Central Office Survey Officer. A representative of the Office of General Counsel shall review the submitted legal opinion regarding the liability of the United States under applicable state law governing negligence and related matters and, in the event of disagreement, shall render a separate legal opinion to the Washington Board of Survey. The report and legal opinion, if any, shall be prepared in an original and five copies and shall be attached to the case file.

(c) If the Survey Officer approves the recommendation of the Washington Board of Survey to pay the claim, the Chairman of the Washington Board of Survey shall complete an original copy of Standard Form 1145 and two memorandum copies of Standard Form 1145A, "Voucher for Payment Under Federal Tort Claims Act." The Chairman shall forward said copies to the claimant for his signature and acceptance.

(d) Upon receiving the Standard Form 1145 and 1145A from the Claimant, the Chairman of the Washington Board of Survey shall attach the forms to the case file and forward the file to the Administrator or his designee for final approval.

(e) If the Survey Officer disapproves the recommendations of the Washington Board of Survey that the claim be paid, the case file shall be forwarded immediately to the Administrator or his designee for final action. If the Administrator or his designee concurs with the Survey Officer, this shall constitute a final agency denial of the claim and appropriate notice shall be given the claimant as provided in §114.110 of this part. If the Administrator or his designee disagrees with the Survey Officer, Standard Form 1145 and 1145A shall be prepared and forwarded to the claimant as provided for in paragraph (c) of this section. After the claimant has signed and returned them, the Administrator or his designee shall sign them.

(f) If the Washington Board of Survey recommends that the claim not be paid, the claim shall nevertheless be processed to final action by the Administrator or his designee through all the appropriate stages outlined in the preceding paragraphs of this section.

§114.106-1 Authority of field offices to adjust, determine, compromise, and settle claims of $5,000 or less.

(a) Upon presentation of a claim in the amount of $5,000 or less and appropriate investigation thereof, the Board of Survey of the District or Branch office to which the claim was presented shall consider all of the evidence and enter the Board's findings of fact, conclusions, and recommendations. There shall be appended to the Board's findings of fact, conclusions, and recommendations, a legal opinion of the District or Branch Counsel regarding the liability of the United States under the applicable state law governing negligence and other related matters. The legal opinion shall also frame the issues in such a way as to provide guidance to the Board of Survey in performing its functions. Such opinion shall be submitted to the Board of Survey after investigation of the claim in question but before the Board of Survey has considered the claim. The District or Branch Board of Survey shall establish a case file containing all documents related to the claim and the incident out of which it arose. The file shall also contain the Board's findings of fact, conclusions, and recommendations, and the legal opinion of the District or Branch Counsel. The file shall be forwarded to the Regional Board of Survey, after the District or Branch Board of Survey has performed its function.

(b) The Regional Board of Survey shall review the case and issue its decision thereon. This decision will then be reviewed by the Regional Survey Officer who will then make a recommendation to the Regional Director, who will make the formal decision. The Regional Director shall complete an original copy of Standard Form 1145 and two memorandum copies of Standard Form 1145A, "Voucher for Payment Under Federal Tort Claim Act." The Regional Director shall forward said copies to the claimant and his legal representative if he is so represented, for his signature and acceptance. Upon receiving the Standard Forms 1145 and 1145A from the claimant, the Regional Director shall attach the forms to the case file and direct that payment be made.

(c) If the Regional Director denies the claim, this shall constitute a final agency denial of the claim and appropriate notice shall be given claimant as provided in §114.110.

(d) Notwithstanding the foregoing, a claim for $5,000 or less shall be processed in accordance with §114.106 when the District Board of Survey or Regional Board of Survey have reason to believe that a related claim may be filed in connection with the same incident and the aggregate amount of such claims will probably exceed $5,000. The reason for such belief shall be included in the case file along with the findings, conclusions, and recommendations.

(e) When an administrative claim may be adjusted, determined, compromised, or settled under the Federal Tort Claims Act only after consultation with the Department of Justice as provided in §114.107 (b) (1), (2), (3), and (c), the Regional Board of Survey shall forward the case file to the Office of General Counsel, SBA Central Office, prior to decision. The Regional Board of Survey shall be guided in this respect by the legal opinion of District Counsel. After consultation with the Department of Justice, the case file shall be forwarded by the Office of General Counsel to the Washington Board of Survey for final processing in accordance with § 114.106.

$114.107 Limitations on authority.

(a) An award, compromise, or settlement of a claim in excess of $25,000 filed under this part shall not be effected without prior written approval of the U.S. Attorney General or his designee. For purposes of this paragraph, a principal claim and any derivative or subrogated claim shall be treated as a single claim.

