Rule2022-20513
Small Business Size Standards: Adoption of 2022 North American Industry Classification System for Size Standards
Primary source
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Published
September 29, 2022
Effective
October 1, 2022
Issuing agencies
Small Business Administration
Abstract
The U.S. Small Business Administration ("SBA" or "Agency") amends 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 size standards for these 111 new industries under NAICS 2022 have resulted in an increase to the size standards for 22 industries and 29 parts of two industries under NAICS 2017, a decrease to size standards for seven industries and 53 parts of two industries, 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 117 industries and 19 parts of seven industries.
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[Federal Register Volume 87, Number 188 (Thursday, September 29, 2022)]
[Rules and Regulations]
[Pages 59240-59292]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-20513]
[[Page 59239]]
Vol. 87
Thursday,
No. 188
September 29, 2022
Part IV
Small Business Administration
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13 CFR Part 121
Small Business Size Standards: Adoption of 2022 North American Industry
Classification System for Size Standards; Final Rule
Federal Register / Vol. 87, No. 188 / Thursday, September 29, 2022 /
Rules and Regulations
[[Page 59240]]
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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: Final rule.
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SUMMARY: The U.S. Small Business Administration (``SBA'' or ``Agency'')
amends 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 size
standards for these 111 new industries under NAICS 2022 have resulted
in an increase to the size standards for 22 industries and 29 parts of
two industries under NAICS 2017, a decrease to size standards for seven
industries and 53 parts of two industries, 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 117 industries and 19 parts of seven
industries.
DATES: This rule is effective October 1, 2022.
FOR FURTHER INFORMATION CONTACT: Dr. Khem R. Sharma, Chief, Office of
Size Standards, (202) 205-6618 or <a href="/cdn-cgi/l/email-protection#72011b08170106131c1613001601320110135c151d04"><span class="__cf_email__" data-cfemail="b0c3d9cad5c3c4d1ded4d1c2d4c3f0c3d2d19ed7dfc6">[email protected]</span></a>. This phone
number can also be reached by individuals who are deaf or hard of
hearing, or who have speech disabilities, through the Federal
Communications Commission's TTY-Based Telecommunications Relay Service
teletype service at 711.
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 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 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. Although SBA is not a statistical
agency, it is adopting NAICS 2022 for its table of size standards,
effective October 1, 2022.
As with the previous NAICS revisions, SBA is adopting 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.
On July 5, 2022, SBA published proposed size standards for the new
industries under NAICS 2022 (87 FR 40034). 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).
BILLING CODE 8026-09-P
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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, 125 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 14 (13%) NAICS 2017 industries without changing their 6-digit codes,
and created seven (6%) 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.''
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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 Register notices regarding the NAICS 2022 revision.
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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, 20 or 25% of new industries were formed by
merging two NAICS 2017 industries, and 12 or 15% were formed by merging
one NAICS 2017 industry with part of another industry. These results
and the formation of the remaining 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.
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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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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, for the July 5, 2022,
proposed rule to adopt NAICS 2022 structure for its size standards
table as well, SBA generally followed the same guidelines, as 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, as detailed in the July 5, 2022, proposed rule, SBA 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 size standards for the new industries under NAICS 2022
are shown in Table 6, 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.
Following the publication of the July 5, 2022, proposed rule to
incorporate NAICS 2022 into the SBA's table of size standards, as part
of the second five-year review of size standards under the Small
Business Jobs Act of 2010 (Jobs Act) (Pub. L. 111-240 (September 27,
2010)), SBA adopted revisions to size standards for industries under
NAICS Sectors 42 (Wholesale Trade) and 44-45 (Retail Trade), effective
July 14, 2014 (87 FR 35869 (June 14, 2022)). Accordingly, in this final
rule, SBA is adjusting proposed size standards for the new industries
under NAICS 2022 to reflect new size standards for Sectors 42 and 44-45
the Agency adopted in the June 14, 2022, final rule. Table 6 shows the
adjusted size standards.
