B-172326, JUN 15, 1971

B-172326: Jun 15, 1971

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO MCCARTY & NOONE: FURTHER REFERENCE IS MADE TO YOUR REPRESENTATION OF INDUSTRIAL MAINTENANCE SERVICES. IT WAS INFORMALLY AGREED THAT BECAUSE OF THE IDENTITY OF ISSUES A DECISION UNDER IFB DACW01-71-B- 0077 WOULD BE DETERMINATIVE OF THE PROTESTS UNDER THE REMAINING TWO INVITATIONS. THE CONTRACTING OFFICER DETERMINED THAT THE SERVICES REQUIRED BY THE INVITATION ARE COVERED BY THE STANDARD INDUSTRIAL CLASSIFICATION MANUAL DEFINITION OF MISCELLANEOUS SERVICES DESIGNATED INDUSTRY 8999. THE INVITATION INCLUDED NOTICE THAT A CONCERN IS SMALL BUSINESS FOR THE PURPOSE OF THE SUBJECT PROCUREMENT IF. BIDS WERE OPENED ON FEBRUARY 18. INDUSTRIAL WAS THE LOW BIDDER. A TIMELY PROTEST WAS FILED CHALLENGING ITS SMALL BUSINESS STATUS.

B-172326, JUN 15, 1971

BID PROTEST - SBA DETERMINATION DECISION DENYING PROTEST AGAINST REJECTION OF ITS LOW BID UNDER AN IFB ISSUED BY THE ARMY ENGINEER DISTRICT, MOBILE, ALA., FOR SERVICES NECESSARY TO CLEAN AND SUPERVISE PUBLIC USE AREAS AND FACILITIES. THE SMALL BUSINESS ADMINISTRATION SIZE APPEAL BOARD DETERMINED THAT PROTESTANT DID NOT QUALIFY AS A SMALL BUSINESS UNDER THE $1 MILLION STANDARD FOR MISCELLANEOUS SERVICES, AND REJECTED PROTESTANT'S CONTENTION THAT THE SUBJECT INVITATION CALLED FOR JANITORIAL AND CUSTODIAL SERVICES SUBJECT TO THE $3 MILLION STANDARD. NEITHER GAO NOR ANY OTHER EXECUTIVE AGENCY MAY IGNORE A DETERMINATION BY SBA AS TO THE SIZE STATUS OF A PARTICULAR CONCERN.

TO MCCARTY & NOONE:

FURTHER REFERENCE IS MADE TO YOUR REPRESENTATION OF INDUSTRIAL MAINTENANCE SERVICES, INCORPORATED, IN CONNECTION WITH ITS PROTEST TO THE SMALL BUSINESS ADMINISTRATION SIZE APPEALS BOARD, UNDER INVITATION FOR BIDS NOS. DACW01-71-B-0072, DACW01-71-B-0076, AND DACW01-71-B-0077, ISSUED BY THE UNITED STATES ARMY ENGINEER DISTRICT, MOBILE, ALABAMA. ALTHOUGH THE PROTEST RELATES TO THE THREE PROCUREMENTS, IT WAS INFORMALLY AGREED THAT BECAUSE OF THE IDENTITY OF ISSUES A DECISION UNDER IFB DACW01-71-B- 0077 WOULD BE DETERMINATIVE OF THE PROTESTS UNDER THE REMAINING TWO INVITATIONS.

THE SUBJECT INVITATION, A TOTAL SMALL BUSINESS SET-ASIDE, CALLED FOR BIDS ON FURNISHING SERVICES NECESSARY TO CLEAN AND SERVICE PUBLIC USE AREAS AND FACILITIES, MOWING GRASS IN DESIGNATED PUBLIC USE AREAS, AND REMOVING GARBAGE FROM DESIGNATED PUBLIC USE AREAS. THE CONTRACTING OFFICER DETERMINED THAT THE SERVICES REQUIRED BY THE INVITATION ARE COVERED BY THE STANDARD INDUSTRIAL CLASSIFICATION MANUAL DEFINITION OF MISCELLANEOUS SERVICES DESIGNATED INDUSTRY 8999. SEE 13 CFR 121.3 1(B)(1). THEREFORE, THE INVITATION INCLUDED NOTICE THAT A CONCERN IS SMALL BUSINESS FOR THE PURPOSE OF THE SUBJECT PROCUREMENT IF, TOGETHER WITH ITS AFFILIATES, ITS AVERAGE ANNUAL RECEIPTS FOR THE PRECEDING THREE FISCAL YEARS DID NOT EXCEED $1 MILLION. SEE 13 CFR 121.3-8(E).

