Decided: December 27, 2021
Agency: Department of the Air Force
Disposition: Protest Dismissed
Keywords: Small Business Innovation Research (SBIR) Program; Timeliness of Protest; Interested Party
This matter stresses the importance of being knowledgeable about the procedures involved in government contracts and ensuring bid protests comply with the Bid Protest Regulations. Both of the protestor’s arguments here were dismissed based on procedure and GAO did not even consider the merits of the arguments. The first argument was dismissed based on timeliness. Had the protester filed the protest on time, there may have been a different, better result for the protester. Losing a protest that could otherwise have been won can result in significant losses, especially to small businesses. Contractors should involve their Legal Counsel early on all proposal work to have a deliberate plan for protest contingencies. While the Small Business Innovation Research (“SBIR”) is an increasingly useful tool for Government acquisitions that often use innovative contracting methods, basics like timely filed protests still apply. GCPC is adept at assisting small businesses throughout all phases of the government contracts process, including initiating protests, and is knowledgeable about the procedures that must be followed to avoid having protests dismissed based on technicalities.
Summary of Facts
Allosense, Inc., a small business, protests the award of a contract to Apptricity Corporation 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 SBIR program was established to assist small business concerns obtain and perform research and development work by requiring that certain federal agencies reserve a portion of their research and development funds for awards to small businesses. Under phase I of the program, small businesses are invited to submit proposals to conduct research on one or more topics specified in the annual SBIR program solicitation. Under phase II, firms that received phase I awards may submit proposals for further development work on the topic. The Small Business Act provides that there may be a “third phase for work that derives from, extends, or completes efforts made under prior funding agreements under the SBIR program.”
Throughout June and July of 2021, the agency conducted market research for a requirement to provide a telematics tracking system to the Air Force’s 437th Maintenance Squadron. As part of the research, the Air Force contacted several potential offerors, including Allosense, to see if they would be able to submit quotations for the requirement. On July 9, Allosense, an SBIR phase I awardee for asset tracking technology, submitted a quotation in response to the agency’s inquiries, with the stated purpose of providing asset tracking technologies “through an SBIR Phase III sole-source contract vehicle.”
The agency ultimately concluded that the type of technology it was seeking was “common in the commercial marketplace” and that several small businesses could potentially meet its requirement.
The agency decided to conduct a competitive procurement and on July 27, the agency issued the RFQ as a small business set-aside, by posting it on the System for Award Management website (SAM.gov). The RFQ established that award would be made on a lowest-price technically acceptable basis and quotations were to be submitted no later than August 3.
On July 30, Allosense emailed an updated version of its previously submitted quotation, quoting a price of $496,700. Following its evaluation, the agency concluded that Apptricity Corporation submitted the lowest-priced technically acceptable quotation and awarded the contract to Apptricity Corporation in the amount of $133,450. On September 9, an agency employee informed Allosense that the agency had conducted a competitive procurement for the requirement and already made an award to another firm. The agency also informed Allosense that its quotation was used for market research and was not considered for award under the RFQ. On September 27, Allosense filed this protest.
Basis of Protest
Allosense alleges that the agency’s actions here violate the Small Business Act’s instructions regarding the award of SBIR phase III contracts. Specifically, Allosense argues that the agency was required to award Allosense an SBIR phase III sole-source contract to meet the instant requirement because it developed the technology being procured. Alternatively, Allosense contends that the agency unreasonably failed to consider its quotation for award under the RFQ. The Air Force argues that GAO should dismiss the protest as untimely.
The Bid Protest Regulations contain strict rules for the timely submission of protests, including a requirement 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. The Air Force argues that Allosense knew the bases for its grounds of protest no later than September 13, based on a September 13 email from Allosense. The email demonstrated Allosense 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.
The FFQ was posted on the SAM.gov website, the current government-wide point of entry (GPE) for acquisition solicitations. GAO explained that it “has consistently explained that protesters are charged with constructive notice of the contents of procurement actions published on the GPE.” This constructive notice creates a presumption of notice that cannot be rebutted and imputes knowledge to a party without regard to the party’s actual knowledge of the matter at issue.
GAO found that Allosense was put on notice that the agency contemplated soliciting quotations and awarding a contract outside the SBIR program as early as July 27, 2021, when the agency issued the solicitation. The RFQ clearly stated that it was a competitive procurement open to all small businesses that met the relevant size standard. GAO explained that “to the extent that Allosense wished to challenge the agency’s decision not to meet this requirement through the SBIR program, it was required to do so prior to the solicitation closing date of August 3. Since Allosense filed its protest on September 27, after the closing date for receipt of quotations, GAO dismissed the allegation as untimely.
GAO also dismissed Allosense’s remaining allegation because it is not an interested party to raise it. Under the Bid Protest Regulations, “a protester must be an interested party, that is, an actual or prospective offeror whose direct economic interest would be affected by the award of a contract.” GAO explained that “a protester is not an interested party if it would not be in line for award if its protest were sustained.” Here, GAO found that Allosense 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 and the awardee quoted a lower price than Allosense. Since Allosense has not challenged the technical acceptability of the awardee and it quoted a higher price than the awardee, it 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.
Our Government Contracts Practice Group has extensive experience in government contract law, helping clients solve their government contract problems relating to the award or performance of a federal government contract, including bid protests, contract claims, small business concerns, and teaming and subcontractor relations. If you need more guidance or information, contact Craig Lawless, Senior Counsel in our Government Contracts practice area at General Counsel, P.C., 703-266-1865.