Guide to SBIR Phase II: U.S. Education Grants

Understanding Phase II Expectations

The U.S. Department of Education’s SBIR Phase II is far more than an extension of Phase I. It’s a full-scale R&D and commercialization effort that requires not only robust technological development but also real-world validation and a market entry strategy. Applicants must think beyond software code or instructional design—they need to demonstrate evidence, usability, scalability, and sustainability.

At its core, Phase II is about transforming a promising prototype into a polished, evidence-backed solution ready for broad implementation. Where Phase I offered around $250,000 for an 8–9 month proof-of-concept, Phase II awards up to $1 million over two years. That increase in funding and timeline signals an elevated standard: a commercially viable product that can prove its value in real education settings.

To be considered competitive, a Phase II proposal must articulate how the final product will be:

• Fully developed and feature-complete,
• Usable and implementable with fidelity in schools or comparable learning environments,
• Evaluated with real users (e.g., students, teachers) for promise,
• Supported by a credible commercialization plan, and
• Positioned for future efficacy research.

These expectations make Phase II a hybrid effort—it is both a technical development contract and a research project. Unlike private-sector seed funding, which might tolerate iterative pivots, the ED/IES program expects structured planning and rigorous execution aligned to educational outcomes.

Phase II applicants must also demonstrate continuity from Phase I. Reviewers will look for clear connections between the prototype’s performance and the rationale for investing in scaled development. Weak or anecdotal Phase I results won’t suffice. Instead, proposers should present structured data from user testing and preliminary evaluations that validate feasibility, usability, and initial promise.

Further, teams should address any challenges encountered during Phase I. If something didn’t go as planned—or if user feedback revealed issues—be transparent. Reviewers appreciate applicants who reflect critically on Phase I and adjust their strategy for Phase II accordingly. This shows maturity and a high likelihood of managing the larger Phase II effort successfully.

ED/IES also expects applicants to show an awareness of real-world implementation. For example, proposing a technology that requires extensive training, high-end equipment, or complex integration may raise questions about feasibility and fidelity. The more that your product can demonstrate seamless integration into existing educational environments, the stronger your case.

Finally, all proposals must include a preliminary plan for future efficacy research. While Phase II won’t fund a full randomized control trial, it must position the product for rigorous future studies. This ensures that promising tools developed under the SBIR program have a path toward becoming part of the broader evidence base in education.

Aligning with ED/IES Priorities

A common misstep in SBIR Phase II proposals is presenting an innovation that, while interesting or even high-tech, doesn’t clearly align with ED/IES funding priorities. The Institute of Education Sciences (IES) is explicit about what it wants to support: education technology products that address real, defined needs within U.S. education systems. If your project doesn’t map to those needs, it won’t be funded—no matter how promising it seems.

The ED/IES SBIR program defines three core priority areas:

• General Education Technology Products: Tools designed to improve student learning outcomes or provide instructional support. This includes assessment platforms, adaptive tutors powered by AI, interactive learning environments (including VR/AR), and tools for teacher professional development.
• Special Education Technology Products: Tools for children with disabilities or at risk of disability, as well as the educators, families, and service providers supporting them. Common themes include early intervention and accessibility enhancements.
• Bringing Research to Practice: Projects that translate existing research findings into scalable, practical products. Especially relevant for innovations emerging from academic research. The “Direct to Phase II” option supports this category.

To compete effectively, you must identify which of these areas your project best fits—and be explicit about it in your proposal. Your narrative should reference the current ED/IES SBIR solicitation and, if available, cite specific language from Section IX of the Phase I solicitation (which often outlines program priorities for Phase II as well).

A strong fit is about more than labels. If you’re building a math game, for example, how will it be used in real classrooms? What learning standards does it support? How will teachers implement it with fidelity? If your tool supports children with speech impairments, does it integrate with IEP processes or existing assistive tech? Reviewers are looking for thoughtful connections to real use cases and actual users in education environments.

