TITLE:  Riley Creek Lumber Company, B-295322, January 13, 2005
BNUMBER:  B-295322
DATE:  January 13, 2005

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   Decision

   Matter of:   Riley Creek Lumber Company

   File:            B-295322

   Date:           January 13, 2005

   James M. English, Esq., English Law Firm, for the protester.

   Lori Polin Jones, Esq., Department of Agriculture, and Julie Clowes, Esq.,
Small Business Administration, for the agencies.

   Kenneth Kilgour, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, participated in the preparation of the decision.

   DIGEST

 Where neither the Small Business Act, the National Forest Management Act, nor
any applicable regulations mandate that certain timber sales be set aside for 
small business or prohibit setting aside any particular timber sale, the 
decision to set aside a particular sale is within the discretion of the Forest
Service and is not subject to review by the Government Accountability Office
pursuant to its bid protest authority.

   DECISION

   Riley Creek Lumber Company protests the decision of the Department of
Agriculture, Forest Service, to set aside the South McSwede, Woody Chuck,
and Bristow forest sales, all in Montana's Kootenai National Forest, for
small businesses under authority of section 92.3 of the Forest Service
Handbook (FSH) 2409.18.  Riley Creek, a large business precluded from
participating in these timber sales, argues that section 92.3 does not
allow the Forest Service and the Small Business Administration (SBA) to
establish set-aside sales prior to a "triggering event" in a National
Forest, and no such triggering event had occurred in the Kootenai National
Forest.

   We dismiss the protest.

   As a preliminary matter, we note that since the subject matter of this
protest is a timber sale, not a procurement of property or services, the
protest is outside our bid protest jurisdiction.  See 31 U.S.C. S
3551(1)(a) (2000).  We will consider protests concerning sales by a
federal agency only if that agency has agreed in writing to have protests
decided by our Office, 4 C.F.R. S 21.13(a) (2004); the Forest Service has
agreed to have protests concerning timber sales decided by our Office. 
Delta Timber Co., B-290710, Sept. 6, 2002, 2002 CPD P 161 at 1 n.1.

   The Forest Service, in conjunction with the SBA, has established the
Timber Sale Set-Aside Program in order to ensure that small business
timber purchasers have the opportunity to purchase a portion of the
National Forest timber, based on the percentage of timber purchased by
small businesses in specific forests at the time the program was created. 
The Timber Sale Set-Aside Program is conducted as follows.  See FSH
2409.18, ch. 90.  The Forest Service assigns each National Forest, which
is a separate "market area," a percentage of its timber to be sold to
small businesses.  These percentages are recomputed every 5 years, and the
agency's progress toward meeting these target percentages is assessed
every 6 months. 

Set-aside sales are automatically triggered when the agency determines
that the volume of small business purchases in a market is 10 percent or
more below the targeted percentage volume.  Although a triggering event
did not occur in Kootenai National Forest, the Regional Forester and the
SBA Regional Representative, in a letter dated October 25, 2004, jointly
agreed that it was appropriate to set aside the three protested timber
sales.  The two officials concluded that, without the set-aside, small
businesses would face possible bankruptcy and a trigger situation would
occur for the upcoming 6-month period.

   Section 92.3 of FSH 2409.18, entitled "Variation from Required Set-Aside
Program," states:  "The Forest Supervisor . . . upon consultation with the
SBA Regional Representative, may establish or eliminate set-aside sales
when determined appropriate under the Small Business Act.  Document such
variances."  Riley Creek argues that, absent a triggering event, section
92.3 does not provide the Forest Service Supervisor and the SBA Regional
Representative with the discretion to establish set-aside timber sales,
while the agency maintains that section 92.3 grants it just such
discretion.  Riley Creek further argues that the agency's broad
interpretation of Section 92.3 eviscerates the intent of several other FSH
section.

   Unlike with regard to procurements of property or services, see Federal
Acquisition Regulation part 19, there is nothing in the Small Business
Act, the National Forest Management Act, or any applicable regulations
that mandate that certain timber sales be set aside for small businesses
or that prohibit setting aside any timber sale.  Accordingly, the Forest
Service's decision, in its discretion, to set aside these three sales is
not subject to review pursuant to our Office's bid protest authority. 
Tricon Timber, Inc., B-241065, B-242174, Jan. 15, 1991, 91-1 CPD P 37 at
3. 

   The protest is dismissed.

   Anthony H. Gamboa

   General Counsel
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