SETA Corporation , No. 4477 (March 1, 2002)
Docket No. SIZ-2001-06-01-17

Federal Emergency Management Agency, No. 4477 (March 1, 2002)
Docket No. SIZ-2001-06-04-18



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

                                )     
SIZE APPEALS OF:                )     
                                ) 
SETA Corporation                )     
                                )     Docket Nos. SIZ-2001-06-01-17
Federal Emergency Management    )                 SIZ-2001-06-04-18
Agency                          )                 
                                )    
     Appellants                 )     
                                )     
Solicitation No.                )     Decided:  March 1, 2002
   RFQ EMV-2001-RQ-0013         )     
   BPA EMV-2001-BP-0075         )     
                                )     
Federal Emergency Management    )     
Agency                          )     
Procurement Office              )      
Bluemount, Virginia             )      
                                
                                
                           APPEARANCES
                                
                      Leslie H. Lepow, Esq.
                     Paul W. Cobb, Jr., Esq.
                    Geoffrey A. Barrow, Esq.
                       Jenner & Block, LLC
                 for Appellant SETA Corporation
                                
                      Edward Broyles, Esq.
                    Office of General Counsel
        for Appellant Federal Emergency Management Agency
                                
                       Kenneth Dodds, Esq.
                    Office of General Counsel
           for Appellant Small Business Administration
                                
                    Andrew P. Hallowell, Esq.
                Piliero, Mazza, & Pargament, PLLC
                   for Intervenor ARTEL, Inc.
                                
                    Thedlus L. Thompson, Esq.
                    Office of General Counsel
         for Intervenor General Services Administration
                                
                     William L. Walsh, Esq.
                  William Craig Dubishar, Esq.
                      Paul N. Wengert, Esq.
                Venable, Baetjer and Howard, LLP
       for Intervenor Applied Computing Technologies, Inc.


                             DIGEST

The  Small  Business Administration's regulations  governing  the
8(a)  program  do  not  apply to a size determination  issued  in
connection with a procurement that is not an 8(a) procurement.

A  Request for Quotations issued under a Federal Supply  Schedule
or  Multiple  Award  Schedule contract,  with  the  intention  of
entering  into a Blanket Purchase Agreement, which the  procuring
agency  designates as a small business set-aside, is a new  small
business set-aside procurement.

In  a small business set-aside procurement issued as Request  for
Quotations  under  a Federal Supply Schedule  or  Multiple  Award
Schedule contract, the size of a challenged firm is determined as
of the date of its submission of its certification as an eligible
small  business,  with its price quotation  in  response  to  the
Request for Quotations.


                            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  the  Small  Business  Administration's  regulations
governing  the 8(a) program apply to a size determination  issued
in connection with a procurement that is not an 8(a) procurement.

     Whether  a  Request for Quotations issued  under  a  Federal
Supply  Schedule  or Multiple Award Schedule contract,  with  the
intention  of  entering into a Blanket Purchase Agreement,  which
the procuring agency designates as a small business set-aside, is
a new small business set-aside procurement.

     When  is the size of a challenged firm determined in a small
business set-aside procurement issued as a Request for Quotations
under  a  Federal  Supply  Schedule or  Multiple  Award  Schedule
contract.


                         I.  BACKGROUND
                                
                       A.  The Procurement
                                
      On  November  18,  1996, Appellant SETA Corporation  (SETA)
submitted  an offer to the General Services Administration  (GSA)
for  a  Multiple  Award Schedule (MAS) contract  for  Information
Technology  (IT) Professional Services on GSA's Group 70  Federal
Supply Schedule (FSS) contract. [1] On March 4, 1997, GSA awarded
FSS  Contract Number GS35F4490G to SETA for a term of two  years,
with a three-year option period.  GSA later modified the contract
to a five-year term.

