Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 9129 

are established for such purposes and 

that have the following characteristics: 

(1) The classification of the accounts 

involved complies with the Board’s 

Regulation D, 12 CFR 204.2(d)(2), (2) the 

consumer does not have direct access to 

the non-transaction subaccount that is 

part of the retail sweep program, and (3) 

the consumer’s monthly statement 

shows the account balance as the 

combined balance in the subaccounts. 

3fiø2¿. Additional balance. The 

institution may disclose additional 

balances supplemented by funds that 

may be provided by the institution to 

cover an overdraft, whether pursuant to 

a discretionary overdraft service, a 

service subject to the Board’s Regulation 

Z (12 CFR part 226), or a service that 

transfers funds from another account 

held individually or jointly by the 

consumer, so long as the institution 

prominently states that any additional 

balance includes these additional 

overdraft amounts. The institution may 

not simply state, for instance, that the 

second balance is the consumer’s 

‘‘available balance,’’ or contains 

‘‘available funds.’’ Rather, the institution 

should provide enough information to 

convey that the second balance includes 

these amounts. For example, the 

institution may state that the balance 

includes ‘‘overdraft funds.’’ Where a 

consumer flhas not opted into, or as 

applicable,fi has opted out of the 

institution’s discretionary overdraft 

service, any additional balance 

disclosed should not include funds 

øinstitutions¿ provided under that 

service. Where a consumer flhas not 

opted intofiøhas opted out of ¿ the 

institution’s discretionary overdraft 

service for some, but not all transactions 

(e.g., the consumer has flnot opted 

intofiøopted out¿ overdraft services for 

ATM and flone-time fidebit card 

transactions), an institution that 

includes flthese additional overdraft 

fifunds øfrom its discretionary 

overdraft service¿ in the flsecond 

fibalance should convey that the 

overdraft funds are not available for all 

transactions. For example, the 

institution could state that overdraft 

funds are not available for ATM and 

flone-time (or everyday) fidebit card 

transactions.fl Similarly, if funds are 

not available for all transactions 

pursuant to a service subject to the 

Board’s Regulation Z (12 CFR part 226) 

or a service that transfers funds from 

another account, a second balance that 

includes such funds should also 

indicate this fact.fi 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, February 18, 2010. 

Jennifer J. Johnson, 

Secretary of the Board. 

[FR Doc. 2010–3719 Filed 2–26–10; 8:45 am] 

BILLING CODE 6210–01–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Parts 121, 124, 125, 126, and 

134 

RIN 3245–AF65 

Small Business, Small Disadvantaged 

Business, HUBZone, and ServiceDisabled Veteran-Owned Protest and 

Appeal Regulations 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Proposed rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA or Agency) 

proposes to amend its regulations to 

clarify the effect, across all small 

business programs, of initial and appeal 

eligibility decisions on the procurement 

in question; increase the amount of time 

that SBA has to render formal size 

determinations; require that SBA’s 

Office of Hearings and Appeals (OHA) 

issue a size appeal decision within 60 

calendar days of the close of the record, 

if possible; increase the amount of time 

that SBA has to file North American 

Industry Classification System (NAICS) 

code appeals; alter the NAICS code 

appeal procedures to comply with a 

Federal Court decision; clarify that 

contracting officers must reflect final 

agency eligibility decisions in federal 

procurement databases and goaling 

statistics; clarify how a contracting 

officer assigns a NAICS code and size 

standard to a multiple award 

procurement; and make other changes to 

size status protest and appeal rules. 

DATES: Comments must be received on 

or before March 31, 2010. 

ADDRESSES: You may submit comments, 

identified by RIN: 3245–AF65, by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail, for paper, disk, or CD/ROM 

submissions: Khem Sharma, Chief, 

Office of Size Standards, U.S. Small 

Business Administration, Office of 

Government Contracting, 409 Third 

Street, SW., Washington, DC 20416. 

• Hand Delivery/Courier: Khem 

Sharma, Chief, Office of Size Standards, 

U.S. Small Business Administration, 

Office of Government Contracting, 409 

Third Street, SW., Washington, DC 

20416. 

SBA will post all comments on 

http://www.regulations.gov. If you wish 

to submit confidential business 

information (CBI) as defined in the User 

Notice at http://www.Regulations.gov, 

please submit the information to Khem 

Sharma, Chief, Size Standards Division, 

U.S. Small Business Administration, 

Office of Government Contracting, 409 

Third Street, SW., Washington, DC 

20416, or send an e-mail to 

khem.sharma@sba.gov. Highlight the 

information that you consider to be CBI 

and explain why you believe SBA 

should hold this information as 

confidential. SBA will review the 

information and make the final 

determination on whether it will 

publish the information or not. 

FOR FURTHER INFORMATION CONTACT: Carl 

Jordan, Program Analyst, Size Standards 

Division, Office of Government 

Contracting, (202) 205–7189 or at 

carl.jordan@sba.gov. 

SUPPLEMENTARY INFORMATION: SBA is 

proposing to delete the reference to 

other factors to be considered when 

assigning a NAICS code to a 

procurement in 13 CFR 121.402. SBA’s 

regulations currently provide that a 

contracting officer should consider the 

principal purpose of the product or 

service to be acquired, and that a 

procurement is usually classified 

according to the component which 

accounts for the greatest percentage of 

contact value. SBA’s regulations further 

provide that contracting officers may 

consider previous Government 

procurement classifications of the same 

or similar products or services and 

which classification would best serve 

the purposes of the Small Business Act. 

SBA believes these additional factors 

are unnecessary. A repeated error is not 

persuasive evidence, especially since 

such classifications are almost never 

reviewed or challenged. As discussed 

above, SBA receives very few NAICS 

code appeals because of the short appeal 

timelines. Further, it is unclear how a 

contracting officer can determine which 

NAICS code and size standard can best 

serve the purposes of the Small 

Business Act. Thus, we are proposing to 

delete reference to prior government 

classifications and the purpose of the 

Small Business Act. Each solicitation 

should be classified based on the 

principal purpose of that particular 

solicitation, and the contracting officer 

only needs to make a reasonable choice. 

SBA is proposing to delete a provision 

in § 121.404 that requires a concern to 

recertify its size where a solicitation is 

modified so that initial offers are no 

longer responsive. Generally, a firm 

must be small at the time of initial offer, 

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9130 Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 

including price. This rule provides 

procuring agencies and offerors with 

finality with respect to eligibility. Some 

procurements may drag on for several 

years due to a variety of reasons, 

including protests, discussions, funding 

issues, and changes in requirements. 

Disqualifying an offeror based on 

whether a procuring agency’s 

requirement changes during the course 

of a protracted procurement unfairly 

punishes both the procuring agency and 

offerors that have expended time and 

resources pursuing the procurement. 

