[Federal Register Volume 82, Number 187 (Thursday, September 28, 2017)]
[Proposed Rules]
[Pages 45212-45218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20384]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 134

RIN 3245-AG87


Rules of Practice for Protests and Appeals Regarding Eligibility 
for Inclusion in the U.S. Department of Veterans Affairs, Center for 
Verification and Evaluation Database

AGENCY: U.S. Small Business Administration.

ACTION: Proposed rule.

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SUMMARY: The U.S. Small Business Administration (SBA) is proposing to 
amend the rules of practice of its Office of Hearings and Appeals (OHA) 
to implement procedures for protests of eligibility for inclusion in 
the Department of Veterans Affairs (VA) Center for Verification and 
Evaluation (CVE) database, and procedures for appeals of denials and 
cancellations of inclusion in the CVE database. These amendments would 
be in accordance with Sections 1832 and 1833 of the National Defense 
Authorization Act for Fiscal Year 2017 (NDAA 2017).

DATES: Comments must be received on or before October 30, 2017.

ADDRESSES: You may submit comments, identified by RIN 3245-AG87 by any 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail, Hand Delivery/Courier: Delorice Price Ford, 
Assistant Administrator for Hearings and Appeals, U.S. Small Business 
Administration, 409 Third Street SW., Washington, DC 20416.
    SBA will post all comments on www.regulations.gov. If you wish to 
submit confidential business information (CBI) as defined in the User 
Notice at www.regulations.gov, please submit the information to Daniel 
K. George, Attorney Advisor, Office of Hearings and Appeals, U.S. Small 
Business Administration, 409 Third Street SW., Washington, DC 20416, or 
send an email to [email protected]. Highlight the information that 
you consider to be CBI and explain why you believe SBA should hold this 
information as confidential. SBA will review the information and make 
the final determination whether it will publish the information.

FOR FURTHER INFORMATION CONTACT: Daniel K. George, Attorney Advisor, at 
(202) 401-8200 or [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    Sections 1832 and 1833 of the NDAA 2017 authorized the SBA's OHA to 
determine protests and appeals related to inclusion in the CVE 
database. In order to implement these sections, this proposed rule 
would amend OHA's jurisdiction at subparts A and B of 13 CFR part 134 
to include protests of eligibility for inclusion in the CVE database 
and appeals of denials and cancellations of inclusion in the CVE 
database. In addition, the proposed rule would create a new subpart J 
in 13 CFR part 134 to set out detailed rules of practice for protests 
of eligibility for inclusion in the VA CVE database, and a new subpart 
K to set out detailed rules of practice for appeals of denials and 
cancellations of verification for inclusion in the VA's CVE database.

Section-by-Section Analysis

A. 13 CFR Part 134 Subparts A and B

    SBA proposes to amend Sec.  134.102, the rules for establishing OHA 
jurisdiction, to add protests of eligibility for inclusion in the CVE 
database and appeals of denials and cancellations of inclusion in the 
CVE database, as two new types of proceedings over which OHA would have 
jurisdiction. New Sec.  134.102(u) would allow for protests of 
eligibility for inclusion in the CVE database. New Sec.  134.102(v) 
would allow for appeals of denials and cancellations of inclusion in 
the CVE database.
    SBA also proposes to amend Sec.  134.201(b) by adding new 
paragraphs (8) and (9) to include protests of eligibility for inclusion 
in the CVE database and appeals of denials and cancellations of 
inclusion in the CVE database. As a result of these new paragraphs, 
existing Sec.  134.201(b)(8) would be redesignated as Sec.  
134.201(b)(10).

