January 01, 2024
Recommended:
A $312M contract was awarded in 15 minutes by the Air Force. The fastest recorded. Typically, an award can be made in a matter of weeks.
Below are eight (8) steps based on our experiences with Air Force, Census Bureau, Federal Emergency Management Agency (FEMA), US Navy, and US Marine Corps Phase III SBIR awards. Although the exact steps vary slightly by agency, all agencies must adhere to the Small Business Administration's SBIR Policy Directive.
Steps | Contracting Document | Description | Remarks |
1.Requirements Document | Statement of Work (SOW), Performance Work Statement (PWS), or Statement of Objectives (SOO)
Because SBIR non-disclosure rules, Forward Edge-AI is allowed to provide input to the contracting document (SOW, PWS, SOO)
The SBA website states: "This nondisclosure obligation creates the imperative, the necessity, to deal only with the SBIR firm that developed the SBIR Data in the first place." | This is a document that lays out the scope of your requirement. This should describe, at a high level, your requirement | There is no limit on the size, scope, or duration of a Phase III. Consider establishing an IDIQ, BPA, or BOA with no ceiling for flexibility in meeting your current and future requirements.
The DAU Contract Cone states "SBIR Phase III enables agencies to "uniquely negotiate terms and conditions, and pricing arrangements enables improved mission outcomes." |
2.Market Research | Forward Edge-AI presentation, information our our website (click below), or white paper. Then agency should request that Forward Edge-AI provide a Rough Order of Magnitude (ROM) estimate for the project.
| This is when the customer searches and finds a company that can fulfill the Government’s requirements. Once you have identified a SBIR company who can meet your needs, you should ask for a ROM | Costs would be reviewed against the proposed technical effort (FAR 15.404-1(d) & (e)) to ensure contractor understands requirements
Note also in a Bid Protest Decision, General Accountability Office (GAO) determined that the Government (technical and contracts) has broad discretion on determining what extends, derives, or completes a SBIR Phase I/II |
3.Funding | Purchase Request, commonly referred to as a Form 9 in the DOD | Customer must request funds for the project from their local budget shop | Any color of money is appropriate, except SBIR Phase I/II sources of funds cannot be used |
4.Sole Source Justification Not Required | Sometimes referred to as a J&A or SSJ | J&As/SSJs are not required. Instead, the contracting officer must create a "Memorandum for the Record." The Memorandum is a document that simply records that the Contracting Officer did not compete the requirement because the competition requirements have been satisfied by a Phase I or Phase II SBIR. The Memorandum states that award is pursuant to FAR 6.302-5, and that the project is an SBIR Phase III award that is derived from, extends, or completes efforts made under prior SBIR/STTR funding agreements and is authorized under 10 U.S. C 2034(b)(2) or 41 U.S. C. 3303(b) | Air Force calls the Memorandum a Determination and Finding. Some agencies call it a DEC (Derives, Extends, Completes) document. Army refers to a Memorandum for the Record. There are slight differences in each, but they all seek to accomplish the same thing. Templates are available here.
Guidance recommending Phase III- DoDI 5000.02. SBIR Phase III is not a set aside program. Size standards and 51% workshare requirements by prime do not apply (5% - 20% acceptable)
A relevant GAO bid protest decision is available here |
5.Provide Requirements Package to the Contracting Officer | Use format for any normal package the Contracting Office is accustomed to seeing
Requirements/PR Package to the PCO – things to identify include:
| Period of Performance, Type of Government Funds, CDRLs, GFP/GFI/Base Support, Data Rights, DD 254, ITAR, other docs as needed | Must incorporate DFARS 252.227-7018 DEVIATION 2020-O0007 Bring in agency attorney early |
6.Solicitation | RFP, RFQ, or letter invitation to bid | This is a letter sent to the contractor, requesting a quote for the product, research, or service | Public notice is not required under 15 U.S. Code § 638(r)(4)
No standard technical evaluation criteria for Phase III (Phase I/II criteria provided in solicitation) Cost reviewed against proposed technical effort – see FAR 15.404-1
|
7.Pre-Negotiation Memorandum | PNM | This is a document recording the negotiation entered into between the Contracting Officer and Forward Edge-AI | |
8.Contract Award | Purchase Order 1155 or 1449 | Congrats! Award has been made and product/service/research may now be delivered | Synopsis of the award is not required per FAR 5.301(b)(2) |
Phase III SBIR/STTR Frequently Asked Questions (FAQs)
Who is eligible to receive a Phase III sole source?
