Merdan Group, Inc., No. 4287 (January 20, 1998). Docket No. SIZ-97-9-19-40 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. _______________________________ ) SIZE APPEAL OF: ) ) Merdan Group, Inc. ) ) Appellant ) Docket No. SIZ-97-9-19-40 ) Re: J.G. Van Dyke & ) Decided: January 20, 1998 Associates, Inc. ) ) Solicitation No. ) DAAB07-97-R-0004 ) Department of the Army ) U.S. Army Communications- ) Electronics Command ) Acquisition Center ) Fort Huachuca, Arizona ) ______________________________ ) APPEARANCES for Appellant Nancy O. Dix, Esq. Mary E. Shallman, Esq. Gray, Cary, Ware & Freidenrich for J.G. Van Dyke & Associates, Inc. Shelly L. Ewald, Esq. Lewis J. Baker, Esq. Watt, Tieder & Hoffer, L.L.P. for the Department of the Army Michael T. Russell, Esq. DIGEST This Office will dismiss as moot an appeal of a size determination based upon issues specific to the particular contract, after the procuring agency has awarded the contract and the award remains in place, even if Appellant has received partial relief due to a GAO bid protest. 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 this Office will dismiss as moot an appeal of a size determination based upon issues specific to the particular contract, after the procuring agency has awarded the contract and the award remains in place, even if the Appellant has received partial relief due to a GAO bid protest. I. BACKGROUND On May 15, 1997, the Department of the Army, Communications- Electronics Command Acquisition Center at Fort Huachucha, Arizona (Army), issued, as a total small business set aside, the subject solicitation for Information Security Engineering Support Services. The Contracting Officer (CO) assigned to the procurement Standard Industrial Classification (SIC) code 7379, Computer Related Services, Not Elsewhere Classified, with a corresponding average annual receipts size standard of $18 million. The CO issued technical amendments to the solicitation on May 23rd, May 28th, June 6th, and August 11th. On August 21, 1997, the CO sent a pre-award notice to the other offerors, informing them J.G. Van Dyke & Associates, Inc. (Van Dyke) was the prospective awardee. On August 25th, Merdan Group, Inc. (Appellant), an unsuccessful offeror, filed a protest with the CO, asserting Van Dyke was not eligible for the procurement, because its prospective sales for the year exceeded the size standard, and because it was unduly reliant on its ostensible subcontractors, ManTech Telecommunications and Information Systems Corporation (ManTech), and Troy Systems, Inc. (Troy). The CO forwarded the protest to the Small Business Administration (SBA) Area II Office of Government Contracting in Philadelphia, Pennsylvania (Area Office). On August 27, 1997, the Area Office informed Appellant of the protest and requested certain information, including a completed SBA Form 355. Van Dyke submitted the requested information on August 29th . On September 11, 1997, the Area Office issued a size determination concluding Van Dyke was an eligible small business. The Area Office dismissed as insufficiently specific Appellant's allegations that Van Dyke unduly relied upon its ostensible subcontractors, citing 13 C.F.R. Section 121.1007(c). The Area Office found Van Dyke's average annual receipts for the last three completed fiscal years were within the applicable size standard, citing 13 C.F.R. Section 121.104(b)(1). On September 12, 1997, the CO awarded the contract to Van Dyke. Appellant received the size determination on September 15, 1997, and filed the instant appeal on September 19th. Appellant asserts Van Dyke is unduly reliant on ManTech, and attaches as evidence a classified newspaper advertisement for personnel, placed jointly by Van Dyke and ManTech. On September 19th, the Administrative Judge issued an Order setting the date for close of record as October 6, 1997. On September 26, 1997, counsel for Van Dyke filed an appearance. On October 2, 1997, Appellant filed a supplemental pleading, including additional information to support its contention that Van Dyke is unduly reliant on ManTech. Appellant asserts, based upon the debriefing it received from the Army, that Van Dyke previously relied upon ManTech for proposal preparation; and will rely upon ManTech for performance of the contract. Appellant further asserts Van Dyke and ManTech conducted joint interviews with prospective employees for this contract; Van Dyke and ManTech currently share office space; and they are exploring long- term joint occupancy of office space. On October 3, 1997, Van Dyke moved to dismiss the instant appeal as moot. Van Dyke relies upon this Office's precedent that an appeal, which raises contract-specific issues, must be dismissed as moot once the contract is