B. 13 CFR Part 134, Subpart J

    SBA proposes to add new subpart J, consisting of Sec. Sec.  
134.1001-1013, in order to conform OHA's rules of practice for protests 
of eligibility for inclusion in the CVE database (CVE Protests). As a 
result, the new rules of practice for protests of eligibility for 
inclusion in the CVE database would mirror SBA's existing rules for 
protests of service-disabled veteran owned small businesses, found in 
13 CFR part 125 subpart D.
    Proposed Sec.  134.1001(b) states that the provisions of subparts A 
and B also apply to protests of eligibility for inclusion in the CVE 
database. Section 134.1001(c) adds that the protest procedures are 
separate from those governing Service-Disabled Veteran-Owned Small 
Business Concern (SDVO SBC) protests for non-VA procurements, which are 
subject to 13 CFR part 125. Section 134.1001(d) states that protests of 
a concern's eligibility for a non-VA procurement as an SDVO SBC are 
governed by 13 CFR part 125. In addition, Sec.  134.1001(e) specifies 
that appeals that relate to a determination made by the SBA's Director, 
Office of Government Contracting (D/GC) are governed by subpart E of 13 
CFR part 125.
    As proposed in Sec.  134.1002, the Secretary of the VA, or his/her 
designee, as well as the Contracting Officer (CO) or an offeror in a VA 
procurement awarded to a small business may file a CVE Protest. A 
protesting offeror need not be the offeror next in line for award.
    Section 134.1003 establishes the grounds for filing a CVE Protest 
as status, and ownership and control. Paragraph (c) requires the Judge 
to determine a protested concern's eligibility for inclusion in the CVE 
as of the date the protest was filed.
    Section 134.1004(a) establishes the deadlines for filing a CVE 
Protest, which is at any time for the Secretary of the VA and any time 
during the life of a contract for the CO. Paragraph (a)(2)(i) instructs 
that an offeror must file its protest within five days of being 
notified of the identity of the apparent awardee. Paragraphs (a)(3) and 
(4) indicate the rule for counting days and that any untimely protest 
will be dismissed. Paragraph (b) describes the methods for filing a CVE 
Protest by interested parties. A CVE Protest brought by an offeror is 
filed with the CO, who then forwards the protest to OHA.

[[Page 45213]]

    Section 134.1005 specifies the contents that every CVE Protest must 
have. Paragraph (b) would require a protective order be requested 
within five days of a protest being filed.
    Section 134.1006 would apply the servicing and filing requirements 
found at Sec.  134.204.
    Section 134.1007 would establish the process of CVE Protests as 
follows: Paragraph (a) would require OHA to issue a notice and order if 
the protest is found to be timely, specific, and based on protectable 
allegations; paragraph (b) would require dismissal of a protest if the 
Judge determines the protest to be premature, untimely, nonspecific, or 
based on non-protestable allegations; paragraph (c) would require the 
Director of the CVE (D/CVE) to send the case file to OHA by the 
deadline specified in the notice and order; paragraph (d) describes the 
process for requesting a protective order; paragraph (e) allows for 
supplemental arguments after a protester reviews the CVE case file; 
paragraph (f) allows for a response to a protest within 15 days of the 
date the protest was filed; and paragraph (g) would require the Judge 
to base the decision on the case file and information provided by the 
parties or information requested by the Judge. The Judge may also 
investigate issues beyond those raised by the parties. Paragraph (h) 
proposes to allow a CO to award the contract after a protest is filed 
but before a decision is reached if the CO determines the public 
interest will be protected and notifies the Judge of his/her decision; 
paragraph (i) would require OHA to serve all parties with the decision, 
which would be considered a final agency decision; finally, paragraph 
(j) stipulates the effects of the decision upon the protested concern 
and the contract at issue.
    Section 134.1008 prohibits discovery in CVE Protest proceedings.
    Section 134.1009 allows for oral hearings only in extraordinary 
circumstances, as found by the Judge, and establishes that if a hearing 
is allowed, it would be conducted in accordance with the rules of 
practice in subpart B of Part 134.
    Section 134.1010 establishes the standard of review as 
preponderance of the evidence, in which the burden of proof falls on 
the protested firm, not the protester.
    Section 134.1011 specifies that the Judge will give greater weight 
to specific, signed, factual evidence than to unsupported allegations 
and opinions, and provides that the Judge may draw an adverse inference 
from failure to produce relevant information.
    Section 134.1012 applies the provisions of Sec.  134.225 where 
relevant.
    Under Sec.  134.1013, there will be no appeal of OHA's decision on 
a CVE Protest. However, paragraph (a) allows for the Judge to 
reconsider a CVE Protest decision if a party to the proceeding files a 
petition for reconsideration within twenty (20) calendar days after 
issuance of the written decision. The request for reconsideration must 
clearly show an error of fact or law material to the decision. The 
Judge may also reconsider a decision on his or her own initiative. 
Paragraph (b) states that if the Judge reverses the initial decision on 
reconsideration, the CO must comply with Sec.  134.1007(j) in applying 
the new decision's results.

