Small Business Size Standards: Inflation Adjustment to Monetary Based Size Standards

This Rule document was issued by the Small Business Administration (SBA)

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SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245-AG60

Small Business Size Standards: Inflation Adjustment to Monetary Based Size Standards

Agency

U.S. Small Business Administration.

Action

Interim Final Rule with request for comments.

Summary

The U.S. Small Business Administration (SBA or Agency) is adjusting the monetary based industry size standards (i.e., receipts, assets, net worth, and net income) for inflation that has occurred since the last adjustment in 2008. These adjustments are in addition to the recent revisions to size standards as part of the current comprehensive size standards review, as mandated by the Small Business Jobs Act of 2010 (Jobs Act). Also adjusted for inflation are program based size standards, with the exception of the new alternative size standard for SBA's 7(a) and 504 loan programs that was established under the Jobs Act. The new alternative size standard will remain in effect until SBA establishes a permanent alternative size standard for the 7(a) and 504 loan programs. SBA is also deleting references to Surety Bond Guarantee size standards for contracts awarded in 2005 in the Presidentially declared disaster areas following Hurricanes Katrina, Rita, and Wilma. In addition, SBA is deleting the determination date for eligibility under the Agency's Economic Injury Disaster Loan (EIDL) Program in connection with the same 2005 hurricanes. Finally, SBA is clarifying that footnote 9 to its table of size standards is not limited to NAICS 531190, but rather applies to all industries in Industry Group 5311, Lessors of Real Estate.

Dates

Effective Date: This rule is effective July 14, 2014.

Comment Date: Comments must be received on or before August 11, 2014.

Addresses

You may submit comments, identified by RIN 3245-AG60, by any of the following methods: (1) Federal Rulemaking Portal: http://www.regulations.gov, following the specific instructions for submitting comments; or (2) Mail/Hand Delivery/Courier: Khem R. Sharma, Ph.D., Chief, Office of Size Standards, 409 Third Street SW., Mail Code 6530, Washington, DC 20416. SBA will not accept comments submitted by email to this rule.

SBA will post all comments to this interim final rule on www.regulations.gov. If you wish to submit confidential business information (CBI) as defined in the User Notice at www.regulations.gov, you must submit such information to the U.S. Small Business Administration, Khem R. Sharma, Ph.D., Chief, Office of Size Standards, 409 Third Street SW., Mail Code 6530, Washington, DC 20416, or send an email to sizestandards@sba.gov. Highlight the information that you consider to be CBI and explain why you believe SBA should hold this information as confidential. SBA will review your information and determine whether it will make the information public.

For Further Information Contact

Jorge Laboy-Bruno, Ph.D., Office of Size Standards, (202) 205-6618 or sizestandards@sba.gov.

Supplementary Information

As explained in the SBA's “Size Standard Methodology” White paper available at www.sba.gov/size, SBA reviews small business size standards and makes necessary adjustments to them for two reasons: (i) Changes in industry structure and Federal market conditions; and (ii) inflation. Recently, SBA reviewed all monetary based industry size standards with respect to industry structure and Federal market conditions. SBA published a series of rules to revise many of them as part of its ongoing comprehensive size standards review. In this rule, SBA is adjusting its monetary based industry size standards for inflation that has occurred since the last inflation adjustment, published in July 2008 (73 FR 41237). These include receipts based size standards for 476 industries and 11 subindustries (i.e.,“exceptions” in SBA Table of Size Standards) and assets based size standards for five industries. Additionally, SBA is adjusting three program specific receipts based size standards, namely, (1) Sales or Leases of Government Property (other than manufacturing); (2) stockpile purchases; and (3) the alternative size standard for the Small Business Investment Company (SBIC) Program that is based on tangible net worth and net income. As explained elsewhere in this rule, SBA is not adjusting the new tangible net worth and net income based alternative size standard established under the Jobs Act for its 7(a) and 504 Loan Programs. Also not adjusted is the $750,000 receipts based size standard set by statute for agricultural industries.

SBA is required to assess the impact of inflation on its monetary based size standards at least once every five years (see SBA Interim Final Rule: Small Business Size Standards; Inflation Adjustment to Size Standards (67 FR 3041 (January 23, 2002)) and 13 CFR 121.102). Although the provision does not mandate that SBA actually adjust size standards for inflation every five years, it does provide assurances to the public that the Agency is monitoring inflation and is making a decision on whether or not to adjust size standards within a reasonable period of time since its last inflation adjustment. Previous inflation adjustments to size standards were in SBA Final Rule: Small Business Size Standards; Inflation Adjustment to Size Standards July 2008 (73 FR 41237 (July 18, 2008)); SBA Interim Final Rule: Small Business Size Standards; Inflation Adjustment to Size Standards; Business Loan Program; Disaster Assistance Loan Program (70 FR 72577 (December 6, 2005)); SBA Final Rule: Small Business Size Standards; Inflation Adjustment to Size Standards (67 FR 65285 (October 24, 2002)); SBA Interim Final Rule: Small Business Size Standards; Inflation Adjustment to Size Standards (67 FR 3041 (January 23, 2002)); SBA Final Rule: Small Business Size Standards; Inflation Adjustment to Size Standards (59 FR 616513 (April 7, 1994)); SBA Final Rule: Small Business Size Standards; Inflation Adjustment to Size Standards (49 FR 5025 (February 9, 1984)); and SBA Final Rule: Small Business Size Standards (39 FR 44423 (December 24, 1974)).

Many businesses may have lost small business eligibility for Federal assistance under SBA's monetary based size standards simply because of inflation that has occurred since the 2008 adjustment. This rule aims to reinstate those firms' eligibility for Federal assistance.

As mentioned above, the adjustment for inflation in this rule applies to all monetary based industry size standards, except for the $750,000 receipts based size standard for agricultural industries (which is set by the statute). Adjustments in this rule are in addition to revisions that were part of SBA's ongoing comprehensive size standards review, as mandated by the Jobs Act. SBA's comprehensive size standards review primarily focused on industry structure (i.e., average firm size, startup costs and entry barriers, industry concentration, and distribution of firms by business size) and Federal contracting trends. It did not consider the impacts of inflation on size standards.

Rather than reviewing all size standards at one time, for the comprehensive review, SBA reviewed size standards on a Sector by Sector basis over a period of several years. The objective of the comprehensive size standards review is to review all size standards and make necessary adjustments so that they are consistent with current industry structure and Federal market conditions. Including inflation as an additional factor in the analysis would have meant applying different inflation rates to different sectors at different times. For example, the applicable inflation would be lower for sectors reviewed earlier in the cycle and higher for those reviewed later, resulting in inconsistent size standards across sectors and industries. To avoid this, SBA decided to evaluate all monetary based size standards for inflation separately at one time upon completion of the comprehensive review. As mentioned above, SBA recently completed reviewing all monetary based industry size standards.

Updating size standards based on inflation, in addition to latest industry and Federal contracting data under the comprehensive review, not only satisfies the Jobs Act's mandate that SBA review all size standards, but also is consistent with Executive Order 13563 on improving regulation and regulatory review.

SBA's Inflation Adjustment Methodology

For this interim final rule, SBA has used the same methodology it has described in its “Size Standards Methodology” White Paper, available at www.sba.gov/size. SBA had also applied the same methodology in its previous inflation adjustments, including the last adjustment in 2008. This methodology involves the following steps.

1. Selecting an inflation measure.

2. Selecting a base period.

3. Selecting an end period.

4. Calculating the inflation rate.

5. Adjusting the monetary based size standards.

Selecting an Inflation Measure

SBA establishes small business size standards to determine eligibility of businesses for a wide variety of SBA's and other Federal programs. The majority of businesses participating in those programs are engaged in multiple industries producing a wide range of goods and services. Therefore, it is important that the Agency use a broad measure of inflation to adjust its size standards. In the past, SBA's preferred measure of inflation had been the chain-type price index for the U.S. Gross Domestic Product (GDP price index), published by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA) on a quarterly basis as part of its National Income and Product Accounts (NIPA), available at http://www.bea.gov/iTable.

There are a number of other price indexes that the Federal Government produces to measure inflation. In its “Size Standards Methodology,” SBA has stated that, besides the GDP price index used in the previous adjustments, it may also consider using alternative inflation measures to adjust size standards in future inflation adjustments, including industry specific inflation indices that will better capture the variation in inflation levels across industries. Accordingly, for the current inflation adjustment, SBA reviewed some possible industry specific inflation measures. These included chain-type GDP price indices by industry from BEA and consumer and producer prices by industry from the U.S. Bureau of Labor Statistics (BLS). Additionally, in recent years, SBA received comments from the public suggesting that the Agency should consider using alternative measures of price indexes to adjust size standards for inflation (see SBA Final Rule: Small Business Size Standards; Business Loan Program and Disaster Assistance Loan Program 73 FR 41237 (July 18, 2008)). The commenters argued that the GDP price index underestimates inflation and that it does not account for cost increases that are unique to certain industries that may have experienced a higher rate of inflation than the one suggested by GDP price index. In response, besides the GDP price index, in this rule, SBA also reviewed data on several alternative inflation measures published by the Federal Government, namely the consumer price index (CPI), the personal consumption expenditures price index (PCEPI), the producer price index (PPI), and the employment cost index (ECI). The Agency compared the performance of these indexes with the performance of the GDP price index to determine the appropriateness of using the GDP price index to adjust size standards for inflation. Below are brief descriptions of each of these indexes.

GDP chain-type price index (GDP price index): The GDP price index measures the prices of final goods and services produced by the U.S. economy. BEA produces this index on a quarterly basis. It is derived from the prices of personal consumption expenditures, gross private domestic investment, net exports, and government consumption expenditures, and gross investment. Therefore, it is a very broad measure of inflation in the economy. It is used to adjust for inflation the gross value of the output of the U.S. economy in NIPA during a period considered. For more information, refer to the BEA Web site at http://www.bea.gov/national/Index.htm.

