[Federal Register Volume 67, Number 138 (Thursday, July 18, 2002)]
[Rules and Regulations]
[Pages 47244-47251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17618]


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SMALL BUSINESS ADMINISTRATION

13 CFR Parts 121, 124, 134

RIN 3245-AE71


Small Business Size Regulations; 8(a) Business Development/Small 
Disadvantaged Business Status Determinations; Rules of Procedure 
Governing Cases before the Office of Hearings and Appeals

AGENCY: Small Business Administration.

ACTION: Final rule.

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SUMMARY: The Small Business Administration (SBA) amends its regulations 
governing proceedings before the Office of Hearings and Appeals (OHA). 
The SBA also makes conforming changes to several sections of the 
regulations governing the Small Business Size Determination program and 
the 8(a) Business Development (8(a) BD) program.
    This rule improves the appeals process by revising and clarifying 
procedures, particularly those on filing, service, and calculating 
deadlines that have proven to be ``stumbling blocks,'' causing 
additional litigation and delays; expedites certain procedures; 
conforms the regulations and procedures developed by case law and 
prevailing practice; and makes plain language revisions.

DATES: Effective Date: This rule is effective on September 16, 2002.
    Applicability Date: This rule does not apply to any case already 
pending at OHA on September 16, 2002. The rule applies to cases arising 
from:
    (a) SBA actions taken or determinations made on or after September 
16, 2002, including 8(a) and SDB determinations (part 124), size 
determinations (part 121), debt collections (part 140), and development 
cases (part 120);
    (b) in NAICS code appeals, solicitations or amendments, issued on 
or after September 16, 2002, that include NAICS code designations 
(Secs. 121.1102, 134.304(a)(3));
    (c) in SBA Employee Dispute Resolution Cases, decisions by 
appropriate management officials made or overdue on or after September 
16, 2002 (Standard Operating Procedure 37 71 02, ] 3-6, available at 
www.sba.gov/library/soproom.html); or
    (d) SBA orders to show cause (Sec. 134.202(b) or (c)) issued on or 
after September 16, 2002.

FOR FURTHER INFORMATION CONTACT: Michael J. Wolter, Attorney-Advisor, 
Office of Hearings and Appeals, at (202) 401-1420 or [email protected]. If 
you use a telecommunications device for the deaf (TDD), you may call 
the Federal Information Relay Service at 1-800-877-8339, 24 hours per 
day, 7 days per week. (If you have any problem using this number, call 
Customer Service at 1-800-877-0996.)

SUPPLEMENTARY INFORMATION: With this rule, the SBA revises 13 CFR part 
134, the rules of procedure governing cases before the Office of 
Hearings and Appeals, improving and clarifying various procedures; and 
makes conforming changes to the sections of 13 CFR part 121, the Small 
Business Size Regulations, and 13 CFR part 124, the 8(a) Business 
Development program, that relate to OHA appeals. The SBA proposed this 
rule in the Federal Register, 67 FR 11057 (Proposed Rule), on March 12, 
2002. The Proposed Rule included ``Highlights of [the] Proposed Rule,'' 
67 FR at 11057-11058; a ``Section-by-Section Analysis,'' 67 FR at 
11058-11062; the amendatory instructions and text, 67 FR at 11063-
11068; and a request for comments, 67 FR at 11057.
    The SBA published two corrections to the Proposed Rule: The first, 
67 FR 13108, on March 21, 2002, corrected the Regulation Identifier 
Number (RIN) to that shown here. The second, 67 FR 13294, on March 22, 
2002, clarified the amendatory text for Sec. 134.313; and clarified 
amendatory instruction 50.c., pertaining to Sec. 134.406(c).
    During the Proposed Rule's 30-day comment period, SBA received no

[[Page 47245]]

comments regarding the proposed changes. SBA itself corrected some 
errors of grammar, form, or punctuation not enumerated here. SBA also 
found several provisions that were inaccurate or unclear. These 
provisions are discussed below, in their numerical order.
    In the amendatory text for Sec. 124.305(c) (appeal of a suspension 
from the 8(a) Program), Proposed Rule, 67 FR at 11063, ``applicant 
concern'' should read ``Participant.'' This rule corrects an error 
contained in 63 FR 35726, 35752 (1998 Rule).
    In addition to the changes to Sec. 134.202 already discussed in the 
Proposed Rule, 67 FR at 11059, this rule corrects a typographical error 
contained in the 1998 Rule at 35766, amendatory instruction 8 (amending 
Sec. 134.202(d)): ``Sec. 134.305'' (concerning size appeal petitions) 
should read ``Sec. 124.305'' (addressing suspension and suspension 
appeals). The amendatory text for Sec. 134.202(a)(4), Proposed Rule, 67 
FR at 11064, included this correction, but the analysis did not explain 
it.
    The analysis for Sec. 134.211(b) states that the rule ``would 
require the moving party, in most motions, to obtain and to state, in 
the motion itself, the other parties' positions on the motion.'' 
Proposed Rule, 67 FR at 11060. Similarly, the amendatory text states 
that the moving party ``must make reasonable efforts to contact all 
non-moving parties prior to filing the motion to determine whether they 
oppose the motion, and must set forth in the motion all non-moving 
parties' positions.'' Proposed Rule, 67 FR at 11065-11066. This 
language could be construed to require the moving party to detail each 
non-moving party's position on the motion; however, the SBA did not 
intend that. As the Proposed Rule states, SBA's intent is to avoid a 
20-day delay to await a response that, if no one opposes the motion, is 
unnecessary. Proposed Rule, 67 FR at 11060. Therefore, this rule 
clarifies that, before filing the motion, the moving party must make 
reasonable efforts to contact any non-moving party to determine whether 
the party will oppose the motion; and then state in the motion, as to 
each non-moving party, either whether the party plans to oppose the 
motion or what efforts the moving party made to learn whether that 
party plans to oppose the motion.

