Systems Resource Management, Inc., No. 4640 (June 7, 2004)
Docket No. SIZ-2004-05-05-30
UNITED STATES OF AMERICA
SMALL BUSINESS ADMINISTRATION
OFFICE OF HEARINGS AND APPEALS
WASHINGTON, D.C.
)
SIZE APPEAL OF: )
)
Systems Resource Management, ) Docket No. SIZ-2004-05-05-30
Inc. )
) Decided: June 7, 2004
Appellant )
)
Re: Aquidneck Management )
Associates, Ltd. )
)
Solicitation No. N66604-01-R- )
2997 )
Department of the Navy )
Commercial Acquisition Dept.
Newport, Rhode Island
APPEARANCES
L. James D'Agostino, Esq., Greenberg Traurig, LLP
for Appellant
Alexander J. Brittin, Esq., Brittin Law Group, PLLC
for Aquidneck Management Associates, Ltd.
DIGEST
A procuring agency which issues an Indefinite Delivery/Indefinite
Quantity Multiple Award Contract, awards the contract to four
vendors who self-certify at the time the contract was issued, and
subsequently the procuring agency issues a Task Order under the
original contract, a timely protest must be filed at the time of
the original award, not when the subsequent Task Order is
awarded.
A business that is small at the time of self-certification under
an Indefinite Delivery/Indefinite Quantity Multiple Award
Contract remains eligible for award for a Task Order issued
during the period of the contract, even though it has become
other than small in the interim.
DECISION
BLAZSIK, Administrative Judge:
Jurisdiction
This appeal is decided under the Small Business Act of 1958,
15 U.S.C. Section 631 et seq., and 13 C.F.R. Parts 121 and 134.
Issues
When can a timely protest be filed under an Indefinite
Delivery/Indefinite Quantity Multiple Award Contract.
Whether a business that is small at the time of self-
certification under an Indefinite Delivery/Indefinite Quantity
Multiple Award Contract remains eligible for a later award of a
Task Order, even though the business has become other than small
in the interim.
Facts
On June 11, 2001, the Contracting Officer (CO) for the
Department of the Navy, Commercial Acquisition Department, in
Newport, Rhode Island, issued a negotiated solicitation for a
small business set-aside, Indefinite Delivery/Indefinite Quantity
(IDIQ), Multiple Award Contract, with cost plus fixed fee
provisions. The solicitation stated that individual Task Orders
under this contract will be issued on either a term or completion
form basis. Further, the solicitation stated that it will
consist of up to a two year Base Period, followed by three one
year Options, and then by three one year Award Terms. Finally,
the solicitation stated that "it is possible that the total
Period of Performance for this contract could reach eight years.
"
The CO assigned to the solicitation North American Industry
Classification System (NAICS) code 541330 (Engineering Services -
Military and Aerospace Equipment and Military Weapons), which has
a corresponding small business size standard of $20 million in
average annual receipts. [1]The CO competed this solicitation
among four selected small business vendors. They self-certified
on or about July 19, 2001, the closing date for the offers. On
May 2, 2002, the CO awarded the contracts to Aquidneck Management
Associates, Ltd. (AMA); McLaughlin Research Corporation (MRC);
Future Technologies, Inc.; and Systems Resource Management, Inc.
(SRM or Appellant).
On February 7, 2004, Science Applications International
Corporation (SAIC), an undisputed large concern, acquired AMA.
The Defense Contract Management Agency is completing novation of
AMA's contract to SAIC. The current status of the novation is not
of record.
On March 16, 2004, the CO requested quotations for a Task
Order under the IDIQ contract, but did not request a new size
certification from the previously selected vendors. Three of the
original four vendors competed for the award, and after the CO
evaluated their proposals, he notified offerors of the identity
of the successful offeror on April 5, 2004. He made the award to
SAIC/AMA on the same day. [2]
By letters dated April 8, 2004, SRM and MRC, the two
unsuccessful offerors, filed individual protests against the
award with the CO. The protests' basis was that SAIC/AMA was not
eligible for award because it is no longer a small business. On
April 20, 2004, the CO forwarded the protests to the Small
Business Administration's (SBA) Office of Government Contracting-
Area I (Area Office) in Melville, New York, for a size
determination. The CO also requested the Area Office to advise
him whether the award to SAIC/AMA is proper and whether SAIC/AMA
is eligible to compete for future Task Orders inasmuch as AMA is
no longer small
.
