Rules of Procedure Governing Cases Before the Office of Hearings and Appeals, 25503-25509 [2017-10471]

Agencies

• SMALL BUSINESS ADMINISTRATION

[Federal Register Volume 82, Number 105 (Friday, June 2, 2017)]
[Rules and Regulations]
[Pages 25503-25509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10471]



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Rules and Regulations
                                                Federal Register
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under 50 titles pursuant to 44 U.S.C. 1510.

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Federal Register / Vol. 82, No. 105 / Friday, June 2, 2017 / Rules 
and Regulations

[[Page 25503]]



SMALL BUSINESS ADMINISTRATION

13 CFR Parts 121 and 134

RIN 3245-AG82


Rules of Procedure Governing Cases Before the Office of Hearings 
and Appeals

AGENCY: U.S. Small Business Administration.

ACTION: Final rule.

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

SUMMARY: The U.S. Small Business Administration (SBA) is amending the 
rules of practice of its Office of Hearings and Appeals (OHA) to 
implement section 869 of the National Defense Authorization Act for 
Fiscal Year 2016 and section 1833 of the National Defense Authorization 
Act for Fiscal Year 2017. This legislation authorizes OHA to decide 
Petitions for Reconsideration of Size Standards (Size Standard 
Petitions or Petitions). This rule also revises the rules of practice 
for OHA appeals of agency employee disputes.

DATES: 
    Effective Date: This rule is effective on July 3, 2017.
    Applicability Date: Size Standard Petitions pertaining to size 
standards revised, modified, or established in a final rule published 
during the interval between November 25, 2015, and July 3, 2017 shall 
be considered timely if filed within 30 calendar days of the latter 
date.

FOR FURTHER INFORMATION CONTACT: Linda (Lin) DiGiandomenico, Attorney 
Advisor, at (202) 401-8206 or OHA@sba.gov.

SUPPLEMENTARY INFORMATION: This rule amends the rules of practice for 
the SBA's Office of Hearings and Appeals (OHA) in order to implement 
section 869(b) of the National Defense Authorization Act for Fiscal 
Year 2016, Public Law 114-92, 129 Stat. 726, November 25, 2015 (NDAA 
2016). This legislation added new paragraph 3(a)(9) to the Small 
Business Act, 15 U.S.C. 632(a)(9), to authorize OHA to hear and decide 
Petitions for Reconsideration of Size Standards (Size Standard 
Petitions or Petitions). A Size Standard Petition may be filed at OHA 
after SBA publishes a final rule in the Federal Register to revise, 
modify, or establish a size standard. This rule creates a new subpart I 
in OHA's regulations (13 CFR part 134) to set out detailed rules of 
practice for Size Standard Petitions, revises OHA's general rules of 
practice in subparts A and B of part 134 as required by the new 
legislation, and amends SBA's small business size regulations (13 CFR 
part 121) to include Size Standard Petitions as part of SBA's process 
for establishing size standards.
    This rule also revises the rules of practice for OHA appeals of 
agency employee disputes in subpart H of part 134, to comport with 
SBA's revisions of its Standard Operating Procedure (SOP) 37 71, The 
Employee Dispute Resolution Process.
    On October 7, 2016, SBA published in the Federal Register (81 FR 
69723), a proposed rule to implement section 869(b) of NDAA 2016 and to 
revise procedures for OHA appeals of agency employee disputes. The 
proposed rule provided a 60-day comment period, with comments due on 
December 6, 2016. During the comment period SBA received three 
comments, each of which concerned the implementation of section 869(b). 
No comments were received concerning employee disputes.
    On December 23, 2016, President Obama signed into law the National 
Defense Authorization Act for Fiscal Year 2017, Public Law 114-328 
(NDAA 2017). Section 1833(b) of NDAA 2017 added new subparagraph 
3(a)(9)(E) to the Small Business Act, 15 U.S.C. 632(a)(9)(E). This 
provision authorizes OHA to accept Size Standard Petitions after SBA 
issues rules or guidance for processing these cases; SBA is issuing 
those procedural rules today, in this final rule. Until this final 
rule, SBA had no specific rules or guidance for processing Size 
Standard Petitions, and thus OHA dismissed without prejudice the Size 
Standard Petitions that were filed. This new statutory provision also 
provides that Size Standard Petitions pertaining to size standards 
revised, modified, or established in a final rule published during the 
interval between November 25, 2015, and the effective date of this 
final rule will be considered timely if filed within 30 calendar days 
of that effective date.

