Proposed Rule2022-13250
Small Business Size Standards: Adoption of 2022 North American Industry Classification System for Size Standards
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Published
July 5, 2022
Issuing agencies
Small Business Administration
Abstract
The U.S. Small Business Administration ("SBA" or "Agency") proposes to amend its small business size regulations to incorporate the U.S. Office of Management and Budget's (OMB) North American Industry Classification System (NAICS) revision for 2022, identified as NAICS 2022, into its table of small business size standards. The NAICS 2022 revision created 111 new industries by reclassifying, combining, or splitting 156 NAICS 2017 industries or their parts. SBA's proposed size standards for these 111 new industries under NAICS 2022 have resulted in an increase to the size standards for 21 industries and 27 parts of three industries under NAICS 2017, a decrease to size standards for seven industries and 41 parts of one industry, a change in the size standard measure from average annual receipts to number of employees for one industry, a change in the size standard measure from number of employees to average annual receipts for a part of one industry, and no change in size standards for 118 industries and 33 parts of eight industries. SBA proposes to adopt the updated table of size standards, effective October 1, 2022.
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[Federal Register Volume 87, Number 127 (Tuesday, July 5, 2022)]
[Proposed Rules]
[Pages 40034-40087]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-13250]
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Vol. 87
Tuesday,
No. 127
July 5, 2022
Part III
Small Business Administration
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13 CFR Part 121
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Small Business Size Standards: Adoption of 2022 North American Industry
Classification System for Size Standards; Proposed Rule
Federal Register / Vol. 87, No. 127 / Tuesday, July 5, 2022 /
Proposed Rules
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245-AH89
Small Business Size Standards: Adoption of 2022 North American
Industry Classification System for Size Standards
AGENCY: U.S. Small Business Administration.
ACTION: Proposed rule.
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SUMMARY: The U.S. Small Business Administration (``SBA'' or ``Agency'')
proposes to amend its small business size regulations to incorporate
the U.S. Office of Management and Budget's (OMB) North American
Industry Classification System (NAICS) revision for 2022, identified as
NAICS 2022, into its table of small business size standards. The NAICS
2022 revision created 111 new industries by reclassifying, combining,
or splitting 156 NAICS 2017 industries or their parts. SBA's proposed
size standards for these 111 new industries under NAICS 2022 have
resulted in an increase to the size standards for 21 industries and 27
parts of three industries under NAICS 2017, a decrease to size
standards for seven industries and 41 parts of one industry, a change
in the size standard measure from average annual receipts to number of
employees for one industry, a change in the size standard measure from
number of employees to average annual receipts for a part of one
industry, and no change in size standards for 118 industries and 33
parts of eight industries. SBA proposes to adopt the updated table of
size standards, effective October 1, 2022.
DATES: SBA must receive comments to this proposed rule on or before
August 4, 2022.
ADDRESSES: Identify your comments by RIN 3245-AH89 and submit them by
one of the following methods: (1) Federal eRulemaking Portal:
<a href="http://www.regulations.gov">www.regulations.gov</a>, following the instructions for submitting
comments; or (2) Mail/Hand Delivery/Courier: Khem R. Sharma, Ph.D.,
Chief, Office of Size Standards, 409 Third Street SW, Mail Code 6530,
Washington, DC 20416. SBA will post all comments to this proposed rule
on <a href="http://www.regulations.gov">www.regulations.gov</a>.
If you wish to submit confidential business information (CBI), as
defined in the User Notice at <a href="http://www.regulations.gov">www.regulations.gov</a>, you must submit such
information to U.S. Small Business Administration, Khem R. Sharma,
Ph.D., Chief, the Office of Size Standards, 409 Third Street SW, Mail
Code 6530, Washington, DC 20416, or send an email to
<a href="/cdn-cgi/l/email-protection#a4d7cddec1d7d0c5cac0c5d6c0d7e4d7c6c58ac3cbd2"><span class="__cf_email__" data-cfemail="89fae0f3ecfafde8e7ede8fbedfac9faebe8a7eee6ff">[email protected]</span></a>. Highlight the information that you consider to
be CBI and explain why you believe SBA should hold such information as
confidential. SBA will review your information and determine whether it
will make the information public.
Requests to redact or remove posted comments cannot be honored and
a request to redact or remove posted comments will be posted as a
comment. See the <a href="http://www.regulations.gov">www.regulations.gov</a> Help section for information on
how to make changes to your comments.
FOR FURTHER INFORMATION CONTACT: Dr. Khem R. Sharma, Chief, Office of
Size Standards, (202) 205-6618 or <a href="/cdn-cgi/l/email-protection#deadb7a4bbadaabfb0babfacbaad9eadbcbff0b9b1a8"><span class="__cf_email__" data-cfemail="37445e4d524443565953564553447744555619505841">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: Effective October 1, 2000, the U.S. Small
Business Administration (SBA) adopted North American Industry
Classification System (NAICS) 1997 industry definitions as a basis for
defining industries for its table of small business size standards,
replacing the 1987 Standard Industrial Classification (SIC) (65 FR
30836 (May 15, 2000)). Since then, the Office of Management and Budget
(OMB) has issued five revisions to NAICS. SBA's table of size standards
adopted the OMB's first revision, NAICS 2002, effective October 1, 2002
(67 FR 52597 (August 13, 2002)); the second revision, NAICS 2007,
effective October 1, 2007 (72 FR 49639 (August 29, 2007)); the third
revision, NAICS 2012, effective October 1, 2012 (77 FR 49991 (August
20, 2012)); and fourth revision, NAICS 2017, effective October 1, 2017
(82 FR 44886 (September 27, 2017)).
On December 21, 2021, OMB published its fifth and the latest
revision to NAICS ``Notice of NAICS 2022 Final Decisions; Update of
Statistical Policy Directive No. 8, North American Industry
Classification System: Classification of Establishments; and
Elimination of Statistical Policy Directive No. 9, Standard Industrial
Classification of Enterprises'' (86 FR 72277). In the December 21,
2021, Federal Register notice, OMB accepted the Economic Classification
Policy Committee's (ECPC) recommendations, as outlined in the July 2,
2021, Federal Register notice (86 FR 35350), for the 2022 revisions to
the North American Industry Classification System (NAICS), as well as
the recommendations to update OMB Statistical Policy Directive No. 8,
North American Industry Classification System: Classification of
Establishments and to eliminate OMB Statistical Policy Directive No. 9,
Standard Industrial Classification of Enterprises.
The OMB's notice stated that Federal statistical establishment data
published for reference years beginning on or after January 1, 2022,
should be published using NAICS 2022. Though SBA is not a statistical
agency, it proposes to adopt NAICS 2022 for its table of size
standards, effective October 1, 2022.
As with the previous NAICS revisions, SBA proposes to adopt the
latest NAICS revision, identified as NAICS 2022, effective October 1,
2022 (i.e., the beginning of the new fiscal year following the
effective date of the OMB's release of the NAICS 2022 revision), for
several reasons: (1) Federal Government contracting data and related
statistics will be more consistent and comparable with past data for
analyzing future small business activity if implementation of the
revised table of size standards occurs at the beginning of a new fiscal
year; (2) Users of size standards, for instance, Federal prime
contractors, who may use the size standards for developing their
subcontracting plans, can have more consistent data to examine the past
and future Federal contracting trends; and (3) Small business size
standards apply to most Federal agencies and their programs involving
small businesses; with a time lag between the OMB's effective date and
SBA's update of its size standards, agencies will have sufficient time
to implement the changes and develop training tools, if necessary.
Changes in NAICS 2022
The NAICS 2022 revision created 111 new NAICS industries by
splitting, merging, or modifying 6-digit codes or industry titles/
definitions of 156 exiting industries under NAICS 2017 structure, of
which nine industries were split to two or more NAICS 2022 industries.
These changes are broken down by NAICS sector in Table 1, ``Modified
Industries under NAICS 2017 and New Industries under NAICS 2022 by
NAICS Sector.'' As can be seen in Table 1, Sector 44-45 (Retail Trade)
accounts for the largest proportions of NAICS 2017 industries that have
changed or been amended and of the new industries that have been
created under NAICS 2022, followed by Sector 31-33 (Manufacturing), and
Sector 51 (Information).
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Table 1--Modified Industries Under NAICS 2017 and New Industries Under NAICS 2022 by NAICS Sector
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Existing NAICS 2017 industries New NAICS 2022 industries
changed created
NAICS sector ---------------------------------------------------------------
Count % Count %
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Sector 21....................................... 13 8.3 6 5.4
Sector 31-33.................................... 33 21.2 19 17.1
Sector 42....................................... 5 3.2 3 2.7
Sector 44-45.................................... 61 39.1 52 46.8
Sector 51....................................... 20 12.8 18 16.2
Sector 52....................................... 12 7.7 6 5.4
Sector 81....................................... 7 4.5 2 1.8
Sectors 48-49, 54, 56 & 62...................... 5 3.2 5 4.5
All Sectors..................................... 156 100.0 111 100.0
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Of the 111 new industries under NAICS 2022, 79 (71% of the new
industries) were created by merging two or more NAICS 2017 industries
in their entirety, one or more of NAICS 2017 industries and part(s) of
one or more NAICS 2017 industries, or parts of two or more NAICS 2017
industries. Altogether, 124 NAICS 2017 industries or their parts were
involved in the creation of the 79 new industries. Of the remaining 32
new industries, OMB changed the 6-digit codes for 11 (10%) NAICS 2017
industries without changing their titles, amended the industry titles
of 15 (14%) NAICS 2017 industries without changing their 6-digit codes,
and created six (5%) new industries by modifying the title, 6-digit
code, or definition (or any combination thereof) of a single NAICS 2017
industry or part. These results are summarized in Table 2, ``Summary of
NAICS 2022 Changes.''
Table 2--Summary of NAICS 2022 Changes
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Types of new industries formed Count %
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New industries formed by merging two or 79 71.2
more NAICS 2017 industries or their
parts \1\..............................
NAICS 2017 industries for which 6-digit 11 9.9
codes have changed without changing
their titles...........................
NAICS 2017 industries for which titles 15 13.5
have changed without changing their 6-
digit codes............................
NAICS 2017 industries for which titles, 6 5.4
6-digit codes, or definitions have
changed, mostly by splitting a single
NAICS 2017 industry....................
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Total............................... 111 100.0
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\1\ Of the 79 NAICS 2022 new industries, 15 industries formed by merging
two or more NAICS 2017 industries or their parts used the NAICS 2017
industry titles, of which 14 used different 6-digit codes and one used
the same NAICS 2017 industry code.
Complete information on the relationship between NAICS 2017 and
NAICS 2022 is available on the U.S. Bureau of the Census (Census
Bureau) website at <a href="https://www.census.gov/naics/">https://www.census.gov/naics/</a>. The Census Bureau's
website also provides detailed documentation on Federal notices
involving the replacement of SIC with NAICS, and all subsequent NAICS
updates and revisions, including both the July 2, 2021, and December
21, 2021, Federal notices regarding the NAICS 2022 revision.
Of the 79 new NAICS 2022 industries formed by merging existing
NAICS 2017 industries or their parts, 33 or 42% were formed by merging
one NAICS 2017 industry with parts of two other NAICS 2017
industries.\1\ Likewise, 21 or 27% of new industries were formed by
merging two NAICS 2017 industries, and 11 or 14% were formed by merging
one NAICS 2017 industry with part of another industry. These results
and the formation of the remining 14 or 18% of new industries are
summarized in Table 3, ``Formation of New Industries in NAICS 2022.''
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\1\ These 33 industries were in Sector 44-45 (Retail Trade).
Specifically, NAICS 2017 industry 454110 (Electronic Shopping and
Mail-Order Houses) was split to and distributed across 42 different
retail trade industries, and similarly NAICS 454390 (Other Direct
Selling Establishments) was split to and distributed across 39
different retail trade industries, which were in turn merged with 33
different Retail Trade industries.
Table 3--Formation of New Industries in NAICS 2022
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NAICS 2022 new industries
formed by merging NAICS 2017
NAICS 2017 industries or their parts industries or their parts
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Count %
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One industry and parts of two industries 33 41.8
Two industries.......................... 21 26.6
One industry and part of one industry... 11 13.9
Three industries........................ 4 5.1
Two industries and parts of two 2 2.5
industries.............................
Parts of three industries............... 2 2.5
Four industries......................... 2 2.5
One industry and parts of three 1 1.3
industries.............................
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Parts of two industries................. 1 1.3
Three industries and part of one 1 1.3
industry...............................
Six industries and parts of two 1 1.3
industries.............................
-------------------------------
Total............................... 79 100.0
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Table 4, ``NAICS 2017 Industries or Their Parts Matched to NAICS
2022 Industries,'' below, shows the detailed changes from NAICS 2017 to
NAICS 2022.
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Proposed Size Standards for New Industries in NAICS 2022
On October 22, 1999, SBA proposed to replace SIC with NAICS 1997 as
the basis of industry definitions for its table of small business size
standards (64 FR 57188). The proposed rule included a set of guidelines
or rules that SBA applied to convert the size standards for industries
under SIC to industries under NAICS. The guidelines primarily aimed to
minimize the impact of applying a new industry classification system on
SBA's size standards and on small businesses that qualified as small
under the SIC-based size standards. SBA received no negative comments
against the proposed guidelines. Thus, SBA published its final rule on
May 15, 2000 (65 FR 30386), corrected on September 5, 2000 (65 FR
53533), adopting the resulting table of size standards based on NAICS
1997 structure, as proposed. To be consistent, SBA generally applied
the same guidelines when it updated its table of size standards to
adopt NAICS 2002, NAICS 2007, NAICS 2012, and NAICS 2017 revisions. In
those updates as well, SBA received no adverse comments against using
those guidelines, or against the resulting changes to the size
standards. These guidelines to adopt NAICS revisions for size standards
were also included in the SBA's ``Size Standards Methodology'' white
paper and SBA received no adverse comments when the revised methodology
was open for public comments. Accordingly, in this proposed rule to
adopt NAICS 2022 structure for its size standards table as well, SBA
has generally followed the same guidelines. The guidelines that are
applicable to this update are shown below in Table 5, ``General
Guidelines to Establish Size Standards for New Industries under NAICS
2022.''
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SBA generally applied the guidelines in Table 5 to convert the size
standards from NAICS 2017 industries to NAICS 2022 industries. In
addition to following the above general guidelines in Table 5, in cases
where a new industry is formed by merging multiple industries or parts
of multiple industries with substantially different levels or measures
of size
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standards, in this proposed rule, SBA has also examined the relevant
latest industry and Federal procurement data to determine an
appropriate size standard for the new industry. Developed based on the
above guidelines and analyses of the relevant data, where necessary,
SBA's proposed size standards for the new industries under NAICS 2022
are shown in Table 6, ``Proposed Size Standards for New Industries in
NAICS 2022.'' Also shown in Table 6 are the current size standards for
the affected NAICS 2017 industries and their parts.