C. 13 CFR Part 134, Subpart K

    The rule proposes a new subpart K to cover the procedures for 
filing appeals of denials and cancellations of verification for 
inclusion in the VA CVE database (CVE Appeals). Section 134.1101 states 
that the provisions of subparts A and B also apply to CVE Appeals. 
Section 134.1101(c) adds that the appeal procedures for CVE Appeals are 
separate from those governing SDVO SBC status appeals based on D/GC 
determinations, which are subject to 13 CFR 134 subpart E. Paragraph 
(d) states that protests of a concern's eligibility for inclusion in 
the VA's CVE database are governed by 13 CFR 134 subpart J.
    Section 134.1102 establishes standing to file a CVE Appeal upon a 
concern that has been denied verification of its CVE status or had its 
CVE status cancelled.
    Section 134.1103 permits CVE Appeals to OHA as long as the denial 
or cancellation was not based on the concern's failure to meet any 
veteran or service-disabled veteran eligibility criteria.
    Section 134.1104 requires CVE Appeals to be filed within 10 
business days of being notified that the CVE status has been denied or 
cancelled. Paragraph (b) establishes the rules for counting days as 
those in Sec.  134.202(d). Paragraph (c) requires OHA to dismiss any 
untimely appeal.
    Section 134.1105(a) requires the appeal petition to include a copy 
of the denial or cancellation, a statement as to why the cancellation 
or denial is in error, any information the appellant believes the Judge 
should consider, and the name, address, telephone number, facsimile 
number, and signature of appellant or its attorney. Paragraph (b) 
requires that the appellant serve copies of the appeal upon the D/CVE 
and VA counsel. Paragraph (c) requires all appeal petitions to include 
a certificate of service that meets the requirements of Sec.  
134.204(d). Paragraph (d) allows the Judge to dismiss appeal petitions 
that do not meet all the requirements of Sec.  134.1105.
    Section 134.1106 applies the provisions in Sec.  134.204 regarding 
the service and filing requirements of all pleadings and submissions 
allowed under 13 CFR part 134, subpart K.
    Section 134.1107 requires the D/CVE to send OHA the entire case 
file relating to the denial or cancellation, by the deadline specified 
in the notice and order. The case file must be authenticated and 
certified that it is the true and correct copy of the case file, to the 
best knowledge of the D/CVE.
    Section 134.1108 would permit a response to the appeal petition. 
Paragraph (a) allows the D/CVE, or his/her designee, or VA counsel, to 
respond to the appeal. Paragraph (b) establishes the close of record as 
15 days after the Judge issues a notice and order informing all parties 
of the filing of the appeal. The notice and order would establish the 
date all responses to the appeal petition would be due. Paragraph (c) 
requires all respondents to serve their response upon all parties 
identified in the certificate of service attached to the appeal 
petition, as required by Sec.  134.1105. Paragraph (d) prevents a reply 
to a response, unless allowed by the Judge.
    Section 134.1109 does not allow for discovery or oral hearings in 
CVE Appeals.
    Section 134.1110 prevents new evidence in CVE Appeals, unless good 
cause is shown.
    Under Sec.  134.1111, the standard of review for CVE Appeals would 
be whether the denial or cancellation by the D/CVE was based on clear 
error of fact or law, which the appellant would have the burden of 
proof.
    Under Sec.  134.1112(a), the Judge will decide a CVE Appeal, if 
practicable, within 60 calendar days after the close of record. 
Paragraph (b) requires the decision to contain findings of fact and 
conclusions of law, and any reasons for those findings and conclusions, 
and any relief so ordered. Paragraph (c) requires decisions to be based 
primarily on the evidence in the CVE case file, and arguments made 
during the appeal process. The Judge will, however, have the ability to 
consider issues that are beyond those raised by any pleading or in the 
denial or cancellation letter. Paragraph (d) establishes a Judge's 
decision as the final agency decision, becoming effective immediately. 
If OHA dismisses an appeal of a D/CVE denial or cancellation, the D/CVE 
determination remains in effect.

[[Page 45214]]

Paragraph (e) requires OHA to serve a copy of the decision on all 
parties, or their counsel if represented. Paragraph (f) stipulates that 
if the appeal is granted and the appellant is found eligible for 
inclusion in the CVE database, the D/CVE must reinstate or include the 
appellant in the CVE database immediately. Paragraph (g) allows any 
party that has appeared in the proceeding, or the Secretary of VA or 
his or her designee, to file a petition for reconsideration. The 
petition must be filed within twenty (20) calendar 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.

Compliance With Executive Orders 12866, 12988, 13132, 13771, and the 
Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory 
Flexibility Act (5 U.S.C. 601-612)

Executive Order 12866

    OMB has determined that this rule does not constitute a 
``significant regulatory action'' under Executive Order 12866. This 
rule is also not a major rule under the Congressional Review Act, 5 
U.S.C. 800. This proposed rule would amend the rules of practice for 
the SBA's OHA in order to implement procedures for protests of 
eligibility for inclusion in the CVE database and appeals of denials 
and cancellations of inclusion in the CVE database. As such, the rule 
has no effect on the amount or dollar value of any Federal contract 
requirements or of any financial assistance provided through SBA or VA. 
Therefore, the rule is not likely to have an annual economic effect of 
$100 million or more, result in a major increase in costs or prices, or 
have a significant adverse effect on competition or the United States 
economy. In addition, this rule does not create a serious inconsistency 
or otherwise interfere with an action taken or planned by another 
agency, materially alter the budgetary impact of entitlements, grants, 
user fees, loan programs or the rights and obligations of such 
recipients, nor raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.

