Loren Data's SAM Daily™

FBO DAILY ISSUE OF MARCH 07, 2009 FBO #2658
SOLICITATION NOTICE

W -- MAIL METERING SYSTEM

Notice Date

3/5/2009
 

Notice Type

Modification/Amendment
 

NAICS

532420 — Office Machinery and Equipment Rental and Leasing
 

Contracting Office

Department of the Air Force, Air Force Materiel Command, WR-ALC, WR-ALC/PK Acquisition Opportunities, 235 Byron St,, Warner Robins, Georgia, 31098-1611, United States
 

ZIP Code

31098-1611
 

Solicitation Number

FA8501-09-R-0012
 

Point of Contact

Deborah A. Middlebrooks,, Phone: (478) 222-1181
 

E-Mail Address

deborah.middlebrooks@robins.af.mil
 

Small Business Set-Aside

Total Small Business
 

Description

A question and/or comment was submitted in response to the Combined Synopsis/Solicitation FA8501-09-R-0012. Question/Comment: Request to reconsider the Small Business Set Aside status based on the Small Business Administration's Non-Manufacturer Rule, citing that the small business offeror must furnish the product of a small business manufacturer. Response: The Non-manufacturing rule does not apply for this requirement as Robins AFB is seeking to lease, rather than purchase, manufactured items. The following case was provided by our JAG Office, citing that the SBA Office of Hearings and Appeals has ruled that leases are not covered under the non-manufacturing rule. Attached below is a 2004 case by the SB A's Office of Hearing and Appeals which ruled on a similar matter. In issuing its decision, the SBA Office of Hearings and Appeals stated, in part: "The nonmanufacturer rule is not applicable to this procurement. While the clause is included in the solicitation, it applies only in very limited circumstances. The concern must have less than 500 employees; be primarily engaged in wholesale and retail trade and normally sell the item supplied to the general public; and supply the end item of a small business manufacturer in the United States. 13 C.F.R. § 121.406(b). This [*10] is not a procurement for a manufactured item, but for the lease of an aircraft...." Attached below in the case in its entirety. 2004 SBA LEXIS 49, * SIZE APPEAL OF: Pride International, LLC, Appellant Docket No. SIZ-2004-06-17-38, SBA No. SIZ-4648 Small Business Administration Office of Hearings and Appeals 2004 SBA LEXIS 49 July 28, 2004 CORE TERMS: solicitation, procurement, small business, protest, aircraft, affiliates, nonmanufacturer, manufactured, lease, set-aside, ambiguity, annual, designation, offeror, number of employees, clear error, book value, prisoner, untimely, revise, intends, sites CONTRACT: [*1] Solicitation No. MS-04-R-005, United States Marshals Service, Judicial Security Contracts, Washington, DC HEADNOTES: A size appeal which challenges the subject procurement's underlying NAICS code designation must be dismissed as an untimely NAICS code appeal. This Office has no jurisdiction to revise a solicitation as part of a size appeal. The nonmanufacturer rule does not apply to a concern which intends to provide an item manufactured by a large business. COUNSEL: APPEARANCES. David M. Hernandez, Esq., Pillsbury Winthrop LLP for Appellant. James P. Flynn, President for Aviation Enterprises, Inc. JUDGES: CHRISTOPHER HOLLEMAN, Administrative Judge. OPINION BY: HOLLEMAN OPINION: DECISION HOLLEMAN, Administrative Judge: Jurisdiction This appeal is decided under the Small Business Act of 1958, 15 U.S.C. § 631 et seq., and 13 C.F.R. Parts 121 and 134. Issues Whether a size appeal may challenge the subject procurement's underlying NAICS code designation. Whether this Office has jurisdiction to revise a solicitation as part of a size appeal. Whether the nonmanufacturer rule applies to a concern which intends to provide an item manufactured by a large business. I. BACKGROUND [*2] A. The Procurement On January 9, 2004, the United States Marshals Service of the Department of Justice (USMS) issued the subject solicitation for the short term lease of narrow bodied (single aisle) large passenger/transport jet aircraft to perform its missions of moving federal prisoners and illegal aliens. The solicitation seeks to award three contracts, one at each of three different operational sites. The sites are Oklahoma City, Oklahoma; Mesa, Arizona; and Alexandria, Louisiana. The contractor will lease the aircraft to USMS, and be responsible for aircraft maintenance and logistics. USMS will operate the aircraft. The Contracting Officer (CO) set the procurement aside for small business, and designated North American Industry Classification System (NAICS) code 532411, Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing, with a corresponding $ 6 million annual receipts size standard, as the applicable NAICS code for the procurement. However, the solicitation also contains Federal Acquisition Regulation (FAR or 48 C.F.R.) clause 52.212-1, stating the small business size standard for a firm which intends to furnish an item which it did not itself manufacture [*3] is 500 employees. 