destruction of the same free system the Act is intended to protect.
In considering the last requirement, it is quite plain that the Small Business Act does not contain any clear and convincing provision indicating that the SBA Administrator's discretionary actions are precluded from judicial review.
Therefore, the Plaintiffs have standing to pursue this action.
III. THE DECISION TO INSTITUTE THE 1971 SET-ASIDE HAD A RATIONAL BASIS AND WAS WITHIN THE ADMINISTRATOR'S STATUTORY AUTHORITY.
The real bone of contention in this suit is the Administrator's decision to change the 1958 program.
The Plaintiffs take umbrage with the implementation scheme of the 1971 program because it effectively protects the existence of small timber businesses at the expense of Plaintiffs increasing quasi-monopoly of the industry.
It is apparent from the factual record in this case that the policy of the Act motivated if not mandated the change in the program.
The Small Business Act clearly grants the Administrator wide discretion to effectuate the purposes of the Act. 15 U.S.C. § 634. This fact the Plaintiffs do not contest. Rather, they argue that the Administrator's substantive decision in this matter was arbitrary, capricious, and beyond the scope of his statutory authority.
The scope of this Court's review in the instant case has been delimited by the standard set forth in Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971). This Court must examine whether the administrative decision was based upon a consideration of the relevant facts and law, and determine whether there has been a clear error of judgment. It is not the Court's duty to weigh the alternatives available to the Administrator and to determine which is the more reasonable. Ray Baillie Trash Hauling, Inc. v. Kleppe, 477 F.2d 696, 703-4 (5th Cir. 1973); see, Allen M. Campbell Co., Gen. Con., Inc., v. Lloyd Wood Construction Co., 446 F.2d 261, 265 (5th Cir. 1971).
The Plaintiffs argue that the Administrator's decision has no rational basis on two counts. First, they claim there was no "proven need" for a uniform, objective triggering apparatus. Second, they allege the computations and formula upon which the program rests are an irrational determination of the statutory "fair proportion".
As a matter of clarification, it should be stated that small business' "need" is not a factor which the Administrator must take into consideration. The "need" has already been established by the Act.
The Plaintiffs' other points regarding the basis of the Administrator's decision consist of unsupported allegations. They offer no evidence contradicting the Administrator's factual determination that small businesses were on the decline at the expense of large business' significant growth. (See a discussion of the Administrator's findings, supra, at 366-367.) The Plaintiffs, furthermore, have made no showing that the Administrator's choice of 1971 program was a clear error of judgment in light of other alternatives.
The Administrator adopted the 1971 program after examining the historical position of small business within the timber industry and the problems inherent in the 1958 set-aside program and after listening to the suggestions of members of the industry and weighing the proposed alternatives. The program appears to be the reasonable, precise yet flexible, means of insuring that small businesses receive a "fair proportion" of government timber sales. The ratio of timber sales which the program seeks to preserve is based upon the competitive history within the industry. Small business is guaranteed no more than an opportunity to bid on that proportion of the market which it has purchased in the past.
The Plaintiffs' tangential argument regarding possible Congressional limitations upon the Administrator's admittedly wide discretion is without merit. The Plaintiffs maintain that there is a strong inference that Congress does not approve of a set-aside scheme of the type of the 1971 program. To support this inference the Plaintiffs argue that Congress defeated a Resolution
which would have brought to the floor of the House a Bill
containing a subsection legislating mandatory set-asides similar to the Administrator's 1971 program.
The Plaintiffs also point to the Bill's accompanying report which contains a clause saying the 1958 set-asides were satisfactory.
Any conceivable limitation of the Administrator's discretion which could be inferred from this tenuous evidence is rebutted by other Congressional statements which unequivocably lauds the 1971 timber set-aside program.
Based upon the evidence in the record, the Court can only conclude that the Administrator acted within the scope of his statutory duty, in a rational manner, after full consideration of the relevant factors.
IV. THE PLAINTIFFS WERE NOT DENIED ADMINISTRATIVE DUE PROCESS
One of this Court's long-standing concerns has been the enforcement of the Administrative Procedure Act's procedural rulemaking provisions. 5 U.S.C. § 553. The Court's concern is embedded in the belief that administrative agencies have a fundamental responsibility to insure that any rules and regulations which affect the day-to-day existence of our citizens be conceived in an atmosphere immune from prejudice. Upon examination of the facts in this case, however, the Court fails to see how the Plaintiffs can seriously complain that they were prejudiced because the agency did not comply literally with the notice and hearing requirements under Section 4 of the Administrative Procedure Act. 5 U.S.C. § 553.
Overlooking for the moment that matters relating to government contracts and property are specifically exempted from the notice and hearing requirements of Section 4,
the facts indicate that the Plaintiffs not only had actual notice of the proposed change,
but they also attended several industry-wide meetings at which the proposed program was discussed in depth.
Furthermore, the Plaintiffs' representatives met privately with agency officials,
and submitted an in-depth analysis of the program.
As a result of this industry input, the SBA-USDA received and considered many suggested alternatives. Some were adopted. For example, a triggering procedure was incorporated, supplanting an automatic set-aside procedure which had been previously proposed.
In light of these facts, the Court is compelled to find that the Plaintiffs were neither prejudiced nor denied due process. They had sufficient opportunity to participate in the development of the 1971 program. The Plaintiffs can not now claim, in spite of their active participation, that they were prejudiced because the Defendants failed to comply with the formalistic requirements of Section 553. See, United States v. Elof Hansson, Inc., 48 C.C.P.A. 91, 296 F.2d 779 (C.C.Pa. 1960); see also, Florida Citrus Comm. v. United States, 144 F. Supp. 517, 521 (N.D. Fla. 1956).
Nevertheless, the fact remains that Section 553(a) specifically exempts an agency when making rules regarding public property
or contracts. When the government is dealing with these matters, Congress affords the government complete discretion to decide what, if any, public rulemaking procedures it should adopt and follow.
The Senate Committee on the Judiciary, in its report on this exception to the APA stated:
"The exception of proprietary matters is included because the principal consideration in most such cases relate to mechanics and interpretation of policy and it is deemed wise to encourage and facilitate the issuance of rules by dispensing with all mandatory procedural requirements . . ."