Source: https://www.federalregister.gov/documents/2011/02/02/2011-2177/small-business-small-disadvantaged-business-hubzone-and-service-disabled-veteran-owned-business
Timestamp: 2016-10-01 22:30:58
Document Index: 224281770

Matched Legal Cases: ['ART 134', '§\u2009121', '§\u2009121', '§\u2009121', '§\u2009134', '§\u2009134', '§\u2009121', 'art2', '§\u2009121', '§\u2009121', 'art3', '§\u2009121', 'art4', '§\u2009121', '§\u2009121', 'art5', '§\u2009121', '§\u2009121', 'art6', '§\u2009121', '§\u2009121', 'art7', 'art 124', 'art\n15', 'art8', '§\u2009124', '§\u2009124', '§\u2009124', '§\u2009124', '§\u2009124', 'art9', '§\u2009124', 'art10', 'art 125', 'art11', '§\u2009125', '§\u2009125', '§\u2009125', 'art12', '§\u2009125', '§\u2009125', 'art13', 'art 126', 'art14', '§\u2009126', '§\u2009126', '§\u2009126', 'art15', '§\u2009126', 'ART 134', 'art16', 'art 134', 'art17', '§\u2009134', '§\u2009134', 'art18', '§\u2009134', '§\u2009134', '§\u2009134', 'art19', '§\u2009134', '§\u2009134', 'art20', '§\u2009134', '§\u2009134', 'art21', '§\u2009134']

:: Small Business, Small Disadvantaged Business, HUBZone, and Service-Disabled Veteran-Owned Business Status Protest and Appeal Regulations.
A Rule by the Small Business Administration on 02/02/2011
2011-2177
PART 134—RULES OF PROCEDURE GOVERNING CASES BEFORE THE OFFICE OF HEARINGS AND APPEALS Subpart C—Rules of Practice for Appeals From Size Determinations and NAICS Code Designations
https://www.federalregister.gov/d/2011-2177
Start Printed Page 5680
Two commenters supported SBA's proposed amendment of § 121.407 to address the assignment of NAICS codes and corresponding size standards to task or delivery order contracts with contract line item numbers (CLINs) for divergent goods and services. One commenter found the proposed rule confusing and suggested requiring NAICS codes and size standards for orders with a value above $500,000. On September 27, 2010, Congress enacted the Small Business Jobs Act of 2010, Pub. L. No. 111-240, 124 Stat. 2504 (Jobs Act), which contained several provisions addressing small business contracting in the context of multiple award contracts. Consequently, we have decided to address the issue of assignment of NAICS codes and size standards to multiple award contracts when we address all of the statutory provisions of the Jobs Act that pertain to multiple award contracts, to ensure that multiple award small business contracting is addressed in a holistic manner.
Several commenters supported SBA's proposed amendment of § 121.1009 to allow itself more time to decide size protests. One commenter suggested that SBA use calendar days instead of business days. SBA has historically used business days to measure timeframes concerning protest filing and processing. Consequently, SBA has retained business days to measure status protest determination timeframes, and has not adopted the commenter's suggestion.
Several commenters supported SBA's proposed amendment of §§ 121.1009, 124.1013, 125.27, 126.803, and 134.504 to address the effect of status determinations on the procurement in question. However, two commenters did not support the provision which addresses situations where a contracting officer withholds award, SBA finds the protested concern to be eligible, the procuring agency then awards to that concern, and the initial determination is subsequently overturned on appeal. In that circumstance, the contracting officer may take some action based on the appellate decision, but is not required to do so. One commenter also noted the possibility that a firm found to be ineligible as a result of a formal size determination could successfully challenge the decision on appeal, yet not be awarded the contract. Both of these outcomes are consistent with the regulatory framework which has been in place for many years. The existing framework provides contracting officers with an incentive to withhold award until SBA renders a formal size determination. If SBA issues a formal size determination finding an apparent successful offeror to be small, the agency may proceed with award, even if an appeal is filed. Similarly, if SBA finds an apparent successful offeror to be other than small, the agency may proceed with award to another offeror, even if an appeal is filed. Size appeals can take several months or more to resolve, and agencies typically cannot delay their procurements for months and await an appeal decision. Consequently, SBA has never required contracting officers to apply appellate decisions to the procurement in question when the contracting officer waited for SBA's formal size determination and awarded to a concern based on SBA's formal size determination. If in all cases the contracting officer was required to take some action based on an appellate decision, regardless of whether the contracting officer withheld award and Start Printed Page 5681waited for SBA's formal size determination, contracting officers would likely award before SBA issues a formal size determination, which could result in an increase in the number of ineligible firms performing the base terms of set-aside contracts. Similarly, if SBA issues a formal size determination finding the apparent successful offeror to be other than small and the contracting officer awards to another concern, it would be costly for the Government to have to terminate the award to an eligible concern based on an appellate decision finding the initial successful offeror to be eligible. Thus, SBA is adopting the proposed rule without modification.
One commenter supported SBA's proposed amendment of § 134.316 to require OHA to issue a NAICS code appeal decision within 15 calendar days of the close of the record. However, after further internal review and discussion SBA decided to remove the NAICS code appeal decision deadline. OHA prioritizes NAICS code appeals and issues decisions as soon as practicable, because of the time sensitive nature of such an appeal.
One commenter objected to SBA's proposed amendment of § 134.304 to allow SBA to file a NAICS code appeal at any time before offers are due. The commenter recommended that SBA be allowed to file a NAICS code appeal up to 15 calendar days before offers are due. However, the commenter's proposal would extend the deadline for an SBA NAICS code appeal by only five days in many cases, since offers are often due 30 days after issuance of a solicitation and SBA currently must file a NAICS code appeal within 10 calendar days of issuance of a solicitation. As SBA stated in the preamble of the proposed rule, SBA often does not find out about egregious NAICS codes and/or size standard designations until well after the solicitation has been issued. SBA anticipates that it will file relatively few NAICS code and size standard appeals, but needs to be able to intervene to stop clear-cut abuses. Thus, SBA is adopting the proposed rule without modification.