Summary of Comments and SBA's Response

A. Part 121

    SBA proposed adding new paragraphs (e), (f), and (g) to Sec.  
121.102 to include Size Standard Petitions as part of SBA's process for 
establishing size standards. New paragraph (e) requires SBA to include 
instructions for filing a Size Standard Petition in any final rule 
revising, modifying, or establishing a size standard. There were no 
comments on it and SBA is adopting it exactly as proposed.
    New paragraph (f) requires SBA to publish a notice in the Federal 
Register within 14 calendar days after a Size Standard Petition is 
filed. SBA received one comment on proposed new Sec.  121.102(f). The 
commenter requested that SBA also have an online tracking system, 
preferably on the Web site regulations.gov, for Size Standard Petitions 
filed at OHA. The same commenter also suggested that SBA include 
information on Size Standard Petitions in the record for the applicable 
revised, modified, or newly established size standard.
    In response, SBA notes that OHA has no online tracking system as 
yet; however, systems already in place will enable the public to track 
Size Standard Petition cases. First, notices for Federal Register 
publication appear automatically on federalregister.gov, and the public 
may use that site's advanced search feature to locate them. Second, 
once issued, OHA's decisions are public and available at sba.gov/oha/decisions. Regarding the inclusion of information on Size Standard 
Petitions in the record for size standards rulemakings, SBA declines to 
add this requirement, leaving it up to SBA's Office of Size Standards 
to determine what to include in the rulemaking record for a particular 
rule. Thus, SBA is adopting the proposed Sec.  121.102(f) as proposed, 
with one editorial change to the first sentence, where ``announcing a 
size standard'' is replaced with ``announcing the size standard''.
    Proposed new paragraph (g) would require SBA to publish a document 
in the Federal Register where SBA grants a Petition for Reconsideration 
of a Size Standard that had been revised or

[[Page 25504]]

modified. There were no public comments on this provision. SBA is 
changing this provision to clarify that OHA will remand the case to 
SBA's Office of Size Standards for further action.

B. Part 134, Subparts A and B

    SBA proposed to revise four sections contained in subparts A and B 
of part 134. These are Sec. Sec.  134.101 (Definitions) and 134.102 
(Jurisdiction of OHA) in subpart A; and Sec. Sec.  134.201 (Scope of 
the rules in this subpart B) and 134.227 (Finality of decisions) in 
subpart B. SBA received no comments on any of these sections. SBA added 
a definition to clarify that Step One and Step Two refer to the 
Employee Dispute Resolution Process described in SBA Standard Operating 
Procedure, 37 71, as denoted in Sec.  134.801(a). All other revisions 
are exactly as proposed.

C. Part 134, Subpart H

    SBA proposed to revise Sec. Sec.  134.801, 134.803, 134.804, 
134.805, 134.807, 134.808, and 134.809 of subpart H. All of these 
sections concern OHA appeals of SBA employee disputes. SBA received no 
comments regarding the proposed revision of any of these sections, and 
is adopting these revisions exactly as proposed, with three minor 
changes. In Sec.  134.805(d), the words ``at his or her home address'' 
are being removed as unnecessary since service is by email. In Sec.  
134.807(a), the words ``it wishes'' are being replaced with ``SBA 
wishes'' for clarity. In Sec.  134.809(a), an official's title is being 
corrected.

