[Federal Register Volume 83, Number 62 (Friday, March 30, 2018)]
[Rules and Regulations]
[Pages 13626-13632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06034]



[[Page 13626]]

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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: Final rule.

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SUMMARY: The U.S. Small Business Administration (SBA) is amending 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 are 
issued in accordance with sections 1832 and 1833 of the National 
Defense Authorization Act for Fiscal Year 2017 (NDAA 2017).

DATES: This rule is effective on October 1, 2018.

FOR FURTHER INFORMATION CONTACT: Kenneth M. Hyde, Administrative Judge, 
(202) 401-8200.

SUPPLEMENTARY INFORMATION: Sections 1832 and 1833 of the National 
Defense Authorization Act for Fiscal Year 2017, Public Law 114-328, 130 
Stat. 2000 (Dec. 23, 2016) authorize the SBA's OHA to determine 
protests and appeals related to inclusion in the CVE database. In order 
to implement these sections, this rule amends OHA's jurisdiction in 
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, this rule 
creates a new subpart J in 13 CFR part 134 to set detailed rules of 
practice for protests of eligibility for inclusion in the VA CVE 
database, and a new subpart K to set detailed rules of practice for 
appeals of denials and cancellations of verification for inclusion in 
the VA CVE database.
    On September 28, 2017, SBA published in the Federal Register (82 FR 
45212) a proposed rule to implement sections 1832 and 1833 of the NDAA 
2017 and to amend OHA's jurisdiction and procedures in order to 
accommodate protests of eligibility for inclusion in the CVE database 
and appeals of denials and cancellations of inclusion in the CVE 
database. The proposed rule allowed for a comment period ending on 
October 30, 2017. During the comment period, SBA received thirteen 
comments.

Summary of Comments and SBA's Response

A. Subparts A and B

    SBA proposed amending Sec.  134.102, which defines OHA's 
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. SBA also proposed adding new paragraphs (8) and (9) to 
Sec.  134.201(b) to identify the location of the regulations concerning 
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, SBA also proposed to redesignate 
existing Sec.  134.201(b)(8) as Sec.  134.201(b)(10). There were no 
comments on these specific revisions, and SBA is adopting them exactly 
as proposed.
    SBA received four comments that were generally supportive of 
transferring the protests and appeals at issue from VA to OHA for 
adjudication. In addition, four other comments described the 
commenters' views and experiences with existing processes. SBA is 
unable to respond to these comments as they did not address the 
proposed regulations at issue here.

B. Subpart J

    SBA proposed to add a new subpart J, consisting of Sec. Sec.  
134.1001 through 134.1013, to establish the rules of practice before 
OHA for protests of eligibility for inclusion in the CVE database (CVE 
Protests). The new rules of practice for CVE Protests mirror SBA's 
existing rules for protests of service-disabled veteran-owned small 
businesses, found in 13 CFR part 125, subpart D.
    SBA received no comments regarding the proposed new Sec. Sec.  
134.1001 (Scope of rules), 134.1002 (Who may file a CVE Protest?), 
134.1004 (Commencement of CVE Protests), 134.1005 (Contents of the CVE 
Protest), 134.1006 (Service and filing requirements), 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), 
and 134.1013 (Request for reconsideration). Except for Sec.  134.1001, 
which SBA is amending to delete a duplicative sentence, SBA is adopting 
these provisions exactly as proposed. As discussed below, SBA received 
comments on proposed Sec. Sec.  134.1003 and 134.1007.
    The penultimate sentence in proposed Sec.  134.1001(c) stated that 
``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.'' This sentence is duplicative with 
language in Sec.  134.1001(d), so SBA is amending Sec.  134.1001(c) to 
remove the sentence. No other changes were made to Sec.  134.1001.
    Proposed Sec.  134.1003 outlined the grounds for filing a CVE 
Protest. Proposed paragraph (c) required the Judge to determine a 
protested concern's eligibility for inclusion in the CVE database as of 
the date the protest was filed. SBA received one comment on paragraph 
(c). The commenter states that proposed Sec.  134.1003(c) is 
inconsistent with VA Acquisition Regulation (VAAR) clause 852.219-
10(b), VA Notice of Total Service-Disabled Veteran-Owned Small Business 
Set-Aside, which indicates that offers received that are not from 
service-disabled veteran-owned small businesses will not be considered 
and that award must be made to a service-disabled veteran-owned small 
business. The commenter adds that this clause has been interpreted by 
CVE to mean that eligibility is determined both at the time a bid or 
initial proposal containing price has been submitted, and at time of 
award. In addition, the commenter observes that 13 CFR 125.18(a) 
requires service-disabled veteran-owned small business concerns to 
self-certify their status at time of initial offer, including price, 
and also that similar language is found at Federal Acquisition 
Regulation 19.1403(b). The commenter further maintains that a concern's 
status may change between the date of proposal submission and the date 
of award. The commenter urges SBA to revise proposed Sec.  134.1003(c) 
so that eligibility is determined as of the date the initial proposal 
with pricing, or bid, was submitted.
    In response, SBA agrees with the commenter that, if the CVE Protest 
pertains to a procurement, SBA should examine eligibility at two 
separate points: (1) As of the date the concern submits its bid or 
initial offer, which includes price; and (2) as of the date the CVE 
Protest was filed. Such an approach would restrict concerns that became 
ineligible after their initial bid or proposal from being awarded 
contracts. However, SBA notes that, under 38 U.S.C. 8127(f)(8)(B), the 
Secretary of the VA or his/her designee may initiate a CVE Protest that 
does not involve a procurement. In this situation,