Executive Order 12988

    This action meets applicable standards set forth in section 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. The action does not 
have retroactive or preemptive 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 levels of government, as specified in the Executive Order. As 
such it does not warrant the preparation of a Federalism Assessment.

Executive Order 13771

    This proposed rule is not expected to be an Executive Order 13771 
regulatory action because this proposed rule is not significant under 
Executive Order 12866.

Paperwork Reduction Act

    The SBA has determined that this rule does not impose additional 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act, 44 U.S.C. Chapter 35.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980, as amended (RFA), 5 U.S.C. 
601-612, requires Federal agencies to prepare an initial regulatory 
flexibility analysis (IRFA) to consider the potential impact of the 
regulations on small entities. Small entities include small businesses, 
small not-for-profit organizations, and small governmental 
jurisdictions. Section 605 of the RFA allows an agency to certify a 
rule, in lieu of preparing an IRFA, if the rulemaking is not expected 
to have a significant economic impact on a substantial number of small 
entities.
    This proposed rule would revise the regulations governing cases 
before SBA's Office of Hearings and Appeals (OHA), SBA's administrative 
tribunal. These regulations are procedural by nature. Specifically, the 
proposed rule would establish rules of practice for the SBA's OHA in 
order to implement protests of eligibility for inclusion in the CVE 
database and appeals of denials and cancellations of inclusion in the 
CVE database, new types of administrative litigation mandated by 
sections 1832 and 1833 of the National Defense Authorization Act for 
Fiscal Year 2017. This legislation provides a new statutory right to 
challenge eligibility for inclusion in the CVE database, as well as 
denials and cancellation of inclusion in the CVE database. This 
proposed rule merely provides the rules of practice at OHA for the 
orderly hearing and disposition of CVE database inclusion protests and 
denials and cancellations of CVE database inclusion. While SBA does not 
anticipate that this proposed rule would have a significant economic 
impact on any small business, we do welcome comments from any small 
business setting out how and to what degree this proposed rule would 
affect it economically. Therefore, the Administrator of SBA certifies 
under 5 U.S.C. 605(b) that this proposed rule would not have a 
significant economic impact on a substantial number of small entities.

List of Subjects in 13 CFR Part 134

    Administrative practice and procedure, Claims, Equal access to 
justice, Lawyers, Organization and functions (government agencies).

    For the reasons stated in the preamble, SBA proposes to amend 13 
CFR part 134 as follows:

PART 134--RULES OF PROCEDURE GOVERNING CASES BEFORE THE OFFICE OF 
HEARINGS AND APPEALS

0
1. 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), 634(i), 
637(a), 648(l), 656(i), and 687(c); 38 U.S.C. 8127(f); E.O. 12549, 
51 FR 6370, 3 CFR, 1986 Comp., p. 189.

0
2. Amend Sec.  134.102 by adding paragraphs (u) and (v) to read as 
follows:


Sec.  134.102  Jurisdiction of OHA.

* * * * *
    (u) Protests of eligibility for inclusion in the Department of 
Veterans Affairs Center for Verification and Evaluation (CVE) database;
    (v) Appeals of denials and cancellations of inclusion in the CVE 
database.
0
3. Amend Sec.  134.201 by:
0
a. Removing the word ``and'' in paragraph (b)(7);
0
b. Redesignating paragraph (b)(8) as paragraph (b)(10);
0
c. Adding new paragraphs (b)(8) and (b)(9).
    The additions read as follows:


Sec.  134.201  Scope of the rules in this Subpart B.

* * * * *
    (b) * * *
    (8) For protests of eligibility for inclusion in the Center for 
Verification and Evaluation (CVE) database, in subpart J of this part;
    (9) For appeals of denials and cancellations of inclusion in the 
CVE database, in subpart K of this part; and
* * * * *

[[Page 45215]]

0
4. Add subpart J to read as follows:
Subpart J--Rules of Practice for Protests of Eligibility for Inclusion 
in the U.S. Department of Veterans Affairs (VA) Center for Verification 
and Evaluation (CVE) Database (CVE Protests)
Sec.
134.1001 Scope of rules.
134.1002 Who may file a CVE Protest?
134.1003 Grounds for filing a CVE Protest.
134.1004 Commencement of CVE Protests.
134.1005 Contents of the CVE Protest.
134.1006 Service and filing requirements.
134.1007 Processing a CVE Protest.
134.1008 Discovery.
134.1009 Oral hearings.
134.1010 Standard of review and burden of proof.
134.1011 Weight of evidence.
134.1012 The record.
134.1013 Request for reconsideration.

