DoD SBIR/STTR Guide

DoD SBIR/STTR Overview

The Department of Defense is the largest SBIR/STTR funding agency, awarding over a billion dollars annually through its small business innovation programs. Unlike civilian agency SBIR programs where topics may be broad, DoD SBIR and STTR topics are defined by specific military needs identified by program managers across the Army, Navy, Air Force, Space Force, and defense agencies like DARPA and the Missile Defense Agency.

The SBIR program funds small businesses directly, while the STTR (Small Business Technology Transfer) program requires a formal partnership between a small business and a nonprofit research institution, typically a university. Both programs follow a phased structure: Phase 1 for feasibility, Phase 2 for development, and Phase 3 for commercialization.

Understanding the DoD Solicitation

DoD releases SBIR/STTR solicitations periodically, each containing hundreds of topics organized by military service and defense agency. Each topic describes a specific technical need, the current state of the art, the desired capability, and the Phase 1 scope of work.

Selecting the Right Topic

Your first task is finding a topic that aligns with your technology. Read the topic description carefully — every sentence matters. Pay attention to the stated objective, the specific technical requirements, and the description of Phase 1 deliverables. If your technology addresses only part of the topic, it may not be competitive.

Contact the topic author before the solicitation closes. DoD encourages pre-submission communication during a designated Q&A period. This conversation helps you understand what the topic author really needs (which sometimes differs from the written description) and whether your approach is in scope. Direct dialogue with the topic author is one of the most valuable steps you can take.

SBIR vs. STTR

Choose SBIR if your company can perform the work primarily in-house. The small business must perform at least two-thirds of Phase 1 work (measured by cost). Choose STTR if you need substantial university or research institution involvement. Under STTR, the small business performs at least 40 percent and the research institution at least 30 percent of the work.

Proposal Structure

DoD SBIR/STTR proposals follow a standardized format with strict page limits. The typical Phase 1 proposal includes the following sections.

Technical Volume

The technical volume is the core of your proposal and typically has a 20-page limit. It must cover the specific technical approach, the relationship to the topic objectives, key personnel qualifications, facilities and equipment, and a detailed work plan with milestones.

Address the topic requirements point by point. Do not make reviewers search for how your proposal maps to their stated needs. If the topic lists three technical objectives, your proposal should clearly address each one.

Cost Volume

The cost volume provides a detailed breakdown of all proposed costs by category: labor, materials, travel, subcontracts, and overhead. DoD Phase 1 awards are typically fixed-price, with maximum award amounts varying by solicitation (usually $50,000 to $250,000). Your costs must be reasonable and directly tied to the proposed work.

Commercialization Strategy

DoD places increasing emphasis on the transition of SBIR-developed technologies to defense applications. Your proposal should include a commercialization section describing the military customer for your technology, the transition pathway from Phase 2 to Phase 3, and any existing relationships with defense end-users. A letter of support from a potential military customer significantly strengthens this section.

Phase 1 to Phase 2 Transition

A successful Phase 1 positions you for a Phase 2 award, which provides substantially more funding (typically $750,000 to $1.75 million) for full prototype development. The Phase 2 proposal builds on Phase 1 results, so plan your Phase 1 work to produce compelling data and demonstrations that make the case for continued investment.

During Phase 1, begin building relationships with the program office and potential end-users. Understanding the acquisition timeline and the operational requirements for your technology will strengthen your Phase 2 proposal and your long-term commercialization strategy.

Phase 3 and Commercialization

Phase 3 is where SBIR technologies transition to military or commercial use. There is no separate Phase 3 competition — instead, Phase 3 involves procurement contracts, licensing agreements, or additional development funded by the military customer. The government has data rights to SBIR-developed technologies, which creates both opportunities and considerations for your intellectual property strategy.

Successful SBIR companies begin thinking about Phase 3 during Phase 1. Identify who within the DoD would procure your technology, what acquisition program it supports, and what the timeline looks like. This forward thinking is exactly what DoD evaluators want to see.

Evaluation Criteria

DoD SBIR/STTR proposals are evaluated on technical merit, qualifications of key personnel, and the potential for commercialization and transition to defense applications. Technical merit carries the most weight, but commercialization potential is increasingly important.

Proposals are reviewed by panels of technical experts, often including military personnel and civilian engineers who work on the relevant programs. They are looking for innovative solutions to real problems, not academic exercises.

Common Pitfalls

• Proposing a technology that does not directly address the topic requirements
• Failing to contact the topic author during the Q&A period
• Writing a proposal that reads like an academic paper rather than a technology development plan
• Weak or missing commercialization strategy
• Not budgeting enough effort for the small business (SBIR) or the research institution (STTR) to meet work percentage requirements

DoD SBIR/STTR programs offer a structured pathway from concept to deployment. The companies that succeed are those that combine technical innovation with a clear understanding of the military customer's needs and a realistic plan for getting their technology into the field.