[Federal Register Volume 61, Number 98 (Monday, May 20, 1996)]
[Rules and Regulations]
[Pages 25366-25374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12375]
[[Page 25365]]
_______________________________________________________________________
Part IV
Department of Agriculture
_______________________________________________________________________
Cooperative State Research, Education, and Extension Service
_______________________________________________________________________
7 CFR Part 3403
Small Business Innovation Research Grants Program; Administrative
Provisions; Final Rule
Federal Register / Vol. 61, No. 98 / Monday, May 20, 1996 / Rules and
Regulations
[[Page 25366]]
DEPARTMENT OF AGRICULTURE
Cooperative State Research, Education, and Extension Service
7 CFR Part 3403
Small Business Innovation Research Grants Program; Administrative
Provisions
AGENCY: Cooperative State Research, Education, and Extension Service,
USDA.
ACTION: Final rule.
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SUMMARY: The Cooperative State Research, Education, and Extension
Service (CSREES) is amending its regulations relating to the
administration of the Small Business Innovation Research (SBIR) Grants
Program, which prescribe the procedures to be followed annually in the
solicitation of research grant proposals, the evaluation of such
proposals, and the award of competitive research grants under this
program. This rule amends those regulations by encouraging the
individuals who are principally responsible for the scientific or
technical direction of the proposed work to be designated as the
principal investigator, making it a condition that Federal funds remain
for an extension of a Phase I grant and that an extension will not
normally exceed 12 months, requiring that when purchasing equipment or
products with agreement funds that only American-made items are
purchased to the extent possible, and making a few additional changes.
CSREES is publishing these regulations in their entirety in order to
enhance their use by the public and to ensure expeditious submission
and processing of grant proposals.
(The CSREES was established by Pub. L. 103-354, the Federal Crop
Insurance Reform and Department of Agriculture Reorganization Act of
1994, and the functions of the Cooperative State Research Service
(CSRS) were transferred to the CSREES by the Secretary of Agriculture
in the Secretary's Memorandum 1010-1, October 20, 1994.)
EFFECTIVE DATE: May 20, 1996.
FOR FURTHER INFORMATION CONTACT:
Louise Ebaugh, Director, Office of Extramural Programs, Cooperative
State Research, Education, and Extension Service, U.S. Department of
Agriculture, AG Box 2245, Washington, DC 20250-2245. Telephone: (202)
401-5024.
SUPPLEMENTARY INFORMATION:
Paperwork Reduction
Under the provisions of the Paperwork Reduction Act of 1980 (44
U.S.C. Chapter 35), the collection of information requirements
contained in this final rule have been approved under OMB Document Nos.
0524-0022, 0524-0025, and 0524-0026.
Classification
This rule has been reviewed under Executive Order 12866, and it has
been determined that it is not a ``significant regulatory action'' rule
because it will not have an annual effect on the economy of $100
million or more or adversely and materially affect a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities. This rule will not create any serious inconsistencies or
other wise interfere with any actions taken or planned by another
agency. It will not materially alter the budgetary impact of
entitlements, grants, user fees or loan programs and does not raise
novel legal or policy issues arising out of legal mandates, the
President's priorities, or principles set forth in Executive Order No.
12866. In addition, it will not have a significant impact on a
substantial number of small entities as defined in the Regulatory
Flexibility Act, Pub. L. 96-534 (5 U.S.C. 601 et seq.). This rule has
been reviewed in accordance with Executive Order No. 12778, Civil
Justice Reform, and the required certification has been made to OMB.
All State and local laws and regulations that are in conflict with this
rule are preempted. No retroactive effect is to be given to this rule.
This rule does not require administrative proceedings before parties
may file suit in court.
Regulatory Analysis
Not required for this rulemaking.
Environmmental Impact Statement
This regulation does not significantly affect the environment.
Therefore, an environmental impact statement is not required under the
National Environmental Policy Act of 1969, as amended.
Catalog of Federal Domestic Assistance
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.212, Small Business Innovation Research (SBIR
Program). For the reasons set forth in the Final Rule-related Notice to
7 CFR Part 3015, Subpart V, 48 FR 29115, June 24, 1983, and pursuant to
the Notice found at 52 FR 22831, June 16, 1987, this program is
excluded from the scope of Executive Order 12372 which requires
intergovernmental consultation with State and local officials.
Background and Purpose
On June 10, 1988, the Department published a Final Rule in the
Federal Register (53 FR 21966-21972), which established Part 3403 of
Title 7, Subtitle B, Chapter XXXIV of the Code of Federal Regulations,
for the purpose of administering the U.S. Department of Agriculture's
Small Business Innovation Research (SBIR) Grants Program conducted
under the authority of the Small Business Innovation Development Act of
1982, as amended (15 U.S.C. 638) and section 630 of the Act making
appropriations for Agriculture, Rural Development, and Related
Agencies' programs for fiscal year ending September 30, 1987, and for
other purposes, as made applicable by section 101(a) of Pub. L. No. 99-
591, 100 Stat. 3341. This rule established and codified the procedures
to be followed in the solicitation of competitive small business
innovation research proposals, the evaluation of such proposals, and
the award of grants under this program. On September 20, 1991, the
Department published a Final rule in the Federal Register (56 FR 47882-
47889), which amended the Cooperative State Research Service (CSRS)
regulations relating to the Small Business Innovation Research Grants
Program. On December 30, 1994, the Department published a Final Rule in
the Federal Register (59 FR 68072) which amended 7 CFR Chapter XXXIV to
reflect the abolishment of CSRS and the establishment of CSREES. On
August 17, 1995, the Department published a notice in the Federal
Register (60 FR 42990) requesting comments on proposed revisions to the
Proposed Rule--Small Business Innovation Research (SBIR) Grants
Program. Interested parties were invited to submit comments. The
Department received one comment from a Federal agency. The comment was
considered in developing this final revision.