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Summary of 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 size standards for these 111 new industries under
NAICS 2022, as shown in Table 3 (above) have resulted in an increase to
the size standards for 22 industries and 29 parts of two industries
under NAICS 2017, a decrease to size standards for seven industries and
53 parts of two industries, 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 117 industries and 19 parts of seven industries. These
figures are slightly different from those published in the proposed
rule because of the adoption of the latest size standards for
industries in Sectors 42 and 44-45 that became effective on July 14,
2022 (87 FR 35869).\2\
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\2\ In the proposed rule, SBA's proposed size standards for the
111 new industries under NAICS 2022 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.
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In accordance with 13 CFR 121.102(e), SBA advises eligible parties
of the option to file a petition for reconsideration of a revised,
modified, or established size standard at SBA's Office of Hearings and
Appeals (OHA) within 30 calendar days after publication of this final
rule in accordance with 15 U.S.C. 632(a)(9) and 13 CFR 134 Subpart I.
OHA can be reached using the following contact information: by mail at
U.S. Small Business Administration, Office of Hearings and Appeals, 409
Third St. SW, Eighth Floor, Washington, DC 20416, by email at
<a href="/cdn-cgi/l/email-protection#3a55525b5c535653545d497a49585b145d554c"><span class="__cf_email__" data-cfemail="ec83848d8a858085828b9fac9f8e8dc28b839a">[email protected]</span></a> by phone: 202-401-8200 TTY/TRS: 711, or by fax at
(202) 205-7059.
Discussion of Comments
For the July 5, 2022, proposed rule, SBA provided a 30-day comment
period for the public to comment on proposed changes to size standards
from the adoption of the NAICS 2022, which ended on August 4, 2022. SBA
sought comment on whether its proposed size standards for new
industries under NAICS 2022 were appropriate and suggestions on
alternative size standards, along with supporting data and analysis, if
proposed size standards were not appropriate. SBA also sought 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 received three comments, which
are summarized and discussed below.
Comments on Correct Size Standards
SBA received one comment contending that the Agency did not propose
the latest size standards it updated on July 14, 2022 for three NAICS
codes, namely NAICS 425120 (Wholesale Trade Agents and Brokers), NAICS
445291 (Baked Goods Stores), and NAICS 445292 (Confectionery and Nut
Stores). The commenter urged the SBA to use the most recent size
standards for these NAICS codes.
SBA Response
Following the publication of the July 5, 2022, proposed rule to
adopt NAICS 2022 for size standards, as part of the second five-year
review of size standards under the Jobs Act, SBA adopted size standards
revisions for industries under NAICS Sectors 42 and 44-45, effective
July 14, 2022. At the time when SBA published the NAICS 2022 proposed
rule, the old size standards were in effect. Thus, SBA applied the old
size standards in the proposed rule. In this final rule, however, SBA
is adopting the July 14, 2022, version of the size standards as shown
in Table 6 (above) and Table 7, Adopted Size Standards for NAICS
425120, 445291 and 445292, below, which are the latest size standards
in effect.
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Comments on Missing NAICS Codes
SBA received a comment stating that the proposed rule did not
mention three NAICS codes added for the 2022 NAICS revision, namely
NAICS 521110 (Monetary Authorities-Central Bank), NAICS 541120 (Offices
of Notaries), and NAICS, 551114 (Corporate, Subsidiary, and Regional
Managing Offices). These are found on the Economic Census NAICS website
(<a href="https://www.census.gov/naics">https://www.census.gov/naics</a>), the commenter added.
SBA Response
SBA disagrees with the commenter that NAICS codes 521110, 541120,
and 551114 were newly added to NAICS 2022. These NAICS codes existed
since the initial, 1997 edition of NAICS, which replaced the Standard
Industry Classification (SIC) system as the basis of industry
definitions for size standards. Table 8, NAICS-SIC Concordance for
NAICS 521110, 541120, and 551114, shows the relationship between NAICS
and SIC with respect to these three NAICS codes. When SBA first
switched from SIC to NAICS as the basis of industry definitions for
size standards, it did not establish small business size standards for
these NAICS codes for the following reasons.
