M. P. Environmental Services, Inc., No. 3950 (September 12, 1994) Docket No. SIC-94-5-10-68 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. SIC APPEAL OF: ) ) M. P. Environmental ) Services, Inc. ) ) Appellant ) ) Docket No. SIC-94-5-10-68 Solicitation No. ) N00406-94-R-5066 ) Department of the Navy ) Fleet and Industrial Supply ) Center ) Bremerton, Washington ) DIGEST A solicitation that calls for collection and disposal of oily waste materials generated by ships, is more appropriately classified under Standard Industrial Classification (SIC) code 4212 (Local Trucking, Without Storage), than under SIC code 4953 (Refuse Systems) or SIC code 8744 (Base Maintenance), because SIC code 4953 encompasses the processing and destruction of the refuse and not its mere collection and removal, whereas SIC code 8744 has not been shown to be applicable in any way to this solicitation. DECISION September 12, 1994 BLAZSIK, Administrative Judge: Jurisdiction This appeal is being 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 correct Standard Industrial Classification (SIC) code to be assigned to this solicitation is SIC code 4953, 8744, or 4212. Facts on April 15, 1994, the Department of the Navy, Fleet and Industrial Supply Center, Bremerton, Washington, issued this solicitation for "Removal and Disposal of Oily Waste" and classified it under Standard Industrial Classification (SIC) code 4953 (Refuse Systems), having a $6 million average annual receipts size standard. The solicitation was totally set aside for small businesses, and the opening date for bids was postponed indefinitely by an amendment issued on May 6, 1994. By letter postmarked May 20, 1994, Environmental Services, Inc. (Appellant) filed a timely appeal from the Contracting Officer's designation, arguing that SIC code 4953 is inappropriate because the solicitation at issue is not for garbage or refuse, but requires the contractor to provide transportation and disposal of the refuse. Accordingly, Appellant believes that SIC code 8744 (Base Maintenance), with a $13.5 million average annual receipts size standard would be appropriate since facilities, which treat or recycle industrial or hazardous wastes, do not have their own SIC code, SIC code 8744 "may apply." Appellant presented no evidence to support its assertion. The solicitation's Statement of Work sets out the requirements of the solicitation as follows: Oily waste removal operations can only be done during daylight hours when ammunition handling is not taking place. The contractor shall have all of the necessary equipment needed in order to perform the required services. This equipment must include: oily waste disposal tanks; oily waste disposal trucks; non-collapsible hose with camlock fittings; non-collapsible hoses of various lengths. Removal/dumping to be accomplished as frequently as needed, as determined by the issuance of individual delivery orders. The oily waste to be removed is composed primarily of bilge water with some oil contamination. In an emergency, orders will be placed 4 hours before services will be required.... * * * * * * * The contractor is responsible for providing all of the equipment needed in order for the ship to pump the oily waste to either a contractor-provided truck or a contractor- provided tank. A government representative will then pump the oily waste from the ship to the contractor-provided vessel. As the material is pumped, the ship shall take a sample of the material. This sample shall then be split between the Government and the contractor, so that each may be tested.... Regardless where the vendor chooses to dispose of the waste when servicing any of the areas, the vendor shall be responsible for notifying the appropriate city/ county officials; securing all required permits and licenses; and performing in accordance with all city/ county applicable rules and regulations pertaining to oily waste hauling and disposal. On May 19, 1994, the Contracting Officer filed a reply. He asserts that solicitation is for the removal and disposal of oily waste (bilge water with oily contaminants) at multiple locations and the contractor will be required to collect, transport, and dispose of these wastes. Thus, the Contracting Officer argues, SIC code 4953 which concerns "establishments primarily engaged in the collection and disposal of refuse..." is the appropriate classification. Discussion SIC code 4953, selected by the Contracting Officer, is described in the SIC Manual thus: */ Establishments primarily engaged in the collection and disposal of refuse by processing or destruction or in the operation of incinerators, waste treatment plants, landfills, or other sites for disposal of such materials. Establishments primarily engaged in collecting and transporting refuse without such disposal are classified in Transportation, Industry 4212. Examples shown under this description are garbage: collecting, destroying, and processing; hazardous waste material disposal sites; sludge disposal sites; and waste materials disposal at sea. SIC code 8744, requested by Appellant, 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.... Some