Oregon Iron Works, Inc., No. 2938 (August 15, 1988) Docket No. SIC-88-7-25-101 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. 20416 SIC APPEAL OF: ) ) Oregon Iron Works, Inc. ) ) Appellant ) Docket No. SIC-88-7-25-101 ) Solicitation No. ) N0024-88-13-2134 ) Department of the Navy ) Naval Sea Systems Command ) Washington, D.C. ) DIGEST A solicitation for 50-Foot Dive Boats should be classified under Standard Industrial Classification (SIC) code 3731 (Ship Building and Repairing), based on the structure and technical function of the vessel. DECISION August 15, 1988 BLAZSIK, Administrative Judge, Presiding: Jurisdiction This appeal is decided under the Small Business Act of 1958, 15 U.S.C. 631 et. seq., and the regulations codified at 13 CFR 121.11. Issue Whether the proper classification to be assigned to this solicitation is SIC code 3731 or SIC code 3732. Facts On June 13, 1988, the Department of the Navy's Naval Sea Systems Command in Washington, D.C., issued this solicitation for a "50 Foot Dive Boat MKII," and classified it under Standard Industrial Classification (SIC) code 3731 (Ship Building and Repairing), which has a 1,000-employee size standard. The solicitation was totally set aside for small business firms, and the bid-opening date is August 24, 1988. On July 22, 1988, Oregon Iron Works, Inc. (Iron Works or Appellant) filed a timely appeal from the Contracting Officer's SIC code designation arguing that the appropriate SIC code for this solicitation should be SIC code 3732 (Boat Building and Repairing), with a 500-employee size standard. In support, Iron Works argues that the text of the solicitation frequently refers to the term "boat" or "boats" rather than "ship" or "ships" dictating the use of SIC code 3732. Additionally, Iron Works argues that the craft being procured is a small, uncommissioned vessel, capable of limited independent operation. Thus, it falls within the definition of the term "boat" as contained in Marine Engineering (June 1987), where the term is defined as [a]n uncommissioned, water-borne unit of the fleet, not designed as a service craft, and capable of limited independent operation. It may be assigned to and carried on a ship as a ship's boat, or assigned to a shore station or fleet operating unit. On July 29, 1988, the Contracting Officer filed a reply arguing generally that the SIC code 3731 has been used for identical items being procured and that Iron Works's argument has no merit. The Contracting Officer states further [t]his procurement was classified under SIC 3731 after review of the craft and its principal nature. This classification was made on the basis of the information contained in the 1987 Standard Industrial Classification Manual. In my estimation as the Contracting Officer, due to the craft's size and highly technical function, it is clearly more closely related to the craft contemplated in SIC 3731 than those in any other category. An examination of the work statement reveals that the item being procured (the 50-Foot Dive Boat) is a fifty-foot, semi-flat bottom, welded steel construction service craft with a pilot house, twin screws and two diesel engines generating 173 horsepower per shaft. The craft is 14' 9" wide and has an approximate weight of 37 gross tons (83,000 pounds). The Diver's System Module/Diver's Air System contained in the craft is a modular component providing support for divers performing underwater inspection of mooring equipment, anchors and ground tackle, underwater repair work, and mobile salvage operations. This system allows divers to operate to depths of 190' without the use of recompression chambers or roving diving bells and is equipped with a low pressure air compressor and high pressure air flasks. Discussion SIC code 3731, selected by the Contracting Officer as the proper classification for the solicitation, is defined in the SIC Manual as follows: */ Establishments primarily engaged in building and repairing ships, barges, and lighters, whether self-propelled or towed by other craft. This industry also includes the conversion and alteration of ships and the manufacture of offshore oil and gas well drilling and production platforms (whether or not self-propelled). Establishments primarily engaged in fabricating structural assemblies or components for ships, or subcontractors engaged in ship painting, joinery, carpentry work, and electrical wiring installation, are classified in other industries. Examples of the types of vessels listed under SIC code 3731 include cargo vessels, landing ships, naval ships, passenger-cargo vessels, barges, and tugboats. Appellant contends, however, that the proper classification is SIC code 3732, which is, described in the SIC Manual as follows: Establishments primarily engaged in building and repairing boats. Establishments primarily engaged in manufacturing rubber and nonrigid plastics [sic] boats are classified in Major Group 30. Establishments primarily engaged in operating marinas and which perform incidental boat repair are classified in Transportation, Industry 4493; membership yacht clubs are classified in Services, Industry 7997; and those performing outboard motor repair are classified in Services, Industry 7699. Examples shown under SIC code 3732 include boats, sailboats, rowboats, canoes, dinghies, hydrofoil boats, and motor boats. Review of the work statement and the description of the specification for the procured item supports the conclusion that the types of crafts shown under SIC code 3731 more closely match the craft at issue. We note, however, that this case represents a borderline situation; nonetheless, the evidence adduced preponderates in favor of the SIC code designation made by the Contracting Officer. We disagree with Appellant's central argument that the determinative factor in classifying this craft should be the craft's lack of independent operation. As noted, SIC code 3731 lists among other examples, barges. It further appears that, like those listed under SIC code 3731, the craft is a heavy-duty, purpose-built vessel, with specific technical functions. It also appears that, as pointed out by the Contracting officer, previous solicitations for this type of a craft have been classified under SIC code 3731. We have held that, in borderline cases, consideration may be given to the classification of previous procurements of the same or similar products or services. See SIC Appeal of Rothe Development, Inc., No. 2613 (1987). Conclusion Based on our analysis, we conclude that the Contracting Officer's SIC code 3731 designation was correct. The appeal is DENIED. This constitutes the final decision of the Small Business Administration. See 13 CFR 121.11(t), (u), and (v). Gloria E. Blazsik (Presiding) Administrative Judge Jane E. Phillips (Concurring) Administrative Judge Joseph K. Riotto (Concurring) Administrative Judge ______________ */ Standard Industrial Classification Manual, Executive Office of the President Office of Management and Budget, 1987 ed.