[GRAPHIC] [TIFF OMITTED] TR29SE22.032
BILLING CODE 8026-09-C
NAICS 521110--Monetary Authorities-Central Bank
In the United States, the functions of the Monetary Authorities-
Central Bank are performed by the Federal Reserve System. According to
the NAICS manual, found at <a href="http://www.census.gov/naics">www.census.gov/naics</a>, establishments of the
Board of Governors of the Federal Reserve System are classified in
NAICS Industry 921130, Public Finance Activities. As stated in Footnote
17 to the SBA's table of size standards, small business size standards
are not established for industries within NAICS Sector 92, Public
Administration.
NAICS 541120--Offices of Notaries
As shown in Table 8 (above), NAICS Industry 541120 (Offices of
Notaries) is not a valid industry in the United States and accordingly
SBA does not establish the small business size standard for that NAICS
code. According to the NAICS manual, available at <a href="http://www.census.gov/naics">www.census.gov/naics</a>,
establishments of notaries public engaged in activities, such as
administering oaths and taking affidavits and depositions, witnessing
and certifying signatures on documents, but not empowered to draw and
approve legal documents and contracts, are classified in U.S. NAICS
Industry 541199, All Other Legal Services. Moreover, NAICS 541120 is
not covered by both the Economic Census and County Business Patterns
Reports.
NAICS 551114--Corporate, Subsidiary, and Regional Managing Offices
As shown in Table 8 (above), NAICS Industry 551114 did not
correspond to any specific industry under SIC. As a result, when SBA
first established size standards for NAICS industries, the Agency did
not establish a small business size standard for NAICS 551114. The
adoptions of the subsequent NAICS revisions also did not assign the
size standard for NAICS 551114. Like NAICS 541120, NAICS 55114 is also
not covered by both the Economic Census and County Business Patterns
Reports.
Comments on Inflation Adjustment of Revenue-Based Size Standards
SBA received a comment urging SBA to adjust all revenue-based size
standards for inflation. The commenter maintained that current
inflation is running at 9.1% and that inflation adjustment of size
standards by that amount is appropriate in the current economic
environment.
SBA Response
SBA is required to assess the impact of inflation on its monetary-
based size standards at least once every five years (67 FR 3041
(January 23, 2002)) and 13 CFR 121.102(c)) and make necessary
adjustments to restore their values in real terms. As stated in the
SBA's Semiannual Regulatory Agenda for Spring 2022, SBA is currently
pursuing a separate rulemaking (RIN 3245-AH93) to assess the impact of
the current general price increases on size standards. SBA agrees with
the comment that current inflation trends warrant adjustment of
monetary-based size standards for inflation. SBA expects to issue that
rulemaking in the near future.
Conclusion
In absence of adverse comments against the proposed size standards
for the new industries under NAICS 2022, SBA is adopting the size
standards for the new industries, as proposed.
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
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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,
1.8%, 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 adopting new size standards for NAICS 2022
industries, in this final rule, 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 Jobs Act, 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 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.
Justification for the October 1, 2022, Effective Date
The Administrative Procedure Act (APA) requires that ``publication
or service of a substantive rule shall be made not less than 30 days
before its effective date, except * * * as otherwise provided by the
agency for good cause found and published with the rule.'' 5 U.S.C.
553(d)(3). The purpose of the APA provision delaying the effective date
of a rule for 30 days after publication is to provide interested and
affected members of the public sufficient time to adjust their behavior
before the rule takes effect. For the reasons set forth below, SBA
finds that good cause exists to make this final rule become effective
on October 1, 2022, less than 30 days after it is published in the
Federal Register.
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.
Small business size standards apply to most Federal agencies and
their programs involving small businesses; the time lag between the
OMB's effective date and SBA's update to its size standards has already
given them time to implement the changes and develop training tools, if
necessary; so further additional time to prepare to comply is
unnecessary.
