B-167665, APRIL 20, 1970, 49 COMP. GEN. 702

B-167665: Apr 20, 1970

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WAS INCONSISTENT WITH THE SIC DEFINITION OF THE INVOLVED REFUSE SERVICES AS TRANSPORTATION AND PURSUANT TO SECTION 121.3-8(F) OF THE SBA REGULATION. 1970: FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED AUGUST 6. STATED THAT THE PROCUREMENT WAS 100 PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS. THE SCHEDULED BID OPENING DATE WAS APRIL 22. THE FOLLOWING SUBPARAGRAPH (C) IS ADDED TO PARAGRAPH 25 OF THE ADDITIONAL SOLICITATION INSTRUCTIONS AND CONDITIONS. IS CLASSIFIED AS A SMALL BUSINESS IF ITS AVERAGE ANNUAL SALES OR RECEIPTS FOR ITS PRECEDING THREE FISCAL YEARS DO NOT EXCEED $3 MILLION. THREE BIDS WERE RECEIVED AS FOLLOWS: SQUARE DEAL TRUCKING COMPANY $66. 244 THE GOVERNMENT ESTIMATE FOR THE SERVICES WAS $79.

B-167665, APRIL 20, 1970, 49 COMP. GEN. 702

CONTRACTS -- AWARDS -- SMALL BUSINESS CONCERNS -- SIZE -- CLASSIFICATION PROPRIETY THE SMALL BUSINESS SIZE APPEALS BOARD IN CLASSIFYING THE COLLECTION AND DISPOSAL OF REFUSE AS A SERVICE FALLING WITHIN THE $1 MILLION SMALL BUSINESS SIZE STANDARD, TO BE APPLIED IN THE FUTURE AS THE APPEAL HAD NOT BEEN TIMELY TAKEN, RATHER THAN AS A TRANSPORTATION ACTIVITY WITHIN THE CONTEMPLATION OF THE $3 MILLION SIZE STANDARD USED BY THE PROCURING AGENCY, DISREGARDED SMALL BUSINESS ADMINISTRATION REGULATION 121.3 1(B)(1) MAKING CONSIDERATION OF THE STANDARD INDUSTRIAL CLASSIFICATION (SIC) MANDATORY IN DEFINING INDUSTRIES FOR THE PURPOSE OF ESTABLISHING SMALL BUSINESS SIZE STANDARDS--A REGULATION THAT HAS THE FORCE AND EFFECT OF LAW. THE RESULT IN THE SIZE APPEAL, THEREFORE, WAS INCONSISTENT WITH THE SIC DEFINITION OF THE INVOLVED REFUSE SERVICES AS TRANSPORTATION AND PURSUANT TO SECTION 121.3-8(F) OF THE SBA REGULATION, THE $3 MILLION SMALL BUSINESS SIZE STANDARD SHOULD APPLY TO THE SERVICES.

TO SADUR, PELLAND & BRAUDE, APRIL 20, 1970:

FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED AUGUST 6, AUGUST 19, OCTOBER 10, AND OCTOBER 23, 1969, PROTESTING ON BEHALF OF JOHNSON & SPEAKE, INCORPORATED, AGAINST THE AWARD OF A CONTRACT TO SQUARE DEAL TRUCKING COMPANY, INCORPORATED, PURSUANT TO INVITATION FOR BIDS NO. F49604 -69-B-0259, FOR REFUSE AND GARBAGE COLLECTION AND DISPOSAL SERVICES AT BOLLING AIR FORCE BASE FOR THE FISCAL YEAR 1970.

THE INVITATION, ISSUED ON MARCH 24, 1969, STATED THAT THE PROCUREMENT WAS 100 PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS. THE SCHEDULED BID OPENING DATE WAS APRIL 22, 1969. ON APRIL 14, 1969, THE CONTRACTING OFFICER ISSUED AN AMENDMENT PROVIDING IN PART AS FOLLOWS:

1. THE FOLLOWING SUBPARAGRAPH (C) IS ADDED TO PARAGRAPH 25 OF THE ADDITIONAL SOLICITATION INSTRUCTIONS AND CONDITIONS, "NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE": (C) ANY CONCERN BIDDING ON A CONTRACT FOR TRANSPORTATION, COLLECTING AND TRANSPORTING OF REFUSE, IS CLASSIFIED AS A SMALL BUSINESS IF ITS AVERAGE ANNUAL SALES OR RECEIPTS FOR ITS PRECEDING THREE FISCAL YEARS DO NOT EXCEED $3 MILLION.