48 C.F.R. § 52.212-1. Offers were due on February 19, 2004. Amendment 1, issued on February 9, 2004, extended the due date to February 26, 2004. Amendment 2 was issued on March 3, 2004. Amendment 3, issued on April 2, 2004, announced the conclusion of discussions, and set April 9, 2004, as the due date for final proposal revisions. B. Protest and Response On May 6, 2004, the CO issued notices that the apparent successful offerors were Pride International, LLC (Appellant) for the Oklahoma City and Alexandria contracts, and Metscan Technologies, LLC d/b/a Prisoner Transportation Services (Metscan) for the Mesa contract. On that same day, Aviation Enterprises, Inc. (AEI) filed a size protest with the CO, alleging that Appellant was other than small, and identifying several alleged affiliates. On May 7th, the CO forwarded the protest to the Small Business Administration (SBA) Office of Government Contracting - Area V, in Dallas, Texas (Dallas Area Office). On May 14, 2004, the Dallas Area Office informed Appellant of the protest, and requested it to submit a response to the protest, together with a completed SBA Form 355 and certain other information. On May 19, [*4] 2004, Appellant responded to the protest. Appellant identified three affiliates: Cenla FTZ, LLC; Cenla Intermodal Transportation Group, and Rice and Rice, LLC. None of these three firms has ever generated any revenue. Appellant further asserted it had been adversely affected by the drop in air travel after the terrorist attacks of September 11, 2001. Appellant alleged its book value and number of employees are well under the small business size standards. Appellant asserted that correct size standard for the procurement was 500 employees, because the solicitation included the clause at 48 C.F.R. § 52.212-1. On May 26th, the Dallas Area Office transferred the case to the SBA Office of Government Contracting - Area IV in Chicago, Illinois (Chicago Area Office) for completion. C. The Size Determination On May 27, 2004, the Chicago Area Office issued a size determination finding Appellant an other than small business. The Chicago Area Office found that Appellant is 47.5% owned by Frank B. Rice, its President; 47.5% by Carol B. Rice; and 5% by Tom Welch, its Vice-President. Mr. and Ms. Rice are divorced. Mr. and Ms. Rice also each own 50% of Pride Flight Services, Inc. (Flight), located [*5] at an address adjacent to Appellant. Flight provides airport services in Alexandria, Louisiana. The three affiliates identified by Appellant above are dormant and have never generated any revenue. The Chicago Area Office found Appellant affiliated with Flight, as well the three identified affiliates, due to common ownership. The Chicago Area Office also found that the correct size standard for the procurement was $ 6 million in annual receipts, as the procurement was for the lease of an aircraft, and not the furnishing of a manufactured product. After review of the tax returns for Appellant and its affiliates, the Chicago Area Office concluded Appellant was other than small. Appellant received the size determination on June 2, 2004. D. The Appeal On June 17, 2004, Appellant filed the instant appeal. First, Appellant asserts the solicitation lacks the commercial service related clauses found at 48 C.F.R. § 52.212-5, Contract Terms and Conditions Required to implement Statutes or Executive Orders - Commercial Items; 48 C.F.R. § 52.219-14, Limitations on Subcontracting; 48 C.F.R. § 52.219-6, Notice of Total Small Business Set-Aside; or 48 C.F.R. § 52.219-7, Notice of Partial [*6] Small Business Set-Aside. The absence of these clauses means the procurement is not a commercial services contract, and not a small business set-aside. Appellant argues this procurement is not a set-aside due to the absence of the clauses it identifies. Second, Appellant asserts the inclusion of FAR clause 48 C.F.R. § 52.212-1 means the non-manufacturer rule is applicable to the instant procurement, and thus the correct size standard is 500 employees. Appellant argues this is a contract for supplies, not services. At the least, this creates an ambiguity which the CO failed to resolve despite three amendments and a questions and answers session. Appellant also argues that a bidder may not be awarded a contract as a small business unless the firm agrees that at least 50% of the cost of contract performance incurred for personnel shall be expended for employees of the concern, citing 15 U.S.C. § 644(o)(1)(A). This required the CO to insert the clause 48 C.F.R. § 52.219-14 into the solicitation, and the Chicago Area Office should not have ignored the failure to do so. Appellant asserts it is a small business and, further, the solicitation is fatally [*7] flawed, and requests this Office order the CO to issue a new solicitation.* - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - - * Appellant also mentions its protest of Metscan's size. Issues related to that protest will be addressed in Appellant's appeal of the dismissal of that protest. Size Appeal of Pride International, LLC, SBA No. SIZ-4649 (2004). - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - E. AEI's Response On July 2, 2004, AEI Responded to the appeal. AEI argues that the instant appeal should be dismissed as an untimely NAICS code appeal. AEI further argues that the nonmanufacturer rule is not applicable here, as Appellant does not seek to provide a product manufactured by a small business, but an aircraft manufactured by the Boeing Aircraft Company, a large business. Accordingly, AEI urges that this Office dismiss or deny the appeal. II. DISCUSSION Appellant filed the instant appeal within 15 days of receiving the size determination, and thus the appeal is timely. 13 C.F.R. § 134.304(a)(1). Appellant has the burden of proving, by a preponderance of the evidence, all elements of its appeal. [*8] Specifically, it must prove the Area Office size determination is based on a clear error of fact or law. 13 C.F.R. § 134.314; Size Appeal of Procedyne Corp., SBA No. SIZ-4354, at 4-5 (1999). A review of the solicitation reveals that it clearly states in its cover sheet that the procurement is a small business set-aside and the applicable NAICS code is 532411, with a $ 6 million size standard. The Notice of Total Small Business Set-Aside clause (48 C.F.R. § 52.219-5) is included at page 12, contrary to Appellant's assertion. If Appellant disagreed with that classification, or thought there was any ambiguity in the solicitation, it had 10 days in which to file a NAICS code appeal to challenge it. 13 C.F.R. § 134.304(a)(3). Having failed to do so, Appellant cannot now challenge the solicitation's NAICS code designation in its size appeal. A size appeal which challenges the subject procurement's underlying NAICS code designation must be dismissed as an untimely NAICS code appeal. Size Appeal of ncobrasa Industries, Ltd., SBA No. SIZ-4557, at 5 (2003). Appellant had an additional chance to challenge ambiguities in the solicitation through three amendments and the discussion [*9] process. It cannot do so now, after the CO has selected the apparent successful offeror. Similarly, Appellant's argument that the solicitation should have included the clause at 48 C.F.R. § 52.219-14 is again a challenge to the solicitation, and is inapposite to the issues in this size appeal, which reviews the determination by the Chicago Area Office, not the solicitation. This Office has no jurisdiction to review and revise solicitations. See 13 C.F.R. § 134.102(k). Further, the issue of whether an offeror has complied with the Limitations on Subcontracting rule (13 C.F.R. § 125.6) is not within the jurisdiction of the size determination program, and thus not of this Office. Size Appeal of SDS International, Inc., SBA No. SIZ-4541, at 2 fn.3 (2003). The nonmanufacturer rule is not applicable to this procurement. While the clause is included in the solicitation, it applies only in very limited circumstances. The concern must have less than 500 employees; be primarily engaged in wholesale and retail trade and normally sell the item supplied to the general public; and supply the end item of a small business manufacturer in the United States. 13 C.F.R. § 121.406(b). This [*10] is not a procurement for a manufactured item, but for the lease of an aircraft. Here, as noted by AEI, Appellant will be providing an airplane manufactured by a large business. Therefore, even if Appellant's challenge to the NAICS code were timely, its argument is without merit, as it would not meet the standard for the nonmanufacturer rule. A review of the record clearly establishes Appellant is other than small under the applicable size standard for this procurement. Appellant's own arguments assert it is a small business based upon its number of employees or its book value, and do not address its size under the applicable annual receipts size standard. Thus, Appellant has failed to establish that the size determination is based on any error of fact or law. Appellant has failed to establish clear error of fact or law on the part of the Area Office, and thus the Administrative Judge must AFFIRM the Area Office's size determination. III. CONCLUSION For the above reasons, the Administrative Judge AFFIRMS the Area Office's size determination and DENIES the instant appeal. This is the final decision of the Small Business Administration. 13 C.F.R. § 134.316(b).
 

Web Link

FedBizOpps Complete View
(https://www.fbo.gov/?s=opportunity&mode=form&id=63637eee53ac91693b8c119fe0026dad&tab=core&_cview=1)
 

Place of Performance

Address: see Statement of Work, Robins AFB, Georgia, 31098, United States

Zip Code: 31098
 

Record

SN01762222-W 20090307/090305215517-63637eee53ac91693b8c119fe0026dad (fbodaily.com)
 

Source

FedBizOpps Link to This Notice
(may not be valid after Archive Date)

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