SIZE APPEAL OF: POTOMAC ELECTRIC CORP., APPELLANT RE: SERVO REPAIR INTERNATIONAL, INC.
SBA No. SIZ-5714, 20162016 WL 759723February 10, 2016
SBA No. SIZ-5714, 2016 (S.B.A.), 2016 WL 759723
Small Business Administration (S.B.A.)
Office of Hearings and Appeals
[Size Appeal]
*1 SIZE APPEAL OF: POTOMAC ELECTRIC CORP., APPELLANT
*1 RE: SERVO REPAIR INTERNATIONAL, INC.
*1 SBA No. SIZ-5714
*1 Appealed from Size Determination No. 02-2015-114
*1 February 10, 2016
Appearances
*1 Leny Chertov
*1 Vice President
*1 Potomac Electric Corp.
*1 Boston, Massachusetts
*1 Stephen Suity
*1 Assistant Manager
*1 Servo Repair International, Inc.
*1 Allison Park, Pennsylvania
REDACTED DECISION FOR PUBLIC RELEASE
DECISION1
I. Introduction and Jurisdiction
*1 On November 20, 2015, the U.S. Small Business Administration (SBA) Office of Government Contracting, Area II (Area Office) issued Size Determination No. 2-2015-114, denying a size protest filed by Potomac Electric Corp. (Appellant) against Servo Repair International, Inc. (SRI). In its protest, Appellant alleged that SRI is not an eligible small business, because SRI would not manufacture the end items or comply with the nonmanufacturer rule, 13 C.F.R. § 121.406(b).
*1 On appeal, Appellant maintains that the Area Office improperly denied the protest, and requests that SBA's Office of Hearings and Appeals (OHA) reverse. For the reasons discussed infra, the appeal is denied.
*1 The SBA Office of Hearings and Appeals (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.
II. Background
A. RFQ
*1 On April 27, 2015, the U.S. Department of Commerce, National Oceanic and Atmospheric Administration (NOAA) issued Request for Quotations (RFQ) No. WC-133W-15-RQ-0287 for the acquisition of 70 servo motor assemblies for the National Weather Service's Next Generation Radar system. The RFQ was for commercial items and was conducted under Part 12 of the Federal Acquisition Regulations. It set out the following requirements:
*1 2.1. TYPE: THE MOTOR SHALL BE A PERMANENT MAGNET DC SERVO MOTOR WITH AN INTEGRAL TACHOMETER. THE MOTOR WILL BE USED WITH A PWM AMPLIFIER WITH AN OPERATING VOLTAGE OF ± 170 VDC.
*1 2.2. CHARACTERISTICS: THE MOTOR AND TACHOMETER SHALL CONFORM TO THE CHARACTERISTICS GIVEN IN TABLE A.
TABLE A | ||
|---|---|---|
MOTOR CHARACTERISTIC | VALUE | UNITS |
HORSEPOWER | 2.0 | HP |
KILOWATTS | 1.49 | KW |
MAX. OPERATING SPEED | 2000 | RPM |
CONTINUOUS TORQUE | ≤8.8 | FT-LBS |
PEAK TORQUE | 26.3 | FT-LBS |
CURRENT AT CONTINUOUS TORQUE | 16.1 | AMPS |
CURRENT AT PEAK TORQUE | ||
MAX. TERMINAL VOLTAGE | 90 | AMPS |
COUNTER EMF CONSTANT | 115 | VDC |
TORQUE SENSITIVITY | ≤60 ± 10% | VDC/KRPM |
.404 ± 10% | FT-LB/AMP | |
TACHOMETER CHARACTERISTIC | VALUE | UNITS |
|---|---|---|
TACHOMETER RESISTIVE LOAD RANGE | 10K TO 50K | OHMS |
TACHOMETER SENSITIVITY (MEASURED THROUGH RESISTIVE LOAD RANGE) | 19.0 ± 10% | VDC/KRPM |
*2 2.3. OUTLINE: THE MOTOR SHALL CONFORM TO THE DIMENSIONS SHOWN IN FIGURE 1
*2 2.4. WEIGHT: THE MOTOR SHALL NOT WEIGH MORE THAN 35 LBS.
*2 2.5. MATERIAL: THE MATERIALS USED IN FABRICATION OF THE MOTOR SHALL BE CORROSION RESISTENT TO A SALT LADEN ENVIRONMENT, AND DISSIMILAR METALS ARE PROHIBITED FROM DIRECT CONTACT.
