Procure ObjectSecurity Through SBIR Phase III

SBIR Phase III gives federal acquisition teams a streamlined statutory path to buy qualifying ObjectSecurity technology directly, without conducting a new competition. Phase III may be used for products, software licenses, production, services, testing, integration, support, and further development when the requirement derives from, extends, or completes prior ObjectSecurity SBIR/STTR work.

Why Use SBIR Phase III?

Government preference for the SBIR/STTR developer: Federal agencies and federal prime contractors are directed, to the greatest extent practicable, to issue Phase III awards relating to the technology, including sole-source awards, to the company that developed it under SBIR/STTR.
If award to the original developer is practicable, SBA policy requires a noncompetitive award to that firm.
Prior SBIR/STTR competition satisfies applicable competition requirements.
No new competition is generally required for qualifying Phase III work.
No FAR 5.201 presolicitation synopsis is required when FAR 5.202(a)(7) applies.
No limit on the number, duration, type, or dollar value of Phase III awards.
Any federal agency may issue qualifying Phase III work, even if another agency funded the original SBIR/STTR effort.
Phase III uses non-SBIR/STTR funding appropriate to the requirement.

Phase III Is More Than a Sole-Source Option

SBIR Phase III is not merely authority that permits a sole-source award. Congress established an affirmative preference for continuing qualifying SBIR/STTR-developed technology with the company that developed it. Under 15 U.S.C. § 638(r)(4), federal agencies and federal prime contractors are directed, to the greatest extent practicable, to treat the prior SBIR/STTR award as satisfying applicable competition requirements and to issue related Phase III awards, including sole-source awards, to the SBIR/STTR award recipient that developed the technology.

The SBA SBIR/STTR Policy Directive implements this as a special acquisition requirement. Agencies pursuing qualifying Phase III work are required to make a good-faith effort to negotiate with the original SBIR/STTR awardee. If pursuing the work with that awardee is found practicable, the agency must award a noncompetitive contract to that firm. If the agency instead intends to pursue the work with another entity, SBA policy establishes additional documentation and review requirements.

What Qualifies as SBIR Phase III?

A Phase III effort must derive from, extend, or complete work performed under one or more prior SBIR/STTR funding agreements and must use funding from sources other than the SBIR/STTR programs.

Phase III is not limited to additional R&D. Qualifying work may include products, production, software licenses, services, testing and evaluation, deployment, integration, support, additional development, or combinations of these activities.

ObjectSecurity has performed numerous SBIR/STTR efforts for the Department of Defense and other federal agencies. Technologies resulting from this federally funded R&D have transitioned into ObjectSecurity capabilities including BinLens™ and FortiLayer™.

What the Acquisition Team Needs

Phase III simplifies the competition and source-selection path, but normal contract formation requirements still apply. ObjectSecurity can work with the program office and contracting activity to provide the information needed for the acquisition file.

Requirement / SOW: Define the products, licenses, services, production, testing, integration, support, or development being acquired.
SBIR/STTR lineage: Identify the prior ObjectSecurity Phase I, Phase II, or qualifying Phase III effort from which the new requirement derives, extends, or completes.
Funding: Identify appropriate non-SBIR/STTR funding for the requirement.
Phase III determination: Document why the requirement qualifies as Phase III and cite the applicable statutory authority.
Proposal and pricing: Request the appropriate technical and price proposal from ObjectSecurity.
Normal award documentation: Complete applicable funding, responsibility, price reasonableness, negotiation, clauses, approvals, and other agency-specific contract documentation.

How to Award an ObjectSecurity Phase III

Define the requirement. Identify what the program needs to acquire.
Confirm Phase III lineage. ObjectSecurity can provide the relevant prior SBIR/STTR award information and explain how the requirement derives from, extends, or completes that work.
Identify non-SBIR/STTR funding. Use otherwise-appropriate program, procurement, RDT&E, O&M, or other non-SBIR/STTR funding consistent with the requirement and applicable fiscal rules.
Request the proposal. ObjectSecurity provides the technical approach, pricing, schedule, SOW input, and supporting Phase III information required by the contracting activity.
Document the Phase III basis. The Contracting Officer documents the relationship to the underlying SBIR/STTR work and cites the applicable Phase III authority.
Negotiate and award. Complete the normal contract award process without conducting a new competition for the qualifying Phase III requirement.

Department of the Navy

NMCARS 5206.302-5(b) specifically addresses SBIR/STTR Phase III awards. Prior to award, the Contracting Officer must affirm in the Business Clearance Memorandum (BCM) that the Phase III effort derives from, extends, or completes work performed under prior SBIR/STTR Phase I or Phase II awards and is authorized pursuant to 15 U.S.C. § 638(r)(4).

Department of the Navy SBIR guidance also describes Phase III as an opportunity for a directed award that can bypass formal solicitation, evaluation, and award procedures, and notes that DON acquisition offices have used directed Phase III awards as an efficient way to transition SBIR/STTR-developed technologies.

Key Acquisition Authorities

15 U.S.C. § 638(r)(4): Directs federal agencies and federal prime contractors, to the greatest extent practicable, to treat prior SBIR/STTR awards as satisfying applicable competition requirements and to issue related Phase III awards, including sole-source awards, to the SBIR/STTR award recipient that developed the technology.
SBA SBIR/STTR Policy Directive: Establishes the government-wide Phase III framework, including the special acquisition requirement, the preference for the original developer, noncompetitive Phase III awards, permissible Phase III activities, and the absence of limits on the number, duration, type, or dollar value of Phase III awards.
FAR 5.202(a)(7): Provides an exception to the FAR 5.201 presolicitation synopsis requirement when the proposed contract action results from acceptance of a proposal under the Small Business Innovation Development Act.
FAR 6.302-5: Provides authority for other than full and open competition when acquisition from a specified source is authorized or required by statute.
NMCARS 5206.302-5: Provides specific Department of the Navy instructions for documenting an SBIR/STTR Phase III award in the BCM.

Key Phase III Rules for Acquisition Professionals

Prior competition counts: The Phase I/II SBIR/STTR competition satisfies applicable federal competition requirements for qualifying Phase III work.
Sole-source Phase III is expressly authorized: The statute specifically contemplates Phase III awards, including sole-source awards, to the SBIR/STTR developer.
Preference for the original developer: Federal agencies and federal prime contractors are directed to award qualifying Phase III work to the developer to the greatest extent practicable.
Noncompetitive award when practicable: SBA policy states that if pursuing the Phase III work with the original awardee is practicable, the agency must award the work noncompetitively to that firm.
Further competition justification is generally unnecessary: SBA policy states that for a qualifying Phase III, it is sufficient, if an agency requires a J&A, to identify the effort as Phase III, establish the required lineage, and cite 15 U.S.C. § 638(r)(4); further competition justification is not needed.
No Phase III dollar ceiling: There is no limit on the number, duration, type, or dollar value of Phase III awards.
No expiration of Phase III eligibility: There is no limit on the time between the underlying Phase I or Phase II effort and a subsequent Phase III award.
Cross-agency awards are permitted: The Phase III awarding agency does not have to be the agency that issued the original SBIR/STTR award.
Phase III subcontracts are permitted: Qualifying work performed as a subcontract to a federally funded prime contract may also constitute Phase III.