SBIR Policy Directive Update Preserves Government Contracting Benefits in Acquisition

The policy directive for the Small Business Innovation Research and Small Business Technology Transfer programs (collectively, “SBIR”) will be updated, effective October 1, 2020, to ensure that SBIR contracting benefits for participating firms are preserved, even if the participating entity pursues a merger or acquisition. This policy clarification is beneficial to SBIR firms who are considering or may in the future consider being acquired.

One of the benefits of winning an SBIR contract is the opportunity to obtain follow-on government contracts at a competitive advantage. The SBIR program provides a three-phase structure in which Phase I and Phase II awards are typically directed to research and development, while Phase III awards are typically larger contracts directed to commercialization. SBIR firms may be eligible for Phase III contracts, provided that the Phase III contract “derives from, extends, or completes” work performed under an earlier SBIR contract.

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