     On  February 1, 2001, Appellant Federal Emergency Management
Agency  (FEMA)  issued  a  Request for Quotations  (RFQ)  for  IT
Professional   Services  for  FEMA's  Mount   Weather   Emergency
Assistance  Center (and other FEMA sites).  The FEMA  Contracting
Officer  (CO) limited the distribution of the RFQ to  contractors
listed on the GSA Schedule Contract for IT Professional Services,
Group  70,  Special Item 132-51.  FEMA stated  its  intention  to
award  one  Blanket Purchase Agreement (BPA) for the services  in
the RFQ.  The cover letter for the RFQ stated the procurement was
totally  set  aside  for  small  business  under  North  American
Industry   Classification  System  (NAICS)  code   514210,   Data
Processing  Services, with a corresponding  $18  million  average
annual  receipts  size  standard.  The RFQ  included  FAR  clause
Section  52-219-1  designating a NAICS code  and  requiring  each
quoter  to  self-certify as to whether it is or is  not  a  small
business.

     On  March  1, 2001, SETA submitted its quotation in response
to  the  RFQ.   SETA  self-certified that  it  was  not  a  small
business.  On April 20, 2001, the CO awarded the BPA to SETA  and
notified  the unsuccessful offerors of the award.  On  April  24,
2001,  ARTEL,  Inc. (ARTEL), protested the award to SETA  because
SETA  was  not a small business when it submitted its  quotation.
On  April  25, 2001, Applied Computing Technologies,  Inc.  (ACT)
also  filed  a  protest, alleging SETA was not a  small  business
based  on  news accounts that described it as having receipts  in
excess  of the applicable size standard.  On May 2, 2001, the  CO
forwarded the two protests to the Small Business Administration's
(SBA) Area II Office of Government Contracting (Area Office),  in
Philadelphia, Pennsylvania.
     
     On  May  7,  2001,  the  Area Office informed  SETA  of  the
protests  and  requested that it file an SBA Form  355,  together
with its financial statements for its last three completed fiscal
years  and  certain  other information.  On May  10,  2001,  SETA
responded  with its financial information for fiscal years  1993,
1994, and 1995, while arguing that the BPA is not a new contract,
and that SBA must determine size as of the date of SETA's initial
offer  on  the  original  FSS  contract,  not  the  date  of  any
subsequent orders, including BPAs.  SETA cited 13 C.F.R.  Section
124.503(h) in support of its argument.  SETA also argued that any
size  determination would have only prospective  effect,  because
the underlying procurement is the FSS contract awarded in 1997.
     
     In  a letter dated May 15, 2001, the Area Office stated that
it  would  determine SETA's size as of its March 1, 2001 response
to   the  RFQ,  because  it  considered  the  RFQ  to  be  a  new
procurement, set aside for small business.  The Area Office  also
stated  that  because the protests were timely  filed,  its  size
determination would apply to the instant procurement.  On May 17,
2001,  SETA  replied,  reiterating its  argument  that  the  only
contract  involved  in  the procurement was  the  underlying  FSS
contract.   SETA  further argued that the  BPA  could  not  be  a
contract,  because it lacked mutual consideration,  an  essential
element  for  formation  of  a contract,  because  FEMA  was  not
obligated  to order any minimum quantity of services.  SETA  also
stipulated that it was other than small as of March 1, 2001.

                   B.  The Size Determination
     
     On   May   21,  2001,  the  Area  Office  issued  its   size
determination  finding SETA other than small.   The  Area  Office
found  that  ARTEL's and ACT's protests were timely filed  within
five days of their notification of the award and, thus, they  are
timely and apply to the instant procurement.  Therefore, the size
determination  applies  to  the instant  procurement.   The  Area
Office  then  addressed the issue of what date it  would  use  to
determine SETA's size.  The Area Office concluded that 13  C.F.R.
Section 124.503(h) and 48 C.F.R. Section 19.804-6, relied  on  by
SETA,  are  not applicable here because they apply  to  the  8(a)
program  -- this is not an 8(a) procurement, nor SETA is an  8(a)
firm. [2]

      The  Area  Office  found that the RFQ  required  the  firms
responding  to  it to provide a technical quote reflecting  their
organizational structure, background, and past performance and to
offer  a discount on the price listed on the GSA Schedule.  Firms
were  required to self-certify their small business  status  with
their  response.   (SETA certified it was not  small.)   The  RFQ
established  FEMA  would award a BPA.  The  BPA  was  a  separate
vehicle  against  which FEMA would place Task Orders.   The  Area
Office  found  FEMA  was  using the list of  contractors  on  the
schedule  as  a preferred vendor's list or a source  list.   FEMA
initiated its own vehicle for contracting for services by issuing
the  RFQ and requiring the concerns to respond according  to  its
evaluation criteria and to provide a new price.

