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Proposed Rule

Small Business Size Standards; Restructuring of Size Standards

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AGENCY:

Small Business Administration (SBA).

ACTION:

Proposed rule.

SUMMARY:

The U.S. Small Business Administration (SBA) proposes to modify its small business size standards by establishing size standards in terms of the number of employees of a business concern for most industries and SBA programs. This change will reduce the number of different size standard levels and at the same time simplify size standards and their application to Federal Government programs. Under this proposal, size standards will range between 50 employees and 1,500 employees, depending on the industry or SBA program.

For a limited number of industries, SBA proposes to establish a maximum average annual receipts amount (referred to as a receipts cap) along with the employee-based size standard. Concerns in those industries that meet the employee-based size standard also cannot exceed a specific receipts cap to qualify as an eligible small business.

To further simplify size standards, SBA also proposes the following: (1) modify the size standard for the Surety Bond Guarantee (SBG) Program by replacing the $6 million size standard with the requirement that the contractor meet the size standard for its primary industry; (2) extend the 125,000 barrels per calendar day component of the size standard for petroleum refiners beyond Federal Government procurement to all Federal small business programs using SBA's size standards; (3) eliminate the special size standard based on market share for tire manufacturers that applies to only Federal Government procurement; (4) modify three receipts-based size standards and one employee-based size standard for the sale or lease of Government property; and (5) revise the nonmanufacturer size standard applicable to Federal procurements from 500 employees to 100 employees, the size standard that applies to wholesale trade businesses for all other SBA programs.

DATES:

Comments must be received on or before May 18, 2004.

ADDRESSES:

Send comments to Gary M. Jackson, Assistant Administrator for Size Standards, 409 Third Street, SW., Mail Code 6530, Washington DC 20416; by email to restructure.sizestandards@sba.gov; or by facsimile at (202) 205-6390. You may also submit comments to www.regulations.gov. Upon receipt of a written request under the Freedom of Information Act, SBA will make all public comments available.

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FOR FURTHER INFORMATION CONTACT:

Contact the SBA's Office of Size Standards at (202) 205-6618 or sizestandards@sba.gov.

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SUPPLEMENTARY INFORMATION:

SBA's 37 small business size standards have evolved over the past 40 years from a considerably smaller number that applied only to SBA's financial assistance programs and to Federal procurement programs. Presently, there are size standards for 1,151 industries and 11 special financial and procurement programs. Many of these size standards resulted from the expansion and development of new SBA programs, the increasing size and complexity of the U.S. economy, and demands from small businesses to address unique situations.

SBA's current size standards use two primary measures of business size—number of employees and average annual receipts. Financial assets, electric generation, and refining capacity are used for a few specialized industries. In addition, SBA's Small Business Investment Company (SBIC) and the Certified Development Company (CDC) Programs determine small business eligibility based on either the industry-based size standards or net worth and net income size standards.

The current structure of SBA's size standards has worked well. However, several recurring criticisms suggest that SBA should consider improving their current structure. These criticisms raise questions about the complexity of determining if a business is small, the fairness of defining a business as small in some industries but not others, the influence of Federal procurement programs in establishing size standards, and the intentional misclassification of Federal contracts or the primary industry activity of a business to apply a different, and usually a much higher, size standard.

SBA's last comprehensive attempt to address size standards was in the late 1970s and early 1980s. Although SBA considered several approaches, it made only a few minor changes. The most important change replaced two sets of size standards, one for procurement programs and one for financial programs, with a single set for all programs. SBA also adjusted receipts-based size standards for inflation and formalized a methodology for evaluating size standards.

In the early 1990s, SBA proposed to streamline size standards with nine levels of size standards (four receipts-based size standards and five employee-based size standards) similar to one aspect of this proposed rule. Public comments tended to favor this approach. However, SBA determined that converting receipts-based size standards in effect at that time to one of four proposed receipts levels created a number of unacceptable anomalies and, therefore, did not adopt it as a final rule.

Currently, SBA's size standards consist of 37 different size levels which apply to 1,151 industries and 13 sub-industry activities in the North American Industry Classification System (NAICS). In addition, a size standard has been established for 11 financial and procurement programs. Thirty size standards are based on annual receipts, five are based on number of employees, and two are based on other measures. Table 1a below summarizes the current receipts-based size standards and Table 1b summarizes the current employee-based and other size standards.

Table 1a.—Size Standards Based on Annual Receipts

Range of receipts-based size standardsNumber of different receipts- based size standards in the rangeNumber of industries covered by size standards in this range
$48.5 million11
$21.5 million to $30 million852
$12.5 million to $21 million724
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$12 million124
$7 million to $11 million746
$6 million1337
$1.5 million to $4 million418
$0.75 million146

Table 1b.—Employee-based and Other Size Standards

Size standardNumber of industries covered by the size standard
1,500 employees17
1,000 employees66
750 employees63
500 employees388
100 employees71
$150 million in assets6
4 million megawatt hours6

Most variations in size standards occur among those based on annual receipts. In many cases, a specific receipts-based size standard applies to only one or a few industries. SBA believes it can simplify size standards and make them less complicated by establishing a single size standard measure and reducing the number of different size standard levels. With fewer size standards, they will be clearer, more consistent, and easier to understand, resulting in less confusion to users, particularly the non-governmental users, such as small businesses. In addition, a single size measure eliminates a problem that some concerns encounter when they operate in different industries that have different size standard measures. The information technology industries provide a good example of this situation. Many information technology businesses provide both goods and services. Yet, SBA's size standards are based on number of employees for providers of computer and peripheral equipment and receipts for providers of computer services. Consequently, an information technology business may be small for one type of work but not small for a related activity.

Proposal to Use Employee-based Size Standards for All Industries

SBA proposes to restructure its size standards by establishing an employee-based size standard for each industry. The number of employees of a business concern is its average number of persons employed for each pay period over the firm's latest 12 months and includes the employees of all affiliates. Any person on the payroll must be included as one employee regardless of hours worked or temporary status. The number of employees of a firm in business under 12 months is based on the average for each pay period it has been in business. For more information on how SBA calculates the employment size of a business, see 13 CFR 121.106.

The size standards currently based on number of employees will be retained at their current levels. This proposal converts the current size standards that are based on receipts, financial assets, or generating capacity to employee-based size standards. SBA proposes to establish an employee-based size standard which varies for each industry, but is limited to one of the following ten employee levels:

Table 2.—Proposed Employee Size Standard Levels

50100150200300
4005007501,0001,500

SBA believes that fewer size standard levels also help to simplify size standards. In converting receipts-based size standards to employee-based size standards (described further below), five new employee size levels (50, 150, 200, 300, and 400) along with the current five employee size levels (100, 500, 750, 1,000 and 1,500) results in employee-based size standards that equate to about the same number of eligible small businesses as does the current receipts-based size standards. A fewer number of employee size levels would result in a much larger number of businesses gaining or losing small business eligibility while a greater number of employee size levels would apply to only a small number of businesses and not simplify the size standards to the same degree.

Why the SBA Proposes Employee-Based Size Standards for All Industries

SBA believes that a single measure of size helps make size standards less complex. Having a single size measure simplifies the structure and enables SBA to establish fewer size standard levels. Under a structure composed of one size measure and fewer size standard levels, many small businesses that currently operate in several industries each with different size standards would in many cases be subject to only one or two different size standards under the proposed employee-based size standards. SBA believes that the benefits of simplification that come from having a single size measure outweigh the benefits of retaining multiple size measures.

Proposing number of employees as the only measure of business size departs from SBA's long tradition of using receipts and other non-employee size measures. SBA has generally utilized receipts as a preferred size measure because it constitutes the value of a concern's output. Other measures of size are used where receipts tend to skew the value added by a concern in the production of goods and services. For example, SBA uses number of employees to define a small manufacturing concern. For manufacturing, two manufacturers in the same industry with the same number of employees can generate significantly different receipts depending on the number of stages in their production operations. Receipts for a manufacturer in its final production stage include the value added by the manufacturer(s) in its earlier production stages. This is true even though the value added by the final manufacturer may be minor relative to the value of the final product. Because of this characteristic of manufacturing, number of employees has a stronger correlation to value added than do receipts.

Several aspects of employee-based size standards support SBA's decision to use them as the single measure of size Start Printed Page 13132for all industries. The single best reason to do so is that they do not vary with changing economic conditions. Inflation, for example, has no direct impact on employee-based size standards. Similarly, rising costs unique to an industry have no direct impact on employee-based size standards. An ideal size standard would not affect eligibility, unless a company's level of real output of goods and services changes.

Employment also tends to be a more stable measure of business size. Businesses have economic incentives to maintain their workforce as business fluctuates to avoid recruitment and training costs. Using overtime can satisfy short-term increases in output until management is convinced that a permanent increase in business activity justifies adding personnel. Most businesses, especially small businesses, display a strong commitment to their employees and they are reluctant to change employment levels frequently in response to short-term business considerations.

Finally, number of employees is a widely accepted measure of business size. More than half of the present SBA size standards are expressed in employees. Although employment is an input into the production of goods and services, it generally accounts for a significant portion of total costs. A business's employment level is a representative indicator of its resources as well as its scale of operations. In one of the few studies conducted on an appropriate size standard measure, two researchers concluded that the number of employees of a business had a stronger correlation with the qualitative description of a small business (an approach to defining a small business preferred by many small business analysts) than did receipts. (See “Definition of Small Business,” Scott Holmes and Brian Gibson, The University of Newcastle, April 5, 2001. The report is available at http://www.smallbusiness.org.au/​sbc/​publications/​sbc004a.htm.)

How SBA Determined the Number of Employees for Size Standards With Annual Receipts and Other Size Measures

SBA developed criteria for deciding which of the ten employee size standard levels to apply to an industry that currently has a receipts-based size standard. These criteria were designed to convert a receipts-based size standard to an equivalent employee-based size standard. The primary tool used to calculate the equivalent employee size standard associated with a receipts-based size standard is the receipts-to-employee ratio for an industry. Data to calculate these ratios were provided to the SBA by the U.S. Bureau of the Census in a special tabulation of the 1997 Economic Census (The 1997 Economic Census is available at

http://www.census.gov/​epcd/​www/​econ97.html). Since total receipts in an industry are provided along with employees in the industry, SBA was able to calculate receipts per employee ratios for almost all industries covered by this rule. These ratios were next adjusted 8.54% to account for inflation that occurred from 1997 to 2002 (the year in which receipts-based size standards were last adjusted for inflation). SBA used the chain-type price index for gross domestic product (GDP) (as published by the U.S. Department of Commerce, Bureau of Economic Analysis, and is available at

http://www.bea.gov/​bea/​ARTICLES/​2003/​10October/​D-Pages/​1003DpgC.pdf), which is a broad measure of inflation for the economy as a whole. The resulting figure was divided into the present receipt-based size standard for the industry under review to calculate an employee equivalent size standard. This employee equivalent size standard was then rounded to the closest of the ten employee size standard levels to minimize the difference between the current receipts-based size standard and the calculated employee-based size standard.

The criteria also preserve the common size standard level that SBA currently has established for related industries. That is, for closely related industries that have the same receipts size standard, SBA has proposed an employee size standard that best represents an equivalent employee size standard for that group of industries, such as the computer services industries.

Below are the criteria and how SBA applied them to receipts-based size standards.

Selection of Employment Size Standard for Industries With a $6 Million Size Standard

For industries with a $6 million size standard, SBA had three considerations. The first consideration was whether to propose a 50 employee size standard for those industries. SBA's methodology for evaluating a size standard for a nonmanufacturing industry presumes that $6 million in average annual receipts is an appropriate size standard. This size standard is generally referred to as the “nonmanufacturing anchor size standard.” SBA considers a size standard higher or lower than the anchor level as appropriate for an industry when the structural economic characteristics of the industry are significantly different from the typical nonmanufacturing industry. SBA has decided to retain the concept of an anchor size standard for the nonmanufacturing industries as part of its restructuring and simplification of size standards. However, SBA proposes that the anchor size standard will be expressed in number of employees rather than receipts. Based on the ratio of receipts to employees in the nonmanufacturing industries, 50 employees is the employee anchor size standard for the nonmanufacturing industries. SBA is proposing a 50 employee size standard for industries currently with a $6 million size standard, unless the criteria discussed in the second and third considerations are present within an industry.

SBA's second consideration was whether the size standard should be higher than the 50 employee size standard anchor for industries where the conversion of receipts to employees produces a figure significantly above 50 employees. The SBA has decided to propose a size standard of 50 employees for industries where the conversion produces an equivalent size standard from 51 to 74 employees, since these levels round to the closest of the ten proposed employee size standards. For industries where the receipts to employees conversion results in a figure of 75 employees or more, the SBA selected a size standard above 50 employees, but only if other information justified the higher size standard. In these cases, a higher size standard is appropriate to (1) reflect the industrial structure of the industry, or (2) avoid a significant reduction in the number of small businesses currently eligible to compete for Federal procurements.[1]

SBA's third consideration examined the relationship of the size standard with other size standards within an Start Printed Page 13133industry subsector or industry group (three-digit and four-digit NAICS codes, respectively). For several industries with a $6 million size standard, SBA decided to propose a size standard greater than 50 employees in order to maintain the size standard relationship within their industry group (such as for the Land Subdivision and Land Development industry, NAICS 236110).

An example of the decision process utilizing the three criteria is Barber Shops (NAICS 81211), whose present size standard is $6 million. Dividing $6 million by the inflation-adjusted figure of $34,700 receipts per employee resulted in the equivalent size standard of 172 employees. This level rounds to 150 employees using the preselected employee size standards. However, the SBA believes that a 150 employee size standard for barber shops is too high, and that the 50 employee proposed anchor size standard better matches the industry structure for barber shops, as well as public perception of what constitutes a small business in this industry. This industry has one of the largest concentrations of very small businesses, where the average size barber shop is only three employees.

By contrast, the present size standard for the Other Airport Operations industry (NAICS 488119) has the same $6 million anchor size standard. Dividing $6 million by the $56,969 receipts per employee resulted in the equivalent size standard of 105 employees, which the SBA rounded to 100 employees. The average size firm in this industry has 49 employees—more than four times the average size firm of 11 employees for the nonmanufacturing industries with a $6 million size standard. In addition, the 50 employee anchor size standard would render approximately 50 currently defined small businesses ineligible to compete for Federal procurements that require small business status. In FY 2002, the Federal Government awarded more than $280 million in contract awards, with small businesses obtaining less than $17 million in contracts. A 50 employee size standard would have the unintended result of further diminishing the participation of small businesses in Federal contracting within this industry activity.

Three hundred and thirty-seven industries have a size standard of $6 million. In applying the above considerations, SBA proposes a 50 employee size standard for 315 industries, and a higher size standard for the remaining 21 industries. The chart below identifies the 21 industries with a size standard higher than 50 employees and the basis for proposing a higher size standard.

Table 3.—Industries Currently With a $6 Million Size Standard That SBA Proposes a Size Standard Higher Than 50 Employees

NAICS codesNAICS industryProposed employee size standardReason for employee size standard different from anchor size standard
237210Land Subdivision200Common size standard for all industries in Subsector 237 and impact on Federal procurement.
485111Mixed Mode Transit Systems100Common size standard for most transit industries (NAICS Subsector 485).
485112Commuter Rail Systems100Common size standard for most transit industries.
485113Bus and Other Motor Vehicle Transit Systems100High average firm size.
485119Other Urban Transit Systems100Common size standard for most transit industries.
485210Interurban and Rural Bus Transportation100High average firm size.
485410School and Employee Bus Transportation100High average firm size and common size standard for most transit industries.
485510Charter Bus Service100Common size standard for most transit industries.
486210Pipeline Transportation of Natural Gas100High average firm size and common size standard with NAICS 486990, All Other Pipeline Transportation.
488119Other Airport Operations100High average firm size and impact on Federal procurement.
488190Other Support Activities for Air Transportation100Common size standard with NAICS 488119 and impact on Federal procurement.
512131Motion Picture Theatres (except Drive-In)100High average firm size.
518112Web Search Portals150Common size standard for all industries in Subsector 518 and impact on Federal procurement.
561422Telemarketing Bureaus150High average firm size.
621910Ambulance Services100High average firm size and common size standard with other ambulatory health services.
711310Promoters of Performing Arts, Sports, & Similar Events with Facilities100High average firm size.
713110Amusement and Theme Parks100High average firm size.
713920Skiing Facilities200High average firm size.
721110Hotels (except Casino Hotels) and Motels100High average firm size and impact on Federal procurement.
721120Casino Hotels100High average firm size and common size standard with hotels and motels.
812930Parking Lots and Garages100High average firm size.
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Selection of Employment Size Standard for Industries Size Standards Above or Below $6 Million

For industries that have a size standard below $6 million, SBA has proposed 50 employees. This would establish the policy that any business with 50 or fewer employees is a small business regardless of its industry. Only a few industries would be affected by this proposal, and we strongly believe that the benefits of simplification outweigh any impact on SBA's programs or on other Federal small business programs.