You should also be aware that technological sophistication is not, by itself, compelling. A product using blockchain or machine learning might sound impressive—but unless it directly solves an articulated problem in a scalable, sustainable way, it’s unlikely to be funded. Fit matters more than flash.

Finally, don’t ignore the “why now” question. The strongest applications reflect urgency: for instance, a digital reading tool that addresses literacy gaps post-pandemic, or an intervention aligned with emerging policy trends. This helps show reviewers your product isn’t just aligned—it’s timely.

Clarification:
ED/IES will not fund Phase II proposals that don’t align with one of its explicitly stated priority areas—even if the technology is innovative.

Pre-Submission Readiness: Registrations & Eligibility

Many strong Phase II proposals never reach reviewers because the applicant failed to meet basic eligibility or registration requirements. These aren’t formalities—they’re prerequisites for submission. If you’re serious about securing funding, you need to complete these tasks before you write a single sentence of your proposal.

First, confirm that you are eligible to apply.
To qualify for an ED/IES SBIR Phase II award, your business must:

• Be for-profit and based in the U.S.
• Have fewer than 500 employees.
• Be majority-owned by U.S. citizens, permanent residents, or other qualified small businesses.
• Have completed a Phase I award from ED/IES or be eligible for “Direct to Phase II.”

Importantly, the Principal Investigator (PI)—the person overseeing the work—must be employed primarily (at least 51%) by the applying small business at the time of the award and throughout the project. This is a strict rule, and violating it disqualifies your proposal.

Second, complete all required registrations.
There are four systems you must register with. Each one has its own steps and validation process, and some may take several weeks:

Start this process at least eight weeks before the expected proposal deadline. The ED/IES Phase II solicitation typically drops in November with a submission deadline in early January. That means your registrations need to be complete—and verified—before the holidays.

This is not the most exciting part of the process, but it is one of the most consequential. Skipping steps here can erase months of effort.

Interpreting and Responding to the RFP

The Request for Proposals (RFP)—also called the Funding Opportunity Announcement (FOA)—is the most important document in the entire application process. It’s not just a call for proposals; it’s the rulebook. And for SBIR Phase II applicants, failing to read it thoroughly is one of the fastest paths to rejection.

The ED/IES Phase II solicitation is typically released on SAM.gov each winter, with submission deadlines approximately 60 days later. The document outlines the agency’s priorities, required proposal structure, formatting rules, and the evaluation criteria that reviewers will use. It also details how and where to submit, which is typically via Grants.gov.

Always use the most recent solicitation. Even if you’ve applied in previous years, do not recycle an old format or reuse boilerplate content without reviewing the current version. Requirements can and do change—sometimes significantly.

Start by downloading the PDF as soon as it’s available and reading it cover to cover. Then build a checklist of all required components, including page limits, font size, margin settings, and specific instructions for attachments like letters of support or biosketches.

Your proposal should follow the RFP’s structure exactly. If it asks for “Section A: Phase I Results,” followed by “Section B: Technical Objectives,” then your document should use those same headings in the same order. This isn’t just about clarity—reviewers are instructed to evaluate based on how well your proposal adheres to the requested format.

Another common mistake is underestimating the complexity of the submission process. Even if your proposal is perfectly written, it won’t be considered if you fail to follow the upload instructions. This includes:

• File naming conventions
• File types (PDF is usually required)
• Order of submission
• System registration (SAM.gov, Grants.gov)
• Confirmation emails and time zone cutoffs

It’s also essential to note deadlines down to the hour. Most deadlines are stated in Eastern Time, and late submissions—even by a minute—are typically not accepted.

To stay ahead, monitor SAM.gov regularly starting in mid-October for pre-solicitation notices. You can also set up alerts. Once the solicitation is released, assign someone on your team to track all requirements, deadlines, and submissions logistics.

If anything is unclear in the RFP, submit your question to the designated Contracts Specialist by the deadline stated in the document—usually about 3–4 weeks before the full proposal deadline. Responses are typically posted in a public Q&A format, and they often include clarifications that can affect everyone’s submission.