The Size Determination
On April 21, 2004, the Area Office dismissed the protests as
untimely, citing 13 C.F.R. Section 121.1004, without pinpointing
the specific provisions of that rule on which the dismissal was
based. Further, the Area Office did not respond to the CO's two
specific questions, supra. On April 27, 2004, MRC requested the
Area Office to reopen the dismissal determination. [3] On May 7,
2004, the Area Office denied the request to reopen and attached
to its denial a lengthy memorandum explaining its previous
dismissal.
In this memorandum, the Area Office stated that its previous
dismissal of the protests was based on 13 C.F.R. Section
121.1004(a)(2), which provides that in a negotiated procurement
"[a] protest must be received by the contracting officer prior to
the close of business on the 5th day, exclusive of Saturdays,
Sundays, and legal holidays, after the contracting officer has
notified the protestor of the identity of the prospective
awardee." Subsection (d) requires SBA to dismiss untimely
protests
.
The Area Office noted that MRC's request for reopening was
premised on 13 C.F.R. Section 121.1004(a)(3), which provides that
protests against a Multiple Award Schedule (MAS) procurement that
is set aside for small business will be timely if received by SBA
prior to the expiration of the contract period. The Area Office
noted that MRC was not contesting the original IDIQ award, supra,
but was protesting the April 5, 2004, award of the Task Order.
The Area Office stated that 13 C.F.R. Section 121.1004(a)(3)
is inapplicable here because the "provision specifically
references multiple award schedule contracts and applies only to
General Services Administration (GSA) Federal Supply Schedule
Contracts." The contract at issue is a Multiple Award Contract,
not a MAS contract. Thus, the Area Office must rely on the
original self-certification date on the original IDIQ contract,
and the five-day rule of 13 C.F.R. Section 121.1004(a)(2). Under
that interpretation, the instant protests were clearly untimely.
SRM (Appellant) received the size determination on April 26,
2004, and filed its appeal on May 5, 2004.
The Appeal and Response
Appellant asserts its protest was timely under 13 C.F.R.
Section 121.1004(a)(3) because that rule provides that protests
on a MAS contract set aside for small business are timely if
received by the SBA prior to the expiration of the contract
period. Since the MAS contract period has not expired,
Appellant's protest was timely under this regulation.
Alternatively, Appellant asserts its protest was timely,
noting that the instant Task Order had been awarded to SAIC/AMA
on April 5, 2004. Appellant asserts it filed its protest with the
CO on April 8, 2004, which is within three business days of
notification of the award of contract and thus it complied with
the five-day rule of 13 C.F.R. Section 121.1004(a)(2).
Appellant includes in its appeal, several exhibits which are
copies of documents already in the record. Exhibits C and D,
however, contain new evidence.
On May 21, 2004, AMA filed a motion to intervene. Because
SAIC/AMA is the challenged firm and therefore an interested
party, the Administrative Judge granted the motion on the same
day. The Administrative Judge observes that AMA, as the
challenged firm, had no need to request intervention. It could
file a response under any circumstances in view of its obvious
interest in this proceeding.
On May 24, 2004, AMA filed its response to the appeal. AMA
asserts the Area Office properly dismissed the Appellant's and
MRC's protests for the following reasons:
First, contrary to Appellant's characterization, the
solicitation at issue is NOT a MAS contract in which case 13
C.F.R. Section 121.1004(a)(3) would apply (Counsel for AMA
miscites the regulation as "1004(c)), but is rather a Multiple
Award Contract.
Second, because this solicitation is a Multiple Award
Contract and not a MAS contract, the regulation that applies is
set forth at 13 C.F.R. Section 121.1004(a)(2). Thus, the five-day
period for filing timely protests begins from the date the
contract was awarded initially on May 2, 2002.
Finally, AMA asserts the Area Office and this Office should
ignore the fact that AMA was acquired by SAIC before award of the
Task Order. AMA asserts SBA has a longstanding policy to allow a
concern that qualified as a small business at the time it
received a contract to be so considered throughout the life of
that contract.
On May 24, 2004, Appellant amended its motion requesting
permission to file a reply to AMA's response, pursuant to 13
C.F.R Section 134.309(d). Appellant represented to the
Administrative Judge that AMA would not oppose the filing of a
reply. On May 27, 2004, the Administrative Judge granted
Appellant permission to file a reply
.
On May 27, 2004, Appellant filed its reply to AMA's
response. Appellant reiterates its principal assertion made in
its appeal that its protest was timely because it is from the
date of the notification of the identity of the Task Order
awardee -- April 5, 2004 -- that the period for filing a timely
protest begins. This is consistent with 13 C.F.R. Section
121.1004(a)(2).
