SIZE APPEAL OF: LOYAL SOURCE GOVERNMENT SERVICES, LLC, APPELLANT

*1 On March 12, 2015, the U.S. Small Business Administration (SBA) Office of Government Contracting, Area III (Area Office) issued Size Determination No. 3-2015-046, finding that Loyal Source Government Services, 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 is an ineligible small business for the instant procurement. For the reasons discussed infra, I grant the appeal, and reverse the size determination.

*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 filed 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 October 8, 2014, the U.S. Army Contracting Command (Army), Picatinny Arsenal, NJ (Army) issued Solicitation No. W15QKN-14-R-0137 for New Equipment Training (NET), Delta New Equipment Training (Delta NET) and Field Service Representative (FSR) Support for the M777A2 howitzer, the M119 howitzer, and the Improved Position Azimuth Determining System (IPADS).² The Contracting Officer (CO) set the procurement aside for Service-Disabled Veteran-Owned Small Business (SDVO SB) concerns and designated North American Industry Classification System (NAICS) code 541330, Engineering Services, Military and Aerospace Equipment and Military Weapons Exception, with a corresponding $38.5 million annual receipts size standard, as the appropriate code for this procurement. Offers were due on November 14, 2014.

*1 The solicitation's Performance Work Statement (PWS) states the contractor will be responsible for providing NET and ancillary program support personnel. Beyond weapons training, “Contractor instructors/technical representatives shall serve as Contractor technical representatives (CTR) to support Government [Material Fielding Teams].” Solicitation, Section C, at 26. The contractor will further be required to provide maintenance, expedited repair to equipment, including on-site repairs and modifications, and assist in vehicle deprocessing and equipment retrofit. The PWS lists nine labor categories that must be filled by the contractor: (i) Operator NET Instructors; (ii) Maintainer NET Instructors; (iii) Survey Specialists; (iv) Fire Direction Center NET Instructor; (v) Artillery Analyst; (vi) Liaison Supply Chain; (vii) IPADS NET Instructor/Maintenance Specialist; (viii) Program Support Technician; and (ix) On-Site FSR. Id. at 27.

*2 The Operator NET Instructors and Maintainer NET Instructors require that the contractor personnel filling these positions not only provide training, but preparation of training sites, and necessary repairs. The IPADS Net Instructor/Maintenance Specialist shall provide maintenance and certain removal and replacement duties.

*2 Proposals were to be evaluated on three factors: (i) Management/Technical; (ii) Price; and (iii) Past Performance. The Army planned on awarding the contract based on a best value assessment, with the Management/Technical Factor having more importance than Past Performance. However, Past Performance is more important than Price.

*2 On February 5, 2015, the Army awarded the contract to Appellant. On February 10, 2015, Charles F. Day & Associates, LLC (CF Day) protested the award, alleging Appellant's revenues exceeded the size standard and that it was in violation of the ostensible subcontractor rule.

*2 On March 12, 2015, the Area Office issued its size determination finding Appellant is not a small business concern for the procurement at issue.

*2 The Area Office first reviewed Appellant's size together with that of its affiliate, Loyal Source, LLC (LS), and found that they did not exceed the size standard. Size Determination, at 3.

*2 However, the Area Office did find Appellant affiliated with its subcontractor Tec-Masters, Inc. (TMI) for this procurement under the ostensible subcontractor rule. The Area Office noted that the CO described the contract's primary and vital requirements as conducting training for new equipment, Delta new equipment, and providing FSRs support. Beyond instructing, the contractor's instructors/technical representatives must also serve as technical representatives in support of Material Fielding Teams (MFTs). Id. at 4. The Area Office found Appellant and TMI had a teaming agreement that was effective October 22, 2014. Throughout the agreement, the word “team” is used in reference to Appellant and TMI. Id.