PRIOR TO THE ABOVE AMENDMENT THE INVITATION FAILED TO SET FORTH THE SIZE CRITERIA AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR)1- 703(C)(1). IT MADE REFERENCE TO A SMALL BUSINESS CONCERN ONLY UNDER PARAGRAPH 14 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS (SF 33A), WHICH DEFINES A SMALL BUSINESS AS ONE MEETING THE CRITERIA PRESCRIBED BY THE SMALL BUSINESS ADMINISTRATION (SBA), CODE OF FEDERAL REGULATIONS (CFR), TITLE 13, PART 121, AS AMENDED.

THREE BIDS WERE RECEIVED AS FOLLOWS: SQUARE DEAL TRUCKING COMPANY $66,240 SHAYNE BROTHERS $69,264 JOHNSON & SPEAKE $95,244 THE GOVERNMENT ESTIMATE FOR THE SERVICES WAS $79,300. AWARD WAS MADE TO SQUARE DEAL TRUCKING COMPANY ON JULY 1, 1969, AS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER.

YOU CONTEND IN YOUR PROTEST LETTER DATED AUGUST 6, 1969, THAT THE AWARD SHOULD BE CANCELED AS VIOLATING (1) THE SMALL BUSINESS SET-ASIDE PROGRAM; (2) THE ARMED SERVICES PROCUREMENT REGULATION; AND (3) THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. YOU STATE THAT THE AMENDMENT SENT BY MAIL WAS NOT RECEIVED BY JOHNSON & SPEAKE UNTIL 2 DAYS BEFORE BID OPENING, THUS PRECLUDING A TIMELY PROTEST UNDER ASPR 1 703(C)(2)(II) REQUIRING SUBMISSION NOT LESS THAN 5 WORKING DAYS BEFORE BID OPENING. IN ADDITION YOU QUESTION THE GOOD FAITH OF SQUARE DEAL TRUCKING COMPANY IN CERTIFYING ITSELF AS SMALL BUSINESS INASMUCH AS IT KNEW THAT UNDER THE ALLEGEDLY PROPER SIZE CRITERION OF $1,000,000, IT DID NOT QUALIFY.

ALTHOUGH NO JUSTIFICATION IS GIVEN IN THE CONTRACTING OFFICER'S REPORT AS TO WHY THE INVITATION AS ISSUED DID NOT CONTAIN A PRESCRIBED DOLLAR LIMITATION IN ACCORDANCE WITH ASPR 1-703(C)(1), IT WAS CLEARLY PROPER TO AMEND THE INVITATION TO PROVIDE FOR THE REQUIRED SIZE CLASSIFICATION. SEE ASPR 2-208(A). THE AMENDMENT, ISSUED ON APRIL 14, 1969, BASED THE $3,000,000 SIZE STANDARD ON INFORMATION SUBMITTED BY THE DEPUTY FOR SMALL BUSINESS DIRECTORATE OF PROCUREMENT POLICY, HQ USAF, BY LETTER OF APRIL 11, 1969, ADVISING THAT REFUSE COLLECTION COULD BE PLACED IN EITHER OF TWO CATEGORIES, AS FOLLOWS:

(A) IF THE CONTRACT MERELY REQUIRES THAT THE TRASH BE COLLECTED, THE SIC (STANDARD INDUSTRIAL CLASSIFICATION) IS 4212 "TRUCKING" AND THE SIZE STANDARD IS $3 MILLION. (B) IF THE CONTRACT PROVIDES THAT THE TRASH BE COLLECTED AND DISPOSED OF IN A PARTICULAR MANNER, THE SIC CODE IS 4953 AND THE SIZE STANDARD IS $1 MILLION. IN EVALUATING THE REQUIREMENTS OF THE INVITATION, THE CONTRACTING OFFICER DETERMINED THAT SINCE A PARTICULAR METHOD FOR COLLECTION AND DISPOSAL WAS NOT SPECIFIED, THE SIZE STANDARD OF $3,000,000 SHOULD APPLY TO THE SUBJECT PROCUREMENT.