awarded. Alternatively, Van Dyke asserts it is not unduly reliant on its subcontractors. On October 6, 1997, Van Dyke filed a supplemental response, asserting the employment interviews relied upon by Appellant instead establish it will hire its own employees, and that its employees will provide technical direction under the contract. On October 16, 1997, Appellant responded to the motion to dismiss, asserting that, because Appellant's General Accounting Office (GAO) protest of the award to Van Dyke still was pending, the case is not moot. On November 5, 1997, Appellant submitted additional classified advertisements as further evidence of Van Dyke's undue reliance on ManTech. On November 11, 1997, Van Dyke responded to Appellant's filing, denying the information established undue reliance. In December, Appellant attempted to contact this Office ex parte to inform it of developments in the GAO proceedings. After unsuccessfully attempting to convene a conference call with all parties to clarify the issue, the Administrative Judge, on December 17, 1997, issued an Order to Show Cause why he should not dismiss the instant appeal as moot. On December 17, 1997, Van Dyke filed a copy of GAO's December 5th Order, which approved the withdrawal of Appellant's GAO protest and closed the GAO file without further action. Merdan Group, Inc., No. B-278214 (December 5, 1997). On December 19th, counsel for Appellant filed an appearance. On December 23, 1997, Appellant filed its response to the Order to Show Cause. Appellant asserts it withdrew its GAO bid protest as part of a settlement agreement with the Army, and encloses a copy of the agreement. The settlement agreement provides the Army will -- 1) delete proposal page limitations in the solicitation; 2) inform all offerors that it will reevaluate, in accordance with the evaluation factors in the solicitation, all proposal information already submitted; and 3) since the filing of the protest did not stay the award to Van Dyke, the Army will continue to place delivery orders against the contract. Appellant's cover letter to the GAO reserves its right to refile its protest if the Army does not fulfill its obligations under the agreement, or does not reevaluate the proposals in accordance with the applicable statutes and regulations. Appellant urges the Administrative Judge not to declare the appeal moot for several reasons. First, it asserts the settlement agreement gives it the same relief GAO would have granted had it prevailed in its protest: a reevaluation of proposals and an award consistent with such reevaluation. This could result in the Army reawarding the contract. Second, Appellant asserts the instant appeal is distinguishable from Size Appeal of Resources Applications, Inc., No. 4252 (1997) (RAI), because the Administrative Judge's decision here might affect the present solicitation, and would not be merely advisory. Third, Appellant asserts this Office will decide an appeal raising contract-specific issues even after award, if a determination on the merits might affect the instant procurement, citing Size Appeals of Omnisec International and Securiguard, Inc., No. 3761 (1993) and Marwais Steel Company, No. 3894 (1994). On December 29, 1997, Van Dyke filed a response to the Order, asserting the instant appeal is moot because the award remains in place and cannot be affected by the Administrative Judge's decision on the merits. Under the settlement agreement, the Army either will reaffirm the award to Van Dyke or terminate the award to Van Dyke and award the contract to another offeror. Neither the settlement agreement nor the Army's reevaluation of the proposals will encompass the issues in Appellant's appeal. Moreover, Van Dyke asserts OHA has overruled the precedent Appellant relies on, and will not issue a decision after contract award where the issues are contract specific, even if the contracting agency request a decision on the merits, because such a decision would merely be advisory. Also on December 29th, the Army filed a response to the Order, asserting the instant appeal is moot because Appellant filed the appeal after award of the contract, and this Office's decision will not affect the contract. II. DISCUSSION Appellant filed the instant appeal within 15 days of its receipt of the size determination, and it is thus timely. 13 C.F.R. Section 134.304(a)(1). Because the appeal does not reassert Appellant's protest claim, that Van Dyke's average annual receipts exceed the applicable size standard, it has abandoned this issue; the Administrative Judge need not consider it. Size Appeal of Infotec Development, Inc., No. 4197 at 7 (1996). Appellant's primary argument on the merits is that Van Dyke is other than small because its reliance on its ostensible subcontractor creates affiliation with that subcontractor. 