*2 After reviewing Appellant's proposal, the Area Office found that 54% of the instructor positions, after calculated by man hours, and 64% of instructor positions, after calculated by dollar amount, are provided by TMI. Id. The Area Office noted that the PWS states training as the contract's primary effort. The solicitation allocated 58% of the dollars for instructors, while 45% of that allocation is for one single instructor job, which will be performed by TMI. The Area Office concludes that “the most critical technical factor for this effort is a labor category which is being provided by the subcontractor.” Id.

*2 The proposed Program Manager, Mr. Nixon, is a current employee of CF Day. However, at time of proposal submission, Appellant did not have a commitment letter from Mr. Nixon, thus the Area Office determined that the key personnel position of PM, at time proposals are due, was not an employee of Appellant. The Area Office found this was a change of approach after the date of the final proposal, and should have little, if any bearing on determining Appellant's compliance with the rule, citing Size Appeal of WG Pitts Co., SBA No. SIZ-5575 (2014). Because Mr. Nixon was still employed by CF Day, the incumbent contractor, the Area Office found that Appellant lacked the “technical expertise to perform the program management functions of the contract” which Appellant had argued was a critical part of the contract. Id. at 5. The Area Office concluded that Appellant was unduly reliant upon TMI in performing the contract, and therefore was in violation of the ostensible subcontractor rule. When adding Appellant's annual receipts, along with its affiliate, LS, Appellant does not exceed the applicable size standard. However, when adding TMI's annual receipts, Appellant and its affiliates exceed the size standard for the solicitation at hand.

*3 On March 27, 2015, Appellant filed its appeal of the size determination. Appellant argues the Area Office committed errors of fact and law, and thus the size determination should be reversed.

*3 Appellant argues the Area Office performed a cursory review of the solicitation, which led it to erroneously determine that providing training is the contract's primary and vital requirement. Appellant contends that field service support, according to the Area Office, is part of the contract's primary and vital requirement, yet the Area Office later in the size determination erroneously found that training is the only primary and vital task. Size Determination, at 8-9. According to Appellant, the solicitation calls for training and program support as the contract's primary purpose, thus highlighting the Area Office's error. The solicitation does not identify one labor category as more important than any other; the Area Office simply based its determination on what labor category has the largest dollar amount attached to it.

*3 Citing Size Appeal of igov Technologies, Inc., SBA No. SIZ-5359 (2012), Appellant argues that a solicitation's dollar value is not dispositive of a contract's primary and vital requirements being performed by a subcontractor. Appeal Petition, at 9. All labor categories are essential to contract performance and they all perform overlapping functions, which includes the possibility that some of the technical personnel may need to provide training. Id. at 10. Instructors perform field support services and personnel not labeled instructors will often perform training. Training is carried out only at scheduled times, field support services are provided on a continuous basis, and are thus vital to contract performance. The training provided by the Maintainer NET instructors, FDC NET instructors, and IPADS NET instructors is more technical, complex and critical than training provided by Operator NET instructors. The duties performed by these labor categories ensure that the howitzers and IPADS are inspected, maintained, and prepared for training. Without maintenance inspection and training, the unit will not have howitzers to train with. Without fire direction, the howitzers cannot shoot, and without IPADS, the unit will not have common survey, a requirement for live-fire operations. Id.

*3 Given that the Area Office failed to consider the CO's input in determining the contract's primary and vital requirements, Appellant argues the Area Office “erred in finding that TMI is performing the ‘most critical technical factor’ of the Contract” making Appellant unduly reliant upon TMI. Id. Appellant notes that all labor categories must be taken into consideration when calculating what percentage of the work is performed by TMI. When all labor categories are taken into consideration, Appellant is providing 55% of the labor positions and incurring 51% of the direct labor costs. Id. at 11.

*4 However, Appellant maintains that even if the Area Office's finding that training is the contract's primary and vital requirement, Appellant is still providing XX training personnel compared to TMI's XX. Appellant comes to this conclusion by stating that the Program Support Technicians (PST) provide training as part of their duties, thus even under the Area Office's definition of the primary and vital requirements, Appellant contends it provides 55% of the training personnel and 50.25% of direct labor costs.