    Authority: 38 U.S.C. 8127(f)(8)(B).

Subpart J--Rules of Practice for Protests of Eligibility for 
Inclusion in the U.S. Department of Veterans Affairs (VA) Center 
for Verification and Evaluation (CVE) Database (CVE Protests)


Sec.  134.1001  Scope of rules.

    (a) The rules of practice in this subpart J apply to Department of 
Veterans Affairs (VA) Center for Verification and Evaluation protests 
(CVE Protests).
    (b) Except where inconsistent with this subpart, the provisions of 
subparts A and B of this part apply to protests listed in paragraph (a) 
of this section.
    (c) The protest procedures described in this subpart are separate 
from those governing protests and appeals of a concern's size or status 
as a Service-Disabled Veteran-Owned Small Business Concern (SDVO SBC) 
for a non-Department of Veterans Affairs (non-VA) procurement. All 
protests relating to whether a veteran-owned concern is a ``small'' 
business for purposes of any Federal program are subject to part 121 of 
this chapter and must be filed in accordance with that part. If a 
protester protests both the size of the concern and the concern's 
eligibility for the CVE database, SBA will process each protest 
concurrently. All protests relating to a concern's status as a SDVO SBC 
for a non-VA procurement are subject to part 125 of this chapter and 
must be filed in accordance with that part. SBA does not review issues 
concerning contract administration.
    (d) Protests of a concern's eligibility for a non-VA procurement as 
a SDVO SBC are governed by 13 CFR part 125 subpart D.
    (e) Appeals relating to determinations made by SBA's Director, 
Office of Government Contracting regarding SDVO SBC status are governed 
by subpart E of this part.
    (f) Appeals of denials and cancellations of verification for 
inclusion in the CVE database are governed by subpart K of this part.


Sec.  134.1002  Who may file a CVE Protest?

    A CVE Protest may be filed by:
    (a) The Secretary of the VA, or his/her designee; or
    (b) In the case of a small business that is awarded a contract for 
a VA procurement, the contracting officer or an offeror.


Sec.  134.1003  Grounds for filing a CVE Protest.

    (a) Status. In cases where the protest is based on service-
connected disability, permanent and severe disability, or veteran 
status, the Judge will only consider a protest that presents specific 
allegations supporting the contention that the owner(s) cannot provide 
documentation from the VA, Department of Defense, or the U.S. National 
Archives and Records Administration to show that they meet the 
definition of veteran, service-disabled veteran, or service-disabled 
veteran with a permanent and severe disability.
    (b) Ownership and control. In cases where the protest is based on 
ownership and control, the Judge will consider a protest only if the 
protester presents credible evidence that the concern is not 51% owned 
and controlled by one or more veterans or service-disabled veterans.
    (c) Date for Determining Eligibility. The Judge will determine a 
protested concern's eligibility for inclusion in the CVE database as of 
the date the protest was filed.


Sec.  134.1004  Commencement of CVE Protests.

    (a) Timeliness. (1) The Secretary of the VA, or his/her designee, 
may file a CVE Protest at any time.
    (2) Where the CVE Protest is in connection with a VA procurement:
    (i) An offeror must file a CVE Protest within five business days of 
notification of the apparent awardee's identity.
    (ii) A contracting officer may file a CVE Protest at any time 
during the life of the VA contract.
    (3) The rule for counting days is in Sec.  134.202(d).
    (4) An untimely protest will be dismissed.
    (b) Filing. (1) Private Parties. Interested parties, other than the 
contracting officer or Secretary of the VA or his/her designee, must 
deliver their CVE Protests in person, by email, by facsimile, by 
express delivery service, or by U.S. mail (postmarked within the 
applicable time period) to the contracting officer.
    (2) Referral to OHA. The contracting officer must forward to OHA 
any non-premature CVE Protest received, notwithstanding whether he/she 
believes it is sufficiently specific or timely. The contracting officer 
must send all CVE Protests, along with a referral letter, directly to 
OHA, addressed to Office of Hearings and Appeals, U.S. Small Business 
Administration, 409 Third Street SW., Washington, DC 20416, by email at 
[email protected], or by facsimile to (202) 205-6390, marked Attn: CVE 
Protest. The referral letter must include information pertaining to the 
solicitation that may be necessary for OHA to determine timeliness and 
standing, including:
    (i) The solicitation number;
    (ii) The name, address, telephone number, email address, and 
facsimile number of the contracting officer;
    (iii) Whether the contract was sole source or set-aside;
    (iv) Whether the protester submitted an offer;
    (v) Whether the protested concern was the apparent successful 
offeror;
    (vi) Whether the procurement was conducted using sealed bid or 
negotiated procedures;
    (vii) The bid opening date, if applicable;
    (viii) When the protest was submitted to the contracting officer;
    (ix) When the protester received notification about the apparent 
successful offeror, if applicable; and
    (x) Whether a contract has been awarded.
    (3) Protests filed by Secretary of the VA. The Secretary of VA or 
his/her designee must submit his/her CVE Protest directly to OHA in 
accordance with the procedures in Sec.  134.204.
    (4) Protests filed by a contracting officer. The contracting 
officer must submit his/her CVE Protest directly to OHA in accordance 
with the procedures in Sec.  134.204. The protest should include the 
information set forth in the referral letter in Paragraph (2).


