Marine Design Technologies, Inc., No. 2925 (August 1, 1988) Docket No.SIC-88-6-28-85 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. 20416 SIC APPEAL OF: ) ) Marine Design Technologies, Inc., ) ) Appellant ) Docket No.SIC-88-6-28-85 ) Solicitation No. ) F04606-88-R-15065 ) Department of the Air Force ) McClellan AFB, California ) DIGEST The production of engineering drawings is a service, not a manufacturing function, and the correct Standard Industrial Classification (SIC) code is 7389. DECISION August 1, 1988 ANDRETTA, Administrative Judge, Presiding: Jurisdiction This appeal of a service classification is decided pursuant to the Small Business Act of 1958, 15 U.S.C. 632 et seq., and the regulations codified at 13 CFR Part 121. Issue What is the correct SIC code for redrawing engineering drawings? Facts On May 2, 1988, the Directorate of Contracting and Manufacturing at McClellan Air Force Base, California, issued the above-cited solicitation for provision of new originals of 148 engineering drawings. The solicitation was set aside for small business and classified under Standard Industrial Classification (SIC) code 3663 (Radio and Television Broadcasting and Communications Equipment), which bears a size standard of 750 employees. This means that, to be qualified for the solicitation, a concern and any affiliates may not employ a total of more than 750 employees. Bid closing was set for July 7, 1988. On June 20, 1988, Appellant Marine Design Technologies, Inc. (MDT) filed this appeal of the service classification. MDT states, in pertinent part: Marine Design Technologies, Inc. (MDT) believes that this SIC and size assignment are incorrect as SIC 3663 is for "Radio and TV Communications Systems and Equipment, and Broadcast and Studio Equipment". The subject solicitation does not procure equipment of any kind but does seek to procure engineering services. MDT believes that the proper SIC is 8711 and the proper size standard is $2.5 million. On July 12, 1988, the Contracting Officer (KO) filed her response to the appeal with supporting evidence. The KO explains that the requirement is for redrawing readable duplicate drawings for the Defense Meteorological Satellite Program (DMSP) that were originally procured as part of the acquisition of the major system, but are now of poor quality. Since Congress appropriates money designated for a specific system, and the drawings are part of the DMISP system, the KO asserts that procurement of the replacement drawings should be classified under the same SIC code as procurement of the original total system; i.e., SIC code 3663. The KO further states that Appellant's suggested SIC code, 8711 (Engineering Services), is incorrect because it is part of major group 87, which includes architectural and other engineering services. The KO maintains that no engineering effort is called for in this solicitation because redrawing, as opposed to original drawing, requires no engineering effort "to change form, fit, or function." The KO also notes that concerns which do perform engineering services that require expertise are not excluded from this solicitation. Rather, her point is that such expertise is simply not a criterion. Appellant made no additional statements. Discussion SIC code 3663, which was assigned to the solicitation by the KO, is described in the Standard Industrial Classification Manual (Manual) l/ as follow (not all examples are listed): 3663 Radio and Television Broadcasting and Communications Equipment Establishments primarily engaged in manufacturing radio and television broadcasting and communications equipment. Important products of this industry are closed-circuit and cable television equipment; studio equipment; light communications equipment; transmitters, transceivers and receivers (except household and automotive); cellular radio telephones; communication antennas; receivers; RF power amplifiers; and fixed and mobile radio systems. Establishments primarily engaged in manufacturing household audio and video equipment are classified in Industry 3651; those manufacturing intercommunications equipment are classified in Industry 3669; and those manufacturing consumer radio and television receiving antennas are classified in Industry 3679. Airborne radio communications equipment Antennas, transmitting and communications Broadcast equipment (including studio), radio and television Carrier equipment, radio communications Cellular radio telephones Digital encoders Encryption devices Marine radio communications equipment Microwave communications equipment Phototransmission equipment Radio transmitting and communications antennas and ground equipment Receivers, radio communications Satellites, communications Space satellite communications equipment Telemetering equipment, electronic Television transmitting antennas and ground equipment Transceivers Transmitting apparatus, radio and television SIC code 8711, which is advocated by Appellant, is described in the Manual as follows: 8711 Engineering Services Establishments