*4 Next, Appellant disputes the Area Office's conclusion that Mr. Nixon is not an employee of Appellant and thus Appellant lacks the expertise and experience to perform the contract. According to Appellant, its proposal stated that Mr. Nixon “had made a binding agreement to serve as PM exclusively for [Appellant] upon award.” Id. at 12. The Area Office did not take into account this particular fact, instead it relied on Mr. Nixon's resume which states that he is not a current employee of Appellant and on WG Pitts Company, SBA No. SIZ-5575 (2014) for the proposition that Mr. Nixon's hiring as PM was conducted after the proposal was submitted and thus Appellant lacked the experience and expertise to perform the contract. However, Appellant challenges the Area Office's reliance on WG Pitts Company, SBA No. SIZ-5575 (2014) because that case, and others cited within it, relate to situations where the prime contractor makes changes to the breakdown of work between prime and subcontractors, which is irrelevant to the facts at hand. Id. Here, Appellant asserts there was no requirement that any commitment letter from key personnel be signed at time proposals were due. The signed letter of commitment from Mr. Nixon did not alter or change Appellant's proposal, it only ““memorialized” the October 2014 oral agreement between Mr. Nixon and Appellant that Mr. Nixon would serve as the PM if Appellant was awarded the contract at issue; the commitment letter simply supports what was already established in Appellant's proposal. Id. at 13.

*4 Even if Mr. Nixon would not be considered Appellant's employee, Appellant argues it is still not unduly reliant on TMI because Mr. Nixon was not an employee of TMI, but in turn an employee of the incumbent contractor and protester, CF Day. No undue reliance exists because even if Mr. Nixon is not considered an employee of Appellant, TMI is not providing the PM, any program management duties, or any experience in the labor categories performed by Appellant. Id. at 13-14. Additionally, the solicitation did not evaluate past performance on an offeror's experience providing howitzer equipment training.

*4 Appellant disputes the Area Office's conclusion that it lacked the necessary experience to perform this contract. Appellant argues the Area Office made a responsibility determination, which is the CO's duty and is outside the Area Office's authority. Id.; citing Size Appeal of Spiral Solutions and Technologies, Inc., SBA No. SIZ-5279 (2011).

*5 Appellant's proposal explains that it has “experience with designing, organizing and implementing government equipment training programs; providing equipment and weapon systems training, non-equipment related training, education and training support; providing technical assistance in the areas of maintenance logistics, engineering and management consultation; and program management.” Id. at 14. The past performance experience highlighted by Appellant's proposal relates directly to the contract's requirements, including experience with field artillery systems. Here, TMI is not providing any program management functions, a majority of the staff required to perform the contract, preparing the proposal, providing financial assistance to Appellant, or providing the relevant experience required by the solicitation. Appellant thus maintains TMI is not performing or managing the contract instead of Appellant, and the Area Office erred in finding Appellant unduly reliant upon TMI.

*5 Lastly, Appellant argues under 13 C.F.R. § 121.103(h)(4), if TMI is Appellant's ostensible subcontractor, then they are deemed to be a joint venture. However, exceptions found in 13 C.F.R. § 121.103(h)(3)(i) state that under an unbundled contract, a joint venture where both concerns individually would be considered small, and the dollar value of the procurement exceeds half the size standard corresponding to the NAICS code assigned to the contract, then the concerns, despite their affiliation, can perform the contract. Id. at 15-16. Because Appellant and TMI meet this exception, Appellant concludes that even if affiliated under the ostensible subcontractor rule, Appellant is eligible to perform the contract as a small business concern.

*5 On April 15, 2015, CF Day filed its response to the appeal. CF Day requests OHA affirm the size determination and deny the instant appeal because Appellant has failed to establish any clear error of fact or law by the Area Office.