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. Like the adoption of the previous
NAICS revisions, the adoption of NAICS 2022 is ``not significant'' and
noncontroversial, as SBA is merely implementing the revised NAICS codes
promulgated by OMB through a comment and notice process.
3. With the adoption of the updated size standards at the start of
the new fiscal year (October 1, 2022), instead of the OMB January 1,
2022, effective date, 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 final rule is not a ``significant
regulatory action'' for purposes of Executive Order 12866. This rule
incorporates 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 the 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 final rule will also affect other
Federal Government programs that use SBA's size standards and provide
various benefits for small businesses. 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 final
rule, including (1)
[[Page 59274]]
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)), the 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 final 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 125 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 includes
32 changes in 6-digit codes, industry titles, or descriptions without
changing the size standards. SBA's size standards for these 111 new
industries under NAICS 2022 have resulted in an increase to the size
standards for 22 industries and 29 parts of two industries, a decrease
to size standards for seven industries and 53 parts of two industries,
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 117 industries and 19
parts of seven 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, 97.9% 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 9, 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 2018-2020.
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[[Page 59275]]
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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 average annual basis, a total of 8,316 7(a) loans and CDC/504 loans
in that period. That corresponded to about $4.8 billion in total loan
amount, 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.
---------------------------------------------------------------------------
Increases to Size Standards
As stated above, SBA's size standards for the 111 new industries
under NAICS 2022 have resulted in an increase to the size standards for
22 industries and 29 parts of two industries under NAICS 2017. Below
are descriptions of the benefits, costs, and transfer impacts of
increases to size standards.
Benefits of Increases to Size Standards
The benefits of adopting NAICS 2022 and the resulting increases to
size standards 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 the new 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
[[Page 59276]]
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 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 450 additional businesses would gain
small business status under the proposed size standards for 2022 NAICS
industries. That represents about 0.6% of the total number of small
businesses in the affected industries. SBA's size standards for new
industries under NAICS 2022 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 40.7% to 45.7%. Table 10,
Impacts of Increases to Size Standards for NAICS 2022 Industries,
provides impacts of increasing size standards for 22 industries and 29
parts of two industries from NAICS 2017.
[[Page 59277]]
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BILLING CODE 8026-09-C
[[Page 59278]]
As shown in Table 10, 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 size standards for new industries under NAICS 2022.
Based on the same data, SBA estimates that those newly-qualified small
businesses under the 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 new 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-aside contracts for small
businesses. 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 new size standards under NAICS 2022, 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 increases
to size standards will have a significant impact on the distribution of
firms receiving loans by size of firm. Since SBA's 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 $.01 million, could be made to the newly-defined small
businesses under the proposed size standards under NAICS 2022. That
represents a 0.003% increase to the loan amount compared to the
baseline (see Table 10). The actual impact might be even smaller as the
newly-qualified firms under the new 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 new
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 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 new 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
final 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 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 new
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
[[Page 59279]]
offers under the new 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
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 Increases to Size Standards
The new 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 increases
to size standards for 22 NAICS 2017 industries and 29 parts of two
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 new
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 new size
standards. With larger businesses qualifying as small under the higher
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.
Decreases to Size Standards
As stated above, SBA's size standards for the 111 new industries
under NAICS 2022 have resulted in a decrease to the size standards for
seven industries and 53 parts of two industries from NAICS 2017. Below
are descriptions of the benefits, costs, and transfer impacts of these
decreases to size standards.
Benefits of Decreases to Size Standards
The most significant benefit from 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, 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 Decreases to Size Standards
Table 11, Impacts of Decreases to Size Standards, shows the various
impacts of proposing to lower size standards in seven industries and 53
parts of two industries under NAICS 2017. Based on the 2017 Economic
Census, about 849 (1.9%) firms would lose their small business status
under the 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 above 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 849 firms losing small business status under the size
standards for new industries under NAICS 2022 structure, 808 (or
95.1%) 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 40
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.
