The SBIR program is reserved for small businesses that have less than 500 employees. The rules are that they can’t be majority-owned by a single venture capital company. Spectro repeatedly self-certified that it met the small business size requirements for eligibility to receive SBIR funding.
Based on certain disclosures made later it was discovered that Spectro did not meet SBIR criteria. Both its ownership and size were not as originally disclosed.
The United States contends that Spectro became ineligible to participate in the SBIR program by virtue of an acquisition where it became majority-owned by a single venture capital company at the time it was awarded and performed certain phases of the SBIR contract.
Specifically, Spectro was awarded contracts in 2012, 2014 and 2017, all while the company was ineligible. The Massachusetts-based entity received funding from the Air Force Research Laboratory at Wright-Patterson AFB for exploratory applications of advanced oil analysis technology for use in the field.