13 C.F.R. Section 121.104(f)(3). However, this allegation is specific to this contract. Since the Army already has awarded the contract, this Office's precedent requires the Administrative Judge to dismiss the appeal. Size Appeal of Lightcom International, Inc., No. 4118 (1995) (Lightcom). The rationale for this precedent is that a size appeal decision made after award of the contract in question can no longer affect the subject firm's interest in that procurement, because the issue is contract-specific a decision would not affect the firm's future size status. Size Appeal of Management Assistance Corporation of America, No. 3484 (1991). Such a decision thus would be an advisory opinion, which this Office does not issue. Size Appeal of Team Contracting, Inc., No. 3890 (1994). In Lightcom, the Administrative Judge reaffirmed and broadened the prior precedent, holding such cases must be dismissed as moot even if the procuring agency requested a decision. Lightcom, at 7. The Administrative Judge expressly rejects Appellant's argument that he should not dismiss this appeal as moot because it concerns an ongoing procurement; and the Army, upon reevaluation of the proposals, could reaward it. The Administrative Judge notes the award to Van Dyke remains in place; Appellant withdrew its GAO protest; and the settlement agreement does not disturb the award. The mere speculation that the Army might terminate its contract with Van Dyke (always a possibility with any contract) after the reevaluations is insufficient to create an exception to this Office's clear precedent that, after award, a contract-specific appeal is moot. Nor does RAI, which is factually distinguishable, support Appellant's position; Appellant has misread it. There, because the CO stayed the award after a GAO protest was filed, the award was not final. The appeal was not dismissed as moot until after GAO issued its decision affirming the award. Thus, the Administrative Judge dismissed the appeal because the contract award was no longer stayed, not because the appellant in RAI failed to receive relief from GAO. There, as here, any decision this Office issued after dissolution of the stay could have no present or future effect. Further, while Appellant here received relief as a result of its GAO protest, that relief does not disturb the award to Van Dyke. Thus, even by Appellant's reading of the case, RAI is inapposite here. [1] The Administrative Judge also rejects Appellant's arguments, because it relies on earlier cases which no longer are applicable. In those cases, this Office did not dismiss as moot appeals filed after award, which concerned contract-specific issues. Omnisec International and Marwais Steel, supra. These prior cases held that, under certain circumstances, this Office may consider appeals, after award of contract, based on contract- specific issues. Recent cases have emphasized that this Office explicitly changed its mootness policy in Lightcom, which overruled prior cases, such as those on which Appellant relies. Size Appeal of Cordant, Inc., No. 4193 (1996). The Administrative Judge finds that Appellant based the instant appeal upon issues specific to the instant procurement; the Army already has awarded the contract; there is no stay of award; and there is no pending proceeding to overturn the award. Accordingly, a decision in this case would have no present or future effect. Therefore, the Administrative Judge concludes the appeal is moot. [2] III. CONCLUSION The Administrative Judge DISMISSES the instant appeal as MOOT. This is the final decision of the Small Business Administration. See 13 C.F.R. Section 134.316(b). ______________________________ CHRISTOPHER HOLLEMAN Administrative Judge _________________________ [1] This decision does not address the issue of whether an appeal is moot if there is a pending GAO protest which might disturb the award. [2] The Administrative Judge notes that, even if the appeal were not moot, it is unlikely Appellant would prevail. The Area Office dismissed the undue reliance portion of its protest for lack of specificity. Appellant attempts to remedy this deficiency by introducing new evidence for the first time on appeal. However, the Administrative Judge cannot consider evidence not previously presented to the Area Office, unless he requests it or a motion is served and filed establishing good cause for the late submittal. 13 C.F.R. Section 134.308(a). Neither condition applies here. Appellant also improperly attempts to submit evidence after the close of the record, without first seeking leave to do so or establishing good cause for late filing. Size Appeal of First American Tax Valuation, Inc., No. 4206 (1996). Posted: May, 1998