Best Practice:
Download and follow the current-year solicitation—never rely on a previous year’s instructions. Changes in formatting or evaluation criteria can disqualify your proposal.

Writing a Competitive Phase II Technical Proposal

The Technical Proposal is the centerpiece of your Phase II application. It’s where you lay out your vision, evidence, and execution plan in a way that convinces reviewers to fund your work. At this stage, innovation alone isn’t enough. Your proposal needs to tell a clear, credible, and well-structured story about how you’ll move from prototype to impact.

The best proposals are built around three pillars:

1. Results from Phase I
2. A robust two-year development and evaluation plan
3. A viable commercialization strategy

Start with Phase I accomplishments

Begin by summarizing the original objectives of your Phase I project, then present clear, data-driven evidence of what was achieved. Use concrete performance metrics: How many users tested the prototype? What usability or feasibility findings did you generate? Did you encounter challenges, and how did you adapt?

This section is also your chance to show that your project has momentum. Reviewers are looking for proof that Phase I wasn’t just exploratory—it delivered results that justify a larger investment.

Tip:
Include actual data from pilot users in your Phase I summary—quantitative or qualitative. Vague claims won’t hold up during review.

Outline your Phase II R&D plan

The main body of your proposal should describe your objectives, methodology, and expected outcomes over the full two-year timeline. Break this into discrete tasks, milestones, and deliverables. Avoid generalizations—use SMART objectives (Specific, Measurable, Achievable, Relevant, Time-bound).

Your R&D plan should demonstrate:

• Full product development (not just feature additions)
• Real-world testing environments (e.g., public schools, community colleges)
• Defined roles for partners, advisors, and evaluators
• An iterative process to incorporate user feedback

Also include a timeline with checkpoints, such as alpha and beta releases, pilot studies, and final product delivery.

Make sure your evaluation plan goes beyond usability. Reviewers want to see a clear methodology for assessing promise—i.e., whether the product is likely to lead to improved learning or behavior outcomes. This might include comparison groups, pre/post assessments, or validated survey tools.

If you’re working with external researchers or evaluation firms, include letters of commitment and describe their qualifications.

Present a commercialization strategy

This is where many proposals fall short. A strong commercialization plan should show not just how the product will be built, but how it will be sustained and scaled in the marketplace.

Include:

• Target customer segments (e.g., K–12 schools, districts, higher ed)
• Go-to-market strategy (direct sales, channel partners, licensing)
• Revenue model (e.g., SaaS pricing, institutional licenses)
• Competitive landscape and positioning
• Key partnerships or pilot agreements

Don’t wait until the end of the proposal to introduce these ideas—reference them throughout to show that development decisions are driven by real-world viability.

Finally, acknowledge your next steps after Phase II. Even though Phase III isn’t SBIR-funded, reviewers want to see that you’re already planning for efficacy trials, fundraising, or business development activities post-award.

A compelling Phase II proposal doesn’t just describe what you’ll build. It convinces reviewers that you know how to build it, prove it works, and get it into the hands of users who need it most.

What Happens After Submission

Once your proposal is submitted through Grants.gov, the most important thing you can do is stay organized and patient. The U.S. Department of Education typically notifies applicants of Phase II decisions approximately 90 days after the submission deadline.

During that time, proposals are reviewed by both internal staff and external peer reviewers. They score each application based on criteria such as technical merit, feasibility, alignment with priorities, commercialization potential, and team qualifications. In some cases, follow-up questions or clarifications may be requested by the contracting officer.

If your application is successful, you’ll receive a formal notice of intent to award, followed by negotiation of contract terms and a final award notice. Projects often begin within a few weeks of notification, typically in late spring or early summer.

If your proposal is not selected, feedback is typically provided. Read it carefully—many businesses revise and resubmit successfully in future cycles.

Timeline:
Expect award notifications approximately 90 days after submission; project start dates usually follow in late spring.