RAI, Inc., No. 3854 (November 9, 1993) Docket No. SIC-93-10-18-115 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. SIC APPEAL OF: ) ) RAI, Inc. ) ) Appellant ) ) Docket No. SIC-93-10-18-115 Solicitation No. ) EMW-94-R-4251 ) Federal Emergency Management ) Agency ) Washington, D.C. ) DIGEST A solicitation that seeks a contractor to maintain and manage a map distribution center owned by the procuring agency, not the contractor, and which requires the contractor to provide numerous services other than mere storage of the maps, is properly classified under Standard Industrial Classification (SIC) code 8744 (Facilities Support Management Services), with a $3.5 million average annual receipts size standard, rather than SIC code 4226 (Special Warehousing and Storage, Not Elsewhere Classified), with a $12.5 million average annual receipts size standard. DECISION November 9, 1993 BLAZSIK, Administrative Judge, Presiding: Jurisdiction This appeal is decided under the Small Business Act of 1958. 15 U.S.C. 632 et seq., and the regulations codified at 13 CFR Part 121. Issue Whether the proper Standard Industrial Classification (SIC) code for this solicitation is SIC code 4226, assigned by the Contracting Officer, or SIC code 8744 advocated by the Appellant. Facts On October 8, 1993, the Federal Emergency Management Agency, Washington, D.C., issued this solicitation for "Flood Map Distribution Center" and classified it under Standard Industrial Classification (SIC) code 4226 (Special Warehousing and Storage, Not Elsewhere Classified), having a $12.5 million average annual receipts size standard. The solicitation was totally set aside for small businesses and a bid opening date of November 22, 1993, was established. On October 19, 1993, RAI, Inc. (RAI or Appellant) filed a timely appeal of the Contracting Officer's SIC code designation contending that the solicitation should be classified under SIC code 8744 (Facilities Support Management Services), to which a $3.5 million average annual receipts size standard applies. The introduction to the Statement of Work declares that this solicitation is for the acquisition of services needed to manage and to maintain the Federal Emergency Management Agency's (FEMA) Flood Map Distribution Center (FMDC). This includes, but is not limited, to the processing of camera-ready materials and related documents for printing; receiving printed map products from government printers; storing map products; and distributing map products. According to the Statement of Work, the principal objectives of the solicitation are the following: - Acquire capability to process, print, receive, store and distribute map products and data. - Continue, without interruption, the distribution of map products and data to designated government officials, insurance agents, lenders, design engineers and others concerned with floodplain management. - Develop an automated data processing (ADP) system, utilizing commercial-off-the-shelf software, that - Provides FEMA increased functionality, reduced operational costs and achieves compliance with: (1) the Chief Financial Officer's Act and related reporting requirements, (2) Generally Accepted Accounting principles, and (3) current Federal Information Processing Standards and Federal Telecommunication Standards. - Maintain the automated data processing system and improve availability of data to other FEMA systems and personnel. - Provide the basis for FEMA to reduce paper inventory and storage space requirements through the use of new technologies. The Statement of Work describes the specific tasks that the successful contractor must perform. These include providing personnel, space, supplies, equipment, administrative support, environmental storage, and an ADP system to maintain the FMDC. Other specific tasks involve the processing of materials for printing when the inventory of maps is low and when new map products are created or an existing map product has been changed. Also, the contractor must be able to scan, convert, and store electronically, map products in a digital format and provide paper map products that can be printed on demand. Finally, the contractor must have the capability to distribute map products and data related to these maps on a state, county, and community basis. It is estimated that 300 new orders for map products will be received daily and up to 700 system orders will be generated each day by customers who have a standing agreement with the FMDC, to send products each time a map change occurs. The Statement of Work also requires that the contractor must maintain sufficient space to store the various map products. This includes three areas of storage: a temporary storage area to handle map products coming in and being shipped; a storage area to handle map products available for public distribution to those persons or companies who request them; and a storage area for permanent storage of the map products. RAI's principal argument for the application of SIC code 8744 is that the functions to be performed under the solicitation are "varied," and "broad-ranging" and the contractor's responsibility will be "virtually plenary." Accordingly, SIC code 8744, which is broadly defined, in that it includes [e]stablishments not elsewhere classified which provide overall management and the personnel to perform a variety of related support services in operating a complete facility.... is the more appropriate classification. On November 3, 1993, the Contracting Officer filed a reply to the appeal, arguing that the activities sought in