For industries with a size standard above $6 million, SBA calculated an equivalent employee size standard based on the ratio of receipts to employees. For example, the receipts per employee of a computer systems design firm is $152,000. A firm of $21 million equates to a firm with 127 employees. Because SBA is proposing to have size standards at one of ten employee levels, SBA rounded this figure to the nearest employee size standard, or 150 employees.

For most of these industries, SBA proposes the size standard resulting from the receipts per employee ratio. For closely related industries (those within the same 4-digit NAICS Industry Group or 3-digit NAICS Subsector) that currently have a common receipts-based size standard, SBA proposes a common employee-based size standard, even though a different size standard could be established for each closely related industry based on the receipts-to-employee calculation. SBA recognizes that small businesses are often eligible for SBA assistance in a number of closely related industries, and it simplifies size standards if closely related industries have the same size standard. An example of this pattern is the computer services industries in which businesses typically operate in at least several of the nine computer services industries. After reviewing the equivalent employee-based size standards for the nine computer services industries, SBA is recommending a common size standard of 150 employees for all nine computer services industries. Examples of other industries where SBA proposes a common size standard include the consulting service industries, the trucking industries, the warehousing industries, and the waste management industries.

Summary of Proposed Employee Size Standards

In summary, the major factors influencing the proposed employee size standard are:

  • A size standard of 50 employees generally applies when an industry receipt-based size standard is at the present anchor of $6 million in average annual receipts or is less than $6 million;
  • An employee size standard above 50 employees applies to an industry with a $6 million size standard if the calculated equivalent employee size standard is above 76 employees and industry structure, existing size standards relationships, or Federal procurement implications merited a size standard above 50 employees.
  • An employee size standard for an industry above $6 million is based on the calculated equivalent employee-based size standard.
  • Exceptions to these rules occurred when SBA attempted to maintain traditional size standards relationships within closely related industries.

Selection of Employment Size Standard for Industries With Size Standards Based on Electric Generation and Financial Assets

The size standard for the industries involved in the generation, transmission, or distribution of electric energy (NAICS 221111-221122) is 4 million megawatts of total electric output (see footnote 1 of the table to size standards in § 121.210). The U.S. Bureau of the Census does not publish capacity data on businesses in this industry. SBA identified small electric utilities from the U.S. Department of Energy's publication “Financial Statistics of Investor-Owned Electric Utilities, 1996” (available at

http://www.eia.doe.gov/​cneaf/​electricity/​invest/​invest _sum.html). SBA reviewed publicly available information, such as Security and Exchange Commission 10-K reports, to determine the employment levels of small electric utilities. Based on this review, SBA is proposing a 1,000 employee size standard for the electrical generation, transmission, and distribution industries. At that employment size, electric utilities under the current 4 million megawatt size standard would continue to be defined as small without adding other electric utilities as small.

The size standard for the banking and other credit intermediation industries (NAICS 522110—522210, and 522293) is $150 million in financial assets (see footnote 8 to the table of size standards in § 21.201). The U.S. Bureau of the Census does not publish industry financial data on the banking and credit industries. Using asset and employment data published by the Federal Deposit Insurance Corporation's Statistics on Depository Institutions (available at http://www2.fdic.gov/​SDI/​main4.asp), the average assets per employee of smaller banks is about $2.5 million. Based on those data, a $150 million bank would have, on average, about 60 employees. Applying the methodology described above, SBA is proposing a 50 employee size standard for banking and other credit intermediation industries since that is the nearest of the ten employee size standards proposed by this rule.

Proposal To Add a Maximum Average Annual Receipts Cap as an Additional Component of the Size Standard for Certain Industries

SBA further proposes that 31 industries will have a maximum average annual receipts amount (referred to as a receipts cap) along with the employee-based size standard. To qualify as small, concerns in those industries would have to be no greater in size than the employee-based size standard and have average annual receipts less than the receipts cap amount. SBA proposes that 36 size standards in the following 31 industries have an annual receipts cap along with the proposed employee size standard. Table 4, below, lists those industries and SBA's proposed employee size standards and receipts caps.

Table 4.—Industries With Proposed Receipts Caps

NAICS codesNAICS U.S. industry titleProposed number of employeesProposed maximum annual receipts ($ million)
115310Support Activities for Forestry50N/A
Except,Forest Fire Suppression400$20.0
Except,Fuels Management Services400$20.0
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236115New Single-Family Housing Construction (except Operative Builders)150$35.0
236116New Multifamily Housing Construction (except Operative Builders)150$35.0
236117New Housing Operative Builders150$35.0
236118Residential Remodelers150$35.0
236210Industrial Building Construction150$35.0
236220Commercial and Institutional Building Construction150$35.0
237110Water and Sewer Line and Related Structures Construction200$35.0
237120Oil and Gas Pipeline and Related Structures Construction200$35.0
237130Power and Communication Line and Related Structures Construction200$35.0
237210Land Subdivision200$35.0
237310Highway, Street, and Bridge Construction200$35.0
237990Other Heavy and Civil Engineering Construction200$35.0
Except,Dredging and Surface Cleanup Activities150$22.0
518210Data Processing, Hosting, and Related Services150$30.0
541310Architectural Services50$7.0
541330Engineering Services50$7.0
Except,Military and Aerospace Equipment and Military Weapons200$30.0
Except,Contracts and Subcontracts for Engineering Services Awarded Under the National Energy Policy Act of 1992200$30.0
Except,Marine Engineering and Naval Architecture150$30.0
541511Custom Computer Programming Services150$30.0
541512Computer Systems Design Services150$30.0
541513Computer Facilities Management Services150$30.0
541519Other Computer Related Services150$30.0
541611Administrative Management and General Management Consulting Services50$10.0
541612Human Resources and Executive Search Consulting Services50$10.0
541613Marketing Consulting Services50$10.0
541614Process, Physical Distribution and Logistics Consulting Services50$10.0
541618Other Management Consulting Services50$10.0
541620Environmental Consulting Services50$10.0
541690Other Scientific and Technical Consulting Services50$10.0
541990All Other Professional, Scientific and Technical Services50$10.0
561110Office Administrative Services50$10.0
561210Facilities Support Services400$40.0
611519Other Technical and Trade Schools50N/A
Except,Job Corps Centers400$30.0

In some industries, businesses have more latitude in deciding whether to hire employees to perform work or to subcontract the work to others. For example, general contractors can decide what and how much construction work to perform themselves and what work to subcontract to others. Under an employee-based size standard, a business may exceed the size standard because it decided to perform more work in-house while another business performing the same level of work stays under the employee size standard because more work is subcontracted. Under SBA's Small Business Size Regulations, the employees of a subcontractor are not included in counting the number of employees of a business (unless affiliation was found between the business and subcontractor). SBA recognizes that such decisions and their implications on small business status are best made by the management of concerns that will be affected. SBA is concerned, however, about cases where businesses operating in industries that have greater latitude in subcontracting significant portions of work purposely subcontract an unusual amount of work relative to customary industry practices to retain small business status. Because of this potential, SBA proposes to establish an average annual receipts cap along with employee size standards in the 31 industries listed in Table 4, above.

In the industries for which SBA proposes an employee-based size standards and receipts cap size standard, it expects that most businesses which are small under the applicable employee size standard will also meet the corresponding receipts cap. The purpose of the receipts cap is to prevent businesses from creatively manipulating their employment levels to remain small. Without such a receipts cap requirement, SBA might otherwise, and inappropriately, provide large businesses with assistance that is intended for small businesses, and put small businesses in the position of competing against businesses that by any consideration are not small. As discussed further below, the receipts cap will include almost all businesses under the employee size standard, but exclude those businesses that have an inordinate amount of receipts for their level of employment.

How the SBA Determined the Maximum Annual Receipts Cap Level for the Industry Activities in Table 4 (Above)

The methodology in determining the receipts caps was to first examine the size distribution of firms that are presently in SBA's Procurement Marketing and Access (PRO-Net) database which was merged with the Department of Defense Central Contractor Registration—the SBA's list of small businesses interested in doing business with the Federal Government. For each of the 31 industries under review, it has data on the number of Start Printed Page 13136employees and the annual receipts of each firm in that database that is active in the industry. SBA analyzed employment and receipts data of small businesses near the proposed employee size standard. By calculating a receipts to employee ratio for each of these small businesses, and then multiplying that ratio by the proposed size standard in employees, the SBA was able to estimate at what point a small business would lose eligibility under a receipt cap if it were to expand to the new size standard limit based on employees. In other words, if a business has 110 employees, what level of receipts would it produce if it expanded to a proposed 150 employee size standard.

The proposed receipt caps were designed to permit a majority of the small businesses that are presently under the size standard to expand to the proposed employee-based size standard without exceeding the dollar caps. The receipts caps proposed generally range from 22% to 35% higher than the current receipts size standards for those industries with a size standard of $15 million or higher, and from 67% to 74% higher than the current receipts size standard for those industries that have a receipts size standard of $6 million or less. The only exemption to this analysis was for the newly established Job Corps Centers size standard (part of NAICS 611519). This sub-industry consists of a small number of businesses. The current receipts size standard fully captures all small businesses under the proposed employee size standard for this sub-industry category and is retained as the receipts cap.

Simplification of Other Program and Special Size Standards

SBA has established a number of size standards to meet the needs of specific programs or to address special Federal procurement considerations. SBA proposes to eliminate or modify six of these size standards in an attempt to further simplify size standards and to apply consistent size standards for all Federal Government programs and purposes.

1. Surety Bond Guarantee (SBG) Program size standard: SBA proposes that any construction (general or special trade) concern or a concern performing a contract for services is small provided it meets the size standard for the NAICS code for its primary industry. Currently, the size standard for the SBG Program is $6 million for performing contracts for construction (general or special trades) or services (see 13 CFR 121.301(d)(1)).

Federal procurement regulations require a contractor to meet the size standard for the NAICS code that best describes the principal purposes of the procurement. Therefore, if a contractor bids and is successful as a prime contractor on a Federal procurement, it may qualify as a small business if it meets the size standard for the procurement, even if the size standard exceeds $6 million. Further, § 121.305 states “A concern qualified as small for a particular procurement, including an 8(a) subcontract, is small for financial assistance directly and primarily relating to the performance of the particular procurement.” SBA's SBG Program is a financial assistance program, and contractors awarded Federal contracts requiring a surety bond are therefore eligible for SBA's guarantee on the bond, if a guarantee is needed, including those with size standards in excess of $6 million, provided the contractor meets the size standard for its industry.

However, for SBA to guarantee a surety bond involving a subcontract or a bond running to an obligee other than the Federal Government, such as a private owner or non-Federal political subdivision or agency, a contractor is not eligible for an SBA guarantee unless it meets the current $6 million size standard. SBA believes this is inconsistent with the intent of its SBG Program because it does not provide assistance to small businesses otherwise eligible as small for SBA's other financial assistance programs. SBA proposes to eliminate the $6 million size standard. SBA proposes, rather, that a contractor applying for SBA's guarantee meet the size standard for its primary industry for any bond (§ 121.301(d)). This is consistent with the intent of this proposed rule, which is to base all size standards on number of employees and have a single size standard for all programs.

2. Petroleum refining size standard: The size standard for the Petroleum Refineries industry (NAICS 324110) is 1,500 employees. In addition, for purposes of the Federal Government's procurement of refined petroleum products, the refiner may not have more than 125,000 barrels per calendar day (bpcd) capacity of petroleum-based inputs, including crude oil or bona fide feedstocks. This is included in Footnote 4 to SBA's current table of small business size standards. SBA increased the refining capacity from 75,000 bpcd to 125,000 bpcd, effective April 28, 2003 (see 68 FR 15047 dated March 28, 2003, available at http://www.sba.gov/​size/​indexwhatsnew.html#petrol-fr).

SBA proposes to extend the 125,000 bpcd size standard component to all Federal Government programs. Before the April 28, 2003 revision, SBA had progressively increased the refining capacity component over a number of years. In its last two rulemaking actions pertaining to the petroleum refining size standard, SBA's proposed rules included a request for comments on whether SBA should retain or eliminate the refining capacity component. SBA retained it because industry comments have always been very strong in favor of doing so. The petroleum refining industry has always affirmed that refining capacity is the single best measure of a refiner's size. Further, it is the same measure that the U.S. Department of Energy, Energy Information Administration, uses to assess the size of refiners and their refineries.

Before proposing to increase the refining capacity component, SBA studied the petroleum refining industry to analyze the effect that it would have on existing small businesses. The final rule increasing it to 125,000 bpcd did not increase the number of small businesses, nor did any small businesses lose eligibility. That is, there was no change in the number of small refiners. There were other reasons for the rule, more fully described in the Federal Register notice cited above. This proposed change (footnote 5, § 121.201) is consistent with SBA's intention to simplify size standards, by having a single size standard apply to an industry for all Federal Government programs and purposes.

Because the remaining eligibility requirements for petroleum refiners are Federal procurement specific, and not part of the size standard, SBA does not propose to extend them to other Federal programs.

3. Tire manufacturing size standard: The size standard for the Tire Manufacturing (except Retreading) industry (NAICS 326211) is 1,000 employees. For the Federal Government's procurement of pneumatic tires under this NAICS code and within Census Classification codes 30111 and 30112, SBA has established an alternative size standard based on a concern's share of the worldwide tire market (see Footnote 5 to SBA's current table of size standards). Tire manufacturers satisfying the provisions of this alternative size standard exceed 1,000 employees in size. SBA implemented these requirements effective January 18, 1967 (see 31 FR 15737). SBA believes, based on Federal procurement data, that this footnote is no longer necessary. A review of Federal Start Printed Page 13137contract awards in fiscal years 2001 and 2002 found that all small businesses receiving tire supply contracts met the current 1,000 employee size standard. SBA therefore proposes to eliminate this alternative size standard.

4. Sales or lease of Federal Government property: SBA proposes to modify the following three receipts-based and one employee-based size standards that pertain to programs involving the sale and lease of Federal Government property:

(a) Size standards for sales or leases of Government property: The current size standard for concerns not primarily engaged in manufacturing is $6 million (see § 121.502(a)(2)). SBA proposes to establish a size standard of 50 employees for those concerns. This is consistent with the intent of this proposed rule, which is to base all size standards on number of employees. Also, this proposal is consistent with the criteria to propose a 50 employee size standard for industries that currently have a $6 million size standard unless certain conditions exits. SBA does not believe industry or procurement factors exist to warrant a different size standard.

(b) Size standards for the purchase of Government-owned Special Salvage Timber: To purchase Government-owned Special Salvage Timber from the U.S. Forest Service or the U.S. Bureau of Land Management, a concern, with its affiliates, can have no more than 25 employees during any of its pay periods for the last twelve months, and must meet other requirements as well (see § 121.508). SBA proposes to increase this size standard to 50 employees. SBA believes that applying the 50 employee anchor size standard as a minimum size standard is warranted to achieve its overall goal of simplicity and uniformity among the various size standards. SBA does not propose to amend any other parts of § 121.508, since they are Federal procurement specific requirements and not part of the size standard.