BIDS WERE OPENED ON FEBRUARY 18, 1971, AND INDUSTRIAL WAS THE LOW BIDDER. HOWEVER, A TIMELY PROTEST WAS FILED CHALLENGING ITS SMALL BUSINESS STATUS. ON MARCH 18, 1971, THE SBA DISTRICT OFFICE, BIRMINGHAM, ALABAMA, SUSTAINED THE PROTEST ON THE GROUND THAT INDUSTRIAL DID NOT QUALIFY AS SMALL BUSINESS CONCERN UNDER THE $1 MILLION STANDARD. THE DECISION WAS APPEALED TO THE SIZE APPEALS BOARD ON THE GROUND THAT THE PROCUREMENT WAS NOT ONE FOR MISCELLANEOUS SERVICES, BUT RATHER A CONTRACT FOR JANITORIAL AND CUSTODIAL SERVICES WITHIN THE MEANING OF 13 CFR 121.3- 8(E)(3) AND, THEREFORE, SUBJECT TO THE $3 MILLION AVERAGE ANNUAL RECEIPTS SIZE STANDARD SPECIFIED THEREIN. THE APPEAL WAS DENIED IN A DECISION DATED MAY 14, 1971, IN WHICH IT WAS HELD THAT THE SERVICES WERE PROPERLY CLASSIFIED UNDER THE $1 MILLION SIZE STANDARD. IN ADDITION, THE BOARD FOUND THE APPEAL UNTIMELY UNDER 13 CFR 121.3-6(B)(3)(II), RELATING TO AN APPEAL FROM A PRODUCT CLASSIFICATION DETERMINED BY A CONTRACTING OFFICER, SINCE THE QUESTION CONCERNING THE PROPER CLASSIFICATION WAS FIRST RAISED ON APPEAL FROM THE DISTRICT OFFICE.

THE QUESTION AS TO WHICH CLASSIFICATION SHOULD HAVE BEEN USED IN THE DEFINITION OF A SMALL BUSINESS CONCERN WAS FOR DETERMINATION IN THE FIRST INSTANCE BY THE CONTRACTING OFFICER, SUBJECT TO AN APPEAL TO THE SIZE APPEALS BOARD OF THE SBA, WHICH AGENCY HAS THE STATUTORY AUTHORITY TO DETERMINE WITHIN ANY INDUSTRY THE CONCERNS, FIRMS, PERSONS, CORPORATIONS, PARTNERSHIPS, COOPERATIVES, OR OTHER BUSINESS ENTERPRISES WHICH ARE TO BE DESIGNATED "SMALL BUSINESS CONCERNS" FOR THE PURPOSES OF EFFECTUATING THE PROVISIONS OF THE SMALL BUSINESS ACT. SEE SUBSECTION 637(B), PARAGRAPH (6), OF TITLE 15, UNITED STATES CODE. THE STATUTORY PROVISION FURTHER STATES THAT:

" *** OFFICES OF THE GOVERNMENT HAVING PROCUREMENT *** POWERS, *** SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED 'SMALL-BUSINESS CONCERNS,' AS AUTHORIZED AND DIRECTED UNDER THIS PARAGRAPH." NEITHER OUR OFFICE NOR ANY EXECUTIVE AGENCY OF THE GOVERNMENT MAY IGNORE A DETERMINATION BY SBA AS TO THE SIZE STATUS OF A PARTICULAR CONCERN. 46 COMP. GEN. 102 (1966); 44 COMP. GEN. 271 (1964); SEE ALSO AMERICAN ELECTRIC COMPANY LTD. V UNITED STATES, 270 F. SUPP. 689 (1967); SPRINGFIELD WHITE CASTLE COMPANY V FOLEY, 230 F. SUPP. 77 (1964).