RAI, No. 3808 (July 30, 1993), Docket No. SIC-93-6-16-70 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. SIC APPEAL OF: ) ) RAI ) ) Appellant ) ) Docket No. SIC-93-6-16-70 Solicitation No. ) JXJMD93-R-0029 ) U.S. Department of Justice ) Procurement Service Staff ) Washington, D.C. ) DIGEST A procurement for the operation of the Department of Justice's main and satellite mailrooms, requiring a variety of mail, messenger, and staff support services which predominantly involve mail processing and delivery functions for letters, parcels and packages is appropriately classified under SIC code 4215, Courier Services, Except by Air, with a size standard of $12.5 million in average annual receipts, rather than under SIC code 8744, Facilities Management, with a $3.5 million size standard. DECISION July 30, 1993 COLE, Administrative Judge, Presiding: Jurisdiction This appeal is decided under the Small Business Act of 1958, 15 U.S.C. S631 et seq., and the regulations codified at 13 CFR Part 121. Issue Whether the Standard Industrial Classification (SIC) code 4215, designated by the Contracting Officer for this procurement, was in error. Facts On June 4, 1993, the United States Department of Justice (DOJ), Procurement Service Staff, Washington, D.C., issued the captioned Request For Proposal (RFP) for the operation of its main and (10) satellite mailrooms. The procurement is a total small business set aside, and was classified under Standard Industrial Classification (SIC) code 4215, "Courier Services, Except by Air," with a size standard of $12.5 million in average annual receipts. Proposals were originally due by July 6, 1993. By letter postmarked June 11, 1993, RAI (Appellant) filed a timely appeal with the Office of Hearings and Appeals (OHA), contesting the SIC code designated by the Contracting Officer, and arguing that "Facilities Management," under SIC code 8744, is a more appropriate classification, with a size standard of $3.5 million. The Appellant contends, in pertinent part: According to the pricing schedule for the current solicitation the percentage of billings for courier/messenger services totals less than 20%. The remaining 80% is for mailing service, maintaining files, truck driving, warehousing, photocopying, and general labor. These are all found under SIC Code 8744.... The services called for by the Statement of Work are broad ranging...For example the pricing schedule calls for labor categories of mail clerks and forklift operators two distinctly different classes of service employees involved in two distinctly different natures of work. Rather than analyze each of the many services called for in the RFP, we assert that the agency is seeking the overall management of several mail facilities, staffing and operation of several mail facilities. Under no reasonable definition is this a messenger and courier services contract. In fact the services called for in the RFP appear to be archetypical services described in SIC Code 8744.... After quoting the definition of "Facilities Management" set forth at note 19 to 13 CFR 121.601, the Appellant cites our decisions in SIC Appeal of Proteus Corporation. Inc., No. 3629 (1992), and SIC Appeal of Transcontinental Enterprises. Inc., No. 3519 (1991), for the proposition that the focus of this classification is the presence of "a variety of related services." The Appellant continues as follows: The RFP in this case clearly calls for Facilities Support Management Services, rather than mere Courier Services. The contractor: 1. "shall provide full time employees to perform the work required in this mailroom"; 2. "provide correspondence analysis and referral services for incoming correspondence addressed to the Attorney General, DOJ telegrams, and bulk correspondence received from the White House. Services also include processing subpoenas, summons, and complaints, and providing autopen services"; 3. "Operates a manually controlled gasoline or electric powered truck or tractor to transport goods and materials"; 4. "loads and unloads trucks and other conveyances, moves supplies and materials to proper location, stacks materials for storage or binning, moves and arranges heavy pieces of office furniture and equipment"; 5. "Receives, stores, and issues equipment, materials, supplies, merchandise, foodstuffs, or tools, and compiles stock records of items in stockroom, warehouse or storage yard"; 6. "performs a variety of warehousing duties which require an understanding of the established storage plan. Work involves: verifying materials against receiving documents, noting and reporting discrepancies and obvious damages"; 7. "Maintain the U.S. Marshals Service (USMS) Personnel Office files by retrieving, copying, and providing information upon request, re-filing Official Personnel Folders (OPF), or document switching OPFs, and by performing other related functions required by the USMS Personnel Office". This solicitation goes far beyond mere courier cervices. It calls for specialized personnel and personnel services, even the processing of subpoenas, summons, and complaints. The courier services is [sic] only a small part of the solicitation and in the labor hours required to perform the work. The Contracting Officer, through counsel, filed a motion to dismiss and statements in support thereof and in opposition to the appeal. 