One commenter suggested that SBA should require firms to recertify their size prior to award and on an annual basis. The commenter suggested that procuring agencies should not exercise any option with a firm that is other than small. This comment is beyond the scope of this rule. SBA considered these issues when it issued its recertification rule (71 FR 66434), and believes requiring such action could seriously disrupt the procurement process and result in unacceptable costs for procuring agencies and contractors. SBA notes that recertification is required in all cases where there is an acquisition, merger or novation and, for long-term contracts, prior to the sixth year and prior to each option thereafter (see § 121.404(g)).
For the purpose of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA has determined that this final rule will not impose new reporting requirements nor will require new recordkeeping requirements.Start Printed Page 5682
Size protestsFY 2005FY 2006FY 2007FY 2008FY 2009Total Determinations Requested459593451493488Cases Dismissed122139131104146Determined Small Business190219193200207Determined Other Than Small115163119115128Cases in Process/Other Determinations32728747
This final rule would not impose any new information collection requirement on small businesses. This final 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.Start Printed Page 5683
Start Amendment Part2. Amend § 121.402(b) by removing the third sentence.End Amendment Part
§ 121.404 [Amended]
Start Amendment Part3. Amend § 121.404(a) by removing the second sentence.End Amendment Part
Start Amendment Part4. Amend § 121.1009 by revising paragraphs (a), (g)(1), (g)(2), (g)(3), and (h) to read as follows:End Amendment Part
§ 121.1009 What are the procedures for making the size determination?
Start Amendment Part5. Amend § 121.1101 by revising paragraph (b) to read as follows:End Amendment Part
§ 121.1101 Are formal size determinations subject to appeal?
Start Amendment Part6. Amend § 121.1103 as follows:End Amendment Part
Start Amendment Parta. Revise the section heading;End Amendment Part
Start Amendment Partb. In paragraph (a), add a new sentence after the first sentence and before the second sentence;End Amendment Part
Start Amendment Partc. Revise paragraph (b)(1);End Amendment Part
Start Amendment Partd. Remove paragraphs (b)(4), and (b)(5); andEnd Amendment Part
Start Amendment Parte. Add new paragraph (c).End Amendment Part
§ 121.1103 What are the procedures for appealing a NAICS code or size standard designation?
(v) Inform OHA of any amendments, actions or developments concerning the procurement in question.Start Printed Page 5684
Start Amendment Part7. The authority citation for part 124 continues to read as follows:End Amendment Part
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.
Start Amendment Part8. Amend § 124.1013 as follows:End Amendment Part
Start Amendment Parta. Remove the second sentence in paragraph (a);End Amendment Part
Start Amendment Partb. Revise paragraph (b);End Amendment Part
Start Amendment Partc. Revise paragraph (d)(1);End Amendment Part
Start Amendment Partd. Revise paragraphs (h)(1) and (h)(2); andEnd Amendment Part
Start Amendment Parte. Add new paragraphs (h)(3) and (h)(4).End Amendment Part
§ 124.1013 How does SBA make disadvantaged status determinations in considering an SDB protest?
(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 its 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.
(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 DC/SDBCE, without an appeal, or by the AA/GCBD 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]
Start Amendment Part9. Amend § 124.1014 by removing paragraph (f) and redesignating paragraphs (g) through (i) as paragraphs (f) through (h), respectively.End Amendment Part
Start Amendment Part10. The authority citation for part 125 continues to read as follows:End Amendment Part
Start Amendment Part11. Amend § 125.27 by revising paragraphs (e) and (g) to read as follows:End Amendment Part
§ 125.27 How will SBA process an SDVO protest?
(iii) If OHA affirms the D/GC's determination finding the protested concern ineligible, the contracting Start Printed Page 5685officer shall either terminate the contract or not exercise the next option.
(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.
Start Amendment Part12. Revise § 125.28 to read as follows:End Amendment Part
§ 125.28 What are the procedures for appealing an SDVO status protest?
Start Amendment Part13. The authority citation for part 126 continues to read as follows:End Amendment Part
Start Amendment Part14. Amend § 126.803 by revising paragraphs (b)(2) and (b)(3), redesignating paragraph (d) as paragraph (d)(1), and adding new paragraphs (d)(2), (d)(3), (d)(4) and (d)(5) to read as follows:End Amendment Part
§ 126.803 How will SBA process a HUBZone status protest?
§ 126.805 [Amended]
Start Amendment Part15. Amend § 126.805 by removing paragraph (g) and redesignating paragraph (h) as paragraph (g).End Amendment Part
PART 134—RULES OF PROCEDURE GOVERNING CASES BEFORE THE OFFICE OF HEARINGS AND APPEALS End Part
Start Amendment Part16. The authority citation for part 134 continues to read as follows:End Amendment Part
Start Amendment Part17. Revise § 134.304 to read as follows:End Amendment Part
§ 134.304 Commencement of appeals from size determinations and NAICS code designations.
Start Amendment Part18. 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) to read as follows:End Amendment Part
§ 134.316 The decision.
§ 134.504 [Removed and Reserved]
Start Amendment Part19. Remove and reserve § 134.504.End Amendment Part
§ 134.514 [Amended]
Start Amendment Part20. Amend § 134.514 by removing the second sentence.End Amendment Part
§ 134.515 [Amended]
Start Amendment Part21. Amend § 134.515(b) by removing the word “service” in the second sentence and adding in its place the word “issuance.”End Amendment Part