Comment and Response
General
Comment: The commentor suggested that the rule be amended to
associate award eligibility and approval procedures more closely with
performance and financial accountability.
Response: This comment requires a thorough examination since it has
far-reaching implications not only for the SBIR program but for other
[[Page 25367]]
Departmental programs. The Department is currently establishing a
committee to evaluate and consider the suggestions and will respond
directly to the commenting agency when appropriate. If further changes
to the program are deemed necessary, the Department will publish a
proposed amendment to the SBIR rule and invite public comments.
List of Subjects in 7 CFR Part 3403
Grant Programs--Agriculture, Grant administration.
For the reasons set out in the preamble, Title 7, Subtitle B,
Chapter XXXIV, Part 3403 of the Code of Federal Regulations is revised
to read as follows:
PART 3403--SMALL BUSINESS INNOVATION RESEARCH GRANTS PROGRAM
Subpart A--General Information
Sec.
3403.1 Applicability of regulations.
3403.2 Definitions.
3403.3 Eligibility requirements.
Subpart B--Program Description
3403.4 Three-phase program.
Subpart C--Preparation and Submission of Proposals
3403.5 Requests for proposals.
3403.6 General content of proposals.
3403.7 Proposal format for phase I applications.
3403.8 Proposal format for phase II applications.
3403.9 Submission of proposals.
Subpart D--Proposal Review and Evaluation
3403.10 Proposal review.
3403.11 Phase I evaluation criteria.
3403.12 Phase II evaluation criteria.
3403.13 Availability of information.
Subpart E--Supplementary Information
3403.14 Terms and conditions of grant awards.
3403.15 Notice of grant awards.
3403.16 Use of funds; changes.
3403.17 Other Federal statutes and regulations that apply.
3403.18 Other conditions.
Authority: 5 U.S.C. 638.
Subpart A--General Information
Sec. 3403.1 Applicability of regulations.
(a) The regulations of this part apply to small business innovation
research grants awarded under the general authority of section 630 of
the Act making appropriations for Agriculture, Rural Development, and
Related Agencies' programs for fiscal year ending September 30, 1987,
and for other purposes, as made applicable by section 101(a) of Public
Law 99-591, 100 Stat. 3341, and the provisions of the Small Business
Innovation Development Act of 1982, as amended (15 U.S.C. 638). The
Small Business Innovation Development Act of 1982, as amended, mandates
that each Federal agency with an annual extramural budget for research
or research and development in excess of $100 million participate in a
Small Business Innovation Research (SBIR) program by reserving a
statutory percentage of its annual extramural budget for award to small
business concerns for research or research and development in order to
stimulate technological innovation, use small business to meet Federal
research and development needs, increase private sector
commercialization of innovations derived from Federal research and
development, and foster and encourage the participation of socially and
economically disadvantaged small business concerns and women-owned
small business concerns in technological innovation. The U.S.
Department of Agriculture (USDA) will participate in this program
through the issuance of competitive research grants which will be
administered by the Office of Competitive Research Grants and Awards
Management, Cooperative State Research, Education, and Extension
Service (CSREES).
(b) The regulations of this part do not apply to research grants
awarded by the Department of Agriculture under any other authority.
Sec. 3403.2 Definitions.
As used in this part:
Ad hoc reviewers means experts or consultants, qualified by
training and experience in particular scientific or technical fields to
render expert advice on the scientific or technical merit of grant
applications in those fields, who review on an individual basis one or
several of the eligible proposals submitted to this program in their
area of expertise and who submit to the Department written evaluations
of such proposals.
Awarding official means any officer or employee of the Department
who has the authority to issue or modify research project grant
instruments in behalf of the Department.
Budget period means the interval of time into which the project
period is divided for budgetary and reporting purposes.
Commercialization means the process of developing markets and
producing and delivering products or services for sale (whether by the
originating party or by others); as used here, commercialization
includes both government and commercial markets.
Department means the Department of Agriculture.
Funding agreement is any contract, grant, or cooperative agreement
entered into between any Federal agency and any small business for the
performance of experimental, developmental, or research work funded in
whole or in part by the Federal Government.
Grantee means the small business concern designated in the grant
award document as the responsible legal entity to whom a grant is
awarded under this part.
Peer review group means experts or consultants, qualified by
training and experience in particular scientific or technical fields to
give expert advice on the scientific and technical merit of grant
application in those fields, who assemble as a group to discuss and
evaluate all of the eligible proposals submitted to this program in
their area of expertise.
Principal investigator means a single individual designated by the
grantee in the grant application and approved by the Department who is
responsible for the scientific or technical direction of the project.
Therefore, the individual should have a scientific and technical
background.
Program solicitation is a formal request for proposals whereby an
agency notifies the small business community of its research or
research and development needs and interests in selected areas and
invites proposals from small business concerns in response to those
needs.
Project means the particular activity within the scope of one of
the research topic areas identified in the annual solicitation of
applications, which is supported by a grant award under this part.
Project period means the total length of time that is approved by
the Department for conducting the research project as outlined in an
approved grant application.
Research or research and development (R&D) means any activity which
is:
(1) A systematic, intensive study directed toward greater knowledge
or understanding of the subject studied;
(2) A systematic study directed specifically toward applying new
knowledge to meet a recognized need; or
(3) A systematic application of knowledge toward the production of
useful materials, devices, and systems or methods, including design,
development, and improvement of prototypes and new processes to meet
specific requirements.
[[Page 25368]]
Research project grant means the award by the Department of funds
to a grantee to assist in meeting the costs of conducting for the
benefit of the public an identified project which is intended and
designed to establish, discover, elucidate, or confirm information or
the underlying mechanisms relating to a research topic area identified
in the annual solicitation of applications.
