B-170713, OCT. 6, 1970

B-170713, OCT. 6, 1970

CONTRACTS - SBA SIZE CLASSIFICATION DENIAL OF PROTEST ON BEHALF OF RITTNER'S DINER CO., WHEN IT WAS CONSIDERED FOR CONTRACT UNDER SMALL BUSINESS AND IT WAS LATER DETERMINED THAT THE COMPANY HAD AN AFFILIATES OF THE SAME NAME, WHICH WITH SIZE AND ANNUAL INCOME EXCLUDED IT FROM BEING CONSIDERED AS A SMALL BUSINESS UNDER THE SBA REGULATIONS. UNSUCCESSFUL BIDDER WHO PROTESTS REQUIREMENT IN INVITATION FIXING $1 MILLION AS SIZE STANDARD FOR SMALL BUSINESS PARTICIPATION BUT WHO DID NOT APPEAL SIZE STANDARD MUST HAVE CONTRACTING OFFICER'S PRODUCT CLASSIFICATION CONSIDERED FINAL AND CONCLUSIVE. HENCE PROTEST MUST BE DENIED.

TO BERMAN AND BOSWELL:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 27, 1970, WITH ENCLOSURE, ON BEHALF OF RITTNER'S DINER COMPANY, HARRISBURG, PENNSYLVANIA, PROTESTING A DECISION OF THE SIZE APPEALS BOARD WHICH HELD THAT RITTNER'S DINER IS NOT A SMALL BUSINESS CONCERN FOR GOVERNMENT PROCUREMENT UNDER INVITATION FOR BIDS NO. DABB17-70-B-0085, ISSUED BY THE U. S. GARRISON IGMR, ANNVILLE, PENNSYLVANUA. YOU ATTACH A COPY OF THE FINDINGS AND DECISION OF THE SIZE APPEALS BOARD ISSUED ON AUGUST 13, 1970, AND FORMALLY ADOPTED BY THE ADMINISTRATOR OF THE SMALL BUSINESS ADMINISTRATION. THIS DECISION, WHICH DENIED ELIGIBILITY TO YOUR CLIENT, STATES IN PERTINENT PART AS FOLLOWS:

"A. INVITATION FOR BIDS CALLS FOR THE PROSPECTIVE CONTRACTOR TO FURNISH MEALS TO APPLICANTS FOR ENLISTMENT IN THE ARMED SERVICES AND SELECTIVE SERVICE REGISTRANTS PROCESSED THROUGH THE ARMED FORCES EXAMINING AND ENTRANCE STATION, HARRISBURG, PENNSYLVANIA, FOR THE PERIOD JULY 1, 1970, THROUGH JUNE 30, 1971. SERVICES ARE TO INCLUDE BREAKFASTS, DINNERS (NOON), SUPPERS AND BOX LUNCHES. ALL MEALS ARE TO BE SERVED AT THE CONTRACTOR'S ESTABLISHMENT, EXCEPT THE BOX LUNCHES WHICH ARE TO BE DELIVERED TO NEW CUMBERLAND ARMY DEPOT, NEW CUMBERLAND, PENNSYLVANIA. THE SOLICITATION WAS RESTRICTED EXCLUSIVELY TO BIDDING BY SMALL BUSINESS CONCERNS. AN ELIGIBLE SMALL BUSINESS CONCERN WAS DEFINED IN THE INVITATION AS ONE WHICH, TOGETHER WITH ITS AFFILIATES, HAD AVERAGE ANNUAL SALES OR RECEIPTS FOR THE PRECEDING THREE FISCAL YEARS NOT EXCEEDING $1 MILLION.

