Jack Faucett Associates, 3240 (January 4, 1990) Docket No. SIC-89-9-29-128 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. 20416 SIC APPEAL OF: ) ) Jack Faucett Associates ) ) Appellant ) ) Docket No.SIC-89-9-29-128 Solicitation No. D901834M1 ) Environmental Protection ) Agency ) Research Triangle Park, ) North Carolina ) DIGEST A solicitation seeking the services of a consultant to implement a management tool established by the procuring agency should be classified under SIC code 8742, "Management Consulting Services." DECISION January 4, 1990 PHILLIPS, Administrative Judge, Presiding: Jurisdiction This appeal is resolved in accordance with 15 U.S.C. 632 and the regulations published at 13 CFR 121, 48 Fed. Req. 55832, 49 Fed. Reg. 5024 and the amendments thereto. Issue Whether the solicitation should be classified under Standard Industrial Classification (SIC) code 8731 or under SIC codes 8732, 8742 or 8748, as suggested by Appellant. Facts On September 18, 1989, the Environmental Protection Agency issued, as a small business set aside, Solicitation No. (RFP) D901834M1 for technical support for its National Program Offices (NPO) and for its Office of Research and Development (ORD) organizations in their application of the "Data Quality Objectives" [DQO] process. The Statement of Work lists the following "typical activities to be carried out" by the contractor: A) Assistance in the establishment of [NPO and] ORD specific technical guidance and procedures applicable rto the Data Quality Objectives process. B) Exploration of the relationships between DQO's and related research-oriented concepts such as experimental design and peer review. C) Management/coordination/facilitation of the DQO process for specific [NPO and] ORD data collection projects. D) Direct technical advice and statistically-based design analyses in support of specific [NPO and] ORD data collection projects. E) Technical review of DQO outputs provided by [NPO and] ORD organizations, and feedback to support the [NPO and] ORD organization in completion of the DQO development. F) Training in DQO implementation issues provided directly to [NPO and] ORD staff. G) Assistance to the Quality Assurance Management Staff in support of its DQO implementation efforts in the [NPO and] Office of Research and Development. H) Provide guidance on the status of DQO institutionalization in the Agency, and advice on the best Agency-wide strategies and approaches for meeting the DQO- related needs of [NPO and] ORD. The Contracting Officer classified this small business set aside under SIC code 8731, "Commercial Physical and Biological Research," to which a 500-employee size standard applies. Proposals were due on November 2, 1989. On September 27, 1989, Jack Faucett Associates (Faucett) filed a timely appeal of the Contracting Officer's classification, contending as follows: We find no evidence in the enclosed statement of work that the proposed procurement involves the provision of physical or biological research. Based on the statement of work, we believe the procurement should be classified in either SIC 8732, Commercial Economic, Sociological, and Educational Research (which includes economic, business and market research); SIC 8742, Management Consulting Services (which includes operations research, physical distribution consultants, management engineering consultants, and management information systems consultants); or SIC 8748, Business Consulting Services, N.E.C. (which includes economic consulting, systems engineering consulting, and traffic consultants). The size standard for these SICs is $3.5 million. Award of the contract is pending. Discussion The size regulations provide as follows at 13 CFR 121.5(b)(1) concerning selection of the proper SIC code for a solicitation: The procurement is classified for size standard purposes in the most appropriate SIC code industry category (121.2); giving consideration to the industry description in the regulation and the SIC Manual, the product or service description in the solicitation and attachments thereto, the relative value of items in the procurement and the principal nature of the procurement. In borderline cases, consideration may be given to previous Government procurement classifications of the same or similar products or services, additional information on the industries and on the product or service being procured, and to evaluations on which industry classification would best serve the purposes of the Small Business Act. SIC code 8731, selected by the Contracting Officer, is described, in pertinent part, as follows in the Standard Industrial Classification Manual, 1987 edition, issued by the Office of Management and Budget: Commercial Physical and Biological Research Establishments primarily engaged in commercial physical and biological research and development on a contract or fee basis. Agricultural research, commercial Biological research, commercial Chemical laboratories, commercial research: except testing Engineering laboratories, commercial research: except testing Food research, commercial Industrial laboratories, commercial research: except testing Physical research, commercial Research and development, physical and biological: commercial It is clear from the statement of work that the activities to be performed under the contract do not constitute "'test tube' research and analysis" 1/ to be performed in a "typical laboratory setting." 2/ Thus, the Contracting Officer's selection of SIC code 8731, "Commercial Physical and Biological Research," must be rejected. See, Size Appeal of Jack Faucett Associates, No. 2893 (1988). SIC codes 8732, 8742 and 8748, advocated by Faucett, are described, in pertinent part, as follows, respectively: Commercial Economic Sociological and Educational Research [8732] Establishments primary engaged in performing commercial business, marketing, opinion, and other economic, sociological, and educational research on a contract or fee basis. Business economists, commercial Business research, commercial Economic research, commercial Educational research, commercial Market research, commercial Opinion research, commercial Research: economic, sociological, and educational-commercial Sociological research, commercial Management Consulting Services [8742] Establishments primarily engaged in furnishing operating counsel and assistance to managements of private, nonprofit, and public organizations. These establishments generally perform a variety of activities, such as strategic and organizational planning; financial planning and budgeting; marketing objectives and policies; information systems planning, evaluation and selection; human resource policies and practices planning; and production scheduling and control planning. These establishments are characterized by the breadth and scope of the problems they address. Administrative management consultants General management consultants Human resource consultants Management engineering consultants Management information systems consultants Manufacturing management consultants Marketing consultants Operations research consultants Personnel management consultants, except employment service Physical distribution consultants Site location consultants Business Consulting Services. Not Elsewhere Classified [8748] Establishments primarily engaged in furnishing business consulting services, not elsewhere classified, on a contract or fee basis. Agricultural consulting City planners, except professional engineering Economic consulting Educational consulting, except management Industrial development planning service, commercial Radio consultants Systems engineering consulting, except professional engineering or computer related Test development and evaluation service, educational or personnel Testing services, educational or personnel Traffic consultants The solicitation at issue requires the contractor to implement EPA's Data Quality Objectives process and, as such, does not involve the research function which characterizes SIC code 8732. As an aid to implementing an Agency-developed management tool for data quality, the contractor's duties are encompassed by SIC code 8742 "Management Consulting Services," obviating recourse to the catch-all code, 8748. In consequence, the $3.5 million average annual receipts size standard, not the 500-employee size standard, applies to the solicitation. Conclusion The solicitation should be classified under SIC code 8742 and the $3.5 million average annual receipts size standard. The Contracting Officer's designation to the contrary is REVERSED. This constitutes the final decision of the Small Business Administration. See 13 CFR 121.11(t), (u) and (v). ________________________________ Jane E. Phillips (Presiding) Administrative Judge _________________________________ Gloria E. Blazsik (Concurring) Administrative Judge __________________________________ Benjamin G. Usher (Concurring) Administrative Judge ______________ 1/ SIC Appeal of Jack Faucett Associates, No. 2672 (1987). 2/ SIC Appeal of CSR, Incorporated, No. 1910 (1984).