Ohio Research Commercialization Grant Program

Ohio Research Commercialization Grant Program

Fiscal Year 2008Request for Proposals (RFP)

RFP Released – January 11, 2008

Bidder’s Conferences – 9:00 AM, January 25, 2008

TechColumbus, 1275 Kinnear Rd., Columbus, OH

Letters of Intent due by 2:00 PM – February 8, 2008

Written Questions – through March 13, 2008

Proposals due by 2:00 PM – March 27, 2008

Review and Award approximately – May 20, 2008

RFP Administered by: The Ohio Department of Development Technology Division 77 South High Street, 25th Floor Columbus, Ohio 43215

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TABLE OF CONTENTS

1. Statement of Solicitation 1 1.1 Introduction 1 1.2 The RFP Process 1 1.2.1 Release of RFP 2 1.2.2 Bidder’s Conference (Optional) 2 1.2.3 Letter of Intent 2 1.2.4 Questions and Answers 2 1.2.5 Submittal of Proposal 2-3 1.2.6 Review and Evaluation of Proposals 3 1.2.7 Recommendations, Decision, and Approvals 3 1.2.8 Award/Grant Agreement Preparation and Execution 4 1.3 Mandatory Compliance 4 1.3.1 Human and Animal Research 4 1.3.2 Obligations to State; Compliance with Laws 5 1.3.3 Other Compliance 5

2. Third Frontier Project 5 2.1 Background 5-6 2.2 Commercialization Framework 6-9 2.3 Commercialization Questions 9-10

3. Program Description 11 3.1 Purpose 11 3.2 Goals and Objectives 11-12 3.3 Eligibility 12 3.3.1 Technology Subject Matter 12 3.3.2 Lead Applicant 12-14 3.3.3 Collaborators and Committed End-Users 14 3.4 Funding 14 3.5 Cost Share Requirements 14 3.6 Term of Project 14 4. Evaluation Criteria 15

Ohio Third Frontier Research Commercialization Grant Program

TABLE OF CONTENTS

5. General Proposal Requirements 15 5.1 General Instructions 15-16 5.2 Trade Secret Information 16-17 5.3 Order and Content of Proposal Sections 17 5.3.1 Application Information Page 17 5.3.2 Trade Secret Information 17 5.3.3 Lead Applicant Information 17 5.3.4 Abstract 17 5.3.5 Table of Contents 17 5.3.6 Proposal Narrative 17-18 5.3.7 Commercialization Strategy 19-20 5.3.8 Projected Economic Impacts 20 5.3.9 Budget 20-21 5.3.10 Past Performance on Prior TFP Awards 21 5.3.11 Linkage to Prior TFP Investments 21 5.3.12 Experience and Qualifications 21-22 5.3.13 Collaborator Information/Letters of Commitment 22 5.4 Page Limitations 23

APPENDICES

A. DefinitionsB. FormsC. Evaluation CriteriaD. Ineligible Costs



Fiscal Year 2008Request for Proposals (RFP)

1. Statement of Solicitation 1.1 Introduction This Request for Proposal (RFP) is being issued for grants to be awarded under the Third Frontier Project (TFP). The Third Frontier Commission (TFC) reserves the right to fund any Proposal in full or in part, to request additional information to assist in the review process, to accept new Proposals from interested parties, to reject any or all Proposals responding to this RFP, and to re-issue the RFP and accept new proposals if the TFC determines that doing so is in the best interest of the State of Ohio. Issuing this RFP does not bind the State to make an award of Grant Funds. Any award of Grant Funds in respect of this RFP will be subject to availability of funds as provided in Ohio Revised Code Section 126.07. All capitalized words and phrases not otherwise defined in this RFP have the meanings given them in Appendix A – Definitions. All costs incurred in preparation of a Proposal shall be borne by the Lead Applicant. Proposal preparation costs are not recoverable from Grant Funds. The State shall not otherwise contribute to or be liable for the costs of Proposal preparation. If requested, Lead Applicants must attend the TFC meeting at which Proposals will be considered for funding. The funding decisions of the TFC are final. All Lead Applicants will be notified of the outcome of their applications after the TFC makes its funding decisions. Award of Grant Funds is subject to approval of the State’s Controlling Board. If requested, Lead Applicants selected by the TFC for funding must attend the Controlling Board meeting at which their applications for funding are to be considered. The Ohio Department of Development (ODOD) administers this RFP. ODOD reserves the right to adjust the dates for this RFP for whatever reason it deems appropriate. The ODOD Technology Division will administer all grants made under this RFP.

1.2 The RFP Process The RFP process will consist of the following steps: • Release of RFP • Bidder’s Conference (Optional) • Letter of Intent • Questions & Answers (Q&A) • Submittal of Proposals • Review and Evaluation of Proposals • Recommendations, Decisions and Approvals • Award and Grant Agreement Preparation and Execution

Ohio Third Frontier Research Commercialization Grant Program 1

Each of these steps is discussed below.

1.2.1 Release of RFP This RFP will be released by publication on the TFP website www.thirdfrontier.com.

1.2.2 Bidder’s Conference (Optional) A Bidder’s Conference will be held regarding this RFP. Attendance is encouraged, but is not mandatory. The conference will include a presentation by ODOD covering the intent and purpose of the RFP, the requirements of the RFP, and the evaluation process that will be used to determine awardees. Prospective Lead Applicants may submit written questions regarding the RFP to ODOD staff at the Bidder’s Conference. Answers to such questions will be provided at the Bidder’s Conference and posted on the TFP website.

1.2.3 Letter of Intent A prospective Lead Applicant must submit a Letter of Intent (LOI) as a condition to submitting a Proposal. The LOI must include the following information: the prospective Lead Applicant’s name, address, phone number; contact person, including e-mail address for the contact; proposed Project title, estimated Grant Funds to be requested, known Collaborators, and a one page summary of the proposed Project. Submitting an LOI does not obligate the prospective Lead Applicant to submit a Proposal. A Proposal will not be reviewed unless an LOI for such Proposal has been submitted by the LOI deadline. ODOD will issue to each prospective Lead Applicant that submits an LOI an identification number for the anticipated Proposal. The identification number must appear on the Application Information Page of the Proposal. See Appendix B – Forms.

The LOI must be submitted by e-mail and received before the LOI deadline. The e-mail should be addressed to: [email protected] with “2008 ORCGP LOI” appearing in the subject line. 1.2.4 Questions and Answers All questions regarding this RFP must be submitted in writing via e-mail. Substantive questions and answers will be posted in a Frequently Asked Questions section at the TFP website. Questions should be sent to [email protected] with a subject line “ORCGP Q&A”. ODOD reserves the right to edit questions for brevity and clarity and to consolidate the same general question if received from more than one prospective Lead Applicant. Do not contact ODOD staff or TFC members directly with questions regarding this RFP.

1.2.5 Submittal of Proposal It is the responsibility of each Lead Applicant to ensure that ODOD’s Technology Division receives Proposals at the prescribed place and by the submission deadline. Late Proposals will not be reviewed.


http://www.thirdfrontier.com

mailto:[email protected]

mailto:[email protected]

A Lead Applicant must ensure that a Proposal submitted in response to this RFP complies with all the requirements set forth in the RFP. All Lead Applicants are advised to read this RFP carefully to ensure a complete understanding of the Proposal requirements. In particular, the form, format, and content of all Proposals must follow the directions provided in Sections 3, 4 and 5 and use the forms presented in Appendix B. All Lead Applicants are hereby advised that there will be no opportunity to correct mistakes or deficiencies in a Proposal after the submission deadline. The Lead Applicant is solely responsible to ensure its Proposal is complete, accurate, responsive to the requirements of the RFP, and received by the ODOD Technology Division on time. Incomplete Proposals and those not complying with the requirements of the RFP may, at the discretion of ODOD, be excluded from evaluation or evaluated as submitted.

1.2.6 Review and Evaluation of Proposals All Proposals are subject to an administrative review during which the Proposals are screened for compliance with RFP requirements. Proposals found not to comply with the RFP requirements may be eliminated from the competition and not reviewed further.

ODOD uses external reviewers to read, evaluate, and rank the Proposals on their merits. The external reviewers will evaluate the Proposals based on the requirements, objectives, and criteria discussed in Sections 3, 4, and 5. Prior to review, ODOD will implement a process with external reviewers to identify potential conflicts of interest on the part of individual reviewers and will take such steps as ODOD determines appropriate to avoid any such conflict. External reviewers will create a rank-ordered list of Proposals recommended for funding, prepare a written set of comments about each Proposal, and brief ODOD staff about the risks and benefits of each Proposal. ODOD reserves the right to require interviews of potential awardees.

