[Federal Register Volume 76, Number 22 (Wednesday, February 2, 2011)]
[Rules and Regulations]
[Pages 5680-5685]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-2177]
[[Page 5680]]
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SMALL BUSINESS ADMINISTRATION
13 CFR Parts 121, 124, 125, 126, and 134
RIN 3245-AF65
Small Business, Small Disadvantaged Business, HUBZone, and
Service-Disabled Veteran-Owned Business Status Protest and Appeal
Regulations.
AGENCY: U.S. Small Business Administration.
ACTION: Final rule.
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SUMMARY: The U.S. Small Business Administration (SBA or Agency) is
amending 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; and make other
changes to size status protest and appeal rules.
DATES: Effective date: March 4, 2011. Applicability date: The
amendments to 13 CFR 121.402(b), 121.404(a), and 121.407 apply to
solicitations issued on or after March 4, 2011.
FOR FURTHER INFORMATION CONTACT: Jon Haitsuka, Program Analyst, Office
of Size Standards, Office of Government Contracting, (202) 401-1420 or
[email protected].
SUPPLEMENTARY INFORMATION: On March 1, 2010, SBA published a proposed
rule in the Federal Register (75 FR 9129) 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
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 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 status protest and appeal rules.
SBA received comments from four individuals or entities in response
to the proposed rule. The comments, as well as SBA's response to them,
are discussed below. For a section-by-section analysis of the revised
Parts 121, 124, 125, 126, and 134, see the supplementary information
published as part of the proposed rule (75 FR 9129).
Analysis of Comments Received
SBA received three supportive comments concerning its proposed
removal of the second sentence of paragraph 121.404(a), which required
recertification if a procuring agency modifies a solicitation to such
an extent that original offers are no longer responsive. All three
commenters maintained that it is unfair to disqualify a firm from
consideration after the firm has spent a great deal of time and
resources pursuing a contract opportunity that it was eligible for at
the time of its initial offer including price. The commenters also
noted that the current rule reduces competition by eliminating
offerors, which is not necessarily in the best interests of the
procuring agency. As we explained in the proposed rule, if a
requirement changes so much that it is essentially new, the agency
should cancel the solicitation and issue a new solicitation and open
the competition up to all eligible offerors. In that case, size will be
determined as of the date of the initial offer including price in
response to the new solicitation. Consequently, SBA has adopted its
proposed rule.
Two commenters supported SBA's proposed amendment of Sec. 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 Sec.
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 Sec. Sec.
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
[[Page 5681]]
waited 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 Sec. 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 Sec. 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 Sec. 121.404(g)).
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
final 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 effectively assist 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
the proposed and final 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 protest and NAICS code appeal 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 final provisions may have cost implications associated with
delays to the contracting process. Contracting officers may have to
wait an additional five business 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 Historically
Underutilized Business Zone (HUBZone), Small Disadvantaged Business
(SDB), or Service-Disabled Veteran-Owned (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.
3. What are the alternatives to this final rule?
SBA considered as an alternative completing size determinations
within 10 business days of receiving all requested information from the
protested concern. Although this would also achieve the objective of
this final rule, it would create uncertainty as to when a size
determination would actually be rendered. If the necessary information
requested of a business is received within the three-day period
requested by SBA, a size determination will be completed within 13
days. However, if the protested concern submits incomplete information,
the size determination period will 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 final
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 final rule will not impose new reporting
requirements nor will require new recordkeeping requirements.
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Regulatory Flexibility Act
SBA has determined that this final rule 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 a Final Regulatory Flexibility Act (FRFA)
analysis addressing this final rule.
FRFA
When preparing a Regulatory Flexibility Analysis, an agency shall
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 FRFA considers these points and the impact this
final rule 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 three business days to
respond to the protest. Thus, SBA generally has only five 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.
Current regulations provide SBA with 15 business days to decide
socio-economic 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 prepare 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 amending its regulations to require OHA to issue size
appeal decisions within 60 business days of the close of the record, if
possible, and render NAICS code appeal decision as soon as practicable.
The final 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 final rule. 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 non-profit 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, this final rule (like the
regulation currently in effect) will not impact small organizations or
small governmental jurisdictions.
