to Notice and Comment rulemaking. If there is a change in the regulation, the Directive will be changed accordingly.

67 Fed. Reg. at 60076. Shortly after issuing this Policy Directive, SBA proposed revisions to the size regulations. 67 Fed. Reg. 70339 (Nov. 22, 2002). Except for new language pertaining to joint ventures, the proposed text of Section 121.702(a) retains the same language as before. 67 Fed. Reg. at 70350. The preamble to the proposed rule states:

The current requirement … requires 51 percent direct ownership by individuals who are U.S. citizens or permanent resident aliens in every case. This change is being made to make the size regulations consistent with a recent change made to the SBIR Policy Directive.

67 Fed. Reg. at 70344-45 (emphasis added).

Based on the above, the Administrative Judge concludes that, as of both April 2, 2003, Phase II award date determining Appellant's size eligibility and the present time, this Office's holding in CBR still governs the issue of whether the term "individuals" in 13 C.F.R. Section 121.702(a) must refer to natural persons.

Accordingly, Appellant's arguments to the contrary have no basis of fact or law and, thus, are without merit. In the circumstances, the Administrative Judge affirms the size determination and reaffirms this Office's decision in CBR.


For the above reasons, the Administrative Judge DENIES the instant appeal and AFFIRMS the Area Office's size determination.

This is the Small Business Administration's final decision. 13 C.F.R. Section 134.316(b).


Administrative Judge


On May 7, 2003, the CO notified this Office that the grant was suspended pending resolution of this appeal.

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