Compliance With the Regulatory Flexibility Act (5 U.S.C. 601-612), the 
Paperwork Reduction Act (44 U.S.C. Ch. 35), and Executive Orders 12866, 
12988, and 13132

    SBA has determined that this rule has no significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601-612. This rule revises 
some of the rules of practice for SBA administrative proceedings to 
simplify those rules and make them easier for the few small businesses 
that engage in administrative litigation with the SBA to understand and 
to use. Accordingly, this rule is purely procedural and does not affect 
the operations of small entities.
    For purposes of the Paperwork Reduction Act (44 U.S.C. Ch. 35), SBA 
certifies that this rule imposes no new reporting or record-keeping 
requirements on firms. This rule revises certain procedures for 
administrative litigation, and those revisions do not require firms to 
maintain any records or make any reports to SBA they do not already 
maintain or make.
    OMB has determined this rule is not a ``significant'' regulatory 
action within the meaning of Executive Order 12866. The rule is merely 
procedural and, therefore, will not have an annual economic effect of 
$100 million or more or have any adverse effect on any sector of the 
economy or on State, local, or tribal governments or communities.
    For purposes of Executive Order 12988, SBA certifies that it has 
drafted this rule, to the extent practicable, in accordance with the 
standards set forth in section 3 of that Order. This action has no 
retroactive or preemptive action.
    For purposes of Executive Order 13132, SBA certifies that this rule 
has no federalism implications warranting the preparation of a 
Federalism Assessment.

List of Subjects

13 CFR Part 121

    Administrative practice and procedure, Government procurement, 
Government property, Grant programs--business, Loan programs--business, 
Small businesses.

13 CFR Part 124

    Government procurement, Hawaiian Natives, Minority businesses, 
Reporting and recordkeeping requirements, Technical assistance, 
Tribally owned concerns.

13 CFR Part 134

    Administrative practice and procedure, Organization and functions 
(Government agencies).


    For the reasons set forth in the preamble, SBA amends parts 121, 
124, and 134 of Title 13, Code of Federal Regulations (CFR), 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 
662(5); and Sec. 304, Pub. L. 103-403, 108 Stat. 4175, 4188.

    2. In Sec. 121.1009, revise paragraph (h) to read as follows:


Sec. 121.1009  What are the procedures for making the size 
determination?

* * * * *
    (h) Limited reopening of size determinations. In cases where the 
size determination contains clear administrative error or a clear 
mistake of fact, SBA may, in its sole discretion, reopen the size 
determination to correct the error or mistake, provided no appeal has 
been filed with OHA.

    3. Revise Sec. 121.1101 to read as follows:


Sec. 121.1101  Are formal size determinations subject to appeal?

    A formal size determination made by a Government Contracting Area 
Office or by a Disaster Area Office may be appealed to OHA. The 
procedures governing OHA appeals are set forth in part 134 of this 
chapter. The OHA appeal is an administrative remedy that must be 
exhausted before judicial review of a formal size determination may be 
sought in a court.

    4. Revise Sec. 121.1102 to read as follows:


Sec. 121.1102  Are NAICS code designations subject to appeal?

    A NAICS code designation made by a procuring activity contracting 
officer may be appealed to OHA. The procedures governing OHA appeals 
are set forth in part 134 of this chapter. The OHA appeal is an 
administrative remedy that must be exhausted before judicial review of 
a NAICS code designation may be sought in a court.

PART 124--[AMENDED]

    5. 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. 101-37, Pub. L. 101-
574, and 42 U.S.C. 9815.


[[Page 47246]]



    6. In Sec. 124.206, revise paragraph (c) to read as follows:


Sec. 124.206  What appeal rights are available to an applicant that has 
been denied admission?

* * * * *
    (c) The applicant may initiate an appeal by filing a petition in 
accordance with part 134 of this chapter with OHA within 45 days after 
the applicant receives the Agency decision.
* * * * *

    7. Amend Sec. 124.304 as follows:
    a. Revise the second sentence of paragraph (b) and remove the last 
sentence; and
    b. Revise the last sentence of paragraph (e).
    The revisions read as follows:


Sec. 124.304  What are the procedures for early graduation and 
termination?

* * * * *
    (b) * * * The Letter of Intent to Terminate or Graduate Early will 
set forth the specific facts and reasons for SBA's findings, and will 
notify the concern that it has 30 days from the date it receives the 
letter to submit a written response to SBA explaining why the proposed 
ground(s) should not justify termination or early graduation.
* * * * *
    (e) * * * If a Participant does not appeal a Notification of Early 
Graduation or Termination within 45 days after the Participant receives 
the Notification, the decision of the AA/8(a)BD is the final agency 
decision effective on the date the appeal right expired.
* * * * *

    8. In Sec. 124.305, revise the first sentence of paragraph (c) to 
read as follows:


Sec. 124.305  What is suspension and how is a Participant suspended 
from the 8(a) BD program?