Consumer price index (CPI): The CPI, produced monthly by the BLS, is a measure of the average change in the prices paid by urban consumers for a market basket of goods and services, including imports. The federal government, Federal Reserve Bank, and the private sector use this index as an economic indicator to assess inflationary pressures in the economy. The CPI and its components are also used to adjust other economic series (including various components of NIPA by the BEA) for price change and to convert these series to inflation-free or constant dollars. Finally, the CPI is used to adjust social security and other Government payments. For a detailed explanation, refer to the BLS Web site at http://stats.bls.gov/cpi.

Personal consumption expenditures price index (PCEPI): Similar to the CPI, the PCEPI measures the change in prices paid for goods and services purchased by consumers, and is produced by the BEA on a quarterly basis. The two indexes are similar, but they differ in terms of coverage, weighting, and calculation procedures (see http://www.bea.gov/iTable). Given its low volatility, comprehensive coverage of goods and services, and historical revision of the data, the Federal Reserve Bank uses the PCEPI to measure inflation for policy considerations.

Producers' price index (PPI): Also published by the BLS on a monthly basis, the PPI is a family of indexes that measure the average change over time in the prices domestic producers receive for their goods and services. Like the CPI, the PPIs data are used to adjust other economic time series for price changes and to translate those series into inflation-free or constant dollars. For example, constant-dollar GDP series are derived using deflators based on PPI data. The PPIs capture price movements of goods and services prior to the retail level. Therefore, they may not account for subsequent price changes experienced by businesses and final consumers. The U.S. government and the Federal Reserve Bank use PPI data in formulating fiscal and monetary policies. Finally, PPI data are also commonly used in escalating purchase and sales contracts. For more information, refer to the BLS Web site at http://www.bls.gov/ppil.

Employment cost index (ECI): Produced by the BLS, ECI provides a quarterly measure of changes in labor costs (i.e. wages and salaries and other benefit costs), as well as changes in total compensation. It is one of the principal indicators used by the Federal Reserve Bank in assessing inflationary conditions in the economy. The ECI is also widely used by both Government and private sector. Some examples of its uses are to formulate and assess public policy, to aid collective bargaining negotiations, to evaluate benefit packages, to index Medicare payments, and to adjust wages in long-term contracts. For more information, refer to the BLS Web site at http://www.blsgov/new.released/eci.toc.htm.

Industry specific inflation measures: Additionally, SBA evaluated if the differences between inflation for individual industries and the overall measure of inflation, as measured by the GDP price index, are significant. For this, SBA examined the value added price indexes (VAPI) and Gross Output price indexes (GOPI) by industry contained in BEA's GDP-by-industry accounts tables (see http://www.bea.gov/iTable). Value added by industry is the contribution of individual industries to the nation's GDP. Gross Output by Industry measures goods and services produced by an industry, valued at producers' prices (i.e., the prices received by producers, including excise and sales taxes). The VAPI and GOPI data are published only annually and the latest data available are for 2012. The level of industry disaggregation is not as detailed as in the Economic Census data. SBA calculated the inflation by industry between the calendar years 2008 and 2012 using VAPI and GOPI, and computed the average inflation rate over all industries for which the data were available.

SBA also compared the inflation rates based on CPI, PCEPI, PPI, ECI, and the GDP price index for the period between the first quarter of 2008 and the second quarter of 2013. The results indicated that, although these price indexes tend to show some variations in the short run, they all move in the same direction in the long run, but in different magnitudes. Inflation based on the CPI and PCEPI measures was more or less similar to the one based on the GDP price index and it was somewhat higher based on the PPI and ECI measures. With some variations among industries, SBA found that, on average, inflation rate by industry based on VAPI and GOPI was also more or less similar to the overall inflation rate based on the GDP price index.

The above discussion shows that there exist differences among various price indexes with respect to what they measure and how they are derived. However, generally speaking, all indexes measure changes in some types of price levels in the economy and they all are used by the Government, Federal Reserve and private sector to assess inflationary pressures in the economy, deflate other economic data series, and adjust social security and other income payments. Each price index has its own limitations and advantages and there is no universal preference of one index to others.

As stated above, SBA requires a broad measure of inflation for adjusting its size standards for inflation. In general, the majority of firms participating in the SBA's and other Federal programs receive income or receipts from multiple industries. Among the various inflation measures SBA reviewed, the GDP price index appears to be the most comprehensive measure of movements in the general price level in the economy. It incorporates price changes for all sectors of the economy, including consumer products and services, capital goods, exports, and government services. It is also the most stable measure of inflation overtime relative to other price indexes, especially PPI and ECI. Besides, the GDP price index is widely used as a measure of inflation for policy purposes, and has historical validity and gained acceptance of the small business community. SBA believes that using some other price indexes (such as PPI and ECI) that yield higher inflation than the GDP price index will overestimate the adjustments for inflation and may affect the competitiveness of smaller businesses for Federal opportunities. Most importantly, the GDP price index seems to incorporate information from most other indexes, including PPI, CPI, and ECI, since the BEA uses several subcomponents of these price indexes to deflate various components of GDP (see BEA, “Concepts and Methods of the U.S. National Income and Product Accounts” at http://bea.gov/national).

For these reasons, SBA continues to prefer using the GDP price index as the best aggregate measure of inflation for the U.S. economy. Thus, as in the previous inflation adjustments, SBA has decided to use the GDP price index to adjust monetary based size standards for the current inflation adjustment as well.

Selecting the Base and End Periods

For this rule, SBA selected the first quarter of 2008 as the base period, because it was the end period for the July 2008 adjustment. SBA selected the fourth quarter of 2013 as the end period for this inflation adjustment.

Calculating the Rate of Inflation

The GDP price index for the base period was 98.5 and the GDP price index for the end period was 107.1. Accordingly, inflation increased 8.73 percent from the first quarter of 2008 to the fourth quarter of 2013 ((107.1 ÷ 98.5) −1.00) × 100 percent = 8.73 percent. During this period, inflation has been relatively subdued, principally because of a weak and slow economic recovery from the 2007-2009 recession of the U.S. economy, despite some bursts of sharp rises in energy and commodity prices at different times during the period.

Making Adjustments to Size Standards

Adjustment to receipts based industry size standards: Receipts based size standards were adjusted by multiplying their current levels by 1.0873, and rounding the results to the nearest $500,000. Table 1, Inflation Adjustment to Receipts Based Size Standards, summarizes the results of the analysis for 16 different receipts based size standards levels, ranging from $5 million to $35.5 million. As stated elsewhere in the rule, the $750,000 receipts based size standard for agricultural industries was not adjusted because it was set by the statute. The first column of Table 1 shows the current receipts based size standards, the second column shows their inflation-adjusted values but not rounded, the third column shows their inflation-adjusted values rounded to the nearest $500,000, and the fourth column shows the count of industries and subindustries that are associated witheach of the receipts based size standards levels. The results lead to adjustment to 487 size standards, including 476 industries and 11 subindustries or “exceptions.”

Table 1—Inflation Adjustment to Receipts Based Size Standards
Current monetary based size standards($ million)Size standards adjusted forinflation, but not rounded($ million)Size standards adjusted forinflation, rounded to nearest $500,000($ million)Number ofindustries(incl. exceptions)
(1)(2)(3)(4)
$5.0$5.4$5.54
7.07.67.5127
10.010.911.039
14.015.215.094
16.517.918.01
17.519.019.02
19.020.720.539
23.025.025.01
25.527.727.555
27.029.429.54
28.030.430.52
29.532.132.02
30.032.632.540
33.536.436.511
34.537.537.51
35.538.638.565
Total Industries and Subindustries487

Adjustment to assets based size standard: Currently, five industries in North American Classification Systems (NAICS) Sector 52, Finance and Insurance, have the size standard of $500 million in average assets. Similar to the receipts based size standards, the assets based size standard was adjusted by multiplying the current value by 1.0873. The result was $543.7 million, but it was rounded to $550 million.

Adjustment to program based size standards: Most SBA and other Federal programs apply size standards established for industries, as defined by the NAICS. SBA has also established a few size standards on a program basis rather than on an industry basis. These size standards were also adjusted for inflation in the same manner as the receipts based industry size standards. Table 2, Inflation Adjustment to Program Based Size Standards, shows the program based size standards and their corresponding inflation-adjusted values. The size standard for “smaller enterprises” under the Small Business Investment Company (SBIC) Program is set by statute (see 13 CFR 107.710(a)) and, therefore, not adjusted.

Table 2—Inflation Adjustment to Program Based Size Standards
ProgramCFR CitationSize standard in millions of dollarsCurrent size standardMeasurementInflation-adjusted size standard
SBIC Program13 CFR 121.301(c)$18.06.0Net WorthNet income$19.56.5
Sales of Government Property Other Than Manufacturing (which uses employee-based size standards)13 CFR 121.5027.0Average Annual Receipts7.5
Stockpile Purchases13 CFR 121.51257.5Average Annual Receipts62.5

Special Considerations

New Alternative Size Standard for 7(a) and 504 Loan Programs: Effective September 27, 2010, the Jobs Act established a new temporary alternative size standard of tangible net worth of not more than $15 million and net income of not more than $5 million for SBA's 7(a) and 504 Loan Programs. On September 29, 2010, SBA issued Notice 5000-1175 advising lenders and the public that, effective September 27, 2010, the new statutory alternative size standard will apply for its 7(a) and 504 Loan Programs, thereby replacing the existing alternative size standard of $8.5 million in tangible net worth and $3 million in net income, then set forth in 13 CFR 121.301(b)(2). The Jobs Act also provided the new temporary alternative size standard would remain in effect for the 7(a) and CDC/504 Loan Programs until the SBA's Administrator has established a different size standard through rulemaking. For this reason, in this rule, SBA is not adjusting the new alternative size standard for its 7(a) and 504 Loan programs for inflation. SBA will issue a different rule to establish apermanent alternative size standard for those programs.

Size Standards for Surety Bond Guarantee Assistance: SBA has decided to remove 13 CFR 121.301(d)(2). Currently, 13 CFR 121.301(d) reads as follows:

(1) A business concern, combined with its affiliates, must meet the size standard for the primary industry in which such business concern, combined with its affiliates, is engaged.

(2) For any contract or subcontract, public or private, to be performed in the Presidentially-declared disaster areas resulting from the 2005 Hurricanes Katrina, Rita or Wilma, a construction (general or special trade) concern or concern performing a contract for services is small if it meets the size standard set forth in paragraph (d)(1) of this section, or the average annual receipts of the concern, together with its affiliates, do not exceed $7 million, whichever is higher.

