and they are designed to meet specific technical needs of NIH Institutes and Centers (ICs).2 This chapter focuses primarily on awards.


Number of Phase I, Year One Awards

While funding for NIH and thus for the NIH SBIR program has substantially increased in recent years, the number of Phase I, year one awards awarded has not.3 In fact, the number of Phase I awards grew by about 25 percent between 1999 and 2004, before falling by 18.5 percent in 2005.4 It is possible that the decline shown in Figure 3-1 represents an important shift in the NIH SBIR program, as fewer Phase I awards might indicate an effort to concentrate resources of fewer, larger, Phase I awards or on Phase II.

Phase I—Award Size

Unlike almost all other agencies and units, NIH does not strictly cap the size of Phase I and Phase II awards. Instead, NIH has applied for and received a blanket waiver from the SBA SBIR administrator. Figure 3-2 shows that the mean size of Phase I, year one awards has increased substantially at NIH in recent years.

Even though there was no change in the Congressionally mandated maximum award size, the mean size of a Phase I, year one award5 increased by approximately 70 percent between 1998 and 2005, reaching $171,806 in the latter year.

A comparison of Figures 3-1 and 3-2 shows that the post-1999 increase in NIH SBIR funding has been directed more at increasing the size of Phase I awards than at increasing their number. This is consistent with the opinion expressed by some NIH SBIR staffers that funding should be more heavily concentrated on the highest-quality applications. This effect is more pronounced for Phase II awards, as we shall see below.

In fact, NIH now consistently makes Phase I awards that are substantially


ICs are the administrative unit at NIH. There are now 27 ICs—such as the National Cancer Institute—and 23 provide SBIR awards.


Because NIH counts awards separately by award year, it is important to differentiate between the first year of an award and subsequent years, which are treated by NIH for data purposes as separate awards.


All awards data in this chapter are based on data provided privately by NIH to NRC, drawn from NIH awards databases. Provided by NIH SBIR Program Coordinator. Because SBA data is maintained differently, cross-checks against the SBA database are not possible.


NIH differentiates between the first and second years of a Phase I award. In some cases (see below), NIH Phase I awards are supported into a second year; however, this second year of support is not typically at a level comparable to the first year, and is therefore excluded from this analysis.

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