Metropolex Corporation, No. 3889 (March 7, 1994)
Docket No. SIZ-93-11-23-130

                    UNITED STATES OF AMERICA

                  SMALL BUSINESS ADMINISTRATION

                 OFFICE OF HEARINGS AND APPEALS

                        WASHINGTON, D.C.

                                

SIZE APPEAL OF:                 )
                                )
Metroplex Corporation           )
                                )
     Appellant                  )
                                )
RE:  Tri-State Design           ) Docket No. SIZ-93-11-23-130
     Construction Co., Inc.     )
                                )
Solicitation No.                )
N62472-93-B-4031                )
Department of the Navy          )
Naval Facilities Engineering    )
  Command                       )
Colts Neck, New Jersey          )

                             DIGEST

Where a Regional Office makes a formal size determination lacking
a sufficient description of the facts relied upon and its
reasoning therefrom, such determination fails to comply with the
requirements of 13 CFR 121.1606(f) and provides neither adequate
notice to interested parties nor an appropriate basis for review
by this Office, and it will be remanded to the Regional Office.

                            DECISION

                          March 7, 1994

WRIGHT, Administrative Judge, Presiding:

Jurisdiction

This appeal is resolved in accordance with 15 U.S.C. 632
et seq., and the regulations codified at 13 CFR 121.

Issue

Whether the Philadelphia Regional Office sizer determination in
this case complied with the requirements of 13 CFR 121.1606(f).

Facts

On August 2, 1993, the Department of the Navy, Naval Facilities
Engineering Command, Colts Neck, New Jersey issued the captioned
solicitation for Preventive Maintenance and Repair of the
Railroad Systems at the Naval Weapons Station, Colts Neck, New
Jersey, set it entirely aside for Small Disadvantaged Businesses,
and classified it under Standard Industrial Classification (SIC)
code 1629, which bears a size standard not to exceed $17.0
million in average annual receipts. On September 21, 1993, a
timely protest, pursuant to 13 CFR 121.1603(a)(3), was lodged
against D&K/Sharp Construction Company, Inc. (D&K) 1/, a joint
venture and the lowest bidder, and Tri-State Design Construction
Co., Inc. (Tri-State), the second lowest bidder by the third
lowest bidder, Metroplex Corporation (Metroplex or Appellant).

Pursuant to the protest, a size determination was rendered by the
Small Business Administration (SBA) Philadelphia Regional Office
on November 10, 1993 and received by the Appellant on November
16, 1993. That determination found that Tri-State Design
Construction Company, Inc. is a small business concern within the
assigned size standard, concluding "that Tri-State is not
unusually reliant upon its subcontractor, Railroad Construction
Corporation, for the primary and vital portions of this effort."
The only analysis proffered in support of its conclusion is as
follows:

     Tri-State will be providing supervision, equipment, bonding,
     and the vast majority of the labor. Although Railroad
     Construction Corporation will be furnishing all of the
     material, it will be responsible for only about 25 percent
     of the labor required.

In its timely appeal 2/ filed with this Office, Metroplex
challenges the Regional Office's conclusion. Appellant directs
our attention to the inexperience of Tri-State regarding railroad
repair and maintenance and the comparatively broad experience of
its subcontractor, Railroad Construction Company. Thus it argues
that

     [a]s set forth below, the Regional Office's findings of fact
     and conclusion were erroneous and failed to follow well-
     established SBA case law. In addition, the Regional Office
     failed to conduct a proper investigation into Metroplex's
     allegations and failed to provide an adequate basis for its
     findings and conclusion.

Metroplex also submitted additional argument and evidence, on
December 9, 1993, demonstrating the specialized and complex
nature of railroad construction and repair contracts; argued that
the successful bidder lacked technical expertise in the field of
railroad construction; and suggests that the proposed subcon
tractor, Railroad Construction Company, Inc., had prior disputed
involvement with contracts set aside for small disadvantaged
business and Section 8(a) business concerns.

No response was received by this Office from Tri-State or the
Contracting Officer.

Discussion

We are not convinced that the Regional Office conducted a
comprehensive investigation into allegations raised by the
protest, as is required by the pertinent regulations and as
applied by the case law of the Office of Hearings and Appeals.
See Size Appeal of Breiner Construction Comsans Inc., No. 3316
(1990).

SBA's regulation at 13 CFR 121.1606(f) provides that

     SBA shall base its formal size determination upon the
     record, including reasonable inferences therefrom, and shall
     state in writing the basis for its findings and conclusions.
     
Thus, regarding whether a contractor has "unusual reliance" on a
subcontractor, this question should be resolved by an assessment
of the totality of the circumstances present in the case, and the
Agency is required, in writing, to state the basis for its
finding and conclusions. In Size Appeal of Ideal Services, No.
3317 (1990), this Office enumerated seven evaluative criteria
which it identified as appropriate to the rendering of that
assessment. In the present case, the Regional Office made no
reference to these criteria, or any others, as a basis for its
finding and conclusion. Its failure of analysis, we conclude,
deprives Appellant of a sufficient basis for the formulation of a
meaningful appeal. See Size Appeal of Knowledge Base Engineering,
No. 3666 (1992). 3/

In consequence, we are compelled to remand this appeal to the
Philadelphia Regional Office for further investigation,
substantiation, and analysis of the allegations of the protest.

Conclusion

The question of Tri-State's size status is REMANDED to the
Philadelphia Regional Office for a determination in accordance
with the foregoing opinion.

                         __________________________________
                         G. Stephen Wright (Presiding)
                         Administrative Judge
                         
                         ___________________________________
                         Gloria E. Blazsik (Concurring)
                         Administrative Judge
                         
                         ____________________________________
                         Elwin H. White (Concurring)
                         Administrative Judge
                         
                         
_______________

     1/   The protest against D&K/Sharp Joint Venture was
referred to SBA's Region II Regional Office for a size
determination.
     2/   The present appeal was received by the Office of
Hearings and Appeals on November 23, 1993, within five days of
Appellant's receipt of the determination, and, for this reason is
timely within the meaning of 13 CFR 121.1705(a)(2).
     3/   For example, Section M.1 of the solicitation requires
the contractor to provide evidence that its "personnel have
experience in railroad maintenance and repair to ensure the
safety and welfare of Railroad systems at Naval Weapons Station
Earle" and that it provide reference lists of two successfully
completed contracts in the last three years for similar projects.
No basis is given by the Regional Office's apparent conclusion
that Tri-State possessed the requisite qualifications.