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Small Business Innovation Research

Posted by Joseph Whitcomb on Aug 10, 2017 2:21:50 PM
Joseph Whitcomb

 

Matter of Global Aerospace Corporation, 2017 WL 2859927

 SBIR_logo.jpg

This case concerns the Small Business Act of 1958. Recognizing the importance of free enterprise and competition, the Small Business Act requires the U.S. Government to assign a fair portion of contracts and purchases to small businesses. 

As part of this process, 15 U.S.C. 638 establishes the Small Business Innovation Research (SBIR) program, which requires federal agencies to involve small businesses in federally funded research and development (R&D). Federal agencies satisfy this requirement with a three-phase approach. 

Under phase I, small businesses apply to evaluate a product concept for scientific, technical, and commercial viability. Then small businesses compete for a phase II award to continue development on the product concept. After completing phases I and II, small businesses must obtain outside funding to develop their product concept for commercial sale.

 

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Background 

In November of 2015, the National Aeronautics and Space Administration (NASA) issued a solicitation requesting proposals for numerous R&D projects. The NASA solicitation included a request for “Terrestrial and Planetary Balloons.” This request called for R&D on “vehicles capable of conducting scientific research on either the planet Venus or Saturn’s moon Titan.” 

Concerning this request for terrestrial and planetary balloons, two small businesses submitted proposals. Global Aerospace Corporation (Global) submitted a proposal for a “winged glider” for Titan. Thin Red Line USA (TRLU) submitted a proposal for an “adaptable multi-segment altitude control balloon” for Titan and Venus. NASA selected both Global and TRLU for phase I. 

During the evaluation period for phase II, the Science Mission Directorate (SMD) considered 108 proposals. The SMD employed criteria to isolate the 65 projects with the “most promising technical and scientific approaches.” Of the 108 proposals considered, the SMD ranked TRLU 23rd overall. The SMD did not rank Global’s proposal amongst the top 65 projects. 

On March 8, 2017, NASA announced the list of proposals selected for phase II. TRLU was selected. Global was not selected. Global requested a debriefing from NASA concerning the selection process. After the March 16 debriefing, Global issued a formal protest to the Comptroller General. 

Analysis 

First, the Comptroller General addressed Global’s argument that TRLU should be ineligible for participation in phase II. Global alleged that TRLU violated the terms of the solicitation by conducting R&D outside of the United States. As a result, TRLU should be ineligible for phase II. 

The Comptroller General referenced 4 CFR 21.2(a)(2), which outlines the timelines for filing protests. Specifically, this rule provides that protests “must be filed not later than 10 days after the protester knew or should have known of the basis for its protest.” Essentially, this means that Global had a 10-day window to protest TRLU’s ineligibility. The clock started as soon as Global knew, or had reason to know, of TRLU’s ineligibility. 

Evidence indicated that Global knew of TRLU’s ineligibility on or before March 8, when NASA released the phase II awards. By the time Global submitted their protest on March 27, the 10-day window had lapsed. As a result, the Comptroller General dismissed this part of Global’s protest as untimely. 

Second, the Comptroller General addressed Global’s argument that NASA violated the terms of the solicitation by deviating from established selection criteria. To determine the proper course of action, the Comptroller General reviewed the SMD’s evaluation and selection criteria for phase II projects. 

From the Comptroller General’s perspective, NASA had little to no “reasonable documentation” explaining why they rejected Global’s proposal for phase II. Despite the fact that Global clearly submitted a proposal for the Titan project, “the limited record appears to consider Global’s proposed technology as though it had been proposed for Venus exploration.” Overall, the Comptroller General stated, “the record fails to demonstrate that the award recommendation and decision were reasonable.” 

As a result, the Comptroller General sustained this part of Global’s protest. Additionally, the Comptroller General recommended that NASA restart their phase II selection and evaluation process, ensuring proper documentation for all awards and rejections. Moreover, the Comptroller General instructed NASA to reimburse Global for all reasonable legal costs associated with this protest. 

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