1.2.7 Recommendations, Decision, and Approvals Based on the evaluation, a rank-ordered list of the most competitive Proposals will be prepared by ODOD and forwarded to the TFC. The TFC will take into account the evaluations made during the review process and ODOD staff recommendations and will exercise its independent judgment in making its selection. The funding decisions of the TFC are final. If requested, Lead Applicants must attend the TFC meeting at which Proposals are considered for funding. All Lead Applicants will be notified of the outcome of their applications after the TFC makes its funding decisions.


1.2.8 Award and Grant Agreement Preparation and Execution Awards of Grant Funds will be made based on Proposals as submitted (including such modifications as may be agreed by the Lead Applicant), the Project budget, and any conditions set forth by the TFC. The grant will remain open for the duration of the Project, plus a three-year reporting period during which annual reports are required to be submitted to ODOD. Following selection by the TFC, an award of Grant Funds must be approved by the State’s Controlling Board, a legislative body that reviews appropriation of State funds. ODOD will request Controlling Board review as soon as possible after the TFC funding decision. The Controlling Board process normally takes a minimum of thirty (30) days to complete. ODOD will prepare a Grant Agreement. The Grant Agreement will incorporate the Proposal and Project budget, as either may have been modified by evaluation findings, funding decisions, or other terms or conditions consistent with the approval by the TFC. ODOD may require the Lead Applicant to provide cash flow projections on a quarterly basis. Grant Agreements are sent to Lead Applicants for review and signature. ODOD executes Grant Agreements on behalf of the TFC after the Grant Agreement is accepted by the Lead Applicant. After ODOD executes the Grant Agreement, the grant is entered on the State’s accounting system and invoices may be submitted. After the Grant Agreement is fully-executed, the Lead Applicant will be considered and referred to as a “Grantee.” A Grantee is required to complete the Project as described in the Grantee’s Proposal as submitted and with only those modifications as agreed by the Grantee and ODOD in finalizing the Grant Agreement. ODOD will assign a Program Administrator who will work with the Grantee throughout the Project Period. ODOD staff and the Grantee will develop a series of performance metrics that will be used to measure progress on the grant. All Grantees will be required to submit to ODOD required quarterly progress and metrics reports, as well as invoices and expenditures reports, to document achievement of Project milestones, to report Project-related success stories, and to submit post- Project completion annual reports for a period of three (3) years. All reports and invoices will be submitted in the form and format required by ODOD from time to time.

1.3 Mandatory Compliance The following restrictions apply to all Third Frontier Projects:

1.3.1 Human and Animal Research For any Proposal that includes use of human subjects, the Lead Applicant’s and each Collaborator’s human subject policies and procedures must comply with the Code of Federal Regulations, Title 45, Part 46. For any Proposal that includes use of animal subjects, the Lead Applicant’s and Collaborator’s animal subject policies and procedures must comply with US Code, Title 7, Sections 2131-2156.


1.3.2 Obligations to the State; Compliance with Laws Grantees will be required to certify in the Grant Agreement that they do not owe: (1) any delinquent taxes to the State or a political subdivision of the State; (2) any moneys to the State or a state agency for the administration or enforcement of any environmental laws of the State; and (3) any other moneys to the State, a state agency or a political subdivision of the State that are past due, whether the amounts owed are being contested in a court of law or not. Grant Agreements will require Grantees to comply with all applicable federal, state, and local laws in the performance of the Project. Grantees must accept full responsibility for payments of all unemployment compensation, insurance premiums, workers’ compensation premiums, all income tax deductions, social security deductions, and any and all other taxes or payroll deductions required for all employees engaged by Grantees on the performance of the work authorized by the Grant Agreements.

1.3.3 Other Compliance Grant Funds may not be used for research involving tissue obtained from aborted fetuses. (See Ohio Revised Code Section 2919.14, which prohibits use of tissue from aborted fetuses.)

2. The Third Frontier Project

2.1 Background The TFP represents the State’s largest-ever commitment to technology-based economic development. The TFP seeks to expand Ohio’s high-tech research capabilities, promote technology commercialization and innovation, create technology-based businesses, and create high-paying jobs for generations to come. The ten-year, $1.6 billion State of Ohio initiative is designed to:

• Increase the quantity of high quality research that has commercial relevance for Ohio;

• Expand the availability of investment capital needed to form and grow new companies;

• Grow and nurture an increasingly experienced pool of entrepreneurial management talent supported by organized systems of services and networking;

• Expand the availability of capital and assistance to support product innovation in established companies; and

• Attract new-to-Ohio company activity that grows and strengthens the function of specific clusters of excellence.

The TFC has overall responsibility for the TFP. In addition, a 16-member Third Frontier Advisory Board (TFAB) of leaders from industry, academia, and government was created to provide advice and counsel to the TFC.


The TFC and TFAB developed the following strategic operating guidelines that provide the framework for awarding TFP grants:

• Support the best the State has to offer, not just regions of the State; • Anticipate and act on market opportunities; • Demand strong industry involvement; • Invest at the intersections of core competency areas; • Recruit world-class talent and high-growth companies; • Engage regional partners; • Emphasize accountability and use of metrics.

These strategic operating principles should be consulted and applied in the formulation of all Proposals submitted for TFP grants. The TFC also made the decision to focus TFP investments in the following priority areas: 1) research and commercialization collaborations; 2) entrepreneurial support; 3) product development assistance; and 4) company attraction. Further, the TFC determined that the TFP should be focused in the Information Technology, Instruments-Controls-Electronics, Biosciences, Advanced Materials, and Power and Propulsion technology areas.

2.2 Commercialization Framework All TFP Programs share a common goal – to promote technology-based economic development within Ohio by funding activities that move technology from ideas to market. This goal requires the State to design programs, evaluate Proposals and Projects, leverage resources, and provide management oversight within the context of a commercialization framework. The ODOD has adopted the Technology Commercialization Framework based on an extensive literature review on the subject. The framework is depicted in Figure 1.


Figure 1. Technology Commercialization Framework

The Process of Technology Commercialization

Phases of Development to Create Proof

Transition to Mobilize Resources

IMAGING the Commercial

Opportunity

INCUBATING to Define

Commercializability

DEMONSTRATING Products & Processes

in CommercialContext

MARKET ENTRY to Prove Commercial

Viability

GROWTH &SUSTAINABILITY

to GenerateFinancial Returns

Mobilizing Resources for

Incubating


Demonstrating

Mobilizing Resources for Market Entry


Growth &Sustainability

Ohio Research Scholars Program

New R&D Center Cost Share

Wright Projects

Research Commercialization Program

Early-stage Capital


Fuell Cell / Advanced Energy

Targeted Industry Attraction

Valley of Death

The FY 2008 TFP RFP’s have been placed in the stages of commercialization as shown above.

Key characteristics of the framework include five major phases of commercialization and the transitions that must occur as a technology moves from phase to phase. Within each phase, work must be accomplished to produce the technical and commercial proof or evidence required by the resource providers who may fund the next phase. A description of these phases is presented in figure 2.


Phase Technology-Related Activities Status of Commercial Concept

Imaging

Incubating

Demonstrating

Market Entry

Growth & Sustainability

The Imagining Phase begins with the techno-market insight - the linking, if only in concept, of a technology and a market opportunity. Activities focus on the generation of a “proof of principle”, generally defined as the demonstration in a laboratory setting of critical components of the technology.

The Incubating Phase activities focus on defining product performance specifications, and then validating technical capabilities in the context of proposed performance specifications.

During the Demonstrating Phase, project teams attempt to generate technical proof within a more defined commercial context. Activities focus on product development and market acceptance. Working prototypes, performance to commercial specifications, and manufacturability within defined cost and quality standards characterize the goals on the technical side. On the market side, Demonstrating Phase activities focus on generating evidence that customers will buy the product.

In the Market Entry Phase, participantsenter the market to validate the commercial opportunity. Activities are those typically associated with an ongoing business – production, service, distribution, sales and marketing. The technology is embedded in a product or service and the opportunity has attracted the resources necessary to expand marketing, sales, and service.

The Growth & Sustainability Phase involves the execution of a comprehensive business plan to increase market share and/or total revenue and profit in context of a self-sustaining business.

