Cygnus Corporation, No. 3575 (February 5, 1992) Docket No. SIC-91-12-3-151 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. 20416 SIC APPEAL OF: ) ) Cygnus Corporation ) ) Appellant ) ) ) Docket No. SIC-91-12-3-151 Solicitation No. ) NIH-NIAID-OD-92-11 ) Department of Health and ) Human Services ) National Institutes of Health ) Bethesda, Maryland ) DIGEST A solicitation for "publishing support" for a government research effort, which describes six tasks including editing and publishing, academic research and organization of conferences, but which specifies that 75 percent of the effort will be devoted to "publishing and publishing-related tasks" will be classified under SIC code 2741, Miscellaneous Publishing. DECISION February 5, 1992 PHILLIPS, Administrative Judge, Presiding: Jurisdiction This appeal is resolved in accordance with the Small Business Act of 1958, 15 U.S.C. 631 et. sea., and the regulations published at 13-CFR Part 121. Issue Whether the solicitation should be classified under Standard Industrial Classification (SIC) codes 2741, 8741, 8742 or 8748. Facts On November 21, 1991, the National Institutes of Health issued Solicitation No. (RFP)NIH-NIAID-OD-92-11 for "Publishing Support for the Office of the Director of the National Institute of Allergy and Infectious Diseases" (NIAID) as a small business set aside under SIC code 2741, Miscellaneous Publishing, to which a 500-employee size standard applies. The date for submitting proposals was subsequently extended to January 31, 1992, but on December 3, 1991, Cygnus Corporation (Cygnus) filed a timely SIC appeal contending as follows: The 2741 SIC Code applies to organizations engaged in the printing, publishing, and allied industries, specifically in the printing and publishing of material for wide distribution to large populations of consumers. The procurement under question merely provides for the preparation of research, planning, and program reports, including facilitating the printing of these reports by the NIH Printing facility and/or the Government Printing Office. In addition, these reports are primarily for the internal use of NIAID personnel. The 2741 SIC Code presumes that the publishing and distribution activity is the primary activity or end product of the contract work, i.e., a publisher, which is not the case with the proposed contract effort. Moreover, this activity is only one of five management services that are to be performed under the proposed contract. Analysis, written inquiries, conference management, and logistical support services such as technical assistance and training for computer-related activities are also included. Cygnus suggests several other SIC code classifications, all of which bear a $3.5 million average annual receipts size standard: SIC code 8741, Management Services; SIC code 8742, Management Consulting Services; and SIC code 8748, Business Consulting Services, Not Elsewhere Classified. Cygnus contends as follows in support of these alternative designations: These SIC Codes are currently applied to similar contracts with other Institutes at NIH. For example, a recently issued procurement (RFP No. NCI-CP-21030-13) from the Division of Cancer Etiology, National Cancer Institute, to provide conference management, report documentation, and graphics support has the SIC Code of 8742. In addition, a contract with the Division of Cancer Biology, Diagnosis, and Centers, National Cancer Institute, to provide editorial services, annual report preparation, conference management, data management, data management [sic], miscellaneous support such as graphics and publication distribution, and records management has the SIC Code of 8741. The Statement of Work describes the following six areas of responsibility and tasks to be performed within those areas, all in support of NIAID, whose mission is the conduct and support of research, training, health information dissemination, and the conduct of other programs concerning allergic and immunologic diseases and disorders and infectious diseases: I. PROVIDE WRITING. EDITING AND PUBLISHING SUPPORT A. The Contractor shall write, edit and prepare research reports on topics specified by the Project Officer and designated NIAID staff.... Tasks may include: 1. report writing and editing-support may be limited to typing and editing of recorded, handwritten, or draft typed materials, but also may extend to all stages of development including original writing, design, preparation of multi-media graphics and publishing; and 2. publishing, outlining and formatting reports, desk- top publishing, providing camera-ready copy for reproduction, etc. These activities may also include advising and suggesting alternative modes to display information, coordinating and writing of portions of various contributors; preparing art work; editing, typing and distributing drafts; collating comments on drafts; providing revised drafts through several review cycles; designing covers, typing the report in final form, duplicating a limited number of copies, and providing camera-ready copy to vendor(s) and/or the Government Printing Office (GPO) for publishing and printing. Editorial support may include condensing, synthesizing and rewriting reports, manuscripts, narratives to provide a final draft for the Project Officer's review. Support may also include basic copy editing for correct grammar and clarity.... II. PROVIDE ANALYSIS SUPPORT The NIAID will require support for a variety of analytic tasks. The results of all analysis services provided