"B. NO EXCEPTION WAS TAKEN TO PRODUCT CLASSIFICATION ASSIGNED BY THE CONTRACTING OFFICER PRIOR TO BID OPENING. IN THIS CONNECTION, SECTION 121.3-8 OF THE SMALL BUSINESS SIZE STANDARDS REGULATION PROVIDES:

"' *** THE DETERMINATION OF THE APPROPRIATE CLASSIFICATION OF A PRODUCT OR SERVICE SHALL BE MADE BY THE CONTRACTING OFFICER AND HIS DETERMINATION SHALL BE FINAL UNLESS APPEALED IN THE MANNER PROVIDED IN SECTION 121.3- 6.' SINCE NO APPEAL WAS TAKEN IN ACCORDANCE WITH SECTION 121.3-6 OF THE REGULATION, THE $1 MILLION SIZE STANDARD SET FORTH IN THE INVITATION GOVERNS THIS PARTICULAR PROCUREMENT.

"C. REVIEW OF THE RECORD DISCLOSES THAT RITTNER'S DINER COMPANY IS OWNED AND CONTROLLED BY WILLIAM F. RITTNER, FRANCES M. RITTNER AND ERNEST L. RITTNER, WHO ARE HUSBAND, WIFE AND SON. THESE SAME INDIVIDUALS ALSO OWN AND CONTROL WILLIAM F. RITTNER COMPANY. THEREFORE, THESE TWO CONCERNS ARE AFFILIATES OF EACH OTHER WITHIN THE MEANING OF SECTION 121.3-2(A) OF THE SIZE REGULATION. SINCE THE AVERAGE ANNUAL RECEIPTS OF THE RITTNER CONCERNS EXCEED THE $1 MILLION SIZE STANDARD APPLICABLE TO THIS PROCUREMENT, RITTNER'S DINER COMPANY IS NOT AN ELIGIBLE SMALL BUSINESS CONCERN FOR AWARD OF THIS PROCUREMENT."

IT IS YOUR CONTENTION THAT THE SOLICITATION IS FOR FOOD SERVICES AND THAT BY TWO RECENT AMENDMENTS TO THE SBA REGULATIONS, ANY CONCERN BIDDING ON A CONTRACT FOR FOOD SERVICES IS CLASSIFIED AS SMALL IF ITS AVERAGE ANNUAL SALES OR RECEIPTS FOR ITS PROCEDING THREE FISCAL YEARS DO NOT EXCEED $4 MILLION. YOU ALSO STATE THAT THERE IS NO DISPUTE AS TO WHETHER YOUR CLIENT FALLS WITHIN THE $4 MILLION CLASSIFICATION. IN VIEW OF THE ABOVE, YOU CONTEND THAT THE INVITATION CONTAINED AN IMPROPER SIZE STANDARD AND YOU REQUEST OUR OFFICE TO INVESTIGATE THIS MATTER.

UNDER SECTION 8(B)(6) OF THE SMALL BUSINESS ACT OF 1958, 15 U.S.C. 637(B)(6), A DECISION OF THE SBA REGARDING THE SIZE STATUS OF A PARTICULAR CONCERN IS CONCLUSIVE UPON THE PROCUREMENT AGENCY INVOLVED. SINCE THE DECISION OF THE SBA REGARDING SIZE STATUS OF A COMPANY, BY STATUTE, IS "CONCLUSIVE," WE HAVE NO ALTERNATIVE BUT TO DENY YOUR PROTEST ON THIS GROUND. SEE 46 COMP. GEN. 102 (1966); 44 ID. 271, 273 (1964); B-166663, MAY 21, 1969. ACCORDINGLY, ANY FUTURE CORRESPONDENCE REGARDING THE SUBJECT MATTER OF THIS PROTEST SHOULD BE ADDRESSED TO THE SBA.

MOREOVER, AS POINTED OUT IN THE BOARD'S DECISION, THE FAILURE TO TIMELY FILE AN APPEAL RENDERED THE CONTRACTING OFFICER'S DECISION AS TO PRODUCT CLASSIFICATION FINAL IN THIS PROCUREMENT. SEE, ALSO, ARMED SERVICES PROCUREMENT REGULATION 1-703(C)(1)(2).

UNDER THE CIRCUMSTANCES, THERE IS NO ACTION WHICH PROPERLY MAY BE TAKEN BY THIS OFFICE.