USDA SBIR Phase 1&2 Supplemental Funding (TABA)

This year’s USDA Phase 1 Request for Applications (RFA) includes an option for supplemental funding that many companies are not aware of.  In addition to the base $100,000 for your Phase 1 research budget, you can request $6500 for commercialization activities not normally eligible for SBIR.  These activities can include IP legal costs, marketing, market research, financial review, consultants on funding strategy or activities related to manufacturing (as examples). 

This program is called Technical and Business Assistance (TABA).  Programs like this are not new nor only at USDA.  What is new is that for FY2019, legislation was enacted under the John McCain National Defense Authorization Act (NDAA) which allowed the SBIR agencies, if they choose, to give the small business the option to get TABA from “a vendor of their own choosing” rather than a government-contracted agency.  In the past, entities like Dawnbreaker and Larta Institute have provided this service. 

USDA now has specific language on p34-35 of the RFA on how to request TABA, which must be done as part of the Phase 1 application.  Here is an excerpt:

Request for use of Technical and Business Assistance (TABA): The John S. McCain National Defense Authorization Act for Fiscal Year 2019 permits SBIR Phase I awardees to enter into agreements with one or more vendors to provide Technical and Business Assistance (TABA). USDA is able to fund TABA assistance to all USDA SBIR Phase I grantees. Grant recipients have two options for receiving TABA assistance: (1) utilize services provided by a USDA vendor or (2) identify their own TABA assistance provider.

If you wish to utilize your own TABA assistance provider, you are required to include this as “Other Direct Costs” in your budget, provide a detailed budget justification, and a signed letter of commitment from the provider. You may include up to $6,500 for assistance. Please note that this commercialization assistance does not count toward the maximum grant size of $100,000.

What costs are allowable, and implementation at other agencies is still under review by the agency and the US SBA.  Some basics that are known:

-          Funds MUST be spent outside the company paid to a provider; no internal salaries are allowed.

-          You must request this in the proposal, it cannot be requested after an award is already made.

-          If you do not select an external vendor, the USDA-approved vendor will be assigned to you.

-          Research activities (expenses normally eligible in an SBIR budget) are NOT eligible for TABA.

At VertueLab SBIR Assistance, we strongly recommend that USDA applicants consider which TABA option is best for the company and make time to add this small extra work to their proposal if appropriate.   TABA is an exceptional opportunity to get funding for business development activities not normally eligible for SBIR, and can be used to compensate consultants and strategic partners that may otherwise be uncompensated or unavailable. 

In addition to Phase 1, TABA guidelines apply to Phase II SBIR proposals and in the NDAA have been authorized up to $50,000.  USDA already included this in their Phase II RFA last spring (now closed). 

Other agency implementation of TABA is unclear at this point.  DoD has included this in their 2nd cycle of 2019, and DOE is purported to, but NSF is unknown.  The VertueLab SBIR Assistance staff receive regular updates from the SBA and we also check in with the some of the agency directors regularly.  Watch this blog for updates, and if you have any questions please email Leon.