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Derivation of Proposed Size Standards for Select NAICS 2022 Industries
NAICS 212114--Surface Coal Mining
SBA proposes a 1,250-employee size standard for NAICS 2022 industry
212114 (Surface Coal Mining). This new industry was formed by combining
NAICS 2017 industry 212111 (Bituminous Coal and Lignite Surface Mining)
with the Anthracite Surface Mining part of NAICS 2017 industry 212113
(Anthracite Mining). Their current size standards are 1,250 employees
for NAICS 2017 industry 212111 and 250 employees for NAICS 2017
industry 212113. Based on the 2017 Economic Census data, 91.5% of firms
in NAICS 212111 qualify as small under the 1,250-employee size
standard. Similarly, 98% of all firms in entire NAICS 212113 are small
under the 250-employee size standard. However, SBA cannot compute the
percentage of firms that qualify as small for the Anthracite Surface
Mining part of NAICS 2017 industry 212113 because such information is
not available in the 2017 Economic Census data. Thus, SBA analyzed the
data for NAICS 212111 and entire NAICS 212113. SBA follows this
approach when a new NAICS 2022 industry includes part or parts of one
or more NAICS 2017 industries.
Based on the 2017 Economic Census data, accounting for 98% of
combined receipts, 80% of firms, and 96% of employees of the new 2022
NAICS industry 212114, NAICS 212111 dominates the new industry. When a
new NAICS 2022 industry is composed of one or more NAICS 2017
industries and part(s) of one or more NAICS 2017 industries and they
all have different size standards (which is true in the case of NAICS
2022 industry 212114), the guidelines in Table 5 directs to select the
same size standard as for the NAICS 2017 industry or part that most
closely matches the economic activity described by the NAICS 2022
industry. Additionally, the guidelines also provide that the size
standard for a new NAICS 2022 industry, comprising one or more of NAICS
2017 industries in their entirety and one or more part(s) of NAICS 2017
industries with different size standards, will be the highest size
standard among the NAICS 2017 industries or their part(s) making up the
new industry, provided that the highest size standard does not include
dominant or potentially dominant firms. These criteria support the
higher 1,250-employee size standard for NAICS 2022 industry 212114.
Nevertheless, SBA also considered adopting 250 employees as a size
standard for the new industry, but it would cause 15 firms in NAICS
2017 industry 212111 to lose their small business status under the 250-
employee size standard and access to Federal assistance. Based on the
2017 Economic Census data, 92.5% of firms will qualify as small under
the proposed 1,250-employee size standard for in the new industry.
NAICS 212115--Underground Coal Mining
SBA proposes to adopt a 1,500-employee size standard for NAICS 2022
industry 212115 (Underground Coal Mining). This new industry was
generated by merging NAICS 2017 industry 212112 (Bituminous Underground
Mining) and the Anthracite Underground Mining part of NAICS 2017
industry 212113 (Anthracite Mining). The current size standards are
1,500 employees for NAICS 212112 and 250 employees for NAICS 212113.
Based on the 2017 Economic Census data, 92.6% of firms in NAICS 212112
are below the 1,500-employee size standard. While SBA does not have the
data to estimate the percentage of firms that would be small in the
Anthracite Underground Mining part of NAICS 212113, 98% of firms
qualify as small under the 250-employee size standard for the overall
NAICS 212113 industry.
Based on the 2017 Economic Census data, accounting for 98% of total
receipts, 68% of total firms, and 97% of total employees, NAICS 2017
industry 212112 dominates the new NAICS 2022 industry 212115. These
percentages would be even higher if only the part of NAICS 212113 was
considered instead of the entire industry. Thus, based on these
results, the guidelines in Table 5 support the 1,500-employee size
standard for NAICS 212115. SBA also considered adopting the 250-
employee size standard applicable to NAICS 212113 as the size standard
for NAICS 212115. However, doing so would cause about 20 firms in NAICS
212112 to lose their small business status. Adopting any size standard
lower than 1,500 employees would cause some businesses that are
currently small in NAICS 212112 to lose their small status. The data
shows that one additional firm would qualify as small in NAICS 212113
under the 1,500-employee size standard. According to the 2012 Economic
Census data, 94% of firms would qualify as small under the proposed
1,500-employee size standard for NAICS 2022 industry 212115.
NAICS 212220--Gold Ore and Silver Ore Mining
SBA proposes to adopt a 1,500-employee size standard for NAICS 2022
industry 212220 (Goal Ore and Silver Ore Mining). This new industry was
generated by merging NAICS 2017 industry 212221 (Gold Ore Mining) and
NAICS 2017 industry 212222 (Silver Ore Mining). The current size
standards are 1,500 employees for NAICS 212221 and 250 employees for
NAICS 212222. Based on the 2017 Economic Census data, about 96.2% of
firms in NAICS 212112 are below the 1,500-employee size standard and
almost all firms in NAICS 212222 are small under the 250-employee size
standard. Accounting for 95% of total receipts, 94% of total firms, and
91% of total employees, NAICS 2017 industry 212221 dominates the new
NAICS industry 212220. Thus, according to the guidelines in Table 5,
SBA is proposing to adopt, as the size standard for the new NAICS
industry 212220, a 1,500-employee size standard, which applies to NAICS
2017 industry 212221. If SBA were to adopt the lower 250-employee size
standard, five firms will lose their small business status in NAICS
212221. Based on the 2017 Economic Census data, 96.5% of firms in NAICS
2022 industry 212220 would qualify as small under the proposed 1,500-
employee size standard.
NAICS 212290--Other Metal Ore Mining
SBA proposes to adopt a 750-employee size standard for NAICS 2022
industry 212290 (Other Metal Ore Mining). This new industry was
generated by merging NAICS 2017 industry 212291 (Uranium-Radium-
Vanadium Ore Mining) and NAICS 2017 industry 212299 (Other Metal Ore
Mining). The current size standards are 250 employees for NAICS 212291
and 750 employees for NAICS 212299. Accounting for 83% of total
employees of the new industry (information on receipts and firms not
available in the 2017 Economic Census tabulations), NAICS 212299
dominates the new industry. Thus, SBA is proposing to adopt 750
employees as the size standard for NAICS 212290. SBA also considered
proposing a 250-employee size standard for the new industry but doing
so would cause two firms in NAICS 212299 to lose their small business
status and access to Federal small business assistance.
NAICS 212323--Kaolin, Clay, and Ceramic and Refractory Minerals Mining
SBA proposes to adopt a 500-employee size standard for NAICS 2022
industry NAICS 212323 (Kaolin, Clay, and Ceramic and Refractory
Minerals Mining). This new industry was formed by combining NAICS 2017
industry
[[Page 40066]]
212324 (Kaolin and Ball Clay Mining) and NAICS 2017 industry 212325
(Clay and Ceramic and Refractory Minerals Mining). The current size
standards are 750 employees for NAICS 212324 and 500 employees for
NAICS 212325. Based on the 2017 Economic Census data, almost all firms
in NAICS 212324 are below the 750-employee size standard and 91.7% of
firms are small under the 500-employee size standard in NAICS 212222.
Accounting for half of total receipts and employees and 78% of total
firms, NAICS 212325 tends to dominate the new industry. Following the
guidelines in Table 5, SBA is adopting 500 employees as the size
standard for NAICS 212323. Adopting the higher 750-employee standard
would enable the largest, and possibly a dominant, firm in NAICS 212324
to qualify as small. Adopting 500 employee would cause only one largest
firm in NAICS 212324 to lose its small business status. Thus, SBA is
proposing to adopt 500 employees as the size standard for NAICS 2022
industry 212323. Under the proposed 500-employee size standard, 92.2%
of firms would qualify as small in the new industry.
NAICS 212390--Other Nonmetallic Mineral Mining and Quarrying
SBA proposes to adopt a 500-employee size standard for NAICS 2022
industry 212390 (Other Nonmetallic Mineral Mining and Quarrying). This
new industry was formed by combining four NAICS 2017 industries: NAICS
212391 (Potash, Soda, and Borate Mineral Mining), NAICS 312392
(Phosphate Rock Mining), NAICS 212393 (Other Chemical and Fertilizer
Mineral Mining), and NAICS 212399 (All Other Nonmetallic Mineral
Mining). Their current size standards are 750 employees, 1,000
employees, 500 employees, and 500 employees, respectively. Based on the
2017 Economic Census data, almost all firms in NAICS 212391 and in
NAICS 212392 are below their 750-employee and 1,000-employee size
standards, respectively. Similarly, 90% of firms in NAICS 212393 and
91.9% firms in NAICS 212300 qualify as small under their 500-employee
size standard. Except for NAICS 212399 accounting for 69% of total
firms, no individual industry was found to dominate the new industry.
SBA proposes to assign a 500-employee standard for NAICS 212390, which
applies to two of the four industries comprising the new industry. No
firms in NAICS 212391 and NAICS 212392 would lose their small business
status by adopting a lower 500-employee size standard for the new
industry. Based on the 2017 Economic Census data, 92.5% of firms would
qualify as small under the proposed 500-employee size standard for the
new industry.
NAICS 316990--Other Leather and Allied Product Manufacturing
SBA proposes to adopt a 500-employee size standard for NAICS 2022
industry NAICS 316990 (Other Leather and Allied Product Manufacturing).
This new industry was formed by combining NAICS 2017 industry 316992
(Women's Handbag and Purse Manufacturing) and NAICS 2017 industry
316998 (All Other Leather Good and Allied Product Manufacturing). The
current size standards are 750 employees for NAICS 316992 and 500
employees for NAICS 316998. Based on the 2017 Economic Census data,
98.9% of firms in NAICS 316992 are below the 750-employee size standard
and 98.8% of firms are small under the 500-employee size standard in
NAICS 316998. Accounting for nearly 80% of combined receipts and 87-88%
of combined firms and employees, NAICS 316998 with a 500-employee size
standard dominates the new industry. Thus, SBA is proposing to adopt
the 500 employees as the size standard for new NAICS 2022 industry
316990. No firms in NAICS 316992 would lose their small business status
under the proposed 500-employee size standard. Based on the 2017
industry data, 98.8% of firms will qualify as small under the proposed
500-employee size standard for NAICS 2022 industry 316990.
NAICS 321215--Engineered Wood Member Manufacturing
SBA proposes to adopt a 500-employee size standard for NAICS 2022
industry NAICS 321215 (Engineered Wood Member Manufacturing). This new
industry was formed by combining NAICS 2017 industry 321213 (Engineered
Wood Member (except Truss) Manufacturing) and NAICS 2017 industry
321214 (Truss Manufacturing). The current size standards are 750
employees for NAICS 321213 and 500 employees for NAICS 321214. Based on
the 2017 Economic Census data, 90.3% of firms in NAICS 321213 qualify
as small under its 750-employee size standard and 96.3% of firms are
small under the 500-employee size standard in NAICS 321214. Accounting
for 76% of combined receipts and 86-87% of combined firms and
employees, NAICS 321214 dominates the new industry. Following the
guidelines in Table 5, SBA proposes to adopt the 500-employee size
standard for NAICS 2022 industry 321315. Only one firm in NAICS 321213
would lose small business status under the proposed 500-employee size
standard. Based on the 2017 industry data, 95.4% of firms will qualify
as small under the proposed 500-employee size standard for NAICS 2022
industry 321215.
NAICS 322120--Paper Mills
SBA proposes to adopt a 1,250-employee size standard for NAICS 2022
industry NAICS 322120 (Paper Mills). This new industry was created by
combining NAICS 2017 industry 322121 (Paper (except Newsprint) Mills)
and NAICS 2017 industry 322122 (Newsprint Mills). The current size
standards are 1,250 employees for NAICS 322121 and 750 employees for
NAICS 322122. Based on the 2017 Economic Census data, 77% of firms in
NAICS 322121 qualify as small under its 1,250-employee size standard
and 66.7% of firms are small under the 750-employee size standard in
NAICS 322122. Accounting for 98% of combined receipts, 85% of total
firms, and 91% of aggregate employees, NAICS 322122 dominates the new
industry. Thus, in accordance with the guidelines in Table 5, SBA
proposes to adopt, as the size standard for NAICS 322120, 1,250-
employee standard that applies to NAICS 322122. Adopting 750-employee
size standard would have caused five firms to lose their small business
status in NAICS 322121. Based on the 2017 industry data, 77.1% of firms
will qualify as small under the proposed 1,250-employee size standard
for NAICS 2022 industry 322120.
NAICS 333248--All Other Industrial Machinery Manufacturing
SBA proposes to adopt a 750-employee size standard for NAICS 2022
industry 333248 (All Other Industrial Machinery Manufacturing). This
new industry was formed by combining NAICS 2017 industry 333244
(Printing Machinery and Equipment Manufacturing) and NAICS 2017
industry 333249 (Other Industrial Machinery Manufacturing). The current
size standards are 750 employees for NAICS 333244 and 500 employees for
NAICS 333249. Based on the 2017 Economic Census data, 98.1% of firms in
NAICS 333244 qualify as small under its 750-employee size standard and
95.4% of firms are small under the 500-employee size standard in NAICS
333249. Accounting for 87-89% of combined receipts, firms, and
employees, NAICS 333249 dominates the new industry. Thus, SBA
considered adopting, as the size standard for NAICS 333248, the 500-
employee size standard
[[Page 40067]]
that applies to NAICS 333249. However, under the lower 500-employee
size standard would cause three firms participating in Federal
contracting in NAICS 333244 to lose their small business status. Thus,
SBA is proposing to adopt the higher 750-employee size standard that
applies to NAICS 333244. Based on the 2017 industry data, 96.7% of
firms would qualify as small under the proposed 750-employee size
standard for NAICS 2022 industry 333248.
NAICS 333310--Commercial and Service Industry Machinery Manufacturing
SBA proposes to adopt a 1,000-employee size standard for NAICS 2022
industry 333310 (Commercial and Service Industry Machinery
Manufacturing). This new industry was generated by aggregating three
NAICS 2017 industries. These include NAICS 333314 (Optical Instrument
and Lens Manufacturing) with a 500-employee size standard, NAICS 333316
(Photographic and Photocopying Equipment Manufacturing) with a 1,000-
employee size standard, and NAICS 333318 (Other Commercial and Service
Industry Machinery Manufacturing) with a 1,000-employee size standard.
Based on the 2017 Economic Census data, 91.3% of firms in NAICS 333314,
96.7% of firms in NAICS 333316, and 96.1% of firms in NAICS 333318
qualify as small under their respective size standards. Accounting for
75-76% of combined receipts and employees, and 68% of combined firms,
NAICS 333318 dominates the new industry. Thus, SBA is proposing, as the
size standard for new NAICS 333310, to adopt the 1,000-employee
standard that applies to NAICS 333318. SBA also considered adopting the
500-employee size standard but doing so would, based on the 2017
Economic Census data, cause about 25 firms in NAICS 333316 and 333318
to lose their small business status. This would also, based on the
Federal Procurement Data System-Next Generation (FPDS-NG) data for
fiscal years 2018-2020, cause more than 25 firms participating in
Federal contracting to lose their small business eligibility. Based on
the 2017 Economic Census data, 95.5% of firms will qualify as small
under the proposed 1,000 employee size standard for NAICS 2022 industry
333310.
NAICS 334610--Manufacturing and Reproducing Magnetic and Optical Media
SBA proposes to adopt a 1,250-employee size standard for NAICS 2022
industry 334610 (Manufacturing and Reproducing Magnetic and Optical
Media). This new industry was created by combining NAICS 2017 industry
334613 (Blank Magnetic and Optical Recording Media Manufacturing) and
NAICS 2017 industry 334614 (Software and Other Prerecorded Compact
Disc, Tape, and Record Reproducing). Their current size standards are
1,000 employees for NAICS 334613 and 1,250 employees for NAICS 334614.