Small business concern means a concern which at the time of award
of phase I and Phase II funding agreements meets the following
criteria:
(1) Is organized for profit, independently owned or operated, is
not dominant in the field in which it is proposing, has its principal
place of business located in the United States, has a number of
employees not exceeding 500 (full-time, part-time, temporary, or other)
in all affiliated concerns owned or controlled by a single parent
concern, and meets the other regulatory requirements outlined in 13 CFR
part 121. Business concerns, other than licensed investment companies,
or State development companies qualifying under the Small Business
Investment Act of 1958, 15 U.S.C. 661, et seq., are affiliates of one
another when directly or indirectly one concern controls or has the
power to control the other or third parties (or party) control or have
the power to control both. Control can be exercised through common
ownership, common management, and contractual relationships. The term
``affiliates'' is defined in greater detail in 13 CFR 121.401(a)
through (m). The term ``number of employees'' is defined in 13 CFR
121.407. Business concerns include, but are not limited to, any
individual, partnership, corporation, joint venture, association, or
cooperative.
(2) Is at least 51 percent owned, or in the case of a publicly
owned business at least 51 percent of its voting stock is owned, by
United States citizens or lawfully admitted permanent resident aliens.
Socially and economically disadvantaged individual is a member of
any of the following groups: Black Americans, Hispanic Americans,
Native Americans, Asian-Pacific Americans, or Subcontinent Asian
Americans, other groups designated from time to time by the Small
Business Administration (SBA) to be socially disadvantaged, or any
other individual found to be socially and economically disadvantaged by
the SBA pursuant to section 8(a) of the Small Business Act, 15 U.S.C.
637(a).
Socially and economically disadvantaged small business concern is
one that is:
(1) At least 51 percent owned by
(i) An Indian tribe or a native Hawaiian organization, or
(ii) One or more socially and economically disadvantaged
individuals; and
(2) Whose management and daily business operations are controlled
by one or more socially and economically disadvantaged individuals.
Subcontract is any agreement, other than one involving an employer-
employee relationship, entered into by a Federal Government funding
agreement awardee calling for supplies or services required solely for
the performance of the original funding agreement.
United States means the several States, the territories and
possessions of the United States, the Commonwealth of Puerto Rico, the
Trust Territory of the Pacific Islands, and the District of Columbia.
Women-owned small business concern means a small business concern
that is at least 51 percent owned by a woman or women who also control
and operate it. ``Control'' as used in this context means exercising
the power to make policy decisions. ``Operate'' as used in this context
means being actively involved in the day-to-day management of the
concern.
Sec. 3403.3 Eligibility requirements.
(a) Eligibility of firm. (1) Each organization submitting a
proposal must qualify as a small business for research purposes, as
defined in Sec. 3403.2. Joint ventures and limited partnerships are
eligible to apply for and to receive research grants under this
program, provided that the entity created qualifies as a small business
in accordance with section 2(3) of the Small Business Act (15 U.S.C.
632) and as defined in Sec. 3403.2 of this part. For both phase I and
phase II the research must be performed in the United States.
(2) A minimum of two-thirds of the research or analytical work, as
determined by budget expenditures, must be performed by the proposing
organization under phase I grants. For phase II awards, a minimum of
one-half of the research or analytical effort must be conducted by the
proposing firm. The space used by the SBIR awardee to conduct the
research must be space over which it has exclusive control for the
period of the grant.
(b) Eligibility of principal investigator. (1) It is strongly
suggested that the individual responsible for the scientific or
technical direction of the project be designated as the principal
investigator. In addition, the primary employment of the principal
investigator must be with the proposing firm at the time of award and
during the conduct of the proposed research. Primary employment means
that more than one-half of the principal investigator's time is spent
in the employ of the small business. Primary employment with the small
business applicant precludes full-time employment with another
organization.
(2) If the proposed principal investigator is employed by another
organization (e.g., university or another company) at the time of
submission of the application, documentation must be submitted with the
proposal from the principal investigator's current employer verifying
that, in the event of an SBIR award, he/she will become a less-than
half-time employee of such organization and will remain so for the
duration of the SBIR project.
Subpart B--Program Description
Sec. 3403.4 Three-phase program.
The Small Business Innovation Research Grants Program will be
carried out in three separate phases described in this section. The
first two phases are designed to assist USDA in meeting its research
and development objectives and will be supported with SBIR funds. The
purpose of the third phase is to pursue the commercial applications or
objectives of the research carried out in phases I and II through the
use of private or Federal non-SBIR funds.
(a) Phase I is the initial stage in which the scientific and
technical merit and feasibility of an idea related to one of the
research areas described in the program solicitation is evaluated,
normally for a period not to exceed 6 months. In special cases,
however, where a proposed research project requires more than 6 months
to complete, a longer grant period may be considered. A proposer of a
phase I project with an anticipated duration beyond 6 months should
specify the length and duration in the proposal at the time of its
submission to USDA in order for it to be considered at the time of
award. (See Sec. 3403.16(c) for changes in project period subsequent to
award).
(b) Phase II is the principal research or research and development
effort in which the results from Phase I are expanded upon and further
pursued, normally for a period not to exceed 24 months. Only those
small businesses previously receiving phase I awards are eligible to
submit phase II proposals. For each phase I project funded the awardee
may apply for a phase II award only once. Phase I awardees who for
valid reasons cannot apply for phase II
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support in the next fiscal year funding cycle may apply for support not
later than the second fiscal year funding cycle.
(c) Phase III is to stimulate technological innovation and the
national return on investment from research through the pursuit of
commercial objectives resulting from the work supported by SBIR funding
carried out in phases I and II. This portion of the project is
performed by the small business firm and privately funded or Federally
funded by a non-SBIR source through the use of a follow-on funding
commitment. A follow-on funding commitment is an agreement between the
small business firm and a provider of follow-on capital for a specified
amount of funds to be made available to the small business for further
development of their effort upon achieving certain mutually agreed upon
technical objectives during phase II.