(c) Size standard for leasing of Government land for coal mining: Under the current size standard, a concern, together with its affiliates, may have no more than 250 employees (see § 121.509(a)). SBA proposes increasing this to 300 employees. Retaining 250 employees as a size standard would increase the number of size standards overall (from 10 to 11), and this would be the only 250 employee size standard. SBA has decided to round up this size standard to the 300 employee level instead of rounding down to 250 employees to avoid eliminating eligibility of currently defined small businesses for this program.

(d) Size standard for stockpile purchases: Under the current standard, a concern, together with its affiliates, may not have average annual receipts that exceed $48.5 million (§ 121.512(b)). SBA proposes to establish a size standard of 400 employees for those concerns. Based on the ratio of receipts to employees of businesses with $48.5 million or less in receipts ($109,000 receipts per employee), this size standard equates to 445 employees. Four hundred employees is the closest of the 10 employee-based size standards proposed in this rule. SBA believes that the proposed size standard would not eliminate the eligibility of currently defined small businesses for this program

5. Nonmanufacturer size standard: The SBA proposes to revise the nonmanufacturer size standard from 500 employees to 100 employees. A nonmanufacturer is a business that provides a manufactured product to the Federal Government that it itself did not manufacture (see § 121.406(b)). Substantially all nonmanufacturers are in industries categorized within the Wholesale Trade industries (NAICS Sector 42). A size standard of 100 employees applies to wholesalers for SBA and Federal Government programs, except for Federal procurement programs. Therefore, to further the simplification of small business size standards, the SBA is proposing to eliminate the special 500 employee nonmanufacturer size standard by applying the 100 employee size standard for Wholesale Trade to Federal procurement programs.

SBA continues to believe that 100 employees is an appropriate size standard for the Wholesale Trade Sector. The average size of a wholesaler is 16 employees. Wholesalers with fewer than 100 employees comprise 97% of all wholesalers, employ about 50% of all employees, and generate one-third of total industry receipts. The relatively small share of total industry receipts generated by small wholesalers, however, reflects the significantly higher receipts per employee generated by larger wholesalers in the industry than by small wholesalers. Given the industry share of firms and employment of wholesalers with fewer than 100 employees, SBA believes a current Wholesale Trade Sector size standard of 100 employees would be an appropriate size standard.

Exceptions to the SBA's Proposal To Simplify Size Standards by Basing All of Them on Number of Employees

This proposed rule does not change three size standards, because they are either established by statute or reflect unique program objectives. To ensure that the public is aware of the reasons for not modifying these size standards, SBA explains why it does not propose to modify the following:

1. Agricultural Enterprises: The Small Business Act (15 U.S.C. 632(a)(1)) states in section 3(a)(1) “an agricultural enterprise shall be deemed to be a small business concern if it (including its affiliates) has annual receipts not in excess of $750,000.” This provision applies to concerns in the Crop Production (NAICS Subsector 111) and Animal Production (NAICS Subsector 112) industries. SBA has no authority to modify this Congressionally-mandated size standard.

2. Net Worth/Net Income: Size standards based on the net worth and net income of a business concern are an alternative to SBA's industry-based size standards for the CDC and SBIC financial assistance programs authorized under Title III and Title V of the Small Business Investment Act (Pub. L. 100-107). That is, an applicant may qualify as a small business if it meets the size standard for its primary industry or the net worth and net income size standards. For the CDC program, an applicant must meet either: (a) SBA's size standard established for its primary industry activity; or (b) have tangible net worth not in excess of $7 million and average net income after Federal income taxes for its two preceding completed fiscal years not in excess of $2.5 million (§ 121.301(b)). For assistance under SBA's SBIC Program, an applicant must meet either: (a) SBA's size standard established for its primary industry activity; or, (b) with its affiliates, have tangible net worth not in excess of $18 million and average net income after Federal income taxes for its two preceding completed fiscal years not in excess of $6 million (§ 121.301(c)).

The alternative net worth and net income size standards for the CDC and SBIC programs have been in place for many years and have worked well in serving the intended beneficiaries. Most small businesses qualifying under the net worth and net income size standards also qualify under the industry-based size standards. However, the option to qualify as small under the industry-based size standards ensures that a small business eligible for other SBA programs is also eligible for assistance under the CDC and SBIC Programs. Therefore, SBA believes that the net worth and net income size standards should be retained for these programs. Start Printed Page 13138

Impact on Small Business Eligibility of the Proposed Rule

This proposed rule would change the 514 size standards that are based on receipts, financial assets, or electric generation. As discussed above, the proposed conversion of these receipts-based size standards to employee-based size standards attempts to establish an employment level that is generally equivalent to the receipts-based size standard. Because of variation within industries, some businesses will gain or lose small business eligibility. The decision to establish only ten employee size standard levels also results in some businesses gaining or losing small business eligibility. An analysis of the impact of the proposed rule on small business eligibility shows that a relatively small number of businesses will be affected. Out of approximately 4.4 million businesses in the industries with revised size standards, 35,200 businesses could gain and 34,100 could lose small business eligibility, with the net effect of 1,110 additional businesses defined as small. The 69,300 businesses affected by this proposal represent 1.6% of the 4.4 million businesses in industries with changing size standards. The regulatory impact and regulatory flexibility analyses discussed below describe the impact of this proposal in greater detail.

Alternatives to This Proposed Rule

SBA considered a number of alternative approaches to simplify and restructure its size standards. These are briefly described below. SBA welcomes comments on these alternatives or other alternatives to restructure and simplify size standards.

1. Retain the existing employee-based size standards, while reducing the 30 receipts-based size standards to a fewer number of size standard levels, such as four to eight different receipts size standards. This approach is similar to SBA's proposals of December 31, 1992 (57 FR 62522) and September 2, 1993 (58 FR 46573), which SBA did not adopt as final rules. As discussed above in this proposed rule, SBA believes a single size measure (with a receipts size standards cap for a limited number of industries) represents a less complicated set of size standards.

2. Establish size standards by industry category that would generally be based on NAICS Industry Sectors or Subsectors, such as the size standards of the three Construction Subsectors. Under this approach, SBA could establish a size standard by number of employees and/or receipts for each industry group, and size standards across industries would vary considerably less. This approach would limit SBA's ability to fully assess the need for distinct size standards for specific industries, especially in the Professional, Scientific, and Technical Services Industry Sector.

3. Base all size standards on number of employees, with no receipts cap component. SBA discusses above in this proposed rule why it believes a receipts cap along with an employee size standard is needed for certain industries.

Request for Comments

SBA requests comments on its proposal to simplify and restructure size standards. Specifically, SBA requests comments on the following issues:

1. Are SBA's small business size standards complex, confusing or difficult to use? If so, please describe to what extent the proposed rule addresses this concern.

2. Should all small business size standards be based on number of employees?

3. Do the proposed size standards essentially maintain the level of small business eligibility within an industry that currently exists under the current receipts-based size standards?

4. Should there be a receipts cap component for those industries where subcontracting and outsourcing opportunities may allow a business to remain small but generate an unusually large amount of receipts?

5. Is it appropriate to apply an additional receipts cap requirement for the 31 industries in Table 4, above? Are there other industries that SBA should have a receipts cap?

6. Are the proposed receipts cap levels an appropriate or acceptable way to exclude large businesses?

7. Is one or more of the alternatives that SBA considered preferable to the proposed rule? If so, please explain why. What would be the impact of SBA's adopting one of the alternatives in place of the proposed rule?

8. Should SBA modify the size standard for its SBG Program and require that any construction (general or special trade) concern or concern performing a contract for services is small provided it meets the size standard for its primary industry?

9. Should SBA extend to all Federal Programs the 125,000 bpcd component of the size standard applicable to the Federal Government's procurement of refined petroleum, as described above?

10. Should the SBA eliminate the 500 employee size standard for nonmanufacturers applicable to Federal procurement programs and apply the Wholesale Trade Sector size standard of 100 employees?

11. Should SBA eliminate the special market share size standard for tire manufacturers, as described above?

12. Does the expanded use of employee-based size standards result in additional burdens on businesses verifying small business status or on Federal agencies that use SBA's size standards? These issues are discussed as part of SBA's regulatory impact and regulatory flexibility analyses of this proposed rule (see following two sections).

Compliance With Executive Orders 12866, 12988, and 13132, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Paperwork Reduction Act (44 U.S.C. Ch. 35)

The Office of Management and Budget (OMB) has determined that this rule is a significant regulatory action for purposes of Executive Order 12866. Size standards determine which businesses are eligible for Federal small business programs. This is not a major rule under the Congressional Review Act, 5 U.S.C. 800. For purposes of Executive Order 12988, SBA has determined that this rule is drafted, to the extent practicable, in accordance with the standards set forth in that order. For purposes of Executive Order 13132, SBA has determined that this rule does not have any federalism implications warranting the preparation of a Federalism Assessment.

For purposes of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA has determined that this rule would not impose new reporting or record keeping requirements. It is important to note, however, that while there are no new reporting and record keeping requirements, the size status of a business in industries that currently have a receipts-based size standard will no longer be based on a concern's Federal Income Tax returns, except for those industries whose size standards have receipts caps. Rather, proof of eligibility as a small business will be a concern's payroll records for the period of measurement specified in § 121.106. SBA acknowledges that, in the event it must determine a business' employment size status, it may be more difficult to verify the accuracy of the payroll records submitted. At times, SBA may request a business provide more information to substantiate its employment information. SBA estimates that it takes four hours, on average, to complete an “Application for Small Business Size Determination” (SBA Form 355, OMB Approval No. 3245-0101). SBA invites comments on Start Printed Page 13139whether using employee-based size standards for new industries would be significantly more burdensome on small businesses and result in additional time to complete SBA Form 355. If so, how could SBA reduce the burden?

Regulatory Impact Analysis

1. Need for This Regulatory Action

Small business size standards have become complicated and burdensome for many users. Because size standards have become more complex over time, SBA believes that they should be made more uniform and easier to use. SBA believes that these simplified size standards will be less of a hindrance to small businesses that would like to participate in Federal small business programs and to personnel involved in small business Federal procurement and lending programs.

SBA is chartered to aid and assist small businesses through a variety of financial, procurement, business development, and advocacy programs. To effectively assist intended beneficiaries of these programs, SBA must establish distinct definitions by which businesses are deemed small businesses. The Small Business Act (Act) gives the SBA Administrator responsibility for establishing small business definitions. The Act also requires that small business definitions vary to reflect industry differences. The supplementary information to this proposed rule explains how SBA proposes to modify size standards, and why it believes that establishing employee-based size standards for all industries will be simpler while defining small businesses as equally well as the current structure.

2. Potential Benefits and Costs of This Regulatory Action

Small businesses will benefit because they will find it easier to use the small business size standards to determine if they are a small business. Also, there will be more common size standards among similar industries. Because size standards will be perceived as being less confusing and more straightforward, more small businesses will be encouraged to participate in Federal Government small business programs.

Other users of SBA's small business size standards, such as Federal Government Contracting Officers and commercial lenders that participate in SBA's financial assistance programs, will also benefit. There will be fewer size standards and they will be able to apply them more easily to their needs, and provide better and faster service to small businesses in need of assistance.

In the Federal Government, SBA's size standards are used for procurement programs, the Small Business Innovation Research Program (SBIR), loan programs, and regulatory flexibility analyses; plus, agencies use the size standards for other programmatic purposes. Currently, six agencies use small business size standards for various programs specific to their agencies. After discussions with each of these agencies, SBA believes that this proposed revision of its size standards would not negatively impact any of the program objectives of these agencies. Three agencies viewed positively the objective of simplifying size standards.

The U.S. Department of Transportation pointed out that certain Federal, state and local disadvantaged businesses enterprise (DBE) programs administer programs to certify businesses as small DBEs. Most of the businesses seeking DBE certification come from the construction and services industries that currently have receipts-based size standards. The change to employee size standards from receipts size standards will require applicants for small DBE certification to state their size in terms of number of employees. If a certification office questions the employment size of an applicant, the applicant will have to substantiate their employment size based on payroll records. A review of payroll records is a more time-consuming process than reviewing an applicant's Federal Income Tax return when questions arise concerning the applicant's receipts size. SBA believes that in most cases, the additional time to request and evaluate an applicant's employment size will not be substantial. SBA requests comments on the use of employee size standards on the DBE certification process and how to minimize an additional burden, if any, on the DBE process.

If an agency believes that a size standard different from an SBA's size standard is appropriate for its programs, it must contact SBA. If the agency seeks to change size standards in a general rulemaking context, then the agency should contact SBA's Office of Size Standards (see 13 CFR 121.901-904). If the agency seeks to change size standards for the purposes of its analysis under the Regulatory Flexibility Act (RFA), then the agency should contact SBA's Office of Advocacy (Advocacy) pursuant to section 601(3) of the RFA. Section 601(3) of the RFA requires the agency to consult with Advocacy and provide opportunity for public comment when it uses a different size standard for the RFA analysis.

Additional costs to the Federal Government will be negligible, if any. There will be approximately 1,100 additional small businesses under the proposed restructured size standards. This is less than 0.03% of the businesses in the affected industries. SBA believes that there will be a savings to the Federal Government because there will be fewer size standards, all having employee-based measures, which will reduce administrative costs.

In this rule, the SBA also proposes to revise the nonmanufacturer size standard from 500 employees to 100 employees. The great majority of nonmanufacturers are categorized under Wholesale Trade Sector (NAICS Sector 42) in which the size standard for all industries is 100 employees, except for Federal procurements. To further the simplification, SBA is proposing the same size standard of 100 employees for Federal procurement for wholesale trade industries under the nonmanufacturer size standard. This shift from a 500 employee size standard to one of 100 employees is estimated to affect 744 firms active in Federal procurement based on the SBA's Pro-Net data base of firms interested in doing business with the Federal Government. This data base includes a total of 30,700 firms in the wholesale trade NAICS codes, and a percentage loss of 2.4% would occur if the 100 employee size standard were finalized.

SBA estimates that there will be little distributional effects if this proposed rule is adopted. Small business size standards primarily serve Federal Government agencies in their procurement programs. Federal prime contractors also use them in their subcontracting plans. Since there will be less than a 0.03% increase in newly eligible small businesses, it is possible that a very limited amount of the Federal contracts will transfer from non-small businesses to small businesses.

The proposed revision to the current size standard structure is consistent with SBA's statutory mandate to assist small business. This regulatory action promotes the Administration's objectives. One of SBA's goals in support of the Administration's objectives is to help individual small businesses succeed through fair and equitable access to capital and credit. Reviewing and modifying size standards, when appropriate, ensures that intended beneficiaries have access to small business programs designed to assist them. Size standards do not interfere with State, local, or tribal governments in the exercise of their government functions. In a few cases, State and local governments and Start Printed Page 13140political subdivisions have voluntarily adopted SBA's size standards for their programs to eliminate the need to establish an administrative mechanism to develop their own size standards.

Initial Regulatory Flexibility Analysis

Under the RFA, this rule, if finalized, could have a significant impact on a substantial number of small entities because 35,200 businesses could gain and 34,100 could lose small business eligibility for Federal Government programs. SBA estimates that the net effect will be approximately 1,100 more eligible small businesses than at present. Immediately below, SBA sets forth an initial regulatory flexibility analysis of this rule addressing the following: (1) Need for and objective of the rule; (2) description and estimate of the number of small entities to which the rule will apply; (3) projected reporting, record keeping, and other compliance requirements of the rule; (4) relevant Federal rules that may duplicate, overlap, or conflict with the rule; and (5) alternatives to allow the Agency to accomplish its regulatory objectives while minimizing the impact on small entities.

1. Need for and Objective of the Rule

Small business size standards have become complicated and difficult to apply for many users. Because size standards have become so complex and confusing, SBA believes size standards should be more uniform and consistent, easier to use, and more reliable. SBA believes that these simplified size standards will be less of a hindrance to small businesses that would like to participate in Federal small business programs. In addition, it will reduce perceived impediments for providers of small business assistance who use them, such as personnel involved in Federal procurement and commercial lending, and possibly increase small business participation in Federal programs.