Reasonable people may disagree about 

whether a solicitation has been 

modified so that initial offers are no 

longer responsive. For example, in Size 

Appeal of Continental Staffing, Inc., 

SBA No. SIZ–4808 (2006) the 

contracting officer did not request new 

size certifications and argued that its 

requirement had not changed so much 

that initial offers were no longer nonresponsive. OHA disagreed and 

remanded, ordering the Area Office to 

determine the prospective awardee’s 

size at the time of a revised offer 

submitted approximately five months 

after the initial offer, resulting in the 

firm being ineligible because a more 

recent year would be used to calculate 

the firm’s size. In SBA’s view, if a 

change in a requirement is drastic 

enough that all offers are nonresponsive, the procuring agency will 

have to cancel the procurement and 

issue a new solicitation open to all 

potential offerors, not just offerors who 

responded to the now obsolete 

solicitation. Offerors would then have to 

submit size certifications along with 

their initial offer, including price, in 

response to the new solicitation. SBA 

recently finalized rules which require 

re-certification after award to ensure 

that contracts are properly counted for 

goaling and statistical purposes. 13 CFR 

404(g). In SBA’s view, the procurement 

community is better served if there is a 

clear bright line for purposes of 

determining eligibility for award. 

SBA is proposing to amend § 121.407 

to address how a NAICS code and size 

standard should be assigned to a 

multiple award procurement. Agencies 

frequently acquire diverse goods and 

services from multiple vendors under 

contracts awarded pursuant to a single 

solicitation. SBA’s regulations require 

the contracting officer to assign the 

single NAICS code to the procurement 

that best describes the principal purpose 

of the acquisition. 13 CFR 121.402. The 

fact that multiple contracts will be 

awarded under a solicitation does not 

alter this fundamental principle. 

Generally, if all awardees will be 

eligible to compete for orders, then, just 

like any other procurement, the 

solicitation should be assigned the 

single NAICS code that best describes 

the principal purpose of the acquisition. 

However, if a multiple award 

procurement is divided up into contract 

line item numbers (CLINs) or special 

item numbers (SINs), where only 

awardees under the CLIN or SIN will 

compete for orders, then each CLIN or 

SIN should be assigned the single 

NAICS code that best describes the 

principal purpose CLIN or SIN. This 

will ensure that firms that are actually 

small for the actual work receive the 

award, and ensure that procuring 

agencies only receive credit towards 

their goals for awards to firms that are 

small for the work to be performed. 

SBA is proposing to amend 

§ 121.1009 to provide SBA within 15 

business days to decide a size protest. 

SBA’s regulations currently provide that 

SBA will issue a formal size 

determination within 10 working days 

of its receipt of a size protest, ‘‘if 

possible.’’ 13 CFR 121.1009(e). The 

Federal Acquisition Regulation (FAR) 

currently provides that a contracting 

officer should withhold award for 10 

business days after SBA’s receipt of a 

size protest, after which time the 

contracting officer may proceed with 

award if ‘‘further delay would be 

disadvantageous to the Government.’’ 

FAR 19.302(h)(2). The FAR further 

provides that a contracting officer need 

not withhold award if he or she 

determines in writing that award must 

be made to protect the public interest. 

FAR 19.302(h)(1). 

Under current regulations, after SBA 

receives a size protest, it notifies the 

protested concern, and the protested 

concern is provided 3 business days to 

respond to the protest and provide 

information to SBA. Thus, by the time 

the SBA receives the protested 

concern’s information, SBA generally 

has approximately 5 business days to 

write a formal size determination. 

However, in some cases, protested 

concerns ask for additional time to 

submit the required information, such 

as tax returns or payroll records, 

corporate organization documentation, 

and forms detailing ownership interests 

in other concerns. In some cases, the 

concern’s submission raises additional 

issues, leading the size specialist to 

request additional information from the 

protested concern. Moreover, to draft a 

decision, size specialists sometimes 

have to read and analyze voluminous 

documentation. For example, if a size 

protest involves allegations of undue or 

excessive reliance on a subcontractor, a 

size specialist must thoroughly analyze 

the protested concern’s proposal and the 

solicitation to make a determination. 

Further, a size specialist also may have 

to conduct legal or other research before 

a decision can be drafted. 

SBA conducted a survey of its six 

Government Contracting Area Offices 

and found that, on average, the Area 

Offices issued size determinations more 

than 10 business days after receipt 29% 

of the time. SBA’s regulations currently 

provide SBA with 15 business days to 

decide other status protests, such as 

SDB, SDVO, and HUBZone protests. 13 

CFR 124.1013(a), 125.27(d), 126.803(b). 

Formal size determinations are typically 

more complicated than other small 

business program eligibility 

determinations. Increasing the amount 

of time SBA has to make a size 

determination will also make SBA’s 

regulations more consistent across all 

programs, which would be beneficial to 

all participants in the small business 

procurement community. 

SBA is proposing to amend 

§§ 121.1009, 121.1013, 125.27 and 

126.803 to clarify the effect of protest or 

appeal decisions on the procurement in 

question and make the effect more 

consistent and coherent across small 

business programs. SBA’s size, small 

disadvantaged business (SDB), ServiceDisabled Veteran-Owned (SDVO) and 

Historically Underutilized Business 

Zone (HUBZone) regulations contain 

varied and sometimes inconsistent 

explanations on how the protest or 

appeal decision applies to the 

procurement in question. 13 CFR 

121.1004(c), 121.1009(g), 124.1013(h), 

124.1014(f), 125.27(g), 126.803(d), 

126.805(g), 134.504. 

The purpose of the protest and appeal 

process is to assure that contracts are 

awarded to eligible concerns. However, 

the process must be balanced so that it 

does not impede the procuring agency’s 

ability to accomplish its mission. SBA’s 

size regulations currently provide that a 

timely filed protest applies to the 

procurement in question, even if filed 

after award. 13 CFR 121.1004(c). SBA’s 

regulations further provide that a 

contracting officer may apply an 

appellate size decision received after 

award to the procurement in question, 

but is not required to do so. SBA’s size 

regulations do not address how a formal 

size decision or appellate decision 

applies for goaling purposes, but other 

program regulations, such as the SDVO 

regulations, do address the effect of 

protest and appeal decisions for goaling 

purposes. 13 CFR 125.27(g). Over the 

last several years, the U.S. Government 

Accountability Office (GAO) has 

sustained bid protests, and in many 

cases recommended termination, where 

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a firm was found to be other than small 

and the decision was received after 

award. See Hydroid LLC, B–299072, Jan. 

31, 2007, 2007 CPD ¶ 20; ALATEC Inc., 

B–298730, Dec. 4, 2006, 2006 CPD 

¶ 191; Spectrum Security Services, Inc., 

B–297320.3, Dec. 29, 2005, 2005 CPD 

¶ 227; Tiger Enterprises, Inc., B–293439, 

B–292815.3, Jan. 20, 2004, 2004 CPD 

¶ 19; Adams Industrial, Inc., B–280186, 

Aug. 28, 1998, 98–2 CPD ¶ 56. In 

contrast, SBA’s regulations specifically 

provide that a procuring agency need 

not terminate a contract based on an 

SDVO protest determination that is 

received after award. 13 CFR 125.27(g); 

see Major Contracting Services, Inc., B– 

400616, Nov. 20, 2008, 2008 CPD ¶ 214; 

Veteran Enterprise Technology Services, 

LLC, B–298201.2, Jul. 13, 2006, 2006 

CPD ¶ 108. 

