NSW SBIR program FAQs

The NSW Small Business Innovation & Research (SBIR) program is an initiative of the NSW Government program that provides competitive grants to small and medium-sized enterprises (SMEs) to find and commercialise innovative solutions to well-defined problems for NSW Government agencies.

The SBIR program is modelled on similar programs at the Commonwealth level (the Business Research and Innovation Initiative) and in the United Kingdom (the Small Business Research Initiative) and the United States (Small Business Innovation and Research program).

The SBIR program is designed to:

• Leverage the capacity of NSW-based R&D in SMEs to address the needs of the NSW Government
• Grow the number of innovative products, services and jobs in NSW.

The SBIR program is managed by the Office of the NSW Chief Scientist & Engineer with the support of other NSW Government agencies.

The SBIR program has three phases. Not all SME applications will proceed through all phases:

Phase 1 – Feasibility study: An SME submits a proposal to solve one of the seven SBIR program challenges. The proposals are assessed, with each successful applicant receiving a grant of up to $100,000 to conduct a feasibility study over a period of three months.

Phase 2 – Proof of concept: Successful feasibility study grantees are invited to apply for the proof-of-concept phase. Applications are assessed and each successful proof-of-concept grantee will receive up to $1,000,000 to develop a proof of concept over a period of up to 15 months.

Phase 3 – Procurement: NSW Government agencies will consider purchasing successful solutions.

Funding for Phase 1 feasibility studies will be up to $100,000 per study over a period of three months.

After completing a feasibility study in Phase 1, feasibility study grantees will have the opportunity to apply for Phase 2 proof-of-concept grants. Successful proof of concept grantees will each receive up to $1,000,000 to develop a proof of concept over a period of up to 15 months.

On the successful completion of a feasibility study and a proof of concept, the NSW Government may consider procuring the solution (Phase 3).

All successful applicants will enter into a funding agreement with the NSW Government. Grants may only cover eligible expenditure as defined in the 2022 SBIR Program Guidelines.

Yes, applications for both the feasibility study and proof of concept are assessed against assessment criteria (see below). Not all SMEs will proceed through all phases. There is no guarantee that the NSW Government agency putting forward a challenge will purchase a solution from any grantee.

To be eligible for the SBIR program an applicant must:

1. Have an Australian Business Number (ABN).
2. Be one of the following entities:
   1. A small or medium-sized enterprise with under 200 full-time equivalent employees, or
   2. An individual or partnership, provided you agree to form a company incorporated in Australia to enter into a grant agreement, or
   3. A NSW public research organisation applying through its appropriate technology transfer office, provided you agree to form a company incorporated in Australia to enter into a grant agreement.
3. Meet one of the following criteria:
   1. Be headquartered in NSW, or
   2. Conduct the majority of business research and development and production operations in NSW.
4. Hold the Intellectual Property or the rights to commercialise the proposed solution.
5. If successful, undertake to conduct SBIR program-related research and development work in NSW.

The NSW Government reserves the right to exclude applicants where they do not meet the intention of the above eligibility criteria. For example, where the applicant is a shell corporation or local subsidiary of a multinational corporation.

Yes, you can apply for more than one challenge. You will need to complete a separate application for each challenge.

The SBIR program is focused on supporting innovative technologies and services that:

• Solve NSW Government challenges, and
• Could be commercialised and sold to other end-users (for example, other governments or the private sector).

Proposed solutions that address a NSW Government need, but do not have commercial potential in domestic or international markets will not be successful.

Proposed solutions must be innovative technologies and services that require development and commercialisation, not existing solutions that are already commercially available in Australia or elsewhere.

Grant recipients will retain intellectual property rights and the right to sell in domestic and global markets.

Proposed solutions must be innovative technologies and services that require development and commercialisation, not existing solutions that are already commercially available in Australia or elsewhere.

Grant recipients will retain intellectual property rights and the right to sell in domestic and global markets.

Applicants who are successful at the proof-of-concept stage are expected to conduct negotiations for any potential sale of the solution to the participating NSW Government agency in good faith. Agencies will decide whether to purchase any solution at their own cost and in accordance with NSW Government procurement policies. There is no guarantee that the NSW Government agency putting forward a challenge will purchase a solution from any grantee. Grantees will retain intellectual property rights in their solutions and the right to sell them domestic and global markets.

Applications for Phase 1: Feasibility study applications will be evaluated against the following assessment criteria, which are equally weighted:

Solution (30 points)

(a) To what extent would the proposed solution address the challenge statement, including the solution requirements?

(b) Is the proposed solution ready to enter the feasibility study stage?

(c) How is the proposed solution innovative and superior to what is currently on the market?

Commercial (30 points)

(a) Does the application provide a reasonable plan for the next steps towards commercialisation, adoption and scale to service the challenge agency and other potential customers, including identifying potential barriers and how these will be mitigated?

(b) Does the proposed solution have commercial potential outside of the Challenge Agency?

(c) Given its commercial potential, does the proposed solution deserve public investment?

Delivery (30 points)

(a) Does the company and project team have the appropriate skills and experience to carry out the project?

(b) Does the team have access to the equipment, technology, infrastructure and financial resources needed to carry out the project?

(c) Does the application provide a reasonable project plan, including budget, risk management plan and performance measures?

OCSE will review applications against the SBIR program eligibility criteria. Eligible applications will be assessed by both the Challenge Agency and an independent panel of experts with experience in business development, commercialisation, venture capital and entrepreneurship.

Applicants submit the following:

(a) An application, answering all questions

(b) A video presentation no longer than three minutes

(c) Profit-and-loss statements from the last two years

(d) Balance sheets from the last two years

(e) A project budget.

OCSE will confirm that applications meet the eligibility criteria.

Eligible applications will be assessed by both the NSW Government agency that proposed the challenge and an independent panel of experts (Expert Panel) with experience in business development, commercialisation, venture capital and entrepreneurship.

All applications will be assessed against the other applications within their challenge in the first instance, with the assessment panel trying to ensure that all challenges have feasibility studies granted to them. The Expert Panel will decide on the exact mix of feasibility studies across all challenges.

OCSE will notify all applicants of the outcome of the assessment process.

OCSE will execute funding agreements with successful applicants.

All applicants will be informed of the outcome of their application.

Applications for Round 2 of the SBIR program closed at 9:59am AEDT on Tuesday 14 March 2023.

If your business is not headquartered in NSW, you are still eligible to apply for the SBIR program provided that your business conducts the majority of its research and development and production in NSW.

Yes. In fact, joint applications between NSW SMEs and NSW-based research organisations (including universities) are encouraged. As the SME you must lead the project and submit the application.

In your application, you must describe who the project partners are and what each organisation will contribute to the feasibility study.

You are encouraged to work with NSW partners, including other NSW SMEs and research organisations. You may partner with organisations outside NSW. For example, a business or university in another state or overseas. However, if successful, you will need to conduct the SBIR program-related research and development work in NSW. In practice, this means that you would need to self-fund the portion of the project work outside NSW. For example, if 25% of project work will be undertaken by a partner outside NSW, then the applicant should provide matched funding of at least 25% of the total project cost.

The NSW Government will enter into a funding agreement with each successful SME. The funding will take the form of a cash contribution paid in instalments to the lead SME in the application. The funding agreement will lay out the eligible expenditure, which will include direct costs of the project and eligible labour expenditure. The lead SME will be responsible for distributing the funding to any partners or contractors in accordance with the proposal and funding agreement.