Sec.  134.1005  Contents of the CVE Protest.

    (a) CVE Protests must be in writing. There is no required format 
for a CVE Protest, but it must include the following:
    (1) The solicitation or contract number, if applicable;
    (2) Specific allegations supported by credible evidence that the 
concern does not meet the eligibility requirements for

[[Page 45216]]

inclusion in the CVE database, listed in Sec.  134,1003;
    (3) Any other pertinent information the Judge should consider; and
    (4) The name, address, telephone number, and email address or 
facsimile number, if available, and signature of the protester or its 
attorney.
    (b) If the protester intends to seek access to the CVE case file 
under Sec.  134.205, the protester should include in its protest a 
request for a protective order. Unless good cause is shown, a protester 
must request a protective order within five days of filing the protest.


Sec.  134.1006  Service and filing requirements.

    The provisions of Sec.  134.204 apply to the service and filing of 
all pleadings and other submissions permitted under this subpart.


Sec.  134.1007  Processing a CVE Protest.

    (a) Notice and order. If the Judge determines that the protest is 
timely, sufficiently specific, and based upon protestable allegations, 
the Judge will issue a notice and order, notifying the protester, the 
protested concern, the Director, CVE (D/CVE), VA Counsel, and, if 
applicable, the contracting officer of the date OHA received the 
protest and ordering a due date for responses.
    (b) Dismissal of protest. If the Judge determines that the protest 
is premature, untimely, nonspecific, or is based on non-protestable 
allegations, the Judge will dismiss the protest and will send the 
contracting officer, D/CVE, and the protester a notice of dismissal, 
citing the reason(s) for the dismissal. The dismissal is a final agency 
action.
    (c) Transmission of the case file. Upon receipt of a notice and 
order, the D/CVE must deliver to OHA the entire case file relating to 
the protested concern's inclusion in the CVE database. The notice and 
order will establish the timetable for transmitting the case file to 
OHA. The D/CVE must certify and authenticate that the case file, to the 
best of his/her knowledge, is a true and correct copy of the case file.
    (d) Protective order. A protester seeking access to the CVE case 
file must file a timely request for a protective order under Sec.  
134.205. Except for good cause, a protester must request a protective 
order within five days of filing the protest. Even after issuance of a 
protective order, OHA will not disclose income tax returns or 
privileged information.
    (e) Supplemental allegations. If, after viewing documents in the 
CVE case file for the first time under a protective order, a protester 
wishes to supplement its protest with additional argument, the 
protester may do so. Any such supplement is due at OHA no later than 15 
days from the date the protester receives or reviews the CVE case file.
    (f) Response. (1) The protested concern, the D/CVE, the contracting 
officer, and any other interested party may respond to the protest and 
supplemental protest, if one is filed. The response is due no later 
than 15 days from the date the protest or supplemental protest was 
filed with OHA. The record closes the date the final response is due.
    (2) Service. The respondent must serve its response upon the 
protester or its counsel and upon each of the persons identified in the 
certificate of service attached to the notice and order or, if a 
protective order is issued, in accordance with the terms of the 
protective order.
    (3) Reply to a response. No reply to a response will be permitted 
unless the Judge directs otherwise.
    (g) Basis for decision. The decision will be based primarily on the 
case file and information provided by the protester, the protested 
concern, and any other parties. However, the Judge may investigate 
issues beyond those raised in the protest and may use other information 
or make requests for additional information to the protester, the 
protested concern, or VA.
    (h) Award of contract. The contracting officer may award a contract 
during the period between the date he/she receives a protest and the 
date the Judge issues a decision only if the contracting officer 
determines that an award must be made to protect the public interest 
and notifies the Judge in writing of any such determination. 
Notwithstanding such a determination, the provisions of paragraph (j) 
of this section shall apply to the procurement in question.
    (i) The decision. OHA will serve a copy of the written decision on 
each party, or, if represented by counsel, on its counsel. The decision 
is considered the final agency action, and it becomes effective upon 
issuance.
    (j) Effect of decision. (1) A contracting officer may award a 
contract to a protested concern after the Judge has determined either 
that the protested concern is eligible for inclusion in the CVE 
database or has dismissed all protests against it.
    (2) A contracting officer shall not award a contract to a protested 
concern that the Judge has determined is not eligible for inclusion in 
the CVE database. If the contracting officer has already made an award 
under paragraph (h) of this section, 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 
Judge's decision.
    (4) If the Judge finds the protested concern ineligible for 
inclusion in the CVE database, D/CVE must immediately remove the 
protested concern from the CVE database.
    (5) A concern found to be ineligible may not submit an offer on a 
future VA procurement until the protested concern reapplies to the 
Vendor Information Pages Verification Program and has been reentered 
into the CVE database.