During the Imagining Phase, the commercial concept is highly speculative. Often, the concept is only supported by conjecture regarding the potential of the technology and the market opportunity.

During the Incubating Phase, the participants begin to validate the commercial concept, primarily through secondary research. Because the commercial concept lacks market confirmation and is still highly speculative, written descriptions of the business are often titled “Commercial Concepts” rather than “Business Plans”.

During the Demonstrating Phase, participants focus on generating data regarding market acceptance – which customers will buy the product at or near the price required by the business plan. Participants then use the characteristics of the product / prototype and the market-generated data to create a business plan that defines the commercial opportunity.

In the Market Entry Phase, the opportunity is generating direct feedback from the market, measured in terms of sales, revenue, margins and growth.

In the Growth & Sustainability Phase, the goals, value creation mechanisms and resource providers are those generally associated with a thriving business seeking to identify opportunities for growth and profitability.

Figure 2. Summary of Commercial Phases


Given the multiple phases and non-linear nature of the commercialization process, a challenge for the TFP is to answer for each Project the question – “Is progress being made?” To address this critical issue, a measurement system is required. The measurement framework includes three categories of metrics – Level A Metrics, Level B Metrics, and Level C Metrics.

• Level A Metrics are synonymous with a Transition. The occurrence of a Transition (attracting the resources required to engage in the next Phase of commercialization) is the best evidence that a Project is successfully progressing towards commercialization.

• Level B Metrics are tangible evidence that a Project is on the path to achieving Level A Metrics. As an example, a Level A Metric for a Project in the Demonstrating Phase would be an investment by a venture capital fund to provide the resources necessary to engage in Market Entry Phase activities. A Level B Metric for this Project might include the receipt by the Project of a term sheet detailing a potential investment, or even a commitment by the venture capital firm to engage in a de fined set of diligence-related tasks within a relatively short time period.

• Level C Metrics measure activities and are the equivalent of “Project milestones.” These activities (e.g., hiring qualified personnel, preparing patent applications, preparing a business plan, achieving certain technical milestones, etc.) are often critically important, but do not represent evidence of progress toward the goal of Transition or commercial success. Rather, they indicate that the participants are executing their plan.

In evaluating Proposals, ODOD will assess the Lead Applicant’s integration of the A, B, and C Metrics concept into day-to-day Project management and into the performance evaluation sections of the Proposal. The Commercialization Framework will be discussed at the Bidder’s Conference prior to Proposal submission. Post-award, ODOD will conduct a series of meetings to help all Grantees integrate the metrics framework into their actual Project execution. ODOD, using the Grant Agreement and the activities of our Program Administrators, will manage grants and investments in accordance with an agreed set of A, B, and C metrics.

A more extensive discussion of the Technology Commercialization Framework is found on the TFP web site at: http://www.ohiochannel.org/your_state/third_frontier_project/featured_publications.cfm

2.3 Commercialization Questions Most TFP Programs are focused on the imagining, incubating, and demonstrating phases of the commercialization framework. The following guide is useful in identifying the type of work normally associated with these phases and may be helpful to a Lead Applicant in determining into which phase their work falls.


http://www.ohiochannel.org/your_state/third_frontier_project/featured_publications.cfm

Imagining Phase • Developing an understanding of the basic science behind the technology; • Developing a firm understanding about how and why the technology works; • Developing a laboratory proof of principle; • Assessing the work needed to achieve reduction to practice; • Investigating the Lead Applicant’s freedom to operate within its targeted markets and constraints associated with existing patents or other forms of IP; • Developing its own intellectual property (IP) strategy for this technology. Incubating Phase • Performing work to understand and adapt the technology to market needs; • Confirming the company has the freedom to operate; • Acquiring adequate IP protection for the technology and related applications to allow for market introduction; • Completing the reduction to practice and producing a working model based on well-defined and unchanging specifications; • Producing product designs and production processes that support the manufacture of a reliable product. Demonstrating Phase • Finalizing technical product specifications; • Developing a well-defined stage gate process to support the management of the design and development process; • Establishing the reliability of the technology as embedded in a commercial product; • Incorporating feedback from lead users into the design based on alpha and beta versions of the technology; • Producing pilot runs that demonstrate functionality consistent with the product concept; • Securing facilities adequate for near-term production.


3. Program Description 3.1 Purpose The Ohio Research Commercialization Grant Program (ORCGP) was created as part of the Ohio Third Frontier Project to support the commercialization of new products and services derived from Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR) and Advanced Technology Program (ATP) research and development projects. The Phase II SBIRs and STTRs are designed to develop commercial prototypes of products employing advanced technology. Similarly, the ATP program is designed to support research into technologies with potential commercial applications. None of these programs, however, allow small businesses to recover certain types of costs associated with commercializing their technology. Ohio designed the ORCGP to specifically provide a source of funding to cover commercialization expenses and to accelerate the time to commercial market entry of products derived from SBIR, STTR, and ATP funding. The ORCGP is a flexible source of funding to ensure that research and development efforts by Ohio small businesses result in commercial products that improve their top line revenue. Ohio small businesses are strong participants in the SBIR, STTR, and ATP programs. Since the SBIR program began in 1983, Ohio companies have won more than 2,400 SBIR and STTR awards valued at more than $728 million. In federal fiscal year 2006, Ohio companies received 302 SBIR and STTR awards valued at more than $92 million. The ORCGP directly leverages these awards and encourages the recipients to continue their commercialization activities. The 2008 ORCGP program marks the fourth year for this program. To date, approximately thirty-six awards have been made totaling more than $8 million in Third Frontier funding. Awards have been made to support a variety of projects that range from a wireless biometric monitoring system, to advanced composite materials for ballistic armor, to an automatically dimming rear view mirror based upon liquid crystal technology.

3.2 Goals and Objectives The goal of the ORCGP is to make Ohio the national leader in accelerating the movement of new technology-based products developed by Ohio small businesses to the commercial market in sectors important to the Ohio economy. Specific objectives of the ORCGP are: • To create substantial economic value to Ohio within the next three years as a result of R&D funding from the U.S. government;

• To support Ohio’s small business enterprises as they commercialize new products within the next three years;

• To fund discrete commercialization activities that stand as barriers to Ohio small businesses that have validated technologies through SBIR, STTR, or ATP programs.

The successful Lead Applicant will have used a Phase II SBIR, Phase II STTR or the ATP program to develop prototype technology-based products that have commercial potential. Technology products should already be in either the demonstrating stage or in final incubating stage of the commercialization framework. The ORCGP is not a research and development program, but rather a source of funding to accelerate the commercialization and market entry of technologies.


ODOD will measure the performance of the ORCGP grant recipients on the basis of their ability to satisfy the technical work plan proposed and to acquire sufficient additional financial resources to continue the commercialization activities beyond the ORCGP funding. ODOD will consider projects successful (level A metric) if, at the proposed project’s completion, the Lead Applicant has been able to raise capital, whether that capital comes from a source internal to the collaboration or external through additional grants, contracts, or debt or equity financing to finance the next stage of commercialization. Achieving externally validated technical evidence and a compelling business case necessary to secure additional financing is a significant accomplishment indicating that the applicant is on the path toward commercialization (level B metric). Successful accomplishment of development tasks is deemed to indicate that the Lead Applicant is performing the proper activities to eventually achieve commercial progress (level C metric).

3.3 Eligibility

3.3.1 Technology Subject Matter The Ohio Research Commercialization Grant Program is requesting proposals for technologies in any of the Third Frontier technical focus areas—instruments- controls-electronics, biosciences, power and propulsion, information technology, and advanced materials. The proposal must outline how the ORCGP funds will be used to conduct commercialization activities including, but not limited to, the following:

• Intellectual property protection • Market analyses • Business development, marketing and sales • Cost engineering • Product specific tooling • Manufacturing scale-up planning • Sourcing of materials, components, systems, or other business partners. Proposals that include additional research and development activities will not receive favorable consideration in the ORCGP evaluation.

3.3.2 Lead Applicant An eligible Lead Applicant for this program must be a for-profit company based in Ohio or with a Principal Place of Business in Ohio, or an out-of-state for-profit company that pledges to locate a Principle Place of Business within Ohio as a pre- condition to award. Out-of-state Lead Applicants are eligible to receive awards, however no funds will be distributed to an out-of-state Lead Applicant selected for award until the Lead Applicant has a Principal Place of Business in Ohio and this obligation must be fulfilled within 6 months of award notification. In all cases, the Lead Applicant must agree that a substantial portion of the project activity and the benefit from the project will occur in Ohio.