The final rule will have no direct negative impact on 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 final 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.
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Size protests FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
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Total Determinations Requested.. 459 593 451 493 488
Cases Dismissed................. 122 139 131 104 146
Determined Small Business....... 190 219 193 200 207
Determined Other Than Small..... 115 163 119 115 128
Cases in Process/Other 32 72 8 74 7
Determinations.................
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There are more than 330,000 concerns listed as small business
concerns in the Dynamic Small Business Search of the Central Contractor
Registration database. Based on data for fiscal years 2005-2009, SBA
processes an average of nearly 500 size protests each fiscal year,
resulting in 41 percent being determined to be small and 26 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 330 per year, as compared to 330,000
small business concerns that are active in the Federal Government
marketplace. 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 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.
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d. Steps Taken to Minimize the Significant Economic Impact on Small
Entities
This final rule should not result in a significant economic impact
on small entities. This final rule will extend the timeframe SBA has
for determining size of an entity resulting from a size protest. The
addition of the five 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 final rule
will not have a significant impact on a substantial number of small
entities with the meaning of the RFA.
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 amends parts 121, 124,
125, 126, and 134 of title 13 of the Code of Federal Regulations as
follows:
PART 121--SMALL BUSINESS SIZE REGULATIONS
0
1. The authority citation for part 121 continues to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 637(a), 644,
662(5) and 694a; Public Law 105-135, sec. 401 et seq., 111 Stat.
2592.
Subpart A--Size Eligibility Provisions and Standards
Sec. 121.402 [Amended]
0
2. Amend Sec. 121.402(b) by removing the third sentence.
Sec. 121.404 [Amended]
0
3. Amend Sec. 121.404(a) by removing the second sentence.
0
4. Amend Sec. 121.1009 by revising paragraphs (a), (g)(1), (g)(2),
(g)(3), and (h) to read as follows:
Sec. 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 SBA Area
Office will issue a formal size determination within 15 business days,
if possible.
(2) The contracting officer may award a contract after receipt of a
protest if the contracting officer determines in writing that an award
must be made to protect the public interest. Notwithstanding such a
determination, the provisions of paragraph (g) of this section apply to
the procurement in question.
(3) If SBA does not issue its determination within 15 business days
(or request an extension that is granted), the contracting officer may
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 be disadvantageous to the Government.
Notwithstanding such a determination, the provisions of paragraph (g)
of this section apply to the procurement in question.
* * * * *
(g) * * *
(1) A contracting officer may award a contract to a protested
concern after the SBA Area Office has determined either 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 shall not award a 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 decision (either a
formal size determination that is not timely appealed or an appellate
decision), SBA cannot re-open the size determination.
0
5. Amend Sec. 121.1101 by revising paragraph (b) to read as follows:
Sec. 121.1101 Are formal size determinations subject to appeal?
* * * * *
(b) OHA will review all timely appeals of size determinations.
0
6. Amend Sec. 121.1103 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a), add a new sentence after the first sentence and
before the second sentence;
0
c. Revise paragraph (b)(1);
0
d. Remove paragraphs (b)(4), and (b)(5); and
0
e. Add new paragraph (c).
Sec. 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 business 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 any
time before offers 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 (or an electronic link to) 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.
[[Page 5684]]
(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
0
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
0
8. Amend Sec. 124.1013 as follows:
0
a. Remove the second sentence in paragraph (a);
0
b. Revise paragraph (b);
0
c. Revise paragraph (d)(1);
0
d. Revise paragraphs (h)(1) and (h)(2); and
0
e. Add new paragraphs (h)(3) and (h)(4).
Sec. 124.1013 How does SBA make disadvantaged status determinations
in considering an SDB protest?
* * * * *
(b) Award of contract. (1) The contracting officer may award a
contract after receipt of a protest if the contracting officer
determines in writing that an award must be made to protect the public
interest. Notwithstanding such a determination, the provisions of
paragraph (h) of this section apply to the procurement in question.