1/ The Contracting Officer, in her certified statement supporting her SIC code selection, states, inter alia: I discussed the nature of the services needed with the Department officials requesting the procurement and found that the principal purpose of the procurement matched the description of SIC 4215, the operative words of which read: Establishments primarily engaged in the delivery of individually addressed letters, parcels, and packages (generally under 100 pounds), except by means of air transportation or by the United States Postal Service. Delivery is usually made by street or highway within a local area or between cities. The Department needed a contractor to supply the personnel (e.g., mail clerks, mail operations specialists, journeyman and assistant mail clerks, messengers, and driver messengers), the equipment, and vehicles necessary to carry out all mail processing and delivery functions of letters, parcels and packages at the Main DOJ Mailroom...[and]...to provide inter building bulk mail pickup and delivery service between the DOJ Main Mailroom and the Department's ten (10) satellite mailrooms.... The Contracting Officer further represents that she compared the instant procurement with the requirements of a previous contract let by the DOJ for similar services and classified under SIC code 4215, reviewed the Standard Industrial Classification Manual (SIC Manual) for other possible SIC codes, and concluded that: Because the services [in the aforesaid previous contract for "Mail Messenger Service"] were similar to those needed for the Main Mailroom procurement; and because the greatest percentage of the Department's needs mirrored the description of "Courier Services..." in the Standard Industrial Classification Manual, I designated the procurement under code 4215. In further support of this selection, the Contracting Officer cites the Statement of Work (SOW) in the instant solicitation and asserts, inter alia: ...The Statement of Work requires a total of 354,476 hours (actual and estimates) for the labor categories identified in the initial contract period and each option year. Of this total, 70 percent or 248,180 are clearly related to mail/messenger service functions and 30 percent or 106,296 are related to support functions. ...The first seven pages of Section B lists the labor categories for the three contract line items (CLINs) that the contractor will be required to perform. Ninety-six and a half (96.5) percent of the labor categories listed pertain solely and exclusively to mail delivery. Included are Mail Operations Specialists, Deputy Mail Operations Specialists, Mail Clerks, Drivers/Messengers, Assistant Mail Operations Specialists I, and Assistant Mail Operations Specialists II, and Messengers. Two positions (one secretary and one workload data analyst) are required in support of the mail delivery operation. The services of these two people account for 3.5 percent only of total effort. ...In addition to the requirements described in CLINS 0001-0003, 182,192 hours have been included for Additional Labor Categories (CLIN 0004) and Extended Service Hours (CLIN 0005), which may or may not be utilized by the Government. CLINs 0004 and 0005 include 81,920 hours (45 percent of CLINs 0004 and 0005) which can be clearly defined as mail/messenger functions. These labor categories include mail operations specialists, mail clerks, messengers, and driver/messengers. ...The services expressly for mail distribution and delivery account for more that [sic] 76 percent of the total contract. The Contracting Officer, citing "Specific Tasks" in the solicitation, 2/ contends that the various tasks and services described in the solicitation comprise one specialized service, namely, mail/courier service by a private concern, and that these services are classified under SIC code 4215. Both of these circumstances, argues the Contracting Officer, preclude classification of this solicitation under SIC code 8744. The solicitation lists, at pages C-6 through C-13, estimated staffing requirements and man-hours for performance of the contract, 3/ including the operation of the Main Justice Building Mailroom, the Mail Referral Unit and the Optional Mail Facilities, and the provision of inter-building bulk mail service within Washington, D.C., Maryland and Virginia, and Optional Support Services to the numerous offices in the metropolitan area. The overwhelming majority in numbers of estimated positions and man-hours are allocated to the labor categories of "Mail Clerk," "Messenger," and "Driver/Messenger." The next largest allotment is for "Mail Operations Specialist." 