Lajas Industries, Inc., No. 4285 (January 9, 1998). Docket No. SIZ-97-8-13-31 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. _______________________________ ) SIZE APPEAL OF: ) ) Lajas Industries, Inc. ) ) Appellant ) Docket No. SIZ-97-8-13-31 ) Re: Carter Industries, Inc. ) Decided: January 9, 1998 ) Solicitation No. ) SPO100-96-R-0103 ) Defense Personnel Support ) Center ) Philadelphia, Pennsylvania ) ______________________________ ) APPEARANCES for Appellant Alan M. Grayson, Esq. Michael A. Lewis, Esq. Laura J. Mann, Esq. Alan M. Grayson and Associates for Carter Industries, Inc. Marc Lamer, Esq. Kostos and Lamer, P.C. DIGEST A firm found to be an other than small business for a procurement has standing to protest, and thus to appeal the resulting size determination, where only one offeror remains. The family tie between cousins is far removed and not within the scope of the identity of interest regulation (13 C.F.R. Section 121.103), unless sufficient additional evidence establishes another type of identity of interest, such as extensive involvement with each other's business affairs. This Office accords signed affidavits considerably more evidentiary weight than unsupported, self-serving statements. DECISION HOLLEMAN, 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 (1996). Issues Whether a firm found to be an other than small business for a procurement has standing to protest, and thus to appeal the resulting size determination, where only one offeror remains. Whether the family tie between cousins is within the scope of the identity of interest regulation, 13 C.F.R. Section 121.103. Whether, and to what extent, this Office accords signed affidavits more evidentiary weight than unsupported statements. I. BACKGROUND A. Procedural Background On May 13, 1996, the Defense Personnel Support Center (DPSC) in Philadelphia, Pennsylvania, issued the subject solicitation for green coveralls. The procurement was totally set aside for small business. The Contracting Officer (CO) assigned to the procurement Standard Industrial Classification (SIC) code 2326, Men's and Boys' Work Clothing, with a corresponding size standard of 500 employees. [1] On April 10, 1997, the CO awarded the solicitation to Lajas Industries, Inc. (Appellant), the apparent low offeror. On April 15, 1997, Carter Industries, Inc. (Carter), a competing offeror, filed a protest with the CO, through counsel, asserting Appellant is not a small business. The CO referred the protest to the Small Business Administration (SBA) Area II Office for Government Contracting in King of Prussia, Pennsylvania (Area II Office), on April 17th. On April 25, 1997, the CO referred another protest filed by Carter against Appellant, concerning another solicitation, SPO100-96-R-0077 (which had the same SIC code and size standard), to the Area II Office. On May 15, 1997, the Area II Office, which did not formally consolidate the protests, issued two virtually identical size determinations finding Appellant other than small for both procurements. On May 30, 1997, Appellant appealed both size determinations to this Office in a single appeal. On August 22, 1997, this Office denied the appeal and affirmed both Area II Office size determinations. Size Appeal of Lajas Industries, Inc., No. 4263 (1997). Previously, on June 26, 1997, DPSC canceled the award of both procurements to Appellant and, on the same day, notified Appellant of its intent to award the instant solicitation to Carter. On June 27, 1997, Appellant, through counsel, filed with the CO a protest asserting Carter is not a small business because Carter and Carter's officers, Marvin R. Azrak and Saul Wolf, together with Marvin R. Azrak's partner, Ezra Hamway, own and control numerous other entities; and the aggregate numbers of employees exceed the size standard. The protest did not allege affiliation between Carter and any other firm based on the principals' family ties. [2] On July 1, 1997, the CO referred the protest to the SBA Area I Office for Government Contracting in New York, New York (Area I Office). On July 3rd, the Area I Office wrote to Carter, informing it of the protest and requesting a response, an SBA Form 355, and certain other information. On July 9th, Carter, through counsel, submitted to the Area I Office the completed Form 355, affidavits from its President, Saul Wolf, and its Secretary/Treasurer, Marvin R. Azrak, a statement in response to the protest, and the other requested information. On July 24, 1997, the Area I Office issued a size determination finding Carter a small business. Appellant received the size determination on July 29, 1997. On August 13, 1997, Appellant, again through counsel, filed the instant appeal with this Office. On September 2, 1997, Carter responded to the appeal. On September 5, 1997, Appellant filed a motion for a Protective Order. On September 9, 1997, the Presiding Judge denied the motion as untimely, because the record previously had closed and Appellant showed no good cause for the late filing. On December 12, 1997, the Presiding Judge