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there would be no bid or proposal, so eligibility can be assessed only 
as of the date of the CVE Protest. Accordingly, the commenter's 
recommendation is accepted in part, and SBA is revising the language of 
Sec.  134.1003(c).
    Section 134.1007 proposed to establish the process for CVE Protests 
as follows: Paragraph (a) required OHA to issue a notice and order if 
the protest is found to be timely, specific, and based on protestable 
allegations; paragraph (b) required dismissal of a protest if the Judge 
determines the protest to be premature, untimely, nonspecific, or based 
on non-protestable allegations; paragraph (c) required 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) described the process for 
requesting a protective order; paragraph (e) allowed for supplemental 
arguments after a protester reviews the CVE case file; paragraph (f) 
allowed for a response to a protest within 15 days of the date the 
protest was filed; and paragraph (g) required the Judge to base the 
decision on the case file and information provided by the parties or 
information requested by the Judge. The proposed rule also authorized 
the Judge to investigate issues beyond those raised by the parties. 
Paragraph (h) proposed to allow a contracting officer to award the 
contract after a protest is filed but before a decision is reached if 
the contracting officer determines the public interest will be 
protected and notifies the Judge of his/her decision; paragraph (i) 
required OHA to serve all parties with the decision, which would be a 
final agency decision; paragraph (j) set out the effects of the 
decision upon the protested concern and the contract at issue.
    SBA received no public comments on Sec.  134.1007. However, VA 
recommended that Sec.  134.1007(j)(2) be amended to be consistent with 
VA's existing regulation in VAAR 819.307(h). Specifically, the proposed 
Sec.  134.1007(j)(2) stated that ``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), the contracting 
officer shall either terminate the contract or not exercise the next 
option.'' VA recommended that the provision instead read: ``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 contract has already been awarded, then the awarded 
contract shall be deemed void ab initio and the contracting officer 
shall rescind the contract and award the contract to the next [eligible 
concern] in line for the award.'' SBA believes this change is minor 
because, under the proposed Sec.  134.1007(h), a contracting officer 
normally would not have made an award by the time a CVE Protest is 
decided. Furthermore, VA's suggestion removes a potential inconsistency 
between the two agencies' regulations. Therefore, SBA is adopting the 
comment and revising Sec.  134.1007(j)(2) to mirror VA's existing 
regulation at VAAR 819.307(h).

