February 2025
At Pannier Law, P.C., we are proud to announce a significant win for our client, Tinosa, Inc., in a North American Industry Classification System (NAICS) code appeal before the U.S. Small Business Administration’s Office of Hearings and Appeals (OHA). This victory, decided on February 28, 2025, demonstrates our expertise in navigating complex federal procurement regulations and advocating for small businesses.
Case Background
On December 18, 2024, the U.S. Department of the Navy issued a Request for Proposals (RFP) for Divers Life Support System (DLSS) Routine Maintenance Services, assigning NAICS code 811310 (Commercial and Industrial Machinery and Equipment Repair and Maintenance) with a size standard of $12.5 million in average annual receipts. Tinosa, Inc., the incumbent contractor under a prior contract classified under NAICS code 541380 (Testing Laboratories and Services) with a $19 million size standard, faced exclusion from bidding due to the new classification.
Our Strategy
Led by William M. Pannier, Esq., our legal team swiftly filed a NAICS appeal on December 27, 2024, arguing that the Contracting Officer’s selection of NAICS code 811310 was a clear error of fact and law. We contended that the RFP’s primary purpose—focused on precision testing, calibration, and certification of DLSS equipment—aligned with NAICS code 541380, not general machinery repair. Key arguments included:
- Detailed RFP Analysis: We highlighted that the RFP emphasized hydrostatic testing, gauge calibration, air quality sampling, and oxygen cleaning in controlled environments, all of which are core activities under NAICS code 541380.
- NAICS Manual Alignment: We demonstrated that NAICS code 811310 applies to heavy machinery repair (e.g., forklifts, mining equipment), which was inapplicable to the specialized DLSS equipment designed for Navy divers.
- Contract Value Breakdown: Tinosa estimated that approximately 75% of the contract’s dollar value involved testing and compliance services, reinforcing the appropriateness of NAICS code 541380.
Our appeal included a comprehensive appendix analyzing 198 RFP line items, showing that the majority required analytical testing, certification, or precision cleaning, further supporting our position.
The Outcome
On February 28, 2025, the OHA granted Tinosa’s appeal in NAICS Appeal of Tinosa, Inc., SBA No. NAICS-6338 (2025). The Administrative Judge ruled that the Contracting Officer erred in selecting NAICS code 811310, as the RFP’s focus on technical verification, testing, and calibration of DLSS equipment aligned with NAICS code 541380. The OHA mandated that the Navy amend the RFP to reflect NAICS code 541380, enabling Tinosa to compete as a small business under the higher size standard.
Why This Matters
This victory not only preserved Tinosa’s ability to bid on a critical contract but also set a precedent for future solicitations involving similar services. It underscores the importance of precise NAICS code designations in ensuring fair competition for small businesses in federal contracting.
Trust Pannier Law for Your Legal Needs
This successful outcome reflects Pannier Law’s commitment to delivering strategic, results-driven representation. Whether you’re a small business navigating federal procurement challenges or facing other legal hurdles, our team is here to protect your interests with skill and dedication.
Contact Pannier Law, P.C. today at (310) 971-5093 or visit www.pannierlaw.com to learn how we can help you achieve your legal goals.
Disclaimer: This article is for informational purposes only and does not constitute legal advice or create an attorney-client relationship. Consult a qualified attorney for advice specific to your situation.
About the Author: William Pannier, founder of Pannier Law, brings over 20 years of experience as a Government Contracts attorney.