BNUMBER:  B-280318; B-280319 
DATE:  August 31, 1998
TITLE: John Blood, B-280318; B-280319, August 31, 1998
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Matter of:John Blood

File:     B-280318; B-280319

Date:August 31, 1998                                        

John Blood for the protester.
Lynn W. Flanagan, Esq., Department of Agriculture, for the agency.
David R. Kohler, Esq., and Denise Benjamin-Bibby, Esq., for the Small 
Business Administration.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Timber stand improvement requirements were properly accepted into the 
section 8(a) program where no adverse impact on small businesses was 
found, pursuant to  13 C.F.R.  sec.  124.309(c) (1998), because it was 
reasonably determined that the requirements were new, such that there 
were no incumbent small businesses who would be adversely affected.

DECISION

John Blood protests the decision of the Forest Service and Small 
Business Administration (SBA) to contract under the section 8(a) 
set-aside program with Juan Acevedo Reforestation pursuant to request 
for proposals (RFP) No. CAZ-98-24, and with Arrowhead Starr Company 
pursuant to RFP No. CAZ-98-27, for timber stand improvements in the 
Arapaho and Roosevelt National Forests and the Medicine Bow-Routt 
National Forests in Colorado and Wyoming.[1]

We deny the protests.

The Forest Service procures timber stand improvement in connection 
with commercial timber sales.  In order to prepare certain timber for 
sale, the Forest  Service identifies a plot of trees to undergo timber 
stand improvement by thinning defective trees and/or removing 
undesirable species of trees from the designated timber stand, so that 
the most desirable trees are left in the stand for future growth and 
sale.  Timber stand improvement may also include reseeding, 
replanting, or regeneration.  According to the Forest Service, 
repeated improvement to the same stand generally is not required.

Acevedo's 8(a) contract was negotiated through the SBA District Office 
in Fresno, California and Arrowhead's 8(a) contract was negotiated 
through the SBA District Office in Little Rock, Arkansas.  In both 
cases, the SBA determined that award of the contract for these 
services would cause no adverse impact on any other small business 
concerns.  

Mr. Blood, who is a small business with various contracts with the 
Forest Service for timber stand improvement, protests the propriety of 
the adverse impact determinations.

Because the Small Business Act affords the SBA and contracting 
agencies broad discretion in selecting procurements for the section 
8(a) program, we will review challenges to decisions to procure 
requirements under section 8(a) only to ensure that agency officials 
have not acted in bad faith, and that applicable regulations have been 
followed.  American Consulting Servs., Inc., B-276149.2, B-276537.2, 
July 31, 1997, 97-2 CPD  para.  37 at 9. 

The SBA regulation pertaining to adverse impact, 13 C.F.R.  sec.  
124.309(c) (1998), provides that the SBA will not accept a proposed 
procurement not previously in the 8(a) program if the award

     would have an adverse impact on other small business programs or 
     an individual small business, whether or not the affected small 
     business is in the 8(a) program.  The adverse impact concept is 
     designed to protect small business concerns which are performing 
     Government contracts awarded outside the 8(a) program.  Adverse 
     impact does not apply to "new" requirements.  A new requirement 
     is a requirement which has not been previously procured by the 
     relevant procuring agency.  Where a requirement is new, no small 
     business could have performed the requirement and, thus, an 
     impact determination need not be performed.  

The purpose of the regulation is to protect incumbent small business 
contractors.  See Atlantic Coast Contracting, Inc., B-260686, July 13, 
1995, 95-2 CPD  para.  19 at 3.  

The Forest Service and the SBA report that the determinations of no 
adverse impact to small businesses were made because the projects in 
question here constitute new requirements.  The agencies assert that 
timber stand improvement requirements generally constitute new 
requirements because the work being performed usually involves 
improvement to various timber stands in different geographical areas 
within the forests.  That is, for both acquisitions, the Forest 
Service found, and reported to the SBA, that no small business 
contractors had performed this work in these particular timber stands 
within the previous 24-month period, and the SBA therefore determined 
that these were new requirements and thus did not have an adverse 
impact on small businesses.    

Mr. Blood objects to the agencies' adverse impact determinations, 
arguing that the adverse impact determinations are not documented, and 
that the requirements are not new requirements because the Forest 
Service has periodic recurring requirements for timber stand 
improvements in the national forests in question here, many of which 
are performed by small businesses outside the 8(a) program.

Although we agree with Mr. Blood that the documentation of the 
decisions to accept these requirements under the 8(a) program did not 
specifically identify the requirements as new requirements, we find 
the Forest Service and the SBA can reasonably view timber stand 
improvements conducted in different geographical areas within the 
forests to be separate, rather than recurring, requirements.  As 
indicated by the Forest Service, these requirements become necessary 
after the agency has identified a particular stand of trees for 
growth, development, and commercial sale, and when this becomes 
necessary the agency's practice is to enter into various contracts for 
the different timber stands.  While the Forest Service has an overall 
recurring need for timber stand improvement, the agency has been 
procuring a separate and new requirement each time the actual 
geographical location changes.  Under the circumstances, we find 
nothing improper in the Forest Service's and the SBA's determinations 
that the requirements in question here are new requirements, such that 
there is no adverse impact on small businesses.  See American 
Consulting Servs., Inc., supra, at 11-12.

In sum, we find that the agencies properly placed these requirements 
under the 8(a) program.

The protests are denied.

Comptroller General
of the United States

1. Section 8(a) of the Small Business Act, 15 U.S.C.  sec.  637(a) (1994), 
authorizes the SBA to contract with government agencies and arrange 
for performance of those contracts by awarding subcontracts to small 
socially and economically disadvantaged businesses.