     The  Area Office also concluded that, although the BPA might
not  be  a contract, a contract need not be in effect to  make  a
size  determination.  Rather, the underlying protest must pertain
to  a  particular  procurement, and the concern's  size  must  be
determined  as  of the date of its written self-certification  as
part of its initial offer, including price.  The Area Office thus
concluded  it would determine SETA's size as of the date  of  its
response  to  the  RFQ, March 1, 2001.  Accordingly,  drawing  an
adverse inference against SETA based on its refusal to supply the
requested  information and relying on SETA's admission  that  was
not  a small business as of March 1st, the Area Office found SETA
other  than  small.  On May 23, 2001, SETA and FEMA received  the
size determination.

                         C.  The Appeals
                                
       On  June  1,  2001,  SETA  filed  an  appeal,  essentially
reiterating the arguments it made to the Area Office.  On June 4,
2001,  FEMA also filed an appeal.  FEMA argues that it  solicited
no  sources  outside the GSA Schedules for the BPA and  that  the
process was in accordance with FAR procedures on BPAs.  The  set-
aside  and  small business certification language was superfluous
and   was   included  in  the  RFQ  cover  letter  due  only   to
administrative   error.   FEMA  did  not   consider   the   self-
certifications  as to size because it assumed the  quoters'  size
status was governed by the status listed on the GSA Schedule.

     FEMA  further argues that, absent the erroneous language  in
the  cover  letter,  FEMA's actions were wholly  consistent  with
contracting  under  FAR Part 8, which governs  FSS  procurements.
FEMA  also  argues that, if the provisions of FAR Part 19  (Small
Business Programs) apply to this procurement, then it would  have
been  required  to  use the procedures in FAR  Parts  14  (Sealed
Bidding)  or  15  (Contracting  by  Negotiation),  because   this
procurement  exceeds  the thresholds for acquisitions  under  FAR
Part  13  (Simplified Acquisition Procedures).  Further,  if  the
procurement is not being conducted under FAR Part 8, then it must
meet the publication and competition requirements of FAR Parts  5
and  6.  Therefore, FEMA argues, the Area Office's interpretation
undermines the legality not merely of the procedure used in  this
procurement,  but  of  all contracting under  the  GSA  Schedules
program.   Finally, FEMA asserts in support of its argument  that
small business designation was a mistake that the RFQ itself does
not   contain   a   set-aside  clause  or   a   "Limitations   on
Subcontracting" clause.

                  D.  Responses to the Appeals
                                
     On  June  6,  2001, SBA moved to intervene  in  the  instant
appeals.  On June 14, 2001, the Administrative Judge granted this
motion,  consolidated the two appeals, and set June 29, 2001,  as
the date the record would close.
     
     On June 11, 2001, ARTEL filed a response to the two appeals.
ARTEL   argues   that  FAR  requires  that  the  small   business
requirements in FAR Part 19 be applied to FSS contractors.  ARTEL
argues this Office has issued size determinations in cases  where
the  contracting  vehicles were BPAs, citing Size  Appeal  of  DX
Distributors, Inc., SBA No. SIZ-3905 (1994), and Size  Appeal  of
Good  Food  Distributor  Corporation, SBA  No.  SIZ-3360  (1990).
ARTEL also argues FEMA decided to conduct this procurement  as  a
small business set-aside and should not be permitted now to claim
the  set-aside language in the RFQ cover letter was  inserted  in
error.   Further, ARTEL argues the BPA is, by its terms,  not  an
order,  but  the  contract vehicle against which orders  will  be
placed.
     
     On  June  29,  2001, ACT also filed a response  to  the  two
appeals,  arguing FEMA conducted its own small business set-aside
procurement  by  issuing  the RFQ, and that  therefore  the  size
determination was properly issued.  ACT also requests this Office
order FEMA to produce a number of documents.
       