Subpart C--Preparation and Submission of Proposals
Sec. 3403.5 Requests for proposals.
(a) Phase I. A program solicitation requesting phase I proposals
will be prepared each fiscal year in which funds are made available for
this purpose. The solicitation will contain information sufficient to
enable eligible applicants to prepare grant proposals and will include
descriptions of specific research topic areas which the Department will
support during the fiscal year involved, forms to be completed and
submitted with proposals, and special requirements. A notice will be
published in the Federal Register informing the public of the
availability of the program solicitation.
(b) Phase II. For each fiscal year in which funds are made
available for this purpose, the Department will send a letter
requesting phase II proposals from the phase I grantees eligible to
apply for phase II funding in that fiscal year. The letter will be
accompanied by the solicitation which contains information sufficient
to enable eligible applicants to prepare grant proposals and includes
forms to be submitted with proposals as well as special requirements.
Sec. 3403.6 General content of proposals.
(a) The proposed research must be responsive to one of the USDA
program interests stated in the research topic descriptions of the
program solicitation.
(b) Proposals must cover only scientific/technological research
activities. A firm must not propose product development, technical
assistance, demonstration projects, classified research, or patent
applications. Many of the research projects supported by the SBIR
program lead to the development of new products based upon the research
results obtained during the project. However, projects that seek
funding solely for product development where no research is involved,
i.e. the funds are needed to permit the development of a project based
on previously completed research, will not be accepted. Literature
surveys should be conducted prior to preparing proposals for submission
and must not be proposed as a part of the SBIR phase I or phase II
effort. Proposals principally for the development of proven concepts
toward commercialization or for market research should not be submitted
since such efforts are considered the responsibility of the private
sector and therefore are not supported by USDA.
(c) A proposal must be limited to only one topic. The same proposal
may not be submitted under more than one topic. However, an
organization may submit separate proposals on the same topic. Where
similar research is discussed under more than one topic, the proposer
should choose that topic whose description appears most relevant to the
proposer's research concept. Duplicate proposals will be returned to
the applicant without review.
(d) Phase I applicants should submit a research proposal of no more
than 25 pages, including cover page, budget, and all proposal-related
enclosures or attachments. The text must be prepared on only one side
of the page using standard size (8\1/2\'' x 11''; 21.6 cm x 27.9
cm) white paper, 2.5 cm margins and type no smaller than 11 point font
size regardless of whether it is single or double spaced. In the
interest of equity to all proposers, no additional attachments,
appendixes, or references beyond the 25-page limitation will be
considered in the proposal evaluation process, and proposals in excess
of the 25-page limitation will not be considered for review or award.
In addition, supplementary materials, revisions, and/or substitutions
will not be accepted after the due date for proposals. Phase II
applicants should submit a research proposal of no more than 50 pages,
including cover page, budget, and all proposal-related enclosures or
attachments.
Sec. 3403.7 Proposal format for phase I applications.
(a) Cover sheet. Photocopy and complete Form CSREES-667 in the
program solicitation. The original of the cover sheet must at a minimum
contain the pen-and-ink signatures of the proposed principal
investigator(s) and the authorized organizational official. A proposal
which does not contain the signature of the authorized organizational
official will not be considered a legal document and will be returned
to the proposing small business firm without review. All other copies
of the proposal must also contain a cover sheet, but facsimile or
photocopied signatures will be accepted. The title should be a brief
(80-character maximum), clear, specific designation of the research
proposed. It will be used to provide information to Congress and also
will be used in issuing press releases. Therefore, it should not
contain highly technical words. In addition, phrases such as
``investigation of'' or ``research on'' should not be used.
(b) Project summary. Photocopy and complete Form CSREES-668 in the
program solicitation. The technical abstract should include a brief
description of the problem or opportunity, project objectives, and a
description of the effort. Anticipated results and potential commercial
applications of the proposed research also should be summarized in the
space provided. Keywords, to be provided in the last block on the page,
should characterize the most important aspects of the project. The
project summary of successful proposals may be published by USDA and,
therefore, should not contain proprietary information.
(c) Technical content. The main body of the proposal should
include:
(1) Identification and significance of the problem or opportunity.
Clearly state the specific technical problem or opportunity addressed
and its importance.
(2) Background and rationale. Indicate the overall background and
technical approach to the problem or opportunity and the part that the
proposed research plays in providing needed results.
(3) Relationship with future research or research and development.
Discuss the significance of the phase I effort in providing a
foundation for the phase II R&D effort. State the anticipated results
of the approach if the project is successful (phases I and II). This
should address:
(i) The technical, economic, social, and other benefits to the
Nation and to users of the results such as the commercial sector, the
Federal Government, or other researchers;
(ii) The estimated total cost of the approach relative to benefits;
and, if appropriate,
[[Page 25370]]
(iii) Any specific policy issues or decisions which might be
affected by the results.
(4) Phase I technical objectives. State the specific objectives of
the phase I research or research and development effort, including the
technical questions it will try to answer to determine the feasibility
of the proposed approach.
(5) Phase I work plan. This work plan must provide an explicit,
detailed description of the phase I research or research and
development approach. The plan should indicate the tasks to be
performed as well as how and where the work will be carried out. The
phase I effort should attempt to determine the technical feasibility of
the proposed concept. The work plan should be linked with the technical
objectives of the research and the questions the effort is designed to
answer. Therefore, it should flow logically from Sec. 3403.7(c)(4) of
this part. This section should constitute a substantial portion of the
total proposal.