SBA is proposing to specifically 

address how initial and appellate 

decisions apply to the procurement in 

question across all small business 

programs, including for goaling 

purposes. If the SBA issues an initial 

decision that a concern is eligible, the 

procuring agency may make an award 

based on that decision, notwithstanding 

an appeal or notice of an appeal. If the 

initial decision is overturned on appeal, 

the procuring agency must apply the 

decision to the procurement in question 

for goaling purposes. If the appellate 

decision is received by the contracting 

officer after award, the contracting 

officer may take some action, such as 

terminating the contract or not 

exercising options, but will not be 

required to do so. On the other hand, if 

the SBA issues an initial decision that 

a concern is ineligible, award should 

not be made to that concern, unless and 

until the decision is overturned on 

appeal. If award has made been, the 

procuring agency must take some action 

if the initial decision is not overturned 

on appeal, such as terminating the 

award or not exercising the next option. 

Further, the contracting officer must 

apply the final Agency decision to the 

procurement in question for goaling 

purposes. 

SBA is proposing to amend 

§ 121.1009 to clarify when it will reopen 

a size determination. Currently, SBA 

may reopen a size determination to 

correct an administrative error or clear 

mistake of fact, provided an appeal has 

not been filed. If an appeal has been 

filed, SBA may intervene in the case or 

request a remand. SBA is proposing to 

clarify that once the Agency issues a 

final decision it cannot reopen that 

decision at a later time. SBA’s issuance 

of its final decision starts the clock for 

purposes of challenging the final agency 

decision in a court of law. If SBA could 

reopen a final agency decision then no 

decision could ever be considered final. 

Moreover, such an action would lead to 

due process challenges from the parties, 

who already litigated the matter and 

received a final agency decision. Thus, 

SBA is clarifying that if SBA issues a 

final agency decision and that decision 

is not timely challenged, that is the end 

of the matter. 

SBA is proposing to amend 

§ 121.1101(b), which prohibits a size 

appeal where the contract has been 

awarded and the issues raised in the 

appeal are contract-specific. SBA 

believes that an appellate decision 

should always apply for goaling 

purposes. In other words, if a firm that 

has been awarded a contract is found to 

be other than small, then SBA believes 

that the procuring agency should not be 

able to continue to take small business 

credit for purposes of its small business 

goals. Further, a contracting officer may 

take some action based on a negative 

appellate decision. Consequently, SBA 

is proposing that OHA accept all size 

appeals. 

SBA is proposing to amend 

§ 121.1103 to clarify that a NAICS 

appeal includes an appeal involving 

whether a procuring agency has 

assigned the correct corresponding size 

standard to a procurement. SBA is also 

proposing to increase the amount of 

time SBA has to file a NAICS code 

appeal. Currently, a NAICS code appeal 

must be filed within 10 calendar days 

after issuance of the initial solicitation. 

This 10-day time limit also applies to 

SBA. OHA receives very few NAICS 

code appeals. On average 10 NAICS 

code appeals are filed annually. SBA is 

proposing to amend its regulations to 

allow SBA to file a NAICS code appeal 

at any time before offers or bids are due. 

SBA occasionally receives notice of 

clearly inappropriate NAICS codes and 

size standards, but receives the notice 

well after the 10-day time limit. Size is 

a function of the work to be performed. 

A firm can be small in one industry but 

large in another. Legitimate small 

business concerns in the particular 

industry are harmed when a 

procurement is misclassified because 

they may not be able to successfully 

compete with a concern that is actually 

large for the work to be performed. 

Further, procurement misclassification 

degrades the Federal Government’s 

procurement data, in terms of its small 

business prime contracting goals as well 

as the dollar value and contract action 

data for both the misclassified industry 

and the proper industry. 

SBA is also proposing to amend 

§ 121.1103 to require contracting 

officers to notify the public of the filing 

of a NAICS code appeal to ensure that 

all prospective offerors or bidders have 

an opportunity to submit evidence or 

arguments concerning the appropriate 

NAICS code and size standard. Under 

SBA’s current regulations, if a NAICS 

code appeal is filed SBA’s decision is 

final, even though prospective offerors 

other than the appellant may not have 

received notice of the appeal, and 

therefore may not have had an 

opportunity to be heard. In Advanced 

Systems Technology, Inc. v. U.S., 69 

Fed. Cl. 474 (2006) the U.S. Court of 

Federal Claims enjoined the procuring 

agency from proceeding with its 

acquisition after SBA issued a NAICS 

code appeal decision that a prospective 

offeror had not known about, and after 

SBA dismissed the prospective offeror’s 

subsequent NAICS code appeal. This 

change will ensure prospective offerors 

are provided due process. 

SBA is proposing to amend 

§ 124.1013(d) to correct a typographical 

error. In addition, as discussed above 

SBA is proposing to amend §§ 124.1013 

and 124.1014 to make the effect of an 

SDB status and appeal determination 

consistent with other small business 

programs. 

As discussed above, SBA is proposing 

to amend §§ 125.27, 125.28 and 134.504 

to make the effect of an SDVO status 

and appeal determination consistent 

with other small business programs. In 

addition, SBA is proposing to amend 

§ 125.27 to clarify that a firm found to 

be ineligible must demonstrate to SBA 

that it has overcome the reason the firm 

was found to be ineligible before it can 

represent itself as an SDVO SBC. 

As discussed above, SBA is proposing 

to amend §§ 126.803 and 126.805 to 

make the effect of a HUBZone status and 

appeal determination consistent with 

other small business programs. 

SBA is proposing to amend § 134.304 

to require that all size appeals be filed 

within 15 calendar days after receipt of 

the formal size determination. 

Currently, SBA’s regulations require a 

size appeal to be filed within 15 

calendar days if the procurement is 

‘‘pending,’’ and 30 calendar days if the 

size appeal does not involve a ‘‘pending’’ 

procurement. The term ‘‘pending’’ is 

ambiguous and is therefore subject to 

interpretation, which in turn leads to 

litigation. It is SBA’s view that 15 

calendar days is sufficient for any party 

to file a size appeal. 

SBA is proposing to amend § 134.316 

to require OHA to issue size appeal 

decisions within 60 calendar days of the 

close of the record, if possible. 

Currently, there are no time limits 

applicable to rendering size appeal 

decisions. In a size appeal, the record 

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9132 Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 

generally closes 15 calendar days after 

the Judge notifies the parties that an 

appeal has been received, but may be 

extended at the Judge’s discretion. 13 

CFR 134.309(b). Since an appellate 

decision may affect contract award or 

continued performance, appellate 

decisions need to be rendered in a 

timely fashion. SBA is also proposing to 

amend § 134.316 to require OHA to 

render a NAICS code appeal decision 

within 15 calendar days of the close of 

the record, if possible, to minimize 

delay to the procurement. Currently, 

there are no time limits for rendering 

NAICS code appeal decisions. 

SBA is proposing to delete § 134.504 

and amend redesignated § 134.513 

because the effect of an SDVO status 

appellate determination is set forth in 

§ 125.27. SBA is proposing to amend 

redesignated § 134.508 to clarify when 

OHA will dismiss an SDVO appeal. 

Finally, SBA is proposing to amend 

redesignated § 134.514 to make a change 

to the nomenclature. 