Sec.  134.1008  Discovery.

    Discovery will not be permitted in CVE Protest proceedings.


Sec.  134.1009  Oral hearings.

    Oral hearings will be held in CVE Protest proceedings only upon a 
finding by the Judge of extraordinary circumstances. If such an oral 
hearing is ordered, the proceeding shall be conducted in accordance 
with those rules of subpart B of this part as the Judge deems 
appropriate.


Sec.  134.1010  Standard of review and burden of proof.

    The protested concern has the burden of proving its eligibility, by 
a preponderance of the evidence.


Sec.  134.1011  Weight of evidence.

    The Judge will give greater weight to specific, signed, factual 
evidence than to general, unsupported allegations or opinions. In the 
case of refusal or failure to furnish requested information within a 
required time period, the Judge may assume that disclosure would be 
contrary to the interests of the party failing to make disclosure.


Sec.  134.1012  The record.

    Where relevant, the provisions of Sec.  134.225 apply. In a protest 
under this subpart, the contents of the record also include the case 
file or solicitation submitted to OHA in accordance with Sec.  
134.1007.


Sec.  134.1013  Request for Reconsideration.

    The decision on a CVE Protest may not be appealed. However:
    (a) The Judge may reconsider a CVE Protest decision. Any party that 
has appeared in the proceeding, or the Secretary of VA or his/her 
designee, may request reconsideration by filing with OHA and serving a 
petition for reconsideration on all the parties to the CVE Protest 
within twenty (20) calendar days after service of the written decision. 
The request for reconsideration must clearly show an error of fact or 
law material to the

[[Page 45217]]

decision. The Judge may also reconsider a decision on his or her own 
initiative.
    (b) If the Judge reverses his or her initial decision on 
reconsideration, the contracting officer must follow Sec.  134.1007(j) 
in applying the new decision's results.
0
5. Add subpart K to read as follows:
Subpart K--Rules of Practice for Appeals of Denials and Cancellations 
of Verification for Inclusion in the U.S. Department of Veterans 
Affairs (VA) Center for Verification and Evaluation (CVE) Database (CVE 
Appeals)
Sec.
134.1101 Scope of rules.
134.1102 Who may file a CVE Appeal?
134.1103 Grounds for filing a CVE Appeal.
134.1104 Commencement of CVE Appeals.
134.1105 The appeal petition.
134.1106 Service and filing requirements.
134.1107 Transmission of the case file.
134.1108 Response to an appeal petition.
134.1109 Discovery and oral hearings.
134.1110 New evidence.
134.1111 Standard of review and burden of proof.
134.1112 The decision.

    Authority: 38 U.S.C. 8127(f)(8)(A).

Subpart K--Rules of Practice for Appeals of Denials and 
Cancellations of Verification for Inclusion in the U.S. Department 
of Veterans Affairs (VA) Center for Verification and Evaluation 
(CVE) Database (CVE Appeals)


Sec.  134.1101  Scope of rules.

    (a) The rules of practice in this subpart K apply to appeals of 
denials and cancellations of verification for inclusion in the U.S. 
Department of Veterans Affairs Center for Verification and Evaluation 
Database (CVE Appeals).
    (b) Except where inconsistent with this subpart, the provisions of 
subparts A and B of this part apply to appeals listed in paragraph (a) 
of this section.
    (c) Appeals relating to determinations made by SBA's Director, 
Office of Government Contracting regarding Service-Disabled Veteran-
Owned Small Business Concern (SDVO SBC) status are governed by subpart 
E of this part.
    (d) Protests of a concern's eligibility for inclusion in the VA's 
CVE database are governed by subpart J of this part.


Sec.  134.1102  Who may file a CVE Appeal?

    A concern that has been denied verification of its CVE status or 
has had its CVE status cancelled may appeal the denial or cancellation 
to OHA.


Sec.  134.1103  Grounds for filing a CVE Appeal.

    Denials and cancellations of verification of CVE status may be 
appealed to OHA, so long as the denial or cancellation is not based on 
the failure to meet any veteran or service-disabled veteran eligibility 
criteria. Such denials and cancellations are final VA decisions and not 
subject to appeal to OHA.


