USA Asbestos Removal Co., Inc., No. 4382 (November 4, 1999) Docket No. SIZ-99-08-19-40 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. SIZE APPEAL OF: ) ) USA Asbestos Removal Co., Inc. ) Docket No. SIZ-99-08-19-40 ) Appellant ) Decided: November 4, 1999 ) Solicitation No. ) DAAE30-99-R-0617 ) Department of the Army ) Picatinny, New Jersey ) APPEARANCES Peter Bubalo For Appellant DIGEST The applicable regulations specifically authorize a Contracting Officer to file a protest at any time. 13 C.F.R. Sections 121.1001(a)(1)(ii), 121.1004(b). A Contracting Officer's protest, which details the reasons why he is seeking a size determination on a firm, satisfies the regulation's specificity requirements. 13 C.F.R. Section 121.1007(b). The proper period of measurement for calculating average annual receipts is the last three completed fiscal years immediately preceding self-certification, even though the challenged firm's Federal income tax return for the last completed year was not available when it self-certified. SBA may use all available information to determine a challenged firm's average annual receipts, including financial statements and representations made on the firm's SBA Form 355, where the firm has not filed its Federal income tax return for one of the last three completed fiscal years. DECISION BLAZSIK, 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 (1999). Issues Whether and when may a Contracting Officer file a protest under 13 C.F.R. Sections 121.1001(a)(1)(ii), 121.1004(b). Whether a Contracting Officer's protest is specific where he details the reasons why he has requested a size determination. Whether the proper period of measurement for calculating average annual receipts is the last three completed fiscal years immediately preceding self-certification, even though the challenged firm's Federal income tax return for the last completed fiscal year was not available when it self-certified. Whether SBA may use all available information to determine average annual receipts, including the challenged firm's own representations on its SBA Form 355, where the firm has not filed its Federal income tax return for one of the last three completed fiscal years involved in a size determination. Procedural Background On August 19, 1999, USA Asbestos Removal Co., Inc. (Appellant) filed a motion for an extension of 15 days to file an appeal from a Small Business Administration's (SBA) New York Office of Government Contracting-Area I (Area Office) July 27, 1999 size determination, which concluded Appellant was other than small. On August 25, 1999, this Office issued a Notice and Deficiency Order directing Appellant to file, within 15 calendar days, an appeal complying with the applicable SBA size regulations. OHA also ordered Appellant to provide a full and specific statement supporting its appeal. On September 8, 1999, Appellant filed an appeal with OHA. Facts On March 24, 1999, the Contracting Officer (CO) for the Department of the Army, in Picatinny, New Jersey, issued this negotiated small business set aside procurement for asbestos abatement work. He assigned to it Standard Industrial Classification code 4953 (Refuse Systems), with a corresponding $6 million average annual receipts size standard. Appellant self- certified as a small business on April 26, 1999, at the time it made its initial offer. On May 25, 1999, the CO awarded the contract to Appellant. On July 2, 1999, the CO requested the Area Office to conduct a size investigation of Appellant because the CO received information showing Appellant may be other than small. On July 27, 1999, the Area Office issued its size determination. The Size Determination The Area Office noted the correct size standard is $6 million, although the CO had incorrectly stated it was $7 million. The Area Office also noted the applicable years for determining Appellant's size status were 1996, 1997, and 1998. Appellant's fiscal year ends December 31st of each year. The Area Office noted Appellant provided its SBA Form 355; Federal income tax returns for 1996 and 1997; and financial statements for 1998 because its 1998 income tax return was not yet completed. Based on Appellant's submitted financial data, the Area Office determined Appellant is other than small. Appellant received the size determination on August 5, 1999 and filed an appeal on August 19, 1999. Arguments on Appeal Appellant asserts the CO cannot file a protest because he is not "adversely affected," and his protest was not specific. Appellant asserts that, at the time of its April 26, 1999 self-certification, its 1998 Federal tax return was not available. However, its 1995, 1996, and 1997 tax returns showed Appellant was small. Thus, the Area Office erred in considering its 1996, 1997, and 1998, receipts rather than 1995, 1996, and 1997. Finally, because the CO awarded the contract to Appellant prior to the size determination, this Office must dismiss the proceeding as moot. On November 4, 1999, the CO informed this Office he has suspended performance on this contract until OHA issues a decision. Discussion Appellant filed the instant appeal within 15 days of receiving the size determination; thus the appeal is timely. 13 C.F.R. Section 134.304(a)(1). The Administrative Judge rejects Appellant's assertion that the CO is not an "adversely affected party" and cannot file a protest. The relevant SBA regulations at 13 C.F.R. Sections 121.10001(a)(1)(ii) and 121.1004.(b), specifically authorize a contracting officer to file a size protest at any time. Further, the Administrative Judge's review of the record shows the CO's protest was sufficiently specific. The CO's referral to the Area Office detailed the content of telephone calls he received questioning Appellant's size status, which led him to seek a size determination. The Administrative Judge also specifically rejects Appellant's assertion that the Area Office should have used Appellant's 1995, 1996, and 1997 tax returns to compute Appellant's average annual receipts, because its 1998 returns were not available when it self-certified. It is clear that the proper "period of measurement" for calculating average annual receipts is the last three completed fiscal years immediately preceding self-certification. 13 C.F.R. Section 121.104(b)(1); Size Appeal of TROY Systems, Inc., No. 4296 (1998). Appellant self-certified on April 26, 1999, and its fiscal year ends on December 31st of each year. Thus, the Area Office applied the proper period of measurement for this size determination, the years 1996, 1997, and 1998. After reviewing the record evidence, the Administrative Judge concludes the Area Office also correctly analyzed Appellant's annual receipts data for those years, consistent with TROY, supra. Where, as here, a firm had not filed its Federal income tax return for a particular year, SBA may use all available information to determine the firm's annual receipts. Size Appeal of Armrest Security Patrol, Inc., No. 4371 at 4 (1999). Because Appellant's 1996 and 1997 tax returns and its 1998 financial statements, submitted to the Area Office, clearly show Appellant's average annual receipts were above $7 million,[*] the Area Office correctly found Appellant was other than small. Finally, the Administrative Judge rejects Appellant's argument that the proceeding is moot because the CO awarded the contract to Appellant. OHA has held that a CO's suspension of performance on a contract avoids mootness based on contract award. Size Appeal of InfoTech Enterprises No. 4346 at 10 (1999). Here, the record shows the CO suspended performance on the contract and is waiting for OHA's decision. Further, the issues raised in the appeal are not contract-specific to the instant procurement; that is, the Area Office did not find Appellant other than small for reasons, such as affiliation with a joint venturer, unique to this procurement. Thus, the size determination has future applicability, because Appellant remains ineligible for procurements under the instant SIC code unless and until and unless SBA recertifies Appellant as small. 13 C.F.R. Section 121.1009(g)(3); Size Appeal of Gallagher Transfer & Storage Co., Inc., No. 4295 at 5 (1998). Conclusion For the reasons discussed above, the Administrative Judge AFFIRMS the Area Office's decision, and DENIES the appeal. This is the Small Business Administration's final decision. 13 C.F.R. Section 134.316(b). ______________________________ GLORIA E. BLAZSIK Administrative Judge _________________________ [*] The Area Office inexplicably applied the incorrect $7 million standard after noting the correct $6 million standard. Any error, however, is immaterial and would not change the result. Posted: November, 1999