Trioid International Group, LLC, No. BDP-103 (November 16, 1998) Docket No. BDPE-98-11-09-09 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. ________________________________ ) IN THE MATTER OF: ) Docket No. BDPE-98-11-09-09 ) Trioid International Group, LLC ) Decided: November 16, 1998 _______________________________ ) DIGEST There is no jurisdiction to hear an appeal of an SBA denial of admission into the 8(a) program based on grounds of a negative finding of social disadvantage, economic disadvantage, ownership, or control, if the determination was also based upon another ground, such as a negative finding of potential for success, brokering, or good character. ORDER DISMISSING APPEAL On November 6, 1998, Petitioner Trioid International Group, LLC (TIG) appealed a decision of the Respondent Small Business Administration (SBA) denying it admission into the 8(a) program. [1] Appeal Petition, dated November 5, 1998, signed by Gary Sing, CEO of TIG (Appeal Petition). On October 26, 1998, the SBA, on reconsideration, denied TIG entry into the 8(a) program. The SBA declined TIG's 8(a) application for six reasons: (1) Mr. Sing, the individual upon whom eligibility was based, did not hold the position of President or Chief Executive Officer; (2) Mr. Sing did not devote full-time to the operation of TIG; (3) TIG was not in business for two years and did not qualify for a waiver of the requirement; (4) TIG did not have the potential to successfully perform 8(a) contracts; (5) TIG was a broker; and (6) TIG did not meet the good-character requirement. Appeal Petition, attachment, at 3-4. The SBA advised TIG that it could reapply for admission into the 8(a) program twelve months from the date of the letter, but did not advise TIG that it had the right to appeal the SBA's denial. [2] Id. An 8(a) applicant may appeal a denial of program admission only if the denial is based solely upon a negative finding of social disadvantage, economic disadvantage, ownership, or control. 15 U.S.C. Section 637(a)(9); 13 C.F.R. Section 124.206(a). [3] The regulation makes this clear: An applicant may appeal a denial of program admission to SBA's Office of Hearings and Appeals (OHA), if it is based solely on a negative finding of social disadvantage, economic disadvantage, ownership, control, or any combination of these four criteria. A denial decision that is based at least in part on the failure to meet any other eligibility criterion is not appealable and is the final decision of SBA. 63 Fed. Reg. at 35,750 (to be codified at 13 C.F.R. Section 124.206(a)) (emphasis added). SBA's procedural regulations are in accord: The Administrative Law Judge selected to preside over an appeal shall decline to accept jurisdiction over any matter if . . . [t]he appeal does not, on its face, allege facts that, if proven to be true, would warrant reversal or modification of the determination, including appeals of denials of 8(a) BD program admission based in whole or in part on grounds other than a negative finding of social disadvantage, economic disadvantage, ownership or control . . . . 63 Fed. Reg. at 35,766 (to be codified at 13 C.F.R. Section 134.405(a)) (emphasis added). The SBA denied TIG admission based on negative findings of control, as well as potential for success, brokering, and character. It is settled law that, if any other ground, such as lack of potential for success, is one of the grounds for declining an 8(a) application, there is no jurisdiction to hear the appeal, even if the decline included other grounds such as a negative finding of social disadvantage, economic disadvantage, ownership, or control. Matter of G & L Recycling Co., Inc., SBA No. MSB-613, at 2 (1998) (declining jurisdiction when SBA denied admission for two reasons relating to potential for success, notwithstanding Petitioner's argument that one reason amounted to a negative finding of economic disadvantage); Matter of Stonehenge Int'l, Inc., SBA No. MSB-604, at 2 (1998) (declining jurisdiction when grounds for denying admission included lack of potential for success, failure to manage and operate the applicant firm full-time, and lack of skills necessary to demonstrate control of applicant firm)1. Because the denial of admission was based in part on grounds other than a negative finding of social disadvantage, economic disadvantage, ownership, or control, there is no jurisdiction to hear the appeal, and it must be dismissed. The Petition appealing the SBA's denial of admission of Trioid International Group, LLC, into the 8(a) program is DISMISSED. Subject to 13 C.F.R. Section 134.408(c), [4] this is the final decision of the Small Business Administration; it is binding upon all parties, including those within the employ of the SBA. 15 U.S.C. Section 637(a)(9)(D); 13 C.F.R. Section 134.408(a). [5] _______________________________ RICHARD S. ARKOW Administrative Law Judge _________________________ [1] Small Business Act of 1958, Section 8(a), as amended, 15 U.S.C. Section 637(a). Regulations implementing the 8(a) program were recently amended and apply to this appeal. See Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status Determinations; Rules of Procedure Governing Cases Before the Office of Hearings and Appeals, 63 Fed. Reg. 35,726 (1998) (to be codified at 13 C.F.R. Parts 121, 124, and 134). [2] This decline letter constitutes the final SBA determination. 63 Fed. Reg. at 35,750 (to be codified at 13 C.F.R. Section 124.206(a)). [3] 63 Fed. Reg. at 35,750 (to be codified at 13 C.F.R. Section 124.206(a)). [4] 63 Fed. Reg. at 35,767 (to be codified at 13 C.F.R. Section 134.408(c)). [5] 63 Fed. Reg. at 35,767 (to be codified at 13 C.F.R. Section 134.408(a)). Posted: November, 1998