* * * * *
    (c) The Participant may appeal a Notice of Suspension by filing a 
petition in accordance with part 134 of this chapter with OHA within 45 
days after the concern receives the Notice of Suspension pursuant to 
paragraph (b) of this section. * * *
* * * * *

    9. In Sec. 124.515, revise paragraph (i) to read as follows:


Sec. 124.515  Can a Participant change its ownership or control and 
continue to perform an 8(a) contract, and can it transfer performance 
to another firm?

* * * * *
    (i) The 8(a) contractor may appeal SBA's denial of a waiver request 
by filing a petition with OHA pursuant to part 134 of this chapter 
within 45 days after the contractor receives the Administrator's 
decision.

PART 134--[AMENDED]

    10. The authority citation for part 134 is revised to read as 
follows:

    Authority: 5 U.S.C. 504; 15 U.S.C. 632, 634(b)(6), 637(a), 
648(l), 656(i), and 687(c); E.O. 12549, 51 FR 6370, 3 CFR, 1986 
Comp., p. 189.


    11. Amend Sec. 134.101 as follows:
    a. Add new definitions for ``Appeal petition'' and ``NAICS code'' 
in alphabetical order;
    b. Revise the definitions for ``Party,'' ``Petition,'' and 
``Pleading''; and
    c. Remove the definition for ``SIC code.''
    The revisions and additions read as follows:


Sec. 134.101  Definitions.

* * * * *
    Appeal petition has the same meaning as petition.
* * * * *
    NAICS code means North American Industry Classification System 
code.
* * * * *
    Party means the petitioner, appellant, respondent, or intervenor, 
and the contracting officer in a NAICS code appeal.
* * * * *
    Petition (or appeal petition) means a written complaint, a written 
appeal from an SBA determination, or a written request for the 
initiation of proceedings before OHA.
    Pleading means a petition, an order to show cause commencing a 
case, an appeal petition, an answer, a response, or any amendment or 
supplement to those documents.
* * * * *

    12. Amend Sec. 134.102 as follows:
    a. Revise paragraph (d);
    b. In paragraph (k), remove the acronym ``SIC'' and add the acronym 
``NAICS'' in its place;
    c. In paragraph (m), remove the last word ``and'';
    d. Redesignate existing paragraph (n) as paragraph (r); and
    e. Add new paragraphs (n) through (q).
    The revisions and additions read as follows:


Sec. 134.102  Jurisdiction of OHA.

* * * * *
    (d) The eligibility of any bank or non-bank lender to continue to 
participate in SBA loan programs under the Act and part 120 of this 
chapter, or to do so with preferred or certified status, and any other 
appeal that is specifically authorized by part 120 of this chapter;
* * * * *
    (n) Appeals from the following small disadvantaged business (SDB) 
determinations under part 124 of this chapter:
    (1) SBA's determination that an applicant firm does not qualify for 
certification, or that a certified SDB no longer qualifies for the 
program; and
    (2) A Private Certifier's ownership and control determination made 
on a firm's application for certification;
    (o) The suspension, termination, or non-renewal of cooperative 
agreements with Women's Business Centers and Small Business Development 
Centers under the Act and part 130 of this chapter;
    (p) Certain matters involving debarments and suspensions under part 
145 of this chapter;
    (q) The decision of the Appropriate Management Official in SBA 
Employee Dispute Resolution Process cases (Employee Disputes) under 
Standard Operating Procedure 37 71 02 (available at http://www.sba.gov/library/soproom.html); and
* * * * *


Sec. 134.103  [Amended]

    13. In Sec. 134.103, paragraph (b), remove the last sentence.


Sec. 134.201  [Amended]

    14. Amend Sec. 134.201 as follows:
    a. Designate the first two sentences of the existing text and the 
last sentence of the existing text as paragraphs (a) and (b), 
respectively; and
    b. In the first sentence of newly designated paragraph (a), remove 
the acronym ``SIC'' and add in its place the acronym ``NAICS''.

    15. Revise Sec. 134.202 to read as follows:


Sec. 134.202  Commencement of cases.

    (a) A party other than the SBA may commence a case by filing a 
written petition within the following time periods:
    (1) Except as provided by paragraphs (a)(2) through (a)(5) of this 
section, no later than 45 days from the date of receipt of the SBA 
action or determination to which the petition relates;
    (2) In debt collection proceedings under part 140 of this chapter, 
no later than 15 days after receipt of a notice of indebtedness and 
intention to collect such debt by salary or administrative offset;
    (3) In applications for an award of fees pursuant to subpart E of 
this part, no

[[Page 47247]]

later than 30 days after the decision to which it applies becomes 
final;
    (4) For 8(a) program suspension proceedings, see Sec. 124.305 of 
this chapter;
    (5) For SBA Employee Disputes, see Standard Operating Procedure 37 
71 02, available at www.sba.gov/library/soproom.html.
    (b) The SBA may commence a case by issuing to the respondent an 
appropriate written order to show cause and filing the order to show 
cause with OHA.
    (c) Cases concerning Small Business Investment Company license 
suspensions and revocations and cease and desist orders must be 
commenced with an order to show cause containing a statement of the 
matters of fact and law asserted by the SBA, the legal authority and 
jurisdiction under which a hearing is to be held, a statement that a 
hearing will be held, and the time and place for the hearing.

    16. Revise Sec. 134.203 to read as follows:


Sec. 134.203  The petition.