will be included in the published documents referenced in Task I. Since the number and exact nature of the analytic support services cannot be totally defined at this time, proposal approaches shall be developed based on the following types of tasks: A. Information Collection and Analysis The Contractor shall provide assistance in the collection of a variety of secondary sources of information on scientific activities, findings, and accomplishments; biomedical research and development; cost of health services and clinical trials; health services utilization; and manpower-related and epidemiologic studies.... Analysis of the information will include synthesis, statistical comparisons, and interpretation for publication and the preparation of studies and special reports. B. Analytic Development The Contractor shall provide support for the development and usage of analytic techniques. For example, the Contractor may be asked to develop an epidemiological/cost of a given disease to help analyze NIAID's research portfolio relative to minorities and women. The Contractor will assist in the synthesis, analysis, and interpretation of this information for publication and the preparation of special reports and studies. C. Methods/Techniques Development The Contractor shall develop and apply certain methodologies or special analytic techniques to help examine and analyze specific complex program issues for publication and the preparation of special studies and reports. For example, the Contractor may be asked to develop or perform survey analysis, case-studies analysis, cost-benefit analysis, systems analysis, bibliometrics, and meta-analysis on program issues of interest to NIAID. D. Analytic Studies/Reports Development The Contractor shall publish short-turn around (two-four weeks) and long-term (up to six months) analytic studies designed to examine and answer specific analytic questions.... E. Presentation of Analytic Materials The Contractor shall produce a variety of charts and graphics, in a short-turn around time, to support internal or external analysis for presentation and publishing purposes. III. PROVIDE WRITTEN INQUIRIES SUPPORT A. The Contractor shall be responsible for preparing responses to correspondence regarding NIAID research programs IV. PROVIDE PUBLISHING SERVICES IN SUPPORT OF MEETINGS AND CONFERENCES A. The rapid expansion and evolving nature of infectious and immune-mediated diseases related research necessitates holding a wide range of meetings and conferences each year. The Contractor shall be responsible for preparing premeeting materials minutes, summaries or proceedings of each meeting. Specifically, the Contractor shall: 1. Provide, as requested by the Project Officer, premeeting materials such as notebooks and background briefing materials. It is estimated that there will be approximately 68 premeeting notebooks prepared, varying from 50-200 pages each. 2. Provide, as requested by the Project Officer, a high quality tape recording system and a meeting reporter to ensure the preparation of high-quality transcriptions. 3. Provide, as requested by the Project Officer, secretarial support at meetings to type, proofread, and copy materials from one session for discussion at following sessions. 4. Provide, as requested by the Project Officer, draft minutes, action items, summaries or proceedings of all meetings.... It is estimated that there will be 2-3 meetings required. 5. Provide, as requested by the Project Officer, meeting minutes, summaries or proceedings, which may be highly scientific and narrowly focused or address broad areas of NIAID research, in final publishing form. It is estimated that there will be 2-3 meeting reports published. B. Provide planning, technical, and logistical support for approximately 12 scientific meetings, conferences and workshops per year, specifically: 1. Assistance in Selecting Participants.... 2. Site Selection and Reservation.... 3. Meeting-Participant Travel.... 4. Meeting Room Arrangements.... 5. Letters of Invitation and other Communications with Attendees.... 6. [Collection of] Registration Fees and Materials.... 7. Post-meeting\Conference Services.... (a) The Contractor shall prepare and submit to the Project Officer, within 10 working days following the conclusion of each meeting a final task report.... (b) The Contractor shall prepare and distribute to participants all post-conference publications and materials, as required by Project Officer. V. PROVIDE LOGISTICAL SUPPORT A. Provide support on a task-by-task basis and request for service made by the Project Officer. Program request will be made Specific as to services, deliverables and schedule. The following defines appropriate scope and efforts which may include, but not to be limited to, the following: 1. Technical assistance services including user-support, and preparation of user training manuals, feasibility studies and documentation 2. Technical services in support of NIAID processes and communication links.... 3. Planning and logistical support for analysis, design and/or modification of existing information storage and retrieval.... 4. Documentation, customized training, training and technical materials, adaptation and other allied tasks to assist program staff in using office equipment, networks and telecommunications and mainframe systems.... 