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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
3
Applications and Awards at NASA
3.1
INTRODUCTION
This chapter outlines the information available on Small Business Innovation Research (SBIR) program applications and awards at NASA. The objective is to provide a quantitative overview of award patterns by looking at the data for SBIR Phase I and Phase II applications and awards both overall and broken down by state, by firms that have won multiple awards, and by demographics.
3.2
PHASE I APPLICATIONS1
Since 1997, NASA has attracted on average 2,224 proposals annually for Phase I awards. During this period, the number of applications fluctuated, declining from 1997-2001 and then rebounding sharply with the collapse of the VC-funded boom of 1999-2001 (see Figure 3-1).2
Over the nine years from 1997-2005, the average number of Phase I applications was 2,223. The overall trend is slightly downward, despite the uptick in 2002-2003.
3.2.1
Phase I Awards
The number of Phase I awards made by NASA has been trending steadily down since 1992, the start of the study period for this report (see Figure 3-2).
1
NASA maintains data on applications only since 1997. Accordingly, where we utilize applications data—for example, in the calculation of success rates for applications, our analysis will focus on 1997-2005. Where we are working only with awards data, our analysis will cover 1992-2005.
2
All data in this chapter were provided by NASA to the NRC, unless otherwise labeled.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
FIGURE 3-1 Phase I proposals for 1997-2005.
SOURCE: National Aeronautics and Space Administration.
Just under 300 Phase I awards are made annually, down from over 350 in 1993-1994.
NASA sticks quite closely to its internal guidelines on award size—there is very limited variation: Only four awards are confirmed as being more than $70,000 since 1983, with one of more than $100,000.
FIGURE 3-2 NASA SBIR Phase I awards, 1992-2005.
SOURCE: National Aeronautics and Space Administration.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
3.2.2
Phase I Awards by State
Like other agencies, NASA awards are widely dispersed, with the research hubs accounting for a significant number of awards. However, in light of recent state efforts to encourage more applicants from their states, it is also worth noting that some states—and not necessarily those expected—have companies that are significantly more successful in generating awards from applications.
Table 3-1 shows that five states plus the Virgin Islands and Puerto Rico generated 54 applications, with zero awards. In contrast, Mississippi, Arkansas, and Vermont all had success rates well above average (note that the sheer number of awards and applications from the major research states suggests that these will tend to fall near the median for the group as whole.
TABLE 3-1 SBIR Phase I Application Success Rates by State, 1997-2005
State
Number of Phase I Applications
Number of Phase I Awards
Success Rate (%)
State
Number of Phase I Applications
Number of Phase I Awards
Success Rate (%)
MS
69
13
18.8
KY
16
2
12.5
AR
54
10
18.5
NY
571
69
12.1
VT
39
7
17.9
TX
1,062
128
12.1
NH
234
41
17.5
DE
86
10
11.6
WY
29
5
17.2
MN
246
28
11.4
MT
123
21
17.1
FL
659
73
11.1
CO
1,123
188
16.7
MI
380
42
11.1
LA
30
5
16.7
WV
37
4
10.8
WA
306
51
16.7
AZ
704
75
10.7
AL
694
111
16.0
ID
67
7
10.4
NM
402
64
15.9
HI
44
4
9.1
OR
259
41
15.8
GA
208
18
8.7
IA
38
6
15.8
NV
72
6
8.3
MA
2,395
376
15.7
IL
279
23
8.2
WI
320
50
15.6
KS
56
4
7.1
PA
426
66
15.5
ME
29
2
6.9
UT
155
23
14.8
DC
36
2
5.6
CT
334
49
14.7
SC
36
2
5.6
OH
744
106
14.2
OK
49
1
2.0
NJ
503
71
14.1
AK
13
0.0
MO
66
9
13.6
ND
4
0.0
IN
126
17
13.5
NE
4
0.0
VA
1,196
159
13.3
PR
2
0.0
TN
204
27
13.2
RI
19
0.0
NC
91
12
13.2
SD
10
0.0
CA
4,285
565
13.2
VI
2
0.0
MD
1,074
141
13.1
ALL
20,010
2,734
13.7
SOURCE: National Aeronautics and Space Administration.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
The fact that success rates vary so substantially indicates that state economic development and innovation agencies may wish to address the quality of applicants that they support, as well as the quantity.