2. Description and Estimate of the Number of Small Entities To Which the Rule Will Apply

The SBA estimates that the simplification of size standards by converting receipt-based size standards to employee-based size standards will have a net impact of increasing the number of businesses eligible for SBA assistance by 1,100 firms. This includes an additional 35,200 businesses in 196 industries and the loss of 34,100 businesses in 229 industries. Overall, the SBA estimates that a total of 69,300 businesses could be impacted by this rule in terms of eligibility for SBA's programs. Since approximately 4.4 million businesses are active in industries covered by this rule, SBA estimates that 1.6% of businesses could be affected. However, the great majority of these businesses are not involved in SBA's programs in any one year, and the actual impact is likely to be only a small proportion of the 69,300 estimate. SBA's guaranteed loan program, for example, generated approximately 55,000 loans in FY 2002, indicating that just over one percent of eligible small businesses seek out SBA financial assistance in a given year. The SBA's PRO-Net database of small businesses interested in Federal procurement includes approximately 200,000 businesses—again, only a small proportion (about 4%) of businesses considered small by the SBA. Overall, SBA estimates that fewer than 3,000 businesses out of 4.4 million firms will be directly affected if these proposed changes were to be finalized, and that about half of these businesses would gain eligibility while the other half would lose eligibility.

Although the overall impact will be small relative to the number of businesses with revised size standards, certain industries will be impacted more than others. In particular, the SBA notes that the two restaurant industries, Full Service Restaurants (NAICS 722110) and Limited Service Restaurants (NAICS 722211), have the largest number of businesses losing eligibility for SBA assistance if this rule were to be finalized. In total, these two industries would lose about 14,600 businesses out of 272,000 businesses in both industries, a loss of 5.4% of the total. This stems from SBA's moving from a $6 million size standard to a 50 employee size standard in these industries. However, even under the new anchor size standard of 50 employees, 252,000 out of 272,000 businesses in these two restaurant industries would remain small and eligible for SBA assistance, almost 93% of the total. Other industries with relatively higher proportion of small businesses that could lose eligibility include Child Day Care Services (NAICS 624410), with a loss of 3.1% of businesses; Golf Courses and Country Clubs (NAICS 7138910), with a loss of 10.7% of businesses; Vocational Rehabilitation Services (NAICS 624310), with a loss of 20.7% of businesses; and Fitness and Recreational Sports Centers (NAICS 713940), with a loss of 5.4% of businesses. Among industries gaining eligibility, the biggest impact is Offices of Real Estate Agents and Brokers (NAICS 531210), with an additional 3,600 businesses out of a total of 54,700, or 6.6%.

Overall, SBA estimates that most industries will experience a very small impact from this rule relative to the total number of businesses that are active in industries covered by this rule. Among industries for which the SBA has industry data provided by the U.S. Bureau of the Census, there are a total of 440 industries with 4.4 million businesses, or approximately 10,000 businesses in the average industry. Of these 440 industries, 198 would have a total impact of fewer than 20 businesses, while 288 would have a total impact of fewer than 50 businesses.

Also in this rule, the SBA proposes to revise the nonmanufacturer size standard from 500 employees to 100 employees. The great majority of nonmanufacturers are categorized under Wholesale Trade Sector (NAICS Sector 42) in which the size standard for all industries is 100 employees, except for Federal procurements. To further the simplification, SBA is proposing the same size standard of 100 employees for Federal procurements for wholesale trade industries under the nonmanufacturer size standard. This shift from a 500 employee size standard to one of 100 employees is estimated to affect 744 firms active in Federal procurement based on the SBA's PRO-Net data base of firms interested in doing business with the Federal Government. This data base includes a total of 30,700 firms in the wholesale trade NAICS codes, and a percentage loss of 2.4% would occur if the 100 employee size standard were finalized.

3. Projected Reporting, Record Keeping, and Other Compliance Requirements of the Rule

The new table with all size standards based on number of employees does not impose any additional reporting, record keeping, or compliance requirements on small entities. Users may need to revise existing data bases that use current size standards. However, this is true anytime SBA changes or otherwise modifies a size standard. For example, a much more extensive change occurred when SBA converted from the Standard Industrial Classification (SIC) system to NAICS effective October 1, 2000, and later adopted, effective October 1, 2002, the U.S. Office of Management and Budget's 2002 modifications to NAICS. SBA was not made aware of any user problems with those actions.

It is important to note, however, that while there are no new reporting and record keeping requirements, the size status of a business in industries that currently have a receipts-size standard will no longer be based on a concern's Federal Income Tax returns, except for Start Printed Page 13141those industries whose size standards have receipts caps. Rather, proof of eligibility as a small business will be a concern's payroll records for the period of measurement specified in § 121.106. SBA acknowledges that, in the event it must determine a business' employment size status, it may be more difficult to verify the accuracy of the payroll records submitted. At times, SBA may request a business to provide more information to substantiate its employment information. SBA estimates that it takes four hours, on average, to complete an “Application for Small Business Size Determination” (SBA Form 355). SBA invites comments as to whether using employee-based size standards for new industries would be significantly more burdensome on small businesses and result in additional time to complete a SBA Form 355 and, if so, how SBA could reduce the burden.

4. Relevant Federal Rules That May Duplicate, Overlap, or Conflict With the Rule

In the Federal Government, SBA's size standards are used for procurement programs, the SBIR Program, loan programs, and regulatory flexibility analysis; plus, agencies use the size standards for other programmatic purposes. Currently, six agencies use small business size standards for various programs specific to their agencies. After discussions with each of these agencies, SBA believes that this proposed revision of its size standards will not negatively impact any of the program objectives of these agencies. Three agencies viewed positively the objective of simplifying size standards.

The U.S. Department of Transportation pointed out that certain Federal, state, and local governments administer programs to certify businesses as small disadvantaged business enterprises (DBE). Most of the businesses seeking DBE certification come from the construction and services industries that currently have receipts-based size standards. The change to employee size standards from receipts size standards will require applicants for small DBE certification to state their size in terms of number of employees. If a certification office questions the employment size of an applicant, the applicant will have to substantiate its employment size based on payroll records. A review of payroll records is a more time-consuming process than reviewing an applicant's Federal Income Tax return when questions arise concerning the applicant's receipts size. SBA believes that in most cases, the additional time to request and evaluate an applicant's employment size will not be substantial. SBA requests comments on the use of employee size standards on the DBE certification process and how to minimize an additional burden, if any, on the DBE process.

5. Alternatives To Allow the Agency To Accomplish Its Regulatory Objectives While Minimizing the Impact on Small Entities

As discussed above in the Supplementary Information, there are three alternatives to the proposed rule: (a) Retain the existing employee-based size standards, while reducing the 30 receipts-based size standards to a fewer number of size standard levels, such as four to eight different receipts size standards; (b) establish size standards by industry category that would generally be based on NAICS Industry Sectors or Subsectors, such as the size standards of the three Construction Subsectors; and (c) base all size standards on number of employees, with no receipts cap component.

SBA believes the proposed size standards based on number of employees will simplify size standards and will likely have a minimal adverse impact on small entities. The other alternatives SBA considered would achieve fewer benefits in terms of simplifying size standards or have a much greater impact on the number of businesses either gaining or losing small business eligibility.

Start List of Subjects

List of Subjects in 13 CFR Part 121

End List of Subjects

For the reasons set forth in the preamble, SBA proposes to amend part 13 CFR Part 121.

Start Part

PART 121—SMALL BUSINESS SIZE REGULATIONS

1. The authority citation for part 121 continues to read as follows:

Start Authority

Authority: 15 U.S.C. 632(a), 634(b)(6), 636(b), 637(a), 644(c), and 662(5); and Sec. 304, Pub. L. 103-403, 108 Stat. 4175, 4188, Pub. L. 106-24, 113 Stat. 39.

End Authority

2. Revise § 121.201 to read as follows:

3. § 121.201 What size standards has SBA identified by North American Industry Classification System codes?

The size standards set forth in this section apply to all SBA programs unless otherwise specified in this part. The size standards themselves are expressed in number of employees. Some of the NAICS industries have an additional maximum annual receipts amount. For those NAICS industries with additional annual receipts amounts, the business concern must not exceed the employee-based size standard and the annual receipts amount to qualify as a small business. The number of employees and annual receipts amount are together a single size standard, and they indicate the maximum allowed for a concern, together with its affiliates, to be considered a small business.

