Lone Star Security, No. MSB-489 (November 4, 1994) Docket No. MSBT-94-9-16-40 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. IN THE MATTER OF: ) ) Docket No. MSBT-94-9-16-40 Lone Star Security ) APPEARANCES For the Petitioner: For the Agency: Mr. Manuel Carlos John T. Spotila, Esq. President General Counsel Lone Star Security Deborah S. Charette, Esq. 4323-B Montana Agency Attorney El Paso, TX 79903 Small Business Administration 409 Third Street, SW Washington, DC 20416 ORDER DISMISSING PETITION November 4, 1994 USHER, Administrative Law Judge: Jurisdiction Authority for these proceedings is found in Section 409 of the Business Opportunity Development Reform Act of 1988, Public Law 100-656 (Section 8(a)(9) of the Small Business Act of 1958, as amended; 15 U.S.C. 637(a)(9)), hereinafter referred to as "the Act," and in the regulations codified at 13 CFR Parts 124 and 134, which are referred to hereinafter by section numbers only. Issues Does the appeal, on its face, allege facts which, if proven to be true, would warrant reversal or modification of the Agency's determination; should jurisdiction over the appeal be denied? Facts and Procedural History The Petitioner was approved for participation in the Agency's Section 8(a) Program in December of 1984. The Petitioner was notified on March 12, 1990 of the Agency's intention to terminate its 8(a) participation because of: 1) its failure to make required submissions to the Agency in a timely manner; 2) its failure to repay financial obligations to the Federal government; and 3) its failure to maintain full-time management of the firm by Manuel Carlos, the individual upon whom its eligibility was based. Having received a nonresponsive reply to the March 12, 1990 letter, the Agency's representative again determined to terminate the Petitioner's participation in the 8(a) Program and notified the Petitioner of that fact on December 30, 1990; violations of the following regulations were specified in that notification: Sections 124.103(i); 124.209(a)(1); 124.209(a)(3); 124.209(a)(4); 124.209(a)(6); 124.209(a)(12); and 124.209(a)(24). On the basis of certain admissions made by the Petitioner's Counsel in a February 13, 1991 response to the December 30, 1990 notification, the Agency's representative again notified the Petitioner of the Agency's intention to terminate the Peti- tioner's participation in the Program, citing continuing vio- lations of Sections 124.209(a)(3) and 124.209(a)(12) of the regulations and newly discovered violations of Sections 124.209(a)(7) and 124.104(a)(2). The Petitioner's Counsel sought to excuse - but did not in fact deny - these asserted violations. The Director of the Agency's Division of Program Certification and Eligibility formally notified the Petitioner of the intention of the Agency to terminate its Program participation in a notice dated January 31, 1994, citing the firm's failure to maintain full-time management of the firm by Manuel Carlos, the individual upon whom its eligibility was based; the firm's cessation of bus- iness operations; and the firm's failure to repay significant financial obligations to the Federal government. When no re- sponse to the January 31, 1994 letter was received, the Assistant Administrator sent another "intention" notification to the Petitioner on August 2, 1994, and the Associate Administrator for Minority Enterprise Development issued the Agency's Termination Notification on August 4, 1994. The Petitioner's President filed a three-page Petition on September 16, 1994, presenting argument as to why the termination should not be sustained. Carlos failed, however, to make cred- ible allegations of fact which, if proven to be true, would warrant reversal or modification of the Associate Administrator's determination to terminate the Petitioner's 8(a) Program participation. Discussion Once admitted to the 8(a) Program, a firm is required to continue to meet all eligibility requirements set forth in the regulations promulgated by the Agency (Section 124.101(b)), and the Agency is obliged to ensure that 8(a) Program participation is limited to eligible individuals and firms. The Agency has adduced evidence of the Petitioner's failure to conform its conduct to the requirements of the regulations, and has proved the need to terminate the Petitioner's participation in the Program; the Petitioner has failed to refute that evidence. Sections 124.210(c) and (d) of the regulations provide, insofar as is relevant here: (c) Appeal proceedings brought under the authority of this section shall be conducted by an Administrative Law Judge. (d) The Administrative Law Judge selected to preside over an appeal shall decline to accept jurisdiction over any matter if: (1) The appeal does not, on its face, allege facts that, if proven to be true, would warrant reversal or modification of the determination.... The regulations codified at Sections 124.210(c) and (d) were promulgated by the Agency in strict conformance with the pro- scription set forth in the Act that clearly reflects the intent of Congress to limit my jurisdiction in proceedings brought by applicants for Section 8(a) Program status. The Petition filed here does not, on its face, allege facts which, if proven to be true, would warrant reversal or modi- fication of the Agency's determination to terminate the Petitioner's 8(a) Program participation. Thus, I am without statutory or regulatory jurisdiction to consider the appeal. Conclusion The Petition filed by Manuel Carlos, President of Lone Star Security, on September 16, 1994, does not, on its face, allege facts which, if proven to be true, would warrant reversal or modification of the determination in question, and I am thus without statutory or regulatory jurisdiction to consider the Petitioner's appeal; the Petition is DISMISSED. The final decision of the Small Business Administration in this proceeding was issued by the Agency's Associate Administrator on August 4, 1994. See Section 124.206(c)(4). _______________________________ Benjamin G. Usher Administrative Law Judge