NASA is—substantially more than other SBIR agencies such as NIH and NSF—a widely dispersed agency, with 12 research centers recommending SBIR topics and applications for approval from NASA Headquarters. (See Chapter 5, Program Management, for details.) And NASA centers are also the managers of specific SBIR projects within their areas of technical leadership. Consequently, some states have clearly benefited from the presence of these centers, in terms of their ability to generate SBIR awards among local firms. In Alabama, for example, home of NASA’s Marshall Space Flight Center in Huntsville, NASA made 111 Phase I awards from 1997-2005; NIH—with an SBIR program five times the size—made 67, and NSF 34.
Using the standard NRC metric for award aggregation by states, the top five Phase I states received 2,381 awards from 1992-2005, or 52.5 percent of all awards. The bottom 15 states received 64 awards, or 1.41 percent of all awards. Alaska, the Virgin Islands, and Puerto Rico received no Phase I awards.
3.2.3
Phase I Awards by Company
3.2.3.1
Multiple-award Winners
Overall, 41 companies received at least ten Phase I awards 1997-2005. Orbital Technologies was the most prolific winner, with 40, equivalent to 4.4 awards per year. Four firms received at least 30 awards. (See Table 3-2.) The top 20 winners, however, made up only 16.5 percent of all Phase I awards.
Overall, the top twenty winners averaged 22.6 Phase I awards over 9 years—an average of 2.4 Phase I awards per year.
Some of these firms were much more successful than others in translating applications into awards. For example, GNC made 310 applications during this period—a success rate of 6 percent. Foster-Miller made only 73 applications—a success rate of 40 percent. Given the substantial amount of agency effort involved in evaluation applications, it does appear that the agency may wish to evaluate application rates further, with a view to perhaps discussing poor quality applications with some companies.
3.2.3.2
New Applicants
The numbers of new applicants and new winners attracted into the program is an important measure of program openness. NASA maintains records on whether a firm is a first-time applicant to the NASA SBIR program.
Data in Figure 3-3 indicate that on average about 19 percent of NASA applicants are applying to NASA for the first time. The data also indicate that after
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
TABLE 3-2 Top 20 Multiple NASA SBIR Winners, 1997-2005
Company Name
Number of Phase I Awards
Orbital Technologies Corporation
40
Intelligent Automation, Inc.
37
Physical Optics Corporation
32
Creare, Inc.
31
Foster-Miller, Inc.
29
Lynntech, Inc.
27
Physical Sciences, Inc.
26
Pioneer Astronautics
25
Los Gatos Research
20
American GNC Corporation
19
Luna Innovations, Inc
19
TDA Research, Inc.
19
MER Corporation
18
Umpqua Research Company
18
Southwest Sciences, Inc.
17
Ultramet
15
Stottler Henke Associates, Inc.
15
Eltron Research, Inc
15
Triton Systems, Inc.
15
Continuum Dynamics, Inc.
15
Total (top 20 winners)
452
Percent of all Phase I Awards
16.5
SOURCE: National Aeronautics and Space Administration.
FIGURE 3-3 First-time applications to the NASA SBIR program.
SOURCE: National Aeronautics and Space Administration.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
an uptick in new applicants in 2002-2003, the share of new applicants in overall applications is now trending back down toward the level that prevailed before 2002 (around 14 percent).
While the circumstances of each agency are different and the pool of available firms from which applications must come are also different, it is worth noting that this figure is on the low side compared to other agencies. NASA management may wish to consider whether more outreach efforts are needed.
3.2.4
Phase I Applications and Awards: Woman- and Minority-owned Firms
Support for woman- and minority-owned firms is one of the four primary objectives for the SBIR program set by the Congress. This section examines data related to applications and awards by these demographics.