D. Part 134, Subpart I

    SBA proposed to add subpart I setting forth the rules of practice 
before OHA for Petitions for Reconsideration of Size Standards. SBA 
received no comments regarding the proposed new Sec. Sec.  134.901 
(Scope of the rules in this subpart I), 134.905 (Notice and order), 
134.907 (Filing and service), 134.908 (The administrative record), 
134.909 (Standard of review), 134.911 (Response to the Size Standard 
Petition), 134.912 (Discovery and oral hearings), 134.913 (New 
evidence), 134.914 (The decision), 134.915 (Remand), 134.917 (Equal 
Access to Justice Act), and 134.918 (Judicial review). SBA is adopting 
these new sections as proposed, with one minor change to the first 
sentence in Sec.  134.914, where the second ``the'' is being deleted.
    Proposed Sec.  134.902 provides that any person ``adversely 
affected'' by a new, revised, or modified size standard has standing to 
file a Petition within 30 days from the date of publication of the 
final rule promulgating that size standard. Paragraph (b) provides that 
a business entity is not ``adversely affected'' unless it conducts 
business in the industry associated with the size standard being 
challenged, and it either qualified as a small business concern before 
the size standard was revised or modified, or it would qualify as a 
small business concern under the size standard as revised or modified.
    SBA received two comments. One comment supported the proposed rule 
because it precludes businesses that are large under both the existing 
and the modified or revised size standard from filing Size Standard 
Petitions. The second comment opposed the proposed rule for that same 
reason, asserting that the statute does not limit the availability of 
an OHA review only to small or would-be small businesses, but was meant 
to include all adversely-affected businesses, including large 
businesses. The second commenter believes that it is adversely affected 
by a change in a size standard that favors its competitors, and asserts 
that concerns also should be able to request review on SBA's decision 
in a rulemaking not to modify or revise a size standard, but to keep it 
the same.
    SBA disagrees with the second comment. The statute provides that 
SBA's OHA, in deciding Size Standard Petitions, ``shall use the same 
process it uses to decide challenges to the size of a small business 
concern.'' Small Business Act section 3(a)(9)(C), 15 U.S.C. 
632(a)(9)(C). A challenge to a concern's small business size status, 
also called a size protest, occurs when a competitive procurement or 
order has been restricted to or reserved for small businesses or a 
particular group of small businesses. The size protest, filed by either 
a disappointed offeror or the Government, is initially decided by an 
SBA Area Office in a size determination which may be appealed to OHA. 
At both the protest (Area Office) and the appeal (OHA) stages, the 
process of deciding challenges to a concern's small business size 
status requires a non-Government person bringing the challenge to have 
standing as a small business offeror remaining in the competition and 
still eligible for award. See 13 CFR 121.1001(a)(1) (``Any offeror whom 
the contracting officer has not eliminated for reasons unrelated to 
size''), 13 CFR 134.302(a) (``Appeals from size determinations . . . 
may be filed with OHA by the following, as applicable: Any person 
adversely affected by a size determination . . . .''); Size Appeal of 
Straughan Environmental, Inc., SBA No. SIZ-5767, at 3 (2016), available 
at www.sba.gov/oha. Because the statute requires OHA to follow the 
process used in size challenges, and under the process used in size 
challenges only a small business has standing to file either a size 
protest or a size appeal, SBA believes it was the intent of Congress to 
allow only a small business to file a Size Standard Petition. 
Therefore, SBA is adopting new Sec.  134.902 exactly as proposed.
    Section 134.903(a) reiterates the statutory 30-day deadline for 
filing a Petition, requires dismissal of an untimely Petition, and 
clarifies that the days counted are calendar days. Section 134.903(b) 
requires dismissal as premature a Petition filed in response to a 
proposed rule. The retention of an existing size standard is not 
considered to be the revision, modification, or establishment of a size 
standard and is not subject to these procedures, and so Sec.  
134.903(c) requires OHA to dismiss a petition challenging the retention 
of an existing size standard.
    There were two comments. One comment expressed support for the 30-
day deadline and summary dismissal provisions. The second comment 
requested a process whereby one may comment on and request a review of 
a size standard change at any time, not just within 30 days of the 
change, so long as the change has produced a negative financial impact 
on businesses. SBA notes, with respect to the second comment, that the 
30-day deadline for filing a Petition is statutory and thus SBA may not 
change it. As for opportunities to comment on size standards, there is 
a public comment period each time SBA publishes a proposed rule, and 
during this public comment period any person may submit a comment for 
SBA to consider and address in formulating the final rule. During the 
public comment period, commenters need not demonstrate standing, and 
may comment on any size standard being proposed, regardless of whether 
the proposed rule would modify or revise that size standard. Outside of 
public comment periods, persons may address their concerns about any 
size standard at any time to SBA's Size Standards Office pursuant to 
Sec.  121.102(d). SBA is adopting new Sec.  134.903 exactly as 
proposed.
    Section 134.904 sets out the requirements for a Size Standard 
Petition. Among these, the Petition must include any public comments 
the Petitioner had submitted during the rulemaking on the challenged 
size standard, and the Petitioner also must demonstrate standing for 
each challenged size standard. One commenter suggested an additional 
requirement, that the Petitioner must actually have submitted a public

[[Page 25505]]