Based on the 2017 Economic Census data, 98.2% of firms in NAICS 334613
and 99.2% of firms in NAICS 334614 qualify as small under their
respective size standards. Accounting for 80% of combined receipts, 87%
of firms, and 94% of employees, NAICS 334614 dominates the new
industry. Thus, SBA is proposing to adopt, as the size standard for the
new industry, 1,250-employee size standard that applies to NAICS
334614. SBA also considered proposing to adopt a lower 1,000-employee
size standard; however, doing so would cause seven firms participating
in Federal contracting in that industry to lose their small business
status. Based on the 2017 industry data, 99.1% of firms would qualify
as small under the proposed 1,250-employee size standard for NAICS 2022
industry 334610.
NAICS 335139--Electric Lamp Bulb and Other Lighting Equipment
Manufacturing
SBA proposes to adopt a 1,250-employee size standard for NAICS 2022
industry 335139 (Electric Lamp Bulb and Other Lighting Equipment
Manufacturing). This new industry was generated by merging NAICS 2017
industry 335110 (Electric Lamp Bulb and Part Manufacturing) and NAICS
2017 industry 335129 (Other Lighting Equipment Manufacturing). Their
current size standards are 1,250 employees and 500 employees,
respectively. Based on the 2017 Economic Census data, 93.5% of firms in
NAICS 335110 and 94.9% of firms in NAICS 335129 qualify as small under
their respective size standards. Contributing to 74-75% of combined
receipts and employees and 82% of all firms, NAICS 335129 dominates the
new industry. Thus, SBA considered assigning 500 employees as a size
standard for the new industry. However, adopting the 500-employee size
standard would cause three firms based on the 2017 Economic Census data
and eight firms based on the FPDS-NG data for fiscal years 2018-2020 to
lose their small business eligibility in NAICS 335110. Accordingly, SBA
is proposing to adopt 1,250 employees as a size standard for the new
industry. Based on the 2017 Economic Census data, 95.8% of firms would
qualify as small under the proposed 1,250-employee size standard for
NAICS 2022 industry 335139.
NAICS 335910--Battery Manufacturing
SBA proposes to adopt a 1,250-employee size standard for NAICS 2022
industry 335910 (Battery Manufacturing). This new industry was
generated by merging NAICS 2017 industry 335911 (Storage Battery
Manufacturing) and NAICS 2017 industry 335912 (Primary Battery
Manufacturing). Their current size standards are 1,250 employees and
1,000 employees, respectively. Based on the 2017 Economic Census data,
92.5% of firms in NAICS 335911 and 87.7% of firms in NAICS 335129
qualify as small under their respective size standards. Accounting for
78-79% of combined receipts and employees and 68% of combined firms,
NAICS 335911 dominates the new industry. Thus, SBA is proposing to
adopt, as the size standard for the new industry, 1,250 employees which
is the current size standard for NAICS 359111. Had SBA adopted 1,000
employees as the size standard for the new industry, three firms
participating in Federal contracts in NAICS 359111 would lose their
small business status. Based on the 2017 industry data, 91.5% of firms
would qualify as small under the proposed 1,250-employee size standard
for NAICS 2022 industry 335910.
NAICS 424350--Clothing and Clothing Accessories Merchant Wholesalers
SBA proposes to adopt a 150-employee size standard for NAICS 2022
industry 424350 (Clothing and Clothing Accessories Merchant
Wholesalers). This new industry was formed by combining NAICS 2017
industry 424320 (Men's and Boys' Clothing and Furnishings Merchant
Wholesalers) and NAICS 2017 industry 424330 (Women's, Children's, and
Infants' Clothing and Accessories Merchant Wholesalers). Their current
size standards are 150 employees and 100 employees, respectively. Based
on the 2017 Economic Census data, 96.2% of firms in NAICS 424320 and
96.7% of firms in NAICS 424330 qualify as small under their respective
size standards. Accounting for 55% of combined receipts, 69% of firms,
and 61% of employees, NAICS 424330 tends to dominate the new industry.
Thus, SBA considered adopting 100 employees as size standard for the
new industry. However, that would cause more than 30 firms in NAICS
424320 to lose their small business status. Thus, SBA is
[[Page 40068]]
proposing to adopt the 150 employees as the size standard for the new
industry. Based on the 2017 Economic Census data, 97.1% of firms in
NAICS 2022 industry 424350 would qualify as small under the proposed
150-employee size standard.
Size Standards for New Retail Trade Industries in NAICS 2022
For the Retail Trade sector, given the increasing prevalence of
omni-channel distribution and variations in reporting patterns, the OMB
eliminated the store/nonstore distinction (89 FR 35350 (July 2, 2021)).
Under the NAICS 2017 structure, Subsector 454, Nonstore Retailers,
included industries for NAICS 454110 (Electronic Shopping and Mail-
Order Houses), NAICS 454210 (Vending Machine Operators), NAICS 454310
(Fuel Dealers), and 454390 (Other Direct Selling Establishments). OMB
eliminated Subsector 454 from the NAICS 2017 structure. Under the NAICS
2022 structure for the sector, NAICS 454110 and NAICS 454390 are
distributed throughout the new structure in the same way as retail
stores, delineated by specialized broad product lines, such as
groceries, apparel, hardware, etc. Vending Machine Operators is moved
to Subsector 445 (Food and Beverage Retailers) with a new 6-digit code
of 445132 and Fuel Dealers is moved to Subsector 457 (Gasoline Stations
and Fuel Dealers) with a new 6-digit code of 457210.
As stated previously, NAICS 2017 industry 454110 was distributed to
42 different retail trade industries, and NAICS 454390 was distributed
to 39 different retail trade industries. Almost all the new NAICS 2022
retail trade industries thus formed saw their 6-digit codes and NAICS
industry titles changed but largely retained their contents and
descriptions. Almost all new retail trade industries under NAICS 2022
contained a NAICS 2017 retail trade industry and parts of NAICS 454110
and NAICS 454390 and carried the description of the NAICS 2017 retail
trade industry. Accordingly, following the guidelines in Table 5 (2b),
SBA assigned the same size standard as for the NAICS 2017 retail trade
industry that most closely matched the economic activity described by
the NAICS 2022 retail trade industry.
For example, as shown in Table 7, Formation of NAICS 449110
(Furniture Retailers) under NAICS 2022, NAICS 2022 industry 449110 was
formed by combining NAICS 442110 (Furniture Stores) with parts of NAICS
454110 and 454390 under NAICS 2017 and by changing the industry title
to Furniture Retailers. The description of NAICS 2022 industry 449110
is almost the same as that for the corresponding NAICS 2017 industry.
Thus, based on the same industry description, the size standard for new
NAICS 2022 industry 449110 is $22 million, the same size standard as
that for NAICS 442110 under NAICS 2017. The current size standards are
$41.5 million for NAICS 454110 and $8.0 million for NAICS 454390. In
this example, the adoption of the $22 million size standard for NAICS
2022 industry 449110 will, thus, result in a decrease to size standard
for part of NAICS 454110 and an increase to the size standard for part
of NAICS 454390 that merged with NAICS 442110. SBA applies this
approach in determining the size standard for all other new NAICS 2022
retail trade industries that contained part of NAICS 2017 industry
454110, part of NAICS 454390, or both.
[GRAPHIC] [TIFF OMITTED] TP05JY22.055
Since the current size standards for almost all impacted retail
trade industries are less than $41.5 million which is the size standard
for NAICS 454110, parts of NAICS 454110 that have merged with other
retail trade industries will, in almost all cases, experience a
decrease to the size standard. Specifically, of the 42 different split
parts of NAICS 454110 that have merged with other retail trade
industries, 41 will experience a decrease to the size standard and one
will experience no change. Similarly, of the 39 different split parts
of NAICS 454390 that have merged with other retail trade industries, 25
will see an increase to the size standard and 14 will see no changes to
the size standard. The size standards for the affected NAICS 2017
retail trade industries are not impacted and, therefore, remain the
same.
NAICS 458110--Clothing and Clothing Accessories Retailers
SBA is proposing to adopt the $41.5 million receipts-based size
standard for NAICS 2022 industry 458110 (Clothing and Clothing
Accessories Retailers). This new industry was formed by combining six
clothing and clothing accessories related retail trade industries with
parts of NAICS 2017 industries 454110 and 454390. Table 8, Formation of
NAICS 2022 Industry 458110 (Clothing and Clothing Accessories
Retailers), lists all of these industries along with their respective
size standards. Excluding parts of NAICS 454110 and 454390, the size
standards for those six industries vary from $12 million for NAICS
448110 (Men's Clothing Stores) to $41.5 million for NAICS 448140
(Family Clothing Stores), and the percentages of firms that are small
under their respective size standards vary from 96.7% for 448110
[[Page 40069]]
to 98.9% for NAICS 448120 (Women's Clothing Stores).
[GRAPHIC] [TIFF OMITTED] TP05JY22.056
Excluding parts of NAICS 454110 and 454390, no single industry
seems to dominate among those six clothing and clothing accessories
related retail trade industries making up the new industry.
Accordingly, following the guidelines laid out in Table 5, SBA is
proposing to adopt the highest $41.5 million size standard among the
six industries as the size standard for new NAICS 2022 industry 458110.
Based on the 2017 industry data, 98.7% of firms in NAICS 458110 would
qualify as small under the proposed $41.5 million size standard. SBA
confirmed that no individual firm at the proposed $41.5 million size
standard would dominate the market in any of those industries. For
example, based on the 2017 Economic Census data, the market share of a
firm at the proposed size standard averaged just 0.3%, varying from
0.04% to 0.6%. SBA determines that these levels of market shares
effectively preclude a firm at or below the proposed size standard from
exerting control on any of the industries.
NAICS 513140--Directory and Mailing List Publishers
SBA proposes to adopt a 1,000-employee size standard for NAICS 2022
industry 513140 (Directory and Mailing List Publishers). This new
industry was formed by combining NAICS 2017 industry 511140 (Directory
and Mailing List Publishers) and the internet Directory and Mailing
List Publishers part of NAICS 2017 industry 519130 (Internet Publishing
and Broadcasting and Web Search Portals). Their current size standards
are 1,250 employees and 1,000 employees, respectively. Based on the
2017 Economic Census data, 98.3% of firms in both industries qualify as
small under their respective size standards. Accounting for 97% of
combined receipts, 92% of combined firms, and 95% of combined
employees, NAICS 519130 dominates the new industry. Thus, SBA is
proposing to adopt 1,000 employees as the size standard for the new
industry. Moreover, under the 1,000-employee size standard, no firm in
NAICS 511140 would lose small status, based on both the 2017 Economic
Census and FPDS-NG data for fiscal years 2018-2020.
NAICS 513191--Greeting Card Publishers
SBA proposes to adopt a 1,000-employee size standard for NAICS 2022
industry 513191 (Greeting Card Publishers). This new industry was
formed by combining NAICS 2017 industry 511191 (Greeting Card
Publishers) with the Internet Greeting Card Publishers part of NAICS
2017 industry 519130 (Internet Publishing and Broadcasting and Web
Search Portals). Their current size standards are 1,500 employees and
1,000 employees, respectively. Based on the 2017 Economic Census data,
99% of firms in NAICS 511191 and 98.3% in 519130 qualify as small under
their respective size standards. Accounting for 98% of combined
receipts and firms and 95% of combined employees, NAICS 519130
dominates the new industry. Thus, SBA is proposing to adopt 1,000
employees as the size standard for the new industry. Moreover, at the
1,000-
[[Page 40070]]
employee size standard, no firm in NAICS 511191 would lose small
status, based on both the 2017 Economic Census and FPDS-NG data for
fiscal years 2018-2020. Based on the 2017 industry data, 98.4% of firms
in NAICS 2022 industry 513191 would qualify as small under the proposed
1,000-employee size standard.
NAICS 513199--All Other Publishers
SBA proposes to adopt a 1,000-employee size standard for NAICS 2022
industry 513199 (All Other Publishers). This new industry was formed by
combining NAICS 2017 industry 511199 (All Other Publishers) with the
All Other Internet Publishers part of NAICS 2017 industry 519130
(Internet Publishing and Broadcasting and Web Search Portals). Their
current size standards are 500 employees and 1,000 employees,
respectively. Based on the 2017 Economic Census data, 98.9% of firms in
NAICS 511199 and 98.3% in 519130 qualify as small under their
respective size standards. Accounting for 98-99% of combined receipts
and employees, and 93% of combined firms, NAICS 519130 dominates the
new industry. Thus, SBA is proposing to adopt 1,000 employees as the
size standard for the new industry. SBA also considered adopting, as
the size standard for the new industry, the 500-employee size standard
that applies to NAICS 511199. However, doing so would cause about 40
firms based on the 2017 Economic Census data and 35 firms based on the
FPDS-NG data for fiscal years 2018-2020 to lose small business status
in NAICS 519130. Based on the 2017 Economic Census data, 98.7% of firms
in NAICS 2022 industry 513199 would qualify as small under the proposed
1,000-employee size standard.
NAICS 516210--Media Streaming Distribution Services, Social Networks,
and Other Media Networks and Content Providers
SBA proposes to adopt a $41.5 million receipts-based size standard
for NAICS 2022 industry 516210 (Media Streaming Distribution Services,
Social Networks, and Other Media Networks and Content Providers). This
new industry was formed by combining three industries in their entirety
with parts of two other industries under NAICS 2017. As shown in Table
9, Formation of NAICS 2022 Industry 516210, NAICS 515111 (Radio
Networks), NAICS 515210 (Cable and other Subscription Programming),
NAICS 519110 (News Syndicates), and the Television Networks part of
NAICS 515120 (Television Broadcasting) have receipts-based size
standards, and the Internet Broadcasting part of NAICS 519130 (Internet
Publishing and Broadcasting and Web Search Portals) has an employee
size standard. Since four of the five components of the new industry
have a receipts-based size standard, SBA determines that a receipts-
based size standard would be more appropriate for the new industry
instead of an employee-based size standard. Moreover, industries with
receipts-based size standards account for more than two-thirds (68%) of
total firms in the new industry. When converted to receipts, the 1,000-
employee size standard for the Internet Broadcasting part of NAICS
519130 will translate to a $41.5 million receipts-based size
standard.\2\
---------------------------------------------------------------------------
\2\ Using the 2012 Economic Census data, the 1,000-employee size
standard for NAICS 519130 is equivalent to $286 million in receipts,
capping of which translates to the maximum receipts-based size
standard of $41.5 million. In accordance with the SBA's ``Size
Standards Methodology,'' SBA's receipts-based size standards are
capped at the maximum of $41.5 million and employee-based size
standards are capped at the maximum of 1,500 employees.
[GRAPHIC] [TIFF OMITTED] TP05JY22.057
Considering the $41.5 million receipts-based equivalent of the
1,000-employee size standard for NAICS 519130, four of the five
industries or parts contained in NAICS 2022 industry 516210 now have a
$41.5 million receipts-based size standard. Thus, consistent with the
guidelines as set forth in Table 5, SBA is proposing to
[[Page 40071]]
adopt, as the size standard for the new industry, a $41.5 million
receipts-based size standard which happens to be the highest and most
frequently occurring size standard among the industries or parts
comprising the new industry. SBA has determined that no individual firm
at or below the proposed $41.5 million size standard will be large
enough to dominate the operation in NAICS 2017 industry 519110, which
currently has a lower size $32 million receipts-based size standard.
