A selection notification is not an award. Between the email telling you that your proposal was chosen and the day money is legally obligated sits a negotiation stage that routinely takes weeks and sometimes months. Anything you spend inside that window is at your own risk unless the agency has told you otherwise in writing.
What actually gets negotiated
The budget is usually first on the table. Agencies frequently fund a selected proposal below the amount requested, either because a reviewer flagged a line item as unjustified or because the program has more strong proposals than money. You may be asked to cut a subcontract, drop a piece of capital equipment, or trim a task. Treat that as a scope conversation and not only an arithmetic one: a budget reduced while the statement of work stays untouched is how a project becomes under-resourced before it starts. If you lose a meaningful share of the money, negotiate the deliverables down with it.
Contract agencies, DoD components in particular, may also negotiate indirect rates, direct labor rates, and the payment schedule. Grant agencies such as NIH and NSF handle the same stage very differently, usually through a grants management specialist rather than a contracting officer. Which instrument you are on decides who you talk to, how much is negotiable, and what reporting you will owe, so confirm it early. Most of the numbers argued over here trace straight back to the proposal, which is why it pays to avoid the budget mistakes that invite a cut in the first place.
Certifications, registrations, and paperwork
Expect a package of representations and certifications: size and eligibility as a small business concern, ownership and control, place of performance, whether the work duplicates other federal funding, and human-subjects or animal-use assurances where they apply. Your registrations in the federal award systems have to be active and accurate, and an expired registration is one of the most common self-inflicted delays at this stage. Agencies also re-verify eligibility facts you asserted back in the application, so if ownership or majority control shifted after submission, disclose it rather than hoping nobody checks.
How long it drags, and what not to do
Selection to award commonly runs from a few weeks to several months, varying by agency, by instrument, and by how clean your paperwork is, in much the same way that the decision timeline itself varies. Use the wait to line up hires and quotes, not to commit to them. Do not put people on payroll, order long-lead equipment, or sign a subcontract on the strength of a selection email. Pre-award costs are allowable in some circumstances, but only under written authority from the agency; without it you are funding a project that has not been awarded and may never be.
Ask your point of contact for three things: the expected award date, the start of the period of performance, and whether any pre-award spending is permitted. Getting those answers in writing removes most of the risk from this stage. This is general information rather than legal or accounting advice, so confirm the terms with your own counsel or CPA.
Projects House helps small companies plan the engineering work behind an SBIR award so a reduced budget still produces a real deliverable. Tell us what you were selected for through the contact form.