4/ As described in the solicitation, the "Mail Operations Specialist," including the "Deputy" and the "Assistants," are responsible for managing, directing, supervising, training and reviewing contractor personnel and contractor performance. (Solicitation, 1.6.2 - 1.6.5.1.3, at C-18 through C-26). The "Assistants" also receive, sort and deliver mail. (Id. at 1.6.5.1.1.a., 1.6.5.1.2.b., and 1.6.5.1.3.b.). The "Mail Clerk" sorts incoming mail for distribution and dispatches outgoing mail. (Id. at 1.6.5.2, C-26). The "Messenger" routinely runs errands, operates sealers and mailers, opens mail, distributes mail on a regularly scheduled route and delivers mail requiring special handling. (Id. at 1.6.5.4). The "Driver/Messenger" picks up and delivers time-sensitive packages within the Washington, D.C. area. (Id. at 1.6.5.5). Other "optional" labor categories described in the solicitation include: Outgoing Mail Processor, Driver, Distribution Equipment Operator, File Clerk, Secretary, Workload Data Analyst, Inventory Clerk, Forklift Operator, Laborer, Material Handling Laborer, Supervisory Supply Technician, Supply Clerk, Truck Driver, Warehouseman, Duplicating/Photocopying Machine Operator, Supervisory Duplicating/Photocopying Machine Operator, and Bus Driver. Of these, none is listed under CLINs 0001 and 0002, 5/ and only the categories of Driver, File Clerk, Workload Data Analyst, and Secretary appear under CLIN 0003, 6/ accounting for less than 20 percent of its estimated man-hours. Although predominant in the estimates for CLINs 0004 and 0005, 7/ these other categories of labor account for less than 40 percent of the total, maximum estimated requirements. Moreover, the description of these other labor categories do not indicate that their utilization will be for a purpose other than in support of the "Supplies/Services" sought and described at page 1 of the solicitation, namely: The Contractor shall operate the Department of Justice (DOJ) Main Mailroom and ten (10) satellite mailrooms that provide a variety of mail, messenger, and staff support services to DOJ components. The Contractor shall furnish all personnel, equipment, and vehicles required to provide inter-building bulk mail pickup and delivery service between DOJ-occupied buildings in Washington, DC and nearby Maryland and Virginia. Discussion In determining the appropriate SIC code designation in this procurement, we are governed by the provisions of 13 CFR Part 121 which prescribe, in pertinent part: 121.902 Establishment of the size standard. * * * * * * * (b) 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 attachments thereto,.... 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 services procured, and to evaluations on which industry classification would best serve the purposes of the Small Business Act.... SIC code 8744, "Facilities Support Management Services," is described in the 1987 edition of the Standard Industrial Classification Manual (SIC Manual), in pertinent part, as follows: Establishments primarily engaged in furnishing personnel to perform a range of services in support of the operations of other establishments or in providing a number of different continuing services, on a contract or fee basis, within another establishment.... "Facilities Management, n the subcategory of SIC code 8744 advocated by the Appellant, is described in 13 CFR 121.601 at footnote 19, as follows: Facilities Management. a component of SIC code 8744, has the following definition: Establishments, not elsewhere classified, which provide overall management and personnel to perform a variety of related support services in operating a complete facility in or around the specific building, or within another business or Government establishment. Facilities management means furnishing three or more personnel supply services which may include, but are not limited to, secretarial services, typists, telephone answering, reproduction or Mimeograph service, mailing services, financial or business management, public relations, conference planning, travel arrangements, word processing, maintaining files and/or libraries, switchboard operation, writers, bookkeeping, minor office equipment maintenance and