of the needs of emerging businesses, and the agency's own experience with the 8(a) program. 46 Fed. Reg. 57266-70 (Nov. 23, 1981).
The standard of review for a claim of unreasonable action under the APA is a highly deferential one. Ethyl Corp. v. EPA, 176 U.S. App. D.C. 373, 541 F.2d 1, 34 (D.C. Cir. 1975). The Court is not to substitute its judgment for the agency's but simply to ascertain whether the regulations were based on consideration of the relevant factors and whether there has been a clear error of judgment. Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285, 42 L. Ed. 2d 447, 95 S. Ct. 438 (1974), rehearing denied, 420 U.S. 956, 43 L. Ed. 2d 433, 95 S. Ct. 1340 (1975); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971). The SBA's regulation clearly meets that standard.
The Fund next challenges the SBA's internal procedures for implementing the FPPT requirement, as set forth in Bulletin #3 of the Standard Operating Procedure (SOP 80.05) of the 8(a) program. Bulletin #3 provides for SBA staff a rating and evaluation system for determining FPPTs in particular cases. Bulletin #3 is available on request. There is no mystery about its contents; the Fund does not claim that they were unaware of the matter contained in the Bulletin, or that the SBA had attempted to withhold that information from the public. Nor do they challenge the substance of the procedures outlined in Bulletin #3. Rather, because Bulletin #3 was promulgated without publication in the Federal Register or opportunity for public comment, they allege violations of the procedural requirements outlined in the Administrative Procedure Act, 5 U.S.C. § 553, and the Freedom of Information Act, 5 U.S.C. § 552(a)(1)(D).
The APA requires that an agency's substantive regulations be promulgated in accordance with notice and comment procedures prior to adoption. 5 U.S.C. § 553. However, the statute exempts from that requirement "interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice." 5 U.S.C. § 553(b)(A). The distinction between substantive rules subject to APA notice and comment requirements, and "interpretative rules," "general statements of policy," and "rules of agency procedure" exempt from those requirements, is notoriously fuzzy. Batterton v. Marshall, 208 U.S. App. D.C. 321, 648 F.2d 694, 702 (D.C. Cir. 1980). Analysis of the question must focus on the rule's effect, and whether compliance with the notice and comment provisions of the APA would serve that statute's purpose of enabling an agency promulgating a rule "to educate itself before establishing rules and procedures which have a substantial impact on those regulated." Texaco, Inc. v. FPC, 412 F.2d 740, 744 (3d Cir. 1969). Interpretative rules, general statements of policy, and procedural rules exempt from the APA have consequently been described as those which do not narrowly constrict the discretion of agency officials, Guardian Federal Savings & Loan Association v. Federal Savings & Loan Insurance Corp., 191 U.S. App. D.C. 135, 589 F.2d 658, 666 (D.C. Cir. 1978), do not substantially affect the rights of those subject to agency regulations, Pickus v. United States Board of Parole, 165 U.S. App. D.C. 284, 507 F.2d 1107, 1112 (D.C. Cir. 1974), and do not foreclose alternative courses of action or determine the rights or issues addressed. Batterton, supra at 702.
For several reasons, Bulletin #3 is exempt from the notice and comment requirements of the Act as an interpretative rule, general statement of policy, or internal procedure. Bulletin #3 provides guidance to SBA staff negotiating FPPTs by outlining the criteria to be considered when determining an FPPT. It also provides a numerical point scoring system for evaluating those criteria, and a range of points within which an SBA staff member is authorized to negotiate and recommend a FPPT.
Most significantly, the criteria outlined in Bulletin #3 for establishing an appropriate FPPT are derived entirely from the criteria listed in 13 C.F.R. § 124.1-1(f) itself. Indeed, much of the text in Bulletin #3 is taken verbatim from the published regulation. It is the regulation, and not Bulletin #3, which is "finally determinative of the issues or rights to which it is addressed." Bulletin #3 adds nothing substantive, but simply supplies a procedure to aid SBA staff in applying those criteria more uniformly.
Moreover, the procedures supplied in Bulletin #3 merely guide SBA staff in negotiating FPPTs. They do not produce predetermined results or irreversible decisions. An SBA staff member negotiating FPPTs following Bulletin #3 guidelines can only recommend that a certain FPPT be established for an 8(a) firm. Final approval is in all cases reserved for the Regional Director of the 8(a) program. If an 8(a) applicant wishes to appeal from the FPPT recommended by the staff member, Bulletin #3 provides procedures by which it may do so. Finally, any FPPT set under Bulletin #3 guidelines may, consistent with the regulations, be extended for as many as six years.
13 C.F.R. § 124.1-1(f). Under these circumstances, use of Bulletin #3 guidelines can hardly be said to be "determinative" of the rights involved or to foreclose alternative courses of action and constrict the discretion of the agency. Consequently, it is not a "substantive" rule, and is not subject to the notice and comment requirements of the APA.
For the same reasons, the Fund is incorrect in suggesting that the SBA's failure to publish Bulletin #3 is a violation of FOIA, 5 U.S.C. § 552(a)(1)(D), which requires agencies to publish in the Federal Register "substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the agency." Bulletin #3 is not a substantive rule because it merely provides procedures for the application of the criteria laid out in 13 C.F.R. § 124.1-1(f), and does not itself determine the rights of firms applying to the 8(a) program. It is the regulation that determines those rights. Bulletin #3 falls instead under § 552(a)(2)(C) of FOIA, which requires that "administrative staff manuals and instructions to staff that affect a member of the public" be "available for public inspection and copying." The Fund does not claim that it has been unable to inspect or copy Bulletin #3. Consequently, plaintiff's claim of a § 552(a) violation is without merit.
Summary judgment must be granted for the defendants on all points, and the complaint dismissed.
An appropriate Order is filed herewith.
For the reasons set forth in the Court's Memorandum filed herewith, it is hereby
ORDERED that defendants' motion for summary judgment is granted; and it is further
ORDERED that plaintiff's motion for summary judgment is denied.