January 01, 2024
This page important bid protest decision related to the SBIR program. The list is not exhaustive, but is intended to be representative of what can be expected. In general, the SBIR program has a lot of built in flexibility. The government has broad discretion on the implementation and administration of the program, making a successful bid protest unlikely in our opinion. Indeed, the record shows most protests were either denied or withdrawn.
Protests Related to Phase III Contracting
Key Takeaways of this Decision:
The government (technical point of contact, program manager, and/or contracting officers) has broad discretion in determining the government's requirements and whether new work is a Phase III SBIR
The government must document in a memorandum for the record, its findings that a requirement is a Phase III SBIR. The "justification," required of the government is very limited and cannot be challenged
A Phase III SBIR may be awarded to other than a small business
Excerpts from the Decision:
ASRC Federal Data Network Technologies, LLC (AFDNT), a small business of McLean, Virginia, protests the issuance of a small business innovation research (SBIR) phase III sole-source task order to American Systems Corporation, of Chantilly, Virginia, by the Defense Health Agency (DHA) for the modernization of an existing military healthcare delivery system. AFDNT contends that the agency's phase III order was improper because it did not derive from, extend, or complete a prior SBIR phase I or II agreement performed by American Systems.
An agency may issue a phase III SBIR award for “work that derives from, extends, or completes efforts made under prior funding agreements under the SBIR program.” 15 U.S.C. § 638(e)(4)(C). The Small Business Act also states that agencies shall “issue, without further justification, [p]hase III awards relating to technology, including sole source awards, to the SBIR . . . award recipients that developed the technology.” Id. § 638(r)(4)(B). The SBIR Program Policy Directive explains that the competitions for the phase I and II awards satisfy any competition requirements of the Competition in Contracting Act.[4] SBIR Policy Directive § 4(c)(3).
Thus, where an agency seeks to fund an SBIR phase III award “which is an extension of prior [p]hase I and/or [p]hase II awards,” the agency is not required to conduct a competition for the phase III award. Id. The SBIR Policy Directive provides that “in conducting actions relative to a [p]hase III SBIR . . . award, it is sufficient to state for purposes of a [j]ustification and [a]pproval, if one is deemed required by the agency, that the project is an SBIR . . . [p]hase III award that is derived from, extends, or completes efforts made under prior SBIR . . . [f]unding [a]greements and is authorized pursuant to 15 U.S.C. 638(r)(4)” and that “[f]urther justification is not needed.” Id.
We routinely find that contracting agencies have broad discretion to determine their needs and the best way to meet them. Crewzers Fire Crew Transport, Inc., B-402530, B-402530.2, May 17, 2010, 2010 CPD ¶ 117 at 3. We have recognized this discretion with respect to the SBIR program, and in reviewing the propriety of a phase I or II SBIR award, we have found that our review “is limited to determining whether the agency violated any applicable regulations or solicitation provisions, or acted in bad faith.” Wang Electro-Opto Corp., B-418523, June 4, 2020, 2020 CPD ¶ 187 at 5; U S Positioning Grp., LLC, B-294027, June 21, 2004, 2004 CPD ¶ 133 at 3.
With respect to an SBIR phase III award, our Office has previously found that to show that one effort derives from, extends, or completes another, “it must be evident that the requirements for the second effort incorporated original concepts, findings, ideas, or research results that were generated in the first.”
Given the relatively limited requirements to justify a phase III award and the discretion otherwise afforded to agencies, at issue here is whether AFDNT has clearly shown that the modernization planning order does not incorporate any original concepts, findings, ideas, or research generated under prior SBIR phase I or II work.
In a memorandum for the record, the contracting officer provided an analysis of how the TMIP-J software suite transformation work derives from, extends, or completes the prior work of the phase I contract.[7] AR, Tab 8, Memorandum for Record.
Finally, the contracting officer explained that achieving the four goals set forth in the order awarded to American Systems “will require elements derived from the previous SBIR efforts such as the algorithms, data models, assessments, performance metrics, etc[.], and will extend the previous efforts by broadening the types of technologies and platforms to which those elements are applied.” Id. at 4. The contracting officer concluded that to satisfy those goals, “these elements will provide key benefits due to the prior success of consolidating multiple systems, automating data collection and measurement, and providing the best training practices available.” Id.
