BNUMBER:  B-270603
DATE:  March 29, 1996
TITLE:  Karl Brothers, Incorporated

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Matter of:Karl Brothers, Incorporated

File:     B-270603

Date:     March 29, 1996
                                                                                                                
John P. Ahlers, Esq., Craig Holley, Esq., Barokas & Martin, for the 
protester.
Col. Nicholas P. Retson, and Capt. Bryant Banes, Department of the 
Army, and Audrey Liebross, Esq., Small Business Administration, for 
the agencies.
Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.
                                                                                                                
 DIGEST 

Protester which would not be next in line for award is not an 
interested party to protest award to an offeror ineligible to compete 
under the solicitation's mistakenly stated standard industrial 
classification (SIC) code.  
                                                                                                             
DECISION

Karl Brothers, Incorporated protests the award of a contract to 
CDC/TAG, Joint Venture, under request for proposals (RFP) No. DAHC 
76-94-R-0013, issued by the Department of the Army for military 
housing maintenance at various installations in Alaska.  Karl asserts 
that the award was improper because it was made on the basis of a size 
standard other than that set forth in the RFP.

We dismiss the protest.  

The RFP was issued on June 6, 1995, as a set-aside for small 
businesses certified by the Small Business Administration (SBA) to 
participate in the SBA's 8(a) Program (section 8(a) of the Small 
Business Act, 15 U.S.C.  sec.  637(a) (1994)).  The RFP contemplated the 
award of a firm, fixed-price construction requirements contract for a 
base year with 4 option years.  Work included maintenance of family 
housing quarters and appliance service at Forts Richardson, 
Wainwright, and Greely, and a separate off-post housing unit in 
Fairbanks, Alaska.

The agency first offered this requirement to the SBA in May 1994, for 
competition among eligible 8(a) contractors under standard industrial 
classification (SIC) code 8744, base maintenance.  The size standard 
for SIC code 8744 contractors is $20 million.  At the request of an 
SBA representative, the Army reviewed the requirement and changed the 
SIC code to 1799, base housing maintenance, with a size standard of $7 
million.  In June 1995, the SBA again requested the Army to review the 
requirement for assignment of the appropriate SIC code.  After 
reviewing the requirement, the agency concluded that the 8744 SIC code 
was more appropriate due to the addition of other work.  The Army 
advised the SBA of the change and the SBA concurred.  The SBA also 
provided a list of offerors with the 8744 SIC code; the list included 
Karl, the two offerors forming the CDC/TAG joint venture, and a third 
offeror, American Mechanical, Inc. (AMI).  However, when the Army 
issued the RFP, the applicable SIC code was identified as 1799, and 
the Army did not change the code reference to SIC code 8744[1] in any 
of the three amendments issued prior to the closing date.  On August 
2, the SBA notified the two companies forming the CDC/TAG joint 
venture of the requirements for joint venture proposals, and that the 
applicable SIC code was 8744.  

Four offerors, including CDC/TAG, Karl, and AMI, submitted proposals 
by the August 31 closing time for receipt of proposals.  The RFP 
provided for award on the basis of initial proposals, without 
discussions, and advised that technical factors were more important 
than price.  Award was to be made to the offeror whose proposal was 
most advantageous to the government.

Based on the evaluation, the agency determined that CDC/TAG's initial 
proposal, with the highest technical score and the lowest price, 
$7,865,491.49, represented the most advantageous offer.  This amount 
represented the base year award.  If all four options are awarded, the 
price of the contract, and the amount which was used for comparative 
evaluation purposes, will be $40,413,769.47.  Karl's proposed price 
for the base year was $11,279,565.99 and $59,686,917.59 with all 
options included.  The Army issued the notice of award to the SBA on 
November 17 and, on November 21, the SBA awarded a subcontract to 
CDC/TAG.  Upon receipt of a debriefing letter, Karl filed a protest 
with the agency challenging the size status and eligibility of 
CDC/TAG.  The Army referred the protest to the SBA, which denied it on 
November 24.  Karl then protested to our Office.

Karl argues that because the RFP restricted the procurement to SIC 
code 1799 contractors with a size standard of $7 million, it was 
improper for the Army to select CDC/TAG, a concern that was ineligible 
under that SIC code.  Karl requests either award to it or a 
resolicitation with the correct, intended SIC code.

We find that Karl is not an interested party to pursue this protest.  
Only an "interested party" may protest a federal procurement.  
Competition in Contracting Act of 1984, 31 U.S.C.  sec.  3551-3556.  That 
is, a protester must be an actual or prospective supplier whose direct 
economic interest would be affected by the award of a contract or the 
failure to award a contract.  Bid Protest Regulations, Section 
21.0(a), 60 Fed. Reg. 40,737, 40,739 (Aug. 10, 1995) (to be codified 
at 4 C.F.R.  sec.  21.0(a)).  Determining whether a party is interested 
involves consideration of a variety of factors, including the nature 
of issues raised, the benefit or relief sought by the protester, and 
the party's status in relation to the procurement.  Black Hills Refuse 
Serv., 67 Comp. Gen. 261 (1988), 88-1 CPD  para.  151. 

At the time it submitted its proposal, AMI was an eligible SIC code 
1799 contractor.  While Karl's proposal was scored at 723 points out 
of 1000, AMI's proposal was scored at 717 points.  The Army found that 
Karl's and AMI's proposals were technically equivalent, which would 
make price the determining factor between the two proposals.  Since 
AMI's total proposed price was more than $4.5 million lower than 
Karl's, the agency states, it would have awarded the contract to AMI 
and not to Karl.  Thus, Karl would not be in line for the award if we 
sustained the protest; it therefore is not an interested party.  ECS 
Composites, Inc., B-235849.2, Jan. 3, 1990, 90-1 CPD  para.  7. 

Moreover, we fail to see how Karl was prejudiced by the award to 
CDC/TAG.  Karl's significantly higher proposed price would have 
eliminated it from selection consideration regardless of the SIC code 
used.  In this regard, Karl asserts that had it known of the intended 
SIC code, it could have proposed a joint venture, as did the selected 
contractor.  By joint venturing with a larger firm, Karl states, it 
could lower its price through the spread of risk, increased resources, 
bonding ability, and technical expertise.  However, Karl has not 
provided any specific information on how such an arrangement would 
enable it to eliminate CDC/TAG's approximately 33 percent price 
advantage of more than $19 million.  On this record, there is simply 
no showing that competitive prejudice, an essential element of a 
viable protest, exists with respect to Karl.

The protest is dismissed. 

Comptroller General
of the United States

1. It is clear from the record that both the Army and the SBA agree 
that the appropriate SIC code for this requirement is 8744 and not 
1799.