NAICS codesNAICS U.S. industry titleSize standards in number of employeesMaximum average annual receipts ($ million)
Sector 11—Agriculture, Forestry, Fishing and Hunting
Subsector 111—Crop Production
111110Soybean Farming$0.75
111120Oilseed (except Soybean) Farming$0.75
111130Dry Pea and Bean Farming$0.75
111140Wheat Farming$0.75
111150Corn Farming$0.75
111160Rice Farming$0.75
111191Oilseed and Grain Combination Farming$0.75
111199All Other Grain Farming$0.75
111211Potato Farming$0.75
Start Printed Page 13142
111219Other Vegetable (except Potato) and Melon Farming$0.75
111310Orange Groves$0.75
111320Citrus (except Orange) Groves$0.75
111331Apple Orchards$0.75
111332Grape Vineyards$0.75
111333Strawberry Farming$0.75
111334Berry (except Strawberry) Farming$0.75
111335Tree Nut Farming$0.75
111336Fruit and Tree Nut Combination Farming$0.75
111339Other Noncitrus Fruit Farming$0.75
111411Mushroom Production$0.75
111419Other Food Crops Grown Under Cover$0.75
111421Nursery and Tree Production$0.75
111422Floriculture Production$0.75
111910Tobacco Farming$0.75
111920Cotton Farming$0.75
111930Sugarcane Farming$0.75
111940Hay Farming$0.75
111991Sugar Beet Farming$0.75
111992Peanut Farming$0.75
111998All Other Miscellaneous Crop Farming$0.75
Subsector 112—Animal Production
112111Beef Cattle Ranching and Farming$0.75
112112Cattle Feedlots50
112120Dairy Cattle and Milk Production$0.75
112210Hog and Pig Farming$0.75
112310Chicken Egg Production50
112320Broilers and Other Meat Type Chicken Production$0.75
112330Turkey Production$0.75
112340Poultry Hatcheries$0.75
112390Other Poultry Production$0.75
112410Sheep Farming$0.75
112420Goat Farming$0.75
112511Finfish Farming and Fish Hatcheries$0.75
112512Shellfish Farming$0.75
112519Other Animal Aquaculture$0.75
112910Apiculture$0.75
112920Horse and Other Equine Production$0.75
112930Fur-Bearing Animal and Rabbit Production$0.75
112990All Other Animal Production$0.75
Subsector 113—Forestry and Logging
113110Timber Tract Operations50
113210Forest Nurseries and Gathering of Forest Products50
113310Logging500
Subsector 114—Fishing, Hunting and Trapping
114111Finfish Fishing50
114112Shellfish Fishing50
114119Other Marine Fishing50
114210Hunting and Trapping50
Subsector 115—Support Activities for Agriculture and Forestry
115111Cotton Ginning50
115112Soil Preparation, Planting, and Cultivating50
115113Crop Harvesting, Primarily by Machine50
115114Postharvest Crop Activities (except Cotton Ginning)50
115115Farm Labor Contractors and Crew Leaders50
115116Farm Management Services50
115210Support Activities for Animal Production50
115310Support Activities for Forestry50
Except,Forest Fire Suppression 11 4001 $20.0
Except,Fuels Management Services 11 4001 $20.0
Start Printed Page 13143
Sector 21—Mining
Subsector 211—Oil and Gas Extraction
211111Crude Petroleum and Natural Gas Extraction500
211112Natural Gas Liquid Extraction500
Subsector 212—Mining (except Oil and Gas)
212111Bituminous Coal and Lignite Surface Mining500
212112Bituminous Coal Underground Mining500
212113Anthracite Mining500
212210Iron Ore Mining500
212221Gold Ore Mining500
212222Silver Ore Mining500
212231Lead Ore and Zinc Ore Mining500
212234Copper Ore and Nickel Ore Mining500
212291Uranium-Radium-Vanadium Ore Mining500
212299All Other Metal Ore Mining500
212311Dimension Stone Mining and Quarrying500
212312Crushed and Broken Limestone Mining and Quarrying500
212313Crushed and Broken Granite Mining and Quarrying500
212319Other Crushed and Broken Stone Mining and Quarrying500
212321Construction Sand and Gravel Mining500
212322Industrial Sand Mining500
212324Kaolin and Ball Clay Mining500
212325Clay and Ceramic and Refractory Minerals Mining500
212391Potash, Soda, and Borate Mineral Mining500
212392Phosphate Rock Mining500
212393Other Chemical and Fertilizer Mineral Mining500
212399All Other Nonmetallic Mineral Mining500
Subsector 213—Support Activities for Mining
213111Drilling Oil and Gas Wells500
213112Support Activities for Oil and Gas Operations50
213113Support Activities for Coal Mining50
213114Support Activities for Metal Mining50
213115Support Activities for Nonmetallic Minerals (except Fuels)50
Sector 22—Utilities
Subsector 221—Utilities
221111Hydroelectric Power Generation1,000
221112Fossil Fuel Electric Power Generation1,000
221113Nuclear Electric Power Generation1,000
221119Other Electric Power Generation1,000
221121Electric Bulk Power Transmission and Control1,000
221122Electric Power Distribution1,000
221210Natural Gas Distribution500
221310Water Supply and Irrigation Systems50
221320Sewage Treatment Facilities50
221330Steam and Air-Conditioning Supply50
Sector 23—Construction
Subsector 236—Construction of Buildings
236115New Single-Family Housing Construction (except Operative Builders)150$35.0
236116New Multifamily Housing Construction (except Operative Builders)150$35.0
236117New Housing Operative Builders150$35.0
236118Residential Remodelers150$35.0
236210Industrial Building Construction150$35.0
236220Commercial and Institutional Building Construction150$35.0
Subsector 237—Heavy and Civil Engineering Construction
237110Water and Sewer Line and Related Structures Construction200$35.0
237120Oil and Gas Pipeline and Related Structures Construction200$35.0
237130Power and Communication Line and Related Structures Construction200$35.0
Start Printed Page 13144
237210Land Subdivision200$35.0
237310Highway, Street, and Bridge Construction200$35.0
237990Other Heavy and Civil Engineering Construction200$35.0
Except,Dredging and Surface Cleanup Activities 22 1502 $22.0
Subsector 238—Specialty Trade Contractors
238110Poured Concrete Foundation and Structure Contractors100
238120Structural Steel and Precast Concrete Contractors100
238130Framing Contractors100
238140Masonry Contractors100
238150Glass and Glazing Contractors100
238160Roofing Contractors100
238170Siding Contractors100
238190Other Foundation, Structure, and Building Exterior Contractors100
238210Electrical Contractors100
238220Plumbing, Heating, and Air-Conditioning Contractors100
238290Other Building Equipment Contractors100
238310Drywall and Insulation Contractors100
238320Painting and Wall Covering Contractors100
238330Flooring Contractors100
238340Tile and Terrazzo Contractors100
238350Finish Carpentry Contractors100
238390Other Building Finishing Contractors100
238910Site Preparation Contractors100
238990All Other Specialty Trade Contractors100
Except,Building and Property Specialty Trade Services 33 100
Sectors 31—33—Manufacturing
Subsector 311—Food Manufacturing
311111Dog and Cat Food Manufacturing500
311119Other Animal Food Manufacturing500
311211Flour Milling500
311212Rice Milling500
311213Malt Manufacturing500
311221Wet Corn Milling750
311222Soybean Processing500
311223Other Oilseed Processing1,000
311225Fats and Oils Refining and Blending1,000
311230Breakfast Cereal Manufacturing1,000
311311Sugarcane Mills500
311312Cane Sugar Refining750
311313Beet Sugar Manufacturing750
311320Chocolate and Confectionery Manufacturing from Cacao Beans500
311330Confectionery Manufacturing from Purchased Chocolate500
311340Non-Chocolate Confectionery Manufacturing500
311411Frozen Fruit, Juice and Vegetable Manufacturing500
311412Frozen Specialty Food Manufacturing500
311421Fruit and Vegetable Canning 44 500
311422Specialty Canning1,000
311423Dried and Dehydrated Food Manufacturing500
311511Fluid Milk Manufacturing500
311512Creamery Butter Manufacturing500
311513Cheese Manufacturing500
311514Dry, Condensed, and Evaporated Dairy Product Manufacturing500
311520Ice Cream and Frozen Dessert Manufacturing500
311611Animal (except Poultry) Slaughtering500
311612Meat Processed from Carcasses500
311613Rendering and Meat By-product Processing500
311615Poultry Processing500
311711Seafood Canning500
311712Fresh and Frozen Seafood Processing500
311811Retail Bakeries500
311812Commercial Bakeries500
311813Frozen Cakes, Pies, and Other Pastries Manufacturing500
311821Cookie and Cracker Manufacturing750
311822Flour Mixes and Dough Manufacturing from Purchased Flour500
311823Dry Pasta Manufacturing500
311830Tortilla Manufacturing500
Start Printed Page 13145
311911Roasted Nuts and Peanut Butter Manufacturing500
311919Other Snack Food Manufacturing500
311920Coffee and Tea Manufacturing500
311930Flavoring Syrup and Concentrate Manufacturing500
311941Mayonnaise, Dressing and Other Prepared Sauce Manufacturing500
311942Spice and Extract Manufacturing500
311991Perishable Prepared Food Manufacturing500
311999All Other Miscellaneous Food Manufacturing500
Subsector 312—Beverage and Tobacco Product Manufacturing
312111Soft Drink Manufacturing500
312112Bottled Water Manufacturing500
312113Ice Manufacturing500
312120Breweries500
312130Wineries500
312140Distilleries750
312210Tobacco Stemming and Redrying500
312221Cigarette Manufacturing1,000
312229Other Tobacco Product Manufacturing500
Subsector 313—Textile Mills
313111Yarn Spinning Mills500
313112Yarn Texturizing, Throwing and Twisting Mills500
313113Thread Mills500
313210Broadwoven Fabric Mills1,000
313221Narrow Fabric Mills500
313222Schiffli Machine Embroidery500
313230Nonwoven Fabric Mills500
313241Weft Knit Fabric Mills500
313249Other Knit Fabric and Lace Mills500
313311Broadwoven Fabric Finishing Mills1,000
313312Textile and Fabric Finishing (except Broadwoven Fabric) Mills500
313320Fabric Coating Mills1,000
Subsector 314—Textile Product Mills
314110Carpet and Rug Mills500
314121Curtain and Drapery Mills500
314129Other Household Textile Product Mills500
314911Textile Bag Mills500
314912Canvas and Related Product Mills500
314991Rope, Cordage and Twine Mills500
314992Tire Cord and Tire Fabric Mills1,000
314999All Other Miscellaneous Textile Product Mills500
Subsector 315—Apparel Manufacturing
315111Sheer Hosiery Mills500
315119Other Hosiery and Sock Mills500
315191Outerwear Knitting Mills500
315192Underwear and Nightwear Knitting Mills500
315211Men's and Boys' Cut and Sew Apparel Contractors500
315212Women's, Girls', and Infants' Cut and Sew Apparel Contractors500
315221Men's and Boys' Cut and Sew Underwear and Nightwear Manufacturing500
315222Men's and Boys' Cut and Sew Suit, Coat and Overcoat Manufacturing500
315223Men's and Boys' Cut and Sew Shirt (except Work Shirt) Manufacturing500
315224Men's and Boys' Cut and Sew Trouser, Slack and Jean Manufacturing500
315225Men's and Boys' Cut and Sew Work Clothing Manufacturing500
315228Men's and Boys' Cut and Sew Other Outerwear Manufacturing500
315231Women's and Girls' Cut and Sew Lingerie, Loungewear and Nightwear Manufacturing500
315232Women's and Girls' Cut and Sew Blouse and Shirt Manufacturing500
315233Women's and Girls' Cut and Sew Dress Manufacturing500
315234Women's and Girls' Cut and Sew Suit, Coat, Tailored Jacket and Skirt Manufacturing500
315239Women's and Girls' Cut and Sew Other Outerwear Manufacturing500
315291Infants' Cut and Sew Apparel Manufacturing500
315292Fur and Leather Apparel Manufacturing500
315299All Other Cut and Sew Apparel Manufacturing500
315991Hat, Cap and Millinery Manufacturing500
315992Glove and Mitten Manufacturing500
Start Printed Page 13146
315993Men's and Boys' Neckwear Manufacturing500
315999Other Apparel Accessories and Other Apparel Manufacturing500
Subsector 316—Leather and Allied Product Manufacturing
316110Leather and Hide Tanning and Finishing500
316211Rubber and Plastics Footwear Manufacturing1,000
316212House Slipper Manufacturing500
316213Men's Footwear (except Athletic) Manufacturing500
316214Women's Footwear (except Athletic) Manufacturing500
316219Other Footwear Manufacturing500
316991Luggage Manufacturing500
316992Women's Handbag and Purse Manufacturing500
316993Personal Leather Good (except Women's Handbag and Purse) Manufacturing500
316999All Other Leather Good Manufacturing500
Subsector 321—Wood Product Manufacturing
321113Sawmills500
321114Wood Preservation500
321211Hardwood Veneer and Plywood Manufacturing500
321212Softwood Veneer and Plywood Manufacturing500
321213Engineered Wood Member (except Truss) Manufacturing500
321214Truss Manufacturing500
321219Reconstituted Wood Product Manufacturing500
321911Wood Window and Door Manufacturing500
321912Cut Stock, Resawing Lumber, and Planing500
321918Other Millwork (including Flooring)500
321920Wood Container and Pallet Manufacturing500
321991Manufactured Home (Mobile Home) Manufacturing500
321992Prefabricated Wood Building Manufacturing500
321999All Other Miscellaneous Wood Product Manufacturing500
Subsector 322—Paper Manufacturing
322110Pulp Mills750
322121Paper (except Newsprint) Mills750
322122Newsprint Mills750
322130Paperboard Mills750
322211Corrugated and Solid Fiber Box Manufacturing500
322212Folding Paperboard Box Manufacturing750
322213Setup Paperboard Box Manufacturing500
322214Fiber Can, Tube, Drum, and Similar Products Manufacturing500
322215Non-Folding Sanitary Food Container Manufacturing750
322221Coated and Laminated Packaging Paper and Plastics Film Manufacturing500
322222Coated and Laminated Paper Manufacturing500
322223Plastics, Foil, and Coated Paper Bag Manufacturing500
322224Uncoated Paper and Multiwall Bag Manufacturing500
322225Laminated Aluminum Foil Manufacturing for Flexible Packaging Uses500
322226Surface-Coated Paperboard Manufacturing500
322231Die-Cut Paper and Paperboard Office Supplies Manufacturing500
322232Envelope Manufacturing500
322233Stationery, Tablet, and Related Product Manufacturing500
322291Sanitary Paper Product Manufacturing500
322299All Other Converted Paper Product Manufacturing500
Subsector 323—Printing and Related Support Activities
323110Commercial Lithographic Printing500
323111Commercial Gravure Printing500
323112Commercial Flexographic Printing500
323113Commercial Screen Printing500
323114Quick Printing500
323115Digital Printing500
323116Manifold Business Forms Printing500
323117Books Printing500
323118Blankbook, Loose-leaf Binder and Device Manufacturing500
323119Other Commercial Printing500
323121Tradebinding and Related Work500
323122Prepress Services500
Start Printed Page 13147
Subsector 324—Petroleum and Coal Products Manufacturing
324110Petroleum Refineries 55 1,500
324121Asphalt Paving Mixture and Block Manufacturing500
324122Asphalt Shingle and Coating Materials Manufacturing750
324191Petroleum Lubricating Oil and Grease Manufacturing500
324199All Other Petroleum and Coal Products Manufacturing500
Subsector 325—Chemical Manufacturing
325110Petrochemical Manufacturing1,000
325120Industrial Gas Manufacturing1,000
325131Inorganic Dye and Pigment Manufacturing1,000
325132Synthetic Organic Dye and Pigment Manufacturing750
325181Alkalies and Chlorine Manufacturing1,000
325182Carbon Black Manufacturing500
325188All Other Basic Inorganic Chemical Manufacturing1,000
325191Gum and Wood Chemical Manufacturing500
325192Cyclic Crude and Intermediate Manufacturing750
325193Ethyl Alcohol Manufacturing1,000
325199All Other Basic Organic Chemical Manufacturing1,000
325211Plastics Material and Resin Manufacturing750
325212Synthetic Rubber Manufacturing1,000
325221Cellulosic Organic Fiber Manufacturing1,000
325222Noncellulosic Organic Fiber Manufacturing1,000
325311Nitrogenous Fertilizer Manufacturing1,000
325312Phosphatic Fertilizer Manufacturing500
325314Fertilizer (Mixing Only) Manufacturing500
325320Pesticide and Other Agricultural Chemical Manufacturing500
325411Medicinal and Botanical Manufacturing750
325412Pharmaceutical Preparation Manufacturing750
325413In-Vitro Diagnostic Substance Manufacturing500
325414Biological Product (except Diagnostic) Manufacturing500
325510Paint and Coating Manufacturing500
325520Adhesive Manufacturing500
325611Soap and Other Detergent Manufacturing750
325612Polish and Other Sanitation Good Manufacturing500
325613Surface Active Agent Manufacturing500
325620Toilet Preparation Manufacturing500
325910Printing Ink Manufacturing500
325920Explosives Manufacturing750
325991Custom Compounding of Purchased Resins500
325992Photographic Film, Paper, Plate and Chemical Manufacturing500
325998All Other Miscellaneous Chemical Product and Preparation Manufacturing500
Subsector 326—Plastics and Rubber Products Manufacturing
326111Unsupported Plastics Bag Manufacturing500
326112Unsupported Plastics Packaging Film and Sheet Manufacturing500
326113Unsupported Plastics Film and Sheet (except Packaging) Manufacturing500
326121Unsupported Plastics Profile Shapes Manufacturing500
326122Plastics Pipe and Pipe Fitting Manufacturing500
326130Laminated Plastics Plate, Sheet and Shape Manufacturing500
326140Polystyrene Foam Product Manufacturing500
326150Urethane and Other Foam Product (except Polystyrene) Manufacturing500
326160Plastics Bottle Manufacturing500
326191Plastics Plumbing Fixture Manufacturing500
326192Resilient Floor Covering Manufacturing750
326199All Other Plastics Product Manufacturing500
326211Tire Manufacturing (except Retreading)1,000
326212Tire Retreading500
326220Rubber and Plastics Hoses and Belting Manufacturing500
326291Rubber Product Manufacturing for Mechanical Use500
326299All Other Rubber Product Manufacturing500
Subsector 327—Nonmetallic Mineral Product Manufacturing
327111Vitreous China Plumbing Fixture and China and Earthenware Bathroom Accessories Manufacturing750
327112Vitreous China, Fine Earthenware and Other Pottery Product Manufacturing500
327113Porcelain Electrical Supply Manufacturing500
Start Printed Page 13148
327121Brick and Structural Clay Tile Manufacturing500
327122Ceramic Wall and Floor Tile Manufacturing500
327123Other Structural Clay Product Manufacturing500
327124Clay Refractory Manufacturing500
327125Nonclay Refractory Manufacturing750
327211Flat Glass Manufacturing1,000
327212Other Pressed and Blown Glass and Glassware Manufacturing750
327213Glass Container Manufacturing750
327215Glass Product Manufacturing Made of Purchased Glass500
327310Cement Manufacturing750
327320Ready-Mix Concrete Manufacturing500
327331Concrete Block and Brick Manufacturing500
327332Concrete Pipe Manufacturing500
327390Other Concrete Product Manufacturing500
327410Lime Manufacturing500
327420Gypsum Product Manufacturing1,000
327910Abrasive Product Manufacturing500
327991Cut Stone and Stone Product Manufacturing500
327992Ground or Treated Mineral and Earth Manufacturing500
327993Mineral Wool Manufacturing750
327999All Other Miscellaneous Nonmetallic Mineral Product Manufacturing500
Subsector 331—Primary Metal Manufacturing
331111Iron and Steel Mills1,000
331112Electrometallurgical Ferroalloy Product Manufacturing750
331210Iron and Steel Pipe and Tube Manufacturing from Purchased Steel1,000
331221Cold-Rolled Steel Shape Manufacturing1,000
331222Steel Wire Drawing1,000
331311Alumina Refining1,000
331312Primary Aluminum Production1,000
331314Secondary Smelting and Alloying of Aluminum750
331315Aluminum Sheet, Plate and Foil Manufacturing750
331316Aluminum Extruded Product Manufacturing750
331319Other Aluminum Rolling and Drawing750
331411Primary Smelting and Refining of Copper1,000
331419Primary Smelting and Refining of Nonferrous Metal (except Copper and Aluminum)750
331421Copper Rolling, Drawing and Extruding750
331422Copper Wire (except Mechanical) Drawing1,000
331423Secondary Smelting, Refining, and Alloying of Copper750
331491Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing and Extruding750
331492Secondary Smelting, Refining, and Alloying of Nonferrous Metal (except Copper and Aluminum)750
331511Iron Foundries500
331512Steel Investment Foundries500
331513Steel Foundries (except Investment)500
331521Aluminum Die-Casting Foundries500
331522Nonferrous (except Aluminum) Die-Casting Foundries500
331524Aluminum Foundries (except Die-Casting)500
331525Copper Foundries (except Die-Casting)500
331528Other Nonferrous Foundries (except Die-Casting)500
Subsector 332—Fabricated Metal Product Manufacturing
332111Iron and Steel Forging500
332112Nonferrous Forging500
332114Custom Roll Forming500
332115Crown and Closure Manufacturing500
332116Metal Stamping500
332117Powder Metallurgy Part Manufacturing500
332211Cutlery and Flatware (except Precious) Manufacturing500
332212Hand and Edge Tool Manufacturing500
332213Saw Blade and Handsaw Manufacturing500
332214Kitchen Utensil, Pot and Pan Manufacturing500
332311Prefabricated Metal Building and Component Manufacturing500
332312Fabricated Structural Metal Manufacturing500
332313Plate Work Manufacturing500
332321Metal Window and Door Manufacturing500
332322Sheet Metal Work Manufacturing500
332323Ornamental and Architectural Metal Work Manufacturing500
332410Power Boiler and Heat Exchanger Manufacturing500
Start Printed Page 13149
332420Metal Tank (Heavy Gauge) Manufacturing500
332431Metal Can Manufacturing1,000
332439Other Metal Container Manufacturing500
332510Hardware Manufacturing500
332611Spring (Heavy Gauge) Manufacturing500
332612Spring (Light Gauge) Manufacturing500
332618Other Fabricated Wire Product Manufacturing500
332710Machine Shops500
332721Precision Turned Product Manufacturing500
332722Bolt, Nut, Screw, Rivet and Washer Manufacturing500
332811Metal Heat Treating750
332812Metal Coating, Engraving (except Jewelry and Silverware), and Allied Services to Manufacturers500
332813Electroplating, Plating, Polishing, Anodizing and Coloring500
332911Industrial Valve Manufacturing500
332912Fluid Power Valve and Hose Fitting Manufacturing500
332913Plumbing Fixture Fitting and Trim Manufacturing500
332919Other Metal Valve and Pipe Fitting Manufacturing500
332991Ball and Roller Bearing Manufacturing750
332992Small Arms Ammunition Manufacturing1,000
332993Ammunition (except Small Arms) Manufacturing1,500
332994Small Arms Manufacturing1,000
332995Other Ordnance and Accessories Manufacturing500
332996Fabricated Pipe and Pipe Fitting Manufacturing500
332997Industrial Pattern Manufacturing500
332998Enameled Iron and Metal Sanitary Ware Manufacturing750
332999All Other Miscellaneous Fabricated Metal Product Manufacturing500
Subsector 333—Machinery Manufacturing 6
333111Farm Machinery and Equipment Manufacturing500
333112Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing500
333120Construction Machinery Manufacturing750
333131Mining Machinery and Equipment Manufacturing500
333132Oil and Gas Field Machinery and Equipment Manufacturing500
333210Sawmill and Woodworking Machinery Manufacturing500
333220Plastics and Rubber Industry Machinery Manufacturing500
333291Paper Industry Machinery Manufacturing500
333292Textile Machinery Manufacturing500
333293Printing Machinery and Equipment Manufacturing500
333294Food Product Machinery Manufacturing500
333295Semiconductor Machinery Manufacturing500
333298All Other Industrial Machinery Manufacturing500
333311Automatic Vending Machine Manufacturing500
333312Commercial Laundry, Drycleaning and Pressing Machine Manufacturing500
333313Office Machinery Manufacturing1,000
333314Optical Instrument and Lens Manufacturing500
333315Photographic and Photocopying Equipment Manufacturing500
333319Other Commercial and Service Industry Machinery Manufacturing500
333411Air Purification Equipment Manufacturing500
333412Industrial and Commercial Fan and Blower Manufacturing500
333414Heating Equipment (except Warm Air Furnaces) Manufacturing500
333415Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing750
333511Industrial Mold Manufacturing500
333512Machine Tool (Metal Cutting Types) Manufacturing500
333513Machine Tool (Metal Forming Types) Manufacturing500
333514Special Die and Tool, Die Set, Jig and Fixture Manufacturing500
333515Cutting Tool and Machine Tool Accessory Manufacturing500
333516Rolling Mill Machinery and Equipment Manufacturing500
333518Other Metalworking Machinery Manufacturing500