the solicitation are best described under SIC code 4226 because [s]pecial warehousing and storage is understood to mean the activities of a warehousing operation that go beyond the keeping of "dead storage".... and asserts that is the situation here. On November 3, 1993, ZAI, a firm that claims is qualified to bid on the instant solicitation, filed a statement in support of the Contracting Officer's designation, asserting that it believes that RAI's protest is merely "a ploy to limit the competition." Since ZAI has not requested intervention in this proceeding, nor showed how it is an "interested person who has been adversely affected by a SIC code designation" pursuant to 13 CFR 121.1703(b), its statement will not be considered. Discussion SIC code 8744, "Facilities Support Management Services," is described in the SIC Manual 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. Included in the industry are establishments primarily engaged in the private operation of jails and adult correctional facilities, whether or not providing both management and supporting staff. Establishments primarily engaged in operating juvenile correctional homes are classified in Industry 8361. Establishments which provide management and staff to operate a business are classified according to the type of activity of the business. Establishments primarily providing one specialized service, such as janitorial services or guard services, are classified in the specialized industry. Janitorial services are classified in Industry 7349, and guard services are classified in Industry 7381. Establishments primarily engaged in providing management services only, except agricultural, are classified in Industry 8741. Computer facilities management services are classified in Industry 7376. Establishments primarily supplying temporary or continuing help are classified in Industry 7363. Establishments primarily engaged in providing temporary or continuing help for agricultural purposes and agricultural management services are classified in Agriculture, Industry Group 076. Footnote 19 to 121.601 further defines "Facilities Support Management Services" as follows: Facilities Management. a component of SIC code 8744, has the following definition: Establishments, not elsewhere classified, which provide overall management and the personnel to perform a variety of related support services in operating a complete facility in or around a 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 service, 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. SIC code 4226, selected by the Contracting Officer, is described in the SIC Manual thus: Special Warehousing and Storage. Not Elsewhere Classified Establishments primarily engaged in the warehousing and storage of special products, not elsewhere classified, such as household goods, automobiles (dead storage only), furs (for the trade), textiles, whiskey, and goods at foreign trade zones. Warehouses primarily engaged in blending wines are classified in Wholesale Trade, Industry 5182. Some of the examples shown under this description are the following: Automobile dead storage Furniture storage, without local trucking Household goods warehousing and storage, without local trucking Textile warehousing Warehousing, special: except farm products and cold storage Whiskey warehousing The essential wording of the SIC Manual definition of "Facilities Support Management Services" is: "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." This concept is further amplified in the language of footnote 19, supra, which defines "Facilities Management" as [e]stablishments, not elsewhere classified, which provide overall management and the 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..... An examination of the Statement of Work establishes that the contractor will manage and maintain a storage facility that is owned by FEMA, the procuring agency, not the contractor. Concomitant with this function, the contractor will perform a range of support services and will not be engaged in just warehousing and storage of a "specialized service," as contemplated by the definition of SIC code 4226. Among the services to be performed are processing of camera-ready materials, developing an automated data processing system, receiving the printed map products, and storing and distributing them, as needed. While storing of the map products is clearly one of the functions to be performed, there are numerous other services needed here and thus the solicitation is more properly classified under SIC code 8744. Accordingly, the range of services cannot be considered "one specialized service" but must be viewed as "furnishing three or more personnel supply services" set forth in footnote 19, supra. The solicitation should have been classified under SIC code 8744 (Facilities Support Management Services), with a $3.5 million size standard. SIC Appeal of Transcontinental Enterprises. Inc., No. 3519 (1991). Conclusion The designation of this solicitation under SIC code 4226 by the Contracting Officer is REVERSED. The proper designation is SIC code 8744, with a $3.5 million average annual receipts size standard. Accordingly, the appeal is GRANTED. This constitutes the final decision of the Small Business Administration. See 13 CFR 121.1720(a), (b), and (c). ______________________________________ Gloria E. Blazsik (Presiding) Administrative Judge ______________________________________ Elwin H. White (Concurring) Administrative Judge ______________________________________ G. Stephen Wright (Concurring) Administrative Judge