TITLE:  RDAS Corporation, B-294848, December 23, 2004
BNUMBER:  B-294848
DATE:  December 23, 2004

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   Decision

   Matter of:   RDAS Corporation

   File:            B-294848

   Date:              December 23, 2004

   Augustus H. Green, Jr., for the protester.

   Victor G. Vogel, Esq., U.S. Army Materiel Command, for the agency.

   Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest that agency improperly did not choose to fund protester's phase II
Small Business Innovation Research proposal is denied where record shows
agency had concerns relating to protester's proposed approach, and
protester does not explain or demonstrate why agency's concerns were not
well founded.

   DECISION

   RDAS Corporation protests the decision of the Department of the Army not
to fund its phase II proposal under Department of Defense (DOD) Small
Business Innovation Research (SBIR) program solicitation No. FY03.2.  RDAS
asserts that the agency made errors in the evaluation of its proposal.

   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 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.  See DOD's SBIR Website,
http://www.acq.osd.mil/sadbu/sbir/overview/index.htm.

   The solicitation included Army topic A03-139, entitled "Robust Alignment
Concepts for Precision Guided Weapons."  Previously, the agency had
awarded two phase I awards, one to the protester, and one to Continental
Controls and Design, Inc. (CCDI).  Both firms were asked to submit phase
II proposals, which the solicitation advised would be evaluated using the
following 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. 

   RFP at 10.  Both firms submitted phase II proposals that were subjected to
a two-tiered evaluation process.  First, the proposals were evaluated by
the cognizant Army laboratory or center that had written the topic (in
this case, the Army Aviation & Missile Research and Development Center). 
The protester's proposal was assigned a score of 95 (out of a possible
100) points, while the CCDI proposal was assigned a score of 97 points. 
Agency Report (AR), exhs. N, O.  Thereafter, the proposals were forwarded
to a panel of Army Technology Area Chiefs (TAC), who are responsible for
making the final selection from among all of the Army SBIR proposals.  In
this regard, the TACs take into consideration a number of factors,
including the results of the first tier evaluations, their own assessment
of the merits of a proposal, whether the proposal meets an Army
requirement, whether the proposed work would duplicate other ongoing Army
or DOD efforts, and overall SBIR program balance.  The TAC selected CCDI's
proposal for funding, and not the protester's.  AR, exh. R.

   RDAS asserts that the agency misevaluated its proposal and made an
incorrect finding that led, ultimately, to the decision not to fund its
proposal.  Specifically, RDAS asserts that the agency improperly concluded
that its proposal did not identify an application for its proposed
product, which is a method for determining misalignment between target
sensors and precision guided weapons.  According to the protester, it did
in fact identify two current weapons programs--the non-line-of-site
launcher system (NLOS-LS) and the joint common missile (JCM)--to which its
product does have application.  RDAS therefore asserts that the agency did
not have a reasonable basis for deciding not to fund its proposal.

   Where an agency is conducting an SBIR procurement, it has substantial
discretion to determine which proposals it will fund.  R&D Dynamics Corp.,
B-285979.3, Dec. 11, 2000, 2000 CPD PA 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 209 at 2; see also Intellectual Properties, Inc.,
B-280803.2, May 10, 1999, 99-1 CPD P 83 at 5-6. 

   Here, we have no basis to object to the agency's decision not to select
the RDAS proposal for funding.  Although the protester maintains that it
was the agency's erroneous conclusion that it failed to identify
applications (such as the NLOS-LS and the JCM) for its proposed product
that led the agency not to select its proposal, in fact, this is not borne
out by the record; on the contrary, the selection document specifically
states that the RDAS proposal identified the two proposed applications. 
The document goes on to identify what the agency considers an inherent
limitation of RDAS's proposed approach in light of the stage of
development of those systems, with particular emphasis on the JCM system. 
The selection document states:

   Good engineering approach through a sound algorithmic solution (based upon
[the firm's] previous experience with other similar successful programs). 
Constant progress has been made in the area "Alignment Concepts" for
precision guided weapons.  The proposal addresses two different systems: 
collocated [JCM] and non-collocated [NLOS-LS].  The proposed concepts are
not specific to any particular current or future systems.  The weakness of
the proposal is related to this particular point.  The JCM has not been
fully designed and the misalignment errors are not completely known. 
There is a fair amount of risk involved in the geometry based solution
approach to a system for which errors are not fully established.  In my
[the source selection official's] opinion, the proposed work may be
inadequate for the future/developing systems. 

   AR, exh. R at 8.

   In its report, the agency specifically advanced the position that this was
the basis for not selecting the RDAS proposal.  However, RDAS did not
respond substantively to the agency's position in its comments on the
agency report, stating instead that it essentially stood by the position
taken in its initial protest--that the agency erroneously found that the
firm had not identified any applications for its proposed product.  We
conclude that the protester is simply incorrect in its assertion, and that
the reason stated by the agency at the time of its decision not to fund
the RDAS proposal--that the protester's proposed approach may have
inherent limitations in light of the stage of development of the
identified systems--was the actual basis for the agency's decision not to
fund the RDAS proposal.  The agency's finding regarding RDAS's proposal
appears reasonable, and since RDAS has not shown otherwise, we have no
basis to question it. 

   The protest is denied.

   Anthony H. Gamboa

   General Counsel
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