issued an Order to the CO to inform this Office whether other offerors had bid on this procurement in addition to Appellant and Carter. On December 16th, the CO replied there were none. B. The Protest Appellant asserted in its protest that Carter is the successor in interest to Isratex, Inc., which was discharged from bankruptcy in 1996. Appellant further asserted Carter's officers are directors of Ahi Ezer Congregation, and Ahi Ezer Yeshiva and Mardechei Maslation Elementary School and, thus, Carter is affiliated with those entities. [3] Appellant added that Marvin R. Azrak is an officer of and controls more than 30 businesses. Appellant also asserted Carter was affiliated with four other firms, all incorporated within two months of Carter and sharing the same address, Clark Venture Group, Inc., Clark Venture Associates, Inc., Kent Ave. Properties, Inc., and Overboard Industries, Inc. In his affidavit, Mr. Wolf declared Carter had purchased Isratex's assets as part of a bankruptcy reorganization; and, while the firms sharing an address with Carter are affiliates, none has any employees. In his affidavit, Marvin R. Azrak declared that his cousin, Marvin V. Azrak, not he, owned and controlled the businesses Appellant asserted Marvin R. Azrak controlled. He never had ownership interest or other involvement with these entities or any of his cousin Marvin V. Azrak's other business ventures. Both Marvin R. Azrak and Mr. Wolf asserted that, while they are associated with the synagogue and school named by Appellant, these are non-profit organizations, which are not affiliated with Carter. C. The Size Determination The Area I Office found that Marvin R. Azrak's affidavit was corroborated by a Dun & Bradstreet report, and that Marvin R. Azrak and Marvin V. Azrak were two different people, albeit cousins. Thus, it concluded Carter was not affiliated with the firms affiliated with Marvin V. Azrak. The Area I Office further found no affiliation between Carter and the synagogue and school, as the latter two are non-profit organizations. Conversely, the Area I Office found Carter affiliated with Westwood Hall Associates, Inc., and Pinebrook Care Center, based on Mr. Wolf's ownership interest in those firms; and the four firms sharing the same address as Carter. The Area Office also found Carter was the successor in interest to Isratex, and thus affiliated with two Isratex affiliates, Marywell, Ltd. and MG Brin & Sons, Inc. Nonetheless, after reviewing the numbers of employees for Carter and all its affiliates, the Area I Office found Carter was within the applicable size standard, and concluded it was a small business for this procurement. D. The Appeal Appellant does not challenge the Area I Office's findings of fact. Appellant instead asserts the Area Office erred in failing to consider whether Carter was affiliated with Marvin V. Azrak's companies under the identity of interest rule. Appellant implies, but does not explicitly state, that it first learned there were two different Marvin Azraks from the size determination. [4] Appellant further asserts that several other unnamed Azraks apparently are related to Marvin R. Azrak and have unspecified businesses which may be affiliated with Carter. Appellant asserts the Administrative Judge at a minimum should remand the case to the Area Office for a determination of whether an identity of interests exists between Marvin R. Azrak and his cousin, Marvin V. Azrak. Carter replies that the identity of interest rule does not apply when the family members at issue merely are cousins. As support for its assertion that Carter is not affiliated with Marvin V. Azrak's firms, it relies upon Marvin R. Azrak's declaration that he never had any interest in his cousin's firms II. DISCUSSION Appellant filed the instant appeal within 15 days of its receipt of the size determination and, thus, it is timely. 13. C.F.R. Section 134.304(a)(1). It is settled that Appellant is an other than small business for this procurement, and is not eligible to receive an award. Size Appeal of Lajas Industries, Inc., No. 4263 (1997). Ordinarily, Appellant would not have standing to protest Carter's size. Size Appeal of Arcata Associates, Inc., No. 3377 (1990). An exception to this rule is that a firm found to be other than small for a procurement has standing to protest if only one other offeror remains. 13 C.F.R. Section 121.1001(a)(1)(iv). The rationale for this exception is that a firm successfully challenging the award could compete for the procurement on an unrestricted basis. Arcata, supra. Here, because Appellant and Carter are the only offerors, Appellant has standing to protest and, thus, to file the instant appeal. Appellant neither challenges the Area I Office's findings of fact concerning the ownership and control of the companies at issue here, nor its findings as to those companies' number of employees. Appellant also does not reiterate its protest allegation that Marvin R. Azrak owns or controls the businesses. Accordingly, the Administrative Judge finds Appellant has abandoned these issues, and he need not consider them. Size Appeal of Infotec Development, Inc., No. 4197 at 7 (1996). Appellant does assert, for the first time on appeal, that there are other Azrak cousins whose interests should be considered in determining Carter's size. However, because Appellant attempts to submit evidence not previously presented to the Area Office, without establishing good cause for the late submission, the Administrative Judge excludes that evidence. 