Guest blog by Malcolm A. Meyn, PhD, lead biotechnology consultant at ZForm, LLC.
The addition of an academic partner to an SBIR proposal can add credibility to a company’s investigative team. These partners bring expertise and are often able to complete work unable to be completed at the company. However, for many SBIR applicants, subawards are confusing, and the implications for the SBIR proposal are not well understood. To provide some clarity, I have compiled a short FAQ with answers to provide clarity about the subaward process.
1. What is a subaward? A subaward (also known as a consortium agreement), for SBIR purposes, is a contractual partnership between a small business and a nonprofit, usually academic, institution. It is important to emphasize that the agreement is with the institution, not with the academic PI. Subawards are distinct from fee-for-service contracts a company might have with a CRO or other vendor. With few exceptions, if a non-profit partner provides a budget that includes indirect costs, this a subaward.
2. Are there limits to the subaward budget? For an SBIR, the total subaward budget (direct and indirect costs) cannot exceed 33% of the total research effort budget in Phase 1 or 50% of the total budget in Phase II. Academic indirect rates are often around 70%. Take this into account when planning work and thinking about budgets.
3. What documentation is needed? To be included in an SBIR proposal, a subaward must include the following documents:
a. A letter of intent signed by an organizational representative of the host institution
b. A Statement of Work that describes the work to be done by the academic partner
c. A full budget for the work to be done as part of the subaward
d. A budget justification
e. A letter of support from the subaward PI
f. A biosketch of the PI and other key personnel
g. A list of facilities and equipment available in the PIs lab
4. When should I contact a potential partner about a subaward? Start early! At Grant Engine we learned that the greatest risk to the on-time submission of proposals is failure to obtain the needed paperwork from subawardees. Academic institutions have bureaucracy and grants offices that are often overworked. Contact potential subaward partners at least eight weeks before the submission deadline. These partners should immediately notify their grants offices about the upcoming project. Finalize the work to be performed five weeks before the deadline. Submit the final budget and statement of work to the host institution’s grants office no less than three weeks before the submission date. Meeting these deadlines means that the exact work to be performed by the partner (model, animal number, hours of effort, etc.) must be at least four weeks before the deadline.
5. How should subawards be managed? It is important to remember that the SBIR proposal is YOUR grant. It is the company’s responsibility to manage the planning and performance of all work in the proposal, including the subaward. Plan with your subaward partner and discuss how you will manage the project, how communication will be handled, how delays will be managed, and how publication will work. Include all of this information in the appropriate parts your SBIR proposal.
6. Consider alternatives. Academic partners are not the only option for performing outside research. Contract Research Organizations are another option worth considering. These companies have significant expertise at completing projects on time and, importantly, CRO contracts are not limited to the percentage limits.
Having a strong team in place is critical for getting a winning score on an SBIR. Incorporating an academic partner can be an excellent strategy for strengthening the team. The key to success with these partnerships is understanding the subaward process and doing the upfront work needed to ensure smooth preparation and submission of the proposal.
If you have any questions, please reach out to Grant Engine here.