*5 CF Day asserts the contract's primary and vital requirement is “to train new personnel on the operation of and maintenance of the various weapon systems”, as the Area Office properly determined. CF Day Response, at 4. CD Day argues its experience as the incumbent contractor gives it specialized knowledge which enable it to substantiate the Area Office's determination. Despite the other areas of work required by the contract, the howitzer training is the most important task. Given that in Appellant's proposal TMI was responsible for providing the howitzer training, the Area Office correctly found Appellant unusually reliant on TMI. Id. at 4.

*5 CF Day contends the solicitation requires the offeror to possess past performance experience in the howitzer training, which Appellant does not. CF Day challenges Appellant's assertion that Mr. Nixon, the proposed PM, had the required experience and knowledge of the artillery training highlighted by the solicitation. As Mr. Nixon's employer, CF Day states it has access to Mr. Nixon's resume, job duties and responsibilities, and can corroborate how Mr. Nixon did not perform the duties of a program manager as he claims or acted as a program manager in any capacity while employed by CF Day. Id. at 5-6.

*6 CF Day further argues Appellant and TMI do not qualify for an exception from a finding of affiliation under 13 C.F.R. § 121.101(h)(3)(i) as argued in the appeal. CF Day contends Appellant is trying to benefit from exceptions reserved for joint ventures without having properly organized itself as one.

*6 CF Day next contends that a previous size determination performed on Appellant sometime in 2014 could potentially give light to Appellant's ineligible status as an SDVO small business concern based on Mr. Seth Eubank's role as a Managing Member/Manager of Appellant. Id. at 8. Thus, the control of Appellant comes into question as the disabled veteran is required to have control over an SDVO small business in order to receive its SDVO status. CF Day concludes that “[Appellant] should have been ineligible as a SDVOSB for this procurement, in accordance with a litany of SBA cases on Control [sic] and that requirement for SDVOSB status.” Id.

*6 Furthermore, CF Day claims it has evidence, after having been made aware of a previous size determination on Appellant, that other potential affiliates of Appellant may have gone unreported during the size determination process. According to CF Day, a search of Florida Secretary of State records show Mr. Eubanks as a manager for two other business concerns. While CF Day admits it has no other information besides the existence of these concerns, it argues that their existence raises questions as to Appellant's size and the “propriety of their self-certifications.” Id. at 9. Lastly, CF Day states that a search of Appellant on SAM shows a previous size determination found it ineligible as a small business concern for certain NAICS codes. This information leads CF Day to believe that Appellant should not have been allowed to bid in the instant procurement, and that it fraudulently misrepresented its status as an SDVO small business. Id. at 9-10.

*6 On April 15, 2015, the CO filed a response to the size determination. The CO maintains the Area Office erred in its characterization of the solicitation's primary and vital requirements, which lead to erroneously finding Appellant and TMI affiliated under the ostensible subcontractor rule.

*6 The CO asserts the Area Office failed to account for the contract's FSR support requirements in its “narrow” analysis of the contract. CO Response, at 2. The CO adds all instructors will provide field support as part of their required duties, which the Area Office failed to take into account. The CO further challenges the Area Office's “training-only” determination by overlooking the other instructor and field support positions that are essential to contract performance. The CO also disputes the Area Office's assertion that the Operator NET Instructor labor category is the contract's most important labor position. Explaining each field exercise requires one Operator NET Instructor for the howitzer, the CO states the larger number of required personnel for this labor category does not justify the Area Office's erroneous assertion it is the most important labor category. Further, even with TMI providing the Operator NET Instructor personnel, TMI only provides 49.12% of the total labor dollars. Id. at 3.

*7 Next, the CO contends the Area Office erred by not considering Mr. Nixon an employee of Appellant for purposes of the contract at hand. Because Mr. Nixon had an oral employment agreement with Appellant based on Appellant being awarded the contract, the CO argues that under OHA precedent, an employment agreement dependent on contract award suffices a showing that the proposed employee will be employed by the protested concern for purposes of the contract at hand. Id. at 5; citing Size Appeal of Patrick Wolffe Group, Inc., SBA No. SIZ-5235 (2011). Here, the CO argues Appellant's proposal made it clear that Mr. Nixon will serve as the PM, and the solicitation, after Amendments 0001 and 0002, did not require offerors to submit commitment letters from proposed personnel. The lack of a commitment letter from Mr. Nixon is immaterial to how Appellant's proposal was evaluated and the subsequent commitment letter, dated January 16, 2015, did not alter Appellant's proposal.

