Link: GAO Opinion
Agency: Department of Air Force
Disposition: Protest denied.
General Counsel P.C. Highlight: Where an agency is conducting an SBIR procurement, it has substantial discretion to determine whether it will fund a proposal. In light of such discretion, GAO’s review of an SBIR procurement is limited to determining whether the agency violated any applicable regulations or solicitation provisions, or acted in bad faith.
Photonics Optics Tech, Inc. (Photonics) protests a Department of Air Force (Air Force) decision not to fund its Phase II proposal under the Department of Defense’s Small Business Innovation Research (SBIR) program.
The SBIR solicitation lists research topics and has three phases: Phase I, to determine the scientific, technical, and commercial merit of ideas; Phase II, to perform the principal research and development effort resulting in a well-defined, deliverable prototype; and Phase III, during which a small business must obtain private and public funding to develop the prototype into a viable commercial product for sale to military and/or private sector markets.
Photonics had been awarded a phase I contract and the Air Force advised, under its standard SBIR procedure, that Photonics could submit a phase II proposal. The phase II proposal reflected various strengths, but also contained several weaknesses. The Phase II proposal was denied funding.
GAO states that where an agency is conducting an SBIR procurement, it has substantial discretion to determine whether it will fund a proposal. In light of such discretion, GAO’s review of an SBIR procurement is limited to determining whether the agency violated any applicable regulations or solicitation provisions, or acted in bad faith.
Based on GAO’s review of the record, it found that Photonics generally disagreed with the evaluation of its proposal, but failed to specifically address some of the criticisms, and failed to establish that the agency’s assessments were unreasonable. For example, with regard to the Air Force’s criticism that the proposal failed to substantiate Photonic’s estimates regarding market potential, Photonics stated that it was “confident that due to the innovativeness of the proposed product over the state-of-the-art technology, the product will attract continued government and industrial investment to develop the full-fledged commercial product.” The Air Force identified and documented its assessment of various weaknesses in Photonic’s proposal, consistent with the solicitation’s evaluation criteria. The protest is denied.