repair, use of information systems (not programming), etc. As noted above, SIC code 4215, selected by the Contracting Officer for this procurement, covers the following services: Establishments primarily engaged in the delivery of individually addressed letters, parcels, and packages (generally under 100 pounds), except by means of air transportation or by the United States Postal Service. Delivery is usually made by street or highway within a local area or between cities. Illustrative of this classification are: Courier services, except by air Letter delivery, private: except air Mail delivery, private: except air Package delivery, private: except air Parcel delivery, private: except air The certified statement of the Contracting Officer, undisputed in this record, demonstrates that the Contracting Officer acted in accordance with the regulatory requirements of 13 CFR 121.902(b) in selecting the SIC code for the subject procurement. Based upon the foregoing, and our review of the solicitation, we cannot agree with the Appellant. The "Facilities Management" classification is only applicable where the services to be rendered are "not elsewhere classified. N 13 CFR 121.601, note 19, supra. We find that the services listed under SIC code 4215 encompass the services sought under the instant solicitation and, consequently, that the cases cited by the Appellant, supra, are inapposite. Here, the principal purpose of the procurement is to provide mail distribution services for DOJ's main office in Washington, D.C. and its satellite offices within the local area. Such services involve sorting, handling, storing and, ultimately, the proper delivery of letters, packages and parcels. We reject the Appellant's suggestion that only courier and messenger delivery fall within SIC code 4215, or that the other described tasks are anything but supportive of the aforesaid principal purpose. Moreover, our conclusion here appears consistent with the classification in the SIC Appeal of Aquasis Services. Inc., No. 2244 (1985). 8/ Consequently, we find that the Contracting Officer correctly classified the subject procurement under SIC code 4215. Conclusion For the reasons stated above, the Contracting Officer's designation of SIC code 4215, with a size standard of $12.5 million in average annual receipts, is AFFIRMED; the appeal is DENIED. This constitutes the final decision of the Small Business Administration. See 13 CFR 121.1720(b). ____________________________________ Michael S. Cole (Presiding) Administrative Judge ____________________________________ Gloria E. Blazsik (Concurring) Administrative Judge ____________________________________ G. Stephen Wright (Concurring) Administrative Judge _______________ 1/ Although these submissions were not received until after the close of record designated in the "Notice" issued on June 17, 1993 by this Office, the Contracting Officer's statement opposing the appeal and supporting her SIC code selection will be allowed into the record pursuant to the provisions of 13 CFR SS121.1713 and 121.1718(b). The Presiding Judge finds good cause for such from: the certified statement of the Contracting Officer that she did not receive a copy of the appeal until June 25 upon the request of her counsel; and the fact that her statement describing the designated SIC code facilitates the disposition of the substantive issue. The untimely motion to dismiss will not be considered, except to note that all "certifications" required of the Appellant accompanied the notice of appeal filed in this Office and we find the notice of appeal otherwise sufficient to support our jurisdiction. 2/ Paragraph 3.0 "Specific Tasks - Mail Operation, Main Justice Building, N page C-50; paragraph 6.0 "Specific Tasks - Mail Operations, Indiana Building," page C-89; and paragraph 11.0 "Specific Tasks - Mail And Messenger Services Provided For Scheduled Post Office Box Mail Service, n page C-121. 3/ Based upon currently existing levels. 4/ Including a "Deputy" and "Assistant" Mail Operations Specialists. 5/ CLIN 0001 requires mail and messenger services for the "DOJ Main Justice Building" and the "Mail Referral Unit." CLIN 0002 requires the operation of "Satellite Mail Facilities" on a requirements-type basis. 6/ CLIN 0003 requires "Satellite Support Services" on a requirements-type basis. 7/ Respectively, "Additional Labor Categories" and "Extended Service Hours" (i.e., Overtime), either of which may be utilized by the Government on a requirements-type basis. 8/ The prior SIC code 4212, "Local trucking, without storage" included the subclassification "Courier services." The 1987 amendments divided 4212 into several categories, including 4215, used here. See 51 Federal Register 35170-35179.