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[[Page 59280]]
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[[Page 59281]]
[GRAPHIC] [TIFF OMITTED] TR29SE22.036
Transfer Impacts of 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
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
decreases to size standards, some set-aside Federal contracts to be
otherwise awarded to small businesses may be competed on an
unrestricted
[[Page 59282]]
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 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 Size Standards Changes
The impacts of the increases of size standards for 22 industries
and 29 parts of two industries were shown in Table 10 (above).
Similarly, the impacts of decreases of size standards for seven
industries and 53 parts of two industries were presented in Table 11
(above). Table 12, Net Impacts of Size Standards Changes, below,
presents the net impacts of changes to size standards for 29 industries
and 82 parts of four industries.
Based on the 2017 Economic Census, SBA estimates that when moving
from NAICS 2017 to NAICS 2022, 29 industries and 82 parts of four
industries resulted in size standard changes. About 403 firms (almost
all in NAICS 2017 industry 454110) would not qualify as small under the
new 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.
[GRAPHIC] [TIFF OMITTED] TR29SE22.037
[[Page 59283]]
[GRAPHIC] [TIFF OMITTED] TR29SE22.038
BILLING CODE 8026-09-C
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 the 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,
[[Page 59284]]
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 adopting 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 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).
Final Regulatory Flexibility Analysis
Under the Regulatory Flexibility Act (RFA), this final rule may
have a significant impact on a substantial number of small businesses
in some industries whose size standards have been changed as a result
of adopting NAICS 2022 for size standards. As described above, this
rule may affect small businesses applying for Federal Government
contracts, loans under SBA's 7(a), 504, and EIDL Programs, and
assistance under other Federal small business programs.
Immediately below, SBA sets forth a final regulatory flexibility
analysis (FRFA) of this final 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 amends 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. SBA's size
standards for these 111 new industries under NAICS 2022 will result in
an increase to the size standards for 22 industries and 29 parts of two
industries under NAICS 2017, a decrease to size standards for seven
industries and 53 parts of two industries, 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 117 industries and 19 parts of seven
industries. In 22 industries and 29 parts of two industries whose size
standards would increase due to the adoption of NAICS 2022, nearly 450
firms above the current size standards would qualify as small under the
updated size standards, thereby
[[Page 59285]]
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 53 parts
of two industries for which size standards will decrease as a result of
adoption of NAICS 2022, 849 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 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 this
final 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 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 most 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 issued this
proposed rule and sought comments to better engage the public in the
process. SBA received two comments during the comment period which SBA
has summarized and discussed above in the Discussion of Comments
section. SBA also updated 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 thoroughly
considered all public comments when developing this 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
final rule 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 final 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 final 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 amends 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.
[[Page 59286]]
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 Subsectors 442 and 443;
0
rr. Revise entry 444120;
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 Subsector 445;
0
xx. Remove Subsectors 446, 447, and 448;
0
yy. Add Subsector 449 in numerical order;
0
zz. Remove Subsectors 451, 452, 453, and 454;
0
aaa. Add Subsectors 455, 456, 457, 458, and 459 in numerical order;
0
bbb. Revise entry 485310;
0
ccc. Remove Subsector 511;
0
ddd. Add Subsector 513 in numerical order;
0
eee. Remove Subsector 515;
0
fff. Add Subsector 516 in numerical order;
0
ggg. Revise Subsectors 517, 518, and 519;
0
hhh. Remove the entry for 522120;
0
iii. Add an entry for 522180 in numerical order;
0
jjj. Remove the entries for 522190, 522293, 522294, and 522298;
0
kkk. Add an entry for 522299 in numerical order;
0
lll. Remove the entries for 523110, 523120, 523130, and 523140;
0
mmm. Add entries for 523150 and 523160 in numerical order;
0
nnn. Remove the entries for 523920 and 523930;
0
ooo. Add an entry for 523940 in numerical order;
0
ppp. Revise entries for 524292, 541380, 541850, 561611, and 624410;
0
qqq. Remove the entries for 811112 and 811113;
0
rrr. Add an entry for 811114 in numerical order;
0
sss. Remove the entry for 811118;
0
ttt. Add an entry for 811210 in numerical order;
0
uuu. Remove the entries for 811211, 811212, 811213, and 811219; and
0
vvv. 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
[[Page 59287]]
* * * * * * *
212290................................. Other Metal Ore Mining............. ................ 750
* * * * * * *
212323................................. Kaolin, Clay, and Ceramic and ................ 500
Refractory Minerals Mining.