The Lead Applicant must have received a federal SBIR Phase II, STTR Phase II or ATP award since January 1, 2004, and have expended at least 75% of the federal program dollars prior to submitting a Letter of Intent. The technology for which State Grant Funds are being requested must be directly related to the technology that was funded under the federal SBIR Phase II, STTR Phase II of the ATP. If the SBIR Phase II, STTR Phase II or ATP was awarded prior to January 1, 2004 and the Lead Applicant has made substantial commercial progress since its completion, the Lead Applicant must ask for an exemption in the Letter of Intent and provide evidence in the Letter of Intent that the Lead Applicant has continued to commercialize the technology since the completion of the federal award. This evidence may include, but is not limited to, debt or equity investments for commercializing the technology and additional federal awards directly supportive of the technology commercialization. Lead Applicants that apply for an exemption will receive a definitive answer from ODOD approximately 3 to 5 days after LOIs are due. Applicants that have not yet completed their SBIR Phase II, STTR Phase II or ATP must attach a copy of their last federal invoice to their LOI as proof that at least 75% of the federal award has been expended. Lead Applicants that are commercializing a medical device that will require FDA approval must indicate in their LOI whether or not they have submitted for regulatory approval. If they have not, then they must indicate when they plan to submit. Those Lead Applicants that do not plan to submit for regulatory approval during calendar year 2008 will be asked to wait until the following program year to submit a proposal to this program. There is no limit to the number of proposals that a single Lead Applicant may submit. However, only one award per Lead Applicant will be made and that decision will be made by ODOD based on the merits of the proposals as determined by the ODOD external review team. The Lead Applicant must have a federal tax identification number. Each Proposal must designate one Lead Applicant which will be responsible for the administration of the Proposal should it be awarded. The Lead Applicant must also serve as both administrative and technical director of the Project. In the Abstract section of the Proposal (section 5.3.4), the Lead Applicant must include a description of the Phase II SBIR, Phase II STTR, or ATP award upon which the Proposal is based, as well as the status of that award, including the percentage of the federal program dollars expended. In the Problem Statement section of the Proposal Narrative (section 5.3.6), each Proposal must provide the following details: the name of the federal program upon which the Proposal is based (e.g., SBIR, STTR, or ATP); the year that the Phase II SBIR, Phase II STTR, or ATP award was received; the name of the awarding federal agency or department and branch, if applicable (e.g., Department of Defense/Air Force); the dollar value of the Phase II or ATP award; the title of the Phase II or ATP project; the name and contact information of the awarding agency’s program


manager. In addition to this information, the proposal must also address the other items described in the Problem Statement section of the Proposal Narrative.

Proposals must demonstrate both the ability and experience of the Lead Applicant in commercializing products and the ability and experience of the Lead Applicant to perform the work needed to produce evidence necessary to satisfy investors, regulators, and the market. Lead Applicants that become Grantees must maintain eligibility while the grant is open. A Grantee that loses eligibility forfeits its award and must repay the State of Ohio the full amount of the monies it has received, plus interest.

3.3.3 Collaborators and Committed End-Users There is no requirement that the Lead Applicant enter into collaboration with any other organization. However, all applicants are encouraged to be knowledgeable of other Third Frontier funded resources and not request funding for activities that are available through organizations that have acquired specialized facilities, equipment or resources through previous Third Frontier or Edison Program investments. Proposals may include one or more committed end-users. A committed end-user is a business or governmental entity that has a commercial interest in, and can anticipate commercial benefit from, the results of the proposed Project. All committed end-users must submit a Letter of Commitment signed by a representative authorized to commit the end-user that describes the nature and value of the relationship with the Lead Applicant. Committed end-users do not require designation on the Budget Form.

3.4 Funding ODOD anticipates awarding up to $2 million in grants through the FY08 Ohio Research Commercialization Grant Program. Individual awards will be made up to $350,000. Awards under the ORCGP can be used for any purpose that supports commercialization of a new technology-based product or service, except those items identified in Appendix D that are expressly prohibited. It is anticipated that between five and eight awards will be made in this funding round.

3.5 Cost Share Requirements No cost share is required for the ORCGP awards. However, the evaluation of proposals will include how realistic the Lead Applicant is with respect to estimating the total funding required to commercialize the new product and service, and whether or not the Lead Applicant has firm commitments for such funding. In the event that two applications score equally, the amount of future resources committed to the project by the company, capital or otherwise, may be used as a tiebreaker.

3.6 Term of Project The term of ORCGP Grant Agreements will be five (5) years. The first two (2) years will be the Project Period during which the active work funded by the grant will take place. During the remaining 3 years, annual reports detailing the overall status of research and commercialization activities and the economic impacts of the Project will be required.


4. Evaluation Criteria Only the most meritorious proposals are sought for funding. Proposals passing the administrative review will be evaluated by external reviewers based on responsiveness to all the requirements of this RFP and to the evaluation criteria listed in Appendix D. Implicit in those requirements and evaluation criteria is the quality of the work plan, budget and cost share. The following criteria however, have been designated with the highest relevance to and weighting for the ORCGP.

• Building on TFP Investments • Consistency with State and Regional Priorities • Degree of Customer Readiness • Degree of Sustainable Competitive Advantage (Fly Wheels) • Demonstrated Leadership Assets • Identified Stage of Market Development • Impact on Ohio • Past Performance (if applicable) • Potential for Leverage • Potential for Products • Size of Opportunity • Vision for Success

More information on each of the above criteria, as well as other less relevant criteria, can be found in Appendix D. All of the evaluation criteria have been designed to support the mission and goals of the TFP and its various programs.

5. General Proposal Requirements

5.1 General Instructions • Submit Letter of Intent and receive a Letter of Intent ID Number from ODOD.

• Submit separate Proposals for each proposed Project.

• Proposals must be submitted in the following manner:

- One original paper copy marked as “Original” and two additional paper copies marked “Copy” and two CDs each containing a single PDF and a single WORD®-compatible file of the Proposal.

• Proposals must be received at the location specified below before the RFP closes. Proposals may not be submitted by fax or e-mail.

Ohio Department of Development Technology Division 77 South High Street 25th Floor Columbus, OH 43215 Attention: “ORCGP Program”


• Proposals are to be submitted on 8.5 x 11-inch paper.

• Margins must not be less than 3⁄4 of an inch on all sides.

• Font must be 10 point or larger with no more than 6 lines per inch.

• All pages must be numbered consecutively using the format “Page [#] of [total number of pages]” (e.g., Page 2 of 25).

• The Proposal title, Lead Applicant name, and Letter of Intent number must appear at the bottom of each page.

• Proposals should not include color figures that cannot be understood when photo copied in black and white.

• The first page of the Proposal must be the Application Information Page. • Do not include a cover or cover letter other than the Application Information Page. • Proposals must be stapled once in the upper left hand corner and must not be bound.

5.2 Trade Secret Information All Lead Applicants are strongly discouraged from including in a Proposal any information that the Lead Applicant considers to be a “trade secret,” as that term is defined in Section 1333.61(D) of the Ohio Revised Code. All information submitted in response to this RFP is public information unless a statutory exception exists that exempts it from public release. If any information in the Proposal is to be treated as a trade secret, the Proposal must: • Identify each and every occurrence of the information within the Proposal with an asterisk before and after each line containing trade secret information and underline the trade secret information itself.

• Check the “Trade Secret Information Included” box on the Applicant Information Page.

• Include a page immediately after the Application Information Page that lists each page in the Proposal that includes trade secret information and the number of occurrences of trade secret information on that page.

To determine what qualifies as trade secret information, refer to the definition of “trade secret” in the Ohio Revised Code, which is reproduced below for reference:

D. “Trade Secret” means information, including the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, pattern, compilation, program, device, method, technique or improvement, or any business information or plans, financial information or listing of names, addresses, or telephone numbers, that satisfies both of the following:

1. It derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.


2. It is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

ODOD requires non-disclosure agreements from all non-ODOD persons who may have access to Proposals containing Trade Secret Information, including evaluators.

5.3 Order and Content of Proposal Sections

5.3.1 Application Information Page The first page of the Proposal must be the completed Applicant Information Page found in Appendix B to this RFP.

