What’s the purpose of a SBIR award? That’s the question at the heart of a legal complaint York Space Systems has filed against the military, over a contract awarded to fellow satellite builder Apex Space.
Tick tock: The conflict began in February, when the Air Force announced a $45.9M Phase II Small Business Innovation Research contract for Apex under SSC, to build multiple satellites that could operate “in two space orbits.”
York believed it should have been able to compete for the contract, and quickly asked the military for more information—including whether the Air Force had performed any research about what tech was already available on the commercial market, according to the complaint. The company filed a FOIA request in March, asking to see the contract and market research, but heard back in May that the military had no documentation to provide.
In June, York filed the complaint in the US Court of Federal Claims.
York’s argument: In most bid protests, a company is alleging that the process was somehow biased. York, however, is making a different argument: The contract award “was an improper use of the SBIR program,” according to the complaint.
“The agency’s award to Apex was not appropriate under the SBIR program because the contract was not designed to foster the development of new technology, as required for SBIR awards,” the complaint reads (the emphasis is York’s). “This technology is neither developmental nor new, and is already available on the commercial marketplace, including by York.”
York is also alleging that the contract violated the Competition in Contracting Act, as well as multiple recent Trump administration executive orders that require agencies to use commercial options to cut costs, when available.
“The Air Force awarded a $46M contract without full and open competition for a capability that is already available in the commercial marketplace,” a York representative told Payload in a statement. “The government, taxpayers, and industry all benefit from ensuring agencies meet their obligation to ensure competition and transparency in the procurement process.”
The goal of a SBIR: The SBIR program is designed to invest in early-stage companies working on innovative, high-risk tech that could benefit the government. But it’s also often used as a way to lead new partners into the complicated DoD procurement process, and invest in building up the industrial base to promote long-term competition.
“It’s a great way to bring companies into the fold and see what they have that could be relevant to the government,” said Kari Bingen, director of the Aerospace Security Project at CSIS, who declined to speak about the suit directly to Payload.
Apex’s response: “We are confident that Space Force knows how to properly award a small business innovation contract,” Apex CEO Ian Cinnamon told Payload in a statement. “It is unfortunate that a multi-billion-dollar space company is using litigation to stifle innovation and slow delivery of a capability our warfighters urgently need.”
What’s next: York is asking the court to stop any work under the contract, and reopen the program for bids from multiple competitors. The case has been assigned to Judge Loren Smith.
Correction: This article originally misstated the nature of York’s legal action. It is a protest complaint.