*2 2.6. MOUNTING: THE MOTOR SHALL BE ABLE TO BE OPERATED IN BOTH A HORIZONTAL AND VERTICAL ORIENTATION WITHOUT DEGRADATION IN PERFORMANCE.
*2 2.7. ELECTRICAL:
*2 2.7.1. TERMINALS: THE ELECTRICAL TERMINALS SHALL CONFORM TO THE SPECIFICATIONS IN TABLE B.
TABLE B | |||
|---|---|---|---|
MOTOR CONNECTION | TACHOMETER CONNECTION | ||
CONNECTOR | J2 | CONNECTOR | J1 |
MS3452W20-16P, or 97-3100A-20-16-P, OR EQUIVALENT | MS3452W14S-5P, OR, 97-3100A-14S-5P, OR EQUIVALENT | ||
|---|---|---|---|
PIN | DESCRIPTION | PIN | DESCRIPTION |
I | MOTOR | A | TACH. |
POSITIVE | |||
B | TACH. | ||
MOTOR | RETURN | ||
H | NEGATIVE | ||
C & D | GROUND | ||
E | GROUND | ||
*2 2.7.2. DIRECTION OF ROTATION: THE MOTOR SHALL BE ABLE TO ROTATE CLOCKWISE AND COUNTERCLOCKWISE. THE MOTOR WILL ROTATE CLOCKWISE AS VIEWED FROM THE OUTPUT SHAFT WHEN POSITIVE VOLTAGE IS APPLIED TO J2 PIN H WITH RESPECT TO J2 PIN UPON CLOCKWISE ROTATION, THE TACHOMETER WILL PROVIDE A POSITIVE VOLTAGE AT JI PIN A WITH RESPECT TO JI PIN B.
*2 2.8. ENVIRONMENTAL:
*2 2.8.1. OPERATING TEMPERATURE: -40°C TO 49°C(-40°F TO 120°F)
*2 2.8.2. NON-OPERATING TEMPERATURE: -62°C TO 60°C (-79°F TO 140°F)
*2 2.8.3. ALTITUDE: 3,300 METERS (10,826 FEET) ABOVE SEA LEVEL
*2 2.8.4. HUMIDITY: 15% TO 95%
*2 2.8.5. FUNGUS: MIL-HDBK-454
*2 2.9. RELIABILITY:
*2 2.9.1. OPERATION LIFE: EXCLUDING THE MOTOR AND TACHOMETER BRUSHES, THE MOTOR SHALL HAVE A MINIMUM OPERATION LIFE OF 87,600 HOURS (10 YEARS).
*2 2.9.2. SERVICE LIFE: EXCLUDING THE MOTOR AND TACHOMETER BRUSHES, THE MOTOR SHALL HAVE A MINIMUM SERVICE LIFE OF 43,800 HOURS (5 YEARS) WHEN THE MAINTENANCE OUTLINED IN SECTION 2.2 IS PERFORMED.
*3 2.9.3. BRUSH INSPECTION AND REPLACEMENT: THE MOTOR BRUSHES INSPECTED AND/OR REPLACED EVERY 6 MONTHS. THE TACHOMETER BRUSHES ARE INSPECTED AND/OR REPLACED EVERY 12 MONTHS. BOTH SETS OF BRUSHES MUST BE FIELD SERVICEABLE/REPLACEABLE.
*3 2.10. PART IDENTIFICATION:
*3 2.10.1. VENDOR IDENTIFICATION: THE MOTOR SHALL BE PERMANENTLY AND LEGIBLY MARKED WITH THE FOLLOWING INFORMATION.
*3 a. MANUFACTURER'S NAME OR SYMBOL
*3 b. MANUFACTURER'S PART NUMBER
*3 c. MANUFACTURER'S SERIAL NUMBER
*3 d. DATE OF PRODUCTION
*3 2.10.2 THE PART NUMBER IS THE ORA WING NUMBER SUFFIXED WITH THE APPLICABLE DASH NUMBER SHOWN IN TABLE II.
...
*3 4 DELIVERY AND STORAGE:
*3 4.1. PACKAGING: THE MOTOR SHALL BE PACKAGED AND SHIPPED IN SUCH A MANNER TO ENSURE PHYSICAL AND MECHANICAL PROTECTION AGAINST DAMAGE DURING SHIPPING. A NOTCHED DUST COVER PLATE ON THE COLD-ROLLED PIN END OF THE SHAFT IS REQUIRED DURING SHIPPING.
