Virginia Tech® home

FCOI Guidance for SBIR and STTR Programs

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 and STTR programs as this can facilitate rapid progress towards commercialization of important inventions. However, when a member of the Virginia Tech research team has a significant financial interest in the small business applicant and they will also conduct Virginia Tech research funded by the small business, this creates a financial conflict of interest (FCOI) for that individual. It is important to note that due to state law considerations, the situation could still be an FCOI and require next steps even if the person is not involved in the Virginia Tech research.

SBIR and STTR programs have a unique potential for financial conflicts of interest, which could lead to a:

  • Concern that the individual might be using Virginia Tech laboratories, students, colleagues, funds, or other university resources to support the small business;
  • Concern that research objectivity has been compromised; and
  • Blurring of the boundary between the university and the for-profit small business.

Therefore, the following guidelines have been developed to guide faculty as they prepare SBIR and STTR proposals and manage grant subawards.

Guidelines for Faculty Participation in SBIR and STTR Programs

Investigators must disclose activities and interests to Virginia Tech, consistent with the university’s policy for conflicts of interest and commitment (No. 1045).

Investigators must also disclose consistent information to research sponsors. Note that the information on this website is for disclosing to Virginia Tech. See the Office of Sponsored Programs’ website for Agency-Specific Disclosure Guidance if you have questions about what should be disclosed to the federal ​sponsor in the proposal.

Investigators must carefully read the agency’s solicitation to stay in compliance with the eligibility requirements for the principal investigator (PI).

Due to the primary employment requirement for SBIR programs and some National Science Foundation (NSF) STTR programs, full-time Virginia Tech faculty cannot serve as PI for the small business. Faculty who are planning 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 to serve in this role.

Faculty may serve as the PI for either the small business or the subaward to Virginia Tech, consistent with other Virginia Tech policies for PI eligibility. An investigator may not serve as the PI on both sides of the project if they hold a greater than 3% equity interest in the sponsoring entity. Any exceptions must be approved by the department in advance of the proposal’s submission and by the Management Plan Advisory Committee once funding is received by the university. 

The Research Conflict of Interest program will review disclosures of significant financial interests for all investigators on the project and develop a management plan, if needed. If there are steps necessary for the investigator to comply with state law, the Research Conflict of Interest Program will assist the investigator in applying for the approvals needed. 

The 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. Note that rights to intellectual property cannot generally be assigned to an entity other than Virginia Tech except as permitted by 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 postdocs might be involved in research sponsored by a faculty-owned business. In developing the management plan, the Research Conflict of Interest Program will consider putting academic or professional protections in place for graduate students or postdoctoral scholars, respectively.

Note: graduate students and postdocs must disclose to Virginia Tech, consistent with the university’s policy for conflicts of interest and commitment (No. 1045).