(b) An administrative claim may be adjusted, determined, compromised, or settled under the Federal Tort Claims Act only after consultation with the Department of Justice when, in the opinion of the Chairman of the Washington Board of Survey and with the concurrence of the General Counsel:

(1) A new precedent or a new point of law is involved; or

(2) A question of policy is or may be involved; or

(3) The United States is or may be entitled to indemnity or contribution from a third party and the Administration is unable to adjust the third party claim; or

(4) The compromise of a particular claim, as a practical matter, will or may control the disposition of a related claim in which the amount to be paid may exceed $25,000.

(c) An administrative claim may be adjusted, determined, compromised, or settled by the Administration under the Federal Tort Claims Act only after consultation with the Department of Justice when the Administration is informed or is otherwise aware that the United States or an employee, agent, or cost-plus contractor of the United States is involved in litigation based on a claim arising out of the same incident or transaction.

$114.108 Referral to Department of Justice.

When Department of Justice approval or consultation is required under § 114.107, or the advice of the Department of Justice is otherwise to be requested, the referral or request shall be sent to the Assistant Attorney General, Civil Division, Department of Justice, in writing and shall contain (a) a short and concise statement of the facts and of the reasons for the referral or request, (b) copies of relevant portions of the Administration's claim file, and (c) a statement of the recommendations or views of the Administration. Such referral may be made any time after the presentment of a claim to the Administration, and shall be transmitted by the General Counsel or his designee.

$114.109 Examination.

The Administration may request any other Federal agency to conduct a physical examination of a claimant and provide a report of the physical examination. Where reimbursement for such services is authorized or required by statute or regulation, the Administration may reimburse any Federal agency which conditions its compliance with the Administration's request upon such reimbursement.

§ 114.110 Final denial of claim.

Final denial of an administrative claim shall be in writing and sent to the claimant, his attorney, or legal representative by certified or registered mail. The notification of final denial may include a statement that, if the claimant is dissatisfied with the agency action, he may file a suit in an appropriate U.S. District Court not later than 6 months after the date of mailing of the notification.

§ 114.111 Action on approved claim.

(a) Payment of a claim approved under this part is contingent upon the claimant's or his duly authorized agent's or legal representative's executing the requisite copies of Standard Form 95, Standard Form 1145, and Standard Form 1145A. When a claimant is represented by an attorney, the voucher shall designate both the claimant and his attorney as payees. The check shall be delivered to the attorney, whose address shall appear on Standard Form 1145, voucher for payment of a claim under the Federal Tort Claims Act.

(b) Acceptance by the claimant, his agent, or legal representative, of any award, compromise, or settlement made pursuant to the Federal Tort Claims Act shall be final and conclusive on the claimant, his agent or legal representative and any other person on whose behalf or for whose benefit the claim has been presented, and shall constitute a complete release of any claim against the United States and against any employee of the Government whose act or omission gave rise to the claim, by reason of the same subject matter.

[40 FR 52717, Nov. 12, 1975]

Subpart B-Indemnification and Representation of SBA Employees $114.112 Policy.

in

(a) The Sl Business Administration .. fy an SBA employee, med as a defendant in state or federal ation proceeding or seeking damages employee personally, udgment, or other

monetary award which is rendered against such employee, provided that the conduct giving rise to the verdict, judgment, or award was taken within the scope of his or her employment and that such indemnification is in the interest of the Small Business Administration, as determined by the Administrator or his designee.

(b) The Small Business Administration may settle or compromise a personal damage claim against an SBA employee by the payment of available funds, at any time, provided the alleged conduct giving rise to the personal damage claim was taken within the employee's scope of employment and that such settlement or com

promise is in the interest of the Small

Business Administration, as determined by the Administrator or his designee.

(c) Absent exceptional circumstances as determined by the Administrator or his designee, the Agency will not entertain a request either to agree to indemnify or to settle a personal damage claim before entry of an adverse verdict, judgment, or award.

(d) An SBA employee may request indemnification to satisfy a verdict, judgment, or award entered against that employee. The employee shall submit a written request, with appropriate documentation including copies of the verdict, judgment, award, or settlement proposal, in a timely manner to the General Counsel, who shall make a recommended disposition of the request. Where appropriate, the Agency shall seek the views of the Department of Justice. The General Counsel shall forward the request, the accompanying documentation, and the General Counsel's recommendation to the Administrator for decision.

(e) Any payment under this section either to indemnify a Small Business Administration employee or to settle a personal damage claim shall be contingent upon the availability of appropriated funds of the Small Business Administration.

[52 FR 32534, Aug. 28, 1987]

$114.113 Attorney-client privilege.