5.3.2 Trade Secret Information This section of the Proposal must disclose any trade secret information included in the Proposal. Follow the instructions in Section 5.2 of the RFP.

5.3.3 Lead Applicant Information Complete and include the Lead Applicant Contact Information Page. One individual may serve in more than one capacity.

5.3.4 Abstract Prepare an Abstract that summarizes the proposed Project and its expected commercial and technical outcomes. This section should minimize use of jargon and technical language and be written so that a non-technical person can under stand it. This section will be used in public documents, including press releases, and must be understandable by the general public. This section may not contain any Trade Secret information.

5.3.5 Table of Contents Prepare a Table of Contents with detail for three levels of headings in the Proposal. All Lead Applicants must use the outline provided by ODOD for the level 1 and 2 headings. This section should also include a list of Charts, Figures, and Tables that appear in the Proposal with a page number for each.

5.3.6 Proposal Narrative The Proposal Narrative should address all the following items in the order presented. • Understanding the Program Intent. This section must demonstrate the Lead Applicant’s understanding of the purpose of the TFP, the specific role of this RFP and how the proposed Project is consistent with these purposes. The Lead Applicant should address the relationship between product and process commercialization and the activities being proposed. The Lead Applicant must demonstrate that the Proposal is responsive to the long-term purposes of the TFP.

• Problem Statement. This section must describe the technical and commercial challenges to be addressed in the proposed Project and why solutions to these challenges will increase the likelihood of successfully achieving commercialization and other program objectives and goals. Evidence that the Lead Applicant understands the eventual customer needs and performance requirements is required.


• Project Goals and Objectives. This section must clearly state the goals and objectives of the proposed Project and each of its related sub-elements. The goals should cover both the long-term commercialization purposes of the proposed Project and other longer-term goals beneficial to Ohio. The objectives should be related to the research, development, and demonstration activities that will be performed and how they are expected to provide the evidence and proof needed to carry the technology forward into phases of the Technology Commercialization Framework. The objectives should be expressed as Level A, Level B, and Level C metrics as discussed in Section 2.2 and at the TFP website posting of the Technology Commercialization Framework: http://www.ohiochannel.org/your_state/third_frontier_project/featured_publications.cfm

• Technical Approach and Work Plan. This section of the Proposal must outline and discuss the overall activities that are proposed to meet the proposed Project’s goals and objectives. Important research techniques, methods, facilities, and equipment to be used in the proposed Project should be discussed and compared to alternative approaches. Key factors that will affect the success of the proposed Project should be identified as well as significant risk factors. The Lead Applicant may elect to organize the technical approach according to different areas of investigation. This section of the Proposal must also identify all the tasks and activities that will be performed for each area of investigation. The tasks should be described in terms of their specific objectives, approach, resources and outcomes. The description should be detailed enough to provide a clear indication of how progress will be made and measured.

• Deliverables. This section must identify the deliverables from the proposed Project. Deliverables will include tangible evidence of commercialization and technical progress, mandatory reporting required by ODOD, and other deliverables that the Lead Applicant deems significant for measuring progress. • Schedule. The Proposal must contain a schedule that graphically displays the duration of tasks, interactions between the tasks, and the timing of deliverables and other key milestones. This section should be based on weeks or months from authorization to proceed, rather than any firm, fixed calendar dates.

• Management Plan. This section must identify the Principal Investigator or Co- Investigators and other Key Personnel who will be assigned to this proposed Project, their roles and responsibilities, and the rationale for their selection for key positions. One of the Key Personnel from the Lead Applicant must be designated as the technical director while another or the same member of Key Personnel must have the required skills and experience serve as commercialization director. Overall, management should possess all the required technical and commercial skills and experience needed for successful execution of the planned scope of work. A short, one paragraph description summarizing the technical and commercialization capabilities of the Co- Investigators and other Key Personnel should be included. This section should address how the Key Personnel will monitor and maintain progress, control quality, resolve problems, and obtain advice on key decisions about the technical and commercial dimensions of the proposed Project. This section should also contain information about the management reporting structure among Key Personnel and the Lead Applicant.



5.3.7 Commercialization Strategy The Commercialization Strategy must contain a discussion of the following questions for each technology or area of investigation that is expected to lead to new product opportunities:

• What is the market place need addressed by the technology? • What alternatives exist to satisfy this need and what alternative approaches are being investigated? • What is the specific value proposition of the Lead Applicant’s proposed approach and what are the differentiating benefits associated with the proposed technology? What evidence supports the contention that the market values these benefits?

• What is the market size and growth? • What is the general magnitude of the investment that will be needed to bring the product into the market? How long will the commercialization process take? • What are the additional potential sources of investment capital that can be used for financing the market entry of the product? • What are the roles and responsibilities of the Lead Applicant and any Collaborators in the commercialization process? • What type of business model (new company formation, license to an existing company, etc.) does the Lead Applicant and partners expect to implement? What are the strengths and weaknesses of the current Lead Applicant and any Collaborators with respect to implementing this business model? In preparing this section of the Proposal, the Lead Applicant must relate its commercialization plans and strategy to the ODOD Technology Commercialization Framework described in Section 2.2 of this RFP. In addition to the topics listed above, the Lead Applicant should specifically address the following questions about each product development opportunity that will be funded by the requested Grant Funds.

• In which phase of the commercialization framework does each technology fall? • What technical proof is required to convince additional investors to finance the next stage of work? • How much will it cost to complete the technical proof and will the State’s funding be adequate? If not, where will additional investment come from and does the Lead Applicant have a firm commitment of these resources? • How much will it cost to perform the next phase of the commercialization process and what organizations provide the types of resources the Lead Applicant will need to conduct the next stage of the commercialization process?


• Does the Lead Applicant have any commitments from potential resource providers about their willingness to fund additional commercial phases? These points will be used to establish the Level A and B metrics for the proposed Project. “Success” is achieved if the Lead Applicant and Collaborators acquire the resources needed to conduct the next phase of commercialization. Management of IP is a key success factor. The Proposal should clearly define how the Lead Applicant intends to manage new IP, describe how it will work with technology transfer offices and Collaborators to establish ownership rights and how it will work with Ohio-based companies and/or investors to realize positive economic impacts from the business opportunities being realized and brought to fruition in Ohio from this IP.

5.3.8 Projected Economic Impacts In addition to the Level A, B, and C metrics, the Lead Applicant must provide projected economic impacts estimating the employment, personal income, product revenues and other monetary leverage (grants, contracts, equity infusions, etc.) from the commercialization success of the technologies. The Proposal must contain a realistic forecast of the direct employment, personal income, product revenue and other leverage for two points in time - the first being at the completion of the active work on the Proposal and the second being five years thereafter. The Lead Applicant should document how the projections were developed and key assumptions used in the analysis. For example, if the projections are based on capturing a particular share of the market, the Proposal should indicate the magnitude of the market and the basis for the estimated market share. The Lead Applicant should identify the impacts for each distinct product or product platform that will come from the State investment. The Lead Applicant should report only direct impacts, not secondary or tertiary impacts derived from economic models. The Lead Applicant may describe a longer term forecast, in addition to the two points required, if the Lead Applicant believes there will be substantial differences in the employment, income, and revenue levels at later periods of time. Again, all methods and assumptions should be described.

5.3.9 Budget The Lead Applicant must retain a significant percentage of the requested budget to be spent in-house for the efforts of the Lead Applicant. No more than 20% of the total direct State Grant Funds requested may be budgeted for indirect costs. Budget Form 1 (Appendix B) is to be used to present the total two-year budget plan for the funds requested by the specific use categories listed on the form. On the bottom half of the form, estimate the allocation of funds by project areas. Generally, these project areas will correspond to the developing technologies identified in the Commercialization Strategy as discussed in section 5.3.7. However, there may be additional project areas focused on supporting commercialization.

Please note that the Lead Applicant must identify its requirements for high performance computing facilities and services, including hardware, software, and infrastructure services in its Proposal. If a Lead Applicant’s computing requirements exceed approximately $100,000 for a proposed Project, the Lead Applicant will notify ODOD, and the Ohio Supercomputer Center may convene a panel of experts.


