ASRC Federal Data Network Technologies, LLC

B-418028,B-418028.2 Dec 26, 2019 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights ASRC Federal Data Network Technologies, LLC (AFDNT), of McLean, Virginia, protests a small business innovation research (SBIR) phase III sole-source award to American Systems Corporation, of Chantilly, Virginia, by the Defense Health Agency (DHA). AFDNT contends that the agency's phase III award was improper because American Systems is not eligible to receive an SBIR phase III award; the award did not meet the definition of a phase III award because it did not derive from, extend, or complete a prior SBIR contract performed by American Systems; and the agency improperly awarded the contract as an undefinitized contract action. We sustain the protest. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of:  ASRC Federal Data Network Technologies, LLC File:  B-418028; B-418028.2 Date:  December 26, 2019 Damien C. Specht, Esq., James Tucker, Esq., and Caitlin Crujido, Esq., Morrison & Foerster LLP, for the protester. Katherine Burrows, Esq., and Nathanael Hartland, Esq., Nelson Mullins Riley & Scarborough LLP, for American Systems Corporation, the intervenor. Timothy J. Haight, Esq., Jennifer M. Hesch, Esq., Song U. Kim, Esq., and Morgan Hilgendorf, Esq., Defense Health Agency; and Meagan K. Guerzon, Esq., Small Business Administration, for the agencies. John Sorrenti, Esq., and Christina Sklarew, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging the agency’s decision to make a small business innovation research (SBIR) phase III sole source award is sustained where the awardee is not eligible to receive SBIR phase III awards under the terms of the SBIR Program Policy Directive issued by the Small Business Administration. DECISION ASRC Federal Data Network Technologies, LLC (AFDNT), of McLean, Virginia, protests a small business innovation research (SBIR) phase III sole-source award to American Systems Corporation, of Chantilly, Virginia, by the Defense Health Agency (DHA).  AFDNT contends that the agency’s phase III award was improper because American Systems is not eligible to receive an SBIR phase III award; the award did not meet the definition of a phase III award because it did not derive from, extend, or complete a prior SBIR contract performed by American Systems; and the agency improperly awarded the contract as an undefinitized contract action. We sustain the protest. BACKGROUND The SBIR program is designed to increase the participation of small business concerns in federally funded research or research and development (R/R&D).  See SBIR Program Act of 1982, 15 U.S.C. § 638.  Pursuant to this authority, certain federal agencies are required to provide a program under which a portion of the agency’s R/R&D effort is reserved for award to small business concerns.  See generally id.  The SBIR program has three phases.  Under phase I, firms competitively apply for an award to test the scientific, technical, and commercial merit and feasibility of a certain concept.  15 U.S.C. § 638(e)(4)(A).  If this is successful, a firm may be invited to apply for a phase II award to further develop the concept.  Id. § 638(e)(4)(B).  A phase III award is defined as work that “derives from, extends, or completes efforts made under prior funding agreements under the SBIR program.”  Id. § 638(e)(4)(C).  Under this phase, firms are expected to obtain funding from non-SBIR government sources or the private sector to develop the concept into a product for sale in private sector or military markets. This protest involves the Theater Medical Information Program - Joint (TMIP-J) healthcare delivery system, which comprises multiple different systems and products that collect a variety of data related to the healthcare of service members.  See Contracting Officer’s Statement at 3-4.  According to the agency, the TMIP-J “enhances the clinical care and information capture at all levels of care in [t]heater, transmits critical information to the [t]heater [c]ommander, the evacuation chain for combat and non-combat casualties and forges the theater links of the longitudinal health record to the [military healthcare system] and the Department of Veterans Affairs.”  Id. at 2.  In short, the TMIP-J is a “system of systems” that supports the various branches of the Armed Forces by providing critical healthcare data and logistics for service members deployed around the world.  See Hearing Transcript (Tr.) at 14:9-21:14. The TMIP-J system is currently in sustainment, which means that the agency is simply maintaining the current capabilities of the system.  Tr.