(6) Related research or research and development. Describe the
significant research or research and development activities from
relevant literature that are directly related to the proposed effort,
including any conducted by the principal investigator or by the
proposing firm, how it relates to the proposed effort, and any planned
coordination with outside sources. The proposer must persuade reviewers
that he or she is aware of related research in the selected subject.
(d) Key personnel and bibliography. Identify key personnel involved
in the effort, including information on their directly related
education and experience. For each key person, provide a chronological
list of the most recent representative publications in the topic area
during the preceding 5 years, including those in press. (List the
authors (in the same order as they appear on the paper), the full
title, and the complete reference as these usually appear in journals.
Where vitae are extensive, summaries that focus on most relevant
experience or publications may be necessary to meet the proposal size
limitation in phase I and phase II.
(e) Facilities and equipment. Describe the types, location, and
availability of instrumentation and physical facilities necessary to
carry out the work proposed. Items of equipment to be purchased must be
fully justified under this section.
(f) Consultants. Involvement of university or other consultants in
the planning and research stages of the project is permitted and may be
particularly helpful to small firms which have not previously received
Federal research awards. If such involvement is intended, it should be
described in detail. Proposals must include letters from proposed
consultants indicating willingness to serve in order for such
participation to be evaluated during the proposal review process. (See
Sec. 3403.11(d) or Sec. 3403.12(5), as appropriate).
(g) Potential post application. Briefly describe:
(1) Whether and by what means the proposed research appears to have
potential commercial application; and
(2) Whether and by what means the proposed research appears to have
potential use by the Federal Government. Firms with prior USDA SBIR
grant support should summarize their progress in commercializing the
results of that research. Past performance in the commercialization
process may be a consideration in award decisions.
(h) Current and pending support. If a proposal, substantially the
same as the one being submitted, has been previously funded or is
currently funded, pending, or about to be submitted to another Federal
agency or to USDA in a separate action, the proposer must provide the
following information:
(1) Name and address of the agency(s) to which a proposal was
submitted, or will be submitted, or from which an award is expected or
has been received.
(2) Date of actual or anticipated proposal submission or date of
award, as appropriate.
(3) Title of proposal or award, identifying number assigned by the
agency involved, and the date of program solicitation under which the
proposal was submitted or the award was received.
(4) Applicable research topic area for each proposal submitted or
award received.
(5) Title of research project.
(6) Name and title of principal investigator for each proposal
submitted or award received. USDA will not make awards that duplicate
research funded (or to be funded) by other Federal agencies.
(i) Cost-breakdown on proposal budget. Photocopy and complete form
CSREES-55 in the program solicitation only for the phase under which
you are currently applying. (An applicant for phase I funding should
not submit both phase I and II budgets.) Please note the following in
completing the budget:
(1) Salaries and wages. Indicate the number and kind of personnel
for whom salary support is sought. For key personnel, also indicate the
number of work months of involvement to be supported with USDA funds
(see blocks labeled ``CSREES Funded Work Months''), and explain how the
level of compensation was established, e.g., the hourly rate of pay,
the monthly rate of pay, or the yearly rate of pay.
(2) Equipment. Performing organizations are expected to have
appropriate facilities, suitably furnished and equipped. Items of
equipment may be requested provided that they are specifically
identified and adequately justified, but such requests should normally
not exceed 10% of the budget for phase I. When purchasing equipment or
a product under the SBIR funding agreement, the awardee should purchase
only American-made items whenever possible. Equipment is defined as an
article of nonexpendable, tangible personal property having a useful
life of more than 2 years and an acquisition cost of $500 or more per
unit. Vesting of title to equipment purchased with funds provided under
an SBIR funding agreement will be determined by USDA based upon whether
such transfer would be more cost effective than recovery of the
property by the government. Awardees should plan to lease expensive
equipment.
(3) Travel. The inclusion of travel will be carefully reviewed with
respect to need and appropriateness for the research proposed. Foreign
travel may not be included in the phase I budget.
(4) Subcontracting limits. Subcontracting may not exceed one-third
of the research or analytical effort during phase I. In addition,
subcontractors must perform their portion of the work in the United
States. If subcontracting costs are anticipated, they should be
indicated in block I, ``All Other Direct Costs,'' on the budget sheet.
A breakdown of subcontractual costs is required. For proposals
involving subcontractual arrangements, the applicant must submit an
agreement or letter of consent signed by the subcontractor in order for
such participation to be evaluated during the proposal review process.
(5) Fee. A reasonable fee not to exceed 7% is permitted under this
program. All fees are subject to negotiation with USDA. If a fee is
requested, the amount should be indicated in block M on the budget
sheet.
(6) Indirect costs. If available, the current rate negotiated with
the cognizant Federal negotiating agency should be used, unless
restricted by statute. Indirect costs may not exceed the lesser of the
negotiated rate or the rate restricted by statute. If no rate has been
negotiated, a reasonable dollar amount in lieu of indirect costs may be
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requested, which will be subject to approval by USDA. A proposer may
elect not to charge direct costs and, instead, use all grant funds for
direct costs. If a negotiated rate is used, the percentage and base
should be indicated in the space allotted under item K on the budget
sheet. If indirect costs are not charged, the phrase ``None requested''
should be written in this space.
(7) Cost-sharing. Cost-sharing is permitted for proposals under
this program; however, cost-sharing is not required nor will it be an
evaluation factor in considering the competitive merit of proposals
submitted.
(j) Research involving special considerations. (1) If the proposed
research will involve recombinant DNA molecules, human subjects at
risk, or laboratory animal care, the proposal must so indicate and
include an assurance statement (Form CSREES-662) as the last page of
the proposal. The original of the assurance statement must at a minimum
contain the pen-and-ink signature of the authorized organizational
official. This form will not be considered a part of the 25-page
limitation for Phase I proposals and the 50-page limitation for Phase
II proposals. In order to complete the assurance statement, the
proposer may be required to have the research plan reviewed and
approved by an appropriate ``Institutional Review Board'' prior to
commencing actual substantive work. It is suggested that proposers
contact local universities, colleges, or nonprofit research
organizations which have established such reviewing mechanisms to have
this service performed.