The panel will review the Proposal to determine whether the Proposal’s requirements can be met through Ohio Supercomputer Center facilities or through other means and report such information to the TFC. All Lead Applicants are en couraged to consult with the Ohio Supercomputer Center in advance of submitting a Proposal with $100,000 or more in high performance computing facilities, equipment, or infrastructure services. Budget Form 2 (Appendix B) is to be used by the Lead Applicant. The total Grant Funds requested in the Proposal must be represented on this form as the Grant amounts that will be used by the Lead Applicant and Collaborators. The Subcontract/ Sub-grant line on this form refers to the funds provided to Collaborators by the Lead Applicant. Budget Form 3 (Appendix B) is to be completed for each Collaborator. A Collaborator is any entity that is receiving a Subcontract/Sub-grant from the Lead Applicant. The total of the requested funds among the Collaborators’ budget forms must equal the total corresponding amounts of the Subcontract/Sub-grant line reported in Budget Form 2. A Budget Narrative should also be included covering an explanation of the costs for the State Grant Funds requested.

5.3.10 Past Performance on Prior TFP Awards If the Lead Applicant has received a prior TFP Grant, then it must discuss in this section the objectives, progress, achievements, and impact of the prior grant or grants. Specific commercialization successes, leverage received, companies started and attracted, and employment impacts should be noted. Any major technical ac complishments can be highlighted in summary fashion. The past performance must be of sufficient detail that an external reviewer will be able to assess whether the performance on each prior grant has been satisfactory.

5.3.11 Linkage to Prior TFP Investments The Lead Applicant must include a section that describes how its Proposal relates to prior TFP investments. This requirement extends to any Project funded by the TFP regardless of whether the Lead Applicant or its Collaborators were involved. The intent of this section is to understand how the proposed Project builds and extends capabilities, capacities, and commercialization initiatives previously funded by the TFP. If a proposed Project does not relate to any prior TFP investments, the Lead Applicant must summarize why this proposed Project is of critical importance to Ohio’s economic future.

5.3.12 Experience and Qualifications The Proposal must contain a description of relevant organizational experience, capabilities, facilities and equipment, and financial conditions of the Lead Applicant and Collaborators. Provide detail sufficient to evaluate whether the Lead Applicant and Collaborators have the direct experience needed to perform both the technical and commercial work being proposed. The Lead Applicant should limit past project experience to activities that have occurred within the past five (5) years.


Biographical information is limited to no more than ten (10) individuals whom the Lead Applicant considers key to the success of the Project. These ten (10) individuals should represent the proposed Project’s leadership from the technical, commercial, and managerial perspectives and ideally should be drawn from personnel of the Lead Applicant as well as Collaborators. Biographical sketches shall be no more than 1 page each and one sketch must be included for each Key Personnel up to the total of ten (10) individuals. The biographical information should present the relevant work history, technical experience, commercialization experience, project management experience, educational attainment, honors and recognitions, and selected recent publications that relate directly to the subject matter of the proposed Project. If a key position is to be filled upon award of a Grant, please provide either a job description for that position or a description of a candidate to whom the Lead Applicant has made a contingent offer.

5.3.13 Collaborator Letters of Commitment A Commitment Letter must be provided for each Collaborator identified in Budget Form 3. The letters must:

• Be submitted on the letterhead of the Collaborator; • Include the name of the Lead Applicant, the title of the Proposal, and the LOI number assigned by ODOD; • Briefly state the nature of the collaboration; • State the duration of the collaboration; • State the resources the Collaborator is committing to the proposed Project; • State how the proposed Project will contribute to the strategy of the Collaborator; • State the specific amount of the commitment that matches the amount on the corresponding Budget Form 3; • State the source of the commitment; • State when the committed resources will be available to the Lead Applicant; • Be dated and signed by a representative of the Collaborator with the authority to make the commitment. Other letters of support are allowed but only if they come from a committed end- user or industrial representatives who have a commercial interest in, and can anticipate commercial benefit from, the results of the proposed Project. These other letters of support must describe the anticipated benefit and what advice or support the industrial representative will be providing in the way of market opportunities, knowledge of competing technologies, technological and/or commercial hurdles for the proposed Project, and parallel and supportive research efforts.


5.4 Page Limitations Any pages beyond the page limits listed below will be eliminated from the Proposal before it is sent for technical review and evaluation. Except as otherwise noted, appendices or other methods to augment the information presented in the Proposal are not allowed. Reference to web-based information to supplement the Narrative is not permitted and such references will not be considered in the evaluation.

• Abstract – 1 page (500 words) • Proposal Narrative – 10 pages (excluding “References”) • Commercialization Strategy – 5 pages • Projected Economic Impact – 2 pages • Budget – use specified forms • Budget Narrative – 5 pages total • Past Performance on Previous TFP Awards – 2 pages • Linkage to Previous TFP Investments – 2 pages • Experience and Qualifications – 5 pages total including the Lead Applicant and all Collaborators • Biographical Sketches – 10 pages (A maximum of 10 biographical sketches of Key Personnel and each bio is limited to 1 page)


APPENDICES

A. DefinitionsB. FormsC. Evaluation CriteriaD. Ineligible Costs


Appendix A

Ohio Third Frontier Research Commercialization Grant Program - Definitions

Collaborator – An individual not employed by or related to the Lead Applicant or an organization, institution, company or other legal entity that is not an affiliate of the Lead Applicant which is anticipated to receive State Grant Funds and/or is contributing to Cost Share.

Cost Share – See Appendix C.

Effective Date – The date upon which a Grant Agreement between a Lead Applicant and the State of Ohio is effective.

Equipment – Any item of equipment which both costs $5,000 or more and has a useful life of more than one year.

Grant Accounts – Accounts established and maintained by a Grantee to record separately in its books and records receipt and use of Grant Funds and Cost Share.

Grant Agreement – A legal agreement setting forth the terms and conditions upon which Grant Funds are awarded and the respective rights and obligations of the Lead Applicant and the State of Ohio with respect to Grant Funds and the Project for which they are to be used.

Grant Funds – Financial assistance in the form of money awarded by a government agency to an eligible applicant in order to accomplish a public purpose of support or stimulation of development authorized by statute.

Indirect Cost – A cost that is incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project but nevertheless is necessary to the operation of the organization. Also known as “Facilities & Administrative (F&A) cost.”

Key Personnel – Individuals from the Lead Applicant and/or Collaborators who represent a Project’s leadership from the technical, commercial, and managerial perspectives.

Lead Applicant – The entity that submits a Proposal and will be legally and financially responsible for the administration of any resulting award of Grant Funds.

Principal Investigator or PI – The individual responsible and accountable for designing, conducting, and monitoring the Project. “Co-Investigators” are two or more investigators who share the responsibilities of a Principal Investigator.

Principal Place of Business – A facility located in the State of Ohio where the Lead Applicant, who is registered with the Secretary of State to conduct business in Ohio, maintains physical operations managed by a senior representative of the Lead Applicant who is authorized to make decisions and to obligate the Lead Applicant and its resources. This facility must be owned by the Lead Applicant or be subject to a lease, the balance of which matches or exceeds the term of the Grant Period. The facility must be a recipient or beneficiary of a significant amount of the funds awarded to the Grantee.

Ohio Third Frontier Research Commercialization Grant Program A1

Program Administrator – Personnel of the Ohio Department of Development assigned to monitor the progress of a Project awarded Grant Funds.

Project – The plan of activity or activities that make up the total scope of work for which an award of Grant Funds is requested and for which a Proposal is approved.

Project Completion Date – The date by which the Grantee shall complete the Project and incur all eligible expenses.

Project Period – The period of time from the Effective Date until the Project Completion Date.

Proposal – A proposal as submitted by a Lead Applicant seeking an award of Grant Funds in response to a Request for Proposal issued for a particular Third Frontier Program. Subcontract/Subgrant – A subcontract/subgrant is a legal agreement between a Grantee and an individual or entity that has expertise in a particular area or access to specialized resources or materials that the Grantee lacks. A subcontract/subgrant is identified in the proposal for performance of a specific function.

Supplies – Materials, including equipment, which both costs less than $5,000 and has a useful life of less than one year.

TFP Website – www.thirdfrontier.com

Ohio Third Frontier Research Commercialization Grant Program A2


Appendix C

Ohio Third Frontier Research Commercialization Grant Program - Evaluation Criteria

Ability to Compete Globally In the context of marketplace and competition, the TFP must consider global trends and characteristics. A Lead Applicant should demonstrate an understanding of the global marketplace(s) and trends, competitor analysis and access and benefits to marketplace(s). Particular attention should be given to situations where initial markets and major competitors are global, where other countries have committed major resources to this technology, and where barriers to market entry favor international firms. Proposals will be evaluated on the basis of how well the Lead Applicant understands and can compete for international business opportunities.