*3 4.2. PREPARATION FOR STORAGE: THE MOTOR SHALL BE PREPARED FOR LONG TERM STORAGE BY PLACING THE MOTOR IN A BAG WITH DESICANT PACKAGE PLACED INSIDE. THE INTERNAL AIR SHALL BE EVACUATED AND THE BAG SEALED.
*3 RFQ § 24.
*3 The Contracting Officer (CO) set the procurement aside entirely for small businesses, and assigned North American Industry Classification System (NAICS) code 335312, Motor and Generator Manufacturing, with a corresponding 1,000-employee size standard. Quotations were due May 8, 2015. Appellant and SRI submitted timely quotations.
B. Protest
*3 On July 27, 2015, the CO notified unsuccessful offerors that SRI was selected for award. The next day, Appellant filed a size protest challenging IAS's compliance with the nonmanufacturer rule. Appellant alleged that SRI is purchasing the end-item from [Subcontractor], [a foreign] company, and reselling it to NOAA, after applying a product label, providing a final test, and packaging the item. Appellant therefore is not manufacturing the end-item being procured, nor is it furnishing the end-item of a small business made in the United States. As a result, Appellant argued, SRI is not an eligible small business for purposes of the subject RFQ.
C. Response to Protest
*3 In response to the protest, SRI argued that it is the manufacturer of the motor assemblies and is capable of performing the subject contract. SRI's primary business is repairing, refurbishing, and manufacturing servo motors. SRI has the requisite facilities and equipment to conduct this business. SRI operates from a two-level building with industrial machines and equipment, including lathes; a milling machine; grinders; drill presses; hydraulic and manual presses; welding machines; acetylene/oxygen torches; special washing equipment; heating and cooling ovens; and painting equipment. SRI's electrical equipment includes a magnetizer, oscilloscopes, digital probes, temperature measuring equipment, air flow meters, megohm, hipot, bar-bar growlers, computerized feedback analyzers, and multiple test systems. SRI also has a computer network to track all manufacturing. SRI's staff is highly trained, and can repair and manufacture servo motors and electronics. SRI assigns its most experienced and thorough technician to construct these motors.
*4 SRI noted that its work will account for more than 50% of the cost involved in manufacturing. [Subcontractor], SRI explained, is providing a subassembly, which SRI will disassemble, replace specific parts, and add features to make the motor functional in accordance with NOAA specifications. In particular, SRI will replace the flange with a much lighter one. Without this lighter flange, [Subcontractor]'s overweight unit would not function properly and could damage NOAA's equipment. (Protest Response at 6.)
*4 With its response, SRI included a document outlining its manufacturing procedure in detail. SRI describes its process in ten stages of work: (1) inspection of subassembly provided by [Subcontractor]; (2) flange installation and frame magnetization: SRI will remove the larger flange and install the new customized flange; (3) connector assembly and wiring: SRI will thoroughly rewire the subassembly; (4) rear cover assembly: SRI will modify and install the end gasket and rear cover; (5) new motor testing; (6) new motor final sealing/paint; (7) new motor nameplate; (8) new motor inspection; (9) test and inspection documentation; and (10) packaging of shipping of units. SRI details the tasks performed at each of these steps, which include rerouting armature, tachometer, and ground wires to prevent wire damage during operation; removing magnet frames, re-magnetizing them, then reinstalling them; shortening flying leads; and modifying the end gasket.
*4 SRI argued that “[i]t is not true that [Subcontractor] is capable of supplying the completed unit to anyone because they do not have access to the drawings and specifications necessary to build motors to suit NOAA's purpose.” (Id. at 7.) SRI explained that [Subcontractor]'s subassembly is a custom part built to SRI's specifications.
*4 SRI explained that it puts its name and [Subcontractor]'s name on the finished product, but that SRI's name was much more prominent. [Subcontractor]'s label was there as an acknowledgment of its contribution—a practice, SRI argued, that is not unusual in the industry.