Compliance With Executive Orders 

12866, 12988, 13132, the Paperwork 

Reduction Act (44 U.S.C. Ch. 35), and 

the Regulatory Flexibility Act (5. U.S.C. 

601–612), Executive Order 12866 

The Office of Management and Budget 

(OMB) has determined that this 

proposed rule is a significant regulatory 

action for purposes of Executive Order 

12866. Accordingly, the next section 

contains SBA’s Regulatory Impact 

Analysis. This is not a major rule, 

however, under the Congressional 

Review Act, 5 U.S.C. 800. 

Regulatory Impact Analysis 

1. Is there a need for the regulatory 

action? SBA’s mission is to aid and 

assist small businesses through a variety 

of financial, procurement, business 

development, and advocacy programs. 

To assist effectively the intended 

beneficiaries of these programs, SBA 

must establish distinct definitions of 

which businesses are deemed small 

businesses. The Small Business Act (15 

U.S.C. 632(a)) delegates the 

responsibility for establishing small 

business definitions to SBA’s 

Administrator. This act also provides 

SBA with the authority to determine 

which businesses are small businesses 

concerns (15 U.S.C. 637(b)(1)(G)(6)). The 

supplementary information section of 

this proposed rule explains SBA’s 

reasons for revising the size protest and 

appeal timeframes and application of 

final decisions on size and other small 

business status determinations. SBA 

believes that these changes are needed 

to provide clarity to procuring agencies 

and contractors. 

2. What are the potential benefits and 

costs of this regulatory action? 

SBA believes that more realistic 

timeframes for filing and rendering 

decisions on size and NAICS cases will 

improve the functioning of the size 

protest and size determination 

processes. Small businesses will have a 

sufficient time in which to raise size 

and NAICS classification issues and 

SBA will have more time, if needed, to 

prepare thorough decisions. 

The proposed provisions may have 

cost implications associated with delays 

to the contracting process. Contracting 

officers may have to wait an additional 

5 days in some cases before SBA renders 

a size determination. However, 

contracting officers are already generally 

required to withhold award for 15 days 

for a HUBZone, SDB, or SDVO status 

protest. SBA believes that the potential 

costs associated with delays in the 

contracting process are relatively minor 

and are significantly outweighed by the 

benefits to the integrity of small 

business procurement programs and the 

intended beneficiaries. 

SBA recognizes that its proposal to 

assign a NAICS code to each line item 

of a multiple award contract will require 

reprogramming of the Federal 

Procurement Data System-NG (FPDS– 

NG). Although contracting officers may 

already be designating NAICS codes to 

task orders, FPDS–NG only records one 

NAICS code for the overall contract. 

However, revisions to FPDS–NG to 

incorporate NAICS codes by task order 

may have already begun in response to 

the November 15, 2006, recertification 

rule. SBA does not have an estimate of 

the costs but it believes that they will 

not be significant because this 

requirement affects only one field 

within the database, especially if 

reprogramming for this feature has 

already started. Nonetheless, SBA 

strongly believes the benefits of 

accurately reflecting small business 

awards for multiple award contract 

vehicles that now account for over $35 

billion in federal contracting dollars 

annually greatly outweighs the 

programming costs associated with 

implementing this policy. 

3. What are the alternatives to this 

proposed rule? 

SBA considered as an alternative 

completing size determinations within 

10 days of receiving all requested 

information from the protested concern. 

Although this would also achieve the 

objective of the proposal, it will create 

uncertainty as to when a size 

determination would actually be 

rendered. If the necessary information 

requested of a business is received 

within the 3-day period requested by 

SBA, a size determination would be 

completed within 13 days. However, if 

the protested concern submits 

incomplete information, the size 

determination period would vary 

depending on the circumstances. SBA 

believes a 15-day period is sufficient in 

most cases and provides a degree of 

certainty to contracting officers. It also 

reinforces the importance of promptly 

providing information to SBA. 

Executive Order 12988 

For purposes of Executive Order 

12988, SBA has drafted this proposed 

rule, to the extent practicable, in 

accordance with the standards set forth 

in section 3(a) and 3(b)(2) of that Order, 

to minimize litigation, eliminate 

ambiguity, and reduce burden. This rule 

has no preemptive or retroactive effect. 

Executive Order 13132 

This rule does not have federalism 

implications as defined in Executive 

Order 13132. It will not have substantial 

direct effects on the States, on the 

relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

layers of government, as specified in the 

order. As such it does not warrant the 

preparation of a Federalism Assessment. 

Paperwork Reduction Act 

For the purpose of the Paperwork 

Reduction Act, 44 U.S.C. Ch. 35, SBA 

has determined that this rule, if adopted 

in final form, would not impose new 

reporting requirements and would not 

require new recordkeeping 

requirements. The proposed rule 

provides additional time in order for 

SBA to make its formal size 

determinations. The proposed rule will 

impose a 60-day timeframe for issuing 

size appeal decisions (from the date of 

close of the record) and a 15-day 

timeframe for issuing NAICS code 

appeals (from the date of the close of the 

record). The rule will also require that 

all size appeals be filed within 15 

calendar days. 

Regulatory Flexibility Act 

SBA has determined that this 

proposed rule, if adopted in final form, 

could have a significant economic 

impact on a substantial number of small 

entities within the meaning of the 

Regulatory Flexibility Act (RFA), 5 

U.S.C. 601–612. Therefore, SBA has 

prepared an Initial Regulatory 

Flexibility Act (IRFA) analysis 

addressing the proposed regulation. 

IRFA 

When preparing a Regulatory 

Flexibility Analysis, an agency shall 

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Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 9133 

address all of the following: The need 

for, and objectives of, the rule; the 

estimated number of small entities to 

which the rule may apply; the projected 

reporting, recordkeeping and other 

compliance requirements; steps taken to 

minimize the significant economic 

impact on small entities. This IRFA 

considers these points and the impact 

the proposed regulation concerning 

initial status determinations and appeal 

decisions may have on small entities. 

a. Need for, and Objectives of, the Rule 

Under the Small Business Act, SBA is 

authorized to determine the size of a 

business entity. 15 U.S.C. 632. SBA’s 

standards and definitions relating to 

formal size determinations and NAICS 

code designation for small business 

concerns are set forth in 13 CFR part 

121. The rules for procedures governing 

cases before OHA are set forth in 13 CFR 

part 134. 

SBA’s regulations currently provide 

that SBA will issue a formal size 

determination within 10 working days 

of its receipt of a size protest, ‘‘if 

possible.’’ 13 CFR 121.1009(e). The FAR 

currently provides that a contracting 

officer should withhold award for 10 

business days after SBA’s receipt of a 

size protest, after which time the 

contracting officer may proceed with 

award if ‘‘further delay would be 

disadvantageous to the Government.’’ 

FAR 19.302(h)(2). The FAR further 

provides that a contracting officer need 

not withhold award if he or she 

determines in writing that award must 

be made to protect the public interest. 

FAR 19.302(h)(1). 

After SBA receives a size protest it 

notifies the protested concern, and the 

protested concern is provided 3 

business days to respond to the protest. 

