The Role of Small Business Innovation in America’s Space Program

The Senate Committee on Small Business & Entrepreneurship recently held a hearing focusing on the role small businesses will play in NASA’s renewed focus on going back to the Moon and then on to Mars. We have recently touched on the growing impact space exploration is having on small businesses, and vice versa, but this dedicated hearing prompts a closer look at the opportunities small businesses will have for working on space exploration.

Two NASA representatives spoke at the hearing. Jenn Gustetic represented NASA’s Small Business Technology Transfer program (“STTR”). Robert Cabana represented NASA’s Kennedy Space Center. Both highlighted the roles small business will play in NASA’s upcoming directives.

At the outset, Ms. Gustetic’s prepared testimony recognized the push to “return American astronauts to the moon within five years.” This effort will be a launching pad to send astronauts to Mars. Mr. Cabana’s prepared testimony highlighted that while the Apollo program’s moon mission “was a government operation” the upcoming missions will see “NASA and a growing host of partners” working together. Both Ms. Gustetic and Mr. Cabana highlighted the role of the Small Business Innovation Research (“SBIR”) and STTR programs in NASA’s Moon and Mars missions.

While the core SBIR/STTR programs are government-wide, agencies are responsible for managing their own SBIR/STTR programs. For a quick background on the larger SBIR/STTR programs, check out my colleague John Mattox’s blog.

NASA’s SBIR/STTR programs allow it to act as a venture capitalist to “invest in concepts and technologies that have potential beyond a sketch or shelf.” Each program operates in a three phase system which takes a concept from idea to commercialization.

Each phase is described in NASA’s interactive guide. In Phase I, a small business establishes the scientific, technical, and commercial feasibility of a product or service. If a product demonstrates its feasibility then it may be awarded a Phase II contract, which is the research and development (“R&D”) phase. Here, prototypes are made, concepts are fleshed out, and small businesses demonstrate the functionality of their idea. “Phase III is the commercialization of innovative technologies, products, and services” coming out of Phase I or Phase II. Phase III contracts may come from within NASA, or the specific agency administering the SBIR/STTR program, or they may also come from other agencies or businesses wishing to utilize the developed product or service.

Each Phase has its own value and duration. For NASA, the breakdown is as follows:

ProgramValueDuration
Phase ISBIRUp to $125,000Up to 6 months
Phase ISTTRUp to $125,000Up to 13 months
Phase IISBIR/STTRUp to $750,000Up to 24 months
Phase IIISBIR/STTRUnlimitedUnlimited

Ms. Gustetic and Mr. Cabana’s prepared testimonies focused on the impact NASA’s SBIR/STTR programs have had, and will have, on NASA’s success. Ms. Gustetic mentioned that NASA has awarded an average of $139 million in Phase I and Phase II contracts annually since 2011. Mr. Cabana mentioned that through his role at the Kennedy Space Center he has seen “total spend to small business [of] more than $159 million.” All to “fund the research, development, and demonstration of innovative technologies that both fulfill NASA needs and have significant potential for successful commercialization.”

Looking at the values of each Phase, it is evident that NASA has a lot of research projects in the hopper. Ms. Gustetic noted that “[i]n the early 2000s, an average of four funded space 4 companies were started per year; in the last six years, the number of funded new companies have averaged 21 per year.” NASA’s SBIR/STTR programs help facilitate this growth by “seeding the growing, emerging commercial space ecosystem, while also bearing responsibility in providing the patient capital for small businesses to succeed in bringing their innovative technologies to market in a high-cost industry.”

If you have the next game-changing idea I imagine you are already wondering how you can take part of NASA’s SBIR/STTR programs. As with traditional small business set-asides, only certain business are able to participate in the SBIR/STTR programs. Under NASA’s programs, a “small business” is one that:

  • Has 500 employees or less, including any affiliates.
  • Is legally established and organized as a for-profit located in the U.S.
  • Operates primarily in the U.S. or makes a significant contribution to the U.S. economy.
  • Is majority owned and controlled by U.S. citizens or permanent resident aliens

Assuming your business qualifies as “small” under these definitions and you are ready to jump into the mix, we recommend you reach out to NASA’s SBIR/STTR program team and get the ball rolling. While the 2019 SBIR/STTR solicitation periods have closed, you can always get your ducks in a row and keep an eye out next year. In the meantime, do not forget that other agencies also have their own programs with different solicitation timelines.

The possibility of extended space travel seems to have caught the nation’s eye. From NASA going to the Moon and Mars, SpaceX’s ever-cheaper (and bigger) launches, and many other advances (Blue Origin, Made In Space, and Light Sail to name a few), more and more people are thinking about the next frontier. Perhaps your new idea, fostered by NASA’s SBIR/STTR programs, could help send us closer to the stars.