Building on TFP InvestmentsA Lead Applicant should generally demonstrate how its Proposal builds on prior investments made by the TFP which are listed on the TFP website. When practical, a Lead Applicant should demonstrate how its Proposal integrates with prior Projects. Examples could include use of technology developed in TFP-funded work, utilization of equipment acquired previously and building on platforms and capacities supported by previous investments. Proposals will be evaluated on how well previous investments are integrated.

Consistency with Roadmaps for SuccessA Lead Applicant should identify or reference technology roadmaps that present clearly identified targets, goals and associated milestones and that includes indications of technical breakthroughs that will lead to commercial success. The specific Project objectives and activities should be related to the roadmap. Proposals will be evaluated on how well the proposed activities meet the roadmap strategies.

Consistency with State and Regional PrioritiesBased on priorities for the TFP developed from the 2002 Battelle study, An Ohio Technology-Based Economic Development Strategy, TFP investments should be focused on one or more of the following priorities: increase the quantity of high-quality research that has commercial relevance to Ohio; expand the availability of investment capital needed to form and grow new companies; grow and nurture an increasingly experienced pool of entrepreneurial management talent supported by organized systems of services and networking; expand the availability of capital and assistance to support product innovation in established companies; and, attract new-to-Ohio company activity that grows and strengthens the function of specific clusters of excellence. These State priorities must be realized within the five technology areas of TFP focus: Advanced Materials; Biosciences; Information Technology; Instruments, Controls and Electronics; and Power and Propulsion. To the extent practical, Proposals involving technologies at the intersection of two or more of the technical focus areas are preferred. Proposals will be evaluated on how well they align with the State priorities.

Building on priorities identified in the 2006 Battelle study, Strategically Aligning Ohio’s Research and Technology Portfolio, as well as the 2005 Deloitte study, Industry-Based Competitive Strategies for Ohio, each of the six Ohio geography-defined regions has identified key strengths and assets for increased technology-based economic development that complement TFP investments. Proposals will be evaluated on how a Lead Applicant’s Proposal fits into the key priorities for advancing economic development in one or more regions of the State. The Battelle and Deloitte studies are available on the TFP website at: http://www.ohiochannel.org/your_state/third_frontier_project/featured_publications.cfm.

Ohio Third Frontier Research Commercialization Grant Program C1


[Note: Regions are defined in the 126th General Assembly’s Am. Sub. Senate Bill 236, which can be found at: http://www.legislature.state.oh.us/bills.cfm?ID=126_SB_236. Regional priorities can be found in the 2005 Deloitte study and abstracts from the FY 2007 Entrepreneurial Signature Program Proposals. Both of these documents are available on the TFP website, www.thirdfrontier.com.]

Degree of Customer Readiness All Lead Applicants are encouraged to define the needs and functionality of their technology, especially by a Collaborator who is also considered a potential customer. Proposals will be evaluated by how well the Lead Applicant builds customer inputs into the Proposal.

Degree of Sustainable Competitive Advantage (Fly Wheels)Projects supported by the TFP must demonstrate that they fit within, or can create, an environment which enables Ohio to maintain a leading, competitive advantage. The advantage may be realized through the State’s supply chain, labor base, research and other assets. Similarly, the advantage may be created from the IP and knowledge of the Lead Applicant and its Collaborators which provide assurance that commercialization will benefit Ohio. Proposals will be evaluated on how well their competitive advantage can be created and sustained beyond the two-year Project Period without State Funds.

Demonstrated Leadership Assets A significant element cutting across all of the TFP evaluation criteria is the proposed Project’s leadership. A Lead Applicant should demonstrate its commercialization, scientific, collaborative, regulatory and programmatic leadership experience and assets. Leadership should be evident at the individual, Key Personnel, corporate and Collaborator levels in all critical phases of the proposed Project to include research, IP protection, regulatory compliance, product development, leveraging of additional funding or investment capital, and commercialization. A Lead Applicant should also demonstrate the highest level of support from both within its institution and a proposed Project’s Collaborators, commitments of Cost Share and/or in-kind support, and other evidence of committed support. Proposals will be evaluated on the basis of demonstrated leadership skills of the Lead Applicant and its team members.

Existence of Supporting WorkforceProposed projects should discuss the needs for workforce and whether Ohio’s workforce resources are, or could be, a positive factor in achieving success. Proposals will be evaluated on the basis of how closely matched the labor needs of the Project and Ohio’s workforce are to one another.

Identified Stage of Market Development A Lead Applicant must place its proposed Project within the Commercialization Framework, as described in Section 2.2 of the RFP, and compare the positioning of the proposed Project to the intended placement of the ORCGP. A Lead Applicant should demonstrate an understanding of the commercialization process, resource requirements for commercialization, the type of knowledge that must be produced at the identified positioning stage, and who will likely be the next funding providers for the subsequent stage. Proposals will be evaluated on the basis of how well the proposed Project meets the strategic position of the ORCGP.

Impact on OhioWithin the TFP, significance is placed on the following key impact metrics: economic impact, including job creation (for-profit, not-for-profit, retained); personal wealth (average salary of created jobs); new sales of products; companies created or attracted to Ohio; follow-on investments (all stages of venture capital) and the receipt of new public or private funding (federal, industry, other) for sponsored research and technical services that fit within the expressed mission of the proposed Project; talent recruitment; and enhanced Ohio, national and/or international recognition, which


http://www.legislature.state.oh.us/bills.cfm?ID=126_SB_236


leads to further interest and potential sources of funding and collaboration. The degree to which a Lead Applicant demonstrates the proposed Project’s potential magnitude of impact will be evaluated.

Importance to Key Existing and Emerging Ohio Industry DriversAn expectation of the TFP is that the differentiating benefits associated with a proposed Project are understood and that evidence can be presented to support the contention that an industry sector of importance to Ohio values these benefits. This includes a strong characterization and comparison of the intended technology, application area, and market compared to competing technologies. Proposals will be evaluated on the basis of the degree to which industrial support is demonstrated.

Involvement of Anchor CompaniesOhio has a wide array of companies providing highly valuable resources and assets to ongoing research and development and commercialization activities related to and within the TFP and its five key technology focus areas. These companies typically have a sizable market share, generate substantial by-product outputs, are highly recognized for supplying industry-oriented product improvements, can provide substantial market opportunities resulting from applied research and development, and provide a significant impact to the State’s economy. Proposals will be evaluated on the basis of how well the Lead Applicant documents the presence of such anchors in Ohio and how they will engage these market leaders.

Involvement of Statewide Research CapacityA Lead Applicant must demonstrate that Ohio has a base of research excellence that will support the future technological innovations required to fully realize the commercial potential. Proposals will be evaluated on how well the Lead Applicant describes Ohio’s research capacities in relevant fields and how well these resources are integrated into the Proposal and Project plans.

Level of Scientific Merit Proposals are expected to address significant scientific objectives which are original and innovative, as well as employ novel concepts, approaches or methods. These objectives must be important to the relevant discipline while having an impact on other disciplines. The proposed Project must hold the potential for new discoveries and understanding, and advances beyond previous studies can be expected with respect to accuracy, validity, sensitivity, comprehensiveness, and range. The proposed Project must advance understanding and stimulate further modeling, theoretical descriptions and discoveries as well as continued research and education. The focus of the proposed Project must be unique and the reasons for it are convincingly described as it is unlikely that the desired knowledge could be obtained in other ways. The proposed Project is scientifically and technologically feasible and the conceptual framework, design, methods, and analyses are adequately developed, well integrated, and appropriate to the objectives of the proposed Project.

Past Performance (if applicable) Proposals from Lead Applicants that have previously received awards of TFP Grant Funds and that seek follow-on funding to build on prior TFP grants must include a section about performance history with each of their prior TFP grant(s). A Lead Applicant should discuss the objectives, progress and achievements of the prior grant(s). Specific commercialization successes, leverage received, identification and protection of IP, companies started and attracted, and employment impacts should be noted. Any major technical accomplishments can be highlighted in summary fashion. The past performance should be adequate to enable an external reviewer who is not familiar with the prior grant(s) to assess progress and independently evaluate the results.