Attorneys employed by the Small Business Administration who participate in any process utilized for the pur

pose of determining whether the Agency should request the Department of Justice to provide representation to an Agency employee sued, subpoenaed or charged in his individual capacity, or whether attorneys employed by the Small Business Administration should provide assistance in the representation of such an agency employee, undertake a full and traditional attorneyclient relationship with the employee with respect to application of the attorney-client privilege. If representation is authorized, Small Business Administration attorneys who assist in the representation of an employee also undertake a full and traditional attorney-client relationship with the employee with respect to the attorney-client privilege. Any adverse information communicated by the client-employee to an attorney during the course of such attorney-client relationship shall not be disclosed to anyone, either inside or outside the Small Business Administration, other than attorneys responsible for representation of the employee, unless such disclosure is authorized by the employee. Such adverse information shall continue to be fully protected whether or not representation is provided, and even though representation may be denied or discontinued.

[52 FR 32534, Aug. 28, 1987]

§ 115.1 Explanation of regulations.

These regulations cover the Small Business Administration's (SBA's) Surety Bond Guarantee programs under part B of title IV of the Small Business Investment Act of 1958, as amended. Subpart A of this part 115 contains regulations common to both the program requiring prior SBA approval of each bond guarantee, and the program not requiring such prior approval. Subpart B contains the regulations applicable only to the prior-approval program. Subpart C contains the regulations applicable only to the program not requiring prior SBA approval. These latter regulations implement the Preferred Surety Bond Guarantee Program Act of 1988, Pub. L. 100-590 (102 Stat. 3007), from which the name Preferred Surety Bond Program (PSB) is derived. § 115.2 Statutory provisions.

The relevant statutory provisions will be found at 15 U.S.C. 694a, et seq.

$115.3 Headings.

Headings are explanatory (for reference ease) and are not regulatory.

§115.4 Savings clause.

The legality of transactions, including the issuance by SBA of bond guarantees, pursuant to provisions of SBA regulations in effect before amendment, shall be governed thereby, notwithstanding subsequent changes.

Nothing herein shall bar SBA enforcement with respect to any transaction consummated or bond guarantees issued in violation of provisions applicable at the time, but no longer in effect. If any section or part of a section of these regulations should be adjudged invalid, only that section or part shall be invalid, and no other part or section shall be affected thereby.

Subpart A-Regulations Applicable to All Surety Bond Guarantees Under This Part

§ 115.10 Policy.

(a) Congressional intent. It is the intent of Congress to strengthen the competitive free enterprise system by assisting qualified small business concerns to obtain bid, payment, or performance bonds and bonds ancillary thereto, which are otherwise unobtainable without a Small Business Administration (SBA) guarantee. Consequently, Congress has authorized SBA to guarantee on a prudent and economically justifiable basis (upon such terms and conditions as SBA may prescribe) sureties participating in the Surety Bond Guarantee (SBG) program, against a part of their losses incurred as a result of a principal's breach of the terms of a bid bond, payment bond, performance bond, or bonds which are ancillary to such bonds, on any contract not exceeding $1,250,000 in face value. Congress has further authorized SBA to empower selected sureties, without further SBA, approval, to issue, monitor, and service such bonds, subject to SBA's guarantee. This latter program is hereafter referred to as the Preferred Surety Bond Program (PSB). Any guarantee agreement under this part is made exclusively for the benefit of SBA and the Surety, and does not confer any rights or benefits on any other party, such as any right of action against SBA. In the event of a surety's insolvency, SBA

shall not be liable on its guarantee except for any loss, as defined in §115.11, incurred and actually paid by such surety under bonds guaranteed by SBA.

(b) Types of bonds. The Administration has determined that only bid, performance, and payment bonds (other than bonds in the nature of a financial guarantee) issued or approved in connection with a contract and of a type listed in the "Contract Bonds" section of the current Rating Manual of the Surety Association of America1 will be eligible for an SBA guarantee. In addition, the SBA guarantee may be extended to such ancillary bonds as are incidental to the contract and essential for its performance.

(c) Guarantee agreement. A surety company participating in this program shall be listed by the U.S. Treasury as eligible to issue bonds in connection with Federal procurement contracts, and be a corporation determined by SBA to be a surety eligible to participate in this program. The terms and conditions of SBA's bond guarantee agreements may vary from surety to surety, depending on SBA's experience with a particular surety. Where the statute does not mandate the division of losses, the Office of Surety Guarantees will consider, by way of example and not of limitation, surety's loss rate in this program in comparison with other sureties participating with SBA to a comparable degree, the rating or ranking designation assigned to the surety by recognized authority, the average contract amount or bond penalty per bond written in this program and the ratio of bid bonds to final bonds written in this program.

(d) Selection of sureties for the PSB program. SBA's selection of sureties empowered to issue, monitor and service bonds subject to SBA's guarantee without prior SBA approval will be guided by, but not limited to, these factors:

(1) An underwriting limitation of at least one and one-quarter million dollars ($1,250,000) on the U.S. Treasury Department list of acceptable sureties;

(2) An agreement to charge small concerns bonded under PSB no more than the advisory premium rates of the Surety Association of America, wheth

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