Ceres Environmental Services, Inc., No. 4471 (January 30, 2002) Docket No. NAICS-2002-01-11-02 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. ) NAICS APPEAL OF: ) ) Ceres Environmental Services, Inc. ) ) Docket No. NAICS-2002-01-11-02 ) Appellant ) Decided: January 30, 2002 ) Solicitation No. NRCS-2-OK-02 ) USDA Natural Resources ) Conservation Service ) Stillwater, Oklahoma ) ) APPEARANCE Karl Dix, Jr., for Appellant DIGEST A procurement for ice storm debris removal, which requires heavy earth-moving equipment, and leveling, grading, compacting, and clearing the area, is appropriately classified under North American Industrial Classification System (NAICS) code 562119 (Other Waste Collection), rather than NAICS code 234990 (All Other Heavy Construction). DECISION BLAZSIK, Administrative Judge: Jurisdiction This appeal is decided under the Small Business Act of 1958, 15 U.S.C. Section 631 et seq., and 13 C.F.R. Parts 121 and 134. Issue Whether the appropriate NAICS code for this procurement is NAICS code 562119 or NAICS code 234990. Facts On January 7, 2002, the Contracting Officer (CO) for the Department of Agriculture, Natural Resources Conservation Service, in Stillwater, Oklahoma, issued this small business set- aside procurement for "ice storm debris removal" in Murray County, Oklahoma, and classified it under North American Industrial Classification System (NAICS) code 562119 (Other Waste Collection), with a corresponding $10 million average annual receipts size standard. Bids are due on February 11, 2002. Statement of Work The contractor must provide the necessary personnel, materials, equipment, and services to perform the procurement. The work consists of mobilizing, furnishing, and operating equipment for ice storm debris removal, which includes earth- moving, leveling, grading, compacting, excavating, clearing, bank shaping, chipping or grinding, and hauling equipment. The contractor will provide hydraulic excavators with mechanical thumb crawlers mounted; wheel loaders with grapple buckets; crawler tractors; dump trucks (10 or 18 wheel); and skid steer loaders. In addition to this equipment and skilled operators, the contractor will provide laborers with chain saws and hand tools such as shovels, rakes, and axes. Finally, the contractor will use diesel fuel for burning the debris, primarily for felling trees. The Appeal On January 11, 2002, Ceres Environmental Services, Inc. (Appellant) appealed the CO's NAICS code designation. Appellant asserts the appropriate NAICS code for the procurement is 234990 (All Other Heavy Construction), with a corresponding $27.5 million average annual receipts size standard. Appellant asserts the principal thrust of the procurement is for construction work, not waste removal, and quotes from the first paragraph of the procurement, summarized infra. Appellant also asserts that the heavy construction equipment to be used for the work is a further indicia that more than brush or debris removal is required. It asserts the necessity for heavy equipment demonstrates that construction, not debris removal, is sought. Appellant further notes NAICS code 234990 is defined as: (1) establishments primarily responsible for the entire construction (i.e., new work, reconstruction, or repairs) of heavy nonbuilding construction projects..(3) establishments primarily engaged in construction equipment rental with an operator; and (4) establishments identified as special trade contractors engaged in activities related primarily to all other heavy construction.. Appellant notes that examples of this type of work include: brush clearing or cutting, drainage project construction, earth moving, heavy construction equipment rental with operator, land clearing, rock removal, and underwater timber removal. [1] Appellant cites SIC Appeal of M.P. Environmental Services, Inc., SBA No. SIC 3950 (1994) for the proposition that the collection and removal of loose refuse was classified under SIC code 4212 (now NAICS code 234990). Thus, Appellant asserts NAICS code 234990 is appropriate here. 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 January 7, 2002, and Appellant filed its appeal on January 11, 2002, 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. Id. In a NAICS code appeal, Appellant has the burden of proof, by a preponderance of the evidence, to show error in the CO's NAICS 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. [2] The NAICS Manual lists the following services for NAICS code 562119 assigned by the CO: This U.S. industry comprises establishments primarily engaged in the collecting and/or hauling waste (except nonhazardous solid waste and hazardous waste) within a local area. Establishments engaged in brush or rubble removal services are included in this industry, NAICS Manual at 613. Examples of this type of work are brush hauling, dump trucking of rubble or brush, with collection or disposal, rubble removal services, and waste collection services. [3] Here, the procurement's only purpose is ice storm debris removal, and it encompasses brush and rubble removal, hauling, and disposal. Thus, it falls squarely within NAICS code 562119. Although this procurement requires use of heavy earth-moving equipment, hauling the debris, and clearing, leveling, grading, and compacting the site, the tasks which also fall under NAICS code 234990, the primary thrust of the procurement is not construction work, as encompassed by NAICS code 234990, and advocated by Appellant, but debris and waste removal. Such work requires heavy equipment, but is not construction work, because nothing is being constructed. Thus, the CO's choice of NAICS code 562119, is a more appropriate designation for this procurement. Finally, Appellant's reliance on M.P. Environmental, supra, is misplaced. The statement of work there called for collection and disposal of oily wastes from ships. This is totally different from the Statement of Work in the instant case. Therefore, Appellant, who has the burden of proof, has not pointed to any applicable case precedent nor other support for the NAICS code it advocates. The Administrative Judge concludes NAICS code 562119 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 AFFIRMED, and the appeal is DENIED. This is the Small Business Administration's final decision. 13 C.F.R. Section 134.316(b). ____________________________________ GLORIA E. BLAZSIK Administrative Judge _________________________ [1] Appellant extracted these examples from the 1997 NAICS Definitions: 234 Heavy Construction, available at www.census.gov/epcd/naics/NDEF234.HTM. [2] Executive Office of the President, Office of Management and Budget. North American Industry Classification System (1997), [3] See 1997 NAICS Definitions: 562 Waste Management and Remediation Services, available at www.census.gov/epcd/naics/NDEF 562. HTM. Posted: February, 2002