Thus, SBA generally has only 5 business 

days to draft a formal size 

determination. In some cases protested 

concerns ask for additional time to 

submit the requested information. In 

other cases, the information submitted 

by the protested concern leads the size 

specialist to request additional 

information. Size specialists typically 

have to sift through voluminous 

documentation before reaching a 

decision. 

SBA’s regulations provide SBA with 

15 business days to decide other status 

protests, such as HUBZone, SDB and 

SDVO. 13 CFR 124.1013(a), 125.27(d), 

126.803(b). Increasing the amount of 

time SBA has to make a size 

determination will allow size specialists 

adequate time to perform a thorough 

review and draft a carefully constructed 

determination. Increasing the amount of 

time SBA has to render a formal size 

determination will also make SBA’s 

regulations consistent and coherent 

across programs. 

SBA’s regulations currently do not 

address the amount of time OHA has to 

render a decision in connection with a 

size or NAICS code appeal. SBA is 

proposing to amend its regulations to 

require OHA to issue size appeal 

decisions within 60 calendar days of the 

close of the record, if possible, and 

render NAICS code appeal decisions 

within 15 calendar days of the close of 

record, if possible. 

The proposed rule will require the 

contracting officer to update federal 

procurement databases to reflect final 

agency status determinations. 

b. Estimate of the Number of Small 

Entities to Which the Rule May Apply 

The RFA directs agencies to provide 

a description of and, where feasible, an 

estimate of the number of entities that 

may be affected by the proposed rules, 

if adopted. The RFA defines ‘‘small 

entity’’ to include ‘‘small businesses,’’ 

‘‘small organizations,’’ and ‘‘small 

governmental jurisdictions.’’ SBA’s 

programs do not apply to ‘‘small 

organizations’’ or ‘‘small governmental 

jurisdictions’’ because they are nonprofit or governmental entities and do 

not qualify as ‘‘business concerns’’ 

within the meaning of SBA’s 

regulations. SBA’s programs apply only 

to for-profit business concerns. 

Therefore, the proposed regulation (like 

the regulation currently in effect) will 

not impact small organizations or small 

governmental jurisdictions. 

The proposed rule will not directly 

negatively affect any small business 

concern, since it is aimed at preventing 

other than small concerns from 

receiving or performing contracts set 

aside for small business concerns. The 

proposed rule will indirectly benefit 

small business concerns by preventing 

awards to ineligible concerns, or 

shortening the length of time other than 

small concerns perform small business 

set-aside contracts. SBA maintains an 

internal database of all size protest 

processed by the agency and the 

following table was constructed to 

illustrate the number of protest 

processed in the last five fiscal years. 

Size protests FY 

2002 

FY 

2003 

FY 

2004 

FY 

2005 

FY 

2006 

FY 

2007 

FY 

2008 

Total Determinations Requested ............. 356 409 348 459 593 459 374 

Cases Dismissed ..................................... 110 101 95 122 139 110 121 

Determined Small Business ..................... 161 170 149 190 219 186 225 

Determined Other Than Small ................. 85 122 71 115 163 117 123 

Cases in Process/Other Determinations 0 16 33 0 72 46 43 

There are more than 330,000 concerns 

listed as small business concerns in the 

Dynamic Small Business Search of the 

Central Contractor Registration 

database. In fiscal year 2008, there were 

over 8 million small business contract 

actions. SBA processes an average of 

428 size protests each fiscal year 

resulting in approximately 43 percent 

being determined to be small and 27 

percent determined to be other than 

small. The rest are dismissed on 

procedural grounds. Thus, the number 

of concerns affected by this rule, 

regardless of size, will be approximately 

290 per year, which is statistically 

insignificant when compared to the 

number of small business concerns in 

the Federal Government marketplace 

(330,000) or the number of small 

business contract actions per year (8 

million). The number of protests in 

other small business programs is 

significantly less than the numbers of 

size protests received. 

c. Projected Reporting, Recordkeeping 

and Other Compliance Requirements 

This proposed rule would not impose 

a new information collection 

requirement on small businesses. SBA 

does not believe that this provision 

imposes any new record keeping 

requirements. This proposed rule will 

require contracting officers to update 

federal procurement databases to reflect 

final agency status decisions. 

Contracting officers should currently be 

updating these databases, and this rule 

will make it clear that this must be 

done. 

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9134 Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 

d. Steps Taken To Minimize the 

Significant Economic Impact on Small 

Entities 

This proposed rule should not result 

in a significant economic impact on 

small entities. This proposed rule will 

extend the timeframe SBA has for 

determining size of an entity resulting 

from a size protest. The addition of the 

5 business days will allow SBA more 

time to adequately review the 

documentation needed to render a 

decision and will make SBA’s 

regulations consistent across programs. 

The timeframe imposed on OHA for 

rendering decision resulting from 

appeals should minimize the economic 

impact on small entities by providing a 

decision in a timely manner. 

e. Conclusion 

Based on the foregoing, SBA has 

determined that this proposed rule will 

not have a significant impact on a 

substantial number of small entities 

with the meaning of the RFA. SBA 

requests comments addressing any of 

the issues raised in this IRFA, including 

comments in the economic effect this 

rule could have on small entities. 

List of Subjects in 13 CFR Parts 121, 

124, 125, 126, and 134 

Administrative practice and 

procedure, Government procurement, 

Government property, Grant programs— 

business, Loan programs—business, 

Individuals with disabilities, Reporting 

and recordkeeping requirements, Small 

businesses. 

For the reasons stated in the 

preamble, SBA proposes to amend parts 

121, 124, 125, 126, and 134 of title 13 

of the Code of Federal Regulations as 

follows: 

PART 121—SMALL BUSINESS SIZE 

REGULATIONS 

Subpart A—Size Eligibility Provisions 

and Standards 

1. The authority citation for part 121 

is revised to read as follows: 

Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 

637, 644, 662(5) and 694a; Public Law 105– 

135, sec. 401 et seq., 111 Stat. 2592. 

§ 121.402 [Amended] 

2. Amend § 121.402(b) by removing 

the third sentence. 

§ 121.404 [Amended] 

3. Amend paragraph 121.404(a) by 

removing the second sentence. 

4. Revise § 121.407 to read as follows: 

§ 121.407 What are the procedures for 

multiple award procurements? 

(a) Except as set forth in paragraphs 

(b) and (c) of this section, a solicitation 

to award multiple task or delivery order 

contracts should be assigned the single 

NAICS code and size standard which 

best describes the principal purpose of 

the acquisition (See § 121.402). 

(b) A solicitation to award multiple 

task or delivery order contracts may be 

assigned more than one NAICS code or 

size standard if the solicitation is 

divided into contract line item numbers 

(CLINs) where orders will only be 

awarded or competed amongst concerns 

that have been awarded contracts for 

those CLINs. In such a case, the 

contracting officer must assign to each 

CLIN the single NAICS code and size 

standard that best describes the 

principal purpose of the goods or 

services acquired under that CLIN. (See 

§ 121.402). A concern must meet the 

applicable size standard to be eligible 

for award as a small business concern. 

(c) A solicitation to award multiple 

contracts for separate and distinct items, 

where a bidder may submit an offer on 

some or all of the items, may be 

assigned multiple NAICS codes and size 

standards. In such a case, the 

contracting officer must assign to each 

CLIN the single NAICS code and size 

standard that best describes the 

principal purpose of the item to be 

acquired under the CLIN. A concern 

must meet the applicable size standard 

to be eligible for award as a small 

business concern. 

