KTA/SET Environmental, No. 4169 (April 15, 1996)
Docket No. SIZ-96-2-13-14

                    UNITED STATES OF AMERICA

                  SMALL BUSINESS ADMINISTRATION

                 OFFICE OF HEARINGS AND APPEALS

                        WASHINGTON, D.C.

_______________________________
                               )
SIZE APPEAL OF:                )
                               )
KTA/SET Environmental          )
                               )
     Appellant                 )
                               )  Docket No. SIZ-96-2-13-14
Solicitation No.               )
DTFH61-95-R-00140              )
Department of Transportation   )
Federal Highway Administration )
Washington, DC                 )
_______________________________)

           ORDER REMANDING IN PART AND DENYING IN PART

                         April 15, 1996

     On June 22, 1995, the Office of Contracts and Procurements
of the Department of Transportation, Federal Highway Administra-
tion (FHA), issued the subject solicitation for the development
of a training course on bridge painting health and safety.  The
Contracting Officer (CO) issued the requirement as a 100% small
business set-aside under Standard Industrial Classification (SIC)
code 8732 (Commercial Economic, Sociological, and Educational
Research).  The CO set July 24, 1995 as the closing date for the
initial offers.  The due date for the best and final offer was
November 7, 1995.  On November 22, 1995, the CO notified all
offerors that KTA/SET Environmental (Appellant) was the apparent
successful offeror.  

     On November 28, 1995, Corrosion Control Consultants and
Labs, Inc. (CCC&L) filed a protest with the CO.  On November 29,
1995, CCC&L filed a letter supplementing its initial protest. 
CCC&L asserted that Appellant was other than small because
Appellant was dominant in the field of operation in which it was
bidding.  CCC&L further asserted that Appellant did not meet the
criteria for small businesses under the solicitation because of
an affiliation with two larger corporations.  On December 15,
1995, the CO forwarded the protest to the Small Business
Administration (SBA) Area II Office of Government Contracting
(Area Office) in Philadelphia.  

     On January 11, 1996, the Area Office sent a letter notifying
Appellant of CCC&L's protest, and requested that Appellant
provide an SBA Form 355 and other documents.  Appellant prepared
and sent the requested materials to the Area Office, which the
Area Office timely received on January 18, 1996.  On January 31,
1996, the Area Office issued a formal size determination finding
that Appellant was other than small.  The Area Office found that
KTA/SET was not independently owned, and was in fact affiliated
with two larger companies KTA/SET Tator, Inc. and SE Technologies
Company.  

     On February 12, 1996, Appellant filed the instant appeal
contesting the size determination on the grounds of untimeliness
and the Area Office's failure to provide it with an opportunity
to respond to the allegations in CCC&L's November 29th supplement
to its protest.  Appellant specifically contends that, because
Appellant received the protest 32 days after it was awarded the
contract, the Area Office exceeded the time limits prescribed in
the Federal Acquisitions Regulations (FAR) for notifying it of
CCC&L's protest.

     However FAR Section 19.302(e) places no time limits upon the
SBA with regard to notifying the challenged concern of the
protest.  Subsection (e)(1) simply requires SBA to:

     Notify the contracting officer and the protestant of
     the date it was received....

Nor does the applicable SBA regulation, 13 C.F.R. Section
121.1605, impose such a requirement.  It merely states:

     Upon receipt of the protest, the SBA Regional
     Administrator or his or her delegate shall immediately
     notify the contracting officer, protested concern and
     the protestor of the date such protest was received and
     whether it will be processed or dismissed for lack of
     specificity.

     Although SBA regulations require the Area Office to
immediately notify the protested concern of a protest,
notification here was delayed by circumstances clearly beyond the
control of the Area Office.  

     The Area Office received the protest from the CO on December
15, 1995.  Federal employees were furloughed from December 18,
1995 - January 5, 1996.  Many Federal agencies in the Northeast
remained closed through January 9, 1996, because of a major
blizzard.  The Area Office actually notified Appellant of the
protest within a few days after the furlough ended and offices
reopened after the blizzard.

     This constitutes due diligence by the Area Office and, under
the extraordinary circumstances imposed by the furlough, the
Presiding Judge finds that the Area Office met the regulatory
requirement of immediate notification, by informing Appellant of
the protest as soon as practicable.  In any event, Appellant has
failed to show that the delay prejudiced it in any way.

     Appellant has the burden of proof by a preponderance of the
evidence in an appeal.  Appellant has failed to meet its burden
in asserting that its appeal should be granted due to SBA's
delays in dealing with its protest.  See Size Appeal of CDE
Enterprises, Inc., No. 4156 (1996).[1]   

     Appellant also asserts that the Area Office exceeded the
prescribed FAR time limits for issuing its size determination,
because Appellant did not receive the size determination within
10 business days after the Area Office received the protest. 
Appellant cites FAR Section 19.302(g)(1), as the applicable
authority:

     Within 10 business days after receiving a protest, the
     challenged offeror's response, and other pertinent
     information, the SBA will determine the size status of
     the challenged concern....

     Notwithstanding subsection (g)(1), however, subsection
(h)(2) appears to contemplate that size determinations may take
more than 10 days.

     After the 10-day period has expired, the contracting
     officer may...continue to withhold award until the
     SBA's determination is received....

Moreover, the applicable SBA regulation, 13 C.F.R. Section
121.1606 (a), states:

     After receipt of a protest or a request for a formal
     size determination, SBA shall make a formal size
     determination.  The size determination shall be made
     within 10 working days after receipt of the protest, if
     possible.

     Thus neither FAR nor SBA's regulations actually require the
SBA Area Office to make a size determination within 10 days. 
Therefore, the portion of Appellant's appeal based upon the
timeliness of the Area Office's issuance of the size
determination is without merit.

     Appellant further asserts that the Area Office failed to
disclose a portion of the record to Appellant.  In support,
Appellant submitted to this Office an Affidavit by Allan J.
Blasko, KTA/SET Environmental Operations Manager, which stated
that Appellant had never seen CCC&L's November 29, 1995
supplemental letter, nor had it been given the opportunity to
respond to the letter's allegations.  

     SBA regulations require that the Area Office forward a copy
of the protest, in its entirety, to the protested concern. 
13 C.F.R. Section 121.1605.  In this case the Area Office failed
to meet the regulatory requirement because it failed to do so. 
Therefore the Area Office failed to provide Appellant with the
opportunity to respond to CCC&L's supplemental letter.  This
omission was material because the Area Office expressly referred
to CCC&L's supplemental letter in its size determination.

     Accordingly this proceeding is REMANDED in part to the Area
Office.  The Area Office is instructed to:

     1) Provide Appellant with the opportunity to respond to
CCC&L's supplemental letter; 

     2) Consider Appellant's response to the supplemental letter;

     3) Issue a new size determination taking into consideration
Appellant's response to the supplemental letter.

     Those portions of the instant appeal alleging untimeliness
of the Area Office in notifying Appellant of the protest and
issuing the size determination are DENIED.  As to those issues,
this is the final decision of the Small Business Administration. 
See 13 C.F.R. Section 121.1720(b).

                                   __________________________
                                   Christopher Holleman
                                   Administrative Judge

____________________
 [1] Appellant impliedly asserts that, because it timely
submitted documents requested by the Area Office, the Area Office
was obliged to act timely as well.  Appellant has presented no
authority for its position and, therefore, has failed to satisfy
its burden of proof. 13 C.F.R. Section 121.1707.