GAO: Agency’s SBIR Phase III Decision Not Protestable

A procuring agency’s decision not to enter into a Small Business Innovation Research program phase III funding agreement cannot be protested to the GAO in most cases, according to a recently-released GAO bid protest decision.

In GAO Bid Protest of Complere, Inc., B-406553 (June 25, 2012), NASA awarded Complere SBIR phase I and phase I research contracts.  After the phase II contract concluded, Complere submitted an unsolicited phase III proposal, which NASA did not accept–electing instead to do its own research on the topic in-house.  Complere filed a GAO bid protest, alleging that NASA had acted improperly.

The GAO dismissed Complere’s bid protest.  The GAO noted that “an agency iss not required to enter a phase III funding agreement with a phase II awardee . . . and may even enter into a phase III funding agreement with an entity other than the phase II awardee, requiring only that the agency notify the SBA of such action.”

The GAO continued: “We conclude from our review of the SBIR Program Act and SBA’s policy guidance that an agency decision not to enter into a phase III funding agreement is generally not subject to our bid protest review, given the broad discretion accorded agencies to determine whether, and with whom, to enter into phase III funding agreements.”

The GAO left the door open to the possibility of bid protest jurisdiction if an agency used non-SBIR federal funds to conduct a SBIR phase III competition.  However, in the “typical” SBIR case, like this one, an agency’s decision not to fund a SBIR phase III agreement is not subject to the GAO’s bid protest jurisdiction.

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