 30% and 33% of the research to a non-profit research institution. This is a unique feature of the DOE that only requires you to submit one proposal to have two chances of getting your project funded.

DOE has specific limits on employment and ownership overlaps among entities participating in an SBIR or STTR project. More specifically,

• No owners or employees of the applicant company can be paid consultants on the project
• No owners or employees of the applicant company can be employees of a subcontractor on the project, except when the sub is a U.S. non-profit research institution like a university or FFRDC.
• Consultants cannot be employees of a subcontractor on the project

Be sure that you review and understand the eligibility requirements before you begin to invest time in developing your proposal to assure that your firm is eligible and that you comply with DOE’s guidelines.