SIZE APPEAL OF: B GSE GROUP, LLC, APPELLANT

*1 On July 7, 2015. the U.S. Small Business Administration (SBA) Office of Government Contracting, Area III (Area Office) issued Size Determination No. 03-2015-066, finding that B GSE Group, LLC (Appellant) is not an eligible small business for the procurement at issue.

*1 Appellant contends the size determination is clearly erroneous, and requests that SBA's Office of Hearings and Appeals (OHA) reverse the size determination and find Appellant to be an eligible small business for the instant procurement. For the reasons discussed infra, the appeal is denied, and the size determination is affirmed.

*1 OHA decides size determination appeals under the Small Business Act of 1958, 15 U.S C, § 631 et seq., and 13 C.F.R. parts 121 and 134. Appellant tiled the instant appeal within fifteen days of receiving the size determination, so the appeal is timely 13 C.F.R § 134.304(a). Accordingly, this matter is properly before OHA for decision.

*1 On April 23, 2015, the Department of the Air Force, Air Force Material Command (Air Force) issued Solicitation No. FAS 126-15-Q-0134 (RFQ), seeking a contractor to provide two mobile solid state frequency converters for building 2280 at Tinker AFB, OK. The Contracting Officer (CO) issued the procurement as a Small Business Set-Aside and assigned North American Industry Classification System (NAICS) code 335312, Motor and Generator Manufacturing, with a corresponding 1.000-employee size standard.

*1 On June 19, 2015, after receiving notice that Appellant was the apparent successful offeror, Unitron, LP (Unitron) filed a protest with the CO. Unitron alleged Appellant did not manufacture the items it would provide under the contract, and was not eligible for award as a nonmanufacturer.

*1 On July 7, 2015, the Area Office issued its size determination finding Appellant was other than small for the instant procurement.

*1 The Area Office found Mr. Bryan Bullerdick owns 60% of Appellant's ownership interest, and Mr. Marshall Scott Dils owns the remaining 31%. Size Determination, at 2. Consequently, the Area Office determined Appellant is controlled by Mr. Bullerdick and that Messrs Bullerdick and Dils do not have any other ownership interest in other business concerns.

*1 The Area Office concluded Appellant was not the manufacturer of items it would provide, after noting that Piller USA, Inc. (Filler) would provide the 400 hz power units, Appellant and NorthCo Corp. (NorthCo) would fabricate the trailer, install the cables, test and ship the items Additionally, Appellant is responsible for only 32% of the value of the end item. Without Piller manufacturing and providing the converter, Appellant would be unable to deliver the end item. Id. at 4. The Area Office found that, according to federal regulations, “firms which perform only minimal operations upon the items being procured do not qualify as manufacturers of the end item.” Id. at 3; citing 13 C.F.R. § 121.406(b)(2). Here, Appellant will not be manufacturing the converters or the trailer. Appellant's role will be to package the end item.

*2 The Area Office then considered whether Appellant can be considered eligible for the instant procurement as a nonmanufacturer under 13 C.F.R. § 121.406(b)(1). Under this rule, a firm may quality as a small business to provide manufactured products as a nonmanufacturer if it (1) does not exceed 500 employees; (2) is primarily engaged in the wholesale or retail trade and normally sells the type of item supplied; (3) takes ownership or possession of the item with its personnel, equipment or facilities in a manner consistent with industry practice, and (4) will supply the item of a small business manufacturer.

*2 In this procurement, the items being supplied arc two 90kVA 400 Hz power frequency converters that are mounted on a mobile trailer. Appellant is a retailer for the power converter. However, in its response to the size protest, Appellant explained to the Area Office that it orders the power converters and subcontracts the trailer build and “‘attaches the required mounts onto the converter for attachment to the trailer.”’ Id. at 3. However, Piller is the supplier of the end item and no waiver was obtained. Piller is a large business with over 4,000 employees. The Area Office thus found Appellant does not meet the requirement under 13 C.F.R. § 121.406(b)(1)(iv), and did not qualify as a nonmanufacturer. As a result, the Area Office concluded Appellant does not meet the requirements of the nonmanufacturer rule and was therefore not an eligible small business for this procurement.

*2 On July 21, 2015, Appellant filed its appeal of the size determination with OH V Appellant argues the Area Office committed errors of fact and law, and thus the size determination should he reversed.

*2 Appellant argues that contrary to the Area Office's determination, the proper analysis for determining whether Appellant qualifies as a small business is under 13 C.F.R. § 121.406(c)(1) Appellant states it is a small business concern because “it does not exceed 500 employees, purchases items and packages them into a kit. and more than 50 percent of the total value of the kit and its contents is accounted for by items' manufactured by small business.” Appeal at 2.

