Step 10: SBIR proposal process – phase III proposals

SBIR Phase III awards only need to have a relationship with prior SBIR funded agreements that the agency is willing to agree exists.

Under Federal Procurement Regulations (see FAR 6.302-5), it is sufficient to state for purposes of a Justification and Approval that the project is a SBIR Phase III award and that the product or service is derived from, extends, or logically concludes efforts performed under prior SBIR funding agreements and is authorized under 10 U.S.C. 2304(b)(2) or 41 U.S.C. 253(b)(2). No sole source justification is required.

In fact, the Act requires reporting to SBA of all instances in which an agency pursues research, development, or production of a technology developed by an SBIR awardee, with a concern other than the one that developed the SBIR technology. (See Section 4(c)(7) immediately for agency notification to SBA prior to award of such a funding agreement and Section 9(a)(12) regarding agency reporting of the issuance of such award.) SBA will report such instances, including those discovered independently by SBA, to Congress.

What is interesting about the Phase III language is that it also applies to large prime contractors. So let’s say that Lockheed Martin wins a $50 Million contract with the FBI to develop analytics tools. You can go to the prime (Lockheed) and request that they award to you a sole source contract to perform part of that work. Below is the citation:

For Phase III, Congress intends that agencies or their Government- owned, contractor-operated facilities, Federally-funded research and development centers, or Government prime contractors that pursue R/R&D or production developed under the SBIR Program, give preference, including sole source awards, to the awardee that developed the technology.

This requirement also applies to technologies of SBIR awardees with SBIR funding from two or more agencies where one of the agencies determines to pursue the technology with an entity other than that awardee.

Notification must include, at a minimum:

  • (a) The reasons why the follow-on funding agreement with the SBIR awardee is not practicable;
  • (b) the identity of the entity with which the agency intends to make an award to perform research, development, or production; and
  • (c) a description of the type of funding award under which the research, development, or production will be obtained.

The SBA may appeal the decision to the head of the contracting activity. If SBA decides to appeal the decision, it must file a notice of intent to appeal with the contracting officer no later than 5 business days after receiving the agency’s notice of intent to make award.

Upon receipt of SBA’s notice of intent to appeal, the contracting officer must suspend further action on the acquisition until the head of the contracting activity issues a written decision on the appeal.

The contracting officer may proceed with award if he or she determines in writing that the award must be made to protect the public interest.

The contracting officer must include a statement of the facts justifying that determination and provide a copy of its determination to SBA.

Within 30 days of receiving SBA’s appeal, the head of the contracting activity must render a written decision setting forth the basis of his or her determination.

– Eric Adolphe


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