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SBIR/STTR Guidelines

Background

The federally-funded Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs encourage small businesses to engage in research and development that could lead to technology commercialization. Small businesses collaborate with a research institution, such as Virginia Tech, in Phases I and II through the issuance of a subaward to the research institution. 

Virginia Tech supports faculty participation in SBIR/STTR programs as this can facilitate rapid progress towards commercialization of important inventions. However, when any member of the Virginia Tech research team has a financial interest in the small business applicant and will also conduct research funded by the small business, this creates a financial conflict of interest (FCOI) for that individual. A study team member has a financial interest when they or an immediate family member receive/hold >$5,000 in payments and equity value (determined through public prices) in total for a publicly traded entity or receive >$5,000 in payments or hold any equity interest in a non-publicly traded entity annually. The FCOI could lead to a:

  • Concern that the individual may be using Virginia Tech laboratories, students, colleagues, funds, or other university resources to support the small business, which could jeopardize academic research and degree progression; 
  • Concern that research objectivity has been compromised; and
  • Blurring of the boundary between the university and the for-proft small business. 

Due to the unique potential for conflicts of interest, the following guidelines have been developed to guide faculty as they prepare SBIR and STTR proposals and manage grant subawards. The principles that govern Virginia Tech research and the potential concerns identified above remain the same regardless of the type of funding; therefore, although the federal rules for COI exempt Phase I SBIR projects from COI requirements, Virginia Tech policy does not exempt these relationships from review and management.

Guidelines for Faculty Participation in SBIR and STTR Programs

The Disclosure and Management System is designed to support disclosure submissions across the university in accordance with multiple policies. Overall, faculty must disclose:

  • If they want to participate in an outside activity (i.e., consulting or outside employment);
  • When they are engaged in research as an Investigator; or
  • When they have a financial interest in a business/vendor that is a party to a contract/transaction with Virginia Tech.

The Disclosure and Management System has 3 modules for faculty, which correspond to the 3 disclosure scenarios indicated above. It is designed to reduce duplicative disclosures. Therefore, if you've already disclosed a relationship in the outside activity disclosure module, you don't have to disclose this relationship again unless there will be a purchase of goods or services from the entity. Contact procurement@vt.edu if that situation applies to you.

Due to the primary employment requirement for SBIR programs and some NSF STTR programs, full-time Virginia Tech faculty cannot serve as PI for the small business. Faculty who plan to serve as the small business PI on SBIR or NSF STTR programs must reduce their employment at the university or take a leave of absence/research leave in order to serve in this role.

The same faculty member may not serve as both the small business PI and the PI on the subaward from a faculty-owned business. For purposes of this guidance, you are considered a “faculty-owner” if you hold any equity in the small business.

Faculty may serve as the PI for either the small business or the subaward to Virginia Tech. If you or any member of the study team hold equity in the company or receive >$5,000 from them annually, a management plan will be put into place to mitigate the FCOI, promote research objectivity, and provide academic protection for graduate students and postdoctoral scholars. See the “FCOI Review” section below for more information.

When the small business issues a subaward to Virginia Tech in the context of the awarded SBIR/STTR, the RCOI Program will review disclosed financial interests for financial conflicts of interest. If the RCOI Program determines that an FCOI exists in the context of the sponsored research, it will develop a plan for managing the FCOI that must be adopted prior to the start of the research, which will be based on state and federal requirements and input from the Investigator with an FCOI, as needed. The elements of the management plan will depend on the nature of the financial interest and the proposed research, but will include, at a minimum, disclosure of the financial interest to the study team, including students and post-docs, and in presentations/publications. Management plan terms are formalized and accepted in the Disclosure and Management System.

Use of university resources on behalf of a small business is not permitted unless Virginia Tech is performing the scope of work authorized through the subaward from the small business to Virginia Tech and that subaward is fully executed before work begins. Only the documented subawarded work is authorized to be performed using Virginia Tech resources.

The University Facilities Usage and Events policy (No. 5000) allows you to use university resources if you pay the rate determined by the Controller's Office and the use is approved by your department/college in the context of your outside activity disclosure, which documents the use of university resources. This only applies in the context of approved consulting activities, and the proposed use cannot interfere with or have priority over anticipated university use of the equipment or facilities.

Note that rights to intellectual property cannot generally be assigned to an entity other than Virginia Tech except as permitted pursuant to Policy 13000, Policy on Intellectual Property.

University personnel cannot support the small business funding application whatsoever, including developing a budget or proposal on behalf of the small business. The involvement of the university in such activities occurs only to the extent that Virginia Tech is an intended subawardee in the research, in which case typical involvement of Virginia Tech researchers and research administrators is permissible. University personnel cannot provide any pre- or post-award support to the small business or make arrangements/handle reimbursements for small business travel.

Graduate students and post-docs might be involved in research sponsored by a faculty-owned business. In developing the management plan for sponsored research involving an FCOI, the RCOI Program will put academic or professional protections in place for graduate students and postdoctoral scholars, respectively. When the faculty-owner serves as the graduate student’s sole advisor or the post-doc’s supervisor, the faculty-owner’s supervisor will be appointed as oversight in the event their academic or professional progress is being hindered or compromised due to their involvement in sponsored research under the management plan.

Graduate students (in certain limited circumstances) must disclose additional employment outside of the Disclosure and Management System. See the Additional Employment for Students Holding a Graduate Assistantship section of the Graduate Catalog. Contact the Graduate School with any questions. 

For post-docs who want to work for a faculty-owned business, see the “Disclosure” section above.