BY LETTER OF APRIL 24, 1969, YOU PROTESTED THE SIZE CLASSIFICATION. IN A DETERMINATION OF JUNE 26, 1969, BY THE SBA MIDDLE ATLANTIC AREA OFFICE, THE SIZE CLASSIFICATION WAS NOT DISTURBED. JOHNSON AND SPEAKE THEN FILED A NOTICE OF APPEAL WITH THE SBA SIZE APPEALS BOARD WHICH, IN A DECISION OF JULY 24, 1969, DECIDED THAT THE $1,000,000 SIZE STANDARD SHOULD HAVE BEEN APPLIED. HOWEVER, THE BOARD ALSO DECIDED THAT THE APPEAL WAS NOT TIMELY FOR PURPOSES OF THE INSTANT PROCUREMENT.

CONCERNING YOUR CONTENTION THAT THE SIZE CLASSIFICATION AMENDMENT COULD NOT HAVE BEEN TIMELY APPEALED TO THE SIZE APPEALS BOARD AS PRESCRIBED BY ASPR 1-703(C)(2)(II), WHICH STATES THAT APPEAL MUST BE TAKEN "NOT LESS THAN FIVE WORKING DAYS BEFORE THE BID OPENING *** WHERE THIS DATE *** IS 30 OR LESS DAYS AFTER THE ISSUANCE OF THE INVITATION FOR BIDS *** ", OUR OFFICE HAS HELD THAT THE CONTROLLING FACTOR IN LIKE CIRCUMSTANCES, IS THE TIME OF RECEIPT OF THE SIZE APPEALS BOARD'S DECISION BY THE CONTRACTING OFFICER, NOTWITHSTANDING THAT A TIMELY APPEAL COULD NOT HAVE BEEN FILED 5 DAYS BEFORE BID OPENING. WE NOTE THAT ALTHOUGH THE AMENDMENT WAS RECEIVED BY YOUR FIRM IN TIME TO ACKNOWLEDGE IT BEFORE BID OPENING, YOUR APPEAL WAS NOT FILED UNTIL 2 DAYS AFTER BID OPENING. THE SIZE APPEALS BOARD'S DECISION WAS DATED 24 DAYS AFTER THE DATE OF AWARD. IN A SIMILAR CASE, B- 167282, MARCH 10, 1970, OUR OFFICE STATED:

WE THINK THE QUESTION TO BE DETERMINED HERE IS WHETHER THE CONTRACTING OFFICER WAS AUTHORIZED, IN THE CIRCUMSTANCES, TO MAKE A VALID AWARD TO SQUARE DEAL TRUCKING COMPANY, NOTWITHSTANDING A TIMELY APPEAL FROM THE SIZE STANDARD USED.

ASPR 1-703(C)(3) PROVIDES THAT: " *** THE SBA DECISION, IF RECEIVED PRIOR TO THE OPENING DATE, SHALL BE CONSIDERED FINAL, AND SOLICITATIONS WILL BE MODIFIED TO REFLECT SUCH DECISION, IF NECESSARY. WHERE APPROPRIATE, OPENING DATES MAY BE EXTENDED. SBA RULINGS RECEIVED AFTER THE OPENING DATE SHALL NOT APPLY TO THE CURRENT PROCUREMENT BUT SHALL APPLY IN FUTURE PROCUREMENTS OF THE PRODUCT."

THERE IS NOTHING IN THE ABOVE REGULATION THAT IS CONTRARY TO THE SBA REGULATIONS, AND THE REGULATION STATES THAT WHERE THE DECISION OF THE SBA IS RECEIVED AFTER THE OPENING DATE, ITS RULING WILL NOT APPLY TO THE CURRENT PROCUREMENT. THERE IS NO PROVISION IN ASPR OR IN THE SBA REGULATIONS REQUIRING A STAY OF AWARD PENDING THE OUTCOME OF AN APPEAL TO THE SIZE APPEALS BOARD. ABSENT SUCH REQUIREMENTS, IT IS OUR VIEW THAT THE CONTRACTING OFFICER CONSUMMATED A BINDING AND VALID AWARD TO THE LOW BIDDER, SQUARE DEAL TRUCKING COMPANY, AND THE VALIDITY OF SUCH AN AWARD IS NOT AFFECTED BY THE RULING OF THE SIZE APPEALS BOARD IN THIS CASE.