5. Amend § 121.1009 by revising 

paragraphs (a), (g)(1), (g)(2), (g)(3), and 

(h) to read as follows: 

§ 121.1009 What are the procedures for 

making the size determination? 

(a) Time frame for making size 

determination. (1) After receipt of a 

protest or a request for a formal size 

determination, the Area Office will 

issue a formal size determination within 

15 business days, if possible. 

(2) If SBA does not issue its 

determination within the 15-day period, 

the contracting officer must contact SBA 

to ascertain when SBA estimates that it 

will issue its decision, and may only 

award the contract if he or she 

determines in writing that there is an 

immediate need to award the contract 

and that waiting until SBA makes its 

determination will harm the public 

interest (see paragraph (g) of this section 

for the effect of a formal size 

determination or appellate decision). 

(3) The contracting officer may award 

the contract after receipt of a protest if 

the contracting officer determines in 

writing that an award must be made to 

prevent significant harm to the public 

interest (see paragraph (g) of this section 

for the effect of a formal size 

determination or appellate decision). 

* * * * * 

(g) * * * 

(1) A contracting officer may award 

the contract to a protested concern after 

the Area Office either has determined 

that the protested concern is an eligible 

small business or has dismissed all 

protests against it. If OHA subsequently 

overturns the Area Office’s 

determination or dismissal, the 

contracting officer may apply the OHA 

decision to the procurement in question. 

(2) A contracting officer may not 

award the contract to a protested 

concern that the Area Office has 

determined is not an eligible small 

business for the procurement in 

question. 

(i) If a contracting officer receives 

such a determination after contract 

award, and no OHA appeal has been 

filed, the contracting officer shall 

terminate the award. 

(ii) If a timely OHA appeal is filed 

after contract award, the contracting 

officer must consider whether 

performance can be suspended until an 

appellate decision is rendered. 

(iii) If OHA affirms the size 

determination finding the protested 

concern ineligible, the contracting 

officer shall either terminate the 

contract or not exercise the next option. 

(3) The contracting officer must 

update the Federal Procurement Data 

System and other procurement reporting 

databases to reflect the final agency size 

decision (the formal size determination 

if no appeal is filed or the appellate 

decision). 

* * * * * 

(h) Limited reopening of size 

determinations. SBA may, in its sole 

discretion, reopen a formal size 

determination to correct an error or 

mistake, provided it is within the appeal 

period and no appeal has been filed 

with OHA. Once the agency has issued 

a final agency decision (either a formal 

size determination that is not timely 

appealed or an appellate decision), SBA 

cannot re-open the size determination. 

6. Amend § 121.1101 by revising 

paragraph (b) to read as follows: 

§ 121.1101 Are formal size determinations 

subject to appeal? 

* * * * * 

(b) OHA will review all timely 

appeals of size determinations. 

6. Amend § 121.1103 as follows: 

a. Revise the section heading; 

b. In paragraph (a), add a new 

sentence after the first sentence and 

before the second sentence; 

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Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 9135 

c. Revise paragraph (b)(1); 

d. Remove paragraphs (b)(4), and 

(b)(5); and 

e. Add new paragraph (c). 

§ 121.1103 What are the procedures for 

appealing a NAICS code or size standard 

designation? 

(a) * * * A NAICS code appeal may 

include an appeal involving the 

applicable size standard, such as where 

more than one size standard 

corresponds to the selected NAICS code 

or there is a question as to the size 

standard in effect at the time the 

solicitation was issued or amended. 

* * * 

(b) * * * 

(1) An appeal from a contracting 

officer’s NAICS code or size standard 

designation must be served and filed 

within 10 calendar days after the 

issuance of the solicitation or 

amendment affecting the NAICS code or 

size standard. However, SBA may file a 

NAICS code appeal at anytime before 

offers or bids are due. OHA will 

summarily dismiss an untimely NAICS 

code appeal. 

* * * * * 

(c) Procedure after a NAICS code 

appeal is filed and served. 

(1) Upon receipt of the service copy 

of a NAICS code appeal, the contracting 

officer shall: 

(i) Stay the solicitation; 

(ii) Advise the public, by amendment 

to the solicitation or other method, of 

the existence of the NAICS code appeal 

and the procedures and deadline for 

interested parties to file and serve 

arguments concerning the appeal; 

(iii) Send a copy of the entire 

solicitation (including amendments) to 

OHA; 

(iv) File and serve any response to the 

appeal prior to the close of the record; 

and 

(v) Inform OHA of any amendments, 

actions or developments concerning the 

procurement in question. 

(2) Upon receipt of a NAICS code 

appeal, OHA shall: 

(i) Notify the appellant, the 

contracting officer, the SBA and any 

other known party of the date OHA 

received the appeal and the date the 

record will close; and 

(ii) Conduct the appeal in accordance 

with part 134 of this chapter. 

(3) Any interested party may file and 

serve its response to the NAICS code 

appeal. 

PART 124—8(a) BUSINESS 

DEVELOPMENT/SMALL 

DISADVANTAGED BUSINESS STATUS 

DETERMINATIONS 

7. The authority citation for part 124 

continues to read as follows: 

Authority: 15 U.S.C. 634(b)(6), 636(j), 

637(a), 637(d) and Pub. L. 99–661, Pub. L. 

100–656, sec. 1207, Pub. L. 100–656, Pub. L. 

101–37, Pub. L. 101–574, and 42 U.S.C. 9815. 

Subpart B—Eligibility, Certification, 

and Protests Relating to Federal Small 

Disadvantaged Business Programs 

8. Amend § 124.1013 as follows: 

a. Amend paragraph (a) by removing 

second sentence; 

b. Revise paragraph (b); 

c. Revise paragraph (d)(1); 

d. Revise paragraphs (h)(1) and (h)(2); 

and 

e. Add new paragraphs (h)(3) and 

(h)(4). 

§ 124.1013 How does SBA make 

disadvantaged status determinations in 

considering an SDB protest? 

* * * * * 

(b) Award of contract. (1) If SBA does 

not issue its determination within the 

15-day period, the contracting officer 

must contact SBA to ascertain when 

SBA estimates that it will issue its 

decision, and may only award the 

contract if he or she determines in 

writing that there is an immediate need 

to award the contract and that waiting 

until SBA makes its determination will 

harm the public interest (see paragraph 

(h) of this section for the effect of an 

SDB status determination or appellate 

decision). 

(2) The contracting officer may award 

the contract after receipt of a protest if 

the contracting officer determines in 

writing that an award must be made to 

prevent significant harm to the public 

interest (see paragraph (h) of this section 

for the effect of an SDB status 

determination or appellate decision). 

* * * * * 

(d) * * * 

(1) Except with respect to a concern 

which is a current Participant in SBA’s 

8(a) BD program and is authorized 

under § 124.1013(b)(3) to submit an 

affidavit concerning it disadvantaged 

status, the disadvantaged status 

determination will be based on the 

protest record, including reasonable 

inferences therefrom, as supplied by the 

protested concern, SBA or others. 