examples shown under this description include base maintenance (providing personnel on continuing basis); correctional facilities; facilities management, except computer; and jails, privately operated. Footnote 20 at 13 CFR 121.601, appended to SIC code 8744 states: SIC code 8744: If one of the activities of base maintenance, as defined below, can be identified with a separate industry, and that activity (or industry) accounts for 50 percent or more of the value of the entire contract, then the proper size standard shall be that for the particular industry, and not the base maintenance size standard. "Base maintenance" constitutes three or more separate activities. The activities may be either service or special trade construction related activities. As services, these activities must each be in a separate industry. These activities may include, but are not limited to, such separate maintenance activities as Janitorial and Custodial Service, Protective Guard Service, Commissary Service, Fire Prevention Service, Safety Engineering Service, Messenger Service, and Grounds Maintenance and Landscaping service. If the contract involves the use of special trade contractors (plumbing, painting, plastering, carpentering, etc.), all such specialized special trade construction activities will be considered a single activity, which is Base Housing Maintenance. This is only one activity of base maintenance and two additional activities must be present for the contract to be considered base maintenance. The size standard for Base Housing Maintenance is $7.0 million, the same size standard as for Special Trade Contractors. Upon further research, I noted that SIC code 4212, (Local Trucking Without Storage), having a $12.5 million average annual receipts size standard is described in the SIC Manual as follows: Establishments primarily engaged in furnishing trucking or transfer services without storage, in a single municipality, contiguous municipalities, or a municipality and its suburban areas. Establishments primarily engaged in collecting and disposing of refuse by processing or destruction of materials are classified in Industry 4953..... Some examples under this description are refuse, local collecting and transporting: without disposal; and garbage, local collecting and transporting: without disposal. Footnote 7 to this classification states: SIC code 4212: The component "Garbage and Refuse, Collecting and Transporting, Without Disposal, shall have a size standard of $6 million. This is the same size standard as SIC code 4953, Refuse Systems. An examination of the solicitation's Statement of Work, detailed above, demonstrates that the principal thrust of the service to be performed by the successful contractor is the collection and disposal of oily waste matter generated on ships. The contractor will be required to collect, transport, and dispose of these wastes in a sanitary and safe manner and the process must be accomplished in compliance with all local and Federal safety and sanitary regulations. The principal emphasis of the solicitation is collection and removal, not the processing or destruction of the wastes by some chemical or other means. In SIC Appeal of Consolidated Marketing Network. Inc., No. 2387 (1986), we made a distinction between SIC code 4212 and 4953 in noting that: ...the solicitation [at issue] primarily involves the collection of loose refuse (including garbage, debris, and other rubbish)...and the removal of such material from the premises. These are the sort of services included in the SIC code 4212 classification. The solicitation does not involve the collection and disposal of refuse by "processing or destruction" which is contained in the description of SIC code 4953.... [At page 6.] Thus, since the solicitation does not require the contractor to process the refuse in some chemical way, but merely to collect and dispose of it, SIC code 4212 is the correct designation. Appellant's advocacy of SIC code 8744 based upon Appellant's supposition that there are no other classifications that are available for the services sought here, has no merit and is not supported by any evidence. According to footnote 7 to SIC code 4212, garbage collection without disposal, is assigned a $6 million size standard. The solicitation here seeks waste collection with disposal and, thus, the $12.5 million average annual receipts size standard applies. Based upon the above discussion, the classification which best describes the instant solicitation is SIC code 4212, with a $12.5 million receipts size standard. Conclusion The classification designated by the Contracting Officer is REVERSED, and the appeal is DENIED. The solicitation should have been classified under SIC code 4212, with a $12.5 million average annual receipts size standard. This constitutes the final decision of the Small Business Administration. See 13 CFR 121.1720(a), (b), and (c). __________________________________ Gloria E. Blazsik Administrative Judge _________________ */ Standard Industrial Classification Manual, Office of Management and Budget, 1987 edition.