C. Subpart K

    SBA proposed to add a new subpart K, consisting of Sec. Sec.  
134.1101 through 134.1112, promulgating the rules of practice before 
OHA for appeals of denials and cancellations of verification for 
inclusion in the VA CVE database (CVE Appeals). SBA received no 
comments regarding the proposed Sec. Sec.  134.1101 (Scope of rules), 
134.1102 (Who may file a CVE Appeal?), 134.1103 (Grounds for filing a 
CVE Appeal), 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), and 134.1111 (Standard of review and burden of proof). 
Therefore, SBA is adopting these provisions exactly as proposed. SBA, 
however, received comments on proposed Sec.  134.1104 (Commencement of 
CVE Appeals), Sec.  134.1110 (New evidence), and Sec.  134.1112 (The 
decision).
    Proposed Sec.  134.1104 required CVE Appeals to be filed within 10 
business days of being notified that the CVE status has been denied or 
cancelled. Paragraph (b) proposed to adopt the rules for counting days 
found at Sec.  134.202(d). Paragraph (c) proposed to require OHA to 
dismiss any untimely appeal.
    SBA received three comments on Sec.  134.1104. All three commenters 
stated that 10 business days to file a CVE Appeal is too short a 
timeframe. The commenters contend that preparing the appeals requires 
gathering a significant amount of documents and developing responses to 
legal issues. The three commenters recommend a 30 calendar day time 
period for filing a CVE Appeal.
    In response, SBA notes that CVE Appeals will be based on the 
documentation provided to the VA by the business concern. In turn, VA 
will be responsible for producing this record to OHA. The commenters' 
concern that a 10 business day timeline is too short because documents 
will need to be provided on appeal is thus unwarranted. On appeal, a 
business concern will not be required to compile the record or produce 
new documents. SBA is thus adopting Sec.  134.1104 exactly as proposed.
    Proposed Sec.  134.1110 prohibited the introduction of new evidence 
in CVE Appeals, unless good cause is shown. SBA received one comment on 
this section. The commenter stated that the section should be revised 
to allow a denied concern to resubmit its application, thus restarting 
the verification process, if new evidence is available.
    SBA responds that under proposed Sec.  134.1112(c), ``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.'' Thus, 
SBA does not anticipate that new evidence will typically be necessary 
to decide a CVE Appeal. Nevertheless, a party that can establish good 
cause for the introduction of new evidence may do so under proposed 
Sec.  134.1110. SBA believes that allowing new evidence to be 
introduced and allowing the Judge to consider the evidence will negate 
the necessity of restarting the verification process. The limitations 
on the introduction of new evidence in proposed Sec.  134.1110 are 
consistent with OHA's restrictions on the use of new evidence in other 
types of proceedings. See 13 CFR 134.308 (limitations on the use of new 
evidence in size appeals). Therefore, SBA will not alter Sec.  134.1110 
and is adopting it exactly as proposed.
    Under proposed Sec.  134.1112(a) the Judge would decide a CVE 
Appeal, if practicable, within 60 calendar days after the close of 
record. SBA received one comment on this section. The commenter argues 
the decisions should be rendered within 30 calendar days, because 60 
days is too long to wait for a decision. The commenter further argues 
the appeal should be automatically granted if OHA does not issue the 
decision by the deadline.
    In response, SBA notes that CVE Appeals under subpart K are not 
tied to a particular procurement. These appeals are of denials and 
cancellations of verification for inclusion in the VA CVE database, so 
there is no pending procurement at stake. Further, the 60 day timeframe 
is similar to that used by OHA in deciding 8(a) eligibility cases (13 
CFR 134.409). As a result, SBA does not agree that a more expedited 
timeframe is warranted. In addition, SBA does not agree that it would 
be appropriate to automatically reinstate a concern in the CVE database 
due to a delay in issuing a decision, because such an approach might 
enable

[[Page 13628]]

ineligible concerns to bid on VA contracts. SBA will not alter Sec.  
134.1112(a) and is adopting it exactly as proposed.
    Proposed Sec.  134.1112(g) allowed any party that has appeared in 
the proceeding, or the Secretary of VA or his or her designee, to file 
a petition for reconsideration. As proposed, 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.
    SBA received one comment on this paragraph. The commenter states 
that 20 calendar days allowed for filing a petition for reconsideration 
is too long, and suggests changing it to 10 calendar days.
    SBA responds that 20 calendar days is the standard for other OHA 
proceedings, as set forth under OHA's rules in 13 CFR 134.227(c). Thus, 
SBA will not alter its timelines and adopts Sec.  134.1112(g) exactly 
as proposed. There were no comments on the remaining paragraphs of 
Sec.  134.1112 and SBA is adopting them exactly as proposed.