*7 The CO explains the fielding process contemplated by the solicitation, which is a vital and primary contract requirement, is when “soldiers and Marines are introduced to new weapon systems along with all the necessary tools, special equipment and training to safely operate and maintain the weapon system.” Id. at 10. Without the distinct fielding support required by the contract, a military unit cannot receive and operate the weapon systems. Appellant will be providing the functions required by the fielding support, while TMI provides the Operator NET Instructors, thus no comingling of labor categories between Appellant and its subcontractor can be found here.

*7 On March 27, 2015, Appellant moved to supplement the record with new evidence. Specifically, Appellant seeks to introduce an affidavit by Mr. Nixon, the proposed PM for the contract at hand. Appellant argues the affidavit, cited throughout the appeal petition, does not expand the issues on appeal. Motion at 2. Appellant argues the affidavit will serve to further explain the contract's primary and vital requirements, clarify the issue of Mr. Nixon's employment agreement with Appellant contingent on contract award. Appellant contends the Area Office did not ask Appellant about facts central to the issues here besides inquiring as to when and if a letter of commitment had been signed. Id. Given the lack of follow up by the Area Office, Appellant had a reasonable belief that it had satisfactorily answered the Area Office's questions regarding Mr. Nixon's employment.

*7 On April 15, 2015, CF Day filed its own motion to supplement the record. CF Day requests admittance of an affidavit by Mr. Dale Winkler. CF Day Motion, at 1. The affidavit will serve to rebut the statements made as to Mr. Nixon's experience and knowledge regarding the contract's requirements. CF Day argues that as the former contract PM, Mr. Winkler is in a unique position to explain how the contract will get carried out. CF Day argues the affidavit, instead of enlarging the issue, will serve to buttress “the fact that the Area Office's Size Determination was correctly made in regards to the interrelationship and importance of all of the contract's labor categories and the affidavit rebuts the claims and experiences that Mr. Nixon and [Appellant] claim.” Id. at 2.

*8 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).

*8 OHA's review is based upon the evidence in the record at the time the Area Office made its determination. Size Appeal of Taylor Consultants, Inc., SBA No. SIZ-4775, at 10-11 (2006). As a result, evidence that was not previously presented to the Area Office is generally not admissible and will not be considered by OHA. E.g., Size Appeal of Maximum Demolition, Inc., SBA No. SIZ-5073, at 2 (2009) (“I cannot find error with the Area Office based on documents the Area Office was unable to review.”). New evidence may be admitted on appeal at the discretion of the administrative judge if “[a] motion is filed and served establishing good cause for the submission of such evidence.” 13 C.F.R. § 134.308(a). The proponent must demonstrate, however, that “the new evidence is relevant to the issues on appeal, does not unduly enlarge the issues, and clarifies the facts on the issues on appeal.” Size Appeal of Vista Eng'g Techs., LLC, SBA No. SIZ-5041, at 4 (2009).

*8 Here, Appellant and CF Day offer affidavits from individuals which the Area Office did not see and did not rely upon for its decision. I therefore conclude that these affidavits should not be the basis of a decision, and EXCLUDE them from the record.

