PublicRelay (73351022Q0087)

B-421154,B-421154.2 Jan 17, 2023 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights PublicRelay, a small business of Vienna, Virginia, protests the issuance of an order to Red Carrot, Inc., a small business of Miami, Florida, under solicitation No. 73351022Q0087, issued by the Small Business Administration (SBA) for a media database, monitoring and analytics, and news briefing services for SBA's Office of Communication and Public Liaison (OCPL). The protester contends that SBA incorrectly concluded that OCPL's requirement does not qualify for a Small Business Innovative Research (SBIR) phase III award, and should have engaged in good faith negotiations with PublicRelay to enter into a phase III contract. We deny 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: PublicRelay File: B-421154; B-421154.2 Date: January 17, 2023 David S. Black, Esq., and Gregory R. Hallmark, Esq., Holland & Knight LLP, for the protester. Meagan K. Guerzon, Esq., Small Business Administration, for the agency. Charmaine A. Stevenson, Esq., and John Sorrenti, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that agency was required to enter into good faith negotiations for a Small Business Innovative Research (SBIR) phase III award on a sole-source basis is denied because such action is not required where the agency was not pursuing production of the technology developed by the SBIR awardee under its prior phase I or II awards, and did not otherwise seek to procure the technology. DECISION PublicRelay, a small business of Vienna, Virginia, protests the issuance of an order to Red Carrot, Inc., a small business of Miami, Florida, under solicitation No. 73351022Q0087, issued by the Small Business Administration (SBA) for a media database, monitoring and analytics, and news briefing services for SBA’s Office of Communication and Public Liaison (OCPL). The protester contends that SBA incorrectly concluded that OCPL’s requirement does not qualify for a Small Business Innovative Research (SBIR) phase III award, and should have engaged in good faith negotiations with PublicRelay to enter into a phase III contract. We deny the protest. BACKGROUND The SBIR program was established under the Small Business Innovation Development Act of 1982, and is codified in section 98 of the Small Business Act. 15 U.S.C. § 638. The program is designed to increase the participation of small business concerns in federally funded research or research and development (R/R&D). See id. 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.[1] See id. § 638(e)(4). The Small Business Act requires SBA to issue policy directives for the operation of the SBIR and STTR programs. Id. § 638(j). Under this authority, SBA has promulgated the SBIR/STTR Program Policy Directive through notice and comment rulemaking. See 84 Fed. Reg. 12794-849 (Apr. 2, 2019). 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 concept. 15 U.S.C. § 638(e)(4)(A). Under phase II, a firm may submit a proposal to further develop the concept that it first conceived in phase I. Id. § 638(e)(4)(B). For phase III, the Small Business Act provides that “where appropriate,” there may be a “third phase for work that derives from, extends, or completes efforts made under prior funding agreements under the SBIR program.” Id. § 638(e)(4)(C). Under phase III, firms obtain funding from the private sector or non-SBIR government sources to develop concepts from a phase I or II award into commercial products or services for use by the federal government. Id. PublicRelay states that starting in 2011, under contracts awarded by the National Science Foundation (NSF) for SBIR phase I and II efforts, it developed media analysis software, including building and testing prototype content processing modules. See Protest at 3. The record shows that beginning in August 2021, after learning about SBA’s then-current contract for news briefing services, PublicRelay initiated communications with OCPL in which it inquired about fulfilling the agency’s requirements for media monitoring, daily briefing, and analytics. In that communication, PublicRelay advised the agency that it is an “SBIR phase [III] company that does media monitoring, briefings, and analytics for almost 100 of the Fortune 500.” Agency Report (AR), Tab 7, Email Correspondence Aug. 19-Sept.