*2 Appellant contends it will package the power frequency converters to fulfill the requirements for this solicitation from parts obtained from NorthCo, Skyko International, LLC (Skyko), Piller, and Appleton Electrical Group (Appleton). Skyko and NorthCo are small businesses with less than 30 employees between the two. Accordingly, the frequency converters have a total value of $79,400, with $48,670 being attributed to Appellant, NorthCo and Skyko. Id. Thus, Appellant concludes that since “more than 50 percent of the total value of the frequency converters is accounted for by items manufactured by small business”, it meets the requirements to be considered a nonmanufacturer for the instant procurement.

*3 Appellant has the burden of proving, by a preponderance of the evidence, all elements of the appeal. Specifically, Appellant must prove the size determination is based upon a clear error of fact or law. 13 C.F.R. § 134.314. OHA will disturb an area office's size determination only if, after reviewing the record, the administrative judge has a definite and firm conviction that the area office erred in making its key findings of fact or law. Size Appeal of Taylor Consultants, Inc., SBA No. SIZ-4775, at 11 (2006).

*3 Here, Appellant is not challenging the Area Office's conclusion that it does not manufacture the items being provided to the Government. Appellant also does not challenge the Area Office's size analysis under 13 C.F.R. § 121.406(b)(2) and its subsequent finding that Appellant fails to meet the requirements of the nonmanufacturer rule. Instead, Appellant argues the Area Office erred by not analyzing Appellant's size under 13 C.F.R. § 121.406(c) and finding Appellant meets the kit assembler exception. I find Appellant is raising new issues on appeal, and as such deny the appeal.

*3 Appellant was notified on June 23, 2015, that Unitron filed a protest challenging Appellant's size based on the nonmanufacturer rule. Protest Notification Letter, at 1. The letter specifically stated that Appellant was to provide evidence of its “compliance with the Non- manufacturer Rule, 13 C.F.R § 121.406.” Id.

*3 On appeal, Appellant raises for the first time that it meets the requirements as a kit assembler under 1.3 C.F.R. § 121.406(c). According to Appellant, this is the correct analysis in determining whether Appellant is a small business concent, Appeal, at 2. However, the record clearly shows that Appellant's size was challenged under the nonmanufacturer rule, which includes the kit assembler exception. The record contains multiple email communications between the Area Office and Appellant in which Appellant is fully aware of the protest allegations made against it by Unitron, and the scope of the Area Office's analysis regarding Appellant's size. At no point in its responses to the protest to the Area Office did Appellant allege that it qualified as a kit assembler, requiring the Area Office to conduct an analysis under § 121.406(c).

*3 As OHA has previously stated, it will not consider new issues raised on appeal. Appellant's argument that it qualifies as a small business under the kit assembler exception is a substantive issue raised for the first time on appeal and thus I cannot consider it. 13 C.F.R. § 134.316(c); see Size Appeal of Fort Carson Support Services, SBA No. SIZ-4724 (2005). Here, Appellant raises for the first time the contention it is a kit assembler under 13 C.F.R. § 121.406(c), despite being fully aware of the protest allegations against it, and that the Area Office was analyzing its size under the nonmanufacturer rule. Because 13 C.F.R. § 134.316(c) provides that I cannot decide substantive issues for the first time on appeal, I cannot decide Appellant's new arguments and must dismiss the instant appeal

*4 Additionally, in its appeal, Appellant did not attempt to challenge the merits of the Size Determination. Appellant does not dispute the finding that it is not the manufacturer of the items to be provided, nor that it does not qualify its a nonmanufacturer under 13 C.F.R. § 121.406(b). Rather, Appellant dedicated its appeal petition to argue that it is a kit assembler and the Area Office failed to analyze it as such. I therefore conclude that Appellant abandoned any challenge that it qualifies either as a manufacturer or as a nonmanufacturer under 13 C.F.R. § 121.406(b)(2). Pursuant to 13 C.F.R. § 134.316(c), OHA will not adjudicate issues an appellant has abandoned. Size Appeal of EASTCO Building Services, Inc., SBA No. SIZ-5437, (2013); Size Appeal of Red River Computer Co., Inc., SBA No. SIZ-5512 (2013).

*4 Appellant has abandoned the claims it made in response to the protest, and based its appeal entirely on a new issue raised for the first time on appeal, which I may not consider. Therefore, Appellant has failed to demonstrate that the size determination is clearly erroneous. Accordingly, the appeal is DENIED, and the size determination is AFFIRMED. This is the final decision of the Small Business Administration. See 13 C.F.R. § 134.316(d).