Specifically, an individual firm at or below the proposed $41.5 million
size standard would account for less than 3% of total industry receipts
in NAICS 519110. This level of market share precludes the possibility
of a firm at the proposed size standard to dominate the industry.
Nearly 96% of firms in NAICS 511930 will qualify as small under the
proposed $41.5 million size standard, as compared to 98% under the
current 1,000-employee size standard. At the $41.5 million size
standard, based on the 2017 Economic Census data, about 15-20 firms in
NAICS 511930 (0.25% of firms in the industry) would lose their status
as small businesses. Based on the 2017 Economic Census data, 92.3% of
total firms in the new industry would qualify as small under the
proposed $41.5 million receipts-based size standard.
NAICS 519290--Web Search Portals and All Other Information Services
SBA proposes to adopt a 1,000-employee size standard for NAICS 2022
industry 519290 (Web Search Portals and All Other Information
Services). This new industry was formed by combining NAICS 2017
industry 519190 (All Other Information Services) with the Web Search
Portals part of NAICS 2017 industry 519130 (Internet Publishing and
Broadcasting and Web Search Portals). Their current size standards are
$30 million in average annual receipts and 1,000 employees,
respectively. Based on the 2017 Economic Census data, 97.7% of firms in
NAICS 519190 and 98.3% in NAICS 519130 qualify as small under their
respective size standards. Accounting for 97-98% of combined receipts
and employees, and 87% of combined firms, NAICS 519130 dominates the
new industry. Thus, SBA is proposing to adopt 1,000 employees as the
size standard for the new industry. Based on the 2017 Economic Census
data, SBA confirmed that the proposed 1,000-employee size standard
excludes the largest and potentially dominant firms in NAICS 519190,
even with 99% of firms qualifying as small under the 1,000-emploee size
standard compared to 97.7% at the $30 million receipts-based size
standard. Based on the 2017 industry data, 98.8% of firms would qualify
as small under the 1,000-employee based size standard for NAICS 2022
industry 519290.
NAICS 811210--Electronic and Precision Equipment Repair and Maintenance
SBA proposes to adopt a $30 million receipts-based size standard
for NAICS 2022 industry 811210 (Electronic and Precision Equipment
Repair and Maintenance). This new industry was formed by merging four
electronic, machinery and equipment repair and maintenance related
industries. These industries, along with their respective size
standards, are listed in Table 10, Formation of NAICS 811210
(Electronic and Precision Equipment Repair and Maintenance). Their
current size standards for these industries vary from $19.5 million for
NAICS 811213 to $30 million for NAICS 811212. The percentages of firms
that are below the current size standards vary from 96.6% for NAICS
811219 to 99% for NAICS 811212. Based on the shares of combined
receipts, firms, or employees, no industry seems to dominate the new
industry. Accordingly, following the guidelines set forth in Table 5,
SBA proposes to adopt, as the size standard for the new industry, the
highest size standard (i.e., $30 million) among the four industries
making up the new industry. Based on the 2017 industry data, 98.4% of
firms in NAICS 2022 industry 811210 would qualify as small under the
proposed $30 million size standard.
In none of the three industries for which the current size standard
is lower than the proposed $30 million, no largest or potentially
dominant firms will be included under the proposed $30 million size
standard. For example, based on the 2017 Economic Census data, the
market share of a firm at the proposed $30 million size standard
averages 1%, ranging from 0.4% for NAICS 812219 to 2.1% for NAICS
811211. SBA determines that these levels of market shares effectively
preclude a firm at or below the proposed size standard from exerting
control on any of the four impacted industries.
[[Page 40072]]
[GRAPHIC] [TIFF OMITTED] TP05JY22.058
Summary of Proposed Size Standards for NAICS 2022 Industries
The NAICS 2022 revision created 111 new industries by
reclassifying, combining, or splitting 156 NAICS 2017 industries or
their parts. SBA's proposed size standards for these 111 new industries
under NAICS 2022, as shown in Table 6 (above) have resulted in an
increase to the size standards for 21 industries and 27 parts of three
industries under NAICS 2017, a decrease to size standards for seven
industries and 41 parts of one industry, a change in the size standard
measure from average annual receipts to number of employees for one
industry, a change in the size standard measure from number of
employees to average annual receipts for part of one industry, and no
change in size standards for 118 industries and 33 parts of eight
industries.
Evaluation of Dominance in Field of Operation
Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) defines a
small business concern as one that: (1) Is independently owned and
operated; (2) Is not dominant in its field of operation; and (3) Meets
a specific small business definition or size standard established by
SBA's Administrator. SBA considers, as part of its evaluation, whether
a business concern at a proposed or revised size standard would be
dominant in its field of operation. For this, SBA generally examines
the industry's market share of firms at the proposed or revised
standard. SBA also examines distribution of firms by size to ensure
that a contemplated size standard excludes the largest and potentially
dominant firms within an industry. The results of the market share
analysis and size distribution of firms may indicate whether a firm, at
the proposed or revised size standard, can exercise a control on a
national basis. SBA has determined that for the industries for which
size standards have been changed in this proposed rule, no individual
firm at or below the proposed size standard will be large enough to
dominate its field of operation. The share of a firm in total industry
receipts at the proposed size standard, among those industries for
which size standards have been changed is, on average, 1.4%, ranging
from 0.005% to 31.2%. SBA determines that these levels of market shares
effectively preclude a firm at or below the proposed size standards
from exerting control on any of the industries.
Alternatives to Adopting NAICS 2022 for Size Standards
As an alternative to proposing new size standards for NAICS 2022
industries, SBA considered retaining NAICS 2017 as the basis of
industry definitions for its small business size standards. That would,
however, lead to inconsistency between SBA's size standards and
establishment data published by Federal agencies that will adopt NAICS
2022 for their statistical and other data collection programs. OMB
stated in its December 21, 2021, notice that ``Federal statistical
establishment data published for reference years beginning on or after
January 1, 2022, should be published using the 2022 NAICS United States
codes.'' SBA is not a statistical agency, but the Agency uses for its
size standards analyses establishment data collected by other Federal
agencies, such as the Economic Census data and County Business Patterns
from the U.S. Census Bureau. If SBA continues using NAICS 2017 for its
size standards, it will not be able to analyze and evaluate industry
structure adequately and accurately and adjust small business size
standards appropriately because the forthcoming Economic Census and
County Business Patterns data based on NAICS 2022 will not be
compatible with NAICS 2017. That would run counter to the mandate of
the Small Business Jobs Act (Jobs Act) (Pub. L. 111-240 (September 27,
2010)), which requires SBA to review all size standards and adjust them
appropriately to reflect the current industry and market data every
five years.
To establish, review, or revise, where necessary, small business
size standards, SBA uses special tabulations of industry data that it
obtains from the U.S. Census Bureau based on its
[[Page 40073]]
Economic Census of U.S. industries and businesses, and establishment
data from its County Business Patterns. Because the 2022 Economic
Census will be based on NAICS 2022 industry definitions, it is
imperative that SBA use NAICS 2022 as the basis of industry definitions
for its table of small business size standards.
Request for Comments
SBA welcomes public comment on this proposed rule. Specifically,
SBA invites comments on whether its proposed size standards for new
industries are appropriate and suggestions on alternative size
standards, along with supporting data and analysis, if proposed size
standards are not appropriate. SBA also seeks comments on its
methodology for converting size standards from NAICS 2017 to NAICS 2022
and data sources and analyses it used in developing proposed size
standards for new industries. SBA will thoroughly evaluate and address
all comments in preparing the final rule to adopt NAICS 2022 for its
table of size standards.
Justification for the October 1, 2022, Effective Date
SBA's small business size standards, matched to NAICS 2022 to be
adopted in a forthcoming final rule, will be effective on October 1,
2022, for the following reasons:
1. OMB stated in its December 21, 2021, notice that Federal
statistical establishment data published for reference years beginning
on or after January 1, 2022, should be published using NAICS 2022. SBA
is not a statistical agency, but it uses the establishment data
collected from other Federal agencies, such as the Economic Census and
County Business Patterns data from the Census Bureau for its size
standards analysis. Similarly, Federal procurement databases and
systems, such as FPDS-NG and the System for Award Management (SAM), use
NAICS codes from SBA's table of size standards. If SBA does not adopt
NAICS 2022 for its table of size standards in a timely manner, it will
result in inconsistency between SBA's size standards and other Federal
procurement databases.
2. October 1, 2022, is the start of the new Federal Government
fiscal year following OMB's adoption of NAICS 2022 effective January 1,
2022, and is consistent with SBA's adoption of previous NAICS revisions
for its size standards effective at the beginning of the new fiscal
year after the OMB's effective date.
3. With the adoption of the updated size standards at the start of
the new fiscal year, Federal agencies that use NAICS industry
definitions and SBA's size standards can collect comparable and
consistent data on Federal statistics for program and industry
analyses.
4. With the October 1, 2022, effective date, Federal agencies that
use SBA's small business size standards for their programs will have
sufficient time to plan and implement the updated size standards and
assess the impact of size standards changes on their programs.
Compliance With Executive Orders 12866, the Congressional Review Act (5
U.S.C. 801-808), the Regulatory Flexibility Act (5 U.S.C. 601-612),
Executive Orders 13563, 12988, and 13132, and the Paperwork Reduction
Act (44 U.S.C. Ch. 35)
Executive Order 12866
OMB has determined that this proposed rule is not a ``significant
regulatory action'' for purposes of Executive Order 12866. This rule
proposes to incorporate the OMB's 2022 revisions of NAICS, which SBA
uses as a basis of industry definitions for purposes of establishing
small business size standards. As discussed above in this SUPPLEMENTARY
INFORMATION section, the size standards of some industries or their
parts would change because of the adoption of the NAICS 2022 revisions
for SBA's Table of Size Standards. However, SBA has determined that a
vast majority of businesses defined as small under the current NAICS
2017 based size standards will continue to remain small under the NAICS
2022 based size standards. The proposed rule, if adopted in its present
form, will also affect other Federal Government programs that use SBA's
size standards and provide various benefits for small businesses. SBA
welcomes comments describing the impact on small businesses of the size
standard changes resulting from the adoption of the NAICS revision for
SBA Table of Size Standards. In order to help explain the need and
objective of this proposed rule and its potential benefits and costs,
SBA is providing, below, a Cost Benefit Analysis of this rule,
including (1) A statement of the need for the regulatory action, (2) An
examination of alternative approaches, and (3) An evaluation of the
benefits and costs--both quantitative and qualitative--of the
regulatory action and the alternatives considered.
Cost Benefit Analysis
1. What is the need for the regulatory action?
SBA believes that revising its small business size standards based
on NAICS 2022 is in the best interests of small businesses. SBA's
mission is to aid and assist small businesses through a variety of
financial, procurement, business development and counselling, and
advocacy programs. To ensure that these programs are best directed to
their intended beneficiaries, SBA establishes numerical small business
definitions (usually referred to as ``size standards'') to determine
which businesses are deemed eligible for Federal small business
assistance. NAICS 2022 provides the latest industry definitions
reflecting the latest changes in industry structure in the United
States.
Under the Small Business Act (Act) (15 U.S.C. 632(a)), SBA
Administrator is responsible for establishing small business size
definitions and for ensuring that such definitions vary from industry
to industry to reflect differences among various industries. By
analyzing and reviewing size standards based on the NAICS 2022 industry
definitions, SBA can more accurately and appropriately fulfill its
mandate. If SBA does not use the latest industry definitions under
NAICS 2022, size standards would not accurately reflect differences
among industries. In addition, the Jobs Act requires SBA to review, at
least every five years, all size standards and make necessary
adjustments to reflect current industry and market conditions. To
better serve this mandate, SBA needs to evaluate the industry data
based on the latest NAICS industry definitions available.
In this proposed rule, SBA is generally following the same
guidelines that it followed for adopting prior NAICS revisions for size
standards, as spelled out under the Supplemental Information section.
SBA also analyzed the relevant industry and program data to determine
the size standards for certain NAICS 2022 industries involving NAICS
2017 industries or their parts with substantially different size
standards. Size standards based on NAICS 2022 industry definitions and
corresponding data will serve SBA's mission more effectively.
2. What are the potential benefits and costs of this regulatory action?
As stated previously, the NAICS 2022 revision created 111 new
industries by reclassifying, combining, or splitting 156 NAICS 2017
industries or their parts. Changes from NAICS 2017 to NAICS 2022
consist of mergers of 124
[[Page 40074]]
NAICS 2017 industries or their parts to form the 79 new industries in
NAICS 2022 with impacts on size standards on a number of NAICS 2017
industries. The NAICS 2022 revision also comprises of 32 changes in 6-
digit codes, industry titles, or descriptions without changing the size
standards. SBA's proposed size standards for these 111 new industries
under NAICS 2022 have resulted in an increase to the size standards for
21 industries and 27 parts of three industries, a decrease to size
standards for seven industries and 41 parts of one industry, a change
in the size standard measure from average annual receipts to number of
employees for one industry, a change in the size standard measure from
number of employees to average annual receipts for part of one
industry, and no change in size standards for 118 industries and 33
parts of eight industries. The benefits, costs, and transfer impacts of
these changes are discussed below.
OMB directs agencies to establish an appropriate baseline to
evaluate any benefits, costs, or transfer impacts of new regulatory
actions and alternative approaches considered. The baseline should
represent the agency's best assessment of what the world would look
like absent the regulatory action. For a regulatory action promulgating
modifications to an existing regulation (such as modifying the existing
size standards), a baseline assuming no change to the regulation (i.e.,
making no changes to current size standards) would generally provide an
appropriate benchmark for evaluating benefits, costs, or transfer
impacts of proposed or final regulatory changes and their alternatives.
The Baseline
For purposes of this regulatory action, the baseline represents
maintaining the ``status quo,'' i.e., making no changes to the current
size standards. Using the number of small businesses and levels of
small business benefits (such as set-aside contracts, SBA's loans,
disaster assistance, etc.) they receive under the current size
standards as a baseline, one can examine the potential benefits, costs,
and transfer impacts of changes to size standards on small businesses
and on the overall economy.
Based on the 2017 Economic Census data, of a total of about 880,245
firms in the 156 impacted industries under NAICS 2017, 97.7% are
considered small under the current size standards under NAICS 2017.
Similarly, based on the data from FPDS-NG for fiscal years 2018-
2020, about 15,400 unique firms in those 156 NAICS 2017 industries
received at least one Federal contract during that period, of which
76.2% were found to be small under the current size standards.\3\ Of
about $18.6 billion in total average annual contract dollars awarded to
businesses in the impacted industries during that period, 25.6% went to
small businesses. Of about $4.8 billion in total small business
contract dollars awarded in those industries during that period, 87.1%
were awarded through various set-aside programs and 12.9% were awarded
through non-set aside contracts. Table 11, Baseline of Impacted
Industries Under NAICS 2017, provides these baseline results.
---------------------------------------------------------------------------
\3\ Of the 156 NAICS 2017 industries impacted in the NAICS 2022
revision, 66 industries were part of Sector 42 (Wholesale Trade) or
Sector 44-45 (Retail Trade) that does not apply for Federal
contracting. In the remaining 90 industries that belong to other
sectors, about 15,400 unique firms got at least one Federal contract
during fiscal years 2018-2022.
