USDA SBIR Phase I Proposal Guide

The USDA SBIR Phase I program is not just about funding innovation—it’s about solving real problems in agriculture, food systems, and rural communities. Unlike some other federal agencies that prioritize technology development alone, USDA emphasizes dual outcomes: commercial viability and societal benefit. This difference shapes every part of the application, from topic selection to technical approach to commercialization planning.

Applicants should understand that a successful USDA SBIR Phase I proposal does more than prove feasibility. It also positions the project to support USDA priorities such as environmental stewardship, rural job creation, food safety, and sustainable agriculture. This requires tailoring both the narrative and metrics to show not just technical success but impact on systems that matter to USDA stakeholders.

USDA Phase I is a short-term, high-risk seed investment—designed to test an idea’s technical merit and commercial promise. The work should be structured to answer a clear research question, with specific milestones and “go/no-go” decision points that pave the way for a stronger Phase II. Proposals that lack this structure tend to underperform in peer review.

USDA SBIR Phase I is mission-driven
Reviewers look for both technical merit and alignment with agricultural and rural priorities.

This guide will walk you through how to prepare and submit a USDA SBIR Phase I application—from checking eligibility to crafting a reviewer-ready proposal. Each section provides actionable advice tailored to USDA’s unique expectations.

Confirm Eligibility and Complete Registrations

Before writing a single word of your proposal, confirm your small business meets USDA SBIR eligibility and complete all federal registrations. These two steps are non-negotiable—mistakes here will disqualify even the strongest applications.

USDA SBIR eligibility requires that your business is:

• A for-profit entity
• More than 50% owned and controlled by U.S. citizens or permanent residents
• Located in the U.S. and employing fewer than 500 people
• Able to conduct at least 66% of Phase I R&D work in-house

These criteria must be met on the day you apply. If your company has complex ownership or prior federal ties, consult SBA’s guidance or an APEX Accelerator.

Ineligible = Rejected Automatically
If you don’t meet every eligibility rule by the application deadline, your proposal cannot be reviewed—no exceptions.

Once eligibility is confirmed, complete these four registrations—ideally 6+ weeks before the USDA deadline:

Delays in SAM.gov verification are the most common reason small businesses miss submission windows. Start now—even if you haven’t finalized your proposal topic.

Choose the Right Topic Area & Deconstruct the RFA

Selecting the correct USDA topic area isn’t just a formality—it determines whether your proposal even makes it past the first screen. Reviewers are trained to assess alignment. A promising idea submitted under the wrong topic can be deemed “non-responsive” and rejected.

Each year, USDA NIFA defines roughly 10–12 topic areas under the SBIR/STTR program. These reflect agency-wide priorities such as food safety, climate resilience, and rural development. Your innovation must directly address one—and only one—of these topics.

Begin by reading the detailed topic descriptions in the most recent USDA SBIR Phase I Request for Applications (RFA). These go beyond brief summaries and spell out the goals, challenges, and preferred project types for each area.

The RFA is your roadmap—it includes:

• Funding levels (minimum/maximum)
• Required forms and formats
• Submission deadlines
• USDA’s three peer review criteria
• Unique agency-specific policies (e.g., no cost-sharing, rural benefit focus)

You must extract these key details and tailor your application accordingly. For example, a project focused on aquaculture should not just mention fish—it should respond to USDA’s stated aquaculture challenges such as disease control, nutrition, or sustainability.

If your innovation spans multiple areas, choose the primary fit and explain cross-cutting benefits within the narrative. Do not list multiple topic codes—this signals a lack of clarity and can lead to disqualification.

Finally, check whether your topic supports SBIR only, STTR only, or both. If you are planning to collaborate with a university or lab, this distinction matters.

Being precise here builds credibility. Reviewers will reward proposals that demonstrate a deep understanding of USDA’s current needs—not just a good idea in search of a home.

Build a Strong USDA-Specific Technical Narrative

Your technical narrative is the heart of your USDA SBIR Phase I application. It must not only demonstrate feasibility but also reflect USDA’s dual emphasis on innovation and societal impact. A successful narrative answers four questions: What is the problem? What’s your solution? How will you test feasibility? Why does this matter to USDA?

The USDA technical narrative typically includes:

• Project Objectives: Define 2–3 clear, measurable objectives tied directly to your hypothesis.
• Technical Approach: Detail the R&D activities you will undertake to test feasibility. Use specific methods, timelines, and milestones.
• Expected Outcomes: Describe the criteria for success and how results will be evaluated.
• Key Personnel and Facilities: Highlight your team’s qualifications and describe access to necessary equipment or labs.

Unlike agencies focused solely on commercial return, USDA expects you to articulate how your solution supports public benefit—such as improving food safety, protecting natural resources, or strengthening rural economies. This doesn’t mean sacrificing commercial focus; it means connecting your market opportunity to USDA’s mission.