SBA believes that paragraph (2) is no longer necessary for two reasons. First, given paragraph (1), paragraph (2) is now mostly redundant, because the inflation adjusted receipts based size standards for all industries, except for four, are higher than $7 million (see Table 1, Inflation Adjustment to Receipts Based Size Standards, above). Second, SBA would not expect, after more than eight years since the Hurricanes Katrina, Rita, and Wilma occurred, small businesses in these disaster areas would be in need of a separate size standard, which now has only limited application. Paragraph (2) made sense when the size standard for a construction concern (general or special trade) for Surety Bond Guarantee was $7 million or less in average receipts, but the size standards for all industries in construction are now higher than $7 million. On August 11, 2010, SBA issued a direct final rule to amend small business size standards for its Surety Bond Guarantee Program (75 FR 48549). Specifically, the direct final rule provided that a business concern is small if such concern, combined with its affiliates, does not exceed the size standard for the NAICS code that corresponds to the primary industry of the business concern, combined with its affiliates.

Size Standards for Economic Injury Disaster Loan (EIDL) Assistance: Since it has been more than eight years since the Hurricanes Katrina, Rita, and Wilma occurred, SBA has decided to remove the text relating to when the Agency determines size status for EIDL assistance under disaster declarations for the Hurricanes Katrina, Rita, and Wilma from 13 CFR 121.302(c).

Size Standard for Leasing of Building Space to Federal Government by Owners—Footnote 9: It has come to SBA's attention that there can be some confusion concerning to what NAICS code(s) footnote 9 and the size standard for the “Leasing of Building Space to Federal Government by Owners” exception apply. Specifically, footnote 9 states, “NAICS code 531190—Leasing of building space to the Federal Government by Owners: For Government procurement, a size standard of $35.5 million in gross receipts applies to the owners of building space leased to the Federal Government. The standard does not apply to an agent.” In the SBA's table of size standards, this “exception” follows immediately after NAICS 531190, Lessors of Other Real Estate Property. This has been understood by some to mean that the exception and footnote 9 apply only to NAICS 531190.

However, the size standard exception for “Leasing of Building Space to Federal Government by Owners” is meant to apply to all industries in NAICS Industry Group 5311, Lessors of Real Estate. That is consistent with SBA's original application of the footnote to Standard Industrial Classification (SIC) Major Group 651, Real Estate Operators (Except Developers) and Lessors, when the SBA's table of size standards was based on the SIC system.

To clarify this, SBA is adding the footnote 9 superscript to each of the four NAICS Industry codes within NAICS Industry Group 5311 and removing from the table the exception that follows NAICS 531190. The new inflation-adjusted size standard for the Leasing of Building Space to Federal Government by Owners exception will be $38.5 million in average annual receipts.

Justification for Updating Size Standards for Inflation as an Interim Final Rule

In general, to revise or update size standards, SBA publishes a proposed rule for public comment before issuing a final rule, in accordance with the Administrative Procedure Act (APA), 5 U.S.C. 553 and SBA regulations, 13 CFR 101.108. The APA provides an exception to this standard rulemaking process, however, in situations where an agency finds good cause to adopt a rule without prior public participation. (See 5 U.S.C. 553(b)(3)(B)). The good cause requirement is satisfied when prior public participation is impracticable, unnecessary, or contrary to the public interest. Under those conditions, an agency may publish an interim final rule without first soliciting public comment. In applying the good cause exception to the standard rulemaking process, Congress recognized that special circumstances (such as a response to a natural disaster or an economic situation) might arise justifying issuance of a rule without prior public participation.

As stated above, the last time SBA made inflation adjustments to size standards was 2008. Many businesses may have lost small business eligibility for Federal assistance under SBA's monetary based size standards simply as a result of the inflation that has occurred since that time. This rule is necessary to make those businesses eligible for Federal assistance. Any delay in the adoption of inflation adjusted size standards could cause serious harm to those businesses and others that are about to exceed current size standards. Immediate implementation of this rule would enable those businesses to benefit from Federal assistance programs and help them create jobs. SBA believes that the job creation under the current economic environment of high unemployment is in the best interest of the public.

The standard notice and comment rulemaking would delay the implementation of this rule by at least eight to twelve months. Such a delay would be contrary to the public interest as it would delay the eligibility of those businesses for Federal small business assistance, perhaps forcing some of them to cease operations before a final rule could be promulgated under the standard rulemaking process. Furthermore, the inflation adjustment will become outdated by the time the final rule is published under notice and comment rulemaking.

SBA believes that delaying the adoption of updated size standards for inflation is not in the best interest of small businesses in the current economic environment. The U.S. economy was in recession from December 2007 to June 2009, the longest and deepest of any recessions since before World War II. The economy lost more than eight million non-farm jobs during 2008-2009. In response, Congress passed and the President signed into law the American Recovery and Reinvestment Act of 2009 (Recovery Act) to promote economic recovery and to preserve and create jobs. Although the recession officially ended in June 2009, the unemployment rate is still at 6.7 percent in March 2014 (www.bls.gov) and is forecast to remain around this level at least through the end of 2014. (http://www.federalreserve.gov/monetarypolicy/mpr_20130717_). In 2010, Congress passed and the President signed the Jobs Act to promote small business job creation. The Jobs Act included several measures to help small businesses create jobs. Delaying the adoption of updated size standards would prevent businesses that have exceeded size standards due to inflation from participating in Federal financial and procurement assistance programs for small businesses. This would be contrary to the expressed will of the President and the Congress.

For the above reasons, SBA finds that good cause exists to publish this rule as an interim final rule. SBA's rationale for preparing this action as an interim final rule and giving it immediate effect is consistent with the Agency's statutory obligation to act in the public interest in determining eligibility for Federal assistance under the Small Business Act, 15 U.S.C. 633(d). SBA had also implemented inflation adjustments to size standards through an interim final rule in 2002 and 2005 without any controversies.

By publishing this rule as an interim final rule, SBA is not excluding public participation in the rulemaking process. SBA is soliciting comments from interested parties on this interim final rule on a number of issues, including SBA's methodology for inflation adjustment and alternative measures of inflation. SBA will evaluate all comments and revise, if necessary, this rule, and publish a final rule on a later date.

Request for Comments

SBA seeks comments on this rule, specifically on the following issues.

1. SBA welcomes comments from the interested parties on SBA's size standards methodology for inflation adjustment to its size standards. Specifically, SBA seeks comment on whether the GDP price index is an appropriate measure of inflation for adjusting size standards. The Agency invites suggestions, along with supporting data and analysis, if a different measure of inflation would be more appropriate.

2. SBA also invites comments on whether it should adjust employee based size standards for changes in labor productivity and technical change, similar to adjusting monetary based size standards for inflation.

3. SBA also invites comments on any other aspects of this rulemaking, such as the changes to size standards for business loan programs, disaster loan programs, and the surety bond guarantee program.

Compliance With Executive Orders 12866, 13563, 12988, and 13132, the Paperwork Reduction Act (44 U.S.C., Ch. 35), and the Regulatory Flexibility Act (5 U.S.C. 601-612) Executive Order 12866

The Office of Management and Budget (OMB) has determined that this interim final rule is not a “significant regulatory action” for purposes of Executive Order 12866. In order to help explain the need for this rule and the rule's potential benefits and costs, SBA is providing a Cost Benefit Analysis in this section of the rule. This is also not a “major rule” under the Congressional Review Act (5 U.S.C. 800).

Cost Benefit Analysis

1. Is there a need for the regulatory action?

SBA's statutory mission is to aid and assist small businesses through a variety of financial, procurement, business development, and advocacy programs. To assist the intended beneficiaries of these programs effectively, SBA must establish distinct definitions of which businesses are deemed small businesses. The Small Business Act (15 U.S.C. 632(a)) (Act) delegates to the SBA Administrator the responsibility for establishing small business definitions. The Act also requires that small business definitions vary to reflect industry differences. The supplementary information to this interim final rule explains how SBA adjusts size standards for inflation. SBA is required to assess the impact of inflation on its monetary based size standards at least once every five years (67 FR 3041 and 13 CFR 102(c)). Many businesses may have lost small business eligibility for Federal assistance under SBA's monetary based size standards simply because of inflation that has occurred since the last inflation adjustment to size standards in 2008. This interim final rule aims to make those businesses eligible again for Federal assistance.

2. What are the potential benefits and costs of this regulatory action?

The most significant benefit to businesses of this interim final rule is to enable businesses that have exceeded size standards simply due to inflation to regain eligibility for Federal small business assistance programs. This will also help businesses to retain small business eligibility for Federal programs for a longer period. These programs include SBA's financial assistance programs, economic injury disaster loans, and Federal procurement programs intended for small businesses. Federal procurement programs provide targeted opportunities for small businesses under SBA's business development programs, such as 8(a), Small Disadvantaged Businesses (SDB), small businesses located in Historically Underutilized Business Zones (HUBZone), women-owned small businesses (WOSB), economically disadvantaged women-owned small businesses (EDWOSB), and service-disabled veteran-owned small businesses (SDVOSB). Federal agencies may also use SBA's size standards for a variety of other regulatory and program purposes. These programs assist small businesses to become more knowledgeable, stable, and competitive. SBA estimates that this rule will enable approximately 8,500 firms in industries and subindustries with receipts based size standards and about 170 firms in industries with assets based size standards, currently above SBA's size standards, to gain small business status and become eligible for these programs. This will increase the small business share of total receipts in industries and subindustries with receipts based size standards from 31.2 percent to 31.8 percent and the small business share of total assets in industries with assets based size standards from 8.8 percent to 9.4 percent.

Three groups will benefit from the revisions of size standards in this rule: (1) Some businesses that are above the current size standards may gain small business status under the higher, inflation-adjusted size standards, thereby enabling them to participate in Federal small business assistance programs; (2) growing small businesses that are close to exceeding the current size standards will be able to retain their small business status under the higher size standards, thereby enabling them to continue their participation in the programs; and (3) Federal agencies will have a larger pool of small businesses from which to draw for their small business procurement programs.