* * * * * 

(h) * * * 

(1) A contracting officer may award 

the contract to a protested concern after 

the DC/SDBCE either has determined 

that the protested concern is an eligible 

SDB or has dismissed all protests 

against it. If the AA/GC&BD 

subsequently overturns the initial 

determination or dismissal, the 

contracting officer may apply the appeal 

decision to the procurement in question. 

(2) A contracting officer may not 

award the contract to a protested 

concern that the DC/SDBCE has 

determined is not an eligible SDB for 

the procurement in question. 

(i) If a contracting officer receives 

such a determination after contract 

award, and no appeal has been filed, the 

contracting officer shall terminate the 

award. 

(ii) If a timely appeal is filed after 

contract award, the contracting officer 

must consider whether performance can 

be suspended until an appellate 

decision is rendered. 

(iii) If the AA/GC&BD affirms the 

initial determination finding that the 

protested concern ineligible, the 

contracting officer shall either terminate 

the contract or not exercise the next 

option. 

(3) The contracting officer must 

update the Federal Procurement Data 

System and other procurement reporting 

databases to reflect the final agency SDB 

decision (the decision of the AA/SDBCE 

if no appeal is filed or the decision of 

the AA/GC&BD). 

(4) A concern found to be ineligible is 

precluded from applying for SDB 

certification for 12 months from the date 

of the final agency decision (whether by 

the AA/SDBCE, without an appeal, or 

by the AA/GC&BD on appeal). A 

concern found to be ineligible is also 

precluded from representing itself as an 

SDB for a subcontract unless it 

overcomes the reasons for the protest 

(e.g., it changes its ownership to satisfy 

the definition of an SDB set forth in 

§ 124.1002). 

§ 124.1014 [Amended] 

9. Amend § 124.1014 by removing 

paragraph (f) and redesignating 

paragraphs (g) through (i) as paragraphs 

(f) through (h). 

PART 125—GOVERNMENT 

CONTRACTING PROGRAMS 

10. The authority citation for part 125 

continues to read as follows: 

Authority: 15 U.S.C. 632(p), (q); 634(b)(6); 

637; 644 and 657(f). 

Subpart D—Protests Concerning 

SDVO SBCs 

11. Amend § 125.27 by revising 

paragraphs (e) and (g) to read as follows: 

§ 125.27 How will SBA process an SDVO 

protest? 

* * * * * 

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9136 Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 

(e) Award of Contract. (1) If SBA does 

not issue its determination within the 

15-day period, the contracting officer 

must contact SBA to ascertain when 

SBA estimates that it will issue its 

decision, and may only award the 

contract if he or she determines in 

writing that there is an immediate need 

to award the contract and that waiting 

until SBA makes its determination will 

harm the public interest (see paragraph 

(g) of this section for the effect of an 

SDVO status size determination or 

appellate decision). 

(2) The contracting officer may award 

the contract after receipt of a protest if 

the contracting officer determines in 

writing that an award must be made to 

prevent significant harm to the public 

interest (see paragraph (g) of this section 

for the effect of an SDVO status 

determination or appellate decision). 

* * * * * 

(g) Effect of determination. (1) A 

contracting officer may award the 

contract to a protested concern after the 

Director, Office of Government 

Contracting (D/GC) either has 

determined that the protested concern is 

an eligible SDVO or has dismissed all 

protests against it. If OHA subsequently 

overturns the D/GC’s determination or 

dismissal, the contracting officer may 

apply the OHA decision to the 

procurement in question. 

(2) A contracting officer may not 

award the contract to a protested 

concern that the D/GC has determined 

is not an eligible SDVO for the 

procurement in question. 

(i) If a contracting officer receives 

such a determination after contract 

award, and no OHA appeal has been 

filed, the contracting officer shall 

terminate the award. 

(ii) If a timely OHA appeal is filed 

after award, the contracting officer must 

consider whether performance can be 

suspended until an appellate decision is 

rendered. 

(iii) If OHA affirms the D/GC’s 

determination finding the protested 

concern ineligible, the contracting 

officer shall either terminate the 

contract or not exercise the next option. 

(3) The contracting officer must 

update the Federal Procurement Data 

System and other procurement reporting 

databases to reflect the final agency 

decision (the D/GC’s decision if no 

appeal is filed or OHA’s decision). 

(4) A concern found to be ineligible 

may not submit an offer as an SDVO 

SBC on a future procurement unless it 

demonstrates to SBA’s satisfaction that 

it has overcome the reasons for the 

protest (e.g., it changes its ownership to 

satisfy the definition of an SDVO SBC 

set forth in § 125.8) and SBA issues a 

decision to this effect. 

12. Revise § 125.28 to read as follows: 

§ 125.28 What are the procedures for 

appealing an SDVO status protest? 

The protested concern, the protester, 

or the contracting officer may file an 

appeal of an SDVO status protest 

determination with OHA in accordance 

with part 134 of this chapter. 

PART 126—HUBZONE PROGRAM 

13. The authority citation for part 126 

continues to read as follows: 

Authority: 15 U.S.C. 632(a), 632(j), 632(p), 

and 657a. 

Subpart H—Protests 

14. Amend § 126.803 by revising 

paragraphs (b)(2) and (b)(3) and 

redesignating paragraph (d) as (d)(1) and 

adding new paragraphs (d)(2), (d)(3), 

(d)(4), and (d)(5) to read as follows: 

§ 126.803 How will SBA process a 

HUBZone status protest? 

* * * * * 

(b) * * * 

(2) If SBA does not issue its 

determination within the 15-day period, 

the contracting officer must contact SBA 

to ascertain when SBA estimates that it 

will issues its decision, and may only 

award the contract if he or she 

determines in writing that there is an 

immediate need to award the contract 

and that waiting until SBA makes its 

determination will harm the public 

interest (see paragraph (d) of this section 

for the effect of a HUBZone status 

determination or appellate decision). 

(3) The contracting officer may award 

the contract after receipt of a protest if 

the contracting officer determines in 

writing that an award must be made to 

prevent significant harm to the public 

interest (see paragraph (d) of this section 

for the effect of a HUBZone status 

determination or appellate decision). 

* * * * * 

(d) * * * 

(2) A contracting officer may award 

the contract to a protested concern after 

the D/HUB either has determined that 

the protested concern is an eligible 

HUBZone or has dismissed all protests 

against it. If the AA/GC&BD 

subsequently overturns the initial 

determination or dismissal, the 

contracting officer may apply the appeal 

decision to the procurement in question. 

(3) A contracting officer may not 

award the contract to a protested 

concern that the D/HUB has determined 

is not an eligible HUBZone for the 

procurement in question. 

(i) If a contracting officer receives 

such a determination after contract 

award, and no appeal has been filed, the 

contracting officer shall terminate the 

award. 

(ii) If a timely appeal is filed after 

contract award, the contracting officer 

must consider whether performance can 

be suspended until an appellate 

decision is rendered. 

(iii) If the AA/GC&BD affirms the 

initial determination finding the 

protested concern ineligible, the 

contracting officer shall either terminate 

the contract or not exercise the next 

option. 