Appellant also references the new revised size regulations
which change the "longstanding" policy cited by AMA in its
response, supra, that a small business remains small during the
lifetime of a contract. Under the revised size regulations, which
will take effect June 21, 2004, if a small business is acquired
by another concern during the contract performance, the new
entity must submit a written self-certification that it is still
small.
Discussion
Appellant filed the instant appeal within 15 days of
receiving the size determination and, thus, the appeal is timely.
13 C.F.R. Section 134.304(a)(1). Even though the appeal is
timely, the Administrative Judge must deny it.
As a threshold matter, the Administrative Judge EXCLUDES
from this record Appellant's proffered new evidence contained in
Exhibits C and D. The Administrative Judge will not consider
evidence Appellant failed to present to the Area Office unless
she orders it presented or a motion is served establishing good
cause for the submission; neither event occurred here. 13 C.F.R.
Section 134.308(a); Size Appeal of Advanced Technologies and
Laboratories International, Inc., SBA No. SIZ-4484 (2002)
.
Appellant has the burden of proving, by a preponderance of
the evidence, all the elements of its appeal. Specifically, it
must prove the size determination is based on a clear error of
fact or law. 13 C.F.R. Section 134.314; Size Appeal of General
Maintenance Engineering, Inc., SBA No. SIZ-4405 (2000). An
examination of the record demonstrates Appellant has failed to
carry its burden.
Appellant's dependence on 13 C.F.R. Section 121.1004(a)(3)
is without merit. It is clear from the record that this is not a
MAS contract, governed by Subpart 8.4 and Part 38 of the Federal
Acquisition Regulation (FAR), but an IDIQ Multiple Award
Contract. Therefore, Appellant's arguments to the contrary, 13
C.F.R. Section 121.1004 (a)(3) does not apply. Size Appeal of
Aquasis Services, Inc., SBA No. SIZ-4444, at 2 (2001).
Similarly, Appellant's alternate assertion that its protest
was timely under 13 C.F.R. Section 121.1004(a)(2) is misplaced.
Appellant states it filed its protest on April 8, 2004, three
days within notification of the award on April 5, 2004. Thus, its
protest was timely under that regulation.
The record demonstrates that the March 16th Task Order is
not a new contract, but a Task Order under the original IDIQ
contract. Moreover, the CO did not request new self-
certifications for the Task Order. The principal issue here --
one of first impression -- is at what point can a protest be
filed timely under a IDIQ Multiple Award Contract when a Task
Order is issued at some point during the existence of the
contract. Because there is no specific SBA regulation or caselaw
governing Task Orders under IDIQ contracts, the Administrative
Judge agrees with the Area Office that a size protest may be
filed timely only in accordance with the five-day rule for
negotiated contracts at 13 C.F.R. Section 121.1004(a)(2), at the
time the original contracts were awarded. Here, the 5-day protest
time frame begins on May 2, 2002. [4] Because the instant
protests were filed on April 8, 2004, they were clearly untimely.
Generally, the SBA determines the size status of a business
concern at the time the concern, including its affiliates,
submits a written self-certification to the procuring agency that
it is small as part of its initial offer, including price. 13
C.F.R. Section 121.404.
The record demonstrates that the four vendors, including
Appellant, self-certified sometime in June, 2001. At the time of
the original self-certification, AMA was small and became large
when SAIC acquired it. Nonetheless, SBA's current size
regulations do not prevent the CO from awarding the instant Task
Order to SAIC/AMA at this time, albeit AMA is now large. SBA has
issued new size regulations effective June 21, 2004, that may
change the current rules on situations similar to the one here;
regardless, as of now, SAIC/AMA is eligible for award.
In conclusion, the Administrative Judge finds that Appellant
has failed to meet its burden of demonstrating error in the Area
Office's dismissal of the protests, and AFFIRMS the dismissals.
Conclusion
For the above reasons, the Administrative Judge AFFIRMS the
Area Office's dismissal of the protests 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
_________________________
1 Effective February 22, 2002, the SBA raised the size
standard for NAICS code 541330 to $23 million. 67 Fed. Reg. 3041,
3052 (Jan. 23, 2002). However, because the CO issued the
solicitation for the underlying IDIQ contract before the
effective date of this rule, the prior size standard applies.
2 The task order is for management support services for the
Weapon and Vehicles Systems PAD and Customer Advocacy Group.
3 MRC's request letter was not enclosed in the Area Office
file.
4 While both parties cited some case law, none is apposite.
Posted: June, 2004