SBA estimates that firms gaining small business status under the inflation adjusted size standards could receive Federal contracts totaling $150 million to $200 million annually under SBA's small business, 8(a), SDB, HUBZone, WOSB, EDWOSB, and SDVOSB Programs, and unrestricted procurements. The added competition for many of these procurements can also result in lower prices to the Government for procurements reserved for small businesses, but SBA cannot quantify this benefit.

Based on the fiscal years 2010-2012 data, SBA estimates about 80 additional loans totaling about $30 million couldbe made to these newly defined small businesses under SBA's 7(a) and 504 Loan Programs under the adjusted size standards. Increasing the size standards will likely result in more small business guaranteed loans to businesses in these industries, but it is impractical to try to estimate the exact number and total amount of loans. There are two reasons for this: (1) Under the Jobs Act, SBA can now guarantee substantially larger loans than in the past; and (2) as described above, the Jobs Act established an alternative size standard ($15 million in tangible net worth and $5 million in net income after income taxes) for business concerns that do not meet the size standards for their industry. Therefore, SBA finds it difficult to quantify the actual impact of these inflation adjusted size standards on its 7(a) and 504 Loan Programs.

Newly defined small businesses will also benefit from SBA's Economic Injury Disaster Loan (EIDL) Program. Since this program is contingent on the occurrence and severity of a disaster in the future, SBA cannot make a meaningful estimate of this impact.

In addition, newly defined small businesses will also benefit through reduced fees, less paperwork, and fewer compliance requirements that are available to small businesses through Federal government.

To the extent that those nearly 8,700 additional small firms could become active in Federal procurement programs, the adjusted size standards in this final interim rule may entail some additional administrative costs to the government as a result of more businesses being eligible for Federal small business programs. For example, there will be more firms seeking SBA's guaranteed loans, more firms eligible for enrollment in the System of Award Management (SAM) database, and more firms seeking certification as 8(a) or HUBZone firms or qualifying for small business, WOSB, EDWOSB, SDVOSB, and SDB status. Among those newly defined small businesses seeking SBA's assistance, there could be some additional costs associated with compliance and verification of small business status and protests of small business status. However, SBA believes that these added administrative costs will be minimal because mechanisms are already in place to handle these requirements.

In some cases, Federal government contracts may have higher costs. With a greater number of businesses defined as small, Federal agencies may choose to set aside more contracts for competition among small businesses only rather than using full and open competition. The movement from unrestricted to small business set-aside contracting might result in competition among fewer total bidders, although there will be more small businesses eligible to submit offers. However, the additional costs associated with fewer bidders are expected to be minor since, by law, procurements may be set aside for small businesses or reserved for the 8(a), HUBZone, WOSB, EDWOSB, or SDVOSB Programs only if awards are expected to be made at fair and reasonable prices. In addition, there may be higher costs when more full and open contracts are awarded to HUBZone businesses that receive price evaluation preferences.

The size standards adjustments in this interim final rule may have some distributional effects among large and small businesses. Although SBA cannot estimate with certainty the actual outcome of the gains and losses among small and large businesses, it can identify several probable impacts. There may be a transfer of some Federal contracts to small businesses from large businesses. Large businesses may have fewer Federal contract opportunities as Federal agencies decide to set aside more contracts for small businesses. In addition, some Federal contracts may be awarded to HUBZone concerns instead of large businesses since these firms may be eligible for a price evaluation preference for contracts when they compete on a full and open basis.

Similarly, some businesses defined small under the current size standards may obtain fewer Federal contracts due to the increased competition from more businesses defined as small under the proposed size standards. This transfer may be offset by a greater number of Federal procurements set aside for all small businesses. The number of newly defined and expanding small businesses that are willing and able to sell to the Federal Government will limit the potential transfer of contracts from large and currently defined small businesses. SBA cannot estimate the potential distributional impacts of these transfers with any degree of precision.

The revision to the current monetary based industry size standards for 481 industries and 11 subindustries, and to the monetary based size standards for other specific programs are 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, Government contracts, and management and technical assistance. Reviewing and modifying size standards, when appropriate, including periodic inflation adjustments, ensure that intended beneficiaries have access to small business programs designed to assist them.

Executive Order 13563

A description of the need for this regulatory action and benefits and costs associated with this action including possible distributions impacts that relate to Executive Order 13563 is included above in the Cost Benefit Analysis under Executive Order 12866.

In an effort to engage interested parties in this action, SBA gave appropriate consideration to all input, suggestions, recommendations, and relevant information obtained from industry groups, individual businesses, and Federal agencies in preparing this interim final rule.

The review of size standards in industries and financial assistance programs covered in this interim final rule is consistent with Executive Order 13563, Section 6, calling for retrospective analyses of existing rules. The last inflationary adjustment of monetary based size standards occurred in July 2008.

Additionally to the inflationary adjustment of monetary based size standards of this final interim rule, SBA finalized a comprehensive review of all the receipts and assets based industry size standards to ensure that they have supportable bases.

Executive Order 12988

This action meets applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have retroactive or preemptive effect.

Executive Order 13132

For purposes of Executive Order 13132, SBA has determined that this interim final rule will not have substantial, direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, SBA has determined that this interim final rule has no federalism implications warranting preparation of a federalism assessment.

Paperwork Reduction Act

For the purpose of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA has determined that this interim finalrule will not impose any new reporting or record keeping requirements.

Initial Regulatory Flexibility Analysis

Under the Regulatory Flexibility Act (RFA), this interim final rule may have a significant impact on a substantial number of small businesses in the industries and subindustries covered by this rule. As described above, this rule may affect small businesses seeking Federal contracts, loans under SBA's 7(a), 504 and Economic Injury Disaster Loan Programs, and assistance under other Federal small business programs.

Immediately below, SBA sets forth an initial regulatory flexibility analysis (IRFA) of this interim final rule addressing the following questions: (1) What are the need for and objective of the rule? (2) What are SBA's description and estimate of the number of small businesses to which the rule will apply? (3) What are the projected reporting, record keeping, and other compliance requirements of the rule? (4) What are the relevant Federal rules that may duplicate, overlap, or conflict with the rule? and (5) What alternatives will allow the Agency to accomplish its regulatory objectives while minimizing the impact on small businesses?

1. What are the need for and objective of the rule?

As discussed in the supplemental information, the revision to the monetary based size standards for inflation more appropriately defines small businesses. This interim final rule merely restores small business eligibility in real terms to businesses that have grown above the size standard due to inflation rather than due to increased business activity. A review of the latest inflation indexes indicates that inflation has increased a sufficient amount to warrant an increase to the current monetary based size standards.

Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) gives SBA the authority to establish and change size standards. Within its administrative discretion, SBA implemented a policy in its regulations to review the effect of inflation on size standards at least once every five years (13 CFR 121.102(c)) and make any changes as appropriate. As discussed in the supplementary information, inflation has increases at a sufficient level since the time of the 2008 final rule to warrant a further adjustment to size standards at this time.

2. What are SBA's description and estimate of the number of small businesses to which the rule will apply?

SBA estimates that about 8,500 additional firms will become small because of increased receipts based size standards of 476 industries and 11 subindustries. That represents 0.2 percent of total firms that are small under current monetary based size standards. This will result in an increase in the small business share of total industry receipts in those industries and subindustries from 31.2 percent under the current size standards to 31.8 percent under the inflation-adjusted size standards. Due to the adjustment of assets based size standards in five industries, about 170 additional firms will gain small business status in those industries. This will increase the small business share of total assets in those industries from 8.8 percent to 9.4 percent. The size standards adopted in this interim final rule will enable businesses that have exceeded the size standards for their industries to regain small business status. It will also help currently small businesses to retain their small business status for a longer period. Many firms may have lost their eligibility and find it difficult to compete at current size standards with companies that are significantly larger than they are. SBA believes the competitive impact will be positive for existing small businesses and for those that exceed the size standards but are on the very low end of those that are not small. They might otherwise be called or referred to as mid-sized businesses, although SBA only defines what is small; entities that are not small are “other than small.”

3. What are the projected reporting, recordkeeping and other compliance requirements of the rule?

The inflation adjustment to size standards imposes no additional reporting or record keeping requirements on small businesses. However, qualifying for Federal procurement and a number of other programs requires that businesses register in the SAM database and certify in SAM that they are small at least once annually. Therefore, newly eligible small businesses opting to participate in those programs must comply with SAM requirements. Businesses whose status changes in SAM from other than small to small must update their SAM profiles and complete the “representations and certifications” sections of SAM. However, there are no costs associated with SAM registration or certification. Changing size standards alters the access to SBA's programs that assist small businesses, but does not impose a regulatory burden because they neither regulate nor control business behavior.

4. What are the relevant Federal rules, which may duplicate, overlap, or conflict with the rule?

Under section 3(a)(2)(C) of the Small Business Act, 15 U.S.C. 632(a)(2)(c), Federal agencies must use SBA's size standards to define a small business, unless specifically authorized by statute to do otherwise. In 1995, SBA published in theFederal Registera list of statutory and regulatory size standards that identified the application of SBA's size standards as well as other size standards used by Federal agencies (60 FR 57988 (November 24, 1995)). SBA is not aware of any Federal rule that would duplicate or conflict with establishing size standards.

However, the Small Business Act and SBA's regulations allow Federal agencies to develop different size standards if they believe that SBA's size standards are not appropriate for their programs, with the approval of SBA's Administrator (13 CFR 121.903). The Regulatory Flexibility Act authorizes an Agency to establish an alternative small business definition for Regulatory Flexibility Analysis purposes, after consultation with the Office of Advocacy of the U.S. Small Business Administration (5 U.S.C. 601(3)).

5. What alternatives will allow the Agency to accomplish its regulatory objectives while minimizing the impact on small entities?

By law, SBA is required to develop numerical size standards for establishing eligibility for Federal small business assistance programs. Other than varying size standards by industry and changing the size measures, no practical alternative exists to the systems of numerical size standards.

SBA's only other consideration was whether to adopt the size standards presented in the interim final rule with no further increase for the inflation. However, SBA believes that the additional 8.73 percent inflation that has occurred since the time of the final rule published in July 2008 sufficiently affects the real value of the size standards to warrant applying an increase at this time.