THEREFORE, YOUR PROTEST IS DENIED. WE THINK THAT THE SIZE APPEALS BOARD'S DECISION, SIZE APPEAL OF JOHNSON AND SPEAKE, NO. 370, JULY 24, 1969, MAY BE SUBJECT TO SOME QUESTION. SBA REGULATIONS ESTABLISH THE PROCEDURE BY WHICH SMALL BUSINESS SIZE STANDARDS ARE TO BE DETERMINED. THE FIRST STEP IN THIS PROCESS IS TO DEFINE EACH INDUSTRY AND ITS ELEMENTS. IN THIS REGARD 13 CFR 121.3-1(B)(1) PROVIDES AS FOLLOWS:

THE STANDARD INDUSTRIAL CLASSIFICATION MANUAL, AS AMENDED, PREPARED AND PUBLISHED BY THE BUREAU OF THE BUDGET, EXECUTIVE OFFICE OF THE PRESIDENT, SHALL BE USED BY SBA IN DEFINING INDUSTRIES. THE SINGLE EXCEPTION TO THE ABOVE QUOTED REGULATION, 13 CFR SEC. 121.3-1(B)(1)(I), APPLIES ONLY TO A SPECIFIED CLASS OF MANUFACTURED PRODUCTS, AND IS NOT APPLICABLE TO THE SERVICES INVOLVED IN THE INSTANT CASE.

SECTION 1-01(A) OF THE SUBJECT SPECIFICATIONS PROVIDED: "THE WORK SHALL CONSIST OF FURNISHING ALL TRANSPORTATION, EQUIPMENT, SUPPLIES, MANAGEMENT AND LABOR NECESSARY TO COLLECT REFUSE ON BOLLING AIR FORCE BASE *** AND REMOVE IT TO A DISPOSAL POINT OFF THE BASE."

THE STANDARD INDUSTRIAL CLASSIFICATION (SIC) MANUAL DESIGNATED "MOTOR FREIGHT TRANSPORTATION AND WAREHOUSING" AS MAJOR GROUP 42. WITHIN THIS GROUP THE MANUAL CLASSIFIED "LOCAL TRUCKING AND DRAYING, WITHOUT STORAGE" AS INDUSTRY NO. 4212 DEFINING IT AS FOLLOWS:

COMPANIES PRIMARILY ENGAGED IN FURNISHING TRUCKING, TRANSFER, AND DRAYING SERVICES WITHOUT STORAGE, IN A SINGLE MUNICIPALITY, CONTIGUOUS MUNICIPALITIES, OR A MUNICIPALITY AND ITS SUBURBAN AREAS. COMPANIES PRIMARILY ENGAGED IN COLLECTING AND DISPOSING OF REFUSE BY PROCESSING OR DESTRUCTION OF MATERIALS ARE CLASSIFIED IN INDUSTRY 4953. INCLUDED IN THIS INDUSTRY CLASSIFICATION (NO. 4212) ARE "COLLECTING AND TRANSPORTING REFUSE, WITHOUT DISPOSAL"; AND "DEBRIS REMOVAL, CARTING ONLY". THE MANUAL ALSO HAS A CLASSIFICATION "MAJOR GROUP 49-ELECTRIC, GAS AND SANITARY SERVICES". INDUSTRY NO. 4953, "REFUSE SYSTEMS" IS DEFINED AS "SYSTEMS PRIMARILY ENGAGED IN THE COLLECTION AND DISPOSAL OF REFUSE BY PROCESSING OR DESTRUCTION. COMPANIES PRIMARILY ENGAGED ON COLLECTING AND TRANSPORTING REFUSE WITHOUT DISPOSAL ARE CLASSIFIED IN INDUSTRY 4212".

IT IS APPARENT THAT THE SERVICES REQUIRED BY THE SUBJECT SOLICITATION ARE COVERED BY THE SIC MANUAL DEFINITION OF THE LOCAL TRUCKING AND DRAYING INDUSTRY NO. 4212. NO SERVICES ARE REQUIRED BEYOND THE COLLECTION OF REFUSE AND ITS TRANSPORTATION TO ANY APPROPRIATE DISPOSAL SITE. IT IS OBVIOUS THAT THE FIRMS INVOLVED ARE NOT PRIMARILY ENGAGED IN COLLECTING AND DISPOSING OF REFUSE BY PROCESSING OR DESTRUCTION.