Compliance With Executive Orders 12866, 12988, 13132, 13771, 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 final rule does not constitute a 
``significant regulatory action'' under Executive Order 12866. This 
final rule is also not a major rule under the Congressional Review Act, 
5 U.S.C. 800. This final rule amends 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 final 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 final rule is not an Executive Order 13771 regulatory action 
because this final rule is not significant under Executive Order 12866.

Paperwork Reduction Act

    The SBA has determined that this final 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 consider the effect of their 
actions on small entities, small non-profit businesses, and small local 
governments. Pursuant to the RFA, when an agency issues a final rule, 
the agency must prepare a final regulatory flexibility analysis (FRFA). 
The FRFA describes whether the impact of the rule will have a 
significant economic impact on a substantial number of small entities, 
which includes small businesses, small not-for-profit organizations, 
and small governmental jurisdictions. However, Section 605 of the RFA 
allows an agency to certify a rule, in lieu of preparing an FRFA, if 
the rulemaking is not expected to have a significant economic impact on 
a substantial number of small entities.
    This final rule revises the regulations governing cases before 
SBA's Office of Hearings and Appeals, SBA's administrative tribunal. 
These regulations are procedural by nature. Specifically, this final 
rule establishes 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 final rule merely 
provides the rules of practice at OHA for the orderly hearing and 
disposition of protests of CVE database inclusion and appeals of 
denials and cancellations of CVE database inclusion. At the proposed 
stage, SBA did not anticipate that this final rule would have a 
significant economic impact on any small businesses (the only small 
entities that would be affected by this rule); we did request comments 
from any small business on how and to what degree this final rule would 
affect it economically. No comments were received regarding RFA issues. 
Therefore, the Administrator of SBA certifies under 5 U.S.C. 605(b) 
that this final rule will 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 amends 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.
    Subpart J issued under 38 U.S.C. 8127(f)(8)(B).
    Subpart K issued under 38 U.S.C. 8127(f)(8)(A).


0
2. Amend Sec.  134.102 by removing the period at the end of paragraph 
(t) and adding a semicolon in its place and 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; 
and

[[Page 13629]]

    (v) Appeals of denials and cancellations of inclusion in the CVE 
database.

0
3. Amend Sec.  134.201 by:
0
a. Revising the section heading;
0
b. Removing the word ``and'' in paragraph (b)(7);
0
c. Redesignating paragraph (b)(8) as paragraph (b)(10); and
0
d. Adding new paragraphs (b)(8) and (9).
    The revision and additions read as follows:


Sec.  134.201  Scope of the rules in this subpart.

* * * * *
    (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
* * * * *

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.

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 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. 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. (1) If the CVE Protest 
pertains to a procurement, the Judge will determine a protested 
concern's eligibility for inclusion in the CVE database as of the date 
of bid or initial offer, including price, and as of the date the CVE 
Protest was filed.
    (2) If the CVE Protest does not pertain to a procurement, the Judge 
will determine a protested concern's eligibility for inclusion in the 
CVE database as of the date the CVE 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) 205-7059, 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;

[[Page 13630]]

    (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 in the 
referral letter the information set forth in paragraph (b)(2) of this 
section.


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 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 order 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 shown, 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) Timing. 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 contract has already been awarded, then the 
awarded contract shall be deemed void ab initio (invalid from the 
outset), and the contracting officer shall rescind the contract and 
award the contract to the next eligible concern in line for the award.
    (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

[[Page 13631]]

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 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.

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 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 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.

[[Page 13632]]

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 subpart 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.
    (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.

    Dated: March 14, 2018.
Linda E. McMahon,
Administrator.
[FR Doc. 2018-06034 Filed 3-29-18; 8:45 am]
 BILLING CODE 8025-01-P