333611Turbine and Turbine Generator Set Unit Manufacturing1,000
333612Speed Changer, Industrial High-Speed Drive and Gear Manufacturing500
333613Mechanical Power Transmission Equipment Manufacturing500
333618Other Engine Equipment Manufacturing1,000
333911Pump and Pumping Equipment Manufacturing500
333912Air and Gas Compressor Manufacturing500
333913Measuring and Dispensing Pump Manufacturing500
333921Elevator and Moving Stairway Manufacturing500
333922Conveyor and Conveying Equipment Manufacturing500
333923Overhead Traveling Crane, Hoist and Monorail System Manufacturing500
Start Printed Page 13150
333924Industrial Truck, Tractor, Trailer and Stacker Machinery Manufacturing750
333991Power-Driven Hand Tool Manufacturing500
333992Welding and Soldering Equipment Manufacturing500
333993Packaging Machinery Manufacturing500
333994Industrial Process Furnace and Oven Manufacturing500
333995Fluid Power Cylinder and Actuator Manufacturing500
333996Fluid Power Pump and Motor Manufacturing500
333997Scale and Balance (except Laboratory) Manufacturing500
333999All Other Miscellaneous General Purpose Machinery Manufacturing500
Subsector 334—Computer and Electronic Product Manufacturing 6
334111Electronic Computer Manufacturing1,000
334112Computer Storage Device Manufacturing1,000
334113Computer Terminal Manufacturing1,000
334119Other Computer Peripheral Equipment Manufacturing1,000
334210Telephone Apparatus Manufacturing1,000
334220Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing750
334290Other Communications Equipment Manufacturing750
334310Audio and Video Equipment Manufacturing750
334411Electron Tube Manufacturing750
334412Bare Printed Circuit Board Manufacturing500
334413Semiconductor and Related Device Manufacturing500
334414Electronic Capacitor Manufacturing500
334415Electronic Resistor Manufacturing500
334416Electronic Coil, Transformer, and Other Inductor Manufacturing500
334417Electronic Connector Manufacturing500
334418Printed Circuit Assembly (Electronic Assembly) Manufacturing500
334419Other Electronic Component Manufacturing500
334510Electromedical and Electrotherapeutic Apparatus Manufacturing500
334511Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing750
334512Automatic Environmental Control Manufacturing for Residential, Commercial and Appliance Use500
334513Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables500
334514Totalizing Fluid Meter and Counting Device Manufacturing500
334515Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals500
334516Analytical Laboratory Instrument Manufacturing500
334517Irradiation Apparatus Manufacturing500
334518Watch, Clock, and Part Manufacturing500
334519Other Measuring and Controlling Device Manufacturing500
334611Software Reproducing500
334612Prerecorded Compact Disc (except Software), Tape, and Record Reproducing750
334613Magnetic and Optical Recording Media Manufacturing1,000
Subsector 335—Electrical Equipment, Appliance and Component Manufacturing 6
335110Electric Lamp Bulb and Part Manufacturing1,000
335121Residential Electric Lighting Fixture Manufacturing500
335122Commercial, Industrial and Institutional Electric Lighting Fixture Manufacturing500
335129Other Lighting Equipment Manufacturing500
335211Electric Housewares and Household Fan Manufacturing750
335212Household Vacuum Cleaner Manufacturing750
335221Household Cooking Appliance Manufacturing750
335222Household Refrigerator and Home Freezer Manufacturing1,000
335224Household Laundry Equipment Manufacturing1,000
335228Other Major Household Appliance Manufacturing500
335311Power, Distribution and Specialty Transformer Manufacturing750
335312Motor and Generator Manufacturing1,000
335313Switchgear and Switchboard Apparatus Manufacturing750
335314Relay and Industrial Control Manufacturing750
335911Storage Battery Manufacturing500
335912Primary Battery Manufacturing1,000
335921Fiber Optic Cable Manufacturing1,000
335929Other Communication and Energy Wire Manufacturing1,000
335931Current-Carrying Wiring Device Manufacturing500
335932Noncurrent-Carrying Wiring Device Manufacturing500
335991Carbon and Graphite Product Manufacturing750
335999All Other Miscellaneous Electrical Equipment and Component Manufacturing500
Start Printed Page 13151
Subsector 336—Transportation Equipment Manufacturing 7
336111Automobile Manufacturing1,000
336112Light Truck and Utility Vehicle Manufacturing1,000
336120Heavy Duty Truck Manufacturing1,000
336211Motor Vehicle Body Manufacturing1,000
336212Truck Trailer Manufacturing500
336213Motor Home Manufacturing1,000
336214Travel Trailer and Camper Manufacturing500
336311Carburetor, Piston, Piston Ring and Valve Manufacturing500
336312Gasoline Engine and Engine Parts Manufacturing750
336321Vehicular Lighting Equipment Manufacturing500
336322Other Motor Vehicle Electrical and Electronic Equipment Manufacturing750
336330Motor Vehicle Steering and Suspension Components (except Spring) Manufacturing750
336340Motor Vehicle Brake System Manufacturing750
336350Motor Vehicle Transmission and Power Train Parts Manufacturing750
336360Motor Vehicle Seating and Interior Trim Manufacturing500
336370Motor Vehicle Metal Stamping500
336391Motor Vehicle Air-Conditioning Manufacturing750
336399All Other Motor Vehicle Parts Manufacturing750
336411Aircraft Manufacturing1,500
336412Aircraft Engine and Engine Parts Manufacturing1,000
336413Other Aircraft Part and Auxiliary Equipment Manufacturing 77 1,000
336414Guided Missile and Space Vehicle Manufacturing1,000
336415Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing1,000
336419Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing1,000
336510Railroad Rolling Stock Manufacturing1,000
336611Ship Building and Repairing1,000
336612Boat Building500
336991Motorcycle, Bicycle and Parts Manufacturing500
336992Military Armored Vehicle, Tank and Tank Component Manufacturing1,000
336999All Other Transportation Equipment Manufacturing500
Subsector 337—Furniture and Related Product Manufacturing
337110Wood Kitchen Cabinet and Counter Top Manufacturing500
337121Upholstered Household Furniture Manufacturing500
337122Nonupholstered Wood Household Furniture Manufacturing500
337124Metal Household Furniture Manufacturing500
337125Household Furniture (except Wood and Metal) Manufacturing500
337127Institutional Furniture Manufacturing500
337129Wood Television, Radio, and Sewing Machine Cabinet Manufacturing500
337211Wood Office Furniture Manufacturing500
337212Custom Architectural Woodwork and Millwork Manufacturing500
337214Office Furniture (except Wood) Manufacturing500
337215Showcase, Partition, Shelving, and Locker Manufacturing500
337910Mattress Manufacturing500
337920Blind and Shade Manufacturing500
Subsector 339—Miscellaneous Manufacturing
339111Laboratory Apparatus and Furniture Manufacturing500
339112Surgical and Medical Instrument Manufacturing500
339113Surgical Appliance and Supplies Manufacturing500
339114Dental Equipment and Supplies Manufacturing500
339115Ophthalmic Goods Manufacturing500
339116Dental Laboratories500
339911Jewelry (except Costume) Manufacturing500
339912Silverware and Hollowware Manufacturing500
339913Jewelers' Material and Lapidary Work Manufacturing500
339914Costume Jewelry and Novelty Manufacturing500
339920Sporting and Athletic Goods Manufacturing500
339931Doll and Stuffed Toy Manufacturing500
339932Game, Toy, and Children's Vehicle Manufacturing500
339941Pen and Mechanical Pencil Manufacturing500
339942Lead Pencil and Art Good Manufacturing500
339943Marking Device Manufacturing500
339944Carbon Paper and Inked Ribbon Manufacturing500
339950Sign Manufacturing500
339991Gasket, Packing, and Sealing Device Manufacturing500
339992Musical Instrument Manufacturing500
Start Printed Page 13152
339993Fastener, Button, Needle and Pin Manufacturing500
339994Broom, Brush and Mop Manufacturing500
339995Burial Casket Manufacturing500
339999All Other Miscellaneous Manufacturing500
Sector 42—Wholesale Trade
Subsector 423—Merchant Wholesalers, Durable Goods
423110Automobile and Other Motor Vehicle Merchant Wholesalers100
423120Motor Vehicle Supplies and New Parts Merchant Wholesalers100
423130Tire and Tube Merchant Wholesalers100
423140Motor Vehicle Parts (Used) Merchant Wholesalers100
423210Furniture Merchant Wholesalers100
423220Home Furnishing Merchant Wholesalers100
423310Lumber, Plywood, Millwork, and Wood Panel Merchant Wholesalers100
423320Brick, Stone, and Related Construction Material Merchant Wholesalers100
423330Roofing, Siding, and Insulation Material Merchant Wholesalers100
423390Other Construction Material Merchant Wholesalers100
423410Photographic Equipment and Supplies Merchant Wholesalers100
423420Office Equipment Merchant Wholesalers100
423430Computer and Computer Peripheral Equipment and Software Merchant Wholesalers100
423440Other Commercial Equipment Merchant Wholesalers100
423450Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers100
423460Ophthalmic Goods Merchant Wholesalers100
423490Other Professional Equipment and Supplies Merchant Wholesalers100
423510Metal Service Centers and Other Metal Merchant Wholesalers100
423520Coal and Other Mineral and Ore Merchant Wholesalers100
423610Electrical Apparatus and Equipment, Wiring Supplies, and Related Equipment Merchant Wholesalers100
423620Electrical and Electronic Appliance, Television, and Radio Set Merchant Wholesalers100
423690Other Electronic Parts and Equipment Merchant Wholesalers100
423710Hardware Merchant Wholesalers100
423720Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers100
423730Warm Air Heating and Air-Conditioning Equipment and Supplies Merchant Wholesalers100
423740Refrigeration Equipment and Supplies Merchant Wholesalers100
423810Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers100
423820Farm and Garden Machinery and Equipment Merchant Wholesalers100
423830Industrial Machinery and Equipment Merchant Wholesalers100
423840Industrial Supplies Merchant Wholesalers100
423850Service Establishment Equipment and Supplies Merchant Wholesalers100
423860Transportation Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers100
423910Sporting and Recreational Goods and Supplies Merchant Wholesalers100
423920Toy and Hobby Goods and Supplies Merchant Wholesalers100
423930Recyclable Material Merchant Wholesalers100
423940Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers100
423990Other Miscellaneous Durable Goods Merchant Wholesalers100
Subsector 424—Merchant Wholesalers, Nondurable Goods
424110Printing and Writing Paper Merchant Wholesalers100
424120Stationary and Office Supplies Merchant Wholesalers100
424130Industrial and Personal Service Paper Merchant Wholesalers100
424210Drugs and Druggists' Sundries Merchant Wholesalers100
424310Piece Goods, Notions, and Other Dry Goods Merchant Wholesalers100
424320Men's and Boys' Clothing and Furnishings Merchant Wholesalers100
424330Women's, Children's, and Infants' Clothing and Accessories Merchant Wholesalers100
424340Footwear Merchant Wholesalers100
424410General Line Grocery Merchant Wholesalers100
424420Packaged Frozen Food Merchant Wholesalers100
424430Dairy Product (except Dried or Canned) Merchant Wholesalers100
424440Poultry and Poultry Product Merchant Wholesalers100
424450Confectionery Merchant Wholesalers100
424460Fish and Seafood Merchant Wholesalers100
424470Meat and Meat Product Merchant Wholesalers100
424480Fresh Fruit and Vegetable Merchant Wholesalers100
424490Other Grocery and Related Products Merchant Wholesalers100
424510Grain and Field Bean Merchant Wholesalers100
424520Livestock Merchant Wholesalers100
424590Other Farm Product Raw Material Merchant Wholesalers100
424610Plastics Materials and Basic Forms and Shapes Merchant Wholesalers100
Start Printed Page 13153
424690Other Chemical and Allied Products Merchant Wholesalers100
424710Petroleum Bulk Stations and Terminals100
424720Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals)100
424810Beer and Ale Merchant Wholesalers100
424820Wine and Distilled Alcoholic Beverage Merchant Wholesalers100
424910Farm Supplies Merchant Wholesalers100
424920Book, Periodical, and Newspaper Merchant Wholesalers100
424930Flower, Nursery Stock, and Florists' Supplies Merchant Wholesalers100
424940Tobacco and Tobacco Product Merchant Wholesalers100
424950Paint, Varnish, and Supplies Merchant Wholesalers100
424990Other Miscellaneous Nondurable Goods Merchant Wholesalers100
Subsector 425—Wholesale Electronic Markets and Agents and Brokers
425110Business to Business Electronic Markets100
425120Wholesale Trade Agents and Brokers100
Sectors 44-45—Retail Trade
Subsector 441—Motor Vehicle and Parts Dealers
441110New Car Dealers50
441120Used Car Dealers50
441210Recreational Vehicle Dealers50
441221Motorcycle Dealers50
441222Boat Dealers50
441229All Other Motor Vehicle Dealers50
441310Automotive Parts and Accessories Stores50
441320Tire Dealers50
Subsector 442—Furniture and Home Furnishings Stores
442110Furniture Stores50
442210Floor Covering Stores50
442291Window Treatment Stores50
442299All Other Home Furnishings Stores50
Subsector 443—Electronics and Appliance Stores
443111Household Appliance Stores50
443112Radio, Television and Other Electronics Stores50
443120Computer and Software Stores50
443130Camera and Photographic Supplies Stores50
Subsector 444—Building Material and Garden Equipment and Supplies Dealers
444110Home Centers50
444120Paint and Wallpaper Stores50
444130Hardware Stores50
444190Other Building Material Dealers50
444210Outdoor Power Equipment Stores50
444220Nursery and Garden Centers50
Subsector 445—Food and Beverage Stores
445110Supermarkets and Other Grocery (except Convenience) Stores150
445120Convenience Stores150
445210Meat Markets50
445220Fish and Seafood Markets50
445230Fruit and Vegetable Markets50
445291Baked Goods Stores50
445292Confectionery and Nut Stores50
445299All Other Specialty Food Stores50
445310Beer, Wine and Liquor Stores50
Subsector 446—Health and Personal Care Stores
446110Pharmacies and Drug Stores50
446120Cosmetics, Beauty Supplies and Perfume Stores50
446130Optical Goods Stores50
Start Printed Page 13154
446191Food (Health) Supplement Stores50
446199All Other Health and Personal Care Stores50
Subsector 447—Gasoline Stations
447110Gasoline Stations with Convenience Stores100
447190Other Gasoline Stations50
Subsector 448—Clothing and Clothing Accessories Stores
448110Men's Clothing Stores50
448120Women's Clothing Stores50
448130Children's and Infants' Clothing Stores50
448140Family Clothing Stores50
448150Clothing Accessories Stores50
448190Other Clothing Stores50
448210Shoe Stores50
448310Jewelry Stores50
448320Luggage and Leather Goods Stores50
Subsector 451—Sporting Good, Hobby, Book and Music Stores
451110Sporting Goods Stores50
451120Hobby, Toy and Game Stores50
451130Sewing, Needlework and Piece Goods Stores50
451140Musical Instrument and Supplies Stores50
451211Book Stores50
451212News Dealers and Newsstands50
451220Prerecorded Tape, Compact Disc and Record Stores50
Subsector 452—General Merchandise Stores
452111Department Stores (except Discount Department Stores)150
452112Discount Department Stores150
452910Warehouse Clubs and Superstores150
452990All Other General Merchandise Stores100
Subsector 453—Miscellaneous Store Retailers
453110Florists50
453210Office Supplies and Stationery Stores50
453220Gift, Novelty and Souvenir Stores50
453310Used Merchandise Stores50
453910Pet and Pet Supplies Stores50
453920Art Dealers50
453930Manufactured (Mobile) Home Dealers50
453991Tobacco Stores50
453998All Other Miscellaneous Store Retailers (except Tobacco Stores)50
Subsector 454—Nonstore Retailers
454111Electronic Shopping50
454112Electronic Auctions50
454113Mail-Order Houses50
454210Vending Machine Operators50
454311Heating Oil Dealers50
454312Liquefied Petroleum Gas (Bottled Gas) Dealers50
454319Other Fuel Dealers50
454390Other Direct Selling Establishments50
Sectors 48-49—Transportation
Subsector 481—Air Transportation
481111Scheduled Passenger Air Transportation1,500
481112Scheduled Freight Air Transportation1,500
481211Nonscheduled Chartered Passenger Air Transportation1,500
Except,Offshore Marine Air Transportation Services150
481212Nonscheduled Chartered Freight Air Transportation1,500
Except,Offshore Marine Air Transportation Services150
481219Other Nonscheduled Air Transportation50
Start Printed Page 13155
Subsector 482—Rail Transportation
482111Line-Haul Railroads1,500
482112Short Line Railroads500
Subsector 483—Water Transportation8
483111Deep Sea Freight Transportation500
483112Deep Sea Passenger Transportation500
483113Coastal and Great Lakes Freight Transportation500
483114Coastal and Great Lakes Passenger Transportation500
483211Inland Water Freight Transportation500
483212Inland Water Passenger Transportation500
Subsector 484—Truck Transportation
484110General Freight Trucking, Local200
484121General Freight Trucking, Long-Distance, Truckload200
484122General Freight Trucking, Long-Distance, Less Than Truckload200
484210Used Household and Office Goods Moving200
484220Specialized Freight (except Used Goods) Trucking, Local200
484230Specialized Freight (except Used Goods) Trucking, Long-Distance200
Subsector 485—Transit and Ground Passenger Transportation
485111Mixed Mode Transit Systems100
485112Commuter Rail Systems100
485113Bus and Motor Vehicle Transit Systems100
485119Other Urban Transit Systems100
485210Interurban and Rural Bus Transportation100
485310Taxi Service50
485320Limousine Service50
485410School and Employee Bus Transportation100
485510Charter Bus Industry100
485991Special Needs Transportation50
485999All Other Transit and Ground Passenger Transportation50
Subsector 486—Pipeline Transportation
486110Pipeline Transportation of Crude Oil1,500
486210Pipeline Transportation of Natural Gas100
486910Pipeline Transportation of Refined Petroleum Products1,500
486990All Other Pipeline Transportation100
Subsector 487—Scenic and Sightseeing Transportation
487110Scenic and Sightseeing Transportation, Land50
487210Scenic and Sightseeing Transportation, Water50
487990Scenic and Sightseeing Transportation, Other50
Subsector 488—Support Activities for Transportation
488111Air Traffic Control50
488119Other Airport Operations100
488190Other Support Activities for Air Transportation100
488210Support Activities for Rail Transportation50
488310Port and Harbor Operations200
488320Marine Cargo Handling200
488330Navigational Services to Shipping50
488390Other Support Activities for Water Transportation50
488410Motor Vehicle Towing50
488490Other Support Activities for Road Transportation50
488510Freight Transportation Arrangement50
488991Packing and Crating100
488999All Other Support Activities for Transportation50
Subsector 491—Postal Service
491110Postal Service50
Subsector 492—Couriers and Messengers
Start Printed Page 13156
492110Couriers1,500
492210Local Messengers and Local Delivery200
Subsector 493—Warehousing and Storage
493110General Warehousing and Storage200
493120Refrigerated Warehousing and Storage200
493130Farm Product Warehousing and Storage200
493190Other Warehousing and Storage200
Sector 51—Information
Subsector 511—Publishing Industries (except Internet)
511110Newspaper Publishers500
511120Periodical Publishers500
511130Book Publishers500
511140Directory and Mailing List Publishers500
511191Greeting Card Publishers500
511199All Other Publishers500
511210Software Publishers150
Subsector 512—Motion Picture and Sound Recording Industries
512110Motion Picture and Video Production100
512120Motion Picture and Video Distribution100
512131Motion Picture Theaters (except Drive-Ins)100
512132Drive-In Motion Picture Theaters50
512191Teleproduction and Other Postproduction Services100
512199Other Motion Picture and Video Industries50
512210Record Production50
512220Integrated Record Production/Distribution750
512230Music Publishers500
512240Sound Recording Studios50
512290Other Sound Recording Industries50
Subsector 515—Broadcasting (except Internet)
515111Radio Networks50
515112Radio Stations50
515120Television Broadcasting100
515210Cable and Other Subscription Programming100
Subsector 516—Internet Publishing and Broadcasting
516110Internet Publishing and Broadcasting500
Subsector 517—Telecommunications
517110Wired Telecommunications Carriers1,500
517211Paging1,500
517212Cellular and Other Wireless Telecommunications1,500
517310Telecommunications Resellers1,500
517410Satellite Telecommunications100
517510Cable and Other Program Distribution100
517910Other Telecommunications100
Subsector 518—Internet Service Providers, Web Search Portals, and Data Processing Services
518111Internet Service Providers150
518112Web Search Portals150
518210Data Processing, Hosting, and Related Services150$30.0
Subsector 519—Other Information Services
519110News Syndicates50
519120Libraries and Archives50
519190All Other Information Services50
Start Printed Page 13157
Sector 52—Finance and Insurance
Subsector 522—Credit Intermediation and Related Activities
522110Commercial Banking50
522120Savings Institutions50
522130Credit Unions50
522190Other Depository Credit Intermediation50
522210Credit Card Issuing50
522220Sales Financing50
522291Consumer Lending50
522292Real Estate Credit50
522293International Trade Financing50
522294Secondary Market Financing50
522298All Other Non-Depository Credit Intermediation50
522310Mortgage and Nonmortgage Loan Brokers50
522320Financial Transactions Processing, Reserve, and Clearing House Activities50
522390Other Activities Related to Credit Intermediation50
Subsector 523—Financial Investments and Related Activities
523110Investment Banking and Securities Dealing50
523120Securities Brokerage50
523130Commodity Contracts Dealing50
523140Commodity Contracts Brokerage50
523210Securities and Commodity Exchanges50
523910Miscellaneous Intermediation50
523920Portfolio Management50
523930Investment Advice50
523991Trust, Fiduciary and Custody Activities50
523999Miscellaneous Financial Investment Activities50
Subsector 524—Insurance Carriers and Related Activities
524113Direct Life Insurance Carriers50
524114Direct Health and Medical Insurance Carriers50
524126Direct Property and Casualty Insurance Carriers1,500
524127Direct Title Insurance Carriers50
524128Other Direct Insurance (except Life, Health and Medical) Carriers50
524130Reinsurance Carriers50
524210Insurance Agencies and Brokerages50
524291Claims Adjusting50
524292Third Party Administration of Insurance and Pension Funds50
524298All Other Insurance Related Activities50
Subsector 525—Funds, Trusts and Other Financial Vehicles
525110Pension Funds50
525120Health and Welfare Funds50
525190Other Insurance Funds50
525910Open-End Investment Funds50
525920Trusts, Estates, and Agency Accounts50
525930Real Estate Investment Trusts50
525990Other Financial Vehicles50
Sector 53—Real Estate and Rental and Leasing
Subsector 531—Real Estate
531110Lessors of Residential Buildings and Dwellings50
531120Lessors of Nonresidential Buildings (except Miniwarehouses)50
531130Lessors of Miniwarehouses and Self Storage Units150
531190Lessors of Other Real Estate Property50
Except,Leasing of Building Space to Federal Government by Owners 99 150
531210Offices of Real Estate Agents and Brokers50
531311Residential Property Managers50
531312Nonresidential Property Managers50
531320Offices of Real Estate Appraisers50
531390Other Activities Related to Real Estate50
Subsector 532—Rental and Leasing Services
Start Printed Page 13158
532111Passenger Car Rental150
532112Passenger Car Leasing150
532120Truck, Utility Trailer, and RV (Recreational Vehicle) Rental and Leasing150
