Red River Service Corporation, No. 4449 (August 23, 2001) Docket No. NAICS-2001-08-09-31 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. ) NAICS APPEAL OF: ) ) Red River Service Corporation ) Docket No. NAICS-2001-08-09-31 ) Appellant ) ) Decided: August 23, 2001 Solicitation No. DACW42-01-R-0009 ) Department of the Army ) Corps of Engineers ) Vicksburg, Mississippi ) APPEARANCES William J. Place For Appellant DIGEST A procurement for telephone switchboard operations and communications services support for an internal voice, video, and data communications network operating over fiber-optic and copper cabling infrastructure, is appropriately classified under North American Industrial Classification System (NAICS) code 513310 (Wired Telecommunications Center), with a corresponding 1,500 employee size standard, rather than NAICS code 513390 (Other Telecommunications), with a corresponding $11 million average annual receipts size standard. DECISION BLAZSIK, Administrative Judge: Jurisdiction This appeal is decided under the Small Business Act of 1958, 15 U.S.C. Sections 631 et seq., and 13 C.F.R. Parts 121 and 134. Issue Whether the appropriate NAICS code for this procurement is 513390 (Other Telecommunications) or 513310 (Wired Telecommunications Carriers). Facts On August 3, 2001, the Contracting Officer (CO) for the Department of the Army, Corps of Engineers, in Vicksburg, Mississippi, issued this negotiated small business set-aside procurement for "Telecommunications Infrastructure Maintenance and Repair" and classified it under North American Industrial Classification System (NAICS) code 513390 (Other Telecommunications), with a corresponding $11 million average annual receipts size standard. Initial proposals are due on September 5, 2001. Statement of Work The contractor must provide all telephone switchboard operators and communications services support for the internal voice, video and data communications networks, which operate over fiber-optic and copper cabling infrastructure on the Waterways 700-acre Experiment Station. Switchboard operators' service will include receiving incoming calls, providing switchboard services to the Corps and staff, accepting complaints, and recording information regarding malfunctions. Inside and outside plant maintenance services will include preventive and remedial (including emergency) maintenance of the copper/fiber-optic cabling, rearrangement of communications services, as necessary, and installation of all new communications equipment and services not installed by the government. Typical contractor tasks are to install and test network wiring; assign telephone numbers; install, move, or disconnect jumper wires on the main distribution frame; install, move, or disconnect auxiliary branch exchange and electronic key systems, including all hardware, cabling, and power connections; install, move, or disconnect telephones, audible ringing devices, speaker units, answering machines, special circuits, and ancillary equipment. The work involves aerial and underground cables, including fibers and coaxial cables. Finally, the contractor must supply all materials, labor, and equipment as necessary. The Appeal On August 9, 2001, Red River Service Corporation (Appellant) appealed the CO's NAICS code designation. Appellant asserts the appropriate NAICS code for the procurement is 513310 (Wired Telecommunications Carriers), with a corresponding 1,500 employee size standard. This NACIS code, Appellant asserts, is specific to the requirements of the work to be performed. Appellant notes that NAICS code 513310 is defined, in part as: Wired Telecommunications Carriers: This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide direct communications via land lines, microwave, or a combination of landlines and satellite linkup. . Appellant asserts, on the other hand, NAICS code 513390 is directed toward specialized telecommunications applications, not pertinent to the work sought by the procurement. The primary work to be performed is telephone switching operations, repair, and maintenance. Thus, NAICS code 513310 is the correct designation. The CO did not file a response. Discussion A NAICS appeal must be filed within ten days after issuance of the procurement. 13 C.F.R. Section 134.304(a)(3). Because the CO issued this procurement on August 3, 2001 and Appellant filed its appeal on August 9, 2001, the appeal is timely. Following the Small Business Administration's (SBA) October 1, 2000, conversion to the 6-digit NAICS codes as the basis for the SBA's small business size standards, SIC code appeals are now known as NAICS code appeals. NAICS Appeal of Phoenix Scientific Corporation, SBA No. NAICS-4416 (2000). Where appropriate, the case precedent of this Office, decided under the prior SIC system, will apply to NAICS code appeals. In a NAICS code appeal, Appellant has the burden of proof, by a preponderance of the evidence, to show error in the Contracting Officer's NAICS code designation. SIC Appeal of Four Winds Services, Inc., SBA No. SIC-4407 (2000). The correct NAICS code is that which best describes the principal purpose of the services being procured, in light of the industry description in the NAICS Manual [*] , the description in the procurement, and the relative weight of each element in the solicitation. The standard of review is whether the NAICS code designation is based on a clear error of fact or law. 13 C.F.R. Section 134.314. The NAICS Manual lists the following services for NAICS code 513390 assigned by the CO: This industry comprises establishments primarily engaged in (1) providing specialized telecommunications applications, such as satellite tracking, communications telemetry, and radar station operations or (2) providing satellite terminal stations and associated facilities operationally connected with one or more terrestrial communications systems and capable of transmitting telecommunications to or receiving telecommunications from satellite systems. NAICS Manual at 513. Here, the procurement's principal purpose is to operate and maintain a wired communications system. The work involves providing telephone switching operations, including repair and maintenance, communications services, their maintenance and repairs, and installation of all new communication services. The description for NAICS code 513310 is specific to the requirements of the work to be performed. NAICS code 513390, on the other hand, appears to be directed toward specialized telecommunications applications that are not required by this procurement. NAICS Manual at 511. The Administrative Judge concludes NAICS code 513310 is appropriate for the instant procurement because the Statement of Work most closely requires the type of services described for that classification in the NAICS Manual. Conclusion The Contracting Officer's designation is REVERSED, and the appeal is GRANTED. This is the Small Business Administration's final decision. 13 C.F.R. Section 134.316(b). _______________________________ GLORIA E. BLAZSIK Administrative Judge _________________________ [*] Executive Office of the President, Office of Management and Budget. North American Industry Classification System (1997). Posted: October, 2001