(2) Guidelines to be applied and observed when conducting such
research are:
(i) Recombinant DNA Molecules. ``Guidelines for Research Involving
Recombinant DNA Molecules'' issued by the National Institutes of
Health, as revised.
(ii) Human Subjects at Risk. Regulations issued by the Department
of Health and Human Services. (See 7 CFR Part 1c.)
(iii) Laboratory Animal Care. Regulations issued by the Department
of Agriculture. (See 9 CFR Parts 1, 2, 3, and 4.)
(k) Proprietary information. (1) If a proposal contains proprietary
information that constitutes a trade secret, proprietary commercial or
financial information, confidential personal information, or data
affecting the national security, it will be treated in confidence to
the extent permitted by law, provided the information is clearly marked
by the proposer with the term ``confidential proprietary information''
is confided to a separate page or pages, and provided the following
legend also appears in the designated area at the bottom of the
proposal's cover sheet (Form CSREES-667):
The following pages (specify) contain proprietary information
which (name of proposing organization) requests not be released to
persons outside the Government, except for purposes of evaluation.
(2) USDA by law is required to make the final decision as to
whether the information is required to be kept in confidence.
Information contained in unsuccessful proposals will remain the
property of the proposer. However, USDA will retain for one year one
file copy of all proposals received; extra copies will be destroyed.
Public release of information for any proposal submitted will be
subject to existing statutory and regulatory requirements. Any proposal
which is funded will be considered an integral part of the award and
normally will be made available to the public upon request except for
designated proprietary information that is determined by USDA to be
proprietary information.
(3) The inclusion of proprietary information is discouraged unless
it is necessary for the proper evaluation of the proposal. ``If
proprietary information is to be included, it should be limited, set
apart from other text on a separate page, and keyed to the text by
numbers.'' It should be confided to a few critical technical items
which, if disclosed, could jeopardize the obtaining of foreign or
domestic patents. Trade secrets, salaries, or other information which
could jeopardize commercial competitiveness should be similarly keyed
and presented on a separate page. ``Proposals or reports which attempt
to restrict dissemination of large amounts of information may be found
unacceptable by USDA. Any other legend than that listed in paragraph
(k)(1) of this section may be unacceptable to USDA and may constitute
grounds for return of the proposal without further consideration.''
Without assuming any liability for inadvertent disclosure, USDA will
limit dissemination of such information to its employees and, where
necessary for the evaluation of the proposal, to outside reviewers on a
confidential basis.
(l) Rights in data developed under SBIR funding Agreement. The SBIR
legislation provides for ``retention of rights in data generated in the
performance of the contract by the small business concern.''
(1) The legislative history clarifies that the intent of the
statute is to provide authority for the participating agency to protect
technical data generated under the funding agreement, and to refrain
from disclosing such data to competitors of the small business concern
or from using the information to produce future technical procurement
specifications that could harm the small business concern that
discovered and developed the innovation until the small business
concern has a reasonable chance to seek patent protection, if
appropriate.
(2) Therefore, except for program evaluation, participating
agencies shall protect such technical data for a period of not less
than 4 years from the completion of the project from which the data
were generated unless the agencies obtain permission to disclose such
data from the contractor or grantee. The government shall retain a
royalty-free license for government use of any technical data delivered
under an SBIR funding agreement whether patented or not.
(m) Organizational management information. Before the award of an
SBIR funding agreement, USDA requires the submission of certain
organization management, personnel and financial information to assure
the responsibility of the proposer. Form CSRS-666 (``Organizational
Information'') and Form CSRS-665 (``Assurance of Compliance with the
Department of Agriculture Regulations Under Title VI of the Civil
Rights Act of 1964, as amended'') are used for this purpose. This
information is not required unless a project is recommended for
funding, and then it is submitted on a one-time basis only. However,
new forms should be submitted if a small business has undergone
significant changes in organizations, personnel, finance, or policies
including those relating to civil rights.
Sec. 3403.8 Proposal format for phase II applications.
(a) Cover sheet. Follow instructions found in Sec. 3403.7(a) of
this part.
(b) Project summary. Follow instructions found in Sec. 3403.7(b) of
this part.
(c) Phase I results. The proposal should contain an extensive
section that lists the phase I objectives and makes detailed
presentation of the phase I results. This section should establish the
degree to which phase I objectives were met and feasibility of the
proposed research project was established.
(d) Proposal. Since phase II is the principal research and
development effort, proposals should be more
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comprehensive than those submitted under phase I. However, the outline
contained in Sec. 3403.7(c) of this part should be followed, tailoring
the information requested to the phase II project.
(e) Coast breakdown on proposal budget. (1) For phase II, a
detailed budget is required for each year of requested support. In
addition, a summary budget is required detailing the requested support
for the overall project period. Form CSREES-55, ``Proposal Budget,'' is
to be used for this purpose and may be photocopied as necessary.
(2) Travel. Foreign travel may be included as necessary in the
phase II budget. Such a request will be reviewed with respect to need
and appropriateness for the research proposed and therefore should be
adequately justified in the proposal.
(3) Subcontracting limits. The instructions found in
Sec. 3403.7(i)(4) of this part apply to phase II proposals except that
the subcontracting limit is changed from one-third to one-half of the
research or analytical effort.
(f) Organizational management information. Each phaser II awarded
will be asked to submit an updated statement of financial condition
(such as the latest audit report, financial statements or balance
sheet).