comment during the rulemaking. The same commenter also noted its 
support for the requirement to demonstrate standing for each challenged 
size standard. SBA disagrees with the suggestion to require the 
Petitioner to have submitted a public comment during the rulemaking, 
because this additional requirement would be overly restrictive. Thus, 
SBA is adopting new Sec.  134.904 as proposed, with the deletion of the 
unnecessary mail code in Sec.  134.904(d)(1).
    Section 134.906 permits interested persons with a direct stake in 
the outcome of the case to intervene and obtain a copy of the Petition, 
under a protective order if necessary. One commenter requested SBA to 
change this provision to require potential intervenors to meet the same 
standing requirement as petitioners, in order to prevent large 
businesses from having a ``back door'' into the size standard review 
process. SBA disagrees with this comment. The proposed rule requires 
only ``a direct stake in the outcome'' and the OHA Judge will make that 
determination on a case-by-case basis. SBA is adopting new Sec.  
134.906 exactly as proposed.
    Section 134.910 requires OHA to dismiss a Petition under four 
scenarios. One commenter stated support for dismissal under those 
scenarios. SBA is adopting new Sec.  134.910 exactly as proposed.
    Section 134.916 sets out the effects of OHA's decision in a Size 
Standard Petition case. Paragraph (a) provides that if the challenged 
size standard is a modified or revised size standard, and OHA grants 
the Size Standard Petition, SBA will rescind the challenged size 
standard and restore the prior size standard, which will remain in 
effect until SBA issues a new size standard. If the challenged size 
standard is newly established, and OHA grants the Size Standard 
Petition, the challenged size standard remains in effect. Paragraph (b) 
provides that if OHA denies a Size Standard Petition, the challenged 
size standard remains in effect.
    One commenter requested clarification of the effect that OHA's 
grant of a Size Standard Petition would have on procurement actions. 
The commenter posed the hypothetical of a concern that is a small 
business under the revised size standard but is not a small business 
under the prior size standard. The concern self-certifies as small 
under the revised size standard with its initial offer including price. 
Later, OHA grants a Size Standard Petition and SBA rescinds the revised 
size standard, restoring the prior size standard, under which that 
concern is not a small business. Would contract award to that concern 
as a small business be valid even though the prior size standard has 
been restored?
    SBA responds to this comment by stating that the contract award to 
that concern as a small business is valid despite SBA's rescission of 
the revised, higher size standard. This result is consistent with the 
general rule, stated in Sec.  121.404(a), that a concern's small 
business eligibility is determined on the self-certification date and 
is based on the size standard in effect at that time. Thus, the 
procuring agency may count the award toward its small business goals. 
On the other hand, if the procuring agency amends the solicitation and 
requires new self-certifications, those self-certifications will be 
based on the size standard in effect on the day they are made. SBA is 
revising the text of Sec.  134.916(a) to clarify the intended effect of 
an OHA decision granting a Size Standard Petition in light of this 
public comment, and also to provide that, on remand, SBA may take any 
appropriate action to rescind the challenged revised or modified size 
standard.

Compliance With Executive Orders 12866, 12988, 13175 and 13132, the 
Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory 
Flexibility Act (5 U.S.C. 601-612)

Executive Order 12866

    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 rule establishes the procedures for Petitions for 
Reconsideration of Size Standards at SBA's Office of Hearings and 
Appeals (OHA) and revises procedural rules at OHA for agency employee 
disputes. 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. 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 13175

    For the purposes of Executive Order 13175, Consultation and 
Coordination with Indian Tribal Governments, SBA has determined that 
this final rule will not have substantial direct effects on one or more 
Indian Tribes, on the relationship between the Federal Government and 
Indian Tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian Tribes. Therefore, SBA 
determines that this final rule does not require consultations with 
tribal officials or warrant the publication of a Tribal Summary Impact 
Statement.

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.

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 (RFA), 5 U.S.C. 601-612, as 
amended, requires Federal agencies to consider the potential impact of 
regulations on small entities during rulemaking. 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 analysis, 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 (OHA), SBA's administrative 
tribunal. These

[[Page 25506]]

regulations are procedural by nature. Specifically, the final rule 
establishes rules of practice for Petitions for Reconsideration of Size 
Standards (Size Standard Petitions), a new type of administrative 
litigation mandated by 869(b) of the National Defense Authorization Act 
for Fiscal Year 2016. This legislation provides a new statutory right 
to challenge a size standard revised, modified, or established by the 
SBA through a final rule. Further, this legislation requires OHA to 
hear any Size Standard Petitions that are filed. This final rule merely 
provides the rules of practice for the orderly hearing and disposition 
of Size Standard Petitions at OHA. While SBA did not anticipate that 
this final rule would have a significant economic impact on any small 
business, we did request comments from any small business setting out 
how and to what degree this final rule would affect it economically. No 
comments were received regarding RFA issues.
    The Small Business Size Regulations provide that persons requesting 
to change existing size standards or to establish new size standards 
may address these requests to SBA's Office of Size Standards. 13 CFR 
121.102(d). Over the past five years, fewer than ten letters concerning 
size standards have been submitted per year, supporting SBA's belief 
that this final rule will not affect a substantial number of small 
entities. Further, a business adversely affected by a final rule 
revising a size standard has always had (and would continue to have) 
the option of judicial review in Federal court, yet the SBA knows of no 
such lawsuit ever having been filed.
    In addition to establishing rules of practice for Size Standard 
Petitions, this rule revises OHA's rules of practice for SBA Employee 
Disputes. This rulemaking is procedural, would impose no significant 
additional requirements on small entities, and would have minimal, if 
any, effect on small entities.
    Therefore, the Administrator of SBA certifies under 5 U.S.C. 605(b) 
that this final rule does not have a significant economic impact on a 
substantial number of small entities.