*8 Under SBA regulations, the ostensible subcontractor rule provides that when a subcontractor is actually performing the primary and vital requirements of the contract, or when the prime contractor is unusually reliant upon the subcontractor, the two firms are affiliated for purposes of the procurement at issue. 13 C.F.R. § 121.103(h)(4). The purpose of the rule is to “prevent other than small firms from forming relationships with small firms to evade SBA's size requirements.” Size Appeal of Fischer Business Solutions, LLC, SBA No. SIZ-5075, at 4 (2009). An area office must examine all aspects of the relationship, including the terms of the proposal and any agreements between the firms, in order to ascertain whether the relationship between a prime contractor and a subcontractor violates the ostensible subcontractor rule. Size Appeal of C&C Int'l Computers and Consultants Inc., SBA No. SIZ-5082 (2009); Size Appeal of Microwave Monolithics, Inc., SBA No. SIZ-4820 (2006). Ostensible subcontractor inquiries are “intensely fact-specific given that they are based upon the specific solicitation and specific proposal at issue.” Size Appeals of CWU, Inc., et al., SBA No. SIZ-5118, at 12 (2010).

*9 In the case at hand, Appellant has persuasively shown that the Area Office erred in finding Appellant and TMI affiliated under the ostensible subcontractor rule. The size determination found that providing training is the contract's primary and vital requirement. The Area Office relied on the CO's statement in making this finding. However, as the CO explains in her response, the Area Office “mischaracterized” the contract's primary and vital requirements, and ignored the RFP and the CO's own statement in response to the protest by not giving full weight to the field support services required by the solicitation. CO Response, at 1. Indeed, training is a key part of the services sought here by the solicitation, but embedded within those requirements is that instructors are required to provide field support, in addition to field support-only positions that are “indispensable and vital to achieve the contract's overall objective.” Id. at 2. Not only that, but the PWS clearly states that the contractor will need to provide repairs and maintenance to the equipment. The contractor must provide “on-site repairs and modifications when possible.” PWS, § 3.1.2. Further, the Operator NET Instructors, Maintainer NET Instructors, IPADS NET Instructors/Maintenance Specialist, and Program Support Technician will be required to provide repair and/or maintenance to the equipment utilized by the contract. Thus, finding that training is the only primary and vital requirement of the solicitation does not align with the solicitation's clearly established duties expected of the contractor.

*9 In the past, OHA has established that a “contract's primary and vital requirements are ascertained from the solicitation itself, and not from comments by the procuring agency.” Size Appeal of Shoreline Services, Inc., SBA No. SIZ-5466, at 11 (2013); citing Size Appeal of iGov Techs. Inc., SBA No. SIZ-5359, at 6, 13 (2012). However, OHA has also stated that when the CO has “explicitly identified” a contract's primary and vital requirements, some weight must be given to the CO's identification. Size Appeal of Paragon TEC, Inc., SBA No. SIZ-5290, at 11 (2011). The CO has provided a detailed response highlighting the Area Office's mischaracterization of the CO's comments as to the RFP's primary and vital requirements, and combined with the RFP's description of the services sought, some weight must be given to the CO's response. Further, the CO states that in her February 12th submission to the Area Office, she identified the primary and vital requirements as:

*10 This statement by the CO makes clear that that the primary and vital requirements are not only the personnel training on the howitzers, but the Field Service Representative Support and the specialists working on the IPADS. This work is an essential part of the services required here. Appellant's personnel provide the vital maintenance on the howitzers, essential for the continued operation of these artillery pieces and thus for the effective training. The IPADS is vital for the operation of the howitzers, providing the essential navigation aids for the operation of the guns.

*10 The RFP states that the field support services required will be provided by the non-instructor labor categories, but that all instructors will also provide field support. The RFP has nine labor categories, with XX positions to be filled. Appellant's proposal provides that TMI will provide XX Operator NET Instructors and XX Survey Specialists. Appellant will provide XX Maintainer NET Instructors, XX Fire Directions Center NET Instructors, XX Artillery Analyst, XX Supply Chain Liaison, XX IPADS NET Instructors/Maintenance Specialists, XX Program Support Technicians, and XX FSR for Australia. Proposal, Vol. III, Table.

*10 Thus, Appellant's proposal makes clear there will be XX of Appellant's personnel to XX of TMI's personnel assigned to the contract. The total cost of Appellant's personnel for the first year will be $XXXX and thus exceed that of TMI's $XXXX, albeit by a small margin. Although TMI is responsible for a slim majority of the total Instructor positions, that number is concentrated in the Operator NET Instructor position, which the Area Office found to be the most important position based solely on the higher number of required positions without an analysis as to the relative complexity or importance of the position.