(g) Follow-on funding commitment. If the proposer has obtained a
contingent commitment for phase III follow-on funding, it should be
forwarded with the phase II application. It will not count as part of
the 50-page limit for phase II application.
(h) Documentation of multiple phase II awards. (1) An applicant
that submits a proposal for a funding agreement for phase I and that
has received more than 15 phase II awards during the preceding 5 fiscal
years must document the extent to which it was able to secure phase III
funding to develop concepts resulting from previous phase II award.
This documentation should include the name of the awarding agency, date
of award, funding agreement number, topic or subtopic title, amount and
date of phase II funding and commercialization status for each phase II
award.
(2) USDA shall collect and retain the information submitted under
paragraph (h)(1) at least until the General Accounting Office submits
the report required under section 106 of the Small Business Research
and Development Enhancement Act of 1992.
Sec. 3403.9 Submission of proposals.
The program solicitation for phase I proposals and the letter
requesting phase II proposals will provide the deadline date for
submitting proposals, the number of copies to be submitted, and the
address where proposals should be mailed or delivered.
Subpart D--Proposal Review and Evaluation
Sec. 3403.10 Proposal review.
(a) All research grant applications will be acknowledged.
(b) Phase I and phase II proposals will be judged competitively in
a two-stage process, based primarily upon scientific or technical
merit. First, each proposal will be screened by USDA scientists to
ensure that it is responsive to stated requirements contained in the
program solicitation. Proposals found to be responsive will be
technically evaluated by peer scientists knowledgeable in the
appropriate scientific field using the criteria listed in Sec. 3403.11
or Sec. 3403.12 of this part, as appropriate. Proposals found to be
nonresponsive will be returned to the proposing firm without review.
(c) Both internal and external peer reviewers may be used during
the technical evaluation stage of this process. Selections will be made
from among recognized specialists who are uniquely qualified by
training and experience in their respective fields to render expert
advice on the merit of proposals received. It is anticipated that such
experts will include those located in universities, Government, and
non-profit research organizations. If possible, USDA intends that peer
review groups shall be balanced with minority and female representation
and with an equitable age distribution.
(d) Technical reviewers will base their conclusions and
recommendations on information contained in the phase I or phase II
proposal. It cannot be assumed that reviewers are acquainted with any
experiments referred to within a proposal, with key individuals, or
with the firm itself. Therefore, the proposal should be self-contained
and written with the care and thoroughness accorded papers for
publication.
(e) Final decisions will be made by USDA based upon the ratings
assigned by reviewers and consideration of other factors, including the
potential commercial application, possible duplication of other
research, any critical USDA requirements, and budget limitation. In
addition, the follow-on funding commitment will be a consideration for
phase II proposals.
Sec. 3403.11 Phase I evaluation criteria.
USDA plans to select for award those proposals offering the best
value to the Nation, with approximately equal consideration given to
each of the following criteria except for paragraph (a) of this section
which will receive twice the value of any of the other items:
(a) The scientific/technical quality of the phase I research plan
and its relevance to the stated objectives, with special emphasis on
innovativeness and originality.
(b) Importance of the problem or opportunity and anticipated
benefits of the proposed research, if successful.
(c) Adequacy of the phase I objectives to show incremental progress
toward proving the feasibility of approach.
(d) Qualifications of the principal investigator(s), other key
staff and consultants, and the probable adequacy of available or
obtainable instrumentation and facilities.
Sec. 3403.12 Phase II evaluation criteria.
(a) A phase II proposal may be submitted only by a phase I awardee.
The phase II proposal will be reviewed for overall merit based on the
following criteria with each item receiving approximately equal weight
except for paragraphs (a) (1) and (2) of this section, which will
receive twice the value of any of the other items:
(1) The scientific/technical quality of the proposed research, with
special emphasis on innovativeness and originality.
(2) Degree to which phase I objectives were met and feasibility was
established.
(3) The technical, economic, and/or social importance of the
problem or opportunity and anticipated benefits if Phase II research is
successful.
(4) The adequacy of the phase II objectives to meet the problem or
opportunity.
(5) The qualifications of the principal investigator(s) and other
key personnel to carry out the proposed work.
(6) Reasonableness of the budget requested for the work proposed.
(b) In the event that two or more phase II proposals are of
approximately equal technical merit, the follow-on funding commitment
for continued development in phase III will be an important
consideration. The value of the commitment will depend upon the degree
of commitment made by non-Federal investors, with the maximum value
resulting from a signed agreement with reasonable terms for an amount
at least equal to the funding requested from USDA in phase II.
Sec. 3403.13 Availability of information.
Information regarding the peer review process will be made
available to the extent permitted under the Freedom of
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Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 552a), the
SBIR policy Directive, and implementing Departmental and other Federal
regulations. Implementing Departmental regulations are found at 7 CFR
part 1.
Subpart E--Supplementary Information
Sec. 3403.14 Terms and conditions of grant awards.
Within the limit of funds available for such purpose, the awarding
official shall make research project grants to those responsible,
eligible applicants whose proposals are judged most meritorious in the
announced program areas under the evaluation criteria and procedures
set forth in this part. The beginning of the project period shall be no
later than September 30 of the Federal fiscal year in which the project
is approved for support. All funds granted under this part shall be
expended solely for the purpose for which the funds are granted in
accordance with the approved application and budget, the regulations of
this part, the terms and conditions of the award, the Federal
Acquisition Regulation (48 CFR part 31), and the Department's Uniform
Federal Assistance Regulations (7 CFR part 3015).
Sec. 3403.15 Notice of grant awards.
(a) The grant award document shall include, at a minimum, the
following:
(1) Legal name and address of performing organization.
(2) Title of project.
(3) Name(s) and address(es) of Principal Investigator(s).
(4) Identifying grant number assigned by the Department.
