SBIR and STTR Compliance begins the day you register in SAM.gov. You must accurately answer the questions and provide information that reflects your business and its relationships. Below are 20 common areas where companies make mistakes.

Company Information and Eligibility

• Incorrect Employee Size Calculations: Miscalculating the number of employees or affiliates risks ineligibility. Use HR software for tracking.
• Excessive Venture Capital Ownership: VC ownership over agency limits (e.g., NSF <50%) disqualifies. Restructure ownership.
• Non-Compliant PI Employment: A PI not primarily employed risks suspension of their award. Implement time-tracking systems.
• Tax Non-Compliance: IRS violations (e.g., late Form 941) can result in penalties and ineligibility. Hire a CPA for compliance.
• Payroll and Timekeeping Errors: Inaccurate records can result in disallowed costs. Use timekeeping software (e.g., TSheets).
• Wage and Hour Violations: FLSA non-compliance risks DOL penalties. Conduct wage audits.
• Unlicensed IP Use: Using unlicensed third-party IP carries risks of legal disputes. Conduct IP audits.
• Inadequate SBIR/STTR Data Protection: Improper Data Marking Risks IP Loss. Use data management systems.
• Missed Certification Deadlines: Late Certifications Delay Funding—Automate Tracking.

Business Operations and Compliance

• Non-Compliant Cost Accounting: Unallowable Costs Risk Repayments. Use GAAP-compliant software.
• Poor Subcontractor Oversight: Non-compliant subcontractors risk findings. Develop contract systems.
• Ignoring American-Made Preferences: Non-U.S. purchases risk disallowed costs. Favor U.S. vendors.
• Lack of Audit-Ready Systems: Inadequate records can lead to audit penalties. Implement auditable systems.
• No Fraud Reporting Process: Lack of OIG Reporting Increases Debarment Risks. Establish whistleblower policies.
• Unawareness of Agency-Specific Requirements: Failure to meet rules (e.g., DoD CMMC) can result in halted funding. Review solicitations.
• Inadequate Cybersecurity: Weak cybersecurity risks, DoD ineligibility. Implement NIST 800-171 and CMMC.
• Improper Fund Allocation: Misallocated funds trigger audits. Segregate phase budgets.
• Failure to Register with SAM.gov: Inactive SAM.gov registration blocks awards. Maintain an active profile.
• Lack of Worker Safety Compliance: OSHA violations carry the risk of fines and penalties. Conduct safety audits.
• Inadequate Diversity Compliance: EEO or agency diversity violations reduce eligibility. Implement EEO policies.

References:

1. Small Business Administration. (2024). SBIR/STTR Policy Directive. https://www.sbir.gov/policy-directive
2. National Science Foundation. (2024). NSF SBIR/STTR Program Guidelines. https://www.nsf.gov/eng/iip/sbir/home.jsp
3. Internal Revenue Service. (2024). Employment Taxes. https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes
4. Code of Federal Regulations. (2024). 2 CFR Part 200 – Uniform Administrative Requirements. https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200
5. U.S. Department of Labor. (2024). Fair Labor Standards Act. https://www.dol.gov/agencies/whd/flsa
6. U.S. Patent and Trademark Office. (2024). Intellectual Property Basics. https://www.uspto.gov/patents/basics
7. National Aeronautics and Space Administration. (2025). NASA SBIR/STTR Program Solicitations. https://sbir.gsfc.nasa.gov/solicitations
8. Occupational Safety and Health Administration. (2024). OSHA Standards. https://www.osha.gov/laws-regs