[Federal Register Volume 59, Number 148 (Wednesday, August 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18835]


[[Page Unknown]]

[Federal Register: August 3, 1994]


=======================================================================
-----------------------------------------------------------------------

SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

 

Procedural Regulations Governing Size Protests

AGENCY: Small Business Administration.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Small Business Administration is amending its procedural 
regulations governing size protests for purposes of clarification. The 
amendment makes clear that size protests filed by any person, including 
the contracting officer, will be considered premature and will be 
dismissed if filed before bids have been opened or the identity of the 
prospective awardee has been established.

EFFECTIVE DATE: This rule is effective on August 3, 1994.

FOR FURTHER INFORMATION CONTACT:
David R. Kohler, Associate General Counsel for General Law, Office of 
the General Counsel, U.S. Small Business Administration, 409 3rd Street 
SW., Washington, DC 20416, (202) 205-6645.

SUPPLEMENTARY INFORMATION: The Small Business Administration (SBA) is 
amending Sec. 121.1603(a)(4) of its procedural regulations governing 
size protests in order to make clear that size protests filed by 
contracting officers, like all other protests, will be dismissed if 
prematurely filed, i.e., if filed prior to bid opening (in the case of 
sealed bids) or prior to identification of the apparent successful 
offeror (in the case of negotiated procurements).
    Section 121.1603(a)(4) presently states that ``(a)t any time after 
bid opening a contracting officer may question the size of any offeror 
for the purpose of a particular procurement or sale by filing a protest 
with the SBA Regional Office * * *'' Although SBA had intended that 
this regulation preclude contracting officers from filing premature 
protests with respect to both sealed bid and negotiated procurements, 
the language employed does not reflect this intention and has resulted 
in a recent decision by SBA's Office of Hearings and Appeals holding 
that a contracting officer's protest filed after the date for 
submitting initial offers but before the submission of best and final 
offers or identification of the apparent successful offeror was not 
premature and necessitated a decision on the merits.
    In order to effect its original intentions with respect to 
premature protests, SBA is amending paragraph (a)(4) by adding 
clarifying language to emphasize that contracting officers (like all 
other protestors) are precluded from filing premature protests in 
negotiated procurements as well as in procurements conducted using 
sealed bid procedures. This expressed intention accords with paragraph 
(b)(5) of Sec. 121.1603, which clearly states that ``(p)rotests filed 
by any person before bid opening or notification of intended award 
shall be considered premature and shall be dismissed.'' It in no way 
conflicts with the statement in paragraph (b)(2) of Sec. 121.1603 that 
``(a) protest by a contracting officer shall be timely for the purpose 
of the procurement or sale in question whether filed before or after 
award.'' Paragraph (b)(2) of Sec. 121.1603 addresses the issue of 
lateness. Paragraphs (a)(4) and (b)(5) address the issue of 
prematurity.
    SBA's distinction between lateness and prematurity with respect to 
protests filed by contracting officers is based upon the realities of 
the procurement process and the need to establish procedures for 
adjudicating size status that are fair as well as administratively 
efficient. A contracting officer, unlike any other potential protestor, 
has the authority to terminate a contract awarded as a small business 
set aside should it be determined that the awardee is not a small 
business. Thus it is prudent to permit a contracting officer to file a 
late protest whenever size ineligibility is suspected in order to 
preserve the integrity of the set-aside program by resolving any 
questions on size status in an expeditious manner. The prohibition 
against premature protests, however, has historically been applied to 
contracting officers and other protestors alike, because in neither 
case is it prudent either to impose the burdens of a size investigation 
on a concern unnecessarily or to expend SBA's limited resources by 
making formal size determinations where it is unclear that the 
protested concern is the potential awardee of the contract.
    Under Sec. 121.1603(a)(4), a protest is considered premature until 
identification of the prospective awardee. Traditionally, this 
identification occurs at bid opening or, in the case of a negotiated 
procurement, at the point the contracting officer notifies other 
offerors of the intended award and names the prospective awardee. SBA 
believes that the concept of notification applicable to protests filed 
by other offerors is not appropriate with respect to contracting 
officers, since it is the contracting officer who does the 
notification. Thus Sec. 121.1603(a)(4) will merely require that a 
contracting officer wait until he or she has identified the apparent 
successful offeror before filing a protest concerning that firm's size 
status. Such a restriction will ensure that SBA does not impose the 
burdens of an unnecessary size investigation on other offerors or 
expend its limited resources rendering size determinations that are 
unlikely to have any practical significance for the procurement in 
question.
    This clarification of SBA's procedural regulations governing 
premature protests applies to all pending protests as well as all size 
determinations for which a final decision has not yet been rendered by 
the Office of Hearings and Appeals.

Compliance With Executive Orders 12866, 12612 and 12778; the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq.; and the Paperwork Reduction Act, 
44 U.S.C. CH 35

    For purposes of Executive Order 12866, SBA certifies that this rule 
will not have an economic effect in excess of $100 million, result in a 
major increase in costs for individuals or governments, or have a 
significant adverse effect on competition and, therefore, will not 
constitute a major or significant rule. SBA has made this determination 
because the rule is purely procedural in nature and will impose no 
additional filing or other requirements and, as such, does not 
represent a significant regulatory event.
    For purposes of Executive Order 12612, SBA certifies that this rule 
will not have Federalism implications warranting the preparation of a 
Federalism assessment.
    For purposes of Executive Order 12778, SBA certifies that the rule 
is drafted, to the extent practicable, in accordance with the standards 
set forth in section 2 of that Order.
    For purposes of the Regulatory Flexibility Act, SBA certifies that 
the rule will not have a significant economic effect on a substantial 
number of small entities, for the same reason that it will not be a 
major or significant rule.
    For purposes of the Paperwork Reduction Act, SBA certifies that the 
rule will not impose a new recordkeeping or reporting requirement.

List of Subjects in 13 CFR Part 121

    Administrative practice and procedure; Government procurement; 
Small business.

    For the reasons set forth above, part 121 of title 13, Code of 
Federal Regulations, is amended as follows:

PART 121--[AMENDED]

    1. The authority citation for part 121 continues to read as 
follows:

    Authority: 15 U.S.C. 632(a), 634(b)(6), 637(a), 644(c) and Pub. 
L. 102-486, 106 Stat. 2776, 3133.


Sec. 121.1603  [Amended]

    2. Section 121.1603 is amended in paragraph (a)(4) by inserting the 
phrase ``or identification of the apparent successful offeror'' between 
the words ``opening'' and ``,a.''

    Dated: July 20, 1994.
Erskine B. Bowles,
Administrator.
[FR Doc. 94-18835 Filed 8-2-94; 8:45 am]
BILLING CODE 8025-01