KTA/SET Environmental, No. 4169 (April 15, 1996) Docket No. SIZ-96-2-13-14 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. _______________________________ ) SIZE APPEAL OF: ) ) KTA/SET Environmental ) ) Appellant ) ) Docket No. SIZ-96-2-13-14 Solicitation No. ) DTFH61-95-R-00140 ) Department of Transportation ) Federal Highway Administration ) Washington, DC ) _______________________________) ORDER REMANDING IN PART AND DENYING IN PART April 15, 1996 On June 22, 1995, the Office of Contracts and Procurements of the Department of Transportation, Federal Highway Administra- tion (FHA), issued the subject solicitation for the development of a training course on bridge painting health and safety. The Contracting Officer (CO) issued the requirement as a 100% small business set-aside under Standard Industrial Classification (SIC) code 8732 (Commercial Economic, Sociological, and Educational Research). The CO set July 24, 1995 as the closing date for the initial offers. The due date for the best and final offer was November 7, 1995. On November 22, 1995, the CO notified all offerors that KTA/SET Environmental (Appellant) was the apparent successful offeror. On November 28, 1995, Corrosion Control Consultants and Labs, Inc. (CCC&L) filed a protest with the CO. On November 29, 1995, CCC&L filed a letter supplementing its initial protest. CCC&L asserted that Appellant was other than small because Appellant was dominant in the field of operation in which it was bidding. CCC&L further asserted that Appellant did not meet the criteria for small businesses under the solicitation because of an affiliation with two larger corporations. On December 15, 1995, the CO forwarded the protest to the Small Business Administration (SBA) Area II Office of Government Contracting (Area Office) in Philadelphia. On January 11, 1996, the Area Office sent a letter notifying Appellant of CCC&L's protest, and requested that Appellant provide an SBA Form 355 and other documents. Appellant prepared and sent the requested materials to the Area Office, which the Area Office timely received on January 18, 1996. On January 31, 1996, the Area Office issued a formal size determination finding that Appellant was other than small. The Area Office found that KTA/SET was not independently owned, and was in fact affiliated with two larger companies KTA/SET Tator, Inc. and SE Technologies Company. On February 12, 1996, Appellant filed the instant appeal contesting the size determination on the grounds of untimeliness and the Area Office's failure to provide it with an opportunity to respond to the allegations in CCC&L's November 29th supplement to its protest. Appellant specifically contends that, because Appellant received the protest 32 days after it was awarded the contract, the Area Office exceeded the time limits prescribed in the Federal Acquisitions Regulations (FAR) for notifying it of CCC&L's protest. However FAR Section 19.302(e) places no time limits upon the SBA with regard to notifying the challenged concern of the protest. Subsection (e)(1) simply requires SBA to: Notify the contracting officer and the protestant of the date it was received.... Nor does the applicable SBA regulation, 13 C.F.R. Section 121.1605, impose such a requirement. It merely states: Upon receipt of the protest, the SBA Regional Administrator or his or her delegate shall immediately notify the contracting officer, protested concern and the protestor of the date such protest was received and whether it will be processed or dismissed for lack of specificity. Although SBA regulations require the Area Office to immediately notify the protested concern of a protest, notification here was delayed by circumstances clearly beyond the control of the Area Office. The Area Office received the protest from the CO on December 15, 1995. Federal employees were furloughed from December 18, 1995 - January 5, 1996. Many Federal agencies in the Northeast remained closed through January 9, 1996, because of a major blizzard. The Area Office actually notified Appellant of the protest within a few days after the furlough ended and offices reopened after the blizzard. This constitutes due diligence by the Area Office and, under the extraordinary circumstances imposed by the furlough, the Presiding Judge finds that the Area Office met the regulatory requirement of immediate notification, by informing Appellant of the protest as soon as practicable. In any event, Appellant has failed to show that the delay prejudiced it in any way. Appellant has the burden of proof by a preponderance of the evidence in an appeal. Appellant has failed to meet its burden in asserting that its appeal should be granted due to SBA's delays in dealing with its protest. See Size Appeal of CDE Enterprises, Inc., No. 4156 (1996).[1] Appellant also asserts that the Area Office exceeded the prescribed FAR time limits for issuing its size determination, because Appellant did not receive the size determination within 10 business days after the Area Office received the protest. Appellant cites FAR Section 19.302(g)(1), as the applicable authority: Within 10 business days after receiving a protest, the challenged offeror's response, and other pertinent information, the SBA will determine the size status of the challenged concern.... Notwithstanding subsection (g)(1), however, subsection (h)(2) appears to contemplate that size determinations may take more than 10 days. After the 10-day period has expired, the contracting officer may...continue to withhold award until the SBA's determination is received.... Moreover, the applicable SBA regulation, 13 C.F.R. Section 121.1606 (a), states: After receipt of a protest or a request for a formal size determination, SBA shall make a formal size determination. The size determination shall be made within 10 working days after receipt of the protest, if possible. Thus neither FAR nor SBA's regulations actually require the SBA Area Office to make a size determination within 10 days. Therefore, the portion of Appellant's appeal based upon the timeliness of the Area Office's issuance of the size determination is without merit. Appellant further asserts that the Area Office failed to disclose a portion of the record to Appellant. In support, Appellant submitted to this Office an Affidavit by Allan J. Blasko, KTA/SET Environmental Operations Manager, which stated that Appellant had never seen CCC&L's November 29, 1995 supplemental letter, nor had it been given the opportunity to respond to the letter's allegations. SBA regulations require that the Area Office forward a copy of the protest, in its entirety, to the protested concern. 13 C.F.R. Section 121.1605. In this case the Area Office failed to meet the regulatory requirement because it failed to do so. Therefore the Area Office failed to provide Appellant with the opportunity to respond to CCC&L's supplemental letter. This omission was material because the Area Office expressly referred to CCC&L's supplemental letter in its size determination. Accordingly this proceeding is REMANDED in part to the Area Office. The Area Office is instructed to: 1) Provide Appellant with the opportunity to respond to CCC&L's supplemental letter; 2) Consider Appellant's response to the supplemental letter; 3) Issue a new size determination taking into consideration Appellant's response to the supplemental letter. Those portions of the instant appeal alleging untimeliness of the Area Office in notifying Appellant of the protest and issuing the size determination are DENIED. As to those issues, this is the final decision of the Small Business Administration. See 13 C.F.R. Section 121.1720(b). __________________________ Christopher Holleman Administrative Judge ____________________ [1] Appellant impliedly asserts that, because it timely submitted documents requested by the Area Office, the Area Office was obliged to act timely as well. Appellant has presented no authority for its position and, therefore, has failed to satisfy its burden of proof. 13 C.F.R. Section 121.1707.