SBIR Proposal Writing Basics: Requesting DOD Phase I Options

Gail & Jim Greenwood, Greenwood Consulting Group, Inc.  

Copyright © 2007 by Greenwood Consulting Group, Inc.  

The Department of Defense (DOD) has just released its FY07.2 SBIR solicitation, so we want to revisit the issue of requesting “options” on your Phase I DOD proposal.  

Two of the DOD components participating in this solicitation, Navy and Army, have Phase I options.  These are opportunities for you to request additional funding beyond what is ordinarily available for the Phase I feasibility study.  

At Army, you can request $70,000 for a “base project” in which you demonstrate the feasibility of solving the problem posed in the Phase I topic to which you are responding.  Then, under the Phase I “option,” you can request an additional $50,000 to take the project beyond the Phase I feasibility study and into some pre-Phase II activities.  Note that, because of this opportunity to get $120k in Phase I, Army limits Phase II proposals to $730k.  

At Navy, things are a little more complicated:   Some NAVAIR topics allow for a $80,000 base project with a $70,000 option.  Other topics in the current Navy section of the DOD solicitation, the base project is limited to $70,000 with an option for another $30,000.  

So why would you request an option on a Phase I proposal to Army or Navy?  There are several good reasons.  

First, it is encouraged.  In fact, that’s the word that the Navy uses:  “Navy encourages proposers to include…an option which furthers this effort and will bridge the funding gap between Phase I and the Phase II start.”  The Army and Navy want you to request the option.  

Second, it shows you are committed to moving quickly on a problem of concern to the military.  Failure to request the option says you’re happy to just wait for Phase II to move the project to the next level.  

Third, it can result in more money for a NAVAIR project:  you can get $150,000 for a NAVAIR Phase I project, which obviously is better than just getting $80,000 if you don’t request the option.  When added to the Phase II, a NAVAIR SBIR project could provide you with $900,000.   

We’ll close with two words of advice about requesting an Army or Navy Phase I option.  

First, realize that the Phase I option will not be exercised by the military until they decide to award you a Phase II project.  Therefore, there will still be a gap between the end of the Phase I base project and the Phase I option that you’ll have to contend with.  

Second, proof of feasibility of your innovative solution to the Army’s or Navy’s problem must be accomplished within the base project.  Do not attempt to continue the feasibility study into the Phase I option.  Why?  Because the decision to invite your Phase II proposal, which will be the precursor to you getting the Phase II award which is when the military will exercise the Phase I option, is based in part on whether your Phase I effort proved feasible.  So if you didn’t prove feasibility in the Phase I base project, there’s no way to move forward to the Phase I option or Phase II award.