Potential for LeverageGrantees are expected to leverage TFP grants with other sources of non-State funding. Performance is evaluated and measured on the ability to acquire sufficient additional financial resources – such as from federal agencies, industry organizations, and private investors – to continue the research and commercialization activities during and beyond specific TFP funding. Goals and plans for leveraging State Grant Funds will be considered in the evaluation process.

Potential for ProductsWhen applicable, Proposals must identify focused commercialization opportunity areas that will have significant industry (i.e., market size and growth) and economic impacts that will have near-term (within 3 years of the start of the Project Period) benefit in Ohio in areas such as production, licensing and spin-off technology opportunities. The proposed Project has already achieved at least proof of principle. Technologies and products must have a competitive advantage over existing and alternative technologies that can meet market needs and can lead to additional enabling technologies and further discoveries. Proposals will be evaluated on their potential to result in specific products that can be produced in Ohio.

Receptive Capital MarketsA Lead Applicant should discuss the potential for long-term financing to support the growth of a commercial enterprise. Evidence of interest in this technology by various sources of capital should be provided. Proposals will be evaluated on the basis of the potential for future funding as evidenced by the Proposal content.

Size of OpportunityAmong its many goals, the TFP is designed to build strong research and development collaborations between Ohio’s colleges and universities, other non-profit research institutions and companies. These collaborations are intended to develop strategies for addressing research and development and commercialization challenges and opportunities that will create significant impacts for Ohio. Collaborations and strategies are expected to lead to the advancement of scientific knowledge, creation of globally competitive products and services, formation of new companies, attraction of new companies and individuals, and the employment of significant numbers of Ohioans.

Proposals must demonstrate that the market is of sufficient size and has growth potential to positively impact the State. Proposals will be evaluated on how well they assess the market and a realistic assumption about the market share that potentially could be captured; potential customers; competition and competing products; beneficial impact on jobs, income, and business formation support in Ohio; and secured additional non-State funding, including federal, industrial, private and other investments.

Vision for SuccessA Lead Applicant must present a realistic discussion of the ultimate goal and achievements for the proposed Project. This vision should include identification of eventual customers, uses of the technology, relevance to key Ohio economic sectors and other factors. The vision should address the question of why this technology and proposed Project is important for Ohio and how Ohio will be able to assess progress toward the vision.


Appendix D

Ohio Third Frontier Research Commercialization Grant Program - Ineligible Costs

Grant Funds may be used only for the Project for which the award is approved and consistent with the terms and conditions of the Grant Agreement. Costs listed below are considered unreasonable and ineligible for reimbursement from Grant Funds.

ALCOHOLIC BEVERAGES The costs of alcoholic beverages are ineligible.

BAD DEBTS Any losses arising from uncollectible accounts and other claims and related costs are ineligible

CONTINGENCY PROVISIONS Contributions to a contingency reserve or any similar provision for unforeseen events are ineli-gible.

CONTRIBUTIONS AND DONATIONS Contributions and donations by the grantee to individuals or to other organizations are ineligible.

ENTERTAINMENT Costs of amusements, social activities, and incidental costs relating thereto, such as meals, alco-holic beverages, non-business-related lodgings, rentals, non-business-related transportation, and gratuities are ineligible.

FINES AND PENALTIES Costs resulting from violation of or failure to comply with Federal, State and local laws and regulations are ineligible.

GOODS AND SERVICES FOR PERSONAL USE Costs of good and services for personal use by the Grantee’s employees are ineligible regardless of whether the cost is reported as taxable income to the employee.

GRANTEE-FURNISHED VEHICLES The portion of the costs of Grantee-furnished vehicles that relates to personal use (including transportation to and from work) is ineligible regardless of whether the cost is reported as taxable income to the employees.

INTEREST, FUNDRAISING, AND INVESTMENT MANAGEMENT Costs incurred for interest on borrowed money (except as permitted for equipment and space costs) or interest for the temporary use of endowment funds, however represented, are ineligible.

A cost of organized fund raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions are ineligible.

Costs of investment counsel and staff and similar expenses incurred solely to enhance income from investments are ineligible.

Ohio Third Frontier Research Commercialization Grant Program D1

LEGAL SERVICES Legal services are ineligible for the areas described below:

A. Definitions:

1. Conviction, as used herein, means a judgment or conviction of a criminal offense by any court of competent jurisdiction whether entered upon verdict or a plea including a conviction, due to a plea of nolo contendere.

2. Costs, include, but are not limited to, administrative and clerical expenses; the cost of legal services, whether performed by in-house or private counsel; the costs of the services of accountants, consultants, or others retained by the institution to assist it; costs of employees, officers and trustees, and any similar costs incurred before, during, and after commencement of a judicial or administrative proceeding that bears a direct relationship to the proceedings.

3. Fraud, as used herein, means (i) acts of fraud or corruption or attempts to defraud the government or to corrupt its agents, (ii) acts that constitute a cause for debarment or suspension (as specified in agency regulations), and (iii) acts which violate the False Claims Act, 31 U.S.C. sections 3729-3721, or the Anti-kickback Act, 41 U.S.C., sections 51 and 54.

4. Penalty, does not include restitution, reimbursement, or compensatory damages.

5. Proceeding, includes an investigation.

B. Ineligible costs:

1. Costs incurred in connection with any criminal, civil or administrative proceeding brought by the Federal government or a state, local, or foreign government are ineligible if the proceeding relates to violation of, or failure to comply with, a Federal, state, local or foreign statute, regulation or rule by the Grantee (including its agents or employees) and results in one of the following dispositions:

a. In a criminal proceeding, a conviction.

b. In a civil or administrative proceeding, a determination on grantee liability or the imposition of a monetary penalty.

c. A final decision by an appropriate Federal or state official to debar or suspend the Grantee, or to terminate an award by reason of a violation or failure to comply with a law, regulation, or rule.

d. A decision by consent or compromise if the action could have resulted in any of the dispositions described in (a), (b), or (c) above.


2. Costs incurred in connection with any civil or administrative proceeding brought by an employee or former employee are ineligible if the proceeding is related to violations of, or failure to comply with, a Federal, state, local or foreign law, regulation, or rule related to anti-discrimination, employment, or whistle-blower matters and results in either of the dispositions described in 1(b) or 1(d) above.

3. Costs which are ineligible under 1 and 2 above may be eligible if one of the following occurs:

a. If a proceeding is commenced by the ODOD and is resolved by consent or compromise pursuant to an agreement entered into between the Grantee and the State government, the costs may be eligible to the extent specifically provided in such agreement.

b. If a proceeding is commenced by the Federal government, by a local or foreign government, or by an employee or former employee, the costs may be eligible if an authorized official of ODOD determines that the costs were incurred as a direct result of (1) a specific term or condition of the grant, or (2) specific written direction of an authorized official of the appropriate ODOD program office.

4. Costs for the prosecution of claims against the Federal government or a state, local or foreign government are ineligible.

LOBBYING Costs associated with the following activities are ineligible:

A. Attempts to influence the outcomes of any Federal, State or local election, referendum, initiative, or similar procedure, through in-kind or cash contributions, endorsements, publicity or similar activity;

B. Establishing, administering, contributing to, or paying the expenses of a political party, campaign, political action committee, or other organization established for the purpose of influencing the outcomes of an election;

C. Attempts to influence legislation pending before Congress or a State legislature by communicating with any member or employee of the Congress or legislature, (including efforts to influence state or local officials to engage in similar lobbying activity), or with any government official or employee in connection with a decision to sign or veto enacted legislation.

D. Preparation, distribution, or use of publicity or propaganda designed to influence legislation pending before Congress or a State legislature by urging members of the general public or any segment thereof to contribute to or participate in any mass demonstration, march, rally or fundraising drive, lobbying campaign, or letter-writing or telephone campaign, for the purpose of influencing such legislation; or E. Legislative liaison activities, including attendance at legislative sessions or committee hearings, gathering information regarding pending legislation, and analyzing the effect of pending legislation, except to the extent that such activities do not relate to lobbying or related activities.


LOSSES ON OTHER AWARDS Any excess of costs over income on any award is ineligible as a cost of any other award. This includes, but is not limited to, the Grantee’s contributed portion by reason of cost sharing agreements (unless approved by the Grantor) or any under-recoveries through negotiation of lump sums for, or ceilings on, indirect costs. Transfers of specific costs which are unrelated to the programs or activities described in the scope of work for the grant are ineligible.

TAXES Taxes from which the Grantee is normally exempt are ineligible.
