Trioid International Group, LLC, No. BDP-103 (November 16, 1998)
Docket No. BDPE-98-11-09-09
                                
                                
                    UNITED STATES OF AMERICA
                  SMALL BUSINESS ADMINISTRATION
                 OFFICE OF HEARINGS AND APPEALS
                        WASHINGTON, D.C.

________________________________
                                ) 
IN THE MATTER OF:               ) Docket No. BDPE-98-11-09-09
                                ) 
Trioid International Group, LLC ) Decided:  November 16, 1998
_______________________________ )
                                
                                
                             DIGEST
                                
There  is  no jurisdiction to hear an appeal of an SBA denial  of
admission  into the 8(a) program based on grounds of  a  negative
finding of social disadvantage, economic disadvantage, ownership,
or  control,  if  the determination was also based  upon  another
ground,  such  as  a negative finding of potential  for  success,
brokering, or good character.

                     ORDER DISMISSING APPEAL
                                
     On  November 6, 1998, Petitioner Trioid International Group,
LLC  (TIG)  appealed a decision of the Respondent Small  Business
Administration (SBA) denying it admission into the 8(a)  program.
[1] Appeal Petition, dated November 5, 1998, signed by Gary Sing,
CEO of TIG (Appeal Petition).

     On October 26, 1998, the SBA, on reconsideration, denied TIG
entry  into  the  8(a)  program.  The  SBA  declined  TIG's  8(a)
application  for six reasons:  (1) Mr. Sing, the individual  upon
whom  eligibility  was  based,  did  not  hold  the  position  of
President or Chief Executive Officer; (2) Mr. Sing did not devote
full-time  to the operation of TIG; (3) TIG  was not in  business
for   two  years  and  did  not  qualify  for  a  waiver  of  the
requirement;  (4) TIG did not have the potential to  successfully
perform 8(a) contracts; (5) TIG was a broker; and (6) TIG did not
meet    the   good-character   requirement.    Appeal   Petition,
attachment,  at 3-4.  The SBA advised TIG that it  could  reapply
for  admission into the 8(a) program twelve months from the  date
of  the  letter, but did not advise TIG that it had the right  to
appeal the SBA's denial. [2] Id.

     An  8(a)  applicant may appeal a denial of program admission
only  if  the denial is based solely upon a negative  finding  of
social   disadvantage,  economic  disadvantage,   ownership,   or
control.     15    U.S.C.    Section   637(a)(9);    13    C.F.R.
Section 124.206(a). [3] The regulation makes this clear:

     An  applicant may appeal a denial of program  admission
     to SBA's Office of Hearings and Appeals (OHA), if it is
     based   solely   on  a  negative  finding   of   social
     disadvantage,    economic   disadvantage,    ownership,
     control, or any combination of these four criteria.   A
     denial  decision that is based at least in part on  the
     failure to meet any other eligibility criterion is  not
     appealable and is the final decision of SBA.
     
63   Fed.   Reg.  at  35,750  (to  be  codified  at   13   C.F.R.
Section 124.206(a)) (emphasis added).

     SBA's procedural regulations are in accord:

     The  Administrative Law Judge selected to preside  over
     an appeal shall decline to accept jurisdiction over any
     matter  if  . . .  [t]he appeal does not, on its  face,
     allege  facts that, if proven to be true, would warrant
     reversal   or   modification  of   the   determination,
     including  appeals  of  denials  of  8(a)  BD   program
     admission  based in whole or in part on  grounds  other
     than   a   negative  finding  of  social  disadvantage,
     economic disadvantage, ownership or control . . . .
     
63 Fed. Reg. at 35,766 (to be codified at 13 C.F.R. Section
134.405(a)) (emphasis added).

     The  SBA denied TIG admission based on negative findings  of
control,  as  well  as  potential  for  success,  brokering,  and
character.  It is settled law that, if any other ground, such  as
lack  of  potential  for  success, is  one  of  the  grounds  for
declining an 8(a) application, there is no jurisdiction  to  hear
the appeal, even if the decline included other grounds such as  a
negative  finding of social disadvantage, economic  disadvantage,
ownership, or control.  Matter of G & L Recycling Co., Inc.,  SBA
No.  MSB-613, at 2 (1998) (declining jurisdiction when SBA denied
admission  for  two  reasons relating to potential  for  success,
notwithstanding Petitioner's argument that one reason amounted to
a   negative  finding  of  economic  disadvantage);   Matter   of
Stonehenge  Int'l, Inc., SBA No. MSB-604, at 2 (1998)  (declining
jurisdiction when grounds for denying admission included lack  of
potential  for  success,  failure  to  manage  and  operate   the
applicant  firm  full-time,  and  lack  of  skills  necessary  to
demonstrate control of applicant firm)1.  Because the  denial  of
admission  was  based in part on grounds other  than  a  negative
finding of social disadvantage, economic disadvantage, ownership,
or  control, there is no jurisdiction to hear the appeal, and  it
must be dismissed.

     The  Petition  appealing the SBA's denial  of  admission  of
Trioid  International  Group,  LLC,  into  the  8(a)  program  is
DISMISSED.

     Subject  to  13 C.F.R. Section 134.408(c), [4] this  is  the
final  decision  of  the  Small Business  Administration;  it  is
binding  upon all parties, including those within the  employ  of
the   SBA.    15   U.S.C.   Section   637(a)(9)(D);   13   C.F.R.
Section 134.408(a). [5]



     
                                 _______________________________
                                 RICHARD S. ARKOW
                                 Administrative Law Judge


_________________________

       [1]  Small Business Act of 1958, Section 8(a), as amended,
15  U.S.C.  Section  637(a).  Regulations implementing  the  8(a)
program  were  recently amended and apply to  this  appeal.   See
Small  Business Size Regulations; 8(a) Business Development/Small
Disadvantaged Business Status Determinations; Rules of  Procedure
Governing  Cases  Before the Office of Hearings and  Appeals,  63
Fed.  Reg. 35,726 (1998) (to be codified at 13 C.F.R. Parts  121,
124, and 134).

        [2]  This  decline  letter  constitutes  the  final   SBA
determination.   63  Fed. Reg. at 35,750 (to be  codified  at  13
C.F.R. Section 124.206(a)).

       [3]  63  Fed. Reg. at 35,750 (to be codified at 13  C.F.R.
Section 124.206(a)).

       [4]  63  Fed. Reg. at 35,767 (to be codified at 13  C.F.R.
Section 134.408(c)).

       [5]  63  Fed. Reg. at 35,767 (to be codified at 13  C.F.R.
Section 134.408(a)).


                                           Posted: November, 1998