South Bay Sand Blasting and Tank Cleaning, Inc., No. 4272 (October 7, 1997). Docket No. SIC-97-9-5-38 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. ________________________________ ) SIC APPEAL OF: ) ) South Bay Sand Blasting and ) Tank Cleaning, Inc. ) ) Appellant ) Docket No. SIC-97-9-5-38 ) Solicitation No. ) Decided: October 7, 1997 N00604-97-R-0039 ) Fleet & Industrial Supply Center) Regional Contracting Department ) Pearl Harbor, Hawaii ) ________________________________) APPEARANCES for Appellant Steven Haggerty DIGEST The appropriate Standard Industrial Classification (SIC) code for a procurement which requires the contractor to pump waste oil and water on a naval base, after Navy personnel have tested the waste material, haul it to the base's Fuel Reclamation Center, and to dispose only of that material found unusable by the Fuel Reclamation Center, is 4212, Local Trucking Without Storage, Garbage and Refuse Collection, with a corresponding average annual receipts size standard of $6 million. 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). Issue Whether the appropriate SIC code for a procurement dealing with the pumping, transporting, and disposal of waste oil and water is properly classified under Standard Industrial Classification (SIC) code 1389, Oil and Gas Field Services, Not Elsewhere Classified or SIC code 4212, Local Trucking Without Storage, Garbage and Refuse Collection. I. BACKGROUND A. Procedural Background On August 28, 1997, the Contracting Officer (CO) for the Department of the Navy's Fleet & Industrial Supply Center, Regional Contracting Department, Pearl Harbor, Hawaii (Navy), issued this small business set-aside procurement for services of vacuum trucks to pump and transport waste oil and water. The CO classified the procurement under Standard Industrial Classification (SIC) code 1389, Oil and Gas Field Services, Not Elsewhere Classified, with a corresponding size standard of $5 million in average annual receipts. The solicitation set a deadline of September 12, 1997 for submission of offers. On September 5, 1997, South Bay Sand Blasting and Tank Cleaning, Inc. (Appellant) filed the instant appeal, asserting the appropriate SIC code for this procurement is 4212, Local Trucking Without Storage, with a corresponding size standard of $18.5 million in average annual receipts. On September 11, 1997, the CO issued Amendment 1 to the solicitation, which extended the due date for proposals to September 26th. On September 12, 1997, the CO filed a copy of the solicitation with this Office. The CO filed no statement in response to the appeal. On September 15, 1997, the CO issued Amendment 2, making some technical changes to the solicitation. B. The Solicitation The solicitation requires the contractor to provide a 2,000 gallon and a 5,000 gallon vacuum truck, for approximately 26 service calls, to pump and transport waste oil and water. The contractor will pump the liquid waste material from pits located at the Pearl Harbor Fleet Industrial Supply Center Fuel Facilities and transport it to Pearl Harbor's Fuel Reclamation Plant. The contractor's trucks must be free of any contaminants, and are subject to inspection and approval by the Navy's Fuel Laboratory. The contractor will obtain shipping documents for transportation of hazardous material, proceed to designated areas to pump up liquid waste material, and proceed to the Navy's Fuel Reclamation Plant to off-load that liquid waste material. When the contractor pumps liquid waste material from the pits which includes any extraneous material, the liquid waste material is not suitable for the Fuel Reclamation Plant, and the contractor must dispose of it. The contractor must provide with its proposal a written technical proposal for disposal of this material; the technical proposal must comply with all Federal, Navy, state of Hawaii and local law and regulations. However, the solicitation states the Navy knows of no previous loads of unsuitable material, because Fuel Department personnel accompany the contractor and check the pits prior to pumping. The solicitation does not require the contractor to dispose of any material other than the unsuitable material described above. C. Arguments on Appeal Appellant asserts this procurement is similar to that in SIC Appeal of M.P. Environ-mental Services, Inc., No. 3950 (1994). There, the Presiding Judge found SIC code 4212 the appropriate SIC code for a procurement dealing with the collection and disposal of oily waste material generated on ships. II. DISCUSSION Appellant filed this appeal within ten calendar days of the issuance of the solicitation. Therefore, the instant appeal is timely. 