Table 11--Baseline of Impacted Industries Under NAICS 2017
------------------------------------------------------------------------
Impact variable Value
------------------------------------------------------------------------
Number of industries impacted........................... 156
Total firms in impacted industries (2017 Economic 880,245
Census)................................................
Total small firms in impacted industries under current 859,573
size standards (2017 Economic Census)..................
Small firms as % of total firms (2017 Economic Census).. 97.7%
Total contract dollars ($ million) (FPDS-NG--fiscal $18,644
years 2018-2020).......................................
Total small business contract dollars under current $4,776
standards ($ million) (FPDS-NG--fiscal years 2018-2020)
Small business dollars as % of total dollars (FPDS-NG 25.6%
fiscal years 2018-2020)................................
Total number of unique firms getting contracts (FPDS-NG 15,391
fiscal years 2018-2020)................................
Total number of unique small firms getting small 11,727
business contracts (FPDS-NG fiscal years 2018-2020)....
Small business firms as % of total firms (FPDS-NG fiscal 76.2%
years 2018-2020).......................................
Number of 7(a) and Certified Development Company (CDC)/ 8,316
504 loans (fiscal years 2018-2020).....................
Amount of 7(a) and 504 loans ($ million) (fiscal years $4,789
2018-2020).............................................
Number of Economic Injury Disaster Loan (EIDL) program 589
loans (fiscal years 2018-2020) \1\.....................
Amount of EIDL loans ($ million) (fiscal years 2018- $52.6
2020) \1\..............................................
------------------------------------------------------------------------
\1\ Excludes COVID-19 related EIDL loans due to their temporary nature.
Effective January 1, 2022, SBA stopped accepting applications for new
COVID EIDL loans or advances.
Based on the SBA's internal data on its loan programs for fiscal
years 2018-2020, small businesses in those 156 industries received, on
an annual basis, a total of 8,316 7(a) loans and CDC/504 loans in that
period, totaling about $4.8 billion, of which 85.8% was issued through
the 7(a) loan guarantee program and 14.2% was issued through the CDC/
504 program. During fiscal years 2018-2020, small businesses in those
industries also received 589 loans through the SBA's EIDL program,
totaling about $52.6 million on an annual basis.\4\
---------------------------------------------------------------------------
\4\ The analysis of the disaster loan data excludes physical
disaster loans that are available to anyone regardless of size,
disaster loans issued to nonprofit entities, and EIDLs issued under
the COVID-19 relief program. Effective January 1, 2022, SBA stopped
accepting applications for new COVID EIDL loans or advances. Thus,
the disaster loan analysis presented here pertains to the regular
EIDL loans only. SBA estimates impacts of size standards changes on
EIDL loans by calculating the ratio of businesses getting EIDL loans
to total small businesses (based on the 2017 Economic Census data)
and multiplying it by the number of impacted small firms. Due to
data limitations, for FY 2019-20, some loans with both physical and
EIDL loan components could not be broken into the physical and EIDL
loan amounts. In such cases, SBA applied the ratio of EIDL amount to
total (physical loan + EIDL) amount using FY 2016-18 data to the FY
2019-20 data to obtain the amount attributable to the EIDL loans.
---------------------------------------------------------------------------
Proposed Increases to Size Standards
As stated above, SBA's proposed size standards for the 111 new
industries under NAICS 2022 have resulted in an increase to the size
standards for 21 industries and 27 parts of three industries under
NAICS 2017. Below are descriptions of the benefits, costs, and
[[Page 40075]]
transfer impacts of the proposed size standards.
Benefits of Proposed Increases to Size Standards
The benefits of adopting NAICS 2022 and the resulting proposed
increases to size standards, if adopted, will accrue to three groups in
the following ways: (1) Some businesses that are currently above their
current size standards may gain small business status, thereby becoming
eligible to participate in Federal small business assistance programs,
including SBA's 7(a) loan program, CDC/504 loan program, EIDL program,
Surety Bond Guarantee Program, and Federal procurement and business
development programs intended for small businesses; (2) Growing small
businesses that are close to exceeding the current size standards for
their NAICS 2017 industries may retain their small business status for
a longer period under proposed size standards under NAICS 2022, and can
continue participating in the above programs; and (3) Federal
Government agencies will have a larger pool of small businesses from
which to draw to fulfill their small business procurement requirements
because they will be able to define more accurately the principal
purposes of their procurements under NAICS 2022 industry definitions.
The most significant benefit to businesses from increases to size
standards is gaining or extending eligibility for Federal small
business assistance programs. These include SBA's 7(a) loan program,
CDC/504 loan program, EIDL program, Surety Bond Guarantee Program, and
Federal procurement programs intended for small businesses. Federal
procurement programs provide targeted, set-aside opportunities for
small businesses. These include the 8(a) Business Development (BD)
program, the Small Disadvantaged Businesses (SDB) program, the
Historically Underutilized Business Zones (HUBZone) program, the Women-
Owned Small Businesses (WOSB) program, the Economically Disadvantaged
Women-Owned Small Businesses (EDWOSB) program, and the Service-Disabled
Veteran-Owned Small Businesses (SDVOSB) program.
For the affected NAICS 2017 industries or their parts for which
size standards have increased, based on the 2017 Economic Census data,
SBA estimates that approximately 700 additional businesses would gain
small business status under the proposed size standards for 2022 NAICS
industries. That represents about 1.0% of the total number of small
businesses in the affected industries. SBA's proposed size standards
would result in an increase to the small business share of total
receipts in those 24 industries (i.e., those with increases in size
standards) from 38.3% to 44.6%. Table 12, Impacts of Proposed Size
Standards for NAICS 2022 Industries, provides impacts of increasing
size standards for 21 industries and 27 parts of three industries under
NAICS 2017.
Table 12--Impacts of Proposed Size Standards for NAICS 2022 Industries
------------------------------------------------------------------------
Impact variable Value
------------------------------------------------------------------------
Number of industries with increases to size standards... 24
Total current small businesses in industries with 70,979
increases to size standards (2017 Economic Census).....
Additional firms qualifying as small under standards 691
(2017 Economic Census).................................
% of additional firms qualifying as small relative to 1.0%
current small businesses in industries with increases
to size standards (2017 Economic Census)...............
Number of current unique small firms getting small 1,479
business contracts in industries with increases to size
standards (FPDS-NG fiscal years 2018-2020) \1\.........
Additional small business firms getting small business 42
status (FPDS-NG fiscal years 2018-2020) \1\............
% increase to small businesses relative to current 2.8%
unique small firms getting small business contracts in
industries with increases to size standards (FPDS-NG
fiscal years 2018-2020)................................
Total small business contract dollars under current $492.3
standards in industries with increases to size
standards ($ million) (FPDS-NG fiscal years 2018-2020).
Estimated additional small business dollars available to $60.4
newly- qualified small firms (using avg. dollars
obligated to small businesses) ($ million) (FPDS-NG
fiscal years 2018-2020) \2\............................
% increase to small business dollars relative to total 12.3%
small business contract dollars under current standards
in industries with increases to size standards.........
Total number of 7(a) and 504 loans to small business in 822
industries with increases to size standards (fiscal
years 2018-2020).......................................
Total 7(a) and 504 loan amounts to small businesses in $300.0
industries with increases to size standards ($ million)
(fiscal years 2018-2020)...............................
Estimated number of 7(a) and 504 loans to newly 1
qualified small firms..................................
Estimated 7(a) and 504 loan amounts to newly qualified $0.001
small firms ($ million)................................
% increase to 7(a) and 504 loan amount relative to the 0.0%
total amount of 7(a) and 504 loans in industries with
increases to size standards............................
Total number of EIDL loans to small businesses in 87
industries with increases to size standards (fiscal
years 2018-2020) \3\...................................
Total amount of EIDL loans to small businesses in $5.4
industries with increases to size standards ($ million)
(fiscal years 2018-2020) \3\...........................
Estimated number of EIDL loans to newly qualified small 0
firms \3\..............................................
Estimated EIDL loan amount to newly qualified small $0.0
firms ($ million) \3\..................................
% increase to EIDL loan amount relative to the total 0.0%
amount of disaster loans in industries with increases
to size standards \3\..................................
------------------------------------------------------------------------
\1\ Total impact represents total unique number of firms impacted to
avoid double counting as some firms are participating in more than one
industry.
\2\ Additional dollars are calculated multiplying average small business
dollars obligated per Data Universal Numbering System (DUNS) times
change in number of firms. Numbers of firms are calculated using the
SBA current size standard, not the contracting officer's size
designation.
\3\ Excludes COVID-19 related EIDL loans due to their temporary nature.
Effective January 1, 2022, SBA stopped accepting applications for new
COVID EIDL loans or advances.
As shown in Table 12, based on the FPDS-NG data for fiscal years
2018-2020, SBA estimates that about 42 firms that are currently active
in Federal contracting in those industries would gain small business
status under the proposed size standards. Based on the same data, SBA
estimates that those newly qualified small businesses under
[[Page 40076]]
the proposed size standards under NAICS 2022 could receive Federal
small business contracts totaling about $60.4 million annually. That
represents a 12.3% increase to Federal small business dollars from the
baseline.
The added competition from more businesses qualifying as small can
result in lower prices to certain Federal Government procurements set
aside or reserved for small businesses, but SBA cannot quantify this
impact precisely. Costs could also be higher when full and open
contracts are awarded to HUBZone businesses that receive price
evaluation preferences. However, with agencies likely setting aside
more contracts for small businesses in response to the availability of
a larger pool of small businesses under the proposed size standards,
HUBZone firms might receive more set-aside contracts and fewer full and
open contracts, thereby resulting in some cost savings to agencies. SBA
cannot estimate such costs savings as it is impossible to determine the
number and value of unrestricted contracts to be otherwise awarded to
HUBZone firms will be awarded as set-asides. However, such cost savings
are likely to be relatively small as only a small fraction of full and
open contracts are awarded to HUBZone businesses.
Under SBA's 7(a) and CDC/504 loan programs, with more businesses
qualifying as small under the proposed size standards, SBA will be able
to guarantee more loans to small businesses. However, SBA expects the
impact on loans to be minimal since applicants to SBA's financial
assistance programs are typically much smaller than the industry size
standard and most businesses that currently participate in the program
would remain eligible for assistance even after this rule is adopted.
Moreover, SBA does not anticipate that the proposed increases to size
standards will have a significant impact on the distribution of firms
receiving loans by size of firm. Since SBA's proposed size standards
changes primarily impact firms at the higher margin of size standards,
SBA estimates the impact to its financial assistance programs by
estimating the number of loans and the amount of loans to firms greater
than 10% below their size thresholds. SBA believes that expanding
access to SBA's financial assistance programs will help all small
businesses to adapt to changes in business environment, recover from
disasters more quickly, and grow successfully, while having no impact
on the ability of smaller small firms to access financial services from
SBA.
Based on its internal data for fiscal years 2018-2020, SBA
estimates that about one additional 7(a) and CDC/504 loans, totaling
approximately $.001 million, could be made to the newly-defined small
businesses under the proposed size standards under NAICS 2022. That
represents a 0.0% increase to the loan amount compared to the baseline
(see Table 12). The actual impact might be smaller as the newly
qualified firms under the proposed size standards could have qualified
anyway under the tangible net worth and net income based alternative
size standard.
Newly-defined small businesses will also benefit from SBA's EIDL
program, which, like SBA's 7(a) and CDC/504 loan program, typically
provides loans to businesses that are much smaller than the industry
size standard. Since this program is contingent on the occurrence and
severity of a disaster, SBA cannot make a precise estimate of the
future EIDL benefit. However, based on its internal disaster loan
program data for fiscal years 2018-2020 and the amount of loans to
firms greater than 10% below their size thresholds, SBA estimates that,
on an annual basis, the newly defined small businesses under the
proposed size standards for NAICS 2022 would not be impacted.
Additionally, the newly-defined small businesses under proposed
size standards under NAICS 2022 would also benefit through reduced
fees, less paperwork, and fewer compliance requirements that are
available to small businesses through the Federal Government programs,
but SBA has no data to quantify this impact.
Costs of Proposed Increases to Size Standards
Aside from taking time to register in the System for Award
Management (SAM) to be eligible to participate in Federal contracting
and update the SAM profile annually, small businesses incur no direct
costs to gain or retain their small business status under proposed size
standards for NAICS 2022. All businesses willing to do business with
the Federal Government must register in SAM and update their SAM
profiles annually, regardless of their size status. SBA believes that a
vast majority of businesses that are willing to participate in Federal
contracting are already registered in SAM and update their SAM profiles
annually. It is important to point out that most business entities that
are already registered in SAM will not be required to update their SAM
profiles. However, it will be incumbent on registrants to review, and
update as necessary, their profiles to ensure that they have the
correct NAICS codes. SAM requires that registered companies review and
update their profiles annually, and therefore, businesses will need to
pay particular attention to the changes to determine if they might
affect them. They will also have to verify, and update, if necessary,
their Representations and Certifications in SAM. More importantly, this
proposed rule does not establish the new size standards for the very
first time; rather it intends to modify the existing size standards to
conform to new industry definitions under NAICS 2022.
To the extent that the newly-defined small firms under NAICS 2022
could become active in Federal procurement programs, this may entail
some additional administrative costs to the Federal Government because
of more businesses qualifying for Federal small business programs. For
example, there will be more firms seeking SBA's loans, more firms
eligible for enrollment in the SBA's Dynamic Small Business Search
(DSBS) database or in <a href="http://certify.sba.gov">certify.sba.gov</a>, more firms seeking
certifications as 8(a) BD or HUBZone firms, or qualifying for SDB,
WOSB, EDWOSB, and SDVOSB status, and more firms applying for SBA's 8(a)
BD mentor-prot[eacute]g[eacute] program.
Among those newly-defined small businesses seeking SBA's loans,
there could be some additional costs associated with verification of
their small business status. However, small business lenders have an
option of using the tangible net worth and net income-based alternative
size standard instead of using the industry-based size standards to
establish eligibility for SBA's loans. For these reasons, SBA believes
that these added administrative costs will be minor because necessary
mechanisms are already in place to handle these added requirements.
Additionally, some Federal contracts may possibly have higher
costs. With a greater number of businesses defined as small due to
proposed size standards under NAICS 2022, Federal agencies may choose
to set aside more contracts for competition among small businesses only
instead of using a full and open competition. The movement of contracts
from unrestricted competition to small business set-aside contracts
might result in competition among fewer total bidders, although there
will be more small businesses eligible to submit offers under the
proposed size standards. However, any additional costs associated with
fewer bidders are expected to be minor since, by law, procurements may
be set aside for small businesses under the 8(a)/BD, SDB, HUBZone,
WOSB, EDWOSB, or SDVOSB programs only if awards are
[[Page 40077]]
expected to be made at fair and reasonable prices.
Costs may also be higher when full and open contracts are awarded
to HUBZone businesses that receive price evaluation preferences.
However, with agencies likely setting aside more contracts for small
businesses in response to the availability of a larger pool of small
businesses under the adopted increases to size standards, HUBZone firms
might receive fewer full and open contracts, thereby resulting in some
cost savings to agencies. However, such cost savings are likely to be
minimal as only a small fraction of unrestricted contracts are awarded
to HUBZone businesses.
