B-181371, JUN 25, 1974

B-181371, JUN 25, 1974

AVERAGE ANNUAL RECEIPTS REQUIREMENT FOR CONCERN TO BE CONSIDERED SMALL BUSINESS AND STANDARD INDUSTRIAL CLASSIFICATION NUMBER USED IN RFP SEEKING ARTISTIC SERVICES IS FOR CONSIDERATION BY SBA RATHER THAN GAO, SINCE CONCLUSIVE AUTHORITY IN SUCH MATTERS IS VESTED IN SBA BY STATUTE.

TO VIRGINIA RESEARCH INC.:

VIRGINIA RESEARCH INCORPORATED (VRI) PROTESTS THE STANDARD INDUSTRIAL CLASSIFICATION (SIC) NUMBER USED BY THE GENERAL SERVICES ADMINISTRATION (GSA) UNDER REQUEST FOR PROPOSALS (RFP) NO. 3FP-A3-N-3593-12-28-73. THE SERVICES REQUESTED BY GSA WERE CATEGORIZED UNDER SIC NO. 8999, WHICH ENCOMPASSES "*** SERVICES, NOT ELSEWHERE CLASSIFIED, SUCH AS *** ARTISTS WORKING ON THEIR OWN ACCOUNT." IT IS VRI'S CONTENTION THAT GSA ERRONEOUSLY ASSIGNED SIC NO. 8999 TO THIS PROCUREMENT, INASMUCH AS COMMERCIAL ART SERVICES (THE TYPE OF SERVICE VRI CONTENDS IS CALLED FOR UNDER THE RFP) ARE CLASSIFIED UNDER SIC NO. 7333.

VRI FURTHER CONTENDS THAT THE REQUIREMENT IN 13 CFR 121.3-8(E) THAT THE AVERAGE ANNUAL RECEIPTS FOR A CONCERN FOR ITS PRECEDING THREE FISCAL YEARS SHALL NOT EXCEED $1,000,000 IF IT IS TO BE CLASSIFIED AS SMALL BUSINESS IS UNREALISTIC AND SHOULD BE INCREASED TO A $5,000,000 AVERAGE.

PURSUANT TO 15 U.S.C. 637(B)(6), THE SMALL BUSINESS ADMINISTRATION (SBA) IS EMPOWERED TO DETERMINE A BUSINESS CONCERN'S SIZE STATUS FOR PROCUREMENT PURPOSES. OFFICES OF THE GOVERNMENT HAVING PROCUREMENT POWERS MUST ACCEPT AS CONCLUSIVE SBA'S DETERMINATION AS TO WHICH CONCERNS ARE TO BE DESIGNATED SMALL BUSINESS. IN DISCHARGE OF THIS RESPONSIBILITY, SBA HAS PROMULGATED REGULATIONS, WHICH HAVE THE FORCE AND EFFECT OF LAW (OTIS STEEL PRODUCTS CORPS. V. UNITED STATES, 161 CT. CL. 694 (1963)), FOUND AT PART 121 OF CHAPTER I OF CFR TITLE 13.

SECTION 121.3-8, "DEFINITION OF SMALL BUSINESS FOR GOVERNMENT PROCUREMENT," STATES IN PART THAT,

"*** THE DETERMINATION OF THE APPROPRIATE CLASSIFICATION OF A *** SERVICE SHALL BE MADE BY THE CONTRACTING OFFICER. ***"

FURTHER, UNDER SECTION 121.3-8, SERVICE CLASSIFICATION IS REQUIRED TO BE SET FORTH IN THE SOLICITATION AND SUCH DETERMINATION OF THE CONTRACTING OFFICER IS FINAL UNLESS APPEALED IN THE MANNER PROVIDED IN SECTION 121.3- 6. SECTION 121.3-6(A) PROVIDES THAT THE SIZE APPEALS BOARD SHALL REVIEW APPEALS FROM CLASSIFICATIONS MADE PURSUANT TO SECTION 121.3-8 AND SHALL MAKE FINAL DECISIONS AS TO WHETHER SUCH CLASSIFICATIONS SHOULD BE AFFIRMED, REVERSED, OR MODIFIED. SECTION 121.3-6(B)(1)(III) PROVIDES THAT AN APPEAL MAY BE FILED WITH THE SIZE APPEALS BOARD BY ANY CONCERN OR INTERESTED PARTY WHICH HAS BEEN ADVERSELY AFFECTED BY A DECISION OF A CONTRACTING OFFICER REGARDING CLASSIFICATION. THE TIME FOR FILING AN APPEAL IS SET FORTH IN SECTION 121.3-6(B)(3)(II). AN OPPORTUNITY FOR RECONSIDERATION BY THE SIZE APPEALS BOARD IS PROVIDED IN SECTION 121.3- 6(G)(5) WHICH STATES THAT THE DECISION OF THE SIZE APPEALS BOARD SHALL CONSTITUTE THE FINAL ADMINISTRATIVE REMEDY OF SBA. FEDERAL PROCUREMENT REGULATIONS (FPR) 1 1.703-2(G) AND (H) REPEAT THE PROVISIONS OF 13 CFR 121.3-8 AND 121.3 6(B)(3)(II), RESPECTIVELY, RECITED ABOVE. WHEN VIEWED IN CONJUNCTION WITH 15 U.S.C. 637(B)(6) AND FPR, THE SBA REGULATIONS CLEARLY ESTABLISH IT AS THE SOLE ADJUDICATOR OF THE CLASSIFICATION ISSUE IN QUESTION. SEE 53 COMP. GEN. (B-178701, DECEMBER 28, 1973).

THEREFORE, THE ISSUES PRESENTED ARE FOR CONSIDERATION BY SBA RATHER THAN BY THE GENERAL ACCOUNTING OFFICE.