     On  June 29, 2001, SBA filed a response to the appeals.  SBA
argues  that,  when a size protest is filed with  respect  to  an
order  placed under an FSS contract, SBA's regulations  generally
require  SBA to look at the size of the protested concern  as  of
the  date of its written self-certification for the FSS contract,
not  at  any  date  corresponding to an order  placed  under  the
contract.   However, SBA further argues that,  when  a  procuring
agency   conducts  its  own  separate  small  business  set-aside
competition   among   FSS  contractors   and   requests   written
certifications  of small business size status, the  general  rule
with  respect to FSS contracts does not apply, and the  date  for
determining  a concern's size in that situation is the  date  the
concern  submits  its  written self-certification  of  its  small
business  size  status to that procuring agency.   An  RFQ  is  a
procurement  and  may be set aside for exclusive  small  business
competition.   FEMA is the procuring agency here,  and  the  only
written  certification submitted to it here was SETA's  March  1,
2001 certification it was other than small.
     
     SBA   disputes  SETA's  contention  that,  because  the  FAR
provides  that responses to RFQ quotes are not offers,  the  date
for  determining size is the date of the initial offer on the FSS
contract.  FAR definitions do not apply to SBA's regulations, and
SBA's regulations are meant to determine size in all procurements
where  size  is relevant, regardless of whether a response  to  a
solicitation   in   that   procurement  constitutes   a   binding
obligation.   SBA  also argues that 13 C.F.R. Section  124.503(h)
does  not  apply to this procurement, because it is a  regulation
for  the 8(a) program, this is not an 8(a) procurement, and  SETA
is no longer an 8(a) firm.
     
      Finally,  on  June  29, 2001, the GSA  filed  a  Motion  to
Intervene.   GSA  argues in support of the appeals.   GSA  argues
that, in FSS procurements, size is routinely determined as of the
date  the  offer for the FSS contract is submitted.  GSA  further
argues  that  this Office has held that SBA will  determine  size
status  as  of  the date of the challenged firm's  initial  self-
certification  to  the procuring agency as part  of  its  initial
offer, citing Size Appeal of Whitecraft Industries, Inc., SBA No.
SIZ-2016,  at 11-13 (1984); Size Appeal of Alphanumeric  Systems,
Inc., SBA No. SIZ-3152, at 5 (1989).

      GSA  further  argues  that the procurement  remains  a  FSS
procurement despite FEMA's issuing the RFQ with intent  to  award
the  BPA.   GSA argues FEMA was not using the GSA Schedule  as  a
source  list; rather, issuing an RFQ resulting in  a  BPA  is  an
integral  feature  of  FSS  ordering  procedures,  authorized  by
regulation and encouraged by the program.  BPAs are accounts that
agencies  establish  with FSS contractors  to  fulfill  recurring
requirements.  The contract language of all FSS and MAS contracts
makes clear that BPAs are authorized for use in placing recurring
orders  and  are not new procurements.  Although FEMA erroneously
included set aside language in the RFQ cover letter, it is  clear
from the original contract, the RFQ, and the BPA taken as a whole
that  FEMA  was  conducting  an FSS procurement.   When  the  FSS
contract  conflicts  with the terms and conditions  of  an  order
issued under it, the FSS contract controls.  Accordingly, the BPA
is not a new procurement.

       GSA   concludes  by  arguing  that  affirming   the   size
determination   could  adversely  impact   the   small   business
initiatives  in  which GSA partners with  SBA.   GSA  submits  as
exhibits  six  attachments on the FSS program and its  impact  on
SBA's  programs.   Most of these memoranda are addressed  to  SBA
and discuss the impact of the FSS program on SBA's programs.

                       E.  Interim Orders

      On August 3, 2001, the Administrative Judge issued an Order
granting  GSA's  Motion to Intervene, excluding  FEMA's  argument
that  its cover letter to the RFQ contains errors, denying  ACT's
request  for  an  order  directing the production  of  documents,
reopening  the record, ordering GSA to file SETA's  original  FSS
contract, and ordering SBA to respond to GSA's argument,  and  to
certain  issues  raised by the Administrative Judge.   The  Order
gave  the  other  parties  the  opportunity  to  reply  to  SBA's
response.
     
     On  August  15, 2001, at the request of SETA  and  GSA,  the
Administrative Judge issued a Protective Order, covering the  GSA
FSS  contract No. GS35F4490G with SETA.  Counsel for the  parties
were admitted under the Protective Order. [3]
     
     SBA filed its response on August 27, 2001.   On September 5,
2001,  Appellants SETA and FEMA, and Intervenors  GSA,  ACT,  and
ARTEL replied to SBA's Response.