*10 Here, the Area Office found that 54% of the instructor man-hours will be provided by TMI, along with 64% of the instructor total dollars. The Area Office came to this conclusion after determining that the Operator NET Instructor was the critical technical position because it received the majority of the instructor total dollars. However, nothing in the RFP leads to this conclusion. As the CO points out, Operator NET Instructors are needed for every fielding exercise, but the fact that this category has a larger number of personnel does not mean that it is more important than the other labor categories. As OHA has stated previously, the complexity and importance of requirements must be considered when making an inquiry of the contract's primary and vital requirements, not just the majority of the contract's dollar value. Size Appeal of Alutiiq Int'l Solutions, LLC, SBA No. SIZ-5098 (2009).

*10 In contrast, the CO states the contract requires a higher number of Operator NET Instructor positions because it requires one instructor per exercise, not because the Operator NET positions require more complex work. After reviewing the RFP, I cannot find that TMI is providing a majority of the contract's primary and vital requirements. The contract requires training of Army and Marine Corps personnel on the M777A2 howitzer, M119A3 howitzer and IPADS, and maintenance and repair of the equipment as needed. PWS §§ 1.1, 3, 3.1, 3.1.2.

*11 I find that all of the positions in the contract are essential to performing the training and maintenance mission here, which the primary and vital requirement. The IPADS instruction Appellant's personnel will provide is vital to the navigation and operation of the howitzers. PWS, § 3.3.7. These personnel will be Appellant's employees. The Maintainer NET Instructor provides vital training in the safe maintenance of the howitzers, a vital part of operating the weapons. PWS § 3.3.2. These personnel will be Appellant's employees. The Fire Direction Center Instructors will train Army and Marine Corps personnel on proper communications between the gunners and the Fire Direction Center. PWS § 3.3.4. Obviously, proper communications in the field are vital in military operations, and Appellant's personnel will perform this function. The Artillery Analyst will provide management of artillery systems and coordinated with program managers and Department of the Army staff on the user requirements for towed artillery. PWS § 3.3.5. The Fire Direction Center Instructor and Artillery Analyst positions are more complex jobs than that of the Operator NET Instructors and both perform important functions in managing this training. Appellant's employees will fill these positions.

*11 The Area Office clearly erred in failing to recognize that the Operator NET positions TMI employees will fill are not the only training positions, nor indeed, the most important positions, for this procurement. Appellant is providing over 50% of the total personnel, and labor dollars, and filling 7 of the 9 labor categories. Appellant's employees will be managing the contract and providing direction to the instructors.

*11 Next, the Area Office found that Appellant's proposed PM, Mr. Nixon, was not Appellant's employee, and no letter of commitment was signed, prior to proposal submission. The Area Office stated that because the letter of commitment was signed after proposals were submitted, Mr. Nixon's assignment as PM is considered a change of approach after proposals were due. Thus, Appellant lacked the technical expertise to perform the contract's functions.

*11 I disagree. As Appellant and the CO point out, the solicitation did not require a letter of commitment be signed and provided at time proposals were due. As stated supra, the terms of a proposal must be examined in any ostensible subcontractor analysis. C&C Int'l Computers and Consultants Inc., SBA No. SIZ-5082 (2009). Here, the proposal makes clear Mr. Nixon is Appellant's proposed PM. Appellant's Proposal, Vol. 1, at 1. The fact the letter of commitment was signed after proposals were submitted does not equate to a change of approach. The proposal listed Mr. Nixon as the proposed PM, in the event Appellant was awarded the contract. OHA has held that an employment agreement contingent on contract award establishes that a proposed employee will be employed by the challenged concern for the contract at issue. Size Appeal of Patrick Wolffe Group, Inc., SBA No. SIZ-5235 (2011). The Area Office's reliance upon Size Appeal of WG Pitts Co., SBA No. SIZ-5575 (2014) is misplaced, because Appellant named Mr. Nixon in its proposal, and so there was no change of approach. The Area Office erred in requiring a letter of commitment to find Mr. Nixon Appellant's PM. Because the Area Office erred in dismissing the proposal's explicit and clear statement that Mr. Nixon will be the contract's PM, I find its determination of Appellant's undue reliance on TMI to be flawed and incorrect.

