B-216880, NOV 7, 1984, OFFICE OF GENERAL COUNSEL

B-216880: Nov 7, 1984

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THAT THE SIZE STANDARD APPLICABLE TO GOVERNMENT PROCUREMENTS OF CERTAIN ENGINEERING SERVICES IS TOO LARGE. IS A COMPONENT OF STANDARD INDUSTRIAL CLASSIFICATION MAJOR GROUP 89. IS THE PRODUCT OF NEW REGULATIONS PROMULGATED BY THE SMALL BUSINESS ADMINISTRATION (SBA) AND EFFECTIVE MARCH 12. WHICH IS NOW REPLACED BY FOUR DISTINCT STANDARDS FOR COMPONENTS OF THE INDUSTRIES COVERED BY THE OLD STANDARD. SBA'S NOTICE OF THE NEW REGULATIONS STATES THAT THE NEW STANDARD WAS PRECEDED BY A NUMBER OF NOTICES IN THE FEDERAL REGISTER DESCRIBING SBA'S EFFORTS TO REVISE ITS STANDARDS. 49 FED.REG. 5024. NEARLY ALL THE COMMENTS ON THE STANDARD IN ISSUE WERE FAVORABLE. 49 FED.REG. 5026.

B-216880, NOV 7, 1984, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

THE HONORABLE JIM COURTER MEMBER, UNITED STATES HOUSE OF REPRESENTATIVES 1 MORRIS STREET MORRISTOWN, NEW JERSEY 07960

DEAR MR. COURTER:

THIS RESPONDS TO YOUR LETTER DATED OCTOBER 12, 1984, REGARDING A COMPLAINT BY MR. CHARLES J. FLETCHER, PRESIDENT OF TECHNOLOGY GENERAL CORPORATION, THAT THE SIZE STANDARD APPLICABLE TO GOVERNMENT PROCUREMENTS OF CERTAIN ENGINEERING SERVICES IS TOO LARGE, AND OPERATES TO THE DETRIMENT OF MANY SMALL COMPANIES.

THE STANDARD APPLIES TO ENGINEERING SERVICES FOR MILITARY AND AEROSPACE EQUIPMENT AND MILITARY WEAPONS, AND IS A COMPONENT OF STANDARD INDUSTRIAL CLASSIFICATION MAJOR GROUP 89. THE STANDARD, WHICH DEFINES A SMALL BUSINESS CONCERN AS HAVING AVERAGE GROSS ANNUAL RECEIPTS FOR THE LAST THREE FISCAL YEARS NOT EXCEEDING $13.5 MILLION, 49 FED.REG. 5020 AND 5037 (1984) (TO BE CODIFIED IN 13 C.F.R. SEC. 121.2), IS THE PRODUCT OF NEW REGULATIONS PROMULGATED BY THE SMALL BUSINESS ADMINISTRATION (SBA) AND EFFECTIVE MARCH 12, 1984. IT DERIVES FROM A $7.5 MILLION STANDARD FOR ALL ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES EXCEPT NAVAL ARCHITECTURAL AND MARINE ENGINEERING SERVICES, WHICH IS NOW REPLACED BY FOUR DISTINCT STANDARDS FOR COMPONENTS OF THE INDUSTRIES COVERED BY THE OLD STANDARD.

THE SMALL BUSINESS ACT GIVES THE ADMINISTRATOR OF SBA EXCLUSIVE AUTHORITY TO DEFINE SMALL BUSINESSES FOR EACH INDUSTRY FOR THE PURPOSE OF GOVERNMENT PROCUREMENTS. 15 U.S.C. SEC. 632(A) (1982). SBA'S NOTICE OF THE NEW REGULATIONS STATES THAT THE NEW STANDARD WAS PRECEDED BY A NUMBER OF NOTICES IN THE FEDERAL REGISTER DESCRIBING SBA'S EFFORTS TO REVISE ITS STANDARDS. 49 FED.REG. 5024. THOSE NOTICES INVITED COMMENTS ON THE PROPOSED STANDARDS AND, ACCORDING TO SBA, NEARLY ALL THE COMMENTS ON THE STANDARD IN ISSUE WERE FAVORABLE. 49 FED.REG. 5026. THUS, IT APPEARS THAT MR. FLETCHER HAD AN OPPORTUNITY TO PRESENT HIS VIEWS TO THE SBA PRIOR TO THE PROMULGATION OF THE NEW SIZE STANDARD. ANY FURTHER REQUEST FOR CHANGING THE STANDARD MUST BE DIRECTED TO THE SBA ADMINISTRATOR.

WE ENCLOSE A COPY OF THE STANDARD AND THE ACCOMPANYING INFORMATION FROM THE FEDERAL REGISTER.