Government Technology Service, Inc., No. 4650 (August 2, 2004) Docket No. SIZ-2004-07-13-40 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. ) SIZE APPEAL OF: ) ) Government Technology Service, Inc. ) Docket No. SIZ-2004-07-13-40 ) Appellant ) Decided: August 2, 2004 ) Solicitation No. N65236-01-R-0002 ) Space & Naval Warfare Systems Center ) North Charleston, South Carolina ) ) ORDER DISMISSING APPEAL [1] Facts By letter dated March 24, 2004, the Small Business Administration's (SBA) Assistant Inspector General for Auditing, of the Office of Inspector General (IG) requested the size specialist of SBA's Philadelphia Office of Government Contracting- Area II (Area Office) to conduct a size determination on Government Technology Service, Inc. (Appellant). The IG stated in his letter that the size determination was in conjunction with an audit of Appellant being conducted by the IG to ascertain whether Appellant was a small business at the time it certified for purposes of receiving various federal contracts. The specific solicitation for the instant size determination is for the acquisition of Hewlett Packard (HP) and Compaq Information technology products. The Contracting Officer had classified the solicitation under Standard Industrial Classification (SIC) code 5045, which has a corresponding 500-employee size standard. [2] Appellant self-certified its size for the instant procurement, on March 14, 2001. The Area Office requested Appellant to provide it with SBA Form 355 and other documents relevant for a size determination. The submitted documents demonstrated that Appellant had an average number of employees above the applicable 500-employee size standard. Accordingly, in its size determination dated May 20, 2004, the Area Office found Appellant other than a small business for the instant procurement. Appellant received the size determination on June 14, 2004, and filed its appeal on July 13, 2004. [3] The Appeal Appellant requests this Office to vacate the size determination, because the Area Office lacked jurisdiction to issue it. Appellant submits the following reasons for its request: First, while the solicitation indicated that it was designated as a small business set-aside, it did not contain the standard Federal Acquisition Regulation (FAR) provisions required if the solicitation is, indeed, a small business set-side. Second, the solicitation specifically called for the acquisition of products from a large business. Thus, it is settled that a small business set-side was a legal impossibility. Appellant notes, in this respect, that the Area Office recognized this "impossibility" in stating in the size determination "since the solicitation required HP [Hewlett Packard] and Compaq products to be provided, a small business set-aside was not appropriate for this procurement." Appellant adds the Area Office failed to recognize that absent a set-aside solicitation, it had no jurisdiction to render a size determination regarding Appellant's size status in 2001. Finally, Appellant asserts that, absent this Office vacating the size determination, Appellant will be adversely affected by it. Appellant will be tainted by the implication that it improperly bid on this "unrestricted" solicitation. Although the contract has been awarded and completed, the issues present here could affect Appellant's interests outside the scope of this particular solicitation. Appellant cites as apposite Size Appeals of Vistronix, Inc. & Department of Justice, SBA No. SIZ- 4585 (2003). Discussion Appellant filed the instant appeal within 30 days of receiving the size determination. Thus, it is timely. 13 C.F.R. Section 134.304(a)(2); Size Appeal of U.S. Grounds Maintenance, Inc., SBA No. SIZ-4601 (2003). After reviewing the record, the Administrative Judge concludes she must dismiss the appeal and cannot grant Appellant's request to vacate the size determination. The record demonstrates the Area Office correctly found Appellant to be other than a small business, based on Appellant's own certified evidence -- its SBA Form 355 showing that Appellant exceeds the applicable size standard. The record also demonstrates, contrary to Appellant's arguments, that the solicitation was a small business set-aside. Also, the Area Office disclosed in its determination that the SBA's IG requested it to perform a formal size determination on Appellant. Thus, regardless of the facts and arguments set forth in the appeal, or whether they have merit, the Area Office had to comply with the IG's request. SBA regulation at 13 C.F.R. Section 121.1001 specifies which person and entities may initiate a size protest or request a formal size determination. While the regulation and its subsections do not refer specifically to the IG, it is self-evident that under Section 121.1001(a)(1)(iii), the Area Director is one of the listed persons that may request a size determination. Here, while the IG did not specifically request the Area Director to initiate the size determination, the fact that the Area Director signed the size determination demonstrates that the Area Director impliedly accepted the IG's referral, initiated the size determination, and consented to its issuance. The Administrative Judge believes it is necessary to observe the IG is the policing and investigatory arm of this Agency. Its mission, among other matters, is to conduct and supervise audits, conduct investigations, detect and prevent fraud and abuse, ensure the integrity of the contracting process, and generally support SBA programs by ferreting out fraud, waste, or violations of law. See Inspector General Act of 1978, as amended, 5 U.S.C. App. 3. Thus, under any circumstances, the IG may request documents for its investigatory purposes, as well as, in this case, consistent with its mandate, request a size determination in connection with an audit of Appellant's practices. In consequence, the Area Office had both the authority and jurisdiction to conduct a size determination and the Administrative Judge will not vacate it. Accordingly, Appellant's arguments to the contrary, its appeal cannot be sustained. Conclusion For the above reasons, the Administrative Judge DISMISSES the appeal and DENIES Appellant's request to vacate the size determination. This is the final decision of the Small Business Administration. 13 C.F.R. Section 134.316(b). GLORIA E. BLAZSIK Administrative Judge _________________________ 1 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. 2 As subsequently explained in the Area Office's determination, infra, the CO used the incorrect code, because effective October 1, 2000, the SIC code system of classification was replaced by the North American Industry Classification System (NAICS) code. The corresponding NAICS code for SIC code 5045 is NAICS code 421430, also with a 500-employee size standard. The Administrative Judge observes that the CO corrected his mistake on March 23, 2001, when he notified the unsuccessful offerors that he awarded the contract to Appellant on March 15, 2001. 3 Apparently the Area Office sent the size determination to an incorrect address. The record establishes that Appellant received the size determination on June 14, 2004. Posted: September, 2004