McNeil Technologies, Inc., No. 4496 (July 11, 2002)
Docket No. NAICS-2002-06-19-22

                                
                    UNITED STATES OF AMERICA
                  SMALL BUSINESS ADMINISTRATION
                 OFFICE OF HEARINGS AND APPEALS
                        WASHINGTON, D.C.

____________________________________    
                                    )
NAICS APPEAL OF:                    )
                                    )
McNeil Technologies, Inc.           )   Docket No. NAICS-2002-06-19-22
                                    )
     Appellant                      )   Decided:   July 11, 2002
                                    )
Solicitation No. DE-RP01-02SO20138  )
Department of Energy                )
Washington, DC                      )
____________________________________)

                           APPEARANCES
                                
            Timothy C. Tozer, Esq., Moore & Lee, LLP,
                          for Appellant
                                
                      Paul A. Gervas, Esq.,
                  for the Department of Energy
                                
                                
                             DIGEST

A  solicitation for assistance in reviewing and making decisions
relative   to   the  disclosure  of  classified  and   sensitive
unclassified  documents  of  a highly  technical  nature,  which
requires expertise in scientific disciplines of the contractor's
key  personnel, is properly classified under NAICS  code  541690
(Other  Scientific  and Technical Consulting  Services),  rather
than NAICS code 541330 (Engineering Services).

While  prior  NAICS/SIC  code  designations  are  a  factor  the
contracting  officer  must  consider  in  making  a  NAICS  code
designation, they are not dispositive in NAICS appeals.

                            DECISION

HOLLEMAN, Administrative Judge:

                                
                          Jurisdiction

     This  appeal  is  decided under the Small Business  Act  of
1958, 15 U.S.C. Section 631 et seq., and 13 C.F.R. Parts 121 and
134.
     
                             Issues

      Whether  a  solicitation for assistance in  reviewing  and
making  decisions relative to the disclosure of  classified  and
sensitive  unclassified  documents of highly  technical  nature,
which  requires  expertise  in  scientific  disciplines  of  the
contractor's key personnel, is properly classified  under  NAICS
code   541690   (Other   Scientific  and  Technical   Consulting
Services), rather than NAICS code 541330 (Engineering Services).

      Whether  prior NAICS/SIC code designations are dispositive
in NAICS appeals.

                         I.  BACKGROUND
                                
                      A.   The Solicitation
                                
     On June 10, 2002, the Department of Energy (DOE) issued the
instant    solicitation   for   classification   and   sensitive
unclassified document review services.  The Contracting  Officer
(CO) set the solicitation totally aside for small business,  and
assigned  to  it  North American Industry Classification  System
(NAICS)  code 541690 (Other Scientific and Technical  Consulting
Services),  with  a  corresponding  $6  million  average  annual
receipts  size standard.  Offers were due on July 9,  2002.   On
June 28, 2002, the CO issued Amendment 2, extending the due date
to July 25, 2002.

                    B.  The Statement of Work

                                
      The  Statement of Work (SOW) states that the objective  of
the   solicitation  is  to  obtain  specialized  technical   and
analytical support for DOE's Office of Classified and Controlled
Information Review (OCCIR).  OCCIR implements DOE's policies and
procedures  to  identify  classified  information  and   certain
unclassified but sensitive information and to determine  whether
the documents may be redacted or declassified for release to the
public.   The  contractor  will  provide  OCCIR  with  qualified
personnel  to  render  specialized  technical,  analytical   and
administrative support for classification, declassification, and
sensitive   unclassified  information   review   of   documents.
Essentially,  the  contractor's  task  is  to  assist  OCCIR  in
complying  with  the  provisions of the Atomic  Energy  Act  and
Executive Order 12958, Classified National Security Information,
governing the control of information.

      The solicitation specifically seeks contractor support for
document  review  in the following areas, among others:  Reviews
made  mandatory  by  statute and Executive Order;  Responses  to
Freedom  of Information Act (FOIA) requests; Patent applications
and documents; Responses to subpoenas and discovery requests  in
litigation;  Responses  to  Congressional  inquiries;  and  Pre-
publication  reviews.   The  contractor  will  support   various
related   missions  such  as:  evaluation  of  document   review
procedures,   evaluation   of   classification   guides    under
development,  and tracking of document action.  The solicitation
requires  100% accuracy from the contractor in the tasks  to  be
performed.

      All  contractor personnel must have a valid  DOE  security
clearance at the time of award.  The Program Manager must have a
Bachelor's degree in an engineering discipline or in  public  or
business    administration,   and   a   Master's   of   Business
Administration  is highly desirable.  Most of  the  contractor's
other   key   personnel  must  have  degrees  in  a   scientific
discipline,  and  must be fully knowledgeable  in  the  area  of
nuclear weapons technology.

                         C.  The Appeal

      On  June  19, 2002, McNeil Technologies, Inc.  (Appellant)
filed  the instant appeal.  Appellant asserts NAICS code  541330
(Engineering  Services,  Military and  Aerospace  Equipment  and
Military  Weapons),  with a corresponding  $23  million  average
annual receipts size standard, is the correct NAICS code for the
instant solicitation.