13 C.F.R. 134.308(a); Size Appeal of L. Freedman & Associates, P.C., No. 4247 at 6 (1997). Conversely, although Appellant's protest did not raise the other issue on appeal, that Carter is affiliated with Marvin V. Azrak's businesses under the identity of interest rule because he is Marvin R. Azrak's cousin, the Administrative Judge will consider it. That issue, and the fact there are two Marvin Azraks, who are cousins, was not apparent to Appellant until the Area I Office issued its size determination. Appellant thus does not attempt to submit new evidence, but, rather, permissibly asserts that the Area Office erred in applying the regulations to the evidence before it. Nonetheless, the Administrative Judge emphasizes that Appellant has the burden of proving, by a preponderance of the evidence, that the Area Office based the size determination on a clear error of fact or law. Size Appeal of Rebmar, Inc., No. 4173 (1996). The applicable regulation requires that individuals with identical or substantially identical economic interests, such as family members, be treated as one party, and their interests aggregated for size determination purposes. 13 C.F.R. Section 121.103(a)(3). In interpreting this rule, the leading case held that family members must be treated as one person for the purpose of determining affiliation, but this presumption may be rebutted by evidence showing the familial tie is far removed, or the individuals concerned are estranged or not closely involved with each other's lives or business transactions. Size Appeal of Golden Bear Arborists, Inc., No. 1899 (1984) at 7. Appellant correctly points out the Area I Office did not consider the identity of interest rule. However, even if the Area I Office erred, it was harmless error at worst. This Office's settled precedent holds that the family tie between cousins is far removed and not within the scope of the regulation, unless sufficient additional evidence establishes another type of identity of interest, such as extensive involvement with each other's business affairs. Size Appeals of E. Huttenbauer & Son, Inc., No. 3865 (1993); and JL Associates, Inc. and HLJ Management Group, Inc., No. 3102 (1989). Here, Appellant offers no evidence, beyond its bare assertions, of economic ties between the two cousins. Conversely, Marvin R. Azrak's unrebutted affidavit unequivocally states he never had any ownership interest or other involvement with his cousin's businesses. This Office accords signed affidavits considerably more weight than unsupported, self-serving statements. [5] Size Appeal of Armed Forces Sports Officials, Inc., No. 3932 (1994). Accordingly, the Presiding Judge concludes, based upon the undisputed record evidence, that no identity of interest exists between Marvin V. Azrak and Marvin R. Azrak. Thus, no affiliation exists between their respective businesses. Accordingly, the Presiding Judge concludes Appellant has failed to sustain its burden of demonstrating the Area I Office based its size determination on a clear error of fact or law, and denies the instant appeal. III. CONCLUSION Accordingly, the Area I Office decision is AFFIRMED, and the instant appeal is DENIED. This is the final decision of the Small Business Administration. See 13 C.F.R. Section 134.316(b). ____________________________ CHRISTOPHER HOLLEMAN Administrative Judge _________________________ [1] A typographical error in the solicitation listed the nonexistent SIC code 2328. The CO later represented that the correct SIC code is 2326. Size Appeal of Lajas Industries, Inc., No. 4263 (1997). [2] On July 15, 1997, the CO notified Appellant of his intent to award the other solicitation, No. SPO100-96-R- 0077, to Specialty Plastic Products (Specialty). On July 22nd, Appellant filed a protest with the Area II Office, asserting Specialty was other than small. On July 28th, the Area Office dismissed Appellant's protest for lack of standing. On August 3, 1997, Appellant appealed that dismissal to this Office. On December 22, 1997, the Administrative Judge affirmed the dismissal. Size Appeal of Lajas Industries, Inc., No. 4284. [3] Ahi Ezer Yeshiva and Mardechei Maslation Elementary School is one institution, according to unrebutted information Carter submitted. [4] Otherwise, Appellant's assertion that a single Marvin Azrak controlled all the firms associated with an individual bearing that name would have been made in bad faith. [5] Appellant's credibility is not enhanced by its earlier assertion of affiliation between Carter and a house of worship and a school, both non-profit entities. Posted: January, 1998