As explained above, the SBIR statute and policy directive set forth relatively limited requirements to justify a phase III award. Here, the record contains an explanation for how the modernization planning order incorporates at least some of the original concepts, findings, and ideas--such as developing unique software able to operate on Navy vessels, providing for automated data feedback, and collecting and transmitting data between disparate systems--from the prior SBIR phase I contract. AFDNT has not clearly shown that the modernization planning order fails to incorporate any of these original concepts, findings, and ideas, and therefore has not shown that the issuance of the phase III order to American Systems violated the applicable statute and regulations.
Our Opinions of the Key Takeaways of this Decision:
The solicitation required each offeror to provide evidence in its proposal of past small business utilization and describe if any advanced technologies through proven SBIR/STTR efforts were available
Following the receipt of initial proposals, the agency entered into discussions with Vertex and issued EN SBOFE-0003 because Vertex’s proposal contained unsupported claims regarding its past small business utilization
Vertex did not incorporate any changes into its proposal because it did not believe it was necessary to do so
Although Vertex claims including this information was unnecessary, the solicitation required evidence of past small business utilization, which the protester failed to provide
Similarly, Vertex did not incorporate a response to EN SBOFE-0004 because Vertex did not utilize any SBIR/STTR advanced technologies, and the solicitation required a response only if it had used such technologies
Excerpts from the Decision:
Vertex Aerospace, LLC, of Madison, Mississippi, protests the award of a contract to Amentum Services, Inc., of Germantown, Maryland, under request for proposals (RFP) No. W58RGZ-21-R-0133, issued by the Department of the Army for services to support the fixed-wing program office. The protester contends the agency unreasonably evaluated proposals, which resulted in an unreasonable source selection decision.
Based on the record, we have no basis to object to the agency’s assignment of an uncertainty and a weakness to Vertex’s proposal here. The solicitation required each offeror to provide evidence in its proposal of past small business utilization and describe if any advanced technologies through proven SBIR/STTR efforts were available. AR, Tab 20, Section L Narrative at 15; see also AR, Tab 21, Section M.2.3 at 6-7, small business commitment document evaluation factor.
Our Opinions of the Key Takeaways of this Decision:
It is improper/illegal for the government to disclose a firm's SBIR Data Rights to a third party, or competitor.
The remedy is judicial (take it to court) or administrative and not a bid protest.
A firm protested the Air Force's failure to award it a contract and any contract award to another firm under a procurement for propulsion testing equipment, contending that the Air Force improperly released its proprietary data in the solicitation specifications. GAO held that the protester: (1) should seek administrative or judicial remedy for the alleged disclosure of its proprietary data; and (2) prematurely protested the Air Force's proposal evaluation under the procurement. Accordingly, the protest was dismissed.
Our Opinions of the Key Takeaways of this Decision:
Phase I/II awardees have a right to sole source contracts, however, if the government decides to compete a requirement, the SBIR awardee must follow the RFP instructions.
Here the SBIR holder failed to submit a proposal and relied on their Request for Information (RFI)/Market Survey response as the basis for their protest.
Because the protestor did not submit a proposal, they lacked standing to file a protest and the question as to whether the government was required to award a sole source contract based on its SBIR was not answered.
The proper steps would have been to 1) respond to the RFI and make the government aware of its SBIR technologies, 2) submit a proposal and 3) simultaneously file a pre-award protest. If the government decided to compete the requirement after being made aware of the SBIR technology, the government must incorporate the SBIR technology into the RFP. The protestor would then have benefit of the SBA's Appeal Rights, which when exercised, would automatically stay award of the contract for 60 days.
Allosense, Inc., a small business of San Antonio, Texas, protests the award of a contract to Apptricity Corporation, a small business of Irving, Texas, under request for quotations (RFQ) No. F1M2X51194A001, issued by the Department of the Air Force, 628th Contracting Squadron for a telematics tracking system for the tracking of aerospace ground equipment. The protester contends that the agency should have met its requirement through a small business innovation research (SBIR) phase III sole-source contract or, alternatively, should have considered Allosense's quotation requesting an SBIR phase III award on a sole-source basis for award under the RFQ.