    (a) A petition must contain the following:
    (1) The basis of OHA's jurisdiction;
    (2) A copy of the SBA determination being appealed, if applicable, 
and date received;
    (3) A clear and concise statement of the factual basis of the case;
    (4) The relief being sought;
    (5) The name, address, telephone number, facsimile number, and 
signature of the petitioner or its attorney;
    (6) A certificate of service (see Sec. 134.204(d)); and
    (7) In a debt collection case, a statement showing when the 
petitioner received the SBA notice initiating the debt collection 
proceeding (see Sec. 140.3 of this chapter).
    (b) A petition also must contain additional information or 
documents as required by the applicable program regulations in this 
chapter or by other subparts of this part 134. For SBA Employee 
Disputes, see Standard Operating Procedure 37 71 02, available at 
www.sba.gov/library/soproom.html.
    (c) A petition which does not contain all of the information 
required by paragraphs (a) and (b) of this section may be dismissed, 
with or without prejudice, at the Judge's own initiative, or upon 
motion of the respondent.

    17. Amend Sec. 134.204 as follows:
    a. Revise the heading of the section;
    b. Revise paragraphs (a) through (d);
    c. Remove paragraph (e); and
    d. Redesignate existing paragraph (f) as new paragraph (e).
    The revisions read as follows:


Sec. 134.204  Filing and service requirements.

    (a) Methods of filing and service. Pleadings or other submissions 
must be filed and served by mail, delivery, or facsimile. Mail includes 
first class (including certified and registered), express, and priority 
mail. For good cause, the Judge may order that filing or service be 
effected by one of these methods.
    (b) Filing. Filing is the receipt of pleadings and other 
submissions at OHA.
    (1) OHA's address. OHA accepts filings between the hours of 8:30 
a.m. and 5 p.m. eastern time at the following address: Docketing Clerk, 
Office of Hearings and Appeals, Small Business Administration, 409 
Third Street, SW., Suite 5900, Washington, DC 20416-0005. OHA's 
telephone number is (202) 401-8203. The number for OHA's facsimile 
machine is (202) 205-7059.
    (2) The date of filing for pleadings and other submissions filed by 
mail, delivery, or facsimile is the date the filing is received at OHA. 
Any filing received at OHA after 5:00 p.m. eastern time is considered 
filed as of the next day.
    (3) Exhibits. An exhibit, whether an original or a copy, must be 
authenticated or identified to be what it purports to be.
    (4) Copies. No extra copies of pleadings or other submissions need 
be filed. If a document is offered as an exhibit, a copy of the 
document will be accepted by the Judge unless--
    (i) a genuine question is raised as to whether it is a true and 
accurate copy; or
    (ii) it would be unfair, under the circumstances, to admit the copy 
instead of the original.
    (c) Service. Service is the mailing, delivery, or facsimile to all 
other parties of a copy of each pleading or other submission filed with 
OHA.
    (1) Complete copies of all pleadings and other submissions filed 
with OHA must be served upon all other parties or, if represented, 
their authorized representatives or their attorneys, at their record 
addresses.
    (2) The date of service is as follows: for facsimile, the date the 
facsimile is sent; for personal delivery by the party, its employee, or 
its attorney, the date the document is given to the party served; for 
commercial delivery, the date the document is given to the delivery 
service; for mail, the date of mailing. The date of mailing is the date 
of a U.S. Postal Service postmark or any other proof of mailing. If 
there is insufficient proof of mailing, there is a rebuttable 
presumption that the mailing was made five days before receipt.
    (3) If the SBA is a party, the SBA must be served, as required by 
the applicable program regulations or by other subparts of this part 
134. If the SBA office for service is not specified elsewhere, serve: 
Office of General Counsel, Small Business Administration, 409 Third 
Street, S.W., Washington, DC 20416. For SBA Employee Disputes, see 
Standard Operating Procedure 37 71 02, available at www.sba.gov/library/soproom.html.
    (d) Certificate of service. A certificate of service shows how, 
when, and to whom service was made. Every pleading and other submission 
filed with OHA and served on the other parties must include a 
certificate of service. The certificate should state: ``I certify that 
on [date], I caused the foregoing document to be served by [either 
``placing a copy in the mail,'' ``sending a copy by facsimile,'' 
``personally delivering a copy,'' or ``giving a copy to a delivery 
service,''] upon the following: [list name, address, telephone number, 
and facsimile number of each party served].'' The certificate must be 
signed and include the typed name and title of the individual serving 
the pleading or other submission.
* * * * *

    18. Revise Sec. 134.205 to read as follows:


Sec. 134.205  Motion for a more definite statement.

    (a) Procedure. No later than 15 days after service of the petition 
or order to show cause, the respondent may file and serve a motion 
requesting a more definite statement of particular allegations in the 
petition.
    (b) Stay. The filing and service of a motion for a more definite 
statement stays the time for filing and serving an answer or response. 
The Judge will establish the time for filing and serving an answer or 
response.

    19. Revise Sec. 134.206 to read as follows:


Sec. 134.206  The answer or response.