3.2.4.1
Application Shares and Trends
A key step in providing such support lies in the attraction of sufficient applications for funding from these demographic groups. Figure 3-4 shows application trends for 1997-2005 by demographics. The chart indicates that the share of all applications from woman- and minority-owned firms has remained remarkably stable at NASA, barely varying from the mean of 26.5 percent of all awards.
FIGURE 3-4 Shares of Phase I applications, by demographic group, 1997-2005.
SOURCE: National Aeronautics and Space Administration.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
3.2.4.2
Phase I Awards, by Demographics
Figure 3-5 shows Phase I awards by demographics, 1992-2005. Data on Phase I awards show little change in the award shares to woman- and minority-owned firms, which have moved narrowly between 20 percent and 25 percent of all awards since 1992.
Minority firms continue to receive a larger share of Phase I awards than woman-owned firms, but the gap between the two groups is narrowing.
3.2.4.3
Phase I Success Rates by Demographic Group
This section concludes by reviewing the relative success rates of minority-owned, woman-owned and other firms within the NASA SBIR program. These success rates—defined as the ratio of contracts to applications in percentage terms—are described in Figure 3-6. The chart indicates that there has been relatively little change in success rates for any group, except for the spike for “other” applicants in 2001.
Overall, success rates for woman and minority-owned firms are significantly lower than for applications from other firms—averaging 11.0 percent and 10.9 percent respectively compared with 14.9 percent of all other firms. NASA might wish to examine the sources of this disparity in more detail in subsequent research.
FIGURE 3-5 NASA SBIR Phase I awards, by demographic group, 1992-2005.
SOURCE: National Aeronautics and Space Administration.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
FIGURE 3-6 NASA SBIR Phase I success rate, by demographic group, 1997-2005.
SOURCE: National Aeronautics and Space Administration.
3.3
PHASE II AWARDS
As with Phase I, the number of Phase II awards made by NASA has remained relatively constant, as indicated in Figure 3-7. From 1997 onwards, the number of awards has fluctuated within the range from 125-155.
Average award size has stayed close to the agency guidelines, as indicated in Figure 3-8. The increase in 1993 reflected changes in the enabling legislation. However, the decrease in 2004 is as yet unexplained.
FIGURE 3-7 NASA SBIR Phase II awards, 1992-2004.
SOURCE: National Aeronautics and Space Administration.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
FIGURE 3-8 NASA SBIR Phase II average award size, 1992-2001; 2003-2004.
NOTE: Data for 2002 not available.
SOURCE: National Aeronautics and Space Administration.
3.3.1
Phase II Awards by State
Patterns of award by state follow the pattern for Phase I quite closely, although as Table 3-3 shows, the “conversion rate”3 for states vary widely. As with Phase I, states with NASA research centers are likely to generate more awards (e.g., Alabama, Maryland).
3.3.2
Phase II Awards by Company
Between 1992 and 2004, NASA awarded a total of 1,924 Phase II awards to 903 different companies. Most firms received just one or at most two awards; a few however were more successful, as Table 3-4 indicates. Creare, the top award winner, received 36 Phase II awards during this period—an average of 2.76 awards per year. The top 20 Phase II award winners collectively received 327 Phase II awards, accounting for 17 percent of all awards made by NASA during this period.
NASA has not provided data on new Phase II winners.