SBA REGULATIONS, 13 CFR 121.3-8(F) ESTABLISH SIZE STANDARDS FOR THE TRANSPORTATION INDUSTRY AS FOLLOWS:

TRANSPORTATION. ANY CONCERN BIDDING ON A CONTRACT FOR PASSENGER OR FREIGHT TRANSPORTATION, NOT ELSEWHERE DEFINED IN THIS SECTION, IS CLASSIFIED *** (3) AS SMALL IF IT IS BIDDING ON A CONTRACT FOR EITHER TRUCKING (LOCAL AND LONG-DISTANCE), WAREHOUSING, PACKING AND CRATING, AND/OR FREIGHT FORWARDING, AND ITS ANNUAL RECEIPTS DO NOT EXCEED $3 MILLION.

SECTION 121.3-8(E) OF THE SBA REGULATIONS PROVIDES:

SERVICES. ANY CONCERN BIDDING ON A CONTRACT FOR SERVICES, NOT ELSEWHERE DEFINED IN THIS SECTION, IS CLASSIFIED AS SMALL IF ITS AVERAGE ANNUAL SALES OR RECEIPTS FOR ITS PRECEDING THREE (3) FISCAL YEARS DO NOT EXCEED $1 MILLION. THUS, ACCORDING TO THE SIC DEFINITIONS, THE SERVICES OF THE SUBJECT PROCUREMENT FALL WITHIN SECTION 121.3-8(F) OF THE SBA REGULATIONS ESTABLISHING THE SMALL BUSINESS SIZE STANDARD FOR THE TRANSPORTATION INDUSTRY OR ANNUAL RECEIPTS NOT TO EXCEED $3 MILLION.

HOWEVER, IN THE SIZE APPEAL OF JOHNSON AND SPEAKE, SUPRA, IT IS STATED: "SBA IS GUIDED BY AND GENERALLY FOLLOWS THE STANDARD INDUSTRIAL CLASSIFICATION (SIC) MANUAL *** HOWEVER, IT IS NOT BOUND BY THE MANUAL." ACCORDINGLY, IT HELD THAT THE SIZE STANDARD APPLICABLE TO THE SUBJECT PROCUREMENT WAS $1 MILLION PURSUANT TO 13 CFR 121.3-8(E) QUOTED ABOVE, FOR SERVICES NOT ELSEWHERE DEFINED.

IN A LETTER TO THIS OFFICE DATED DECEMBER 3, 1969, WITH REGARD TO A SIMILAR PROCUREMENT SBA STATED:

REGULATIONS IMPLEMENTING THESE STATUTORY PROVISIONS HAVE BEEN DULY PROMULGATED AND APPEAR AS PART 121 OF THE SBA RULES AND REGULATIONS, 13 CFR 121, ET. SEQ. SECTION 121.3-1(B) OF SUCH REGULATIONS PROVIDES THAT THE STANDARD INDUSTRIAL CLASSIFICATION MANUAL SHALL BE USED BY THE SMALL BUSINESS ADMINISTRATION IN DEFINING INDUSTRIES. HOWEVER, SUBSECTION (3) THEREOF PROVIDES:

"PRODUCT CLASSIFICATION. FOR SIZE STANDARDS PURPOSES, A PRODUCT SHALL BE CLASSIFIED INTO ONLY ONE INDUSTRY, EVEN THOUGH, FOR OTHER PURPOSES, IT COULD BE CLASSIFIED INTO MORE THAN ONE INDUSTRY. IN DETERMINING THE SIC INDUSTRY INTO WHICH PARTICULAR PRODUCTS SHALL BE CLASSIFIED FOR SIZE STANDARD PURPOSES, CONSIDERATION SHALL BE GIVEN TO ALL APPROPRIATE FACTORS INCLUDING: (1) ALPHABETIC INDICES PUBLISHED BY THE BUREAU OF THE BUDGET, BUREAU OF THE CENSUS, AND THE BUSINESS AND DEFENSE SERVICES ADMINISTRATION; (II) DESCRIPTION OF THE PRODUCT UNDER CONSIDERATION; (III) PREVIOUS GOVERNMENT PROCUREMENTS FOR THE SAME OR SIMILAR PRODUCTS; AND (IV) PUBLISHED INFORMATION CONCERNING THE NATURE OF COMPANIES WHICH MANUFACTURE SUCH PRODUCT."