    (a)(1) Except in a case involving a petition appealing from an SBA 
determination, a respondent must file and serve an answer within 45 
days after the filing of a petition or the service of an order to show 
cause, except that in debt collection cases, answers are due within 30 
days. For SBA Employee Disputes, see Standard Operating Procedure 37 71 
02, available at www.sba.gov/library/soproom.html.
    (2) The answer must contain the following:

[[Page 47248]]

    (i) An admission or denial of each of the factual allegations 
contained in the petition or order to show cause, or a statement that 
the respondent denies knowledge or information sufficient to determine 
the truth of a particular allegation;
    (ii) Any affirmative defenses; and
    (iii) The name, address, telephone number, facsimile number, and 
signature of the respondent or its attorney.
    (3) Allegations in the petition or order to show cause that are not 
answered in accordance with paragraph (a)(2)(i) of this section will be 
deemed admitted unless injustice would occur.
    (b) Upon the filing of a petition appealing from an SBA 
determination, the Judge or the AA/OHA will issue an order informing 
all known parties of the date the appeal was filed. The respondent must 
file and serve a response to such a petition within 45 days after the 
filing of such a petition. The response need not admit or deny the 
allegations in the petition but shall set forth the respondent's 
positions in support of the SBA determination. The response must also 
set forth the name, address, telephone number, facsimile number, and 
signature of the respondent or its attorney.
    (c) If a petition or order to show cause is amended or if 
respondent is not properly served, the Judge will order the time to 
file an answer or response extended and will specify the date such 
answer or response is due. If respondent is not properly served with a 
petition appealing from an SBA determination, the Judge will issue an 
order directing that the petitioner serve respondent within a specified 
time and directing respondent to file and serve a response within 45 
days after petitioner timely serves respondent in accordance with the 
order.
    (d) If the respondent fails to timely file and serve an answer or 
response, that failure will constitute a default. Following such a 
default, the Judge may prohibit the respondent from participating 
further in the case. If SBA, as respondent to a petition appealing from 
an SBA determination, fails to timely file and serve its response or 
the administrative record (where required), the Judge will issue an 
order directing SBA to file and serve the administrative record by a 
specified date.

    20. Amend Sec. 134.207 as follows:
    a. In paragraph (a), revise the first sentence and add a new 
sentence at the end;
    b. Revise paragraph (b); and
    c. Revise paragraph (d).
    The revisions read as follows:


Sec. 134.207  Amendments and supplemental pleadings.

    (a) Amendments. Upon motion, and under terms needed to avoid 
prejudice to any non-moving party, the Judge may permit the filing and 
service of amendments to pleadings. * * * The proposed amendment must 
be filed and served with the motion.
    (b) Supplemental pleadings. Upon motion, and under terms needed to 
avoid prejudice to any non-moving party, the Judge may permit the 
filing and service of a supplemental pleading setting forth relevant 
transactions or occurrences that have taken place since the filing of 
the original pleading. The proposed supplemental pleading must be filed 
and served with the motion.
* * * * *
    (d) Answer or response. In an order permitting the filing and 
service of an amended or supplemented petition or order to show cause, 
the Judge will establish the time for filing and serving an answer or 
response.

    21. Revise Sec. 134.208 to read as follows:


Sec. 134.208  Representation in cases before OHA.

    (a) A party may represent itself, or be represented by an attorney. 
A partner may represent a partnership; a member may represent a limited 
liability company; and an officer may represent a corporation, trust, 
association, or other entity.
    (b) An attorney for a party who did not appear on behalf of that 
party in the party's first filing with OHA must file and serve a 
written notice of appearance.
    (c) An attorney seeking to withdraw from a case must file and serve 
a motion for the withdrawal of his or her appearance.

    22. Revise Sec. 134.210 to read as follows:


Sec. 134.210  Intervention.

    (a) By SBA. SBA may intervene as of right at any time in any case 
until 15 days after the close of record, or the issuance of a decision, 
whichever comes first.
    (b) By interested persons. Any interested person may move to 
intervene at any time until the close of record by filing and serving a 
motion to intervene containing a statement of the moving party's 
interest in the case and the necessity for intervention to protect such 
interest. An interested person is any individual, business entity, or 
governmental agency that has a direct stake in the outcome of the 
appeal. The Judge may grant leave to intervene upon such terms as he or 
she deems appropriate.

    23. Amend Sec. 134.211 as follows:
    a. Redesignate existing paragraphs (b) through (d) as paragraphs 
(c) through (e);
    b. Add a new paragraph (b);
    c. Revise newly redesignated paragraph (e); and
    d. Add a new paragraph (f).
    The revisions and additions read as follows:


Sec. 134.211  Motions.

* * * * *
    (b) Statement of whether motion is opposed. Except when filing a 
motion to dismiss or a motion for summary decision, the moving party 
must make reasonable efforts before filing the motion to contact any 
non-moving party and determine whether it will oppose the motion and 
must state in the motion whether each non-moving party will oppose or 
not oppose the motion. If the moving party cannot determine whether a 
non-moving party will oppose the motion, the moving party must describe 
in the motion the efforts made to contact that non-moving party.
* * * * *
    (e) Motion to dismiss. A respondent may file a motion to dismiss 
any time before a decision is issued. If an answer or response has not 
been filed, the motion to dismiss stays the time to answer or respond. 
If the Judge denies the motion, and an answer or response has not been 
filed, the respondent must file the answer or response within 20 days 
after the order deciding the motion.
    (f) Motion for an extension of time. Except for good cause shown, a 
motion for an extension of time must be filed at least two days before 
the original deadline.
    24. Amend Sec. 134.212 as follows:
    a. In paragraph (c), remove the words ``serve and file'' and add 
the words ``file and serve'' in their place;
    b. In paragraph (d), remove the words ``serving and filing'' and 
add the words ``filing and serving'' in their place; and
    c. Add a new paragraph (e), to read as follows:


Sec. 134.212  Summary decision.