Transfer Impacts of Proposed Increases to Size Standards
The proposed size standards for the NAICS 2022 industries may
result in some redistribution of Federal contracts between the newly-
qualified small businesses and large businesses and between the newly-
qualified small businesses and small businesses under the current size
standards. However, it would have no impact on the overall economic
activity since total Federal contract dollars available for businesses
to compete for will not change with changes to size standards. While
SBA cannot quantify with certainty the actual outcome of the gains and
losses from the redistribution of contracts among different groups of
businesses, it can identify several probable impacts in qualitative
terms. With the availability of a larger pool of small businesses under
the proposed increases to size standards for 21 NAICS 2017 industries
and 27 parts of three industries, some unrestricted Federal contracts
that would otherwise be awarded to large businesses may be set aside
for small businesses. As a result, large businesses may lose some
Federal contracting opportunities. Similarly, some small businesses
under the current size standards may obtain fewer set-aside contracts
due to the increased competition from larger businesses qualifying as
small under the proposed size standards for NAICS 2022 industries. This
impact may be offset by a greater number of procurements being set
aside for small businesses because of more businesses qualifying as
small under the proposed size standards. With larger businesses
qualifying as small under the higher proposed size standards, smaller
small businesses could face some disadvantage in competing for set-
aside contracts against their larger counterparts. However, SBA cannot
quantify these impacts.
Proposed Decreases to Size Standards
As stated above, SBA's proposed size standards for the 111 new
industries under NAICS 2022 have resulted in a decrease to the size
standards for 7 industries and 41 parts of one industry under NAICS
2017. Below are descriptions of the benefits, costs, and transfer
impacts of these proposed decreases to size standards.
Benefits of Proposed Decreases to Size Standards
The most significant benefit from proposed decreases to size
standards based on analytical results is to ensure that size standards
are more reflective of latest industry structure and Federal market
trends and that Federal small business assistance is more effectively
targeted to its intended beneficiaries. These include SBA's 7(a) loan
program, CDC/504 loan program, EIDL program, Surety Bond Guarantee
Program, and Federal procurement programs. As stated previously,
Federal procurement programs provide targeted, set-aside opportunities
for small businesses under SBA's contracting and business development
programs, such as small business, SDB, 8(a) BD, HUBZone, WOSB, EDWOSB,
and SDVOSB programs. The adoption of size standards based on relevant
data diminishes the risk of awarding Federal Government contracts or
granting financial assistance to firms that are not small anymore.
Lowering size standards would also reduce the risk of allowing the
largest and potentially dominant firms to qualify as small and become
eligible for Federal assistance intended for small businesses. This may
provide a better chance for smaller small firms to grow and benefit
from the opportunities available on the Federal marketplace and
strengthen the small business industrial base for the Federal
Government.
Costs of Proposed Decreases to Size Standards
Table 13, Impacts of Proposed Decreases to Size Standards, shows
the various impacts of proposing to lower size standards in seven
industries and 41 parts of one industry under NAICS 2017. Based on the
2017 Economic Census, about 1,055 (2.7%) firms would lose their small
business status under proposed decreases to size standards.\5\ However,
many of these businesses were not found to have participated in Federal
small businesses programs, including SBA's financial assistance and
procurement programs, which suggests that impacts of proposed decreases
to size standards would be fairly minimal. Similarly, based on the
FPDS-NG data for fiscal years 2018-2020, SBA estimates that no small
businesses participating in Federal contracting would lose their small
status and become ineligible to compete for set-aside contracts. Thus,
SBA believes these impacts are minimal.
---------------------------------------------------------------------------
\5\ Of the 1,055 firms losing small business status under the
proposed size standards for new industries under NAICS 2022
structure, 1053 (or 99.8%) belong to NAICS 2017 industry 454110
(Electronic Shopping and Mail-Order Houses). NAICS 454110, with a
$41.5 million size standard, was split and distributed among 42
other Retail Trade industries, resulting in a decrease to the size
standard for 41 parts and no change to the size standard for one
part. This would have very minimal impact on firms seeking SBA's
financial assistance as firms receiving such assistance are
typically much smaller than the size standard. Moreover, businesses
not qualifying as small for financial assistance under the industry
size standard, could still qualify under the tangible net worth and
net income based alternative size standard. The reduction in size
standard for NAICS 454110 would have no impact on small businesses
seeking Federal contracts as that NAICS code does not apply to
Federal contracting.
Table 13--Impacts of Proposed Decreases to Size Standards
------------------------------------------------------------------------
Impact variable Value
------------------------------------------------------------------------
Number of industries for which SBA proposes to decrease 8
size standards.........................................
Total current small businesses in industries for which 39,011
SBA proposes to decrease size standards (2017 Economic
Census)................................................
Estimated number of firms losing small status in 1,055
industries for which SBA proposes to decrease size
standards (2017 Economic Census).......................
% of firms losing small status relative to current small 2.7%
businesses in industries for which SBA proposes to
decrease size standards (2017 Economic Census).........
Number of current unique small firms getting small 30
business contracts in industries for which SBA proposes
to decrease size standards (FPDS-NG FY 2018-2020) \1\..
[[Page 40078]]
Estimated number of small business firms that would have 0
lost small business status in industries for which SBA
proposes to decrease size standards (FPDS-NG FY 2018-
2020) \1\..............................................
% decrease to small business firms relative to current 0%
unique small firms getting small business contracts in
industries for which SBA proposes to decrease size
standards (FPDS-NG FY 2018-2020) \1\...................
Total small business contract dollars under current size $3.3
standards in industries for which SBA proposes to
decrease size standards ($ million) (FPDS-NG FY 2018-
2020)..................................................
Estimated small business dollars not available to firms 0
losing small business status in industries for which
SBA proposes to decrease size standards ($ million)
(FPDS-NG FY 2018-2020) \2\.............................
% decrease to small business dollars relative to total 0%
small business contract dollars under current size
standards in industries for which SBA proposes to
decrease size standards................................
Total number of 7(a) and 504 loans to small businesses 402
in industries for which SBA proposes to decrease size
standards (FY 2018-2020)...............................
Total amount of 7(a) and 504 loans to small businesses $140.3
in industries for which SBA proposes to decrease size
standards ($ million) (FY 2018-2020)...................
Estimated number of 7(a) and 504 loans not available to 1
firms that would have lost small business status in
industries for which SBA proposes to decrease size
standards..............................................
Estimated 7(a) and 504 loan amount not available to $0.001
firms that would have lost small status ($ million)....
% decrease to 7(a) and 504 loan amount relative to the 0.0%
total amount of 7(a) and 504 loans in industries for
which SBA proposes to decrease size standards..........
Total number of EIDL loans to small businesses in 4
industries for which SBA proposes to decrease size
standards (FY 2018-2020) \3\...........................
Total amount of EIDL loans to small businesses in $0.2
industries for which SBA proposes to decrease size
standards ($ million) (FY 2018-2020) \3\...............
Estimated number of EIDL loans not available to firms 0
that would have lost small business status in
industries for which SBA proposes to decrease size
standards \3\..........................................
Estimated EIDL loan amount not available to firms that $0.0
would have lost small business status ($ million) \3\..
% decrease to EIDL loan amount relative to the baseline 0.0%
\3\....................................................
------------------------------------------------------------------------
\1\ Total impact represents total unique number of firms impacted to
avoid double counting as some firms participate in more than one
industry.
\2\ Additional dollars are calculated multiplying average small business
dollars obligated per unique small firm times change in number of
firms. Numbers of firms are calculated using the SBA's current size
standards, not the contracting officer's size designation.
\3\ Excludes COVID-19 related EIDL loans due to their temporary nature.
Effective January 1, 2022, SBA stopped accepting applications for new
COVID EIDL loans or advances.
Transfer Impacts of Proposed Decreases to Size Standards
If the size standards are decreased, it may result in a
redistribution of Federal contracts between small businesses losing
their small business status and large businesses and between small
businesses losing their small business status and small businesses
remaining small under the reduced size standards. However, as under the
proposed increases to size standards, this would have no impact on the
overall economic activity since the total Federal contract dollars
available for businesses to compete for will stay the same. While SBA
cannot estimate with certainty the actual outcome of the gains and
losses among different groups of businesses from contract
redistribution resulting from decreases to size standards, it can
identify several probable impacts. With a smaller pool of small
businesses under the proposed decreases to size standards, some set-
aside Federal contracts to be otherwise awarded to small businesses may
be competed on an unrestricted basis. As a result, large businesses may
have more Federal contracting opportunities. However, because agencies
are still required by law to award 23% of Federal dollars to small
businesses, SBA expects the movement of set-aside contracts to
unrestricted competition to be limited. For the same reason, small
businesses under the reduced size standards are likely to obtain more
set-aside contracts due to the reduced competition from fewer
businesses qualifying as small under the decreases to size standards.
With some larger small businesses losing small business status under
the proposed decreases to size standards, smaller small businesses
would likely become more competitive in obtaining set-aside contracts.
However, SBA cannot quantify these impacts.
Net Impacts of Proposed Size Standards Changes
The impacts of the proposed increases of size standards for 21
industries and 27 parts of three industries were shown in Table 12
(above). Similarly, the impacts of proposed decreases of size standards
for seven industries and 41 parts of one industry were presented in
Table 13 (above). Table 14, Net Impacts of Proposed Size Standards
Changes, below, presents the net impacts of proposed changes to size
standards for 28 industries and 68 parts of four industries.
Based on the 2017 Economic Census, SBA estimates that in 28 NAICS
2017 industries and 68 parts of four industries for which proposed size
standards for NAICS 2022 have resulted changes in size standards, about
364 firms (almost all in NAICS 2017 industry 454110) would not qualify
as small under the proposed size standards for NAICS 2022 industries.
That represents about 0.3% of all firms classified as small in those
industries and industry parts under the current size standards.
Table 14--Net Impacts of Proposed Size Standards Changes
------------------------------------------------------------------------
Impact variable Value
------------------------------------------------------------------------
Number of industries or industry parts with changes to 32
size standards.........................................
[[Page 40079]]
Total number of small firms under the current size 109,990
standards in industries with changes to size standards
(2017 Economic Census).................................
Additional number of firms qualifying as small under -364
size standards changes (2017 Economic Census)..........
% of additional firms qualifying as small relative to -0.3%
total current small firms (2017 Economic Census).......
Number of current unique small firms getting small 1,509
business contracts in industries with changes to size
standards (FPDS-NG FY 2018-2020) \1\...................
Additional number of unique small firms gaining small 42
business status in industries with changes to size
standards (FPDS-NG FY 2018-2020) \1\...................
% increase to small firms relative to current unique 2.8%
small firms gaining small business status (FPDS-NG FY
2018-2020).............................................
Total small business contract dollars under current size $495.6
standards in industries with changes to size standards
($ million) (FPDS-NG FY 2018-2020).....................
Estimated small business dollars available to newly $60.4
qualified small firms ($ million) (FPDS-NG FY 2018-
2020) \2\..............................................
% increase to dollars relative to total small business 12.2%
contract dollars under current size standards..........
Total number of 7(a) and 504 loans to small businesses 1,224
in industries with changes to size standards (FY 2018-
2020)..................................................
Additional number of 7(a) and 504 loans to small 0
businesses in industries with changes to size standards
(FY 2018-2020).........................................
% of additional 7(a) and 504 loans go small businesses 0.0%
in industries with changes to size standards...........
Total amount of 7(a) and 504 loans to small businesses $440.3
in industries with changes to size standards ($
million) (FY 2018-2020)................................
Estimated additional 7(a) and 504 loan amount to newly- $0.0
qualified small firms ($ million)......................
% increase to 7(a) and 504 loan amount relative to the 0.0%
total amount of 7(a) and 504 loans to small businesses.
Total number of EIDL loans to small businesses in 91
industries with changes to size standards (FY 2018-
2020) \3\..............................................
Estimated number of additional EIDL loans to newly- 0
qualified small firms (FY 2018-2020) \3\...............
% of additional EIDL loans to small businesses in 0.0%
industries with changes to size standards..............
Total amount of EIDL loans to small businesses in $0.2
industries with changes to size standards ($ million)
(FY 2018-2020) \3\.....................................
Estimated additional EIDL loan amount to newly-qualified $0.0
small firms ($ million) \3\ (FY2018-2020)..............
% increase to EIDL loan amount relative to the total 0.0%
amount of disaster loans to small businesses \3\.......
------------------------------------------------------------------------
\1\ Total impact represents total unique number of firms impacted to
avoid double counting as some firms participate in more than one
industry.
\2\ Additional dollars are calculated multiplying average small business
dollars obligated per unique firm times change in number of firms.
Numbers of firms are calculated using the SBA's current size
standards, not the contracting officer's size designation.
\3\ Excludes COVID-19 related EIDL loans due to their temporary nature.
Effective January 1, 2022, SBA stopped accepting applications for new
COVID EIDL loans or advances.
Based on the FPDS-NG data for fiscal years 2018-2020, SBA estimates
that about 42 unique active firms in Federal contracting in those
industries would gain their small business status under proposed
changes to size standards, most of them in Sector 31-33
(Manufacturing). This represents an increase of about 2.8% of the total
number of small businesses participating in Federal contracting under
the current size standards. Based on the same data, SBA estimates that
about $60.4 million of Federal procurement dollars would become
available to all small firms, including those gaining small status.
This represents an increase of 12.2% from the baseline. SBA estimates
that the dollars obligated to small businesses will increase despite a
reduction in the total number of small firms because the contract
dollars to newly-qualified small businesses in sectors with increases
to size standards is higher than the contract dollars to small
businesses losing small business status in sectors with decreases to
size standards.
Based on the SBA's loan data for fiscal years 2018-2020, the total
number of 7(a) and CDC/504 loans will not be impacted, and the loan
amount may increase slightly since the average loan value to firms with
increases to size standards is higher than the average loan value to
firms with decreases to size standards.
Firms' participation under the SBA's EIDL program will be affected
as well. Since the benefit provided through this program is contingent
on the occurrence and severity of a disaster in the future, SBA cannot
make a meaningful estimate of this impact. However, based on the
disaster loan program data for fiscal years 2018-2020, SBA estimates
that the total number of EIDL loans and the loan amount will not be
impacted.
3. What alternatives have been considered?
As stated previously, as an alternative to proposing new size
standards for NAICS 2022 industries, SBA considered retaining NAICS
2017 as the basis of industry definitions for its small business size
standards. That would, however, lead to inconsistencies between SBA's
size standards and establishment data published by Federal agencies
that will adopt NAICS 2022 for their statistical and other data
collection programs. OMB stated in its December 21, 2021, notice that
``Federal statistical establishment data published for reference years
beginning on or after January 1, 2022, should be published using the
2022 NAICS United States codes.'' SBA is not a statistical agency, but
it uses for its size standards analyses establishment data collected by
other Federal agencies, such as the Economic Census data and County
Business Patterns from the U.S. Census Bureau. If SBA continues using
NAICS 2017 for its size standards, it will not be able to analyze and
evaluate industry structure adequately and accurately and adjust small
business size standards appropriately because the forthcoming Economic
Census and County Business Patterns data based on NAICS 2022 will not
be compatible with NAICS 2017 industry definitions. That would run
counter to the Jobs Act mandate that requires SBA to review all size
standards and adjust them appropriately to reflect the current industry
structure and market conditions every five years.
