Introduction
For first-time applicants, building a Phase I budget for NASA’s SBIR program can feel like a test in itself. Unlike a typical business budget, this one must meet strict federal guidelines, align with your technical proposal, and convince reviewers that your plan is both feasible and well-justified.
This guide walks you step-by-step through each part of the NASA SBIR Phase I budget form, highlighting what to include, what to avoid, and how to prepare supporting documentation. Whether you’re a startup CEO wearing multiple hats or a small business CFO handling your first government contract, this post will help you build a compliant, reviewer-ready budget.
Understanding NASA’s Budget Requirements
Overview of the NASA SBIR Budget Form
NASA uses a standardized budget form that breaks expenses into several categories, including Direct Labor, Fringe Benefits, Equipment, Materials and Supplies, Travel, Subcontracts and Consultants, Other Direct Costs, Indirect Costs, and the Profit/Fee. Each item must be justified in detail and directly tied to your proposed research.
While the format resembles budget templates used by other agencies, NASA tends to emphasize technical alignment and cost realism. This means every dollar requested should clearly support the project’s objectives.
Funding Limits and Allowable Costs
NASA caps Phase I awards at $150,000, including the 7% profit/fee. Within that limit, applicants may allocate funds across eligible cost categories, but some constraints apply. For instance, no more than 30% of the budget may be allocated to subcontractors or consultants combined.
Most reasonable R&D costs are allowable—this includes staff time, prototyping materials, consulting services, and travel directly tied to the proposed work. However, entertainment, marketing, and patent filing costs are not eligible.
What NASA Reviewers Expect
NASA reviewers expect your budget to do more than add up. It must show:
- That you understand the work effort needed
- That your costs are appropriate for the tasks proposed
- That your justification is specific, not generic
This means you need to explain how each cost item contributes to a specific task or deliverable in your technical narrative. Reviewers are looking for alignment and transparency—your budget should help them say “yes,” not raise questions.
Building Each Budget Category
NASA’s SBIR Phase I budget form is structured to reflect typical R&D project needs, but getting each category right is critical. Here’s how to approach them.
Avoiding Common Budget Pitfalls
A well-prepared NASA SBIR Phase I budget doesn’t just follow the rules—it avoids the most frequent traps that trip up new applicants. Here’s what to watch out for.
Underestimating vs. Overstuffing
Lowballing your budget might seem strategic, but reviewers will see it as a red flag. If your project looks underfunded, it suggests you haven’t realistically scoped the work.
Conversely, padding your budget with vague or excessive costs can raise scrutiny. A solid budget reflects a detailed understanding of your work effort, not a wish list or guess.
Budget-Technical Misalignment
Every dollar you include should map to a task or milestone in your technical proposal. When a reviewer sees a $10,000 travel line but no travel in the work plan, that’s a problem.
The solution is to cross-reference: after you draft your budget, go back through your technical proposal and make sure every cost is clearly linked to a planned activity.
Forgetting Documentation
NASA doesn’t just want numbers—they want to know how you got them. Failing to include consultant letters, subcontract budgets, or vendor quotes is one of the top reasons proposals get flagged or rejected.
Wherever possible, attach documentation to justify significant costs. This not only shows transparency—it gives reviewers confidence in your planning.
Finalizing and Submitting Your Budget
Once your numbers are set and your justifications are written, you’re in the home stretch. But the last steps are just as important as the first.
Using NASA’s Budget Template
NASA requires that you use its official SBIR budget form, available through the Electronic Handbook (EHB) system. The form is structured to reflect each cost category covered earlier, and you’ll input your figures directly into the corresponding fields.
Pay close attention to formatting rules—NASA requires specific file types, naming conventions, and sometimes even page limits for attachments.
Internal Review Tips
Before submitting, take time to double-check everything:
- Do all costs map to tasks in your technical plan?
- Are all totals consistent across the budget form and justification?
- Have you attached all required letters and vendor quotes?
- Did you cap subcontracting at 30% and the fee at 7%?
A second pair of eyes—ideally someone not involved in the original draft—can often catch issues you might miss.
Submission Dos and Don’ts
SBIR proposals to NASA must be submitted through their EHB portal, not Grants.gov. Once uploaded, the system performs basic checks, but it won’t catch missing justifications or unrealistic numbers.
Submit well before the deadline. NASA’s system can lag under heavy load, and late submissions won’t be accepted.