A recent Court of Federal Claims (“COFC”) decision shows that with the right facts, the government’s failure to award a follow-on Small Business Innovation Research Program (“SBIR”) contract can be challenged at COFC.

In Strategi Consulting, LLC v. United States, the protester, Strategi, alleged that the Air Force improperly failed to award Strategi a Phase III contract for its SBIR work while assigning that Phase III work to other contractors.  The Air Force moved to dismiss, asserting that (1) there was no “procurement” and therefore COFC lacked jurisdiction under the Tucker Act, (2) the protest was barred by the Federal Acquisition Streamlining Act (“FASA”) because it related to a task order award, and (3) Strategi’s arguments lacked redressability. 

COFC rejected each argument and determined that Strategi’s protest could proceed to the merits.  Although jurisdictional issues are often resolved on purely legal grounds, this one turned on facts — some disputed.

Strategi’s protest stemmed from a SBIR Phase II contract, under which Strategi developed “Voltron,” a Tactical Surveillance, Reconnaissance and Tracking (“TacSRT”) automation platform.  Strategi alleged that, despite its efforts to secure a Phase III award, the government instead assigned “de facto” Phase III development work that was “Voltron-derived” to four contractors with existing task orders operating under “a pooled, badge-less multi-contractor environment” known as Dragon Army.

Strategi argued that the government’s actions, among other things, violated the statutory requirement to issue Phase III awards to the SBIR recipients who created the technology “[t]o the greatest extent practicable.”  See 15 U.S.C. § 638(r)(4)(B). 

Tucker Act Argument.  Applying a preponderance of the evidence standard, the court found that it was more likely than not that the government reviewed Strategi’s proposal for Phase III work, declined to award Strategi a Phase III contract, requested Strategi’s codebase for Voltron, continued TacSRT development similar to Voltron, and awarded TacSRT development work to other contractors.  Based on that evidence, the court concluded that, given the broad understanding of a “procurement” as including all stages of the process of acquiring property or services, Strategi’s allegations amounted to a reviewable protest claim.  The court analogized to cases where COFC had found “jurisdiction to review certain agency denials of unsolicited proposals, as well as an agency’s decision to insource work to government agencies instead of pursuing competitive private procurement.”

FASA Task Order Bar Argument.  The court found that, although the “de facto” Phase III work was assigned to other contractors via task order, Strategi was not protesting the task orders themselves, but rather the government’s decision to use other contract vehicles instead of awarding Strategi a Phase III contract.  The court found in the alternative that Strategi’s protest would fall under the increased scope exception to the task order bar because the Voltron work exceeded the scope of the contracts the task orders were issued under.

Redressability Argument.  The court found that Strategi’s protest was redressable because it sought a declaration that the government’s actions constituted an abuse of discretion and an injunction preventing the government from assigning work to other contractors — and not, as the government claimed, a declaration that the government be required to buy certain products or enter into certain contracts. 

Following the jurisdictional decision, the government filed a motion for voluntary remand in order to “undertake new agency action, and, if necessary, implement corrective action.”  Strategi stated in a status report that it intends to oppose the government’s remand motion.  Its responsive brief is due August 7.