     As a threshold matter, Appellant asserts it has standing to
file this appeal because a large concern has standing to file  a
NAICS  appeal where it is advocating an increased size  standard
under which it could qualify as small for the procurement.

     Appellant also asserts the instant procurement is a follow-
on  contract to an expiring contract, which was classified under
Standard  Industrial Classification (SIC) code 8711, Engineering
Services-Military and Aerospace Equipment and Military  Weapons,
with  a  corresponding $20 million average annual receipts  size
standard,   and   that  NAICS  code  541330   is   the   current
classification   which  best  corresponds   to   that   previous
classification.   Appellant argues that a CO's decision  not  to
make  the  same  NAICS designation used in earlier  procurements
must  be  reasonable.   Here, because there  is  no  significant
difference  between the statement of work in  this  solicitation
and  its predecessor, Appellant asserts it is not reasonable for
DOE  to  use  a  different  NAICS code than  541330.   Appellant
attaches extracts from the prior procurement's statement of work
and  a  statement of work extract and a Commerce Business  Daily
synopsis  from  another, similar procurement in support  of  its
argument.

      Appellant  further  asserts  the  solicitation  emphasizes
throughout  the  importance  of providing  highly  educated  and
qualified  personnel to perform the functions of  the  contract.
These  personnel must provide expert guidance to DOE related  to
document declassification, and provide support to DOE on a  wide
range  of  matters from FOIA requests to patent applications  to
discovery requests in litigation.  The solicitation refers to  a
number of highly technical documents which directly apply to the
contractor's duties under the solicitation, and the  complicated
issues  contained in these documents require the  contractor  to
hire   highly   educated   and   experienced   personnel.    The
solicitation further requires 100% accuracy from the contractor,
and all the Key Personnel must have either a military background
or military weapons experience.

      Appellant asserts the solicitation requires the contractor
to  have in-depth, specialized knowledge of nuclear weapons, and
characterizes  the  ability  to understand  the  intricacies  of
nuclear  weapons technology as essential to performance of  this
contract.   The high degree of technical expertise  required  by
the  contract  mandates the designation of  NAICS  code  541330,
instead  of  NAICS  code 541690.  Appellant  also  asserts  that
because  the  greater  value  of services  provided  under  this
contract  will  be  under  the  Key  Personnel  category,  which
requires the greater technical expertise, that NAICS code 541330
is the appropriate NAICS code.

      Finally, Appellant asserts DOE chose a NAICS code in  this
case  to  provide  opportunities for firms  in  the  $6  million
average  annual  receipts range, and this  is  an  impermissible
reason for a NAICS code designation.

                      D.  The DOE Response

      On  June  26,  2002, DOE filed a response to  the  appeal.
First,  DOE  moves to dismiss the appeal, because Appellant  has
not  demonstrated how it is adversely affected by the NAICS code
designation.

      Second,  DOE  asserts  NAICS code 541690  is  the  correct
designation for this solicitation because the primary purpose of
the solicitation is obtain contractor support to assist OCCIR in
performing  the classification, declassification  and  sensitive
unclassified  examination of official  Government  documents  in
DOE's possession.

     DOE asserts that while the instant procurement is a follow-
on  to an expiring contract, the requirements have been expanded
to  include  additional contractor support to improve Government
services  at  the program management level.  Thus,  while  NAICS
code 541330 may have replaced SIC code 8711, this fact does  not
mean  SIC  code 8711 is necessarily the best SIC code  for  this
procurement.  NAICS code 541690 is a more accurate match for the
revised follow-on contract.

      DOE further argues that NAICS code 541330 applies to firms
primarily  engaged in applying physical laws and  principles  of
engineering the design of machines, material processes,  and  so
on,  while  NAICS  code 541690 applies to  firms  which  provide
advice and assistance on scientific and technical issues.  Here,
the  SOW  does  not require the contractor's personnel  to  have
engineering  skills,  but  rather  the  combination  of  skills,
knowledge,  education,  and training in nuclear  technology  and
related  details to assess whether classified and  nonclassified
sensitive  documents in DOE's possession and may be released  to
Congress, other agencies, and the general public.  The principal
purpose  of the solicitation is advisory and assistance services
of  highly analytical nature, and therefore the solicitation  is
more properly classified under NAICS code 541690.

                         II.  DISCUSSION

      Appellant filed the instant appeal within 10 days of DOE's
issuance of the solicitation, and thus the appeal is timely.  13
C.F.R. Section 134.304(a)(3).

      As  a  threshold matter, it is clear from the first  point
Appellant raises in its appeal that it is not eligible for  this
procurement  under  the  current  NAICS  code  designation,  and
appealed  to this Office in order to seek a higher size standard
under  which  it  would  be eligible.  Therefore,  Appellant  is
adversely  affected by the current NAICS code  designation,  and
has   standing   to  appeal.   13  C.F.R.  Section   134.302(b).
Accordingly,  DOE's motion to dismiss for lack  of  standing  is
DENIED.
     