To establish, review, or revise, where necessary, small business
size standards, SBA uses special tabulations of industry data that it
obtains from the U.S. Census Bureau based on its Economic Census of
U.S. industries and businesses, and establishment data from its County
Business Patterns (CBP). Because the 2022 Economic Census and CBP data
will be based on NAICS 2022 industry definitions, it is imperative that
SBA also use NAICS 2022 as the basis of industry definitions for its
table of small business size standards.
Congressional Review Act
Subtitle E of the Small Business Regulatory Enforcement Fairness
Act of
[[Page 40080]]
1996 (codified at 5 U.S.C. 801-808), also known as the Congressional
Review Act or CRA, generally provides that before a rule may take
effect, the agency promulgating the rule must submit a rule report,
which includes a copy of the rule, to each House of the Congress and to
the Comptroller General of the United States. SBA will submit a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives, and the Comptroller General of the
United States. A major rule under the CRA cannot take effect until 60
days after it is published in the Federal Register. OMB's Office of
Information and Regulatory Affairs has determined that this rule is not
a ``major rule'' as defined by 5 U.S.C. 804(2).
Initial Regulatory Flexibility Analysis
Under the Regulatory Flexibility Act (RFA), this proposed rule, if
adopted, may have a significant impact on a substantial number of small
businesses in some industries whose size standards have been revised.
As described above, this rule may affect small businesses applying for
Federal Government contracts, loans under SBA's 7(a), 504, and Economic
Injury Disaster Loan Programs, and assistance under other Federal small
business programs.
Immediately below, SBA sets forth an initial regulatory flexibility
analysis (IRFA) of this proposed rule addressing the following
questions: (1) What are the need for and objectives of the rule?; (2)
What are SBA's description and estimate of the number of small
businesses to which the rule will apply?; (3) What are the projected
reporting, record keeping, and other compliance requirements of the
rule?; (4) What are the relevant Federal rules that may duplicate,
overlap, or conflict with the rule?; and (5) What alternatives will
allow the Agency to accomplish its regulatory objectives while
minimizing the impact on small businesses?
1. What are the need for and objective of the rule?
The Small Business Act requires that small business size standards
vary from industry to industry reflecting the differing characteristics
of the various industries. SBA uses the latest NAICS as a basis of
industries definitions for its table of size standards. As part of its
five-year review of and revisions to NAICS industry definitions, OMB
published its latest NAICS revision, NAICS 2022, on December 21, 2021.
According to the OMB's notice, Federal establishment and industry data
for reference years beginning on or after January 1, 2022, should be
published using NAICS 2022. This rule proposes to amend SBA's small
business size regulations to incorporate NAICS 2022 into its table of
size standards. This not only makes SBA's size standards more
reflective of the latest industry differences but also makes them more
consistent with latest industry data the Agency uses to establish,
review or adjust size standards. Updating size standards to the latest
industry definitions also serves the SBA's mandate to review all size
standards and make appropriate adjustments to reflect market conditions
under the Jobs Act.
2. What are SBA's description and estimate of the number of small
businesses to which the rule will apply?
With the update of size standards to the latest industry
definitions under NAICS 2022, Federal small business assistance is more
effectively targeted to its intended beneficiaries. The NAICS 2022
revision created 111 new industries by reclassifying, combining, or
splitting 156 NAICS 2017 industries or their parts. If adopted as
proposed, SBA's proposed size standards for these 111 new industries
under NAICS 2022 will result in an increase to the size standards for
21 industries and 27 parts of three industries under NAICS 2017, a
decrease to size standards for seven industries and 41 parts of one
industry, a change in the size standard measure from average annual
receipts to number of employees for one industry, a change in the size
standard measure from number of employees to average annual receipts
for a part of one industry, and no change in size standards for 118
industries and 33 parts of eight industries. In 21 industries and 27
parts of three industries whose size standards would increase due to
the adoption of NAICS 2022, nearly 700 firms above the current size
standards would qualify as small under the updated size standards,
thereby making them eligible for Federal small business assistance
programs. Based on the data for fiscal years 2018-2020, SBA estimates
that approximately $60.0 million in Federal contracts and about
$100,000 in SBA 7(a) and 504 loans could be awarded to the newly
defined small businesses under the updated size standards. The updated
size standards would enable advanced small businesses to maintain their
small business size status for a longer period and some mid-size
businesses (i.e., businesses that have just exceeded the size
thresholds) regain their small business status. In the seven NAICS 2017
industries and 41 parts of one industry for which size standards will
decrease as a result of adoption of NAICS 2022, 1,055 firms below the
current size standards would lose their small business size status
under the proposed size standards. However, the program data suggests
that this would cause no impact on them in terms of access to Federal
contracting and SBA's loans programs. Currently, they are not
participating in any small business programs.
3. What are the projected reporting, record keeping and other
compliance requirements of the rule?
The proposed size standard changes due to the adoption of NAICS
2022 impose no additional reporting or record keeping requirements on
small businesses. However, qualifying for Federal small business
contracting and other programs may require businesses to register in
SAM and recertify in SAM that they are small at least once annually.
Therefore, the newly qualified small businesses opting to participate
in those programs must comply with SAM requirements. There are minimal
costs associated with SAM registration and annual recertification, but
the proposed rule does not impose any new costs in this area. Changing
size standards alters the access to SBA's financial and other Federal
programs that assist small businesses but does not impose a regulatory
burden because they neither regulate nor control business behavior.
4. What are the relevant Federal rules, which may duplicate, overlap,
or conflict with the rule?
Under section 3(a)(2)(C) of the Small Business Act, 15 U.S.C.
632(a)(2)(c), Federal agencies must generally use SBA's size standards
to define a small business, unless specifically authorized by statute
to do otherwise. In 1995, SBA published in the Federal Register a list
of statutory and regulatory size standards that identified the
application of SBA's size standards as well as other size standards
used by Federal agencies (60 FR 57988 (November 24, 1995)). An agency
may establish for its programs a size standard that is different from
those established by SBA if approved by SBA's Administrator in
accordance with 13 CFR 121.903. SBA is not aware of any Federal rule
that would duplicate or conflict with establishing or updating size
standards.
However, the Small Business Act and SBA's regulations allow Federal
agencies to develop different size standards if they believe that SBA's
size standards are not appropriate for their programs, with the
approval of SBA's Administrator (13 CFR 121.903). The RFA authorizes a
Federal agency to establish an alternative small business
[[Page 40081]]
definition, after consultation with the Office of Advocacy of the U.S.
Small Business Administration (5 U.S.C. 601(3)).
5. What alternatives will allow the Agency to accomplish its regulatory
objectives while minimizing the impact on small entities?
By law, SBA is required to develop numerical size standards for
establishing eligibility for Federal small business assistance
programs. Other than varying levels of size standards by industry and
changing the size measures, no practical alternative exists to the
systems of numerical size standards. As stated previously, SBA
considered continuing to use NAICS 2017 as a basis of industry
definitions for its table of size standards. However, that would render
SBA's table of size standards incompatible with Federal industry and
establishment statistics and other databases when evaluating industry
characteristics to ensure size standards are reflective of current
industry structure and market conditions.
Executive Order 13563
A description of the need for this proposed regulatory action and
benefits and costs associated with this action including possible
distribution impacts that relate to Executive Order 13563 are included
above in the Cost Benefit Analysis.
To engage interested parties in this action, SBA reached out to all
Federal agencies advising them that the Agency plans to update its
table of size standards to NAICS 2022, effective October 1, 2022, and
that agencies must continue using the current size standards until that
date. Adopting the updated size standards on October 1, 2022, is
consistent with SBA's adoptions of previous NAICS revisions at the
beginning of the new fiscal year following the OMB's January 1
effective date of NAICS revisions for Federal statistical agencies.
Unlike the previous NAICS revisions which SBA adopted for its size
standards either through a direct final rule or through an interim
final rule, for the adoption of NAICS 2022 revision, SBA is issuing
this proposed rule and seeking comments to better engage the public in
the process. SBA will also issue a press release on the publication of
the proposed rule and update the size standards web page at
<a href="http://www.sba.gov/size">www.sba.gov/size</a>, asking interested parties to comment on the rule. SBA
will thoroughly consider all public comments when developing the final
rule.
Executive Order 12988
This action meets applicable standards set forth in sections 3(a)
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden. The action does not
have retroactive or preemptive effect.
Executive Order 13132
For purposes of Executive Order 13132, SBA has determined that this
proposed rule, if adopted as proposed, will not have substantial,
direct effects on the States, on the relationship between the Federal
Government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, SBA
has determined that this proposed rule has no federalism implications
warranting preparation of a federalism assessment.
Paperwork Reduction Act
For the purpose of the Paperwork Reduction Act, 44 U.S.C. Ch. 35,
SBA has determined that this proposed rule would not impose any new
reporting or record keeping requirements.
List of Subjects in 13 CFR Part 121
Administrative practice and procedure, Federal Government
procurement, Federal Government property, Grant programs--Business,
Individuals with disabilities, Loan programs--Business, Reporting and
recordkeeping requirements, Small businesses.
For the reasons set forth in the preamble, SBA proposes to amend 13
CFR part 121 as follows:
PART 121--SMALL BUSINESS SIZE REGULATIONS
0
1. The authority citation for part 121 is revised to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 636(a)(36), 662, 694a(9),
and 9012.
0
2. In Sec. 121.201, amend the table, ``Small Business Size Standards
by NAICS Industry'' as follows:
0
a. Remove the entries for 212111, 212112, and 212113.
0
b. Add entries for 212114, 212115, and 212220 in numerical order.
0
c. Remove the entries for 212221 and 212222.
0
d. Add an entry for 212290 in numerical order.
0
e. Remove the entries for 212291 and 212299.
0
f. Add an entry for 212323 in numerical order.
0
g. Remove the entries for 212324 and 212325.
0
h. Add an entry for 212390 in numerical order.
0
i. Remove the entries for 212391, 212392, 212393, and 212399.
0
j. Revise entry 311221.
0
k. Remove the entry for 315110.
0
l. Add an entry for 315120 in numerical order.
0
m. Remove the entries for 315190, 315220, and 315240.
0
n. Add an entry for 315250 in numerical order.
0
o. Remove the entry for 315280.
0
p. Add an entry for 316990 in numerical order.
0
q. Remove the entries for 316992, 316998, 321213, and 321214.
0
r. Add entries for 321215 and 322120 in numerical order.
0
s. Remove the entries for 322121 and 322122.
0
t. Add an entry for 325315 in numerical order.
0
u. Revise entry 325992.
0
v. Remove the entry for 333244.
0
w. Add an entry for 333248 in numerical order.
0
x. Remove the entry for 333249.
0
y. Add an entry for 333310 in numerical order.
0
z. Remove the entries for 333314, 333316, 333318, and 333997.
0
aa. Add an entry for 333998 in numerical order.
0
bb. Remove the entry for 333999.
0
cc. Add an entry for 334610 in numerical order.
0
dd. Remove the entries for 334613, 334614, 335110, 335121, 335122, and
335129.
0
ee. Add entries for 335131, 335132, 335139, and 335910 in numerical
order.
0
ff. Remove the entries for 335911 and 335912.
0
gg. Add an entry for 336110 in numerical order.
0
hh. Remove the entries for 336111, 336112, 337124, and 337125.
0
ii. Add an entry for 337126 in numerical order.
0
jj. Remove the entries for 424320 and 424330.
0
kk. Add an entry for 424350 in numerical order.
0
ll. Revise entry 424940 and the heading for Subsector 425.
0
mm. Remove the entry for 425110.
0
nn. Add an entry for 441227 in numerical order.
0
oo. Remove the entries for 441228, 441310, and 441320.
0
pp. Add entries for 441330 and 441340 in numerical order.
0
qq. Remove the heading for Subsector 442 and entries 442110, 442210,
442291, and 442299 and the heading for Subsector 443 and entries 443141
and 443142.
0
rr. Revise entry 444120.
[[Page 40082]]
0
ss. Remove the entry for 444130.
0
tt. Add entries for 444140 and 444180 in numerical order.
0
uu. Remove the entries for 444190, 444210, and 444220.
0
vv. Add entries for 444230 and 444240 in numerical order.
0
ww. Revise the heading for Subsector 445 and all the entries under
Subsector 445.
0
xx. Remove the heading for Subsector 446 and all the entries under
Subsector 446, the heading for Subsector 447 and all the entries under
Subsector 447, and the heading for Subsector 448 and all the entries
under Subsector 448.
0
yy. Add a heading for Subsector 449 and entries 449110, 449121, 449122,
449129, and 449210 in numerical order.
0
zz. Remove the heading for Subsector 451 and all the entries under
Subsector 451, the heading for Subsector 452 and all the entries under
Subsector 452, the heading for Subsector 453 and all the entries under
Subsector 453, and the heading for Subsector 454 and all the entries
under Subsector 454.
0
aaa. Add a heading for Subsector 455 and entries 455110, 455211, and
455219, a heading for Subsector 456 and entries 456110, 456120, 456130,
456191, and 456199, a heading for Subsector 457 and entries 457110,
457120, and 457210, a heading for Subsector 458 and entries 458110,
458210, 458310, and 458320, and a heading for Subsector 459 and entries
459110, 459120, 459130, 459140, 459210, 459310, 459410, 459420, 459510,
459910, 459920, 459930, 459991, and 459999 in numerical order.
0
bbb. Revise entry 485310.
0
ccc. Remove the heading for Subsector 511 and all the entries under
Subsector 511.
0
ddd. Add a heading for Subsector 513 and entries 513110, 513120,
513130, 513140, 513191, 513199, and 513210 in numerical order.
0
eee. Remove the heading for Subsector 515 and all the entries under
Subsector 515.
0
fff. Add a heading for Subsector 516 and entries 516110, 516120, and
516210 in numerical order.
0
ggg. Remove all the entries under Subsector 517.
0
hhh. Add entries 517111, 517112, 517121, 517122, and 517810 in
numerical order.
0
iii. Revise the heading for Subsector 518, entry 518210, and the
heading for Subsector 519.
0
jjj. Remove the entries for 519110, 519120, 519130, and 519190.
0
kkk. Add entries for 519210 and 519290 in numerical order.
0
lll. Remove the entry for 522120.
0
mmm. Add an entry for 522180 in numerical order.
0
nnn. Remove the entries for 522190, 522293, 522294, and 522298.
0
ooo. Add an entry for 522299 in numerical order.
0
ppp. Remove the entries for 523110, 523120, 523130, and 523140.
0
qqq. Add entries for 523150 and 523160 in numerical order.
0
rrr. Remove the entries for 523920 and 523930.
0
sss. Add an entry for 523940 in numerical order.
0
ttt. Revise entries for 524292, 541380, 541850, 561611, and 624410.
0
uuu. Remove the entries for 811112 and 811113.
0
vvv. Add an entry for 811114 in numerical order.
0
www. Remove the entry for 811118.
0
xxx. Add an entry for 811210 in numerical order.
0
yyy. Remove the entries for 811211, 811212, 811213, and 811219.
0
zzz. Revise footnotes 8 and 15 at the end of the table.
The additions and revisions read as follows:
Sec. 121.201 What size standards has SBA identified by North American
U.S. Industry Classification System codes?