* * * * *
    (e) Appeal petitions from SBA determinations (other than 8(a) 
determinations). In a case involving an appeal petition, except as 
provided in subpart D of this part, if SBA has provided multiple 
grounds for the determination being appealed, SBA may move for summary 
decision on one or more grounds. If the Judge finds that

[[Page 47249]]

there is no genuine issue of material fact and the SBA is entitled to a 
decision in its favor as a matter of law as to any such ground, the 
Judge will grant the motion for summary decision and dismiss the 
appeal.


Sec. 134.213  [Amended]

    25. In Sec. 134.213, paragraph (d), remove the words ``serve and 
file'' and add the words ``file and serve'' in their place.

    26. Amend Sec. 134.214 as follows:
    a. In paragraph (a), add a new sentence at the end; and
    b. In paragraph (d), revise the first two sentences.
    The revisions and additions read as follows:


Sec. 134.214  Subpoenas.

    (a) * * * Subpoenas are not authorized for proceedings relating to 
internal Agency determinations, such as Employee Disputes.
* * * * *
    (d) Motion to quash. A motion to limit or quash a subpoena must be 
filed and served within 10 days after service of the subpoena, or by 
the return date of the subpoena, whichever date comes first. Any 
response to the motion must be filed and served within 10 days after 
service of the motion, unless a shorter time is specified by the Judge. 
* * *


Sec. 134.215  [Amended]

    27. In Sec. 134.215, paragraph (b), remove the words ``serve and 
file'' and add the words ``file and serve'' in their place.

    28. In Sec. 134.217, revise the first sentence and add two new 
sentences after the first sentence, to read as follows:


Sec. 134.217  Settlement.

    At any time during the pendency of a case, the parties may submit a 
joint motion to dismiss the appeal if they have settled the case, and 
may file with such motion a copy of the settlement agreement. If the 
Judge has express authority, under statute, SBA regulation or SBA 
standard operating procedures, to review the contents of a settlement 
agreement for legality, the Judge may order the parties to file a copy 
of the settlement agreement. Otherwise, upon the filing of a joint 
motion to dismiss, the Judge will issue an order dismissing the case. * 
* *

    29. In Sec. 134.226, paragraph (b), add a sentence at the end to 
read as follows:


Sec. 134.226  The decision.

* * * * *
    (b) * * * Time limits for decisions in other types of cases, if 
any, are indicated either in the applicable program regulations or in 
other subparts of this part 134.
* * * * *

    30. Revise Sec. 134.227 to read as follows:


Sec. 134.227  Finality of decisions.

    (a) Initial decisions. Except as otherwise provided in paragraph 
(b) of this section, a decision by the Judge on the merits is an 
initial decision. However, unless a request for review is filed 
pursuant to Sec. 134.228(a), or a request for reconsideration is filed 
pursuant to paragraph (c) of this section, an initial decision shall 
become the final decision of the SBA 30 days after its service.
    (b) Final decisions. A decision by the Judge on the merits shall be 
a final decision in the following proceedings:
    (1) Collection of debts owed to SBA and the United States under the 
Debt Collection Act of 1982 (5 U.S.C. 5514 and 31 U.S.C. 3302, 3701, 
3711, 3716-3719) and part 140 of this chapter;
    (2) Appeals from SBA 8(a) program determinations under the Act and 
part 124 of this chapter;
    (3) Appeals from size determinations and NAICS code designations 
under part 121 of this chapter; and
    (4) In other proceedings as provided either in the applicable 
program regulations or in other subparts of this part 134.
    (c) Reconsideration. Except as otherwise provided by statute, the 
applicable program regulations in this chapter, or this part 134, an 
initial or final decision of the Judge may be reconsidered. Any party 
may request reconsideration by filing with the Judge and serving a 
petition for reconsideration within 20 days after service of the 
written decision, upon a clear showing of an error of fact or law 
material to the decision. The Judge also may reconsider a decision on 
his or her own initiative.

    31. Amend Sec. 134.228 as follows:
    a. Revise paragraph (a);
    b. In paragraph (b), remove the words ``serve and file with OHA'' 
and add in their place the words ``file and serve''.
    The revisions read as follows:


Sec. 134.228  Review of initial decisions.

    (a) Request for review. Within 30 days after the service of an 
initial decision or a reconsidered initial decision of a Judge, any 
party, or SBA's Office of General Counsel, may file and serve a request 
for review by the Administrator. A request for review must set forth 
the filing party's specific objections to the initial decision, and any 
alleged support for those objections in the record, or in case law, 
statute, regulation, or SBA policy. A party must serve its request for 
review upon all other parties and upon SBA's Office of General Counsel.
* * * * *

    32. Revise Sec. 134.229 to read as follows:


Sec. 134.229  Termination of jurisdiction.

    Except when the Judge reconsiders a decision or remands the case, 
the jurisdiction of OHA will terminate upon the issuance of a decision 
resolving all material issues of fact and law. If the Judge reconsiders 
a decision, OHA's jurisdiction terminates when the Judge issues the 
decision after reconsideration. If the Judge remands the case, the 
Judge may retain jurisdiction at his or her own discretion, and the 
remand order may include the terms and duration of the remand.