Your work plan should be feasible within 8 months and $125K–$181.5K (topic-dependent). That means limiting your scope to a defined, testable hypothesis. Proposals that try to do too much often get dinged for lack of focus.

Include measurable go/no-go points
USDA reviewers expect to see decision points in your plan that justify advancing to Phase II or pivoting.

Every reviewer score hinges on three USDA criteria:

1. Technical Merit and Feasibility – Is the concept sound, and is the Phase I plan rigorous and realistic?
2. Commercial Potential – Will this innovation meet a market need in agriculture, food, or rural development?
3. Qualifications of the Team – Does the team have the scientific and business skills to execute?

Address each explicitly. For example, in your work plan, map activities to outcomes that could lead to customer validation or IP filings. In your team section, note past Phase I/II success or prior product launches if applicable.

Also consider including:

• Graphics or Tables to summarize workflows or timelines
• References to peer-reviewed literature or market data
• Customer Discovery Insights, if available

Finally, avoid “academic language” or overly theoretical discussions. This is an applied R&D program. Reviewers—many with industry backgrounds—value clarity, specificity, and actionable plans. Don’t just say your idea is novel—explain what problem it solves, how you’ll test it, and why USDA should care.

Budget, Commercialization Strategy & ARS Collaborations

A strong USDA SBIR budget doesn’t just add up—it reflects a thoughtful, strategically limited Phase I scope. You’re not building a product yet; you’re proving a concept. Reviewers expect every dollar to serve that purpose.

Budget Basics:

• Total requests should align with the ceiling for your topic area (typically $125K–$181.5K).
• At least 66% of direct labor and technical work must be done by the small business.
• Clearly separate direct costs (e.g., labor, materials, testing) from indirect costs (e.g., rent, utilities).

Use USDA’s budget template and ensure the numbers match across all forms. The budget justification is your chance to explain why each item is essential to achieving Phase I objectives. Don’t pad it—reviewers will notice.

Commercialization Strategy:

USDA Phase I doesn’t require a full business plan, but it does require you to address commercial potential. Your narrative should answer:

• Who would buy or adopt this solution?
• What value does it deliver (cost savings, yield improvement, regulatory compliance)?
• What’s the envisioned path to market (direct sales, licensing, partnerships)?

Your innovation doesn’t need a billion-dollar market—but it must solve a real problem in food, ag, or rural sectors. Use real numbers where possible to show market demand or pricing assumptions. Including letters of interest from potential customers or pilot partners is a strong differentiator.

No cost sharing required
USDA SBIR does not require or give preference for matching funds in Phase I—but third-party interest can strengthen your case.

ARS Collaborations:

The USDA encourages applicants to explore partnerships with the Agricultural Research Service (ARS)—especially via Cooperative Research and Development Agreements (CRADAs) or technology licensing. While optional, these partnerships can make your proposal stand out.

To explore options, visit the USDA Office of Technology Transfer. They maintain a list of available ARS technologies and partnering contacts. If you’re considering a CRADA or license, initiate discussions early—well before the submission deadline.

In your application, describe how the collaboration enhances feasibility, credibility, or downstream adoption. If relevant, include letters of support from ARS scientists or licensing officers.

In summary, use your budget to show Phase I discipline, your commercialization section to show real-world viability, and your ARS connections to show strategic leverage.

Submission Mechanics and Review Criteria

Once your proposal is complete, attention must shift to execution. The USDA SBIR submission process is entirely electronic via Grants.gov—but simple technical missteps can derail months of work.

File Formatting Tips:

• Use the required USDA templates and naming conventions.
• Combine attachments exactly as instructed in the RFA (e.g., single PDF for all narrative sections).
• Double-check font size, margins, and page limits—violations can lead to rejection.

Submission is not instant. Grants.gov requires several internal validations, including checks for formatting, digital signatures, and file integrity. Start early and leave a buffer for corrections.

Late = Disqualified
Grants.gov will not accept applications after the USDA deadline—even by minutes. No appeals allowed.

Once submitted, monitor your email for confirmation from Grants.gov. If your application is rejected due to a technical error, you must fix and resubmit before the hard deadline.

Review Process:

USDA peer review is panel-based and competitive. Each proposal is scored on three criteria:

1. Technical Merit and Feasibility – Does the project design support proof-of-concept within 8 months?
2. Commercial Potential – Is there a clear path to a viable product or service?
3. Qualifications of the Team – Do the PI and collaborators have the right mix of expertise?

Scores are based on how well your proposal demonstrates alignment with these expectations. A technically sound idea may still fail if it lacks a credible path to market or if the team lacks relevant experience.

Applications with high scores are then considered for funding by USDA program staff, who may weigh additional factors like topic area balance or potential CRADA partnerships.

Submit early, follow formatting rules precisely, and give reviewers every reason to say yes.