532210Consumer Electronics and Appliances Rental50
532220Formal Wear and Costume Rental50
532230Video Tape and Disc Rental50
532291Home Health Equipment Rental50
532292Recreational Goods Rental50
532299All Other Consumer Goods Rental50
532310General Rental Centers50
532411Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing50
532412Construction, Mining and Forestry Machinery and Equipment Rental and Leasing50
532420Office Machinery and Equipment Rental and Leasing50
532490Other Commercial and Industrial Machinery and Equipment Rental and Leasing50
Subsector 533—Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)
533110Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)50
Sector 54—Professional, Scientific and Technical Services
Subsector 541— Professional, Scientific and Technical Services
541110Offices of Lawyers50
541191Title Abstract and Settlement Offices50
541199All Other Legal Services50
541211Offices of Certified Public Accountants100
541213Tax Preparation Services50
541214Payroll Services100
541219Other Accounting Services100
541310Architectural Services50$7.0
541320Landscape Architectural Services50
541330Engineering Services50$7.0
Except,Military and Aerospace Equipment and Military Weapons200$30.0
Except,Contracts and Subcontracts for Engineering Services Awarded Under the National Energy Policy Act of 1992200$30.0
Except,Marine Engineering and Naval Architecture150$30.0
541340Drafting Services50
541350Building Inspection Services50
541360Geophysical Surveying and Mapping Services50
541370Surveying and Mapping (except Geophysical) Services50
541380Testing Laboratories100
541410Interior Design Services50
541420Industrial Design Services50
541430Graphic Design Services50
541490Other Specialized Design Services50
541511Custom Computer Programming Services150$30.0
541512Computer Systems Design Services150$30.0
541513Computer Facilities Management Services150$30.0
541519Other Computer Related Services150$30.0
Except,Information Technology Value Added Resellers 1515 150
541611Administrative Management and General Management Consulting Services50$10.0
541612Human Resources and Executive Search Consulting Services50$10.0
541613Marketing Consulting Services50$10.0
541614Process, Physical Distribution and Logistics Consulting Services50$10.0
541618Other Management Consulting Services50$10.0
541620Environmental Consulting Services50$10.0
541690Other Scientific and Technical Consulting Services50$10.0
541710Research and Development in the Physical, Engineering, and Life Sciences 1010 500
Except,Aircraft1,500
Except,Aircraft Parts, and Auxiliary Equipment, and Aircraft Engine Parts1,000
Except,Space Vehicles and Guided Missiles, their Propulsion Units, their Propulsion Units Parts, and their Auxiliary Equipment and Parts1,000
541720Research and Development in the Social Sciences and Humanities50
541810Advertising Agencies50
541820Public Relations Agencies50
541830Media Buying Agencies50
541840Media Representatives50
541850Display Advertising50
541860Direct Mail Advertising50
541870Advertising Material Distribution Services50
Start Printed Page 13159
541890Other Services Related to Advertising50
541910Marketing Research and Public Opinion Polling50
541921Photography Studios, Portrait50
541922Commercial Photography50
541930Translation and Interpretation Services50
541940Veterinary Services50
541990All Other Professional, Scientific and Technical Services50$10.0
Sector 55—Management of Companies and Enterprises
Subsector 551—Management of Companies and Enterprises
551111Offices of Bank Holding Companies50
551112Offices of Other Holding Companies50
Sector 56—Administrative and Support, Waste Management and Remediation Services
Subsector 561—Administrative and Support Services
561110Office Administrative Services50$10.0
561210Facilities Support Services 1111 40011 $40.0
561310Employment Placement Agencies50
561320Temporary Help Services500
561330Employee Leasing Services500
561410Document Preparation Services50
561421Telephone Answering Services50
561422Telemarketing Bureaus150
561431Private Mail Centers50
561439Other Business Service Centers (including Copy Shops)50
561440Collection Agencies50
561450Credit Bureaus50
561491Repossession Services50
561492Court Reporting and Stenotype Services50
561499All Other Business Support Services50
561510Travel Agencies50
561520Tour Operators50
561591Convention and Visitors Bureaus50
561599All Other Travel Arrangement and Reservation Services50
561611Investigation Services200
561612Security Guards and Patrol Services500
561613Armored Car Services200
561621Security Systems Services (except Locksmiths)200
561622Locksmiths50
561710Exterminating and Pest Control Services50
561720Janitorial Services500
561730Landscaping Services50
561740Carpet and Upholstery Cleaning Services50
561790Other Services to Buildings and Dwellings50
561910Packaging and Labeling Services50
561920Convention and Trade Show Organizers50
561990All Other Support Services50
Subsector 562—Waste Management and Remediation Services
562111Solid Waste Collection100
562112Hazardous Waste Collection100
562119Other Waste Collection100
562211Hazardous Waste Treatment and Disposal100
562212Solid Waste Landfill100
562213Solid Waste Combustors and Incinerators100
562219Other Nonhazardous Waste Treatment and Disposal100
562910Remediation Services100
Except,Environmental Remediation Services 1212 500
562920Materials Recovery Facilities100
562991Septic Tank and Related Services50
562998All Other Miscellaneous Waste Management Services50
Sector 61—Educational Services
Subsector 611—Educational Services
Start Printed Page 13160
611110Elementary and Secondary Schools50
611210Junior Colleges50
611310Colleges, Universities and Professional Schools50
611410Business and Secretarial Schools50
611420Computer Training50
611430Professional and Management Development Training50
611511Cosmetology and Barber Schools50
611512Flight Training200
611513Apprenticeship Training50
611519Other Technical and Trade Schools50
Except,Job Corps Centers 1313 40013 $30.0
611610Fine Arts Schools50
611620Sports and Recreation Instruction50
611630Language Schools50
611691Exam Preparation and Tutoring50
611692Automobile Driving Schools50
611699All Other Miscellaneous Schools and Instruction50
611710Educational Support Services50
Sector 62—Health Care and Social Assistance
Subsector 621—Ambulatory Health Care Services
621111Offices of Physicians (except Mental Health Specialists)100
621112Offices of Physicians, Mental Health Specialists100
621210Offices of Dentists50
621310Offices of Chiropractors50
621320Offices of Optometrists50
621330Offices of Mental Health Practitioners (except Physicians)50
621340Offices of Physical, Occupational and Speech Therapists and Audiologists50
621391Offices of Podiatrists50
621399Offices of All Other Miscellaneous Health Practitioners50
621410Family Planning Centers100
621420Outpatient Mental Health and Substance Abuse Centers100
621491HMO Medical Centers100
621492Kidney Dialysis Centers200
621493Freestanding Ambulatory Surgical and Emergency Centers100
621498All Other Outpatient Care Centers100
621511Medical Laboratories100
621512Diagnostic Imaging Centers100
621610Home Health Care Services300
621910Ambulance Services100
621991Blood and Organ Banks100
621999All Other Miscellaneous Ambulatory Health Care Services100
Subsector 622—Hospitals
622110General Medical and Surgical Hospitals400
622210Psychiatric and Substance Abuse Hospitals400
622310Specialty (except Psychiatric and Substance Abuse) Hospitals400
Subsector 623—Nursing and Residential Care Facilities
623110Nursing Care Facilities300
623210Residential Mental Retardation Facilities300
623220Residential Mental Health and Substance Abuse Facilities50
623311Continuing Care Retirement Communities300
623312Homes for the Elderly50
623990Other Residential Care Facilities50
Subsector 624—Social Assistance
624110Child and Youth Services50
624120Services for the Elderly and Persons with Disabilities50
624190Other Individual and Family Services50
624210Community Food Services50
624221Temporary Shelters50
624229Other Community Housing Services50
624230Emergency and Other Relief Services50
624310Vocational Rehabilitation Services50
Start Printed Page 13161
624410Child Day Care Services50
Sector 71—Arts, Entertainment and Recreation
Subsector 711—Performing Arts, Spectator Sports and Related Industries
711110Theater Companies and Dinner Theaters50
711120Dance Companies50
711130Musical Groups and Artists50
711190Other Performing Arts Companies50
711211Sports Teams and Clubs50
711212Race Tracks50
711219Other Spectator Sports50
711310Promoters of Performing Arts, Sports and Similar Events with Facilities100
711320Promoters of Performing Arts, Sports and Similar Events without Facilities50
711410Agents and Managers for Artists, Athletes, Entertainers and Other Public Figures50
711510Independent Artists, Writers, and Performers50
Subsector 712—Museums, Historical Sites and Similar Institutions
712110Museums50
712120Historical Sites50
712130Zoos and Botanical Gardens50
712190Nature Parks and Other Similar Institutions50
Subsector 713—Amusement, Gambling and Recreation Industries
713110Amusement and Theme Parks100
713120Amusement Arcades50
713210Casinos (except Casino Hotels)50
713290Other Gambling Industries50
713910Golf Courses and Country Clubs50
713920Skiing Facilities200
713930Marinas50
713940Fitness and Recreational Sports Centers50
713950Bowling Centers50
713990All Other Amusement and Recreation Industries50
Sector 72—Accommodation and Food Services
Subsector 721—Accommodation
721110Hotels (except Casino Hotels) and Motels100
721120Casino Hotels100
721191Bed and Breakfast Inns50
721199All Other Traveler Accommodation50
721211RV (Recreational Vehicle) Parks and Campgrounds50
721214Recreational and Vacation Camps (except Campgrounds)50
721310Rooming and Boarding Houses50
Subsector 722—Food Services and Drinking Places
722110Full-Service Restaurants50
722211Limited-Service Restaurants50
722212Cafeterias50
722213Snack and Nonalcoholic Beverage Bars50
722310Food Service Contractors400
722320Caterers50
722330Mobile Food Services50
722410Drinking Places (Alcoholic Beverages)50
Sector 81—Other Services
Subsector 811—Repair and Maintenance
811111General Automotive Repair50
811112Automotive Exhaust System Repair50
811113Automotive Transmission Repair50
811118Other Automotive Mechanical and Electrical Repair and Maintenance50
811121Automotive Body, Paint and Interior Repair and Maintenance50
811122Automotive Glass Replacement Shops50
Start Printed Page 13162
811191Automotive Oil Change and Lubrication Shops50
811192Car Washes50
811198All Other Automotive Repair and Maintenance50
811211Consumer Electronics Repair and Maintenance50
811212Computer and Office Machine Repair and Maintenance150
811213Communication Equipment Repair and Maintenance50
811219Other Electronic and Precision Equipment Repair and Maintenance50
811310Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance50
811411Home and Garden Equipment Repair and Maintenance50
811412Appliance Repair and Maintenance50
811420Reupholstery and Furniture Repair50
811430Footwear and Leather Goods Repair50
811490Other Personal and Household Goods Repair and Maintenance50
Subsector 812—Personal and Laundry Services
812111Barber Shops50
812112Beauty Salons50
812113Nail Salons50
812191Diet and Weight Reducing Centers50
812199Other Personal Care Services50
812210Funeral Homes and Funeral Services50
812220Cemeteries and Crematories50
812310Coin-Operated Laundries and Drycleaners50
812320Drycleaning and Laundry Services (except Coin-Operated)50
812331Linen Supply200
812332Industrial Launderers200
812910Pet Care (except Veterinary) Services50
812921Photo Finishing Laboratories (except One-Hour)50
812922One-Hour Photo Finishing50
812930Parking Lots and Garages100
812990All Other Personal Services50
Subsector 813—Religious, Grantmaking, Civic, Professional and Similar Organizations
813110Religious Organizations50
813211Grantmaking Foundations50
813212Voluntary Health Organizations50
813219Other Grantmaking and Giving Services50
813311Human Rights Organizations50
813312Environment, Conservation and Wildlife Organizations50
813319Other Social Advocacy Organizations50
813410Civic and Social Organizations50
813910Business Associations50
813920Professional Organizations50
813930Labor Unions and Similar Labor Organizations50
813940Political Organizations50
813990Other Similar Organizations (except Business, Professional, Labor, and Political Organizations)50
Sector 92—Public Administration 14
(Small business size standards are not established for this sector. Establishments in the Public Administration sector are Federal, state, and local government agencies which administer and oversee government programs and activities that are not performed by private establishments.)
1NAICS code 115310—Support Activities for Forestry: Forest Fire Suppression and Fuels Management Services are two components of Support Activities for Forestry. Forest Fire Suppression includes establishments which provide services to fight forest fires. These firms usually have fire-fighting crews and equipment. Fuels Management Services firms provide services to clear land of hazardous materials that would fuel forest fires. The treatments used by these firms may include prescribed fire, mechanical removal, establishing fuel breaks, thinning, pruning, and piling.
2NAICS code 237990—Dredging: To be considered small for purposes of Government procurement, a firm must perform at least 40% of the volume dredged with its own equipment or equipment owned by another small dredging concern.
3NAICS code 238990—Building and Property Specialty Trade Services: If a procurement requires the use of multiple specialty trade contractors (i.e., plumbing, painting, plastering, carpentry, etc.), and no specialty trade accounts for 50% or more of the value of the procurement, all such specialty trade contractors activities are considered a single activity and classified as Building and Property Specialty Trade Services.
4NAICS code 311421—Fruit and Vegetable Canning: For purposes of Government procurement for food canning and preserving, the standard of 500 employees excludes agricultural labor as defined in section 3306(k) of the Internal Revenue Code, 26 U.S.C. 3306(k).
5NAICS code 324110—Petroleum Refineries: To be an eligible small business, a firm may not have more than 1,500 employees or more than 125,000 barrels per day capacity of petroleum-based inputs, including crude oil or bona fide feedstocks. Capacity includes owned or leased facilities as well as facilities under a processing agreement or an arrangement such as an exchange agreement or a throughput. In addition, for the Federal Government's procurement of refined petroleum products, the total product to be delivered under the contract must be at least 90% refined by the successful bidder from either crude oil or bona fide feedstocks. Start Printed Page 13163
6NAICS Subsectors 333—Machinery Manufacturing; 334—Computer and Electronic Product Manufacturing; 335—Electrical Equipment, Appliance and Component Manufacturing; and 336—Transportation Equipment Manufacturing: 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.
7NAICS code 336413—Other Aircraft Parts and Auxiliary Equipment Manufacturing: Contracts for the rebuilding or overhaul of aircraft ground support equipment on a contract basis are classified under NAICS code 336413.
8Subsector 483—Water Transportation—Offshore Marine Services: The applicable size standard shall be 150 employees for firms furnishing specific transportation services to concerns engaged in offshore oil and/or natural gas exploration, drilling production, or marine research; such services encompass passenger and freight transportation, anchor handling, and related logistical services to and from the work site.
9NAICS code 531190—Lessors of Other Real Property, Leasing of Building Space to the Federal Government by Owners: For Government procurement, a size standard of 150 employees applies to the owners of building space leased to the Federal Government. The standard does not apply to an agent.
10NAICS code 541710—Research and Development in the Physical, Engineering, and Life Sciences: For research and development contracts requiring the delivery of a manufactured product, the appropriate size standard is that of the manufacturing industry.
(a) “Research and Development” means laboratory or other physical research and development. It does not include economic, educational, engineering, operations, systems, or other nonphysical research; or computer programming, data processing, commercial and/or medical laboratory testing.
(b) For purposes of the Small Business Innovation Research (SBIR) program only, a different definition has been established. See § 121.701 of these regulations.
(c) “Research and Development” for guided missiles and space vehicles includes evaluations and simulation, and other services requiring thorough knowledge of complete missiles and spacecraft.
11NAICS 561210—Facilities Support Services:
(a) If one or more activities of Facilities Support Services as defined in paragraph (b) (below in this footnote) can be identified with a specific industry and that industry accounts for 50% or more of the value of an entire procurement, then the proper classification of the procurement is that of the specific industry, not Facilities Support Services.
(b) “Facilities Support Services” requires the performance of three or more separate activities in the areas of services or specialty trade construction industries. If services are performed, these service activities must each be in a separate NAICS industry. If the procurement requires the use of specialty trade contractors (plumbing, painting, plastering, carpentry, etc.), all such specialty trade construction activities are considered a single activity and classified as Base Housing Maintenance. Since Base Housing Maintenance is only one activity, two additional activities of separate NAICS industries are required for a procurement to be classified as “Facilities Support Services.”
12NAICS 562910—Environmental Remediation Services:
(a) For SBA assistance as a small business concern in the industry of Environmental Remediation Services, other than for Government procurement, a concern must be engaged primarily in furnishing a range of services for the remediation of a contaminated environment to an acceptable condition including, but not limited to, preliminary assessment, site inspection, testing, remedial investigation, feasibility studies, remedial design, containment, remedial action, removal of contaminated materials, storage of contaminated materials and security and site closeouts. If one of such activities accounts for 50% or more of a concern's total revenues, employees, or other related factors, the concern's primary industry is that of the particular industry and not the Environmental Remediation Services Industry.
(b) For purposes of classifying a Government procurement as Environmental Remediation Services, the general purpose of the procurement must be to restore or directly support the restoration of a contaminated environment (such as, preliminary assessment, site inspection, testing, remedial investigation, feasibility studies, remedial design, remediation services, containment, removal of contaminated materials, storage of contaminated materials or security and site closeouts) and also the procurement must be composed of activities in three or more separate industries with separate NAICS codes or, in some instances (e.g., engineering), smaller sub-components of NAICS codes with separate, distinct size standards. These activities may include, but are not limited to, separate activities in industries such as: Heavy Construction; Special Trade Construction; Engineering Services; Architectural Services; Management Consulting Services; Hazardous and Other Waste Collection; Remediation Services; Testing Laboratories; and Research and Development in the Physical, Engineering and Life Sciences. If any activity in the procurement can be identified with a separate NAICS code, or component of a code with a separate distinct size standard, and that industry accounts for 50 percent or more of the value of the entire procurement, then the proper size standard is the one for that particular industry, and not the Environmental Remediation Service size standard.
13NAICS code 611519—Job Corps Centers: For classifying a Federal procurement, the purpose of the solicitation must be for the management and operation of a U.S. Department of Labor Job Corps Center. The activities involved include admissions activities, life skills training, educational activities, comprehensive career preparation activities, career development activities, career transition activities, as well as the management and support functions and services needed to operate and maintain the facility. For SBA assistance as a small business concern, other than for Federal Government procurements, a concern must be primarily engaged in providing the services to operate and maintain Federal Job Corps Centers.
14NAICS Sector 92—Public Administration: Small Business Size Standards are not established for this sector. Establishments in the Public Administration sector are Federal, state, and local government agencies which administer and oversee government programs and activities that are not performed by private establishments. Concerns performing operational services for the administration of a government program are classified under the NAICS private sector industry based on the activities performed. Similarly, procurements for these types of services are classified under the NAICS private sector industry that best describes the activities to be performed. For example, if a government agency issues a procurement for law enforcement services, the requirement would be classified using one of the NAICS industry codes under 56161, Investigation, Guard, and Armored Car Services.
15NAICS code 541519: An Information Technology Value Added Reseller provides a total solution to information technology acquisitions by providing multi-vendor hardware and software along with significant services. Significant value added services consist of, but are not limited to, configuration consulting and design, systems integration, installation of multi-vendor computer equipment, customization of hardware or software, training, product technical support, maintenance, and end user support. For purposes of Government procurement, an information technology procurement classified under this industry category must consist of at least 15% and not more than 50% of value added services as measured by the total price less the cost of information technology hardware, computer software, and profit. If the contract consists of less than 15% of value added services, then it must be classified under a NAICS manufacturing industry. If the contract consists of more than 50% of value added services, then it must be classified under the NAICS industry that best describes the predominate service of the procurement. To qualify as an Information Technology Value Added Reseller for purposes of SBA assistance, other than for Government procurement, a concern must be primarily engaged in providing information technology equipment and computer software and provide value added services which account for at least 15% of its receipts but not more than 50% of its receipts.
* * * * *