    33. Revise the heading for subpart C to read as follows:

Subpart C--Rules of Practice for Appeals From Size Determinations 
and NAICS Code Designations


Sec. 134.301  [Amended]

    34. In Sec. 134.301, paragraph (b), remove the acronym ``SIC'' and 
add in its place the acronym ``NAICS''.

    35. In Sec. 134.302, revise the introductory text and paragraph (b) 
to read as follows:


Sec. 134.302  Who may appeal.

    Appeals from size determinations and NAICS code designations may be 
filed with OHA by the following, as applicable:
* * * * *
    (b) Any person adversely affected by a NAICS code designation. 
However, with respect to a particular sole source 8(a) contract, only 
the AA/8(a)BD may appeal a NAICS code designation;
* * * * *

    36. Revise Sec. 134.303 to read as follows:


Sec. 134.303  Advisory opinions.

    The Office of Hearings and Appeals does not issue advisory 
opinions.

    37. In Sec. 134.304, revise the section heading and paragraph (a) 
to read as follows:


Sec. 134.304  Commencement of appeals from size determinations and 
NAICS code designations.

    (a) Appeals from size determinations and NAICS code designations 
must be commenced by filing and serving an appeal petition as follows:
    (1) If the appeal is from a size determination in a pending

[[Page 47250]]

procurement or pending Government property sale, then the appeal 
petition must be filed and served within 15 days after appellant 
receives the size determination;
    (2) If the appeal is from a size determination other than one in a 
pending procurement or pending Government property sale, then the 
appeal petition must be filed and served within 30 days after appellant 
receives the size determination;
    (3) If the appeal is from a NAICS code designation, then the appeal 
petition must be filed and served within 10 days after the issuance of 
the initial solicitation. If the appeal relates to an amendment 
affecting the NAICS code, then the appeal petition must be filed and 
served within 10 days after the issuance of the amendment.
* * * * *

    38. Amend Sec. 134.305 as follows:
    a. In paragraphs (a)(1), (a)(3), and (c), remove the acronym 
``SIC'' wherever it appears and add in its place the acronym ``NAICS';
    b. In paragraph (a)(4), before the word ``and'', add the words 
``facsimile number,'; and
    c. Revise paragraph (d) to read as follows:


Sec. 134.305  The appeal petition.

* * * * *
    (d) Certificate of service. The appellant must attach to the appeal 
petition a signed certificate of service meeting the requirements of 
Sec. 134.204(d).
* * * * *

    39. Amend Sec. 134.306 as follows:
    a. Revise the section heading;
    b. Remove the last sentence of the existing text;
    c. Designate the remaining sentence of the existing text as 
paragraph (a); and
    d. Add a new paragraph (b), to read as follows:


Sec. 134.306  Transmission of the case file and solicitation.

* * * * *
    (b) Upon receipt of an appeal petition pertaining to a NAICS code 
designation, or a size determination made in connection with a 
particular procurement, the procuring agency contracting officer must 
immediately send to OHA a paper copy of both the original solicitation 
relating to that procurement and all amendments.

    40. In Sec. 134.308, revise paragraph (a)(2) to read as follows:


Sec. 134.308  Limitation on new evidence and adverse inference from 
non-submission in appeals from size determinations.

    (a) * * *
    (2) A motion is filed and served establishing good cause for the 
submission of such evidence. The offered new evidence must be filed and 
served with the motion.
* * * * *

    41. In Sec. 134.309, revise paragraphs (a) and (b) to read as 
follows:


Sec. 134.309  Response to an appeal petition.

    (a) Who may respond. Any person served with an appeal petition, any 
intervenor, or any person with a general interest in an issue raised by 
the appeal may file and serve a response supporting or opposing the 
appeal. The response should present argument.
    (b) Time limits. The Judge will issue a Notice and Order informing 
the parties of the filing of the appeal petition, establishing the 
close of record as 15 days after service of the Notice and Order, and 
informing the parties that OHA must receive any responses to the appeal 
petition no later than the close of record.
* * * * *


Sec. 134.310  [Amended]

    42. In Sec. 134.310, remove the acronym ``SIC'' and add in its 
place the acronym ``NAICS''.


Sec. 134.311  [Amended]

    43. In Sec. 134.311, remove the acronym ``SIC'' and add in its 
place the acronym ``NAICS''.

    44. Revise Sec. 134.313 to read as follows:


Sec. 134.313  Applicability of subpart B provisions.

    Except where inconsistent with this subpart C, the provisions of 
subpart B of this part apply to appeals from size determinations and 
NAICS code designations.


Sec. 134.314  [Amended]

    45. In Sec. 134.314, remove the acronym ``SIC'' and add in its 
place the acronym ``NAICS''.

    46. In Sec. 134.316, add a new sentence at the end of paragraph 
(b); and add new paragraph (d) to read as follows:


Sec. 134.316  The decision.

* * * * *
    (b) * * * Where a size appeal is dismissed, the Area Office size 
determination remains in effect.
* * * * *
    (d) Reconsideration. The decision in a NAICS code appeal may not be 
reconsidered.


Sec. 134.317  [Removed]

    47. Remove existing Sec. 134.317.
    48. Redesignate existing Sec. 134.318 as new Sec. 134.317 and 
revise it, to read as follows:


Sec. 134.317  Return of the case file.