List of Subjects

13 CFR Part 121

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

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, the U.S. Small Business 
Administration amends 13 CFR parts 121 and 134 as follows:

PART 121--SMALL BUSINESS SIZE REGULATIONS

0
1. The authority citation for part 121 continues to read as follows:

    Authority: 15 U.S.C. 632, 634(b)(6), 662, and 694a(9).


0
2. Amend Sec.  121.102 by adding paragraphs (e), (f), and (g) to read 
as follows:


Sec.  121.102  How does SBA establish size standards?

* * * * *
    (e) When SBA publishes a final rule in the Federal Register 
revising, modifying, or establishing a size standard, SBA will include 
in the final rule, an instruction that interested persons may file a 
petition for reconsideration of a revised, modified, or established 
size standard at SBA's Office of Hearings and Appeals (OHA) within 30 
calendar days after publication of the final rule in accordance with 15 
U.S.C. 632(a)(9) and part 134, subpart I of this chapter. The 
instruction will provide the mailing address, facsimile number, and 
email address of OHA.
    (f) Within 14 calendar days after a petition for reconsideration of 
a size standard is filed, unless it appears OHA will dismiss the 
petition for reconsideration, SBA will publish a document in the 
Federal Register announcing the size standard or standards that have 
been challenged, the Federal Register citation of the final rule, the 
assigned OHA docket number, and the date of the close of record. The 
document will further state that interested parties may contact OHA to 
intervene in the dispute pursuant to Sec.  134.906 of this chapter.
    (g) Where OHA grants a petition for reconsideration of a size 
standard that had been revised or modified, OHA will remand the case to 
SBA's Office of Size Standards for further action in accordance with 
Sec.  134.916(a) of this chapter.

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

0
3. 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); E.O. 12549, 51 FR 6370, 3 CFR, 
1986 Comp., p. 189.


0
4. Amend Sec.  134.101 by revising the definitions of ``AA/OHA'' and 
``Judge'' and adding definitions for ``Administrative Judge'', 
``Petitioner'', ``Size Standard Petition'', and ``Step One and Step 
Two'' in alphabetical order to read as follows:


Sec.  134.101  Definitions.

* * * * *
    AA/OHA means the Assistant Administrator for OHA, who is also the 
Chief Hearing Officer.
* * * * *
    Administrative Judge means a Hearing Officer, as described at 15 
U.S.C. 634(i), appointed by OHA to adjudicate cases.
* * * * *
    Judge means the Administrative Judge or Administrative Law Judge 
who decides an appeal or petition brought before OHA, or the AA/OHA 
when he or she acts as an Administrative Judge.
* * * * *
    Petitioner means the person who initially files a petition before 
OHA.
* * * * *
    Size Standard Petition means a petition for reconsideration of a 
revised, modified, or established size standard filed with OHA pursuant 
to 15 U.S.C. 632(a)(9) and subpart I of this part.
    Step One and Step Two refer to the steps of the Employee Dispute 
Resolution Process, see Sec.  134.801(a) for more information.

0
5. Amend Sec.  134.102 by revising paragraphs (r) and (t) to read as 
follows:


Sec.  134.102  Jurisdiction of OHA.

* * * * *
    (r) Appeals from SBA Employee Dispute Resolution Process cases 
(Employee Disputes) under Standard Operating Procedure (SOP) 37 71 
(available at https://www.sba.gov/tools/resourcelibrary/sops/ 
or through OHA's Web site https://www.sba.gov/oha) and subpart H of this 
part;
* * * * *
    (t) Petitions for reconsideration of revised, modified, or 
established size standards pursuant to 15 U.S.C. 632(a)(9).

0
6. Amend Sec.  134.201 by:
0
a. Removing the word ``and'' in paragraph (b)(6);
0
b. Redesignating paragraph (b)(7) as paragraph (b)(8); and
0
c. Adding a new paragraph (b)(7).
    The addition reads as follows:

[[Page 25507]]

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

* * * * *
    (b) * * *
    (7) For Size Standard Petitions, in subpart I of this part 
(Sec. Sec.  134.901 through 134.918); and
* * * * *

0
7. Amend Sec.  134.227 by:
0
a. Removing the word ``and'' in paragraph (b)(3);
0
b. Redesignating paragraph (b)(4) as paragraph (b)(5); and
0
c. Adding a new paragraph (b)(4).
    The addition reads as follows:


Sec.  134.227  Finality of decisions.

