IIRC to qualify for SIBR a startup must have annual revenue < $10M (?) which excludes larger vendors.

Anyway, a better wording may be "vendors in specific geographies with specialized skills".

The process is not as open as it appears. There is a strong bias for specialization.

Open a new "unrelated" subsidiary. Happens all the time.

I've found a couple of SBIR/STTR RFPs while I was responding to another question, and the ones I've found read:

Has, including its affiliates, not more than 500 employees and meets the other regulatory requirements found in 13 CFR 121.

That's from a DOE SBIR/STTR Phase I application.

hmm only less than 500 employees. Sounds legit.

Wrong. I could tell you stories Buddy, you would not believe. I could complain, but this could easily backfire and could get me and people who benefited from SBIR grants, into trouble. So no, nothing happened and I just dreamed this up when I was smoked up.

I just submitted another SBIR application. Not a really happy about would I delivered in the application, but in the end, to use the words of two of my friends who got an SBIR I +II "It is not an open race". Unfortunately. So the other option is to get funded for the project is China. They shit you with money there if you bring tech.

The SBIR process is based on solicitations. Each solicitation is associated with its own instigators, and there are also a multitude of USGov entities that participate in the program. It's entirely possible for what you experienced to be true and also for other solicitation processes to have been conducted as ethically as one would hope.