212390................................. Other Nonmetallic Mineral Mining ................ 500
and Quarrying.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sectors 31-33--Manufacturing
----------------------------------------------------------------------------------------------------------------
Subsector 311--Food Manufacturing
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
311221................................. Wet Corn Milling and Starch ................ 1,250
Manufacturing.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
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 ................ 500
Manufacturing.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
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.
[[Page 59288]]
* * * * * * *
----------------------------------------------------------------------------------------------------------------
333998................................. All Other Miscellaneous General ................ 500
Purpose Machinery Manufacturing.
----------------------------------------------------------------------------------------------------------------
Subsector 334--Computer and Electronic Product Manufacturing \6\
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
334610................................. Manufacturing and Reproducing ................ 1,250
Magnetic and Optical Media.
----------------------------------------------------------------------------------------------------------------
Subsector 335--Electrical Equipment, Appliance and Component Manufacturing \6\
----------------------------------------------------------------------------------------------------------------
335131................................. Residential Electric Lighting ................ 750
Fixture Manufacturing.
335132................................. Commercial, Industrial, and ................ 500
Institutional Electric Lighting
Fixture Manufacturing.
335139................................. Electric Lamp Bulb and Other ................ 1,250
Lighting Equipment Manufacturing.
* * * * * * *
335910................................. Battery Manufacturing.............. ................ 1,250
* * * * * * *
----------------------------------------------------------------------------------------------------------------
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 ................ 750
and 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 $35.0 ................
Motor Vehicle Dealers.
441330................................. Automotive Parts and Accessories 25.0 ................
Retailers.
441340................................. Tire Dealers....................... 22.5 ................
----------------------------------------------------------------------------------------------------------------
[[Page 59289]]
Subsector 444--Building Material and Garden Equipment and Supplies Dealers
----------------------------------------------------------------------------------------------------------------
* * * * * * *
444120................................. Paint and Wallpaper Retailers...... 30.0 ................
444140................................. Hardware Retailers................. 14.5 ................
444180................................. Other Building Material Dealers.... 22.0 ................
444230................................. Outdoor Power Equipment Retailers.. 8.5 ................
444240................................. Nursery, Garden Center, and Farm 19.0 ................
Supply Retailers.
----------------------------------------------------------------------------------------------------------------
Subsector 445--Food and Beverage Retailers
----------------------------------------------------------------------------------------------------------------
445110................................. Supermarkets and Other Grocery 35.0 ................
Retailers (except Convenience
Retailers).
445131................................. Convenience Retailers.............. 32.0 ................
445132................................. Vending Machine Operators.......... 18.5 ................
445230................................. Fruit and Vegetable Retailers...... 8.0 ................
445240................................. Meat Retailers..................... 8.0 ................
445250................................. Fish and Seafood Retailers......... 8.0 ................
445291................................. Baked Goods Retailers.............. 14.0 ................
445292................................. Confectionery and Nut Retailers.... 17.0 ................
445298................................. All Other Specialty Food Retailers. 9.0 ................
445320................................. Beer, Wine, and Liquor Retailers... 9.0 ................
----------------------------------------------------------------------------------------------------------------
Subsector 449--Furniture, Home Furnishings, Electronics, and Appliance Retailers
----------------------------------------------------------------------------------------------------------------
449110................................. Furniture Retailers................ 22.0 ................