* * * * *
    (b) * * *
    (4) Size Standard Petitions; and
* * * * *


Sec.  134.801  [Amended]

0
8. Amend Sec.  134.801 by:
0
a. Adding the word ``and'' at the end of paragraph (b)(9);
0
b. Removing ``; and'' at the end of paragraph (b)(10) and adding a 
period in its place; and
0
c. Removing paragraph (b)(11).

0
9. Amend Sec.  134.803 by revising the section heading and paragraphs 
(a) and (b) to read as follows:


Sec.  134.803  Commencement of appeals from SBA Employee Dispute 
Resolution Process cases (Employee Disputes).

    (a) An appeal from a Step Two decision must be commenced by filing 
an appeal petition within 15 calendar days from the date the Employee 
receives the Step Two decision.
    (b) If the Step Two Official does not issue a decision within 15 
calendar days of receiving the SBA Dispute Form from the Employee, the 
Employee must file his/her appeal petition at OHA no later than 15 
calendar days from the date the Step Two decision was due.
* * * * *

0
10. Amend Sec.  134.804 by:
0
a. Revising paragraphs (a)(1), (2), and (3);
0
b. Adding the word ``and'' after the semicolon in paragraph (a)(5);
0
c. Removing paragraph (a)(6);
0
d. Redesignating paragraph (a)(7) as paragraph (a)(6);
0
e. Revising paragraph (b)(1);
0
f. Removing paragraph (c); and
0
g. Redesignating paragraphs (d) and (e) as paragraphs (c) and (d).
    The revisions read as follows:


Sec.  134.804  The appeal petition.

    (a) * * *
    (1) The completed SBA Dispute Form;
    (2) A copy of the Step One and Step Two decisions, if any;
    (3) Statement of why the Step Two decision (or Step One decision, 
if no Step Two decision was received), is alleged to be in error;
* * * * *
    (b) * * *
    (1) The Step Two Official;
* * * * *


Sec.  134.805   [Amended]

0
11. Amend Sec.  134.805 in paragraph (d) by removing the words ``U.S. 
Mail'' and adding in their place the word ``email'' and removing the 
words ``at his or her home address''.


Sec.  134.807  [Amended]

0
12. Amend Sec.  134.807 as follows:
0
a. By removing from paragraph (a), the words ``a copy of the Dispute 
File'' and adding in their place the words ``any documentation, not 
already filed by the Employee, that SBA wishes OHA to consider'';
0
b. By removing from paragraph (b), the words ``15 days'' and ``45 
days'' and adding in both their places the words ``15 calendar days''; 
and
0
c. By removing from paragraph (c), the words ``and the Dispute File are 
normally the last submissions'' and by adding in their place the words 
``is normally the last submission''.


Sec.  134.808  [Amended]

0
13. Amend Sec.  134.808(a) by removing the word ``AMO's'' and adding in 
its place the words ``Step One or Step Two''.

0
14. Revise Sec.  134.809 to read as follows:


Sec.  134.809  Review of initial decision.

    (a) If the Chief Human Capital Officer, General Counsel for SBA, or 
Counsel to the Inspector General (IG) believes OHA's decision is 
contrary to law, rule, regulation, or SBA policy, that official may 
file a Petition for Review (PFR) of the decision with the Deputy 
Administrator (or IG for disputes by OIG employees) for a final SBA 
Decision. Only the Chief Human Capital Officer, General Counsel, or 
Counsel to the IG may file a PFR of an OHA decision; the Employee may 
not.
    (b) To file a PFR, the official must request a complete copy of the 
dispute file from the Assistant Administrator for OHA (AA/OHA) within 
five calendar days of receiving the decision. The AA/OHA will provide a 
copy of the dispute file to the official, the Employee, and the 
Employee's representative within five calendar days of the official's 
request. The official's PFR is due no later than 15 calendar days from 
the date the official receives the dispute file. The PFR must specify 
the objections to OHA's decision.

