How to Write a Successful DoD SBIR Phase I Proposal

Introduction

Submitting a proposal to the Department of Defense (DoD) under the SBIR program is unlike applying to any other federal agency. DoD solicitations are mission-driven, highly competitive, and tailored to military applications that demand both technical rigor and operational relevance. For small businesses, this represents both a challenge and an opportunity.

This guide is designed to help you write a DoD SBIR proposal that not only meets the formal requirements, but also stands out in a crowded field. Whether you’re applying to the Army, Navy, Air Force, or a specialized component like DARPA or SOCOM, you’ll need to show reviewers that your technology solves a real defense problem, that your approach is innovative and technically feasible, and that your company has the capacity to deliver results.

We’ll walk through each part of the process—from understanding DoD priorities to assembling your team, crafting your technical narrative, and avoiding common missteps. If your goal is to transition a breakthrough technology into a military or dual-use application, this is where to start.

Understanding the DoD SBIR Program

To succeed in the DoD SBIR program, you must understand how each military branch approaches innovation. While the overarching goal is to support U.S. defense capabilities through small business R&D, each component has distinct priorities and proposal expectations. Tailoring your proposal to the sponsoring branch’s mission is essential.

The tabs below summarize key focus areas and proposal tips by component:

Pre-Proposal Preparation

A winning proposal starts long before you begin writing. Successful applicants spend time upfront ensuring eligibility, registering in required systems, and selecting the right topic. Rushing this step leads to disqualification more often than any technical issue.

Confirm Eligibility

The DoD SBIR program is only open to small business concerns (SBCs) that meet specific criteria:

• Fewer than 500 employees (including affiliates)
• At least 51% U.S.-owned and operated
• For-profit and located in the U.S.

Submissions from ineligible entities are automatically disqualified, regardless of proposal quality.

Complete Required Registrations

Before submitting a proposal, you must register in multiple government systems. These registrations are not optional and can take several weeks to process:

• SAM.gov: To receive funding, your company must be registered and active in the System for Award Management.
• SBIR.gov: Register your business to receive a Control ID from the SBA.
• DSIP (Defense SBIR/STTR Innovation Portal): The official portal for DoD SBIR topic listings and proposal submissions.

Delays in SAM.gov registration are common. Start early and monitor status regularly.

Crafting a Competitive Proposal

Your proposal must do more than explain your idea—it must persuade reviewers that your approach is technically viable, aligns with DoD priorities, and can transition into military or commercial use. With a typical Phase I acceptance rate below 15%, clarity and strategic framing are essential.

Address the Evaluation Criteria

DoD SBIR proposals are judged on three weighted criteria. You must explicitly respond to all three:

1. Technical Merit and Innovation
   Clearly define the problem. Explain how your approach is novel—not just incremental. Demonstrate that your methods are scientifically or technically sound.
2. Qualifications of the Team
   Highlight key personnel and past performance. Describe access to necessary facilities and equipment. Mention any strategic partners or advisors with relevant expertise.
3. Commercialization Potential
   Explain your pathway to Phase III. Include market research, customer interest, or letters of support. Emphasize dual-use potential, especially for AFWERX or Navy topics.

Organize the Proposal Strategically

Most DoD components require a structured technical volume. A typical layout includes:

• Introduction and Problem Statement
• Technical Objectives and Work Plan
• Innovation and Scientific Rationale
• Key Personnel and Facilities
• Commercialization Strategy

Avoid generic statements. Use specific data, cite DoD roadmaps when relevant, and tailor language to the component’s mission. Where allowed, graphics or simple diagrams can clarify complex ideas.

SBIR proposals are not marketing documents.
Reviewers expect rigorous, evidence-based reasoning—not sales language.

Budgeting and Financial Planning

A well-prepared budget shows reviewers that your company understands both the scope of the work and the fiscal responsibilities of managing a federal R&D contract. Even the most innovative idea can be downgraded if the budget is vague, excessive, or poorly justified.

