BNUMBER:  B-275696
DATE:  March 17, 1997
TITLE:  MTB Investments, Inc.

**********************************************************************

Matter of:MTB Investments, Inc.

File:     B-275696

Date:March 17, 1997

J. Randolph MacPherson, Esq., Sullivan & Worcester, LLP, for the 
protester.
Shari Weaver, Esq., Department of Housing and Urban Development, for 
the agency.
David R. Kohler, Esq., John Klein, Esq., and John Silbermann, Esq., 
for the Small Business Administration.
Susan K. McAuliffe, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Where contracting officer believed protester miscertified its size 
status in its quotation, rather than rejecting the quotation on that 
basis, under the applicable Federal Acquisition Regulation contracting 
officer was required to refer question of firm's size status to the 
Small Business Administration for a size determination.

DECISION

MTB Investments, Inc. (MTBI) protests the award of a contract under 
request for quotations (RFQ) No. H03Q96108700000, issued by the U.S. 
Department of Housing and Urban Development (HUD) as a small business 
set-aside for appraisal review services.  MTBI contends that the 
agency improperly rejected the firm's low quotation based upon a 
concern about the firm's self-certification that it is a small 
business without referring the matter to the Small Business 
Administration (SBA) for a size determination.

We sustain the protest.

On June 24, 1996, the SBA issued a formal size determination (under a 
different HUD procurement, invitation for bids No. H03B96008200000) 
that MTBI was other than a small business under Standard Industrial 
Classification (SIC) Code 6531.  MTBI filed a timely appeal of that 
adverse determination with the SBA Office of Hearings and Appeals 
(OHA) on July 10; the protester's request to SBA for recertification 
as a small business was delayed by SBA until the OHA ruled on MTBI's 
appeal.  By decision of October 1, the OHA determined that the  
methodology followed by the SBA in finding MTBI to be other than small 
was erroneous.  The OHA remanded the issue of MTBI's small business 
status back to the SBA area director for a new and complete size 
determination.  In particular, the OHA advised the area director to 
consider amended tax information recently filed by MTBI.

The current RFQ was set aside for small business concerns under the 
same SIC code as the procurement subject to the OHA decision of 
October 1 and established a closing date of October 17.  MTBI 
forwarded a copy of the October 1 OHA decision to the HUD contracting 
office on October 4.  On October 5, it submitted the low quote under 
this RFQ.  MTBI's quotation included a self-certification that MTBI is 
a small business concern.  By letter of November 5,  the agency 
rejected the protester's quotation because the contracting officer 
believed that MTBI had miscertified its status in light of the SBA's 
adverse size determination of June 24 regarding the earlier 
procurement.  Award was than made to Don Williams Associates, Inc., 
the firm that submitted the next low quotation.

MTBI filed a timely agency-level protest with HUD.  HUD then contacted 
the SBA regional office that issued the adverse size determination.  
The acting area director advised that the size determination "is still 
in effect, in spite of the remand from the [OHA]."  Relying on this 
response, the contracting officer denied MTBI's agency-level protest 
by letter of November 20.  By letter of December 4, however, the same 
acting area director at SBA advised MTBI and the agency (as well as 
three other HUD contracting offices in various regions) that "[t]he 
remand of the subject case by the [OHA] vacated the initial size 
determination of this office, effective October 1, 1996."  On December 
5, MTBI filed a protest with our Office challenging the agency's 
rejection of its quotation without first referring the matter to the 
SBA for a size determination for this particular procurement.

The SBA has conclusive authority to determine size status matters for 
federal procurements.  15 U.S.C.  sec.  637(b)(6) (1994).  Federal 
Acquisition Regulation (FAR)  sec.  19.301(b) provides that contracting 
officers shall accept small business self-certifications unless they 
have reason to question them.  Questions concerning specific 
representations are to be referred to SBA in accordance with the 
protest procedures of FAR  sec.  19.302.  United Native Am. 
Telecommunications, Inc., B-260366; B-260465, May 30, 1995, 95-2 CPD  para.  
78.  Thus, where a contracting officer has reason to believe that a 
firm has miscertified its size or is otherwise not a small business, 
the contracting officer is required to refer the matter to the SBA for 
a size determination.  FAR  sec.  19.301(b), 19.302(c).[1]  

MTBI self-certified in its quotation that it is a small business 
concern.  Based on the contracting officer's knowledge of the previous 
size status determination and subsequent appeal, she rejected the 
quotation without referral of the matter to the SBA.  While the 
contracting officer may have believed she had a legitimate basis to 
question MTBI's actual size status at the time of the firm's 
self-certification, she could not make the determination as to MTBI's 
status herself; under the FAR the contracting officer was required to 
refer the matter to the SBA for a size determination for this 
particular procurement.[2]  

Accordingly, we recommend that the agency refer the issue of MTBI's 
size status to the SBA for a determination of whether MTBI is 
legitimately a small business concern for purposes of this 
procurement; given that the SBA has recently recertified the firm 
based on the earlier filed amended tax return, we expect a prompt 
review by SBA of MTBI's size status at the time of its 
self-certification here.  Following the size determination by the SBA, 
the agency should proceed with the award consistent with SBA's 
determination.  If MTBI is ultimately found to be small, the award to 
Don Williams Associates, Inc. should be terminated for the convenience 
of the government and award be made to MTBI.  We also recommend that 
MTBI recover the costs of filing and pursuing its protest, including 
reasonable attorneys' fees.  Bid Protest Regulations, section 
21.8(d)(1), 61 Fed. Reg. 39039, 39046 (1996) (to be codified at 4 
C.F.R.  sec.  21.8(d)(1)).  The protester should submit its claim for such 
costs directly to the agency.  Bid Protest Regulations, section 
21.8(f), 61 Fed. Reg. supra (to be codified at 4 C.F.R.  sec.  21.8(f)).

The protest is sustained.

Comptroller General
of the United States

1. The cases cited by HUD in support of its rejection of the quotation 
without first referring the size issue to the SBA are factually 
distinguishable from the situation here--in those cases there was 
either an urgent need for award "to protect the public interest" 
pursuant to FAR  sec.  19.302(h), or no timely challenge by the contractor 
to--or any material change of circumstances after--an adverse size 
determination.

2. We note that prior to her decision to reject MTBI's offer, the 
contracting officer reasonably knew from the October 1 OHA decision 
that the protester had filed with the SBA amended tax information on 
July 24 which the OHA had decided could materially impact a size 
determination for the firm for this and other new procurements.  The 
record contains documentation which shows that at least one other HUD 
contracting officer on a separate procurement rescinded her initial 
rejection of MTBI's offer in light of the OHA October 1 decision.