(2) If SBA does not issue its determination within 15 business days
(or request an extension that is granted), the contracting officer may
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 be disadvantageous to the Government,
Notwithstanding such a determination, the provisions of paragraph (h)
of this section apply to the procurement in question.
* * * * *
(d) * * *
(1) Except with respect to a concern which is a current Participant
in SBA's 8(a) BD program and is authorized under Sec. 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.
* * * * *
(h) * * *
(1) A contracting officer may award a contract to a protested
concern after the DC/SDBCE has determined either that the protested
concern is an eligible SDB or has dismissed all protests against it. If
the AA/GCBD subsequently overturns the initial determination or
dismissal, the contracting officer may apply the appeal decision to the
procurement in question.
(2) A contracting officer shall not award a 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/GCBD 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/GCBD).
(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 Sec. 124.1002).
Sec. 124.1014 [Amended]
0
9. Amend Sec. 124.1014 by removing paragraph (f) and redesignating
paragraphs (g) through (i) as paragraphs (f) through (h), respectively.
PART 125--GOVERNMENT CONTRACTING PROGRAMS
0
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
0
11. Amend Sec. 125.27 by revising paragraphs (e) and (g) to read as
follows:
Sec. 125.27 How will SBA process an SDVO protest?
* * * * *
(e) Award of contract. (1) The contracting officer may award a
contract after receipt of a protest if the contracting officer
determines in writing that an award must be made to protect the public
interest. Notwithstanding such a determination, the provisions of
paragraph (g) of this section apply to the procurement in question.
(2) If SBA does not issue its determination within 15 business days
(or request an extension that is granted), the contracting officer may
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 be disadvantageous to the Government.
Notwithstanding such a determination, the provisions of paragraph (g)
of this section apply to the procurement in question.
* * * * *
(g) Effect of determination. (1) A contracting officer may award a
contract to a protested concern after the Director, Office of
Government Contracting (D/GC) has determined either 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 shall not award a 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
[[Page 5685]]
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 Sec. 125.8) and SBA issues a decision to this effect.
0
12. Revise Sec. 125.28 to read as follows:
Sec. 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
0
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
0
14. Amend Sec. 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:
Sec. 126.803 How will SBA process a HUBZone status protest?
* * * * *
(b) * * *
(2) The contracting officer may award a contract after receipt of a
protest if the contracting officer determines in writing that an award
must be made to protect the public interest. Notwithstanding such a
determination, the provisions of paragraph (d) of this section apply to
the procurement in question.
(3) If SBA does not issue its determination within 15 business days
(or request an extension that is granted), the contracting officer may
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 be disadvantageous to the Government.
Notwithstanding such a determination, the provisions of paragraph (d)
of this section apply to the procurement in question.
* * * * *
(d) * * *
(2) A contracting officer may award a contract to a protested
concern after the D/HUB has determined either that the protested
concern is an eligible HUBZone or has dismissed all protests against
it. If the AA/GCBD subsequently overturns the initial determination or
dismissal, the contracting officer may apply the appeal decision to the
procurement in question.
(3) A contracting officer shall not award a 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/GCBD 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/GCBD).
(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/GCBD).
Sec. 126.805 [Amended]
0
15. Amend Sec. 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
0
16. The 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),
637(m), 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
0
17. Revise Sec. 134.304 to read as follows:
Sec. 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 code appeal at any time before offers or bids are due.
(c) An untimely appeal will be dismissed.
0
18. Amend Sec. 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:
Sec. 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 as soon as
practicable after close of the record.
* * * * *
Subpart E--Rules of Practice for Appeals From Service-Disabled
Veteran Owned Small Business Concern Protests
Sec. 134.504 [Removed and Reserved]
0
19. Remove and reserve Sec. 134.504.
Sec. 134.514 [Amended]
0
20. Amend Sec. 134.514 by removing the second sentence.
Sec. 134.515 [Amended]
0
21. Amend Sec. 134.515(b) by removing the word ``service'' in the
second sentence and adding in its place the word ``issuance.''
Dated: January 25, 2011.
Karen Mills,
Administrator.
[FR Doc. 2011-2177 Filed 2-1-11; 8:45 am]
BILLING CODE 8025-01-P