List of Subjects in 13 CFR Part 121

Administrative practice and procedure, Government procurement, Government property, Grant programs—business, Individuals with disabilities, Loan programs—business, Reportingand recordkeeping requirements, Small businesses.

For the reasons set forth in the preamble, SBA amends 13 CFR part 121 as follows:

Regulatory Text

Part 121 Small Business Size Regulations

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

Authority:

15 U.S.C. 632, 634(b)(6), 662, and 694a(9).

2. In § 121.201, amend the table “Small Business Size Standards by NAICS Industry” as follows:

a. Revise the entries for “112112”, “112310”, “113110”, “113210”, “114111”, “114112”, “114119”, “114210”, “115111”, “115112”, “115113”, “115114”, “115115”, “115116”, “115210”, “115310”, “115310 first and second sub-entry”, “213112”, “213113”, “213114”, “213115”, “221310”,”221320”, “221330”, “236115”, “236116”, “236117”, “236118”, “236210”, “236220”, “237110”, “237120”, “237130”, “237210”, “237310”, “237990”, “237990 first sub-entry”, “238110”, “238120”, “238130”, “238140”, “238150”, “238160”, “238170”, “238190”, “238210”, “238220”, “238290”, “238310”, “238320”, “238330”, “238340”, “238350”, “238390”, “238910”, “238990”, “238990 first sub-entry “, “441120”, “441210”, “441222”, “441228”, “441310”, “441320”, “442110”, “442210”, “442291”, “442299”, “443141”, “443142”, “444110”, “444120”, “444130”, “444190”, “444210”, “444220”, “445110”, “445120”, “445210”, “445220”, “445230”, “445291”, “445292”, “445299”, “445310”, “446110”, “446120”, “446130”, “446191”, “446199”, “447110”, “447190”, “448110”, “448120”, “448130”, “448140”, “448150”, “448190”, “448210”, “448310”, “448320”, “451110”, “451120”, “451130”, “451140”, “451211”, “451212”, “452111”, “452112”, “452910”, “452990”, “453110”, “453210”, “453220”, “453310”, “453910”, “453920”, “453930”, “453991”, “453998”, “454111”, “454112”, “454113”, “454210”, “454390”, “481211”, “481211 first sub-entry”, “481212”, “481212 first sub-entry”, “481219”, “484110”, “484121”, “484122”, “484210”, “484220”, “484230”, “485111”, “485112”, “485113”, “485119”, “485210”, “485310”, “485320”, “485410”, “485510”, “485991”, “485999”, “486210”, “486990”, “487110”, “487210”, “487990”, “488111”, “488119”, “488190”, “488210”, “488310”, “488320”, “488330”, “488390”, “488410”, “488490”, “488510”, “488510 first sub-entry”, “488991”, “488999”, “491110”, “492210”, “493110”, “493120”, “493130”, “493190”, “511210”, “512110”, “512120”, “512131”, “512132”, “512191”, “512199”, “512210”, “512240”, “512290”, “515111”, “515112”, “515120”, “515210”, “517410”, “517919”, “518210”, “519110”, “519120”, “519190”, “522110”, “522120”, “522130”, “522190”, “522210”, “522220”, “522291”, “522292”, “522293”, “522294”, “522298”, “522310”, “522320”, “522390”, “523110”, “523120”, “523130”, “523140”, “523210”, “523910”, “523920”, “523930”, “523991”, “523999”, “524113”, “524114”, “524127”, “524128”, “524130”, “524210”, “524291”, “524292”, “524298”, “525110”, “525120”, “525190”, “525910”, “525920”, “525990”, “531110”, “531120”, “531130”, “531190”, “531210”, “531311”, “531312”, “531320”, “531390”, “532111”, “532112”, “532120”, “532210”, “532220”, “532230”, “532291”, “532292”, “532299”, “532310”, “532411”, “532412”, “532420”, “532490”, “533110”, “541110”, “541191”, “541199”, “541211”, “541213”, “541214”, “541219”, “541310”, “541320”, “541330”, “541330 first, second and third sub-entry”, “541340”, “541350”, “541360”, “541370”, “541380”, “541410”, “541420”, “541430”, “541490”, “541511”, “541512”, “541513”, “541519”, “541519 first-sub entry”, “541611”, “541612”, “541613”, “541614”, “541618”, “541620”, “541690”, “541720”, “541810”, “541820”, “541830”, “541840”, “541850”, “541860”, “541870”, “541890”, “541910”, “541921”, “541922”, “541930”, “541940”, “541990”, “551111”, “551112”, “561110”, “561210”, “561311”, “561312”, “561320”, “561330”, “561410”, “561421”, “561422”, “561431”, “561439”, “561440”, “561450”, “561491”, “561492”, “561499”, “561510”, “561520”, “561591”, “561599”, “561611”, “561612”, “561613”, “561621”, “561622”, “561710”, “561720”, “561730”, “561740”, “561790”, “561910”, “561920”, “561990”, “562111”, “562112”, “562119”, “562211”, “562212”, “562213”, “562219”, “562910”, “562920”, “562991”, “562998”, “611110”, “611210”, “611310”, “611410”, “611420”, “611430”, “611511”, “611512”, “611513”, “611519”, “611519 first sub-entry”, “611610”, “611620”, “611630”, “611691”, “611692”, “611699”, “611710”, “621111”, “621112”, “621210”, “621310”, “621320”, “621330”, “621340”, “621391”, “621399”, “621410”, “621420”, “621491”, “621492”, “621493”, “621498”, “621511”, “621512”, “621610”, “621910”, “621991”, “621999”, “622110”, “622210”, “622310”, “623110”, “623210”, “623220”, “623311”, “623312”, “623990”, “624110”, “624120”, “624190”, “624210”, “624221”, “624229”, “624230”, “624310”, “624410”, “711110”, “711120”, “711130”, “711190”, “711211”, “711212”, “711219”, “711310”, “711320”, “711410”, “711510”, “712110”, “712120”, “712130”, “712190”, “713110”, “713120”, “713210”, “713290”, “713910”, “713920”, “713930”, “713940”, “713950”, “713990”, “721110”, “721120”, “721191”, “721199”, “721211”, “721214”, “721310”, “722310”, “722320”, “722330”, “722410”, “722511”, “722513”, “722514”, “722515”, “811111”, “811112”, “811113”, “811118”, “811121”, “811122”, “811191”, “811192”, “811198”, “811211”, “811212”, “811213”, “811219”, “811310”, “811411”, “811412”, “811420”, “811430”, “811490”, “812111”, “812112”, “812113”, “812191”, “812199”, “812210”, “812220”, “812310”, “812320”, “812331”, “812332”, “812910”, “812921”, “812922”, “812930”, “812990”, “813110”, “813211”, “813212”, “813219”, “813311”, “813312”, “813319”, “813410”, “813910”, “813920”, “813930”, “813940”, and”813990”.

b. For entries “531110”, “531120”, “531130”, and “531190” add superscript “9” to the entry in the columns “NAICS U.S. industry title” and “Size standards in millions of dollars”.

c. Remove “sub-entry” (or “except”) under entry “531190”.

d. Add “sub-entry” (or “except”) under entry “562910.”

d. Revise footnotes 9 and 15

The revisions read as follows:

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

* * * * *

Small Business Size Standards by NAICS Industry
NAICSCodesNAICS U.S. industry titleSize standards in millions of dollarsSize standards in number ofemployees
Sector 11—Agriculture, Forestry, Fishing and Hunting   
   
*******   
Subsector 112—Animal Production and Aquaculture   
   
*******   
112112Cattle Feedlots$7.5
   
*******   
112310Chicken Egg Production$15.0
   
*******   
Subsector 113—Forestry and Logging   
113110Timber Tract Operations$11.0
113210Forest Nurseries and Gathering of Forest Products$11.0
   
*******   
Subsector 114—Fishing, Hunting and Trapping   
114111Finfish Fishing$20.5
114112Shellfish Fishing$5.5
114119Other Marine Fishing$7.5
114210Hunting and Trapping$5.5
Subsector 115—Support Activities for Agriculture and Forestry   
115111Cotton Ginning$11.0
115112Soil Preparation, Planting, and Cultivating$7.5
115113Crop Harvesting, Primarily by Machine$7.5
115114Postharvest Crop Activities (except Cotton Ginning)$27.5
115115Farm Labor Contractors and Crew Leaders$15.0
115116Farm Management Services$7.5
115210Support Activities for Animal Production$7.5
115310Support Activities for Forestry$7.5
Except, Forest Fire Suppression 17 $19.0 17
Except, Fuels Management Services 17 $19.0 17
Sector 21—Mining, Quarrying, and Oil and Gas Extraction   
   
*******   
Subsector 213—Support Activities for Mining   
   
*******   
213112Support Activities for Oil and Gas Operations$38.5
213113Support Activities for Coal Mining$20.5
213114Support Activities for Metal Mining$20.5
213115Support Activities for Nonmetallic Minerals (except Fuels)$7.5
Sector 22—Utilities   
Subsector 221—Utilities   
   
*******   
221310Water Supply and Irrigation Systems$27.5
221320Sewage Treatment Facilities$20.5
221330Steam and Air-Conditioning Supply$15.0
Sector 23—Construction   
Subsector 236—Construction of Buildings   
236115New Single-family Housing Construction (Except For-Sale Builders)$36.5
236116New Multifamily Housing Construction (except For-Sale Builders)$36.5
236117New Housing For-Sale Builders$36.5
236118Residential Remodelers$36.5
236210Industrial Building Construction$36.5
236220Commercial and Institutional Building Construction$36.5
Subsector 237—Heavy and Civil Engineering Construction   
237110Water and Sewer Line and Related Structures Construction$36.5
237120Oil and Gas Pipeline and Related Structures Construction$36.5
237130Power and Communication Line and Related Structures Construction$36.5
237210Land Subdivision$27.5
237310Highway, Street, and Bridge Construction$36.5
237990Other Heavy and Civil Engineering Construction$36.5
Except, Dredging and Surface Cleanup Activities 2 $27.5 2
Subsector 238—Specialty Trade Contractors   
238110Poured Concrete Foundation and Structure Contractors$15.0
238120Structural Steel and Precast Concrete Contractors$15.0
238130Framing Contractors$15.0
238140Masonry Contractors$15.0
238150Glass and Glazing Contractors$15.0
238160Roofing Contractors$15.0
238170Siding Contractors$15.0
238190Other Foundation, Structure, and Building Exterior Contractors$15.0
238210Electrical Contractors and Other Wiring Installation Contractors$15.0
238220Plumbing, Heating, and Air-Conditioning Contractors$15.0
238290Other Building Equipment Contractors$15.0
238310Drywall and Insulation Contractors$15.0
238320Painting and Wall Covering Contractors$15.0
238330Flooring Contractors$15.0
238340Tile and Terrazzo Contractors$15.0
238350Finish Carpentry Contractors$15.0
238390Other Building Finishing Contractors$15.0
238910Site Preparation Contractors$15.0
238990All Other Specialty Trade Contractors$15.0
Except,Building and Property Specialty Trade Services 13 $15.0 13
   