3
The conversion rate is the rate at which Phase I awards are converted to Phase II. It is a useful indicator of average progress toward commercialization.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
TABLE 3-3 NASA SBIR Phase I to Phase II Conversion Rate, by State, 1997-2004
State
Number of Phase I Awards, 1997-2005
Number of Phase II Awards, 1997-2004
Conversion Rate (%)
State
Number of Phase I Awards, 1997-2005
Number of Phase II Awards, 1997-2004
Conversion Rate (%)
AL
111
45
40.5
ND
n/a
AR
10
4
40.0
NE
n/a
AZ
75
28
37.3
NH
41
24
58.5
CA
565
237
41.9
NJ
71
30
42.3
CO
188
78
41.5
NM
64
28
43.8
CT
49
24
49.0
NV
6
2
33.3
DC
2
0.0
NY
69
24
34.8
DE
10
3
30.0
OH
106
34
32.1
FL
73
26
35.6
OK
1
1
100.0
GA
18
4
22.2
OR
41
18
43.9
HI
4
3
75.0
PA
66
29
43.9
IA
6
4
66.7
PR
n/a
ID
7
3
42.9
RI
n/a
IL
23
9
39.1
SC
2
0.0
IN
17
8
47.1
SD
n/a
KS
4
3
75.0
TN
27
10
37.0
KY
2
1
50.0
TX
128
50
39.1
LA
5
2
40.0
UT
23
9
39.1
MA
376
150
39.9
VA
159
65
40.9
MD
141
58
41.1
VI
n/a
ME
2
1
50.0
VT
7
5
71.4
MI
42
15
35.7
WA
51
24
47.1
MN
28
10
35.7
WI
50
20
40.0
MO
9
3
33.3
WV
4
3
75.0
MS
13
6
46.2
WY
5
3
60.0
MT
21
11
52.4
Total
1,813
738
40.7
NC
12
2
16.7
NOTE: N/A means not applicable.
SOURCE: National Aeronautics and Space Administration.
3.3.3
Phase II Applications and Awards: Woman- and Minority-owned Firms
3.3.3.1
Phase II Applications Shares and Trends
Applications from woman- and minority-owned firms have remained relatively static over time at NASA, as Figure 3-9 shows. Overall, woman-owned firms have made somewhat fewer applications than minority-owned firms. Overall, woman- and minority-owned firms account for a slightly smaller percentage of applications—22.2 percent, compared to 26.5 percent for Phase I.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
TABLE 3-4 Top 20 SBIR Phase II Award Winners for NASA, 1997-2004
Company Name
Number of Phase II Awards
Creare, Inc.
36
Orbital Technologies Corporation
26
Foster-Miller, Inc.
23
Physical Optics Corporation
21
Lynntech, Inc.
21
Intelligent Automation, Inc.
21
Ultramet
19
Physical Sciences, Inc.
18
Triton Systems, Inc.
15
CFD Research Corp
14
TDA Research, Inc.
14
Materials & Electrochemical Research
12
Stottler Henke Associates, Inc.
12
Coherent Technologies, Inc.
12
Nielsen Engineering & Research, Inc.
11
Umpqua Research Company
11
Composite Optics, Incorporated
11
Accurate Automation Corporation
10
Los Gatos Research
10
Eltron Research, Inc
10
Total (top 20)
327
Percent of all NASA Phase II Awards
17.0
Total Firms with Phase II Awards
903
Total Phase II Awards (all firms)
1,924
SOURCE: National Aeronautics and Space Administration.
3.3.3.2
Phase II Awards, by Demographics
Overall, woman- and minority-owned firms receive about 20 percent of NASA Phase II awards. This is slightly down from the end of the 1990s, as Figure 3-10 indicates. And since 2001, the share of awards going to minority-owned firms has consistently exceeded that going to woman-owned firms. These data also indicate that Phase II awards by demographics closely track results from Phase I.
3.3.3.3
Phase II Success Rates, by Demographic Group
Figure 3-11 describes the respective success rates for the different demographic groups. These data indicate that there is general upward trend in success rates, and that success rates for woman- and minority-owned firms is generally in line with those for other firms.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
FIGURE 3-9 NASA SBIR Phase II applications, by demographics, 1997-2005.
SOURCE: National Aeronautics and Space Administration.
FIGURE 3-10 NASA SBIR Phase II awards, by demographic group, 1997-2004.
SOURCE: National Aeronautics and Space Administration.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
FIGURE 3-11 NASA SBIR Phase II success rates, by demographics, 1997-2004.
SOURCE: National Aeronautics and Space Administration.