SBIR/STTR Eligibility Methodology

Primary sources

SBIR/STTR eligibility requirements are defined in 15 USC 638 (the Small Business Innovation Research Program statute). The SBA's SBIR/STTR Policy Directive (most recent version from the Federal Register) operationalizes the statute. SBA size standards are at 13 CFR Part 121, with the size standard table at 13 CFR §121.201.

The control and ownership test — majority owned and controlled by US citizens or permanent resident aliens, or by another small business entity that meets the same criteria — is at 13 CFR §121.103 (affiliation rules) and the SBIR Policy Directive §4(a)(1).

Size standard application

For SBIR purposes, 'small business' means fewer than 500 employees (all affiliates combined) per 15 USC 638(e)(1). This is a headcount test, not a revenue test — unlike many other SBA programs. Our calculator applies the SBA affiliation rules at 13 CFR §121.103 to determine whether employees of related entities count toward the 500-employee threshold.

Affiliation is complex: common ownership, common management, and identity of interest are all grounds for affiliation. We model the most common cases (parent/subsidiary, majority ownership by another entity, shared officers) and flag edge cases for professional consultation.

Prior grant eligibility rules

Phase II recipients who have received more than 15 Phase II awards in the prior 5 federal fiscal years face additional reporting requirements (not ineligibility). Sole-source Phase II awards may have additional past performance requirements. We model the 15-award threshold and the Phase I-to-Phase II conversion rate as eligibility signals, not hard blockers.

Limitations

STTR eligibility requires a formal research institution partnership agreement — our calculator flags this requirement but does not model the specific partnership terms each agency requires. Agency-specific eligibility criteria (DOD, NIH, NSF, DOE, NASA, EPA, USDA) layer on top of the base SBIR statute — we model base eligibility, not all agency exceptions.

Update protocol

This category is reviewed quarterly. Immediate updates are triggered by changes to the primary source documents listed in the citations above — rate table revisions, new agency guidance, or regulatory amendments.

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