*******   
Sector 44-45—Retail Trade   
(These NAICS codes shall not be used to classify Government acquisitions for supplies. They also shall not be used by Federal government contractors when subcontracting for the acquisition for supplies. The applicable manufacturing NAICS code shall be used to classify acquisitions for supplies. A Wholesale Trade or Retail Trade business concern submitting an offer or a quote on a supply acquisition is categorized as a nonmanufacturer and deemed small if it has 500 or fewer employees and meets the requirements of 13 CFR 121.406.)   
Subsector 441—Motor Vehicle and Parts Dealers   
   
*******   
441120Used Car Dealers$25.0
441210Recreational Vehicle Dealers$32.5
441222Boat Dealers$32.5
441228Motorcycle, ATV, and All Other Motor Vehicle Dealers$32.5
441310Automotive Parts and Accessories Stores$15.0
441320Tire Dealers$15.0
Subsector 442—Furniture and Home Furnishings Stores   
442110Furniture Stores$20.5
442210Floor Covering Stores$7.5
442291Window Treatment Stores$7.5
442299All Other Home Furnishings Stores$20.5
Subsector 443—Electronics and Appliance Stores   
443141Household Appliance Stores$11.0
443142Electronics Stores$32.5
Subsector 444—Building Material and Garden Equipment and Supplies Dealers   
444110Home Centers$38.5
444120Paint and Wallpaper Stores$27.5
444130Hardware Stores$7.5
444190Other Building Material Dealers$20.5
444210Outdoor Power Equipment Stores$7.5
444220Nursery and Garden Centers$11.0
Subsector 445—Food and Beverage Stores   
445110Supermarkets and Other Grocery (except Convenience) Stores$32.5
445120Convenience Stores$29.5
445210Meat Markets$7.5
445220Fish and Seafood Markets$7.5
445230Fruit and Vegetable Markets$7.5
445291Baked Goods Stores$7.5
445292Confectionery and Nut Stores$7.5
445299All Other Specialty Food Stores$7.5
445310Beer, Wine and Liquor Stores$7.5
Subsector 446—Health and Personal Care Stores   
446110Pharmacies and Drug Stores$27.5
446120Cosmetics, Beauty Supplies and Perfume Stores$27.5
446130Optical Goods Stores$20.5
446191Food (Health) Supplement Stores$15.0
446199All Other Health and Personal Care Stores$7.5
Subsector 447—Gasoline Stations   
447110Gasoline Stations with Convenience Stores$29.5
447190Other Gasoline Stations$15.0
Subsector 448—Clothing and Clothing Accessories Stores   
448110Men's Clothing Stores$11.0
448120Women's Clothing Stores$27.5
448130Children's and Infants' Clothing Stores$32.5
448140Family Clothing Stores$38.5
448150Clothing Accessories Stores$15.0
448190Other Clothing Stores$20.5
448210Shoe Stores$27.5
448310Jewelry Stores$15.0
448320Luggage and Leather Goods Stores$27.5
Subsector 451—Sporting Good, Hobby, Book and Music Stores   
451110Sporting Goods Stores$15.0
451120Hobby, Toy and Game Stores$27.5
451130Sewing, Needlework and Piece Goods Stores$27.5
451140Musical Instrument and Supplies Stores$11.0
451211Book Stores$27.5
451212News Dealers and Newsstands$7.5
Subsector 452—General Merchandise Stores   
452111Department Stores (except Discount Department Stores)$32.5
452112Discount Department Stores$29.5
452910Warehouse Clubs and Superstores$29.5
452990All Other General Merchandise Stores$32.5
Subsector 453—Miscellaneous Store Retailers   
453110Florists$7.5
453210Office Supplies and Stationery Stores$32.5
453220Gift, Novelty and Souvenir Stores$7.5
453310Used Merchandise Stores$7.5
453910Pet and Pet Supplies Stores$20.5
453920Art Dealers$7.5
453930Manufactured (Mobile) Home Dealers$15.0
453991Tobacco Stores$7.5
453998All Other Miscellaneous Store Retailers (except Tobacco Stores)$7.5
Subsector 454—Nonstore Retailers   
454111Electronic Shopping$32.5
454112Electronic Auctions$38.5
454113Mail-Order Houses$38.5
454210Vending Machine Operators$11.0
   
*******   
454390Other Direct Selling Establishments$7.5
Sector 48-49—Transportation and Warehousing   
Subsector 481—Air Transportation   
   
*******   
481211 Nonscheduled Chartered Passenger Air Transportation1,500
Except, Offshore Marine Air Transportation Services$30.5
481212 Nonscheduled Chartered Freight Air Transportation1,500
Except, Offshore Marine Air Transportation Services$30.5
481219Other Nonscheduled Air Transportation$15.0
   
*******   
Subsector 484—Truck Transportation   
484110General Freight Trucking, Local$27.5
484121General Freight Trucking, Long-Distance, Truckload$27.5
484122General Freight Trucking, Long-Distance, Less Than Truckload$27.5
484210Used Household and Office Goods Moving$27.5
484220Specialized Freight (except Used Goods) Trucking, Local$27.5
484230Specialized Freight (except Used Goods) Trucking, Long-Distance$27.5
Subsector 485—Transit and Ground Passenger Transportation   
485111Mixed Mode Transit Systems$15.0
485112Commuter Rail Systems$15.0
485113Bus and Other Motor Vehicle Transit Systems$15.0
485119Other Urban Transit Systems$15.0
485210Interurban and Rural Bus Transportation$15.0
485310Taxi Service$15.0
485320Limousine Service$15.0
485410School and Employee Bus Transportation$15.0
485510Charter Bus Industry$15.0
485991Special Needs Transportation$15.0
485999All Other Transit and Ground Passenger Transportation$15.0
Subsector 486—Pipeline Transportation   
   
*******   
486210Pipeline Transportation of Natural Gas$27.5
   
*******   
486990All Other Pipeline Transportation$37.50
Subsector 487—Scenic and Sightseeing Transportation   
487110Scenic and Sightseeing Transportation, Land$7.5
487210Scenic and Sightseeing Transportation, Water$7.5
487990Scenic and Sightseeing Transportation, Other$7.5
Subsector 488—Support Activities for Transportation   
488111Air Traffic Control$32.5
488119Other Airport Operations$32.5
488190Other Support Activities for Air Transportation$32.5
488210Support Activities for Rail Transportation$15.0
488310Port and Harbor Operations$38.5
488320Marine Cargo Handling$38.5
488330Navigational Services to Shipping$38.5
488390Other Support Activities for Water Transportation$38.5
488410Motor Vehicle Towing$7.5
488490Other Support Activities for Road Transportation$7.5
488510Freight Transportation Arrangement 10 $15.0 10
Except, Non-Vessel Owning Common Carriers and Household Goods Forwarders$27.5
488991Packing and Crating$27.5
488999All Other Support Activities for Transportation$7.5
Subsector 491—Postal Service   
491110Postal Service$7.5
Subsector 492—Couriers and Messengers   
   
*******   
492210Local Messengers and Local Delivery$27.5
Subsector 493—Warehousing and Storage   
493110General Warehousing and Storage$27.5
493120Refrigerated Warehousing and Storage$27.5
493130Farm Product Warehousing and Storage$27.5
493190Other Warehousing and Storage$27.5
Sector 51—Information   
Subsector 511—Publishing Industries (except Internet)   
   
*******   
511210Software Publishers$38.5
Subsector 512—Motion Picture and Sound Recording Industries   
512110Motion Picture and Video Production$32.5
512120Motion Picture and Video Distribution$32.0
512131Motion Picture Theaters (except Drive-Ins)$38.5
512132Drive-In Motion Picture Theaters$7.5
512191Teleproduction and Other Postproduction Services$32.0
512199Other Motion Picture and Video Industries$20.5
512210Record Production$7.5
   
*******   
512240Sound Recording Studios$7.5
512290Other Sound Recording Industries$11.0
Subsector 515—Broadcasting (except Internet)   
515111Radio Networks$32.5
515112Radio Stations$38.5
515120Television Broadcasting$38.5
515210Cable and Other Subscription Programming$38.5
Subsector 517—Telecommunications   
   
*******   
517410Satellite Telecommunications$32.5
   
*******   
517919All Other Telecommunications$32.5
Subsector 518—Data Processing, Hosting, and Related Services   
518210Data Processing, Hosting, and Related Services$32.5
Subsector 519—Other Information Services   
519110News Syndicates$27.5
519120Libraries and Archives$15.0
   
