In this case, the NAICS Code were appealed by The Bionetics Corporation, SBA No. NAICS-5829 (2017). This case concerns the Small Business Act of 1958. Recognizing the importance of free enterprise and competition, the Small Business Act requires the U.S. Government to assign a fair portion of contracts and purchases to small businesses. The Small Business Administration (SBA) and its Office of Hearings and Appeals (OHA) oversee the administration of the Small Business Act. The SBA uses size standards and the North American Industry Classification System (NAICS) to define what qualifies as a small business.
The Background of an NAICS Code Appeal
On April 13, 2017, the Department of the Navy, Naval Air Systems Command (Navy), submitted a request for “maintenance, repair, and overhaul services for the Fleet Readiness Center Aviation Southeast (FRCSE).” The Contracting Officer (CO) reserved this request for small businesses and classified as NAICS code 488190, under the category of “Other Support Activities for Air Transportation” and carrying a $32.5 million size standard.
The initial request set a due date of May 15, 2017 for all offers. An amendment extended the due date for offers to May 22, 2017. On April 21, 2017, The Bionetics Corporation (Bionetics) challenged the CO’s classification under NAICS code 488190, arguing that NAICS code 336413 was the best classification for this request. NAICS code 336413, “Other Aircraft Part and Auxiliary Equipment Manufacturing,” carries of a size standard of 1,250 employees. On April 28, 2017, the CO cancelled this request. The CO also notified the OHA and posted a cancellation notice to Federal Business Opportunities (FBO).
Legal Analysis of this NAICS Code Appeal
Referencing its decisions in NAICS Appeal of Computer Systems Center Inc., SBA No. NAICS-5541 (2014) and NAICS Appeal of LVW Electronics, SBA No. NAICS-5339 (2012), the OHA dismissed this NAICS code appeal. The reasoning is simple: the CO cancelled the Navy’s request before the OHA could consider whether the designation of NAICS code 488190 was proper.
Essentially, this is a procedural matter. Once the CO cancelled this request, there was nothing left for Bionetics to appeal. Stated otherwise, Bionetics can appeal active requests, not cancelled requests. As a result, the OHA is forced to dismiss the Bionetics appeal.
The OHA also noted that if the Navy reissues an identical request – classified under NAICS code 488190, “Other Support Activities for Air Transportation” – Bionetics would be able to reissue their appeal to challenge the NAICS classification. But as outlined in SNA regulations under 13 CFR 134.304, Bionetics would only have 10 calendar days to issue such an appeal.
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