5. Technical services in support of recording extramural grant information and planning and reporting for the management of NIAID information.... B. Mailing Lists.... VI. PROVIDE MANAGEMENT AND ADMINISTRATION SUPPORT A. The Contractor shall provide a project director/manager for the period of performance of this contract who shall serve as the principal point of contact with the Government and who shall be responsible for preparing reports and plans, supervising project staff and consultants, issuing assignments, monitoring contract progress, providing deliverables and maintaining budget control. B. The Contractor shall establish a multidisciplinary staff and available consultants with demonstrated skills in : writing, editing and miscellaneous publishing support services; analysis; preparing responses to written inquiries; preparing minutes, summaries and/or proceedings of scientific meetings, conferences and workshops; planning, coordinating and conducting meetings, conferences and scientific workshops; and preparing technical manuals and providing technical assistance as required by the Project Officer. The Contractor shall assign subject area consultants to perform scientific report and correspondence writing.... * * * * * * * G. The Contractor shall provide graphic, design, and miscellaneous publishing support and production for tasks requiring less than normal turnaround time (3 working days). These activities shall include graphic and design needs for document publishing support (as identified in Task I) and slide, poster and chart preparations for NIAID scientific meetings, conferences and workshops (as identified in Task IV).... At page 5a of the solicitation the contracting agency identifies the following levels of effort required for performance of the contract: The level of effort set forth below is for guidance to service not as a measure of the Contractor's obligation, but as a further description of the required tasks or products. It represents the use by both the Government and the Contractor to monitor progress of the manner of performance toward achievement of the contract objectives. Labor Category percentage of effort Per Year 1/ Project Director 100% 100% 100% 100% 100% Senior Analyst 15% 15% 15% 15% 15% Analyst Programmer 100% 100% 100% 100% 100% Senior Writer 30% 30% 30% 30% 30% Researcher 10% 10% 10% 10% 10% Senior Conference Coordinator 15% 15% 15% 15% 15% Senior Graphic Artist 20% 20% 20% 20% 20% Administrative Support 45% 45% 45% 45% 45% The solicitation contains a note at the bottom of page 5a stating as follows: NOTE TO OFFEROR: The Government estimates that approximately 75% of the effort listed in the above Percentage of Effort will be devoted to Publishing and Publishing-related tasks. The Proposal Evaluation Criteria section of the solicitation states that the "technical portion of the proposal will be the most important single consideration in the award of the contract" and assigns the following "weights" to the four factors to be used in evaluating an offeror's technical proposal. 30 points: "Technical Approach," including understanding importance and complexity of contract tasks, adequacy of management plan and priority to be accorded with respect to other contractual commitments. 30 points: "Personnel," emphasizing managerial competence and time commitments. 30 points: "Organizational Expertise," emphasizing efficiency regarding compliance with task schedules. 10 points: "Facilities and Equipment," specifying the following "minimum resources": duplicating equipment, facsimile machine, mailing equipment, word processing equipment, desk top publishing and a "moderate sized conference room." Discussion The regulations governing the assignment to government procurements of SIC codes and accompanying size standards are set forth in 13 CFR 121.902(b) and provide as follows: The proper SIC code designation for the goods or services being procured is that which best describes the principal purpose of the procurement, giving primary consideration to the industry descriptions in the SIC Manual, the product or service description in the solicitation and the attachments thereto, the relative value and importance of each of the components in the procurement (if in fact there is more than one component which makes up the end item being procured) and the function of the goods or services being purchased. Consideration may also 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 procured, and to evaluations on which industry classification would best serve the purposes of the Small Business Act. Generally a procurement will be classified according to the component which accounts for the greatest percentage of the contract value. A contracting officer must have a good reason to classify a procurement in a way that is inconsistent with this general rule. The solicitation at issue covers six task areas: writing, editing, formatting, preparing art work, and "providing camera ready copy" for research reports to be printed by other vendors or by the Government Printing Office; performing information collection and analysis as well as presenting results in charts and graphics necessary to the writing and publication of these research reports; preparing written responses to pertinent inquiries on such research; planning and coordinating approximately 12 scientific meetings and conferences each year; preparing preconference and post conference publications to be distributed to conference participants; and maintaining certain data bases and assisting NIH staff in their use. Task VI, entitled "Provide Management and Administration Support," specifies that the contractor's staff be "multidisciplinary," identifies the experience