D. Size Determination
*4 On November 20, 2015, the Area Office determined that SRI qualifies as the manufacturer of the motor assemblies. The Area Office recited the pertinent regulation, which provides:
*4 For size purposes, there can be only one manufacturer of the end item being acquired. The manufacturer is the concern which, with its own facilities, performs the primary activities in transforming inorganic or organic substances, including the assembly of parts and components, into the end item being acquired. The end item must possess characteristics which, as a result of mechanical, chemical or human action, it did not possess before the original substances, parts or components were assembled or transformed. The end item may be finished and ready for utilization or consumption, or it may be semifinished as a raw material to be used in further manufacturing. Firms which perform only minimal operations upon the item being procured do not qualify as manufacturers of the end item. Firms that add substances, parts, or components to an existing end item to modify its performance will not be considered the end item manufacturer where those identical modifications can be performed by and are available from the manufacturer of the existing end item:
*5 (i) SBA will evaluate the following factors in determining whether a concern is the manufacturer of the end item:
*5 (A) The proportion of total value in the end item added by the efforts of the concern, excluding costs of overhead, testing, quality control, and profit;
*5 (B) The importance of the elements added by the concern to the function of the end item, regardless of their relative value; and
*5 (C) The concern's technical capabilities; plant, facilities and equipment; production or assembly line processes; packaging and boxing operations; labeling of products; and product warranties.
*5 (Size Determination at 6, quoting 13 C.F.R. § 121.406(b)(2).)
*5 With regard to the first element, the Area Office reviewed the cost breakdowns SRI submitted for the motor assemblies: After subtracting out testing, quality control, overhead, profit, shipping, and general and administrative costs, the only costs remaining were for labor and parts. Of these costs, SRI was performing 52% and [Subcontractor] was performing 48%. (Id. at 8.) The record contains a worksheet supporting this calculation.
*5 The Area Office then considered the importance of the modifications and determined, “The product provided by [Subcontractor] is not operable and provides no value. The work completed by SRI according to the specifications outlined by NOAA lead[s] to the functional end-item.” (Id.) “SRI disassembles the part received by [Subcontractor] and replaces it with other required parts to the specifications required by NOAA.” (Id.) Therefore, the Area Office reasoned, “[Subcontractor] cannot provide the functionality or the finished product because it does not have the drawings and specification data required by NOAA.” (Id.)
*5 Finally, the Area Office considered SRI's technical capabilities and concluded that, based on the information SRI provided in response to the protest, “SRI clearly demonstrated that it has the manufacturing and production capacity.” (Id. at 9.)
E. Appeal
*5 On December 7, 2015, Appellant filed the subject appeal. Appellant argues the Area Office erred in determining that SRI is the manufacturer.
*5 Appellant disputes the Area Office's conclusion that [Subcontractor] does not have the NOAA specifications. These specifications, Appellant represents, were part of the Technical Data Package distributed to all potential bidders, and the solicitation was publicly available. Appellant argues that, as a result of the Area Office's mistaken belief that [Subcontractor] could not possibly produce the end-product, the Area Office did not investigate the nature of the end-product. Without this information, the Area Office could not determine whether SRI is the manufacturer. Appellant argues further that the Area Office “did not pursue critical data analyses critical to this case-2013-2014 NOAA's solicitation WWGO1401302406 for the same item.” (Appeal at 2.)
*6 Appellant maintains, based on common experience and a previous contract with NOAA, that the type of servo motor being procured is housed with magnets, armature, and tachometer, which represent 70% of the value of the final product. The work performed by SRI represents a small portion of the value of the product. (Id. at 4.)
*6 Appellant contends SRI is essentially taking apart the subassembly provided by [[Subcontractor] and reassembling it without adding value—a situation similar to a scene in the film French Connection where a car is disassembled and reassembled bolt by bolt. (Id. at 5.)
*6 Appellant asserts the Area Office did not properly assess what parts SRI would replace or what the cost of these parts is. To render a more complete size determination, Appellant argues the Area Office should have requested SRI's purchase orders to [Subcontractor] and all other vendors who provided labor and materials. In determining what [Subcontractor] supplied to SRI, the Area Office should have asked “what specifically prohibits [the subassembly] from being a final product[?]” (Id. at 6.) From there, the Area Office should have analyzed the new parts SRI contributed as well as their relative costs. Appellant also argues SRI's description of its manufacturing processes includes overhead, testing and quality control, which the regulation requires be excluded from calculation of the value added to the end item by the challenged concern.