Allosense alleges that the agency’s actions here violate the Small Business Act’s instructions regarding the award of SBIR phase III contracts. Protest at 3 (citing 15 U.S.C. § 638(r)(4)). Specifically, Allosense argues that the agency was required to award Allosense an SBIR phase III sole-source contract to meet the instant requirement because, the protester claims, it developed the technology being procured. Id. Alternatively, Allosense contends that the agency unreasonably failed to consider its quotation for award under the RFQ. Id.
The agency requests that we dismiss the protest as untimely because the protester filed its protest more than 10 days after it knew the bases for its protest. Req. for Dismissal at 2; Memorandum of Law (MOL) at 11‑13. The Air Force argues that Allosense knew the bases for its grounds of protest no later than September 13. MOL at 12. The agency refers to a September 13 email from Allosense, contending that it demonstrates the protester was aware there had been a competitive procurement to fulfill the requirement and that Allosense’s quotation was not considered for award under the RFQ. Id. (citing AR, Tab 10, Emails between Agency and Allosense at 2‑3).
As discussed below, we agree with the Air Force that the protester’s challenge to the agency’s decision not to meet this requirement by awarding Allosense an SBIR phase III contract is untimely. However, we find that the protester’s challenge to the agency’s failure to consider its quotation for award under the RFQ is ripe for resolution on the merits.
Our Bid Protest Regulations contain strict rules for the timely submission of protests. These rules reflect the dual requirements of giving parties a fair opportunity to present their cases and resolving protests expeditiously without unduly disrupting or delaying the procurement process. Verizon Wireless, B‑406854, B‑406854.2, Sept. 17, 2012, 2012 CPD ¶ 260 at 4. Our timeliness rules specifically require that a protest based upon alleged improprieties in a solicitation that are apparent prior to the closing time for receipt of proposals be filed before that time. 4 C.F.R. § 21.2(a)(1).
Here, even were we to view the quotation as properly submitted,[7] the protester has not demonstrated that it would be in line for award. The RFQ established that award would be made on a lowest‑price, technically acceptable basis. RFQ at 2. Allosense quoted a total price of $496,700. AR, Tab 8, Allosense Updated Quotation at 6. The record shows that the awardee’s price was $133,450. AR, Tab 9, Evaluation Abstract. Further, Allosense has not challenged the technical acceptability of the awardee. Accordingly, Allosense has not demonstrated that, but for the agency’s failure to consider its quotation for award under the RFQ, that it would have been in line for award as the lowest‑priced technically acceptable quotation.
Protests Related to Phase I and II Awards
Our Opinions of the Key Takeaways of this Decision:
Phase I and Phase II SBIRs are competitive processes. Phase I does not guarantee award of a Phase II.
PredictiveIQ LLC, a small business of Boston, Massachusetts, protests the decision by the Department of the Air Force not to award it a contract for its proposal submitted in response to small business innovation research (SBIR) commercial solutions opening (CSO) direct to phase II, solicitation No. AFX234, Topic DCSO1, Orbital Prime.[1] The protester complains that the agency unreasonably evaluated its proposal.
We deny the protest.
The Ulysses Group, LLC (Ulysses), a small business of Charleston, South Carolina, protests the decision by the Department of the Air Force not to consider the proposal prepared by Ulysses in response to small business innovation research (SBIR) commercial solutions opening No. X22.1, Topic No. AF221-DCSO1, for research and development. Ulysses argues that it submitted a timely proposal and the Air Force unreasonably failed to consider it.
We deny the protest.
Front End Analytics, LLC, a small business of Boston, Massachusetts, protests the decision by the Department of the Air Force not to select its phase II proposal under the Department of Defense's (DOD) Small Business Innovation Research (SBIR) 21.2 Program Broad Agency Announcement (BAA), which invited proposals for research and development projects. The protester challenges the agency's evaluation of its proposal as not selectable for award and the agency's corrective action taken in response to an earlier protest.
We deny the protest.
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