THE ALPHABETICAL INDEX OF OCCUPATIONS AND INDUSTRIES, PUBLISHED BY THE BUREAU OF THE CENSUS, 1960, AND ITS COMPANION VOLUME, THE CLASSIFIED INDEX OF OCCUPATIONS AND INDUSTRIES, CLASSIFY UNDER CODE 578, SANITARY SERVICES, THE FOLLOWING: TRASH COLLECTION TRASH HAULING TRASH DISPOSAL GARBAGE COLLECTING GARBAGE DISPOSAL GARBAGE TRUCKING CO. REFUSE COLLECTION RUBBISH COLLECTION

THE CLASSIFICATION OF TRUCKING SERVICE, UNDER CODE 509, DOES NOT INCLUDE EITHER COLLECTION OR HAULING OF TRASH, GARBAGE, REFUSE OR RUBBISH. COPIES OF EXTRACTS OF THESE CLASSIFICATIONS ARE ENCLOSED.

IN DETERMINING THE SIC INDUSTRY INTO WHICH PARTICULAR PRODUCTS (INCLUDING SERVICES) ARE CLASSIFIED FOR SIZE STANDARD PURPOSES, SBA HAS GIVEN CONSIDERATION TO THE FOREGOING PUBLICATIONS, AS WELL AS THE OTHER FACTORS ENUMERATED IN SECTION 121.3-1(B)(3) OF THE SBA RULES AND REGULATIONS.

IT IS A WELL ESTABLISHED PRINCIPLE OF ADMINISTRATIVE LAW THAT VALID STATUTORY REGULATIONS HAVE THE FORCE AND EFFECT OF LAW, ARE GENERAL IN THEIR APPLICATION, AND MAY NOT BE WAIVED. 37 COMP. GEN. 820, 821 (1958), AND CASES CITED THEREIN. SBA REGULATION 121.3-1(B) ESTABLISHES THE MANDATORY REQUIREMENT THAT THE SIC MANUAL SHALL BE USED IN DEFINING INDUSTRIES. WHILE IT MAY BE CONCEDED THAT THE TERM "PRODUCT" USED IN SECTION 121.3-1(B)(3) QUOTED ABOVE INCLUDES "SERVICES" SO AS TO PERMIT THE USE OF PUBLICATIONS OF THE BUREAU OF THE CENSUS MENTIONED ABOVE, BY ITS VERY LANGUAGE IT REQUIRES CLASSIFICATION WITHIN A SIC INDUSTRY. IT SHOULD BE NOTED ALSO THAT THE 1960 CENSUS BUREAU INDEX OF INDUSTRIES WHICH IS MENTIONED IN SBA'S LETTER OF DECEMBER 3, 1969, AS SUPPORT FOR THE POSITION THAT COLLECTING AND TRANSPORTING REFUSE IS NOT INCLUDED IN THE TRUCKING SERVICE CLASSIFICATION, HAS BEEN SUPERSEDED BY THE 1970 INDEX. THE 1970 INDEX PLACES TRUCKING SERVICE UNDER CODE 417 AND REFERS SPECIFICALLY TO THE SIC MANUAL CLASSIFICATION WHICH INCLUDES NO. 4212, QUOTED ABOVE. CLASSIFICATION NO. 4212, OF COURSE, INCLUDES COLLECTING AND TRANSPORTING REFUSE, WITHOUT DISPOSAL.

AS ALREADY DISCUSSED, THE SERVICES INVOLVED WERE FOR TRANSPORTATION WITHIN SIC DEFINITIONS AND THEREFORE, A $3 MILLION SMALL BUSINESS SIZE STANDARD APPLIES PURSUANT TO 13 CFR 121.3-8(F).

ACCORDINGLY, WE BELIEVE THAT THE RESULT IN SIZE APPEAL OF JOHNSON AND SPEAKE, SUPRA, IS INCONSISTENT WITH THE MANDATORY REQUIREMENTS OF THE SBA REGULATIONS. IT IS WITHIN SBA'S AUTHORITY TO ESTABLISH SIZE STANDARDS; BUT THE ADMINISTRATIVE PROCESS WHICH ESTABLISHES SUCH STANDARDS MUST CONFORM TO THE SBA REGULATIONS.

A COPY OF THIS DECISION IS BEING SENT TO SBA TODAY.