             F.  SBA's Response to the Interim Order

     SBA  argues  that  it  has not accepted  GSA's  practice  of
considering the size determination valid for the whole term of an
FSS  contract.  SBA argues that SETA's size should be  determined
as  of the date the most recent option was exercised, relying  on
Alphanumeric  and  Whitecraft.  SBA further argues  that  because
this  contract is not in its base period, SETA's size  should  be
determined  as of the date of the option exercised on  March  31,
1999.   SBA  goes  on,  however, to argue that  Alphanumeric  and
Whitecraft  are  not fully apposite, because neither  involved  a
small  business  set-aside contract solicitation  issued  to  FSS
contractors.
     
     SBA   argues  that  it  has  the  sole  responsibility   for
determining  a  firm's  size  when  a  small  business  set-aside
procurement   is  at  issue.   Further,  SBA  argues   the   term
"procurement"  is broadly defined to include all  stages  of  the
process  of acquiring goods or services.  SBA relies upon Federal
Court  of  Claims  and General Accounting Office (GAO)  precedent
that  an action of the type at issue here, an RFQ to award a BPA,
is  a  procurement.  SBA further argues that it must determine  a
firm's  size  as  of  the  date its  submits  its  written  self-
certification of size in response to the solicitation.
     
     SBA  further points out that the RFQ is a solicitation,  and
the  size regulations require a concern to meet the size standard
for  the  NAICS code specified in the solicitation.  SBA  has  no
authority to ignore express terms of a solicitation, and the fact
it is an FSS procurement makes no difference.
     
     SBA  also  argues that the 8(a) regulations are inapplicable
here, as this not an 8(a) procurement.  Finally, SBA argues  that
its  position is not inconsistent with the regulations  governing
the FSS program, as these regulations do not prohibit the use  of
small business set-asides.

                  G.  Replies to SBA's Response

      FEMA  argues  that  FAR Subpart 8.4, which  authorizes  FSS
ordering   without  regard  to  FAR  Part  19,   Small   Business
Procedures, controls here.  FEMA further argues that FAR  Section
19.502-1(b) provides that small business set-asides do not  apply
to FSS purchases.  FEMA simply states that it erred in requesting
a  small business certification and designating the RFQ as a set-
aside,  and that this procedural defect does not convert the  buy
into a set-aside.

      FEMA  argues it was fair in its evaluation, and that  SBA's
argument  lacks a rational basis for distinguishing 8(a) concerns
from small businesses under the FSS program.
     
     SETA  argues that Whitecraft stands for the proposition that
a  concern's  size is determined as of the date  of  the  initial
offer,  or,  if applicable, the date the most recent  option  was
exercised.   In addition, SETA argues that GSA had not  exercised
an  option here, but modified the FSS contract soon after it  was
awarded  to make it a five-year term, and, unlike the concern  in
Whitecraft,  SETA  did not submit a new offer  under  an  option.
Finally,  in  Whitecraft, the parties entered into new  contracts
for each renewal period, which they did not do here.
     
     SETA further argues that SBA's position that this action  is
a  new  procurement  is unsupported by legal  authority,  and  is
contrary to the rule expressed in Whitecraft.
     
     SETA   also  argues  that  13  C.F.R.  Section  124.503   is
applicable here, as the provision's regulatory history shows that
it  was  deliberately  modified  to  distinguish  Basic  Ordering
Agreements from FSS contracts.
     
     SETA argues that the size appeal decisions SBA relies on are
inapposite here, as they do not examine the appropriate time  for
assessing  affiliation  under  an FSS  contract.   Finally,  SETA
argues  that GAO has held that a response to an RFQ that reflects
FSS  prices  is  not  an  offer which  can  be  accepted  by  the
Government.
     
     ACT  argues  that FEMA clearly designated this action  as  a
small   business  set-aside  procurement,  and  that   the   8(a)
regulations  do not apply to a procurement outside  of  the  8(a)
program.
     
     ARTEL  argues SBA properly determined SETA's size under  SBA
regulations, and that the 8(a) regulations are not relevant here.