13 C.F.R. Section 134.304(a)(3). In a SIC appeal, Appellant has the burden of proof, by a preponderance of the evidence, to show error in the CO's SIC code designation. SIC Appeal of the Scientific Consulting Group, Inc., No. 4186 (1996). The correct SIC code for a procurement is that which best describes the principal purpose of the services being procured, in light of the industry description in the SIC Manual*, the description in the solicitation, and the relative weight of each element of the solicitation. Id.; 13 C.F.R. Section 121.402(b). The standard of review is whether the SIC code designation is based on a clear error of fact or law. 13 C.F.R. Section 134.314. The SIC Manual describes SIC code 1389, that designated by the CO, as covering establishments primarily engaged in performing oil and gas field services. The SIC Manual cites as examples building oil and gas well foundations; cleaning, bailing and swabbing wells; removal of condensate gasoline from field lines; and chemically treating wells. Establishments primarily engaged in hauling oil and gas field supplies are classified in Division E, Transporta-tion and Public Utilities. SIC Manual, pp. 46-7. The SIC Manual describes SIC code 4212, in Division E, the SIC code urged by Appellant, as covering establishments primarily engaged in furnishing trucking or transfer services in a single metropolitan area, which do not provide storage for freight. The SIC Manual cites as examples dump truck hauling, local furniture moving, and refuse collection without disposal. Establishments engaged in collecting and disposing of refuse by processing or destruction of materials are classified under SIC code 4953, Refuse Systems. SIC Manual, p. 270. However, this SIC code has two size standards, an average annual receipts size standard of $18.5 million for the SIC code as a whole; and an exception for Garbage and Refuse Collection, Without Disposal, which has an average annual receipts size standard of $6 million. 13 C.F.R. Section 121.201. Appellant relies on M.P. Environmental Services, supra, which held a procurement for the collection and disposal of oily waste bilge water from naval vessels, which did not require the contractor to dispose of the refuse in some chemical way, was properly classified under SIC code 4212. M.P. Environmental Services relied on SIC Appeal of Consolidated Marketing Network, Inc., No. 2387 (1986), which was factually similar to the instant case, and also held SIC code 4212 was the appropriate designation. The instant procurement does not require any of the services specified under SIC code 1389, which all relate to the operations of oil and gas fields. Further, since SIC code 1389 expressly excludes hauling equipment, it is reasonable to infer that it also excludes hauling of waste material. This is especially true where, as here, the waste material is produced not by oil and gas drilling operations, but by the operation of naval vessels. The principal purpose of the instant procurement is the transporting of waste oil and water to the Fuel Reclamation Center; the contractor is not required to provide any storage. The disposal of waste matter is incidental to the contract, as the only disposal required is that of contaminated loads the Fuel Reclamation Center cannot handle. These contaminated loads are likely to be rare, because Navy personnel will test the waste materials prior to the contractor's pumping them into its trucks. Thus, the requirements of the instant procurement very closely match the services included in SIC code 4212. This is consistent with this Office's precedent, noted above, classifying procurements which require the hauling of waste material - but no disposal - under SIC code 4212. The Presiding Judge therefore finds that Appellant has met its burden of establishing the CO's SIC code designation is based on an error of fact or law, and that the appropriate SIC code for the instant procurement is 4212, Local Trucking Without Storage, Garbage and Refuse Collection, with a corresponding average annual receipts size standard of $6 million in average annual receipts. III. CONCLUSION The correct SIC code for this procurement is SIC code 4212. 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). ______________________________ CHRISTOPHER HOLLEMAN Administrative Judge _______________________________ *Standard Industrial Classification Manual, Office of Management and Budget, 1987 edition. Posted: October, 1997