R.M. Vredenburg & Co., No. 4220 (October 29, 1996) Docket No. SIC-96-9-5-66 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. _______________________________ ) SIC APPEAL OF: ) ) R.M. Vredenburg & Co. ) ) Appellant ) ) Docket No. SIC-96-9-5-66 Solicitation No. ) N00030-97-R-0033 ) Department of the Navy ) Strategic Systems Programs ) Arlington, Virginia ) _______________________________) DIGEST An appeal is timely when filed within ten days of a material amendment to the solicitation, even when the information in the amendment, while not in the original solicitation, previously was included in the Commerce Business Daily notice of the procurement. The appropriate SIC code for a procurement of Acquisition Reform support services is SIC code 8742, Management Consulting Services. DECISION October 29, 1996 HOLLEMAN, Administrative Judge: Jurisdiction This appeal is decided under the Small Business Act, 15 U.S.C. Sections 631 et seq., and 13 C.F.R. Part 121. Issues Whether an appeal is timely when filed within ten days of a material amendment to the solicitation, even when the information in the amendment, while not in the original solicitation, previously was included in the Commerce Business Daily notice of the procurement. Whether the appropriate Standard Industrial Classification (SIC) code for a procurement of Acquisition Reform support services is 8742, Management Consulting Services, or 8711, Engineering Services. I. BACKGROUND A. Issuing the Solicitation On July 11, 1996, the Department of the Navy, Strategic Systems Programs (SSP) published an announcement in the Commerce Business Daily (CBD) that it would conduct a procurement for Acquisition Reform support. SSP is the Program Manager for acquisition of the TRIDENT strategic weapons system. The announcement stated the procurement would be totally set aside for small business. On August 6, 1996, R.M. Vredenburg & Co. (Appellant) contacted SSP's Associate Director for Small Business to request that the procurement's intended Standard Industrial Classification (SIC) code be changed from 8742, Management Consulting Services, to 8711, Engineering Services, Military and Aerospace Equipment and Military Weapons.[1] Appellant stated that in other Navy contracts it was performing, which included Acquisition Reform, the designated SIC code was 8711. The Associate Director responded that the SIC code would be chosen in a manner consistent with the regulations. On August 13, 1996, SSP issued the subject solicitation for Professional, Technical and Management Support Services for Acquisition Reform. The Contracting Officer (CO) assigned to the procurement SIC code 8742, Management Consulting Services, with a corresponding average annual receipts size standard of $5 million. Solicitation, Section L, Para. 4, p. 61. Proposals were due on September 12, 1996. On August 14, 1996, Appellant received a copy of the solicitation. On September 3, 1996, the CO issued Amendment 0001, designating the procurement as a 100% small business set- aside, and restating the designated SIC code for the procurement. Id., DD Form 1707; Section K, Para. 14. B. The Statement of Work The solicitation's Statement of Work (SOW) requires the contractor to provide professional, technical, and management support services for SSP's Acquisition Reform efforts, as part of the Department of Defense's Acquisition Reform efforts. The contractor will collect and analyze data on Acquisition Reform, and make necessary recommendations to SSP. The contractor will analyze the effect of reform proposals on SSP's programs, and develop detailed plans to assure SSP's compliance with required changes. The contractor will prepare analyses and presentations for SSP officials, including papers SSP officials will present to Department of Defense management. The contractor also will prepare courses on acquisition reform. Id., Section C, pp. 4-10. C. The Appeal On September 5, 1996, Appellant filed the instant appeal of the SIC code designation, asserting the correct SIC code for this procurement is 8711, Engineering Services, Military and Aerospace Equipment and Military Weapons, with a corresponding average annual receipts size standard of $20 million. On September 10, 1996, SSP forwarded a copy of the solicitation to this Office. On September 12, 1996, SSP filed a Motion to Dismiss the instant appeal as untimely. On September 16, 1996, the Presiding Judge issued an Order setting the close of the record for September 30, 1996, and ordering both parties to address the issue of timeliness. On September 30, 1996, both parties filed responses. D. Arguments of the Parties Appellant asserts its appeal was timely because only a party adversely affected by a SIC code designation has standing to bring an appeal. Appellant was not adversely affected until the CO published the amendment setting aside the procurement for small businesses. Thus, because Appellant was no longer eligible to compete for the procurement after the September 3rd amendment, its standing to appeal arose only after that amendment. Therefore, its time to appeal should be computed from the amendment. SSP asserts Appellant knew the procurement was a small business set-aside based on the CBD notice and its conversation with the Associate Director. SSP thus asserts Appellant's time ran from the date of the solicitation, and, therefore, the instant appeal is untimely. On the merits, Appellant asserts the contractor will have to analyze thoroughly and understand the TRIDENT system, in order to properly perform the required analyses, and only trained engineers are capable of doing so. Further, only trained engineers can acquire the technical understanding of SSP's programs required by the solicitation. Appellant estimates engineers must perform nearly two-thirds of the tasks required by the solicitation. Appellant further asserts it is performing in other, similar Navy procurements, which are classified under the 8711 SIC code. Appellant asserts the required work is quite focused and highly technical, rather than the broad scope contemplated in the description of SIC code 8742. In response, SSP asserts it is not procuring engineering services, because the solicitation on its face seeks to procure management support services for Acquisition Reform. The SIC code classification is correct, because management support services are best classified as management consultant services. II. DISCUSSION A. Timeliness The first issue is whether Appellant timely filed the instant appeal. The Small Business Administration has revised its size, SIC and procedural regulations, effective March 1, 1996. See 13 C.F.R. Parts 121 and 134 (1996). Under the previous regulations, the deadline for SIC appeals was ten business days prior to bid opening when the bid opening was 30 days or more after issuance of the solicitation, and five business days if bid opening was less than 30 days after issuance of the solicitation. Any amendment to the solicitation extending bid opening extended the deadline. 