                         II.  DISCUSSION
                                
                      A.  Threshold Issues

      The instant appeals were filed within 15 days of receipt of
the  size  determination,  and they  are  thus  timely  for  this
procurement.   13  C.F.R.  Section  134.304(a)(1).   While   SETA
concedes that the protests filed here were timely, it argues that
the  size determination may only apply prospectively, since  they
must apply to the FSS, citing FAR Section 19.302(j).  Because the
Administrative Judge finds below that this contracting action was
a procurement, and that the protests apply to the RFQ and not the
original FSS, he rejects this argument, and finds that this  size
determination applies to the RFQ.

      While  the other parties did not object to the new evidence
submitted by GSA in its Motion to Intervene, after reviewing  it,
the  Administrative Judge finds these are documents outlining GSA
policies, copy of agreements with SBA regarding the 8(a) program,
and a letter seeking guidance from SBA regarding the FSS program.
The  documents  largely go to policy questions  between  the  two
agencies  as  to  whether the position GSA  urges  here  is  good
procurement  policy, a determination beyond  the  scope  of  this
Office's  jurisdiction.  The Administrative concludes  that  this
new  evidence is not relevant or probative to the issues in  this
appeal,  and that GSA has failed to establish good cause for  its
admission.   13  C.F.R. Section 134.308(a)(2).   Accordingly,  he
EXCLUDES it from consideration.

                  B.  The Merits of the Appeals
                                
     Appellant  has the burden of proving, by a preponderance  of
the  evidence,  that the Area Office based its size determination
on a clear error of fact or law.  13 C.F.R. Section 134.314; Size
Appeal of Rebmar, Inc., SBA No. SIZ-4173, at 4 (1996).

      The  principal  issue in this case centers on the time that
SETA's size is to be determined.  This, in turn, is determined by
whether  the  procurement at issue is the original FSS  contract,
against  which  the BPA entered into as a result of  the  RFQ  is
merely an order, or whether the RFQ represents a whole new  small
business set-aside procurement.

     When  a  government procurement is at issue, SBA  determines
the  size  of  a  concern as of the date the  concern  submits  a
written  self-certification that it is  small  to  the  procuring
agency  as part of its initial offer, including price.  13 C.F.R.
Section  121.404. [4] A size determination need not  be  made  in
connection with a contract, but must be made in connection with a
particular  procurement.  13 C.F.R. Section  121.1007(a).   Here,
Appellants argue that SETA's size should be determined as of  the
date  of  its  offer in response to the initial FSS solicitation.
The  Area  Office determined SETA's size as of the  date  of  its
response to the RFQ, and SBA argues that this is correct. [5]

      Appellants  rely  on  13 C.F.R. Section  124.503(h),  which
provides  that in procurements conducted under the 8(a)  program,
SBA's  acceptance  of  FSS and FSS contracts  is  valid  for  the
duration of the contract, separate offers and acceptance are  not
required for task orders under such contracts, and a concern  may
continue  to accept new orders under the contract even after  its
program term expires, or it has become other than small.

     However,  13  C.F.R. Section 124.503(h) is  found  in  SBA's
regulations governing the 8(a) program, and it is undisputed that
the  contracting action at issue here is not an 8(a) procurement,
and  that SETA is no longer an 8(a) program participant.  As  SBA
notes  in  its  brief,  the 8(a) program is a  unique  government
contracting  program  with  unique  features.   In  order  for  a
procurement to be an 8(a) procurement, the procuring agency  must
offer  it  to  SBA, and SBA must accept it into the program.   13
C.F.R.   Section   124.503(a).   That  has  not  happened   here.
Appellants'  attempts  to  apply  the  8(a)  regulations   to   a
procurement  that was not within the 8(a) program are unsupported
by law or regulation.  The 8(a) program's regulations apply to  a
size determination or size appeal only when the procurement is an
8(a)  procurement, and are otherwise not relevant  to  the  case.
Size Appeal of IMDT, Inc., SBA No. SIZ-4121, at 4 (1995).
     