      Appellant has the burden of proving, by a preponderance of
the evidence, all elements of its appeal.  Specifically, it must
prove  the CO's NAICS code designation is based on a clear error
of fact or law.   SIC Appeal of The Scientific Consulting Group,
Inc., No. 4186, at 5 (1996); [1] 13 C.F.R. Section 134.314.  The
correct  NAICS  code is that which best describes the  principal
purpose of the services being procured, in light of the industry
description  in  the  NAICS Manual, [2] the description  in  the
solicitation,  and the relative weight of each  element  in  the
solicitation.  13 C.F.R. Section 121.402(b).

      The NAICS Manual describes NAICS code 541690, assigned  by
the CO, as including:

     [E]stablishments primarily engaged in providing  advice
     and assistance to businesses and other organizations on
     scientific and technical issues (except environmental).
     (The  description  then lists ten types  of  consulting
     services  as  examples of the kind of firm  covered  by
     this code).
     
NAICS Manual, at 575.

The   NAICS  Manual  describes  NAICS  code  541330,  urged by
Appellant, as including:

     [E]stablishments primarily engaged in applying physical
     laws   and   principles  of  engineering   in   design,
     development,  and  utilization of machines,  materials,
     instruments,  structures, processes, and systems.   The
     assignments  undertaken  by  these  establishments  may
     involve  any of the following activities: provision  of
     advice, preparation of feasibility studies, preparation
     of  preliminary and final plans and designs,  provision
     of   technical  services  during  the  construction  or
     installation   phase,  inspection  and  evaluation   of
     engineering  projects,  and  related  services.    (The
     description   then  lists  five  types  of  engineering
     services  as  examples of the kind of firm  covered  by
     this code.)

NAICS Manual, at 564.

      Clearly, the SOW does not require the contractor to  apply
physical   laws  and  principles  of  engineering   to   design,
development,   or  utilize  machines,  materials,   instruments,
structures, processes, or systems.  The contractor here will not
design, develop, or build anything.  Rather, the contractor will
advise  DOE on how to handle classified and sensitive documents.
The  SOW requires scientific expertise of the contractor because
these   documents  are  highly  technical  in  nature  and   the
contractor's personnel must have these qualifications  in  order
to understand the documents in question and intelligently review
them.  However, the work the contractor will perform is more  in
the nature of consulting than engineering.

      The  fact that this procurement is a follow-on to previous
procurement classified under SIC code 8711 does not mandate  the
designation  of Appellant's preferred NAICS code.   It  is  true
that  SIC  code  8711  is matched to NAICS code  541330.   NAICS
Manual, at 1007.  While prior NAICS/SIC code designations are  a
factor  the  CO  must consider in designating a NAICS  code  (13
C.F.R.  Section 121.402(b)), they are not dispositive  in  NAICS
appeals  before this Office.  SIC Appeals of Analytical Systems,
Inc.,  et  al., SBA No. SIC-4411, at 8 (2000).  Where, as  here,
the  designation clearly does not call for services  covered  by
the  NAICS  code  urged by Appellant, and this  Office  was  not
called  upon  to  review  the prior  designation  and  render  a
decision, the previous procurement's SIC code designation has no
weight,  and the CO's decision to discount the prior procurement
history  is  justified.  See NAICS Appeal of Phoenix  Scientific
Corporation,  SBA  No.  NAICS-4416, at  12  (2000).   Thus,  the
documentation  Appellant submitted on the prior procurement  and
another similar procurement are not probative evidence, and  are
not entitled to any weight.

      Finally,  Appellant's argument that this  NAICS  code  was
chosen  in  order to provide opportunities for firms in  the  $6
million average annual receipts is a bare assertion, unsupported
by  any  evidence.   Thus,  the Administrative  Judge  will  not
consider it.

     In conclusion, it is clear that the Appellant has failed to
meet  its  burden  of  establishing that the  CO  erred  in  not
designating NAICS code 541330 for this solicitation, because the
solicitation does not call for engineering services, but  rather
assistance  in reviewing classified and sensitive documents  and
making decisions relating on redaction and disclosure, and these
do  not  require  the  contractor to  apply  physical  laws  and
principles  of  engineering  in the design  and  development  of
machines,   structures  and  systems.   The  CO's   NAICS   code
designation is AFFIRMED.

                        III.  CONCLUSION

     The  Administrative Judge AFFIRMS the Contracting Officer's
NAICS code designation and DENIES the appeal.

     This   is   the  final  decision  of  the  Small   Business
Administration.  13 C.F.R. Section 134.316(b).

                               CHRISTOPHER HOLLEMAN
                               Administrative Judge

_________________________

     1   Following  the  Small  Business Administration's  (SBA)
October  1, 2000, conversion to the 6-digit NAICS codes  as  the
basis  for  the  SBA's small business size standards,  SIC  code
appeals  are now known as NAICS code appeals.  NAICS  Appeal  of
Phoenix Scientific Corporation, SBA No. NAICS-4416, at 8 (2000).
Where  appropriate, the case precedent of this  Office,  decided
under  the  prior SIC system, will apply to NAICS code  appeals.
Id.
     2   Executive Office of the President, Office of Management
and  Budget.   North  American  Industry  Classification  System
Manual (1997).

                                             Posted: August, 2002