(4) The contracting officer must 

update the Federal Procurement Data 

System and other procurement reporting 

databases to reflect the final agency 

HUBZone decision (the D/HUB’s 

decision if no appeal is filed or the 

decision of the AA/GC&BD). 

(5) A concern found to be ineligible is 

precluded from applying for HUBZone 

certification for 12 months from the date 

of the final agency decision (the D/ 

HUB’s decision if no appeal is filed or 

the decision of the AA/GC&BD). 

§ 126.805 [Amended] 

15. Amend § 126.805 by removing 

paragraph (g) and redesignating 

paragraph (h) as paragraph (g). 

PART 134—RULES OF PROCEDURE 

GOVERNING CASES BEFORE THE 

OFFICE OF HEARINGS AND APPEALS 

16. Authority citation for part 134 

continues to read as follows: 

Authority: 5 U.S.C. 504; 15 U.S.C. 632, 

634(b)(6), 637(a), 648(1), 656(i), and 687(c); 

E.O. 12549, 51 FR 6370, 3 CFR, 1986 Comp., 

p. 189. 

Subpart C—Rules of Practice for 

Appeals From Size Determinations and 

NAICS Code Designations 

17. Revise § 134.304 to read as 

follows: 

§ 134.304 Commencement of appeals from 

size determinations and NAICS code 

designations 

(a) Size appeals must be filed within 

15 calendar days after receipt of the 

formal size determination. 

(b) NAICS code appeals must be filed 

within 10 calendar days after issuance 

of the solicitation, or amendment to the 

solicitation affecting the NAICS code or 

size standard. However, SBA may file a 

NAICS appeal at anytime before offers 

or bids are due. 

(c) An untimely appeal will be 

dismissed. 

18. Amend § 134.316 by redesignating 

paragraphs (a), (b), (c), and (d) as 

paragraphs (c), (d), (e) and (f), 

respectively, and adding new 

paragraphs (a) and (b). 

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Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 9137 

§ 134.316 The decision. 

(a) The Judge shall issue a size appeal 

decision, insofar as practicable, within 

60 calendar days after close of the 

record. 

(b) The Judge shall issue a NAICS 

code appeal decision, insofar as 

practicable, within15 calendar days 

after close of the record. 

* * * * * 

Subpart E—Rules of Practice for 

Appeals From Service-Disabled 

Veteran Owned Small Business 

Concern Protests 

§ 134.504 [Removed] 

19. Remove § 134.504. 

§§ 134.505 through 134.515 

[Redesignated as §§ 134.504 through 

134.514] 

20. Redesignate §§ 134.505 through 

134.515 as §§ 134.504 through 134.514, 

respectively. 

21. Amend newly redesignated 

§ 134.508 by revising paragraph (a) to 

read as follows: 

§ 134.508 When will a Judge dismiss an 

appeal? 

(a) The Judge shall dismiss an appeal 

if: 

(1) The appeal is untimely filed 

pursuant to § 134.503. 

(2) The matter has been decided or is 

the subject of an adjudication before a 

court of competent jurisdiction over 

such matters. 

* * * * * 

§ 134.513 [Amended] 

21. Amend newly redesignated 

§ 134.513 by removing the second 

sentence. 

§ 134.514 [Amended] 

22. Amend newly redesignated 

§ 134.514(b) by removing the word 

‘‘service’’ in the second sentence and 

adding in its place the word ‘‘issuance’’. 

Dated: October 21, 2009. 

Karen Mills, 

Administrator. 

[FR Doc. 2010–3613 Filed 2–26–10; 8:45 am] 

BILLING CODE 8025–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2010–0173; Directorate 

Identifier 2009–NM–076–AD] 

RIN 2120–AA64 

Airworthiness Directives; The Boeing 

Company Model 737–100, –200, –200C, 

–300, –400, and –500 Series Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: The FAA proposes to 

supersede an existing airworthiness 

directive (AD) that applies to all Model 

737–100, –200, –200C, –300, –400, and 

–500 series airplanes. The existing AD 

currently requires repetitive inspections 

to find cracks, fractures, or corrosion of 

each carriage spindle of the left and 

right outboard mid-flaps, and corrective 

action if necessary. The existing AD also 

currently requires repetitive gap checks 

of the inboard and outboard carriage of 

the outboard mid-flaps to detect 

fractured carriage spindles, and 

corrective actions if necessary. This 

proposed AD would require any new or 

serviceable carriage spindle installed 

per the requirements of the existing AD 

to meet minimum allowable diameter 

measurements taken at three locations. 

This proposed AD also would require 

new repetitive inspections, 

measurements, and overhaul of the 

carriage spindles, and applicable 

corrective actions. In addition, this 

proposed AD would require replacing 

any carriage spindle when it has 

reached its maximum life limit. This 

proposed AD results from reports of 

fractures that resulted from stress 

corrosion and pitting along the length of 

the spindle and spindle diameter, and 

additional reports of corrosion on the 

outboard flap carriage spindles. We are 

proposing this AD to detect and correct 

cracked, corroded, or fractured carriage 

spindles, and to prevent severe flap 

asymmetry, which could result in 

reduced control or loss of controllability 

of the airplane. 

DATES: We must receive comments on 

this proposed AD by April 15, 2010. 

ADDRESSES: You may send comments by 

any of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: 202–493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue, SE., 

Washington, DC 20590. 

• Hand Delivery: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue, SE., 

Washington, DC 20590, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. 

For service information identified in 

this AD, contact Boeing Commercial 

Airplanes, P.O. Box 3707, Seattle, 

Washington 98124–2207. 

Examining the AD Docket 

You may examine the AD docket on 

the Internet at http:// 

www.regulations.gov; or in person at the 

Docket Management Facility between 9 

a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. The AD 

docket contains this proposed AD, the 

regulatory evaluation, any comments 

received, and other information. The 

street address for the Docket Office 

(telephone 800–647–5527) is in the 

ADDRESSES section. Comments will be 

available in the AD docket shortly after 

receipt. 

FOR FURTHER INFORMATION CONTACT: 

Nancy Marsh, Aerospace Engineer, 

Airframe Branch, ANM–120S, FAA, 

Seattle Aircraft Certification Office, 

1601 Lind Avenue, SW., Renton, 

Washington 98057–3356; telephone 

(425) 917–6440; fax (425) 917–6590. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

We invite you to send any written 

relevant data, views, or arguments about 

this proposed AD. Send your comments 

to an address listed under the 

ADDRESSES section. Include ‘‘Docket No. 

FAA–2010–0173; Directorate Identifier 

2009–NM–076–AD’’ at the beginning of 

your comments. We specifically invite 

comments on the overall regulatory, 

economic, environmental, and energy 

aspects of this proposed AD. We will 

consider all comments received by the 

closing date and may amend this 

proposed AD because of those 

comments. 

We will post all comments we 

receive, without change, to http:// 

www.regulations.gov, including any 

personal information you provide. We 

will also post a report summarizing each 

substantive verbal contact we receive 

about this proposed AD. 

Discussion 

On November 24, 2003, we issued AD 

2003–24–08, Amendment 39–13377 (68 

FR 67027, December 1, 2003), for all 

Model 737–100, –200, –200C, –300, 

–400, and –500 series airplanes. That 

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