0
15. Add subpart I to read as follows:
Subpart I--Rules of Practice for Petitions for Reconsideration of Size 
Standards
Sec.
134.901 Scope of the rules in this subpart.
134.902 Standing.
134.903 Commencement of cases.
134.904 Requirements for the Size Standard Petition.
134.905 Notice and order.
134.906 Intervention.
134.907 Filing and service.
134.908 The administrative record.
134.909 Standard of review.
134.910 Dismissal.
134.911 Response to the Size Standard Petition.
134.912 Discovery and oral hearings.
134.913 New evidence.
134.914 The decision.
134.915 Remand.
134.916 Effects of OHA's decision.
134.917 Equal Access to Justice Act.
134.918 Judicial review.

Subpart I--Rules of Practice for Petitions for Reconsideration of 
Size Standards


Sec.  134.901  Scope of the rules in this subpart.

    (a) The rules of practice in this subpart apply to Size Standard 
Petitions.
    (b) Except where inconsistent with this subpart, the provisions of 
subparts A and B of this part apply to Size Standard Petitions listed 
in paragraph (a) of this section.


Sec.  134.902   Standing.

    (a) A Size Standard Petition may be filed with OHA by any person 
that is adversely affected by the Administrator's decision to revise, 
modify, or establish a size standard.
    (b) A business entity is not adversely affected unless it conducts 
business in the industry associated with the size standard that is 
being challenged and:
    (1) The business entity qualified as a small business concern 
before the size standard was revised or modified; or
    (2) The business entity qualifies as a small business under the 
size standard as revised or modified.


Sec.  134.903   Commencement of cases.

    (a) A Size Standard Petition must be filed at OHA not later than 30 
calendar days after the publication in the Federal Register of the 
final rule that revises, modifies, or establishes the challenged size 
standard. An untimely Size Standard Petition will be dismissed.
    (b) A Size Standard Petition filed in response to a notice of 
proposed rulemaking is premature and will be dismissed.

[[Page 25508]]

    (c) A Size Standard Petition challenging a size standard that has 
not been revised, modified, or established through publication in the 
Federal Register will be dismissed.


Sec.  134.904  Requirements for the Size Standard Petition.

    (a) Form. There is no required form for a Size Standard Petition. 
However, it must include the following information:
    (1) A copy of the final rule published in the Federal Register to 
revise, modify, or establish a size standard, or an electronic link to 
the final rule;
    (2) A full and specific statement as to which size standard(s) in 
the final rule the Petitioner is challenging and why the process that 
was used to revise, modify, or establish each challenged size standard 
is alleged to be arbitrary, capricious, an abuse of discretion, or 
otherwise not in accordance with the law, together with argument 
supporting such allegation;
    (3) A copy of any comments the Petitioner submitted in response to 
the proposed notice of rulemaking that pertained to the size 
standard(s) in question, or a statement that no such comments were 
submitted; and
    (4) The name, mailing address, telephone number, facsimile number, 
email address, and signature of the Petitioner or its attorney.
    (b) Multiple size standards. A Petitioner may challenge multiple 
size standards that were revised, modified, or established in the same 
final rule in a single Size Standard Petition, provided that the 
Petitioner demonstrates standing for each of the challenged size 
standards.
    (c) Format. The formatting provisions of Sec.  134.203(d) apply to 
Size Standard Petitions.
    (d) Service. In addition to filing the Size Standard Petition at 
OHA, the Petitioner must serve a copy of the Size Standard Petition 
upon each of the following:
    (1) SBA's Office of Size Standards, U.S. Small Business 
Administration, 409 3rd Street SW., Washington, DC 20416; facsimile 
number (202) 205-6390; or sizestandards@sba.gov; and
    (2) SBA's Office of General Counsel, Associate General Counsel for 
Procurement Law, U.S. Small Business Administration, 409 3rd Street 
SW., Washington, DC 20416; facsimile number (202) 205-6873; or 
OPLService@sba.gov.
    (e) Certificate of service. The Petitioner must attach to the Size 
Standard Petition a signed certificate of service meeting the 
requirements of Sec.  134.204(d).


Sec.  134.905  Notice and order.

    Upon receipt of a Size Standard Petition, OHA will assign the 
matter to a Judge in accordance with Sec.  134.218. Unless it appears 
that the Size Standard Petition will be dismissed under Sec.  134.910, 
the presiding Judge will issue a notice and order initiating the 
publication required by Sec.  121.102(f) of this chapter; specifying a 
date for the Office of Size Standards to transmit to OHA a copy of the 
administrative record supporting the revision, modification, or 
establishment of the challenged size standard(s); and establishing a 
date for the close of record. Typically, the administrative record will 
be due seven calendar days after issuance of the notice and order, and 
the record will close 45 calendar days from the date of OHA's receipt 
of the Size Standard Petition.


Sec.  134.906  Intervention.