449121................................. Floor Covering Retailers........... 8.0 ................
449122................................. Window Treatment Retailers......... 10.0 ................
449129................................. All Other Home Furnishings 29.5 ................
Retailers.
449210................................. Electronics and Appliance Retailers 35.0 ................
----------------------------------------------------------------------------------------------------------------
Subsector 455--General Merchandise Retailers
----------------------------------------------------------------------------------------------------------------
455110................................. Department Stores.................. 35.0 ................
455211................................. Warehouse Clubs and Supercenters... 41.5 ................
455219................................. All Other General Merchandise 35.0 ................
Retailers.
----------------------------------------------------------------------------------------------------------------
Subsector 456--Health and Personal Care Retailers
----------------------------------------------------------------------------------------------------------------
456110................................. Pharmacies and Drug Retailers...... 33.0 ................
456120................................. Cosmetics, Beauty Supplies, and 30.0 ................
Perfume Retailers.
456130................................. Optical Goods Retailers............ 26.0 ................
456191................................. Food (Health) Supplement Retailers. 20.0 ................
456199................................. All Other Health and Personal Care 8.5 ................
Retailers.
----------------------------------------------------------------------------------------------------------------
Subsector 457--Gasoline Stations and Fuel Dealers
----------------------------------------------------------------------------------------------------------------
457110................................. Gasoline Stations with Convenience 32.0 ................
Stores.
457120................................. Other Gasoline Stations............ 29.5 ................
457210................................. Fuel Dealers....................... ................ 100
----------------------------------------------------------------------------------------------------------------
Subsector 458--Clothing, Clothing Accessories, Shoe, and Jewelry Retailers
----------------------------------------------------------------------------------------------------------------
458110................................. Clothing and Clothing Accessories 41.5 ................
Retailers.
458210................................. Shoe Retailers..................... 30.0 ................
458310................................. Jewelry Retailers.................. 18.0 ................
458320................................. Luggage and Leather Goods Retailers 33.5 ................
----------------------------------------------------------------------------------------------------------------
Subsector 459--Sporting Goods, Hobby, Musical Instrument, Book, and Miscellaneous Retailers
----------------------------------------------------------------------------------------------------------------
459110................................. Sporting Goods Retailers........... 23.5 ................
459120................................. Hobby, Toy, and Game Retailers..... 31.0 ................
459130................................. Sewing, Needlework, and Piece Goods 30.0 ................
Retailers.
459140................................. Musical Instrument and Supplies 20.0 ................
Retailers.
459210................................. Book Retailers and News Dealers.... 31.5 ................
459310................................. Florists........................... 8.0 ................
459410................................. Office Supplies and Stationery 35.0 ................
Retailers.
459420................................. Gift, Novelty, and Souvenir 12.0 ................
Retailers.
459510................................. Used Merchandise Retailers......... 12.5 ................
459910................................. Pet and Pet Supplies Retailers..... 28.0 ................
459920................................. Art Dealers........................ 14.5 ................
[[Page 59290]]
459930................................. Manufactured (Mobile) Home Dealers. 16.5 ................
459991................................. Tobacco, Electronic Cigarette, and 10.0 ................
Other Smoking Supplies Retailers.
459999................................. All Other Miscellaneous Retailers.. 10.0 ................
----------------------------------------------------------------------------------------------------------------
Sectors 48-49--Transportation and Warehousing
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 485--Transit and Ground Passenger Transportation
----------------------------------------------------------------------------------------------------------------
* * * * * * *
485310................................. Taxi and Ridesharing Services...... 16.5 ................
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 51--Information
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 513--Publishing Industries
----------------------------------------------------------------------------------------------------------------
513110................................. Newspaper Publishers............... ................ 1,000
513120................................. Periodical Publishers.............. ................ 1,000
513130................................. Book Publishers.................... ................ 1,000
513140................................. Directory and Mailing List ................ 1,000
Publishers.