(5) Project period, which specifies how long the Department intends
to support the effort.
(6) Total amount of Federal financial assistance approved during
the project period.
(7) Legal authorities under which the grant is awarded.
(8) Approved budget plan for categorizing allocable project funds
to accomplish the stated purpose of the grant award.
(9) Other information or provisions deemed necessary by the
Department to carry out its granting activities or to accomplish the
purpose of a particular research project grant.
(b) The notice of grant award, in the form of a letter, will
provide pertinent instructions and information to the grantee which are
not included in the grant award document described in paragraph (a).
Sec. 3403.16 Use of funds; changes.
(a) Delegation of fiscal responsibility. The grantee may not in
whole or in part delegate or transfer to another person, institution,
or organization the responsibility for use or expenditure of grant
funds.
(b) Change in project plans. (1) The permissible changes by the
grantee, principal investigator(s), or other key project personnel in
the approved research project grant shall be limited to changes in
methodology, techniques, or other aspects of the project to expedite
achievement of the project's approved goals. If the grantee and/or the
principal investigator(s) are uncertain as to whether a change complies
with this provision, the question must be referred to the Department
for a final determination.
(2) Changes in approved goals, or objectives, shall be requested by
the grantee and approved in writing by the Department prior to
effecting such changes. In no event shall requests for such changes be
approved which are outside the scope of the original approved project.
(3) Changes in approved project leadership or the replacement or
reassignment of other key project personnel shall be requested by the
grantee and approved in writing by the Department prior to effecting
such changes.
(4) Transfers of actual performance of the substantive programmatic
work in whole or in part and provisions for payment of funds, whether
or not Federal funds are involved, shall be requested by the grantee
and approved in writing by the Department prior to effecting such
transfers.
(c) Changes in project period. The project period may be extended
by the Department to complete or fulfill the purposes of an approved
project provided Federal funds remain. The extension shall be
conditioned upon prior request by the grantee and approval in writing
by the Department. In such cases the extension will not normally exceed
12 months, the phase I award will still be limited to $55,000, and the
submission of a Phase II proposal will be delayed by one year. The
extension allows the grantee to continue expending the remaining
Federal funds for the intended purpose over the extension period. In
instances where no Federal funds remain, it is unnecessary to approve
an extension since the purpose of the extension is to continue using
Federal funds. The grantee may opt to continue the Phase I project
after the grant's termination and closeout, however, the grantee would
have to do so without additional Federal funds. In the latter case, no
communication with USDA is necessary. However, the maximum delay for
submission of a Phase II proposal remains as specified in
Sec. 3403.4(b).
(d) Changes in approved budget. Changes in an approved budget shall
be requested by the grantee and approved in writing by the Department
prior to instituting such changes if the revision will:
(1) Involve transfers of amounts budgeted for indirect costs to
absorb increase in direct costs;
(2) Involve transfers of amounts budgeted for direct costs to
accommodate changes in indirect cost rates negotiated during a budget
period and not approved when a grant was awarded;
(3) Result in a need or claim for the award of additional funds; or
(4) Involve transfers or expenditures of amounts requiring prior
approval as set forth in the Departmental regulations or in the grant
award.
Sec. 3403.17 Other Federal statutes and regulations that apply.
Several other Federal statutes and/or regulations apply to grant
proposals considered for review or to research project grants awarded
under this part. These include but are not limited to:
7 CFR Part 1--USDA implementation of Freedom of Information Act.
7 CFR Part 1c--USDA implementation of the Federal Policy for the
Protection of Human Subjects;
7 CFR Part 3--USDA implementation of OMB Circular A-129,
Managing Federal Credit Programs.
7 CFR Part 15, Subpart A--USDA implementation of Title VI of the
Civil Rights Act of 1964, as amended.
7 CFR Part 3015--USDA Uniform Federal Assistance Regulations,
implementing OMB directives where applicable (i.e., Circular Nos. A-
102, A-110, A-87, A-21, and A-122) and incorporating provisions of
31 U.S.C. 6301-6308 (formerly the Federal Grant and Cooperative
Agreement Act of 1977, Public Law 95-224), as well as general policy
requirements applicable to recipients of Departmental financial
assistance.
7 CFR Part 3017, as amended--USDA implementation of
Governmentwide Debarment and Suspension (Nonprocurement) and
Governmentwide Requirements for Drug-Free Workplace (Grants), as
amended.
7 CFR Part 3018--USDA implementation of New Restrictions on
Lobbying. Imposes new prohibitions and requirements for disclosure
and certification related to lobbying on recipients of Federal
contracts, grants, cooperative agreements, and loans.
7 CFR Part 3407--CSREES procedures to implement the National
Environmental Policy Act;
[[Page 25374]]
48 CFR Part 31--Contract Cost Principles and Procedures of the
Federal Acquisition Regulation.
29 U.S.C. 794, section 504--Rehabilitation Act of 1973, and 7
CFR Part 15B (USDA implementation of statute), prohibiting
discrimination based upon physical or mental handicap in Federally
assisted programs.
35 U.S.C. 200 et seq.--Bayh-Dole Act, controlling allocation of
rights to inventions made by employees of small business firms and
domestic nonprofit organizations, including universities, in
Federally assisted programs (implementing regulations are contained
in 37 CFR Part 401).
Sec. 3403.18 Other conditions.
The Department may, with respect to any research project grant,
impose additional conditions prior to or at the time of any award when,
in the Department's judgment, such conditions are necessary to assure
or protect advancement of the approved project, the interests of the
public, or the conservation of grant funds.
Done at Washington, D.C., this 10th day of May, 1996.
B.H. Robinson,
Administrator, Cooperative State Research, Education, and Extension
Service.
[FR Doc. 96-12375 Filed 5-17-96; 8:45 am]
BILLING CODE 3410-22-M