3. Revise § 121.301(d) to read as follows:

What size standards are applicable to financial assistance programs?
* * * * *

(d) For Surety Bond Guarantee assistance an applicant, including its affiliates, must not exceed the size standard for the industry in which the applicant is primarily engaged.

* * * * *

4. Revise § 121.406(b)(1)(i) to read as follows:

How does a small business concern qualify to provide manufactured products under small business set-aside or MED procurements?
* * * * *
Start Printed Page 13164

(b) Nonmanufacturers. (1) * * *

(i) Does not exceed 100 employees;

* * * * *

5. Revise § 121.502(a)(2) to read as follows:

What size standards are applicable to programs for sales or leases of Government property?

(a) * * *

(2) A concern not primarily engaged in manufacturing is small for sales or leases of Government property if it does not exceed 50 employees.

* * * * *

6. Revise § 121.508(a)(2) to read as follows:

What are the size standards and other requirements for the purchase of Government owned Special Salvage Timber?

(a) * * *

(2) Have, together with its affiliates, no more than 50 employees during any pay period for the last 12 months; and,

* * * * *

7. Revise § 121.509(a) to read as follows:

What is the size standard for leasing of Government land for coal mining?
* * * * *

(a) Together with its affiliates, does not have more than 300 employees;

* * * * *

9. Revise § 121.512(b) to read as follows:

What is the size standard for stockpile purchases?
* * * * *

(b) Together with its affiliates, it does not have more than 400 employees.

Start Signature

Dated: February 3, 2004.

Hector V. Barreto,

Administrator.

End Signature End Part End Supplemental Information

Footnotes

1.  Federal procurement is an appropriate consideration because of the special support provided by SBA to small businesses through the 8(a) Business Development Program, the Small Disadvantaged Business Program, the HUBZone Program, the Small Business Set-Aside program and subcontracting programs. Not only has SBA implemented policies to assist small businesses to develop through these Federal procurement programs, but the businesses themselves have made economic and business decisions affecting their eligibility for these programs. The SBA wants to avoid taking away small business eligibility for Federal procurement programs from a large number of small businesses that could otherwise result from this size standards restructuring proposal. This consideration is limited to industries in which significant Federal Government contracting opportunities exist, or with approximately $100 million or more in Federal contracting.

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[FR Doc. 04-5049 Filed 3-18-04; 8:45 am]

BILLING CODE 8025-01-P