513191................................. Greeting Card Publishers........... ................ 1,000
513199................................. All Other Publishers............... ................ 1,000
513210................................. Software Publishers \15\........... \15\ 41.5 ................
----------------------------------------------------------------------------------------------------------------
Subsector 516--Broadcasting and Content Providers
----------------------------------------------------------------------------------------------------------------
516110................................. Radio Broadcasting Stations........ 41.5 ................
516120................................. Television Broadcasting Stations... 41.5 ................
516210................................. Media Streaming Distribution 41.5 ................
Services, Social Networks, and
Other Media Networks and Content
Providers.
----------------------------------------------------------------------------------------------------------------
Subsector 517--Telecommunications
----------------------------------------------------------------------------------------------------------------
517111................................. Wired Telecommunications Carriers.. ................ 1,500
517112................................. Wireless Telecommunications ................ 1,500
Carriers (except Satellite).
517121................................. Telecommunications Resellers....... ................ 1,500
517122................................. Agents for Wireless ................ 1,500
Telecommunications Services.
517410................................. Satellite Communications........... 38.5 ................
517810................................. All Other Telecommunications....... 35.0 ................
----------------------------------------------------------------------------------------------------------------
Subsector 518--Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
----------------------------------------------------------------------------------------------------------------
518210................................. Computing Infrastructure Providers, 35.0 ................
Data Processing, Web Hosting, and
Related Services.
----------------------------------------------------------------------------------------------------------------
Subsector 519--Web Search Portals, Libraries, Archives, and Other Information Services
----------------------------------------------------------------------------------------------------------------
519210................................. Libraries and Archives............. 18.5 ................
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 750.0 ................
Depository Credit Intermediation million in
\8\. average assets
\8\
* * * * * * *
522299................................. International, Secondary Market, 41.5 ................
and All Other Nondepository Credit
Intermediation.
[[Page 59291]]
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 523--Securities, Commodity Contracts, and Other Financial Investments and Related Activities
----------------------------------------------------------------------------------------------------------------
523150................................. Investment Banking and Securities 41.5 ................
Intermediation.
523160................................. Commodity Contracts Intermediation. 41.5 ................
* * * * * * *
523940................................. Portfolio Management and Investment 41.5 ................
Advice.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 524--Insurance Carriers and Related Activities
----------------------------------------------------------------------------------------------------------------
* * * * * * *
524292................................. Pharmacy Benefit Management and 40.0 ................
Other Third-Party Administration
of Insurance and Pension Funds.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 54--Professional, Scientific and Technical Services
----------------------------------------------------------------------------------------------------------------
Subsector 541--Professional, Scientific and Technical Services
----------------------------------------------------------------------------------------------------------------
* * * * * * *
541380................................. Testing Laboratories and Services.. 16.5 ................
* * * * * * *
541850................................. Indoor and Outdoor Display 30.5 ................
Advertising.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 56--Administrative and Support and Waste Management and Remediation Services
----------------------------------------------------------------------------------------------------------------
Subsector 561--Administrative and Support Services
----------------------------------------------------------------------------------------------------------------
* * * * * * *
561611................................. Investigation and Personal 22.0 ................
Background Check Services.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 62--Health Care and Social Assistance
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 624--Social Assistance
----------------------------------------------------------------------------------------------------------------
* * * * * * *
624410................................. Child Care Services................ 8.5 ................
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 81--Other Services (Except Public Administration)
----------------------------------------------------------------------------------------------------------------
Subsector 811--Repair and Maintenance
----------------------------------------------------------------------------------------------------------------
* * * * * * *
811114................................. Specialized Automotive Repair...... 8.0 ................
* * * * * * *
811210................................. Electronic and Precision Equipment 30.0 ................
Repair and Maintenance.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Footnotes
* * * * * * *
[[Page 59292]]
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. 2022-20513 Filed 9-28-22; 8:45 am]
BILLING CODE 8026-09-P
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</html>Indexed from Federal Register on September 29, 2022.
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