     In  the  Interim Order, the Administrative Judge raised  the
question  of  whether  13  C.F.R.  Section  124.503(h)  has   any
applicability  as  SBA's recognition of  the  state  of  the  law
regarding  FSS procurements.  SBA clearly says it does  not,  and
its  interpretation  of its own regulation is  entitled  to  some
respect.   Size Appeal of Uniband, Inc., SBA No. SIZ-4326,  at  8
(1998).   Further, Appellants' arguments concentrate  on  arguing
the  regulation  is  applicable as a whole  to  this  contracting
action,  and  do not really address this issue.  After  reviewing
the  provision, the Administrative Judge concludes that its clear
reference to SBA's acceptance of the 8(a) contract makes it clear
that this provision applies exclusively to 8(a) procurements.
     
     Appellants' arguments that the FAR supports their appeal are
also  misplaced.   Appellants rely on language  in  FAR  Sections
2.101 and 13.004(a) defining "offer" and "quotes."  However,  the
definitions  in FAR are not necessarily applicable in  construing
the  meaning  of  SBA's  size  regulations  and  thus  cannot  be
determinative here.  FAR Section 2.101(a). [6] SBA alone has  the
responsibility  for  determining a concern's size  in  connection
with  a particular procurement.  15 U.S.C. Section 632(a)(2);  13
C.F.R. Sections 121.101, 121.401, 121.1001(a).
     
     Appellants rely on other FAR provisions (FAR Sections  8.401
et  seq.,  especially  Section 8.404, and  Section  19.502-1(b)),
which deal with the requirements imposed on procuring agencies to
consider  small  business  set-asides and  the  fact  that  these
requirements  and other small business acquisition procedures  of
FAR Part 19 are not required for MAS and FSS contracts.  However,
these provisions are not prohibitions against issuing an RFQ as a
small business set-aside.
     
     Here,  FEMA  elected to issue an RFQ totally  set-aside  for
small  businesses.  FEMA issued the document containing  the  key
provisions  necessary  to  designate a  procurement  as  a  small
business set-aside, e.g., a statement the RFQ was set aside,  and
FAR  clause  Section 52.219-1 designating a NAICS code  with  the
applicable size standard.  After taking such clear actions,  FEMA
cannot  now argue that these actions were mistaken.  (FEMA  could
have  canceled  the  RFQ  and issued a new,  were  this  truly  a
mistake.)   If FEMA made a mistake in issuing the RFQ,  it  would
appear  to  have  been neglecting to include the  few  provisions
associated  with  small business set-asides to  which  Appellants
point  in their pleadings.  Had FEMA merely issued SETA an  order
against  the FSS contract, the question of SETA's size would  not
have arisen.  Instead, FEMA conducted its own small business set-
aside  procurement,  limited to firms on the  GSA  Schedule,  and
nothing in the FAR prohibits this.

     When   a   procuring  agency  uses  an  RFQ,  a   responding
contractor,  or  quoter, does not make an offer,  it  provides  a
quote,  and the Government provides the offer in the form  of  an
order.  FAR Section 13.004(a).  Appellants' argument is that  SBA
is  bound by the term "offer" in a context where the word is  not
used  in  connection with the responding contractor  and  leaving
unspecified the time at which size must be determined.   This  is
not  a  rational  interpretation  of  the  regulation.   In  this
context,  "quotes," are analogous to offers, and a more  coherent
interpretation  of the regulation would find "offer"  to  mean  a
prospective  contractor's  response to  the  RFQ,  including  its
certification.   In  determining what 13 C.F.R.  Section  121.404
means in the context of a response to an RFQ issued under an FSS,
this  Office  holds  that  the date to determine  size,  when  by
definition the contractor does not make an "offer," is  the  date
the  concern submits its written  self-certification of  size  in
its  response  to  the  procuring  agency's  solicitation.   This
holding   is   consistent  with  the  broad   interpretation   of
"procurement," finding that issuing an RFQ in this context  is  a
procurement.
     
     This  Office's  precedent supports this  holding.   In  Size
Appeal  of Whitecraft Industries, Inc., SBA No. SIZ-2016  (1984),
this  Office  held that in an FSS procurement, a  concern's  size
status is determined as of the date of its self-certification  on
the  primary contract, or the date of its submission of a renewal
for  a  subsequent contract, whichever is applicable. Whitecraft,
at  13-14.  In that case, we found that by renewing its contract,
Whitecraft had made a new small business certification, and  that
its  size should be determined as of the later date.  None of our
later cases dealing with FSS, MAS or BPA contracts have disturbed
this holding.  Size Appeal of Alphanumeric Systems, Inc., SBA No.
SIZ-3152   (1989);   Size   Appeal  of  Good   Food   Distributor
Corporation,  SBA  No.  SIZ-3360  (1990);  Size  Appeal   of   DX
Distributors, Inc., SBA No. SIZ-3905 (1994).
     