13 C.F.R. Section 121.1705(b) (1995). Since the instant solicitation was issued subsequent to the effective date of the new regulations, they apply here. Under the new regulations a SIC appeal must be filed within ten days after issuance of the initial solicitation. 13 C.F.R. Section 134.304(a)(3) (1996). The Presiding Judge notes that Appellant filed this appeal after that time had expired. However, this Office has long held that amendments to the solicitation which affect the SIC code designation or assigned size standard may alter the deadline for filing an appeal. SIC Appeal of Engineering Spectrum, Inc., No. 3899 (1994); SIC Appeal of Industrial Maintenance Service, No. 2044 (1984). Nothing in the language of the new regulations or the accompanying Federal Register commentary provides any basis for changing this long- standing rule. The only commentary on the change explains that the new rule is easier to apply.[2] Appellant filed within ten days of the issuance of the amendment setting the procurement aside for small business. Because the amendment changed the solicitation's size standard, this appeal is timely. SSP's argument that the CBD notice constituted notice to Appellant of the set-aside well before the amendment is without merit. A CBD notice does not contain all of a procurement's requirements; it merely announces a pending procurement, and must be published for all procurements above the small purchase threshold. 15 U.S.C. Section 637(e). The solicitation, rather than the CBD notice, formally communicates the government's requirements, the terms and conditions of the procurement, and contains the information necessary for offerors to prepare their proposals. Federal Acquisition Regulation (FAR) Section 15.402(a). This Office previously has recognized the primacy of the solicitation, holding that a CBD announcement is not a SIC code designation. It will dismiss an appeal based upon a CBD notice, since only a solicitation can definitively designate a SIC code. SIC Appeal of Management Systems Applications, Inc., No. 3609 (1992); SIC Appeal of Dickshire Distributing, No. 3597 (1992). The fact that the CO designated the SIC code in the August 13th solicitation is not dispositive, because the solicitation did not identify the procurement as a set-aside for small business.[3] It is only the combination of the SIC code, together with the subsequent designation as a small business set-aside in the amendment, which adversely affects Appellant. It limited the offerors to those firms which meet the size standard. As urged by Appellant, its standing to appeal arose only at that point. See SIC Appeal of Sonicraft, Inc., No. 3864 (1993). In fact, if Appellant had attempted to file an appeal within ten days of the CBD notice, this Office likely would have dismissed it. SSP's argument would create an anomaly: Appellant would be untimely because it appealed only after SSP amended the solicitation to include the provisions to which Appellant objected. The Presiding Judge concludes that designations of a procurement as set aside for small business, as well as SIC code designations, in a CBD notice alone do not provide grounds for appeal. Because Appellant was adversely affected only after SSP amended the solicitation, its appeal, filed within ten days of the amendment, is timely. B. The Correct SIC Code 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[4], the description in the solicitation, and the relative weight of each element of the solicitation. See 13 C.F.R. Section 121.402(b); SIC Appeal of Jack Faucett Associates, No. 4071 at 3 (1995). 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. In a SIC appeal, the appellant has the burden of proof, by a preponderance of the evidence, to show error in the contracting officer's SIC code designation. SIC Appeal of The Scientific Consulting Group, Inc., No. 4186 (1996). SIC code 8711, urged by Appellant, applies to "Establishments primarily engaged in providing professional engineering services." SIC Manual, p. 401. The designated SIC code, 8742, applies to "Establishments primarily engaged in furnishing operating counsel and assistance to managements". Id., p. 403. It is clear that SSP here does not seek to procure professional engineering services. Although SSP's mission involves a sophisticated strategic weapons system, this procurement is not directly involved with the operation of that system. Rather, SSP seeks assistance in revising its procurement procedures consistent with recent statutory, regulatory, and policy changes without adverse affect on its mission. When the work required by the contract is not engineering, but procurement reform, engineers are not necessary to teach classes, prepare presentations, or write position papers. Thus, this procurement actually is for the services of consultants experienced in procurement procedures, although it supports an activity engaged in sophisticated engineering work. A SIC code designation must describe the actual products or services the government is procuring, and not the activities the procurement is supporting. SIC Appeal of Distributed Information Systems, Inc., No. 4189 (1996). The services sought here are clearly those of management consultants, and the SIC code designation is correct. III. CONCLUSION This Office can find no clear error of fact or law in the CO's SIC code designation, and thus Appellant has failed to meet its burden of proof. Accordingly, the correct SIC code for this procurement is 8742, Management Consulting Services, and the Contracting Officer's SIC code determination is AFFIRMED. This constitutes the final decision of the Small Business Administration. See 13 C.F.R. Section 134.316(b). _______________________________ Christopher Holleman Administrative Judge ____________________ [1] The record does not reflect how Appellant learned of the anticipated SIC code. [2] See 61 Fed. Reg. 2682 (January 29, 1996); 60 Fed. Reg. 58282 (November 27, 1995). [3] The Presiding Judge notes that all solicitations above the small purchase threshold must include a SIC code designation. FAR Section 19.303(a). [4] Standard Industrial Classification Manual, Office of Management and Budget, 1987 edition.