necessary for performing the above-enumerated functions, such as publishing and organizational expertise, and requires that the contractor "assign subject area consultants to perform scientific report and correspondence writing." Thus, although the scientific subject matter of the reports suggests a level of effort and an expertise well beyond that involved in publishing, it is clear that the tasks to be performed by the contractor focus on the organization and presentation of informational materials rather than on their content, per se, the latter of which is primarily the responsi bility of the contracting agency. This fact and the relative importance of other contract tasks are reflected in the lesser levels of effort anticipated for such contract personnel as the "researcher" and the "senior conference coordinator," identified on page 5a, and reinforced by the advisory note on page 5a stating that "approximately 75% of the effort...will be devoted to Publishing and Publishing-related tasks." Thus, this solicitation is clearly distinguishable from ostensibly similar solicitations involving technical writing which we have previously classified under more substantively-oriented SIC codes based on our finding that the nature of the materials to be produced required engineering or other technical expertise. 2/ It is also clearly distinguishable from the solicitation at issue in SIC Appeal of Technical Resources. Inc., No. 3265 (1990), which we classified under SIC code 8748, Business Consulting Services, Not Elsewhere Classified, because it required the contractor, inter alia, to develop reports and documents, provide transcription services and organize meetings conducted by the National Cancer Institute and because it necessitated that contractor staff be knowledgeable in biomedical research data. The Contracting Officer has classified the solicitation under SIC code 2741, Miscellaneous Publishing, to which a 500-employee size standard applies. SIC code 2741 is described as follows in the Standard Industrial Classification Manual, 1987 ed.: Establishments primarily engaged in miscellaneous publishing activities, not elsewhere classified, whether or not engaged in printing. Establishments primarily engaged in offering financial, credit, or other business services, and which may publish directories as part of this service, are classified in Division I, Services. Atlases: publishing and printing, or publishing only Business services newsletters: publishing and printing, or publishing only Calendars: publishing and printing, or publishing only Catalogs: publishing and printing, or publishing only Directories: publishing and printing, or publishing only Globe covers (maps): publishing and printing, or publishing only Guides: publishing and printing, or publishing only Maps: publishing and printing, or publishing only Micropublishing Multimedia educational kits: publishing And printing, or publishing only Music, Sheet: publishing and printing, or publishing only Patterns, paper, including clothing patterns: publishing and printing, or publishing only Race track programs: publishing and printing, or publishing only Racing forms: publishing and printing, or publishing only Shopping news: publishing and printing, or publishing only Technical manuals and papers: publishing and printing, or publishing only Telephone directories: publishing and printing, or publishing only Yearbooks: publishing and printing, or publishing only The SIC codes suggested by Cygunus are described in the Manual as follows: 8741 Management Services Establishments primarily engaged in furnishing general or specialized management services on a day to day basis on a contract or fee basis. Establishments in this industry do not provide operating staff. Management and operation of business, where operating staff as well as management is provided, is classified according to the activity of the establishment managed. Administrative management services Business management services Circuit management services for motion Picture theaters Construction management Motel management services Office management services 8742 Management Consulting Services 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 8748 Business Consulting Services. Not Elsewhere Classified 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 Acknowledging the scope and nature of tasks described in the solicitation but conceding that the solicitation, by its terms, specifies that approximately 75 percent of the contractor's effort be directed to those tasks constituting publishing (as opposed to printing), and noting that "Technical manuals and papers: publishing and printing, or publishing only" is listed as an example under SIC code 2471, we agree with the Contracting Officer that the solicitation should be so classified. Conclusion The Contracting Officer's classification is AFFIRMED; the appeal is DENIED. This constitutes the final decision of the Small Business Administration. See 13 CFR 121.1720. ____________________________________ Jane E. Phillips (Presiding) Administrative Judge _____________________________________ Gloria E Blazsik(Concurring) Administrative Judge _____________________________________ G. Stephen Wright (Concurring) Administrative Judge ______________ 1/ The contract at issue is for a base year and four option years. 2/ SIC Appeal of Applied Technical Systems Inc., No. 2382 (1986), SIC Appeal of Information Resources. Inc., No. 2204 (1985) and Size Appeal of RYCO Engineering. Inc., No. 285 (1968).