     Here,  while there is no renewal of the contract,  there  is
instead  an RFQ, which required a self-certification as  a  small
business.  FEMA undertook a procurement as a small business  set-
aside.   SETA certified that it was not a small business when  it
submitted its response to the RFQ.  Under Whitecraft, it is  this
later  certification that is applicable to the  procurement,  and
which controls. [7]
     
     Finally, the Administrative Judge also notes that the  Court
of  Federal Claims, after reviewing Intelligent Decisions,  supra
at fn. 7, has held that the issuance of an RFQ prior to the award
of  a  BPA is a procurement, and the procuring agencies'  actions
must  be  reasonable  and in accordance with  the  terms  of  the
solicitation.  Labat-Anderson, Inc. v. United States, 50 Fed. Cl.
99,  103-04 (2001); Ellsworth Associates, Inc. v. United  States,
45  Fed.  Cl.  388,  395-96  (1999).   The  Administrative  Judge
concludes that this precedent answers definitively the  issue  of
whether  an  RFQ  issued under an FSS contract  with  a  view  to
concluding  a BPA is a procurement.  Here, FEMA conducted  a  new
procurement with an RFQ set aside for small business.  The  firms
which  responded to the RFQ had to be eligible small  businesses,
as  of  their  date the submitted their self-certifications  with
their quotes.
     
     Accordingly,  the  Administrative  Judge  finds   that   the
Appellants have failed to meet their burden of establishing clear
error by the Area Office, and their appeals must be denied.
     
     
                        III.  CONCLUSION
                                
      For the above reasons, the Administrative Judge AFFIRMS the
Area Office size determination and DENIES the instant appeal.

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

     
     
                    
                    ___________________________________________
                    CHRISTOPHER HOLLEMAN
                    Administrative Judge


_________________________

       [1] The Federal Acquisition Regulation (48 C.F.R. or FAR),
at  Subpart 8.4, uses the terms Federal Supply Schedule (FSS) and
Multiple Award Schedule (MAS) interchangeably.
       [2]  SETA graduated from the 8(a) program on November  15,
1998.
       [3] Nevertheless, the Administrative Judge notes that none
of  the  subsequent pleadings filed, including those of SETA  and
GSA, were identified by counsel as containing protected material.
Accordingly,  the  Administrative  Judge  is  not  issuing   this
decision under the Protective Order.
       [4]  "Procurement" is defined broadly,  as  including  all
stages  of  the process for acquiring property or  services.   41
U.S.C. Section 403(2).
       [5]  SBA's argument in the alternative is that SETA's size
should  be  determined as of the date of GSA's  exercise  of  its
option under the FSS contract.  However, the record reflects that
GSA modified the contract rather than exercised an option, and so
SBA's argument is not apposite.
       [6]  SBA's size regulations contain definitions  of  terms
used within those regulations, but they do not define "offer"  or
"quote".  See, e.g.  13 C.F.R. Section 121.104.
       [7]  The  Administrative  Judge directed  the  parties  to
discuss the GAO decision in Intelligent Decisions, Inc., 97-1 CPD
Paragraph  19  (Comp. Gen. B-274626, December 23, 1996),  recons.
denied,  97-1 CPD Paragraph 185 (Comp. Gen. B-274626.3,  May  15,
1997).  There, the Department of Justice entered into a BPA after
issuing  an RFQ.  GAO held that such a contracting action  was  a
procurement and a purchase off the FSS.  GAO further stated  that
quotations  in response to an RFQ were not offers that  could  be
accepted, but are informational responses.  However, it is  clear
that   while   the  prices  were  subject  to  negotiation,   the
contracting  action itself was a new procurement.  That  is  also
the  case  here.   A  review of Intelligent Decisions  leads  the
Administrative  Judge  to conclude that there  is  nothing  there
which  contradicts  a  holding here that FEMA's  RFQ  was  a  new
procurement,  a  small  business  set-aside  which  required  new
certifications from the quoters.
     

                                              Posted: March, 2002