*12 Further, the Teaming Agreement between the two concerns provides that Appellant will prepare and submit the proposal. TMI is to submit to Appellant for inclusion in the proposal only materials relevant to the work to be assigned to it. The proposal itself discusses the plans for training at length. I therefore conclude that Appellant is the principal author of the proposal, and of the training plans for this procurement. In addition, the fact that the proposal uses the term “team” to describe Appellant's relationship with its subcontractor is not indicative of unusual reliance. Size Appeal of Kaiyuh Svcs., LLC, SBA No. SIZ-5581 (2014). Finally, Appellant's past performance submissions establish that it has provided training for High Mobility Artillery Rocket Systems, and training for Global Peacekeeping Operations. Proposal, Vol. II. These submissions demonstrate experience with equipment and weapons system training and establish Appellant has the experience to perform training of the type required here.

*12 In sum, Appellant has capacity to perform the contract, will perform the majority of the work, will manage the contract, and therefore is performing the primary and vital tasks of the contract and there is no violation of the ostensible subcontractor rule. Size Appeal of Paragon TEC, Inc., SBA No. SIZ-5270 (2011). Accordingly, the Area Office erred in its determination.

*12 The protestor CF Day argues Mr. Nixon lacks the experience or skills to perform as the PM in this solicitation. Even if true, this is an issue of contractor responsibility, which falls under the purview of the CO. Size Appeal of Spiral Solutions and Technologies, Inc., SBA No. SIZ-5279, at 23 (2011) (finding that “the determination of what capabilities are necessary to perform a contract, or whether the awardee has such capabilities, are matters of contractor responsibility.”); Size Appeal of Assessment & Training Solutions Consulting Corp., SBA No. SIZ-5228, at 7 (2011) (“A broad inquiry into a firm's ‘capabilities,’ however, is the nature of a responsibility determination, and therefore is the province of the CO, not the Area Office.”) Given that OHA lacks the jurisdiction to perform an analysis of Mr. Nixon's qualifications to perform the duties of the PM, any question as to Appellant's capacity to perform the contract with its proposed personnel is for the CO to determine, and cannot be a basis for finding affiliation under the ostensible subcontractor rule.

*12 CF Day also contends that Appellant may be affiliated with other concerns based on a previous size determination performed in 2014. Additionally, it appears that CF Day is arguing that Articles of Incorporation filed with the State of Florida call into question Appellant's SDVO status based on the listed Managing Members/Managers. Further, CF Day claims that Mr. Eubank, Appellant's CEO and 100% owner, may be an authorized person or manager for another Florida concern, 8-KOI — Loyal Source, LLC.

*13 These arguments are all meritless. CF Day is raising issues not presented by this appeal, based on documents not in the record. CF Day's arguments amount to mere speculation and raise new issues on appeal that I cannot consider here. 13 C.F.R. § 134.316(a). Further, the Area Office conducted an analysis of Appellant's organizational structure and found no reason to question Appellant's SDVO status. I cannot address CF Day's newly found claims of affiliation.

*13 Lastly, Appellant maintains that even if found affiliated with TMI under the ostensible subcontractor rule, it may be excepted from this affiliation finding based on 13 C.F.R. § 121.103(h)(3)(i). I do not need to reach a decision on this issue as I have found that the Area Office erred in finding Appellant and TMI affiliated under the ostensible subcontractor rule.

*13 Appellant has demonstrated that the size determination is clearly erroneous. Accordingly, the appeal is GRANTED, and the size determination is REVERSED. This is the final decision of the Small Business Administration. See 13 C.F.R. § 134.316(d).