*******   
519190All Other Information Services$27.5
Sector 52—Finance and Insurance   
Subsector 522—Credit Intermediation and Related Activities   
522110Commercial Banking 8 $550 million in assets 8
522120Savings Institutions 8 $550 million in assets 8
522130Credit Unions 8 $550 million in assets 8
522190Other Depository Credit Intermediation 8 $550 million in assets 8
522210Credit Card Issuing 8 $550 million in assets 8
522220Sales Financing$38.5
522291Consumer Lending$38.5
522292Real Estate Credit$38.5
522293International Trade Financing$38.5
522294Secondary Market Financing$38.5
522298All Other Nondepository Credit Intermediation$38.5
522310Mortgage and Nonmortgage Loan Brokers$7.5
522320Financial Transactions Processing, Reserve, and Clearinghouse Activities$38.5
522390Other Activities Related to Credit Intermediation$20.5
Subsector 523—Securities, Commodity Contracts, and Other Financial Investments and Related Activities   
523110Investment Banking and Securities Dealing$38.5
523120Securities Brokerage$38.5
523130Commodity Contracts Dealing$38.5
523140Commodity Contracts Brokerage$38.5
523210Securities and Commodity Exchanges$38.5
523910Miscellaneous Intermediation$38.5
523920Portfolio Management$38.5
523930Investment Advice$38.5
523991Trust, Fiduciary and Custody Activities$38.5
523999Miscellaneous Financial Investment Activities$38.5
Subsector 524—Insurance Carriers and Related Activities   
524113Direct Life Insurance Carriers$38.5
524114Direct Health and Medical Insurance Carriers$38.5
   
*******   
524127Direct Title Insurance Carriers$38.5
524128Other Direct Insurance (except Life, Health and Medical) Carriers$38.5
524130Reinsurance Carriers$38.5
524210Insurance Agencies and Brokerages$7.5
524291Claims Adjusting$20.5
524292Third Party Administration of Insurance and Pension Funds$32.5
524298All Other Insurance Related Activities$15.0
Subsector 525—Funds, Trusts and Other Financial Vehicles   
525110Pension Funds$32.5
525120Health and Welfare Funds$32.5
525190Other Insurance Funds$32.5
525910Open-End Investment Funds$32.5
525920Trusts, Estates, and Agency Accounts$32.5
525990Other Financial Vehicles$32.5
Sector 53—Real Estate and Rental and Leasing   
Subsector 531—Real Estate   
531110Lessors of Residential Buildings and Dwellings 9 $27.5 9
531120Lessors of Nonresidential Buildings (except Miniwarehouses) 9 $27.5 9
531130Lessors of Miniwarehouses and Self Storage Units 9 $27.5 9
531190Lessors of Other Real Estate Property 9 $27.5 9
531210Offices of Real Estate Agents and Brokers 10 $7.5 10
531311Residential Property Managers$7.5
531312Nonresidential Property Managers$7.5
531320Offices of Real Estate Appraisers$7.5
531390Other Activities Related to Real Estate$7.5
Subsector 532—Rental and Leasing Services   
532111Passenger Car Rental$38.5
532112Passenger Car Leasing$38.5
532120Truck, Utility Trailer, and RV (Recreational Vehicle) Rental and Leasing$38.5
532210Consumer Electronics and Appliances Rental$38.5
532220Formal Wear and Costume Rental$20.5
532230Video Tape and Disc Rental$27.5
532291Home Health Equipment Rental$32.5
532292Recreational Goods Rental$7.5
532299All Other Consumer Goods Rental$7.5
532310General Rental Centers$7.5
532411Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing$32.5
532412Construction, Mining and Forestry Machinery and Equipment Rental and Leasing$32.5
532420Office Machinery and Equipment Rental and Leasing$32.5
532490Other Commercial and Industrial Machinery and Equipment Rental and Leasing$32.5
Subsector 533—Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)   
533110Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)$38.5
Sector 54—Professional, Scientific and Technical Services   
Subsector 541—Professional, Scientific and Technical Services   
541110Offices of Lawyers$11.0
541191Title Abstract and Settlement Offices$11.0
541199All Other Legal Services$11.0
541211Offices of Certified Public Accountants$20.5
541213Tax Preparation Services$20.5
541214Payroll Services$20.5
541219Other Accounting Services$20.5
541310Architectural Services$7.5
541320Landscape Architectural Services$7.5
541330Engineering Services$15.0
Except, Military and Aerospace Equipment and Military Weapons$38.5
Except, Contracts and Subcontracts for Engineering Services Awarded Under the National Energy Policy Act of 1992$38.5
Except, Marine Engineering and Naval Architecture$38.5
541340Drafting Services$7.5
541350Building Inspection Services$7.5
541360Geophysical Surveying and Mapping Services$15.0
541370Surveying and Mapping (except Geophysical) Services$15.0
541380Testing Laboratories$15.0
541410Interior Design Services$7.5
541420Industrial Design Services$7.5
541430Graphic Design Services$7.5
541490Other Specialized Design Services$7.5
541511Custom Computer Programming Services$27.5
541512Computer Systems Design Services$27.5
541513Computer Facilities Management Services$27.5
541519Other Computer Related Services$27.5
Except, Information Technology Value Added Resellers 18 150 18
541611Administrative Management and General Management Consulting Services$15.0
541612Human Resources Consulting Services$15.0
541613Marketing Consulting Services$15.0
541614Process, Physical Distribution and Logistics Consulting Services$15.0
541618Other Management Consulting Services$15.0
541620Environmental Consulting Services$15.0
541690Other Scientific and Technical Consulting Services$15.0
   