    In accordance with Sec.  134.210(b), interested persons with a 
direct stake in the outcome of the case may contact OHA to intervene in 
the proceeding and obtain a copy of the Size Standard Petition. In the 
event that the Size Standard Petition contains confidential information 
and the intervener is not a governmental entity, the Judge may require 
that the intervener's attorney be admitted to a protective order before 
obtaining a complete copy of the Size Standard Petition.


Sec.  134.907  Filing and service.

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


Sec.  134.908  The administrative record.

    The Office of Size Standards will transmit to OHA a copy of the 
documentation and analysis supporting the revision, modification, or 
establishment of the challenged size standard by the date specified in 
the notice and order. The Chief, Office of Size Standards, will certify 
and authenticate that the administrative record, to the best of his or 
her knowledge, is complete and correct. The Petitioner and any 
interveners may, upon request, review the administrative record 
submitted to OHA. The administrative record will include the 
documentation and analysis supporting the revision, modification, or 
establishment of the challenged size standard.


Sec.  134.909  Standard of review.

    The standard of review for deciding a Size Standard Petition is 
whether the process employed by the Administrator to revise, modify, or 
establish the size standard was arbitrary, capricious, an abuse of 
discretion, or otherwise not in accordance with the law. OHA will not 
adjudicate arguments that a different size standard should have been 
selected. The Petitioner bears the burden of proof.


Sec.  134.910  Dismissal.

    The Judge must dismiss the Size Standard Petition if:
    (a) The Size Standard Petition does not, on its face, allege 
specific facts that if proven to be true, warrant remand of the size 
standard;
    (b) The Petitioner is not adversely affected by the final rule 
revising, modifying, or establishing a size standard;
    (c) The Size Standard Petition is untimely or premature pursuant to 
Sec.  134.903 or is not otherwise filed in accordance with the 
requirements in subparts A and B of this part; or
    (d) The matter has been decided or is the subject of adjudication 
before a court of competent jurisdiction over such matters.


Sec.  134.911  Response to the Size Standard Petition.

    Although not required, any intervener may file and serve a response 
supporting or opposing the Size Standard Petition at any time prior to 
the close of record. 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. The response must present argument.


Sec.  134.912  Discovery and oral hearings.

    Discovery will not be permitted. Oral hearings will not be held 
unless the Judge determines that the dispute cannot be resolved except 
by the taking of live testimony and the confrontation of witnesses.


Sec.  134.913  New evidence.

    Disputes under this subpart ordinarily will be decided based on the 
pleadings and the administrative record. The Judge may admit additional 
evidence upon a motion establishing good cause.


Sec.  134.914  The decision.

    The Judge will issue his or her decision within 45 calendar days 
after close of record, as practicable. The Judge's decision is final 
and will not be reconsidered.


Sec.  134.915  Remand.

    If OHA grants a Size Standard Petition, OHA will remand the matter 
to the Office of Size Standards for further analysis. Once remanded, 
OHA no

[[Page 25509]]

longer has jurisdiction over the matter unless a new Size Standard 
Petition is filed as a result of a new final rule published in the 
Federal Register.


Sec.  134.916  Effects of OHA's decision.

    (a) If OHA grants a Size Standard Petition of a modified or revised 
size standard, SBA will take appropriate action to rescind that size 
standard and to restore the one that was in effect before the one 
challenged in the Size Standard Petition. The restored size standard 
will remain in effect until SBA issues a new size standard. The OHA 
decision does not affect the validity of a concern's size 
representation made under the challenged size standard prior to the 
effective date of the SBA action rescinding that challenged size 
standard. Such a concern remains eligible for award as a small 
business, and the procuring agency may count the award towards its 
small business goals. If the procuring agency amends the solicitation 
and requires new self-certifications, those self-certifications will be 
based on the size standard in effect on the day those self-
certifications are made. If the size standard in question was newly 
established, the challenged size standard remains in effect while SBA 
conducts its further analysis on remand.
    (b) If OHA denies a Size Standard Petition, the size standard 
remains as published in the Code of Federal Regulations.


Sec.  134.917  Equal Access to Justice Act.

    A prevailing Petitioner is not entitled to recover attorney's fees. 
Size Standard Petitions are not proceedings that are required to be 
conducted by an Administrative Law Judge under Sec.  134.603.


Sec.  134.918   Judicial review.

    The publication of a final rule in the Federal Register is 
considered the final agency action for purposes of seeking judicial 
review.

    Dated: May 11, 2017.
Linda E. McMahon,
Administrator.
[FR Doc. 2017-10471 Filed 6-1-17; 8:45 am]
BILLING CODE 8025-01-P