* * * * *
Small Business Size Standards by NAICS Industry
----------------------------------------------------------------------------------------------------------------
Size standards Size standards
NAICS codes NAICS U.S. industry title in millions of in number of
dollars employees
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 21--Mining, Quarrying, and Oil and Gas Extraction
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 212--Mining (except Oil and Gas)
----------------------------------------------------------------------------------------------------------------
212114.............................. Surface Coal Mining................... ................ 1,250
212115.............................. Underground Coal Mining............... ................ 1,500
* * * * * * *
212220.............................. Gold Ore and Silver Ore Mining........ ................ 1,500
* * * * * * *
212290.............................. Other Metal Ore Mining................ ................ 750
* * * * * * *
212323.............................. Kaolin, Clay, and Ceramic and ................ 500
Refractory Minerals Mining.
212390.............................. Other Nonmetallic Mineral Mining and ................ 500
Quarrying.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sectors 31-33--Manufacturing
----------------------------------------------------------------------------------------------------------------
Subsector 311--Food Manufacturing
----------------------------------------------------------------------------------------------------------------
* * * * * * *
311221.............................. Wet Corn Milling and Starch ................ 1,250
Manufacturing.
[[Page 40083]]
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 315--Apparel Manufacturing
----------------------------------------------------------------------------------------------------------------
315120.............................. Apparel Knitting Mills................ ................ 750
* * * * * * *
315250.............................. Cut and Sew Apparel Manufacturing ................ 750
(except Contractors).
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 316--Leather and Allied Product Manufacturing
----------------------------------------------------------------------------------------------------------------
* * * * * * *
316990.............................. Other Leather and Allied Product ................ 500
Manufacturing.
----------------------------------------------------------------------------------------------------------------
Subsector 321--Wood Product Manufacturing
----------------------------------------------------------------------------------------------------------------
321215.............................. Engineered Wood Member Manufacturing.. ................ 500
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 322--Paper Manufacturing
----------------------------------------------------------------------------------------------------------------
* * * * * * *
322120.............................. Paper Mills........................... ................ 1,250
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 325--Chemical Manufacturing
----------------------------------------------------------------------------------------------------------------
* * * * * * *
325315.............................. Compost Manufacturing................. ................ 500
* * * * * * *
325992.............................. Photographic Film, Paper, Plate, ................ 1,500
Chemical, and Copy Toner
Manufacturing.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 333--Machinery Manufacturing \6\
----------------------------------------------------------------------------------------------------------------
* * * * * * *
333248.............................. All Other Industrial Machinery ................ 750
Manufacturing.
333310.............................. Commercial and Service Industry ................ 1,000
Machinery Manufacturing.
* * * * * * *
333998.............................. All Other Miscellaneous General ................ 500
Purpose Machinery Manufacturing.
----------------------------------------------------------------------------------------------------------------
Subsector 334--Computer and Electronic Product Manufacturing \6\
----------------------------------------------------------------------------------------------------------------
* * * * * * *
334610.............................. Manufacturing and Reproducing Magnetic ................ 1,250
and Optical Media.
----------------------------------------------------------------------------------------------------------------
Subsector 335--Electrical Equipment, Appliance and Component Manufacturing \6\
----------------------------------------------------------------------------------------------------------------
335131.............................. Residential Electric Lighting Fixture ................ 750
Manufacturing.
335132.............................. Commercial, Industrial, and ................ 500
Institutional Electric Lighting
Fixture Manufacturing.
335139.............................. Electric Lamp Bulb and Other Lighting ................ 1,250
Equipment Manufacturing.
* * * * * * *
335910.............................. Battery Manufacturing................. ................ 1,250
[[Page 40084]]
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 336--Transportation Equipment Manufacturing \6\
----------------------------------------------------------------------------------------------------------------
336110.............................. Automobile and Light Duty Motor ................ 1,500
Vehicle Manufacturing.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 337--Furniture and Related Product Manufacturing
----------------------------------------------------------------------------------------------------------------
* * * * * * *
337126.............................. Household Furniture (except Wood and ................ 750
Upholstered) Manufacturing.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 42--Wholesale Trade
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 424--Merchant Wholesalers, Nondurable Goods
----------------------------------------------------------------------------------------------------------------
* * * * * * *
424350.............................. Clothing and Clothing Accessories ................ 150
Merchant Wholesalers.
* * * * * * *
424940.............................. Tobacco Product and Electronic ................ 250
Cigarette Merchant Wholesalers.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 425--Wholesale Trade Agents and Brokers
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 44-45--Retail Trade
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 441--Motor Vehicles and Parts Dealers
----------------------------------------------------------------------------------------------------------------
* * * * * * *
441227.............................. Motorcycle, ATV, and All Other Motor 35.00 ................
Vehicle Dealers.
441330.............................. Automotive Parts and Accessories 16.50 ................
Retailers.
441340.............................. Tire Dealers.......................... 16.50 ................
----------------------------------------------------------------------------------------------------------------
Subsector 444--Building Material and Garden Equipment and Supplies Dealers
----------------------------------------------------------------------------------------------------------------
* * * * * * *
444120.............................. Paint and Wallpaper Retailers......... 30.00 ................
444140.............................. Hardware Retailers.................... 8.00 ................
444180.............................. Other Building Material Dealers....... 22.00 ................
444230.............................. Outdoor Power Equipment Retailers..... 8.00 ................
444240.............................. Nursery, Garden Center, and Farm 12.00 ................
Supply Retailers.
----------------------------------------------------------------------------------------------------------------
Subsector 445--Food and Beverage Retailers
----------------------------------------------------------------------------------------------------------------
445110.............................. Supermarkets and Other Grocery 35.00 ................
Retailers (except Convenience
Retailers).
445131.............................. Convenience Retailers................. 32.00 ................
445132.............................. Vending Machine Operators............. 12.00 ................
445230.............................. Fruit and Vegetable Retailers......... 8.00 ................
445240.............................. Meat Retailers........................ 8.00 ................
445250.............................. Fish and Seafood Retailers............ 8.00 ................
445291.............................. Baked Goods Retailers................. 8.00 ................
445292.............................. Confectionery and Nut Retailers....... 8.00 ................
445298.............................. All Other Specialty Food Retailers.... 8.00 ................
[[Page 40085]]
445320.............................. Beer, Wine, and Liquor Retailers...... 8.00 ................
----------------------------------------------------------------------------------------------------------------
Subsector 449--Furniture, Home Furnishings, Electronics, and Appliance Retailers
----------------------------------------------------------------------------------------------------------------
449110.............................. Furniture Retailers................... 22.00 ................
449121.............................. Floor Covering Retailers.............. 8.00 ................
449122.............................. Window Treatment Retailers............ 8.00 ................
449129.............................. All Other Home Furnishings Retailers.. 22.00 ................
449210.............................. Electronics and Appliance Retailers... 35.00 ................
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 455--General Merchandise Retailers
----------------------------------------------------------------------------------------------------------------
455110.............................. Department Stores..................... 35.00 ................
455211.............................. Warehouse Clubs and Supercenters...... 32.00 ................
455219.............................. All Other General Merchandise 35.00 ................
Retailers.
----------------------------------------------------------------------------------------------------------------
Subsector 456--Health and Personal Care Retailers
----------------------------------------------------------------------------------------------------------------
456110.............................. Pharmacies and Drug Retailers......... 30.00 ................
456120.............................. Cosmetics, Beauty Supplies, and 30.00 ................
Perfume Retailers.
456130.............................. Optical Goods Retailers............... 22.00 ................
456191.............................. Food (Health) Supplement Retailers.... 16.50 ................
456199.............................. All Other Health and Personal Care 8.00 ................
Retailers.
----------------------------------------------------------------------------------------------------------------
Subsector 457--Gasoline Stations and Fuel Dealers
----------------------------------------------------------------------------------------------------------------
457110.............................. Gasoline Stations with Convenience 32.00 ................
Stores.
457120.............................. Other Gasoline Stations............... 16.50 ................
457210.............................. Fuel Dealers.......................... ................ 100
----------------------------------------------------------------------------------------------------------------
Subsector 458--Clothing, Clothing Accessories, Shoe, and Jewelry Retailers
----------------------------------------------------------------------------------------------------------------
458110.............................. Clothing and Clothing Accessories 41.50 ................
Retailers.
458210.............................. Shoe Retailers........................ 30.00 ................
458310.............................. Jewelry Retailers..................... 16.50 ................
458320.............................. Luggage and Leather Goods Retailers... 30.00 ................
----------------------------------------------------------------------------------------------------------------
Subsector 459--Sporting Goods, Hobby, Musical Instrument, Book, and Miscellaneous Retailers
----------------------------------------------------------------------------------------------------------------
459110.............................. Sporting Goods Retailers.............. 16.50 ................
459120.............................. Hobby, Toy, and Game Retailers........ 30.00 ................
459130.............................. Sewing, Needlework, and Piece Goods 30.00 ................
Retailers.
459140.............................. Musical Instrument and Supplies 12.00 ................
Retailers.
459210.............................. Book Retailers and News Dealers....... 30.00 ................
459310.............................. Florists.............................. 8.00 ................
459410.............................. Office Supplies and Stationery 35.00 ................
Retailers.
459420.............................. Gift, Novelty, and Souvenir Retailers. 8.00 ................
459510.............................. Used Merchandise Retailers............ 8.00 ................
459910.............................. Pet and Pet Supplies Retailers........ 22.00 ................
459920.............................. Art Dealers........................... 8.00 ................
459930.............................. Manufactured (Mobile) Home Dealers.... 16.50 ................
459991.............................. Tobacco, Electronic Cigarette, and 8.00 ................
Other Smoking Supplies Retailers.
459999.............................. All Other Miscellaneous Retailers..... 8.00 ................
----------------------------------------------------------------------------------------------------------------
Sectors 48-49--Transportation and Warehousing
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 485--Transit and Ground Passenger Transportation
----------------------------------------------------------------------------------------------------------------
* * * * * * *
485310.............................. Taxi and Ridesharing Services......... 16.50 ................
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 51--Information
----------------------------------------------------------------------------------------------------------------
[[Page 40086]]
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 513--Publishing Industries
----------------------------------------------------------------------------------------------------------------
513110.............................. Newspaper Publishers.................. ................ 1,000
513120.............................. Periodical Publishers................. ................ 1,000
513130.............................. Book Publishers....................... ................ 1,000
513140.............................. Directory and Mailing List Publishers. ................ 1,000
513191.............................. Greeting Card Publishers.............. ................ 1,000
513199.............................. All Other Publishers.................. ................ 1,000
513210.............................. Software Publishers \15\.............. \15\ 41.50 ................
----------------------------------------------------------------------------------------------------------------
Subsector 516--Broadcasting and Content Providers
----------------------------------------------------------------------------------------------------------------
516110.............................. Radio Broadcasting Stations........... 41.50 ................
516120.............................. Television Broadcasting Stations...... 41.50 ................
516210.............................. Media Streaming Distribution Services, 41.50 ................
Social Networks, and Other Media
Networks and Content Providers.
----------------------------------------------------------------------------------------------------------------
Subsector 517--Telecommunications
----------------------------------------------------------------------------------------------------------------
517111.............................. Wired Telecommunications Carriers..... ................ 1,500
517112.............................. Wireless Telecommunications Carriers ................ 1,500
(except Satellite).
517121.............................. Telecommunications Resellers.......... ................ 1,500
517122.............................. Agents for Wireless Telecommunications ................ 1,500
Services.
517810.............................. All Other Telecommunications.......... 35.00 ................
----------------------------------------------------------------------------------------------------------------
Subsector 518--Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
----------------------------------------------------------------------------------------------------------------
518210.............................. Computing Infrastructure Providers, 35.00 ................
Data Processing, Web Hosting, and
Related Services.
----------------------------------------------------------------------------------------------------------------
Subsector 519--Web Search Portals, Libraries, Archives, and Other Information Services
----------------------------------------------------------------------------------------------------------------
519210.............................. Libraries and Archives................ 18.50 ................
519290.............................. Web Search Portals and All Other ................ 1,000
Information Services.
----------------------------------------------------------------------------------------------------------------
Sector 52--Finance and Insurance
----------------------------------------------------------------------------------------------------------------
Subsector 522--Credit Intermediation and Related Activities
----------------------------------------------------------------------------------------------------------------
* * * * * * *
522180.............................. Savings Institutions and Other 750.00 million ................
Depository Credit Intermediation\8\. in average
assets \8\
* * * * * * *
522299.............................. International, Secondary Market, and 41.50 ................
All Other Nondepository Credit
Intermediation.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 523--Securities, Commodity Contracts, and Other Financial Investments and Related Activities
----------------------------------------------------------------------------------------------------------------
523150.............................. Investment Banking and Securities 41.50 ................
Intermediation.
523160.............................. Commodity Contracts Intermediation.... 41.50 ................
* * * * * * *
523940.............................. Portfolio Management and Investment 41.50 ................
Advice.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 524--Insurance Carriers and Related Activities
----------------------------------------------------------------------------------------------------------------
* * * * * * *
524292.............................. Pharmacy Benefit Management and Other 40.00 ................
Third-Party Administration of
Insurance and Pension Funds.
[[Page 40087]]
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 54--Professional, Scientific and Technical Services
----------------------------------------------------------------------------------------------------------------
Subsector 541--Professional, Scientific and Technical Services
----------------------------------------------------------------------------------------------------------------
* * * * * * *
541380.............................. Testing Laboratories and Services..... 16.50 ................
* * * * * * *
541850.............................. Indoor and Outdoor Display Advertising 30.50 ................
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 56--Administrative and Support and Waste Management and Remediation Services
----------------------------------------------------------------------------------------------------------------
Subsector 561--Administrative and Support Services
----------------------------------------------------------------------------------------------------------------
* * * * * * *
561611.............................. Investigation and Personal Background 22.00 ................
Check Services.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 62--Health Care and Social Assistance
----------------------------------------------------------------------------------------------------------------
Subsector 621--Ambulatory Health Care Services
----------------------------------------------------------------------------------------------------------------
* * * * * * *
624410.............................. Child Care Services................... 8.50 ................
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 81--Other Services (Except Public Administration)
----------------------------------------------------------------------------------------------------------------
Subsector 811--Repair and Maintenance
----------------------------------------------------------------------------------------------------------------
* * * * * * *
811114.............................. Specialized Automotive Repair......... 8.00 ................
* * * * * * *
811210.............................. Electronic and Precision Equipment 30.00 ................
Repair and Maintenance.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Footnotes:
* * * * * * *
6. NAICS Subsectors 333, 334, 335 and 336--For rebuilding machinery or equipment on a factory basis, or
equivalent, use the NAICS code for a newly manufactured product. Concerns performing major rebuilding or
overhaul activities do not necessarily have to meet the criteria for being a ``manufacturer'' although the
activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are
not considered rebuilding.
* * * * * * *
8. NAICS Codes 522110, 522130, 522180, and 522210--A financial institution's assets are determined by averaging
the assets reported on its four quarterly financial statements for the preceding year. ``Assets'' for the
purposes of this size standard means the assets defined according to the Federal Financial Institutions
Examination Council 041 call report form for NAICS codes 522110, 522180, and 522210 and the National Credit
Union Administration 5300 call report form for NAICS code 522130.
* * * * * * *
15. NAICS code 513210--For purposes of Government procurement, the purchase of software subject to potential
waiver of the nonmanufacturer rule pursuant to Sec. 121.1203(d) should be classified under this NAICS code.
* * * * * * *
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2022-13250 Filed 7-1-22; 8:45 am]
BILLING CODE 8026-09-P
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</html>Indexed from Federal Register on July 5, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.