TITLE:  U S Positioning Group, LLC, B-294027, June 21, 2004
BNUMBER:  B-294027
DATE:  June 21, 2004
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U S Positioning Group, LLC, B-294027, June 21, 2004

   Decision
    
    
Matter of:   U S Positioning Group, LLC
    
File:            B-294027
    
Date:              June 21, 2004
    
Steven M. Shope, Ph.D., for the protester.
Maj. Christina M. Slicker and Eric Kattner, Department of the Air Force,
for the agency.
Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
In procurement under Department of Defense Small Business Innovation
Research program, protest that agency*s source selection was improperly
based on awardee*s proposal to deliver prototype is denied where agency*s
consideration of this factor was in accordance with solicitation*s stated
expectation of deliverable prototype.
DECISION
    
U S Positioning Group, LLC (USPG) protests the Department of the Air
Force*s determination to award phase II funding to JXT Applications, Inc.
(JXT), and not to USPG, for work on command and control interfaces under
the Department of Defense (DOD) Small Business Innovation Research (SBIR)
program. USPG alleges that the Air Force improperly considered JXT*s
proposal to furnish a prototype as a deliverable in making its selection
decision.
    

   We deny the protest.
    
The SBIR program is conducted pursuant to the Small Business Innovation
Development Act, 15 U.S.C. S: 638 (2000), which requires certain federal
agencies to reserve a portion of their research and development funds for
awards to small businesses.  As part of its SBIR program, DOD issues an
SBIR solicitation twice a year listing the research topics for which it
will consider SBIR program admission.  Firms first apply for a 6-month
phase I award to test the scientific, technical, and commercial merit and
feasibility of a certain concept.  If phase I is successful, the firm may
be invited to apply for a 2-year phase II award to further develop the
concept.  After the completion of phase II, firms are expected to obtain
funding from the private sector and/or non-SBIR government sources to
develop the concept into a product for sale in private sector and/or
military markets.  DOD*s SBIR Website,
.
    
DOD issued SBIR solicitation 2003.1, which included Air Force Topic No.
AF03-060, entitled Command and Control Interfaces for Virtual Teams.  The
objective of this topic is to develop user interfaces that permit rapid
and distributed command and control meetings and decision-making.  USPG
and JXT were selected by the Air Force for phase I awards.  When
completion of the phase I contracts drew near, the Air Force requested
phase II proposals from both contractors.  A separate solicitation for
phase II was not issued, since the original DOD solicitation contained the
instructions for all three phases.  Section 4.3 of the solicitation
instructions set forth the following evaluation criteria:
    
a)  The soundness, technical merit, and innovation of the proposed
approach and its incremental progress toward topic or subtopic solution.

   b)  The qualifications of the proposed principal/key investigators,
supporting staff, and consultants. . . .

   c)  The potential for commercial (Government or private sector)
application and the benefits expected to accrue from this
commercialization. 
Section 4.1 stated that final selection decisions would be based on the
scientific and technical evaluations and other factors, including a
commitment for phase III follow-on the funding, the possible duplication
with other research and development, program balance, budget limitations,
and the potential of a successful phase II effort leading to a product of
continuing interest to DOD. 
Both USPG and JXT submitted proposals, which were evaluated by the topic
No. AF03-060 program manager.  USPG*s proposal received a perfect score,
with strengths listed under each evaluation criterion.  JXT*s proposal
received a slightly lower technical score, but had strengths listed under
each evaluation criterion and only one weakness (regarding subcontractor
management).  USPG*s proposal was priced slightly lower than JXT*s.  Both
proposals were highly recommended for funding in the briefing to the
cognizant technical director.  Agency Report (AR), Tab 19 at 15.   The
technical director then re-evaluated the proposals and, based upon the
re‑evaluation and initial evaluation scores and evaluator comments,
concluded that the proposals were essentially equal, except that JXT had
offered a deliverable prototype.  Because there was funding for only one
proposal, the technical director recommended award to JXT, based on the
following reasoning:
    
Both [USPG] and [JXT] submitted excellent proposals . . . .  The deciding
factor was based on the deliverables.  Both contractors proposed to build
hardware/software systems . . . .  However only [JXT] proposed to deliver
the hardware/software to the Government.  [USPG] did not offer to deliver
any hardware/software to the Government; their main deliverables were a
briefing and a final report.  By proposing to deliver the
hardware/software to the Government, [JXT*s] proposal included program
balance and the potential of a successful Phase II effort leading to a
product of continuing interest to DoD which was not contained in the
[USPG] proposal. 
AR, Tab 28.  The division chief agreed and selected JXT*s proposal for
award.  After receiving a written debriefing, USPG filed this protest. 
    
USPG asserts that it was improper for the agency to consider deliverables
other than technical reports and data in distinguishing between the
proposals.[1]  In this regard, it notes that its proposed final report was
*very rich in content* and would include, among other things, a complete
design of a synthetic task environment along with hardware and software, a
validation of its design, and a research tool and laboratory available for
future evaluation experiments.  Comments at 1. 
    
Where an agency is conducting an SBIR procurement, it has the discretion
to determine which proposals it will fund.  R&D Dynamics Corp.,
B-285979.3, Dec. 11, 2000, 2000 CPD P: 201 at 4.  In light of this
discretion, our review of an SBIR procurement is limited to determining
whether the agency violated any applicable regulations or solicitation
provisions, or acted in bad faith.  Bostan Research, Inc., B‑274331,
Dec. 3, 1996, 96-2 CPD P: 209 at 2; see also Intellectual Properties,
Inc., B‑280803.2, May 10, 1999, 99-1 CPD P: 83 at 5-6. 
    
The agency*s award decision was unobjectionable.  Contrary to the
protester*s assertions, there was nothing improper or unreasonable in the
agency*s focusing on deliverables as the key discriminator between the
otherwise equal proposals.  In this regard, the solicitation specifically
provided that *Phase II is the principal research or research and
development effort and is expected to produce a well-defined deliverable
prototype.*  Solicitation, P: 1.2.  Further, though not specified under
the evaluation criteria, delivery of a prototype was logically encompassed
by the first factor regarding technical merit and progress toward topic
solution.  See Base Techs., Inc., B‑293061.2, B-293061.3, Jan. 28,
2004, 2004 CPD P: 31 at 8.  In this regard, we agree with the contracting
officer that offering to deliver a prototype is an indication of the
soundness and technical merit of the proposed approach and the
*embodiment* of the contractor*s solution to the topic problem. 
Contracting Officer*s Statement at 6.  Here, USPG does not dispute that
its proposal failed to include delivery of a prototype; it simply asserts
that the agency*s focus on deliverables as the deciding factor was the
antithesis of the firm*s approach.  Comments at 1.  The agency recognized
that both firms proposed the development of software and hardware, but
reasonably concluded that delivery of a prototype represented a better
value.  USPG*s mere disagreement with the agency*s judgment on the
usefulness of supplying a prototype does not provide a basis for finding
the agency* source selection unreasonable.  Global Assoc., Ltd.,
B‑275534, Mar. 3, 1997, 97-1 CPD P: 129 at 9.
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    

   ------------------------

   [1] USPG*s protest raised a number of other assertions, including an
assertion that the agency failed to consider commercial potential and
principal/key personnel qualifications.  The agency responded to USPG*s
allegations in its agency report and USPG made no mention of these
arguments in its comments on the report.  Accordingly, we find that USPG
abandoned these arguments.  The Writing Co., B‑284622.2, May 19,
2000, 2000 CPD P: 100 at 3.