Sec.  134.1104  Commencement of CVE Appeals.

    (a) A concern whose application for CVE verification has been 
denied or whose CVE status has been cancelled must file its appeal 
within 10 business days of receipt of the denial or cancellation.
    (b) The rule for counting days is in Sec.  134.202(d).
    (c) OHA will dismiss an untimely appeal.


Sec.  134.1105  The appeal petition.

    (a) Format. CVE Appeals must be in writing. There is no required 
format for an appeal petition; however, it must include the following:
    (1) A copy of the denial or cancellation and the date the appellant 
received it;
    (2) A statement of why the cancellation or denial is in error;
    (3) Any other pertinent information the Judge should consider; and
    (4) The name, address, telephone number, and email address or 
facsimile number, if available, and signature of the appellant or its 
attorney.
    (b) Service. The appellant must serve copies of the entire appeal 
petition upon the Director, Center for Verification and Evaluation (D/
CVE) and VA Counsel at [email protected].
    (c) Certificate of Service. The appellant must attach to the appeal 
petition a signed certificate of service meeting the requirements of 
Sec.  134.204(d).
    (d) Dismissal. An appeal petition that does not meet all the 
requirements of this section may be dismissed by the Judge at his/her 
own initiative or upon motion of a respondent.


Sec.  134.1106  Service and filing requirements.

    The provisions of Sec.  134.204 apply to the service and filing of 
all pleadings and other submissions permitted under this subpart.


Sec.  134.1107  Transmission of the case file.

    Once a CVE Appeal is filed, the D/CVE must deliver to OHA the 
entire case file relating to the denial or cancellation. The Judge will 
issue a notice and order establishing the timetable for transmitting 
the case file to OHA. The D/CVE must certify and authenticate that the 
case file, to the best of his/her knowledge, is a true and correct copy 
of the case file.


Sec.  134.1108  Response to an appeal petition.

    (a) Who may respond. The D/CVE or his/her designee or counsel for 
VA may respond to the CVE Appeal. The response should present arguments 
to the issues presented on appeal.
    (b) Time limits. The notice and order will inform the parties of 
the filing of the appeal petition, establish the close of record as 15 
days after service of the notice and order, and inform the parties that 
OHA must receive any responses to the appeal petition no later than the 
close of record.
    (c) Service. The respondent must serve its response upon the 
appellant and upon each of the persons identified in the certificate of 
service attached to the appeal petition pursuant to Sec.  134.1105.
    (d) Reply to a response. No reply to a response will be permitted 
unless the Judge directs otherwise.


Sec.  134.1109  Discovery and oral hearings.

    Discovery will not be permitted and oral hearings will not be held.


Sec.  134.1110  New evidence.

    Except for good cause shown, evidence beyond the case file will not 
be admitted.


Sec.  134.1111  Standard of review and burden of proof.

    The standard of review is whether the D/CVE denial or cancellation 
was based on clear error of fact or law. The appellant has the burden 
of proof, by a preponderance of the evidence.


Sec.  134.1112  The decision.

    (a) Timing. The Judge shall decide a CVE Appeal, insofar as 
practicable, within 60 calendar days after close of the record.
    (b) Contents. Following closure of the record, the Judge will issue 
a decision containing findings of fact and conclusions of law, reasons 
for such findings and conclusions, and any relief ordered.
    (c) Basis for decision. Decisions under this part will be based 
primarily on the evidence in the CVE case file, arguments made on 
appeal, and any response(s) thereto. However, the Judge, in his/her 
sole discretion, may consider issues beyond those raised in the 
pleadings and the denial or cancellation letter.
    (d) Finality. The decision is the final agency decision and becomes 
effective upon issuance. Where OHA dismisses an appeal of a D/CVE 
denial or cancellation, the D/CVE determination remains in effect.
    (e) Service. OHA will serve a copy of all written decisions on each 
party, or, if represented by counsel, on its counsel.

[[Page 45218]]

    (f) Effect. If the Judge grants the appeal and finds the appellant 
eligible for inclusion in the CVE database, the D/CVE must immediately 
reinstate or include the appellant, as the case may be, in the CVE 
database.
    (g) Reconsideration. A decision of the Judge may be reconsidered. 
Any party that has appeared in the proceeding, or the Secretary of VA 
or his or her designee, may request reconsideration by filing with OHA 
and serving a petition for reconsideration on all parties to the CVE 
Appeal within twenty (20) calendar 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.

Linda E. McMahon,
Administrator.
[FR Doc. 2017-20384 Filed 9-27-17; 8:45 am]
BILLING CODE 8025-01-P