*6 Appellant argues that SRI does not comply with the limitation on subcontracting. Appellant argues that much of SRI's costs “do not reach required 50% contribution to the final product.” (Id. at 5.)
F. SRI Response
*6 On December 21, 2015, SRI responded to the appeal. SRI contends only one aspect of the size determination is erroneous but that this error is ultimately harmless.
*6 SRI concedes that [Subcontractor] could have accessed the procurement's specifications and drawings. To SRI's knowledge, though, [Subcontractor] never did so. Appellant argues this misrepresentation was “inadvertent” and “not motivated by an intent to mislead.” (SRI Response at 4.)
*6 Appellant's other contentions, SRI argues, are not valid. SRI notes that Appellant offers evidence from a solicitation other than the subject RFQ, and every solicitation is different. Further, Appellant's estimated costs are ““virtually irrelevant,” given that SRI submitted actual cost data to the Area Office. (Id.) SRI argues Appellant does not offer evidence to support its allegations that SRI's proportionate costs are overstated or that SRI does not add significant value. Moreover, the Area Office carried out the investigation Appellant argues it should have.
III. Discussion
A. Standard of Review
*6 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).
B. Analysis
*7 I find Appellant has not met its burden of proving that the size determination is clearly erroneous. For the reasons discussed infra, the appeal is denied.
*7 SBA regulations stipulate that, when a manufacturing or supply contract is set aside for small businesses, the prime contractor either must be the manufacturer of the end item being acquired, or must fall within certain non-manufacturer exceptions. 13 C.F.R. § 121.406(a). Here, the Area Office determined SRI was the manufacturer and thus did not consider whether any non-manufacturer exceptions applied.
*7 Appellant contends the Area Office erred in determining that SRI is the manufacturer. “The manufacturer is the concern which, with its own facilities, performs the primary activities in transforming inorganic or organic substances, including the assembly of parts and components, into the end item being acquired.” 13 C.F.R. § 121.406(b)(2). A concern that performs minimal operations upon the end item is not the manufacturer. Id. In addition, for size purposes, there can be only one “manufacturer” of an end item. Id.; Size Appeal of Sea Box, Inc., SBA No. SIZ-5613 (2014). The regulations identify three factors to be considered in deciding whether a concern is the ““manufacturer” of an end item: (1) the proportion of total value in the end item added by the concern, excluding costs of overhead, testing, quality control, and profit; (2) the importance of the elements added by the concern to the function of the end item, irrespective of their relative value; and (3) the concern's technical capabilities, such as plant, facilities and equipment. 13 C.F.R. § 121.406(b)(2)(i).
*7 In Size Appeal of NMC/Wollard, Inc., SBA No. SIZ-5668, at 14 (2015), OHA interpreted this regulation in light of its regulatory history. OHA explained:
*7 When SBA created the first two criteria for determining whether a concern is the “manufacturer” of an end item or is performing only minimal operations, SBA remarked:
*7 Neither of [these] factors ... would necessarily have more weight than the other. The circumstances of each case would dictate which factor is more important in that particular instance. For example, a solicitation requires a widget with a safety switch, large manufacturer A makes the widget without such a switch, and small concern B puts the switch on the widget. The end product is the widget with a safety switch. Even though the value added by concern B to the end product may be a very small proportion of its total value, concern B may still be the “manufacturer” of the end product (i.e., widget with safety switch) because the safety switch is so important to the function of the end product.
*8 52 Fed. Reg. 32,870, 32,875 (Aug. 31, 1987). Several years later, in proposing the third factor to the test, SBA stated that it was “add[ing] clarifying language to § 121.406(b)(2) to explain what a firm that makes changes to an item and then resells it must do to qualify as an eligible small business manufacturer.” 67 Fed. Reg. 70,339, 70,344 (Nov. 22, 2002). SBA commented that:
*8 If a firm adds something to an item that the manufacturer of that existing item does not provide, the firm will be considered the manufacturer of the ultimate end item (i.e., the item plus the addition). For example, if firm A manufactures a saw, the Government wants to purchase a saw with a safety switch, and firm B adds a safety switch to the saw, firm B, and not firm A, will be considered the manufacturer of the end item (i.e., saw with safety switch) provided firm A does not itself make or provide a saw with safety switch. Similarly, a firm that merely installs a video card that the manufacturer of a computer could have installed will not be considered the manufacturer of [the] computer. Id.
