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National Research Council (US) Committee for Capitalizing on Science, Technology, and Innovation: An Assessment of the Small Business Innovation Research Program Policy and Global Affairs; Wessner CW, editor. An Assessment of the Small Business Innovation Research Program at the National Aeronautics and Space Administration. Washington (DC): National Academies Press (US); 2009.

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An Assessment of the Small Business Innovation Research Program at the National Aeronautics and Space Administration.

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3Applications 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

FIGURE 3-1. Phase I proposals for 1997–2005.

FIGURE 3-1

Phase I proposals for 1997–2005. SOURCE: National Aeronautics and Space Administration.

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). Just under 300 Phase I awards are made annually, down from over 350 in 1993–1994.

FIGURE 3-2. NASA SBIR Phase I awards, 1992–2005.

FIGURE 3-2

NASA SBIR Phase I awards, 1992–2005. SOURCE: National Aeronautics and Space Administration.

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.

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.

TABLE 3-1

SBIR Phase I Application Success Rates by State, 1997–2005.

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.

TABLE 3-2. Top 20 Multiple NASA SBIR Winners, 1997–2005.

TABLE 3-2

Top 20 Multiple NASA SBIR Winners, 1997–2005.

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 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).

FIGURE 3-3. First-time applications to the NASA SBIR program.

FIGURE 3-3

First-time applications to the NASA SBIR program. SOURCE: National Aeronautics and Space Administration.

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.

FIGURE 3-4

Shares of Phase I applications, by demographic group, 1997–2005. SOURCE: 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.

FIGURE 3-5. NASA SBIR Phase I awards, by demographic group, 1992–2005.

FIGURE 3-5

NASA SBIR Phase I awards, by demographic group, 1992–2005. SOURCE: National Aeronautics and Space Administration.

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.

FIGURE 3-6. NASA SBIR Phase I success rate, by demographic group, 1997–2005.

FIGURE 3-6

NASA SBIR Phase I success rate, by demographic group, 1997–2005. SOURCE: National Aeronautics and Space Administration.

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.

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.

FIGURE 3-7. NASA SBIR Phase II awards, 1992–2004.

FIGURE 3-7

NASA SBIR Phase II awards, 1992–2004. SOURCE: National Aeronautics and Space Administration.

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 3-8. NASA SBIR Phase II average award size, 1992–2001; 2003–2004.

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).

TABLE 3-3. NASA SBIR Phase I to Phase II Conversion Rate, by State, 1997–2004.

TABLE 3-3

NASA SBIR Phase I to Phase II Conversion Rate, by State, 1997–2004.

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.

TABLE 3-4. Top 20 SBIR Phase II Award Winners for NASA, 1997–2004.

TABLE 3-4

Top 20 SBIR Phase II Award Winners for NASA, 1997–2004.

NASA has not provided data on new Phase II winners.

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.

FIGURE 3-9. NASA SBIR Phase II applications, by demographics, 1997–2005.

FIGURE 3-9

NASA SBIR Phase II applications, by demographics, 1997–2005. 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.

FIGURE 3-10. NASA SBIR Phase II awards, by demographic group, 1997–2004.

FIGURE 3-10

NASA SBIR Phase II awards, by demographic group, 1997–2004. SOURCE: National Aeronautics and Space Administration.

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.

FIGURE 3-11. NASA SBIR Phase II success rates, by demographics, 1997–2004.

FIGURE 3-11

NASA SBIR Phase II success rates, by demographics, 1997–2004. SOURCE: National Aeronautics and Space Administration.

Footnotes

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.

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.

Copyright © 2009, National Academy of Sciences.
Bookshelf ID: NBK32526

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