Understand Budget Requirements

Each DoD component sets its own budget caps for Phase I and Phase II awards. Review the topic instructions carefully—submitting a budget over the limit without justification will get your proposal rejected. Most Phase I efforts are capped around $150,000, while Phase II typically ranges from $750,000 to $1.5 million.

Budgets should align with your proposed work plan and timelines. If you’re proposing three technical objectives over six months, ensure labor and materials reflect that scope.

Include Key Cost Categories

A typical DoD SBIR budget includes:

• Direct Labor: Time charged by company personnel.
• Fringe Benefits: Health insurance, payroll taxes, etc.
• Overhead and G&A: Indirect costs must be documented or use the default DoD rate.
• Materials and Supplies: Broken down and justified.
• Consultants/Subcontractors: Must stay within percentage limits set by the solicitation.
• Travel: Only for DoD-required events or testing.
• Profit/Fee: Allowable but must be reasonable (typically ≤7%).

Avoid Common Budget Mistakes

Errors that frequently lead to rejection include:

• Rounding estimates instead of justifying real costs.
• Failing to explain how subcontractor costs support project goals.
• Overestimating labor or indirect rates without documentation.
• Omitting travel justifications or including non-allowable trips.

Be ready to support your rates and costs with documentation. While Phase I budgets are modest, they must still follow federal cost principles (FAR Part 31) and show sound financial stewardship.

Submit at least 48 hours before the deadline to catch any DSIP upload issues—budget errors are among the top reasons for proposal rejection.

Submission Process

Once your proposal is complete, it must be submitted through the Defense SBIR/STTR Innovation Portal (DSIP). This final step might seem procedural, but overlooking technical or formatting instructions can invalidate an otherwise strong proposal.

Use the DSIP Platform Effectively

DSIP is the exclusive portal for submitting DoD SBIR proposals. Each proposal must be submitted in multiple volumes, typically including:

• Cover Sheet
• Technical Volume
• Cost Volume
• Company Commercialization Report
• Supporting Documents (letters of support, technical references, etc.)

All documents must comply with formatting requirements—usually PDF format, specific font sizes, and page limits. Double-check these against the current solicitation.

Before submission:

• Review each file for completeness and format compliance.
• Confirm that UEI, CAGE code, and contact info are correct and match your SAM profile.
• Use DSIP’s validation tool to catch basic upload issues.

Meet Submission Deadlines

Each topic has a specific closing date listed on DSIP. Late submissions are not accepted under any circumstances—even one minute late means automatic disqualification. Plan to upload your final files at least 24–48 hours early to allow time for troubleshooting.

Post-Submission and Beyond

Submitting your proposal isn’t the end—it’s just the end of the beginning. Understanding what happens next can help you prepare for follow-up steps and improve your chances in future cycles, regardless of outcome.

The Review Process

Once the solicitation closes, proposals undergo a multi-stage review by DoD subject matter experts. Reviews are based strictly on the published evaluation criteria:

1. Technical Merit and Innovation
2. Team Qualifications
3. Commercialization Potential

Each reviewer scores independently. The highest-ranked proposals are forwarded to contracting officers, who verify administrative compliance and may request clarifications or updated documents.

Notification Timeline

You’ll typically receive a decision within 90 to 120 days via email and through DSIP. If selected, you may be asked to revise your work plan or budget before contract award. If not selected, DSIP may provide limited feedback or simply list your status as “not selected.”

Do not interpret a lack of feedback as a rejection of your idea. Funding decisions often reflect topic popularity, available budgets, and mission priorities—not just merit.

Preparing for Phase II

If your Phase I is successful, you may be invited to apply for Phase II. Start planning early:

• Gather performance data from Phase I work.
• Engage potential DoD customers or transition partners.
• Update your commercialization strategy with real-world traction.

Many components allow Direct-to-Phase-II proposals for technologies that already have proof of concept. If you’re eligible, be prepared to submit additional documentation such as test data, pilot results, or letters of interest from DoD users.