*8 NMC/Wollard, Inc., SBA No. SIZ-5668, at 12-13 (2015). Based on this regulatory history, OHA has stated that where the challenged firm's modifications contribute no functionality in any of the key product specifications, the challenged firm cannot be reasonably viewed as the manufacturer. Id. at 14. Such is not the case here. According to the RFQ's requirements, the electrical terminals must meet certain specifications. See Requirements 2.7, Section II.A., supra. SRI is rewiring [Subcontractor]'s subassembly to meet these specifications. There are also weight requirements. To meet these specifications, SRI is replacing the flange with a lighter one. The replacement is significant because it addresses Requirement 2.4. Section II.A., supra. Without SRI's modifications, [Subcontractor]'s unit would be overweight and could actually do damage to NOAA's other equipment.
*8 Accordingly, SRI is providing modifications that are essential to making the end-item conform to the NOAA's product specifications. SRI's modifications, then, are not merely “minimal operations.” See Size Appeal of Sea Box, Inc., SBA No. SIZ-5613, at 5 (2014) (modifying a nonconforming product to the fit the solicitation's requirements does not constitute “minimal operations.”) These modifications thus satisfy the first factor of the manufacturer test. 13 C.F.R. § 121.406(b)(2)(i)(A). Further, SRI is performing these modifications at its own extensive and well-equipped plant, which meets the third requirement of the manufacturer test. Id. § 121.406(b)(2)(i)(C).
*9 These modifications, moreover, constitute the majority of the parts and labor necessary to manufacture the end-item, so the second factor is met. Id. § 121.406(b)(2)(i)(B). Appellant's attempts to prove otherwise are unconvincing because Appellant's arguments are not based on the costs in the record. SRI provided a detailed description of its manufacturing process, explaining the extensive work it performs in order to render [Subcontractor]'s motor compliant with the solicitation's requirements. This hard evidence outweighs Appellant's assertions based on “common experience” and another solicitation, which amount to mere speculation.
*9 The Area Office's calculations excluded costs of overhead, testing and quality control, as required by the regulation. After subtracting out these costs, the Area Office concluded SRI is responsible for 52% of the cost of the servo motor Appellant will supply. To make a persuasive argument, Appellant could have, and should have, availed itself of the opportunity to examine the appeal file and critique the Area Office's calculations. Size Appeal of ASI-Sumo JV, LLC, SBA No. SIZ-5594, at 5 (2014) (citing 13 C.F.R § 134.205(d)). Because Appellant did not do so here, the arguments on appeal do not convincingly show error in the size determination.
*9 In summary, it is clear that SRI's work on the servo motors contributes a majority of the value of the end item to be delivered to NOAA, the importance of the elements SRI adds are vital to make the item compatible with NOAA equipment, and SRI has the plant, facilities and equipment to perform the necessary work on the servomotor. Accordingly, the Area Office did not err in finding SRI is the manufacturer under 13 C.F.R. § 121.406(b)(2)(i).
*9 The Area Office did err, however, in finding that [Subcontractor] did not have access to NOAA's specifications, which were available to all potential bidders. This error is ultimately immaterial because the record so strongly supports the conclusion that SRI is the manufacturer of the item. I therefore see no reason to disturb the size determination. Size Appeal of WG Pitts Company, SBA No. SIZ-5575, at 4 n.4 (2014).
*9 Appellant contends that SRI's costs “do not reach required 50% contribution to the final product.” Section II.E., supra. To the extent Appellant is arguing that SRI does not comply with the limitation on subcontracting, this issue is “an element of responsibility and not a component of size eligibility.” 13 C.F.R. § 125.6(e). Thus, whether SRI complies with the limitation on subcontracting is beyond the scope of this appeal. Size Appeal of NMC/Wollard, Inc., SBA No. SIZ-5668, at 14 (2015).
IV. Conclusion
*10 Appellant has not demonstrated clear error in the size determination. Accordingly, the appeal is DENIED and the size determination is AFFIRMED. This is the final decision of the Small Business Administration. 13 C.F.R. § 134.316(d).
Footnotes
This decision was originally issued under the confidential treatment provision of 13 C.F.R. § 134.205. OHA received one or more requests for redactions and considered any requests in redacting the decision. OHA now publishes a redacted version of the decision for public release.
SBA No. SIZ-5714, 2016 (S.B.A.), 2016 WL 759723
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