    Upon issuance of the decision, OHA will return the case file to the 
transmitting Area Office. The remainder of the record will be retained 
by OHA.

    49. In Sec. 134.402, add two sentences at the end, to read as 
follows:


Sec. 134.402  Appeal petition.

    * * * This section does not apply to suspension appeals. For 
suspensions, see Sec. 124.305 of this chapter.


Sec. 134.403  [Amended]

    50. Amend Sec. 134.403 as follows:
    a. Remove paragraph (a)(3); and
    b. In paragraph (b), remove the words ``Service should be addressed 
to'' and add in their place the word ``Serve''.

    51. Amend Sec. 134.406 as follows:
    a. Revise paragraph (a);
    b. In paragraph (b), revise the first sentence;
    c. In paragraph (c), revise the first sentence; and remove the last 
sentence and add two new sentences in its place;
    d. Revise paragraph (d); and
    e. Revise paragraph (e).
    The revisions and additions read as follows:


Sec. 134.406  Review of the administrative record.

    (a) Any proceeding conducted under Sec. 134.401(a) through (d) 
shall be decided solely on a review of the written administrative 
record, except as provided in Sec. 134.407 and in suspension appeals. 
For suspension appeals under Sec. 134.401(e), see Sec. 124.305(d) of 
this chapter.
    (b) Except in suspension appeals, the Administrative Law Judge's 
review is limited to determining whether the Agency's determination is 
arbitrary, capricious, or contrary to law. * * *
    (c) The administrative record must contain all documents that are 
relevant to the determination on appeal before the Administrative Law 
Judge and upon which the SBA decision-maker, and those SBA officials 
that recommended either for or against the decision, relied. * * * The 
petitioner may object to the absence of a document, previously 
submitted to, or sent by, SBA, which the petitioner believes was 
erroneously omitted from the administrative record. In the absence of 
any objection by the petitioner or a finding by the Judge pursuant to 
paragraph (e) of this section that the record is insufficiently 
complete to decide whether the determination was arbitrary, capricious, 
or contrary to law, the administrative

[[Page 47251]]

record submitted by SBA shall be deemed complete.
    (d) Where the Agency files its response to the appeal petition 
after the date specified in Sec. 134.206, the Administrative Law Judge 
may decline to consider the response and base his or her decision 
solely on a review of the administrative record.
    (e) The Administrative Law Judge may remand a case to the AA/8(a)BD 
(or, in the case of a denial of a request for waiver under Sec. 124.515 
of this chapter, to the Administrator) for further consideration if he 
or she determines that, due to the absence in the written 
administrative record of the reasons upon which the determination was 
based, the administrative record is insufficiently complete to decide 
whether the determination is arbitrary, capricious, or contrary to law. 
In the event of such a remand, the Judge will not require the SBA to 
supplement the administrative record other than to supply the reason or 
reasons for the determination and any documents submitted to, or 
considered by, SBA in connection with any reconsideration permitted by 
regulation that occurs during the remand period. After such a remand, 
in the event the Judge finds that the reasons upon which the 
determination is based are absent from any supplemented record, the 
Judge will find the SBA determination to be arbitrary, capricious, or 
contrary to law. The Administrative Law Judge may also remand a case to 
the AA/8(a)BD (or, in the case of a denial of a request for waiver 
under Sec. 124.515 of this chapter, to the Administrator) for further 
consideration where it is clearly apparent from the record that SBA 
made an erroneous factual finding (e.g., SBA double counted an asset of 
an individual claiming disadvantaged status) or a mistake of law (e.g., 
SBA applied the wrong regulatory provision in evaluating the case). A 
remand under this section will be for a reasonable period.


Sec. 134.407  [Amended]

    52. In Sec. 134.407, paragraph (a) introductory text, remove the 
word ``The'' at the beginning and add the words ``Except in suspension 
appeals, the'' in its place.


Sec. 134.408  [Redesignated as Sec. 134.409]

    53. Redesignate existing Sec. 134.408 as Sec. 134.409.
    54. Add a new Sec. 134.408 to read as follows:


Sec. 134.408  Summary decision.

    (a) Generally. In any appeal under this subpart D, either party may 
move or cross-move for summary decision, as provided in Sec. 134.212.
    (b) Summary decision based on fewer than all grounds. If SBA has 
provided multiple grounds for the 8(a) determination being appealed, 
SBA may move for summary decision on one or more grounds.
    (1) Non-suspension cases. Except in suspension appeals, if the 
Judge finds that there is no genuine issue of material fact as to 
whether SBA acted arbitrarily, capriciously, or contrary to law as to 
any such ground or grounds, and that the SBA is entitled to a decision 
in its favor as a matter of law, the Judge will grant the motion for 
summary decision and dismiss the appeal.
    (2) Suspension cases. In suspension appeals, if the Judge finds 
that there is no genuine issue of material fact as to whether adequate 
evidence exists that protection of the Federal Government's interest 
requires suspension, as to any such ground or grounds for the proposed 
suspension, the SBA is entitled to a decision in its favor as a matter 
of law, and the Judge will grant the motion for summary decision and 
dismiss the appeal.


Sec. 134.409  [Amended]

    55. In newly redesignated Sec. 134.409, paragraph (b), remove the 
last sentence.

    Dated: July 5, 2002.
Hector V. Barreto,
Administrator.
[FR Doc. 02-17618 Filed 7-17-02; 8:45 am]
BILLING CODE 8025-01-P