primarily engaged in providing professional engineering services. Establishments primarily providing and supervising their own engineering staff on temporary contract to other firms are included in this industry. Establishments providing engineering personnel, but not general supervision, are classified in Industry 7363. Establishments primarily engaged in providing architectural engineering services are classified in Industry 8712, and those providing photogrammetric engineering services are classified in Industry 8713. Designing: ship, boat, and machine Engineering services: industrial, civil, electrical, mechanical, petroleum, marine, and design Machine tool designers Marine engineering services Petroleum engineering services SIC code 3663 is a manufacturing classification. The description states that it is used to classify "establishments primarily engaged in manufacturing radio and television broadcasting equipment." We don't doubt, but do not here decide, that it is the appropriate SIC code for classification of the DMSP system procurement, including the drawings. However, nothing is to be manufactured under this solicitation, 2/ even though the produced drawings will be, as the KO says, "deliverable" items. We agree with Appellant that the solicitation seeks to procure a service; i.e., the redrawing of drawings. The description of SIC code 8711 and its examples, however, call for a level of creative engineering service (design) which is not necessary to this solicitation. The KO states that only redrawing is needed, and implies that this can be done by a draftsman competent to copy designs already created by another. Such work is included in the description and examples for SIC code 7389, not all of which are listed: 7389 Business Services, Not Elsewhere Classified Establishments primarily engaged in furnishing business services, not elsewhere classified, such as bondspersons, drafting services, lecture bureaus, notaries public, sign painting, speakers' bureaus, water softening services, and auctioneering services, on a commission or fee basis. Auctions of used cars and agricultural commodities, such as livestock and produce, are classified in Wholesale Trade. Appraisers, except real estate appraisers Batik work (handprinting on textiles) Bronzing baby shoes Cloth: cutting to length, bolting, or winding for textile distributors Correct time service Decoration service for special events Diver, commercial Drafting service, except temporary help Embroidering of advertising on shirts, etc. Engrossing, e.g., diplomas and resolutions Exhibits, building of: by industrial contractors Floats, decoration of Folding and refolding service: textiles and apparel Gas systems, contract conversion from manufactured to natural gas Handwriting analysis Interior decorating consulting services except painters and paperhangers Labeling bottles, cans, cartons, etc. for the trade: not printing Laminating of photographs (coating photographs with plastics) Lettering service Mannequin decorating service Map drafting service Mapmaking, including serial Metal slitting and shearing on a contract or fee basis Microfilm recording and developing service Mounting merchandise on cards on a contract or fee basis Packaging and labeling service (not packing and crating) Photogrammetric mapping service (not professional engineers) Photographic library service, still Printed circuitry graphic layout Radio broadcasting music checkers Radio transcription service Recording studios on a contract or fee basis Rug binding for the trade Scrap steel cutting on a contract or fee basis Showcard painting Shrinking textiles for tailors and dressmakers Sign painting and lettering shops Sponging textiles for tailors and dressmakers Styling of fashions, apparel, furniture, and textiles Styling wigs for the trade Tape slitting for the trade (cutting plastics, leather, etc. into widths) All of the above examples suggest the application of professional expertise that falls short of creative design. The examples also specifically include drafting services. Accordingly, we conclude that this is the most appropriate SIC code for classification of the solicitation. Conclusion The appeal is GRANTED. For the reasons stated, the Contracting officer's classification is MODIFIED by substituting SIC code 7389, with a size standard of $3.5 million, for SIC code 3663 as the classification of the McClellan Air Force Base solicitation. This constitutes the final decision of the Small Business Administration. See 13 CFR 121.11(t), (u) and (v). Robert A. Andretta (Presiding) Administrative Judge Gloria E. Blazsik (Concurring) Administrative Judge Jane E. Phillips (Concurring) Administrative Judge __________________ 1/ Office of Management and Budget, 1987 edition. 2/ SBA regulations codified at 13 CFR 121.5(b)(2)(i) define the manufacturer of the end item to be procured as "the concern which, with its own forces, transforms inorganic or organic substances including raw materials and/or miscellaneous parts or components into such end items."