Any company or successor company that has received either a Phase I or II award. Competition requirements are satisfied under Phase I or II
What can be considered a Phase III contract or funding agreement?
“Work that derives from, extends or completes an effort made under prior SBIR/STTR funding agreements, but is funded by sources other than SBIR/STTR set-aside funding.”
Are there limitations to a Phase III SBIR contract?
No limits on the number of awards
No limits on the type of funding agreement
No limits on the dollar value or duration
No limits on the scope (can be products, services, production, and/or research)
No Limits on time lapse between Phase I, II or III
Does the PWS need to mention SBIR Phase III?
The PWS should be generated from the PM and show how the work derives from, extend, or complete an effort made under prior SBIR|STTR (to determine the work is allowable). The Program Office should begin with the current Phase I or II Work Plan to define the requirement. The PR package should include the SOW, non SBIR/STRR funding, PoP, Type of funds, CDRLs, GFP/GFI/Base Support, data rights, DD254, ITAR, as required.
Once the PCO has a complete requirements package, a letter RFP should be issued to the contractor requesting a technical and cost proposal. Once received, the PE/PM would evaluate technical criteria (do not have standard criteria, Phase I/II criteria provided in DoD BAA or AF CSO). Costs would be reviewed against the proposed technical effort (FAR 15.404-1(d) & (e) to determine that the contractor has a clear understanding of the requirement, costs are consistent with various elements of the technical proposal and costs are realistic for the proposed technical approach and PoP. The PCO evaluates the proposed costs and negotiates any issues.
Is a J&A required?
A J&A is not required. The effort can be a sole source. There is no limit on the number, duration, type, or dollar value of Phase III awards made to contractors. There is no limit on the time that may elapse between a Phase I, Phase II or Phase III award. A Federal agency may enter into a Phase III SBIR agreement at any time with a Phase I or Phase II awardee. Small business size limits for Phase I and Phase II awards do not apply to Phase III awards.
Phase III work may be for products, production, services, R&D or any such combination. Per AFFARS 5319.201(c)(10), a DD2579 is not required. Solicitations of Phase I/II satisfies competition requirements. Per FAR 6.302-5 (see 10 U.S.C. 2304 (f)(6)), no J&A is required. PCO just needs to prepare a D&F for the file (with input from PE/PM) on how the Phase III "derives from/extends/completes" previous SBIR/STTR award. Synopsis of the proposed contract action is not required per FAR 5.202(a)(7) and synopsis of the SBIR contract award is not required per FAR 5.301(b)(2).
Is a Phase III funded with SBIR STTR money? No.
Is there a POC, you should work with outside the vendor for preparing the SBIR?
You should work with your PM to determine what funding they intend to use. Phase III awards can be funded by Procurement, O&M, or any other type of agency funds appropriate for the effort. However, SBIR STRR funding is not provided for Phase III efforts. You would still need to receive a proposal with a cost estimate and determine the costs to be fair and reasonable. Your mission partner would also need to work with FM to send you certified funds.
Other important information:
*You will need to incorporate DFARS 252.227-7018 DEVIATION 2020-O0007, SBIR data rights (Recent change to 20 years).
Phase III SBIRs are not small business set asides. The government may choose to make it a set aside, but this not required. Also, Forward Edge-AI is not an 8(a), SDVOSB, HUBZone, WOSB, or ANC company. See https://www.fai.gov/periodic-table:
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