*******   
541720Research and Development in the Social Sciences and Humanities$20.5
541810Advertising Agencies 10 $15.0 10
541820Public Relations Agencies$15.0
541830Media Buying Agencies$15.0
541840Media Representatives$15.0
541850Outdoor Advertising$15.0
541860Direct Mail Advertising$15.0
541870Advertising Material Distribution Services$15.0
541890Other Services Related to Advertising$15.0
541910Marketing Research and Public Opinion Polling$15.0
541921Photography Studios, Portrait$7.5
541922Commercial Photography$7.5
541930Translation and Interpretation Services$7.5
541940Veterinary Services$7.5
541990All Other Professional, Scientific and Technical Services$15.0
Sector 55—Management of Companies and Enterprises   
Subsector 551—Management of Companies and Enterprises   
551111Offices of Bank Holding Companies$20.5
551112Offices of Other Holding Companies$20.5
Sector 56—Administrative and Support, Waste Management and Remediation Services   
Subsector 561—Administrative and Support Services   
561110Office Administrative Services$7.5
561210Facilities Support Services 12 $38.5 12
561311Employment Placement Agencies$27.5
561312Executive Search Services$27.5
561320Temporary Help Services$27.5
561330Professional Employer Organizations$27.5
561410Document Preparation Services$15.0
561421Telephone Answering Services$15.0
561422Telemarketing Bureaus and Other contact Centers$15.0
561431Private Mail Centers$15.0
561439Other Business Service Centers (including Copy Shops)$15.0
561440Collection Agencies$15.0
561450Credit Bureaus$15.0
561491Repossession Services$15.0
561492Court Reporting and Stenotype Services$15.0
561499All Other Business Support Services$15.0
561510Travel Agencies 10 $20.5 10
561520Tour Operators 10 $20.5 10
561591Convention and Visitors Bureaus$20.5
561599All Other Travel Arrangement and Reservation Services$20.5
561611Investigation Services$20.5
561612Security Guards and Patrol Services$20.5
561613Armored Car Services$20.5
561621Security Systems Services (except Locksmiths)$20.5
561622Locksmiths$20.5
561710Exterminating and Pest Control Services$11.0
561720Janitorial Services$18.0
561730Landscaping Services$7.5
561740Carpet and Upholstery Cleaning Services$5.5
561790Other Services to Buildings and Dwellings$7.5
561910Packaging and Labeling Services$11.0
561920Convention and Trade Show Organizers 10 $11.0 10
561990All Other Support Services$11.0
Subsector 562—Waste Management and Remediation Services   
562111Solid Waste Collection$38.5
562112Hazardous Waste Collection$38.5
562119Other Waste Collection$38.5
562211Hazardous Waste Treatment and Disposal$38.5
562212Solid Waste Landfill$38.5
562213Solid Waste Combustors and Incinerators$38.5
562219Other Nonhazardous Waste Treatment and Disposal$38.5
562910Remediation Services$20.5
Except, Environmental Remediation Services 14 500 14
562920Materials Recovery Facilities$20.5
562991Septic Tank and Related Services$7.5
562998All Other Miscellaneous Waste Management Services$7.5
Sector 61—Educational Services   
Subsector 611—Educational Services   
611110Elementary and Secondary Schools$11.0
611210Junior Colleges$20.5
611310Colleges, Universities and Professional Schools$27.5
611410Business and Secretarial Schools$7.5
611420Computer Training$11.0
611430Professional and Management Development Training$11.0
611511Cosmetology and Barber Schools$7.5
611512Flight Training$27.5
611513Apprenticeship Training$7.5
611519Other Technical and Trade Schools$15.0
Except, Job Corps Centers 16 $38.5 16
611610Fine Arts Schools$7.5
611620Sports and Recreation Instruction$7.5
611630Language Schools$11.0
611691Exam Preparation and Tutoring$7.5
611692Automobile Driving Schools$7.5
611699All Other Miscellaneous Schools and Instruction$11.0
611710Educational Support Services$15.0
Sector 62—Health Care and Social Assistance   
Subsector 621—Ambulatory Health Care Services   
621111Offices of Physicians (except Mental Health Specialists)$11.0
621112Offices of Physicians, Mental Health Specialists$11.0
621210Offices of Dentists$7.5
621310Offices of Chiropractors$7.5
621320Offices of Optometrists$7.5
621330Offices of Mental Health Practitioners (except Physicians)$7.5
621340Offices of Physical, Occupational and Speech Therapists and Audiologists$7.5
621391Offices of Podiatrists$7.5
621399Offices of All Other Miscellaneous Health Practitioners$7.5
621410Family Planning Centers$11.0
621420Outpatient Mental Health and Substance Abuse Centers$15.0
621491HMO Medical Centers$32.5
621492Kidney Dialysis Centers$38.5
621493Freestanding Ambulatory Surgical and Emergency Centers$15.0
621498All Other Outpatient Care Centers$20.5
621511Medical Laboratories$32.5
621512Diagnostic Imaging Centers$15.0
621610Home Health Care Services$15.0
621910Ambulance Services$15.0
621991Blood and Organ Banks$32.5
621999All Other Miscellaneous Ambulatory Health Care Services$15.0
Subsector 622—Hospitals   
622110General Medical and Surgical Hospitals$38.5
622210Psychiatric and Substance Abuse Hospitals$38.5
622310Specialty (except Psychiatric and Substance Abuse) Hospitals$38.5
Subsector 623—Nursing and Residential Care Facilities   
623110Nursing Care Facilities (Skilled Nursing Facilities)$27.5
623210Residential Intellectual and Developmental Disability Facilities$15.0
623220Residential Mental Health and Substance Abuse Facilities$15.0
623311Continuing Care Retirement Communities$27.5
623312Assisted Living Facilities for the Elderly$11.0
623990Other Residential Care Facilities$11.0
Subsector 624—Social Assistance   
624110Child and Youth Services$11.0
624120Services for the Elderly and Persons with Disabilities$11.0
624190Other Individual and Family Services$11.0
624210Community Food Services$11.0
624221Temporary Shelters$11.0
624229Other Community Housing Services$15.0
624230Emergency and Other Relief Services$32.5
624310Vocational Rehabilitation Services$11.0
624410Child Day Care Services$7.5
Sector 71—Arts, Entertainment and Recreation   
Subsector 711—Performing Arts, Spectator Sports and Related Industries   
711110Theater Companies and Dinner Theaters$20.5
711120Dance Companies$11.0
711130Musical Groups and Artists$11.0
711190Other Performing Arts Companies$27.5
711211Sports Teams and Clubs$38.5
711212Race Tracks$38.5
711219Other Spectator Sports$11.0
711310Promoters of Performing Arts, Sports and Similar Events with Facilities$32.5
711320Promoters of Performing Arts, Sports and Similar Events without Facilities$15.0
711410Agents and Managers for Artists, Athletes, Entertainers and Other Public Figures$11.0
711510Independent Artists, Writers, and Performers$7.5
Subsector 712—Museums, Historical Sites and Similar Institutions   
712110Museums$27.5
712120Historical Sites$7.5
712130Zoos and Botanical Gardens$27.5
712190Nature Parks and Other Similar Institutions$7.5
Subsector 713—Amusement, Gambling and Recreation Industries   
713110Amusement and Theme Parks$38.5
713120Amusement Arcades$7.5
713210Casinos (except Casino Hotels)$27.5
713290Other Gambling Industries$32.5
713910Golf Courses and Country Clubs$15.0
713920Skiing Facilities$27.5
713930Marinas$7.5
713940Fitness and Recreational Sports Centers$7.5
713950Bowling Centers$7.5
713990All Other Amusement and Recreation Industries$7.5
Sector 72—Accommodation and Food Services   
Subsector 721—Accommodation   
721110Hotels (except Casino Hotels) and Motels$32.5
721120Casino Hotels$32.5
721191Bed-and-Breakfast Inns$7.5
721199All Other Traveler Accommodation$7.5
721211RV (Recreational Vehicle) Parks and Campgrounds$7.5
721214Recreational and Vacation Camps (except Campgrounds)$7.5
721310Rooming and Boarding Houses$7.5
Subsector 722—Food Services and Drinking Places   
722310Food Service Contractors$38.5
722320Caterers$7.5
722330Mobile Food Services$7.5
722410Drinking Places (Alcoholic Beverages)$7.5
722511Full-Service Restaurants$7.5
722513Limited-Service Restaurants$11.0
722514Cafeterias, Grill Buffets, and Buffets$27.5
722515Snack and Nonalcoholic Beverage Bars$7.5
Sector 81—Other Services (Except Public Administration)   
Subsector 811—Repair and Maintenance   
811111General Automotive Repair$7.5
811112Automotive Exhaust System Repair$7.5
811113Automotive Transmission Repair$7.5
811118Other Automotive Mechanical and Electrical Repair and Maintenance$7.5
811121Automotive Body, Paint and Interior Repair and Maintenance$7.5
811122Automotive Glass Replacement Shops$11.0
811191Automotive Oil Change and Lubrication Shops$7.5
811192Car Washes$7.5
811198All Other Automotive Repair and Maintenance$7.5
811211Consumer Electronics Repair and Maintenance$7.5
811212Computer and Office Machine Repair and Maintenance$27.5
811213Communication Equipment Repair and Maintenance$11.0
811219Other Electronic and Precision Equipment Repair and Maintenance$20.5
811310Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance$7.5
811411Home and Garden Equipment Repair and Maintenance$7.5
811412Appliance Repair and Maintenance$15.0
811420Reupholstery and Furniture Repair$7.5
811430Footwear and Leather Goods Repair$7.5
811490Other Personal and Household Goods Repair and Maintenance$7.5
Subsector 812—Personal and Laundry Services   
812111Barber Shops$7.5
812112Beauty Salons$7.5
812113Nail Salons$7.5
812191Diet and Weight Reducing Centers$20.5
812199Other Personal Care Services$7.5
812210Funeral Homes and Funeral Services$7.5
812220Cemeteries and Crematories$20.5
812310Coin-Operated Laundries and Drycleaners$7.5
812320Drycleaning and Laundry Services (except Coin-Operated)$5.5
812331Linen Supply$32.5
812332Industrial Launderers$38.5
812910Pet Care (except Veterinary) Services$7.5
812921Photofinishing Laboratories (except One-Hour)$20.5
812922One-Hour Photofinishing$15.0
812930Parking Lots and Garages$38.5
812990All Other Personal Services$7.5
Subsector 813—Religious, Grantmaking, Civic, Professional and Similar Organizations   
813110Religious Organizations$7.5
813211Grantmaking Foundations$32.5
813212Voluntary Health Organizations$27.5
813219Other Grantmaking and Giving Services$38.5
813311Human Rights Organizations$27.5
813312Environment, Conservation and Wildlife Organizations$15.0
813319Other Social Advocacy Organizations$7.5
813410Civic and Social Organizations$7.5
813910Business Associations$7.5
813920Professional Organizations$15.0
813930Labor Unions and Similar Labor Organizations$7.5
813940Political Organizations$7.5
813990Other Similar Organizations (except Business, Professional, Labor, and Political Organizations)$7.5
   
*******   

Footnotes

* * * * *

2. NAICS code 237990—Dredging: To be considered small for purposes of Government procurement, a firm must perform at least 40 percent of the volume dredged with its own equipment or equipment owned by another small dredging concern.

* * * * *

8. NAICS codes 522110, 522120, 522130, 522190, and 522210—A financial institution's assets are determined by averaging the assets reported on its four quarterly financial statements for the preceding year. “Assets” for the purposes of this size standard means the assets defined according to the Federal Financial Institutions Examination Council 041 call report form for NAICS codes 522110, 522120, 522190, and 522210 and the National Credit Union Administration 5300 call report form for NAICS code 522130.

9. NAICS codes 531110, 531120, 531130, and 531190—Leasing of Building Space to the Federal Government by Owners: For Government procurement, a size standard of $38.5 million in gross receipts applies to the owners of building space leased to the Federal Government. The standard does not apply to an agent.

10. NAICS codes 488510 (part), 531210, 541810, 561510, 561520, and 561920—As measured by total revenues, but excluding funds received in trust for an unaffiliated third party, such as bookings or sales subject to commissions. The commissions received are included as revenue.

* * * * *

12. NAICS code 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 contractors 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 contractors activities are considered a single activity and classified as “Building and Property Specialty Trade Services. Since” Building and Property Specialty Trade Services” is only one activity, two additional activities of separate NAICS industries are required for a procurement to be classified as “Facilities Support Services.”

13. NAICS 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.

14. NAICS code 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 percent 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 or security and site closeouts), although the general purpose of the procurement need not necessarily include remedial actions. 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 components of NAICS codes with separate and distinct size standards. These activities may include, but are not limited to, separate activities in industries such as: Heavy Construction; Special Trade Contractors; Engineering Services; Architectural Services; Management Consulting Services; Hazardous and Other Waster 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.

15. Subsector 483—Water Transportation—Offshore Marine Services: The applicable size standard shall be $30.5 million 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 or at sea.

16. NAICS 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.

17. NAICS 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.

18. NAICS 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-vendorcomputer 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. Amend § 121.301 by revising paragraphs (c)(2) introductory text and (d), to read as follows:

§ 121.301 What size standards are applicable to financial assistance programs?

* * * * *

(c) * * *

(2) Including its affiliates, tangible net worth not in excess of $19.5 million, and average net income after Federal income taxes (excluding any carry-over losses) for the preceding two completed fiscal years not in excess of $6.5 million. If the applicant is not required by law to pay Federal income taxes at the enterprise level, but is required to pass income through to its shareholders, partners, beneficiaries, or other equitable owners, the applicant's “net income after Federal income taxes” will be its net income reduced by an amount computed as follows:

* * * * *

(d) For Surety Bond Guarantee assistance—a business concern, combined with its affiliates, must meet the size standard for the primary industry in which such business concern, combined with its affiliates, is engaged.

* * * * *

4. Amend § 121.302 by revising paragraph (c) to read as follows:

§ 121.302 When does SBA determine the size status of the applicant?

* * * * *

(c) For disaster loan assistance (other than physical disaster loans), size status is determined as of the date the disaster commenced, as set forth in the Disaster Declaration. For pre-disaster mitigation loans, size status is determined as of the date SBA accepts a complete Pre-Disaster Mitigation Small Business Loan Application for processing. Refer to § 123.408 of this chapter to find out what SBA considers to be a complete Pre-Disaster Mitigation Small Business Loan Application.

* * * * *

5. Amend § 121.502 by revising paragraph (a)(2) to read as follows:

§ 121.502 What size standards are applicable to programs for sales and leases of Government property?

(a) * * *

(2) A concern not primarily engaged in manufacturing is small for sales or leases of Government property if it has annual receipts not exceeding $7.5 million.

* * * * *

6. Amend § 121.512 by revising paragraph (b) to read as follows:

§ 121.512 What is the size standard for stockpile purchases?

* * * * *

(b) Its annual receipts, together with its affiliates, do not exceed $62.5 million.

Dated: May 21, 2014.
Maria Contreras-Sweet,
Administrator.
[FR Doc. 2014-12868 Filed 6-11-14; 8:45 am]
BILLING CODE 8205-01-P
 
 
Comment Period Closed
Aug 11 2014, at 11:59 PM ET
ID: SBA-2014-0009-0001
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Date Posted: Jun 12, 2014
RIN: 3245-AG60
CFR: 13 CFR Part 121
Federal Register Number: 2014-12868
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Related Dockets: SBA-2009-0008
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