Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Proposed Rules 14323 

List of Subjects in 7 CFR Part 319 

Coffee, Cotton, Fruits, Imports, Logs, 

Nursery stock, Plant diseases and pests, 

Quarantine, Reporting and 

recordkeeping requirements, Rice, 

Vegetables. 

Accordingly, we propose to amend 7 

CFR part 319 as follows: 

PART 319—FOREIGN QUARANTINE 

NOTICES 

1. The authority citation for part 319 

continues to read as follows: 

Authority: 7 U.S.C. 450, 7701–7772, and 

7781–7786; 21 U.S.C. 136 and 136a; 7 CFR 

2.22, 2.80, and 371.3. 

2. A new § 319.56–51 is added to read 

as follows: 

§ 319.56–51 Fresh figs and pomegranates 

from Chile. 

Fresh figs (Ficus carica) and fresh 

pomegranates (Punica granatum) may 

be imported into the continental United 

States from Chile under the following 

conditions: 

(a) Production site registration. The 

production site where the fruit is grown 

must be registered with the national 

plant protection organization (NPPO) of 

Chile. Harvested figs and pomegranates 

must be placed in field cartons or 

containers that are marked to show the 

official registration number of the 

production site. Registration must be 

renewed annually. 

(b) Low-prevalence production site 

certification. The fruit must originate 

from a low-prevalence production site 

to be imported under the conditions in 

this section. Between 1 and 30 days 

prior to harvest, random samples of fruit 

must be collected from each registered 

production site under the direction of 

the NPPO of Chile. These samples must 

undergo a pest detection and evaluation 

method as follows: The fruit must be 

washed using a flushing method, placed 

in a 20-mesh sieve on top of a 200-mesh 

sieve, sprinkled with a liquid soap and 

water solution, washed with water at 

high pressure, and washed with water at 

low pressure. The process must then be 

repeated. The contents of the 200-mesh 

sieve must then be placed on a petri 

dish and analyzed for the presence of 

live Brevipalpus chilensis mites. If a 

single live B. chilensis mite is found, the 

production site will not qualify for 

certification as a low-prevalence 

production site. Each production site 

may have only one opportunity per 

season to qualify as a low-prevalence 

production site, and certification of low 

prevalence will be valid for one harvest 

season only. The NPPO of Chile will 

present a list of certified production 

sites to APHIS. 

(c) Post-harvest processing. After 

harvest, all damaged or diseased fruits 

must be culled at the packinghouse and 

must be packed into new, clean boxes, 

crates, or other APHIS-approved 

packing containers. Each container in 

which the fruit is packed must have a 

label identifying the registered 

production site where the fruit 

originated and the packing shed where 

it was packed. 

(d) Phytosanitary inspection. Fruit 

must be inspected in Chile at an APHISapproved inspection site under the 

direction of APHIS inspectors in 

coordination with the NPPO of Chile 

following any post-harvest processing. 

A biometric sample must be drawn and 

examined from each consignment. Figs 

and pomegranates in any consignment 

may be shipped to the continental 

United States under the conditions of 

this section only if the consignment 

passes inspection as follows: 

(1) Fruit presented for inspection 

must be identified in the shipping 

documents accompanying each lot of 

fruit to specify the production site or 

sites in which the fruit was produced 

and the packing shed or sheds in which 

the fruit was processed. This 

identification must be maintained until 

the fruit is released for entry into the 

United States. 

(2) A biometric sample of the boxes, 

crates, or other APHIS-approved 

packing containers from each 

consignment will be selected by the 

NPPO of Chile, and the fruit from these 

boxes, crates, or other APHIS-approved 

packing containers will be visually 

inspected for quarantine pests. A 

portion of the fruit must be washed with 

soapy water and the collected filtrate 

must be microscopically examined for 

B. chilensis. If a single live B. chilensis 

mite is found during the inspection 

process, the certified low-prevalence 

production site where the fruit was 

grown will lose its certification. 

(e) Phytosanitary certificate. Each 

consignment of fresh figs or 

pomegranates must be accompanied by 

a phytosanitary certificate issued by the 

NPPO of Chile that contains an 

additional declaration stating that the 

fruit in the consignment was inspected 

and found free of Brevipalpus chilensis 

based on field and packinghouse 

inspections. 

Done in Washington, DC this 9th day of 

March 2011. 

Kevin Shea, 

Acting Administrator, Animal and Plant 

Health Inspection Service. 

[FR Doc. 2011–6040 Filed 3–15–11; 8:45 am] 

BILLING CODE 3410–34–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 121 

RIN 3245–AG07 

Small Business Size Standards: 

Professional, Scientific and Technical 

Services 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Proposed rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA) proposes to 

increase small business size standards 

for 35 industries and one sub-industry 

in North American Industry 

Classification System (NAICS) Sector 

54, Professional, Scientific and 

Technical Services and one industry in 

NAICS Sector 81, Other Services. As 

part of its ongoing comprehensive 

review of all size standards, SBA has 

evaluated 45 industries and three subindustries in NAICS Sector 54 and one 

industry in NAICS Sector 81 to 

determine whether the existing size 

standards should be retained or revised. 

This proposed rule is one of a series of 

proposals that will examine size 

standards of industries grouped by an 

NAICS Sector. SBA has issued a White 

Paper entitled ‘‘Size Standards 

Methodology’’ and published in the 

October 21, 2009 issue of the Federal 

Register a notice that ‘‘Size Standards 

Methodology’’ is available on its Web 

site at http://www.sba.gov/size for 

public review and comments. The ‘‘Size 

Standards Methodology’’ White Paper 

explains how SBA establishes, reviews 

and modifies its receipts based and 

employee based small business size 

standards. In this proposed rule, SBA 

has applied its methodology that 

pertains to establishing, reviewing and 

modifying a receipts based size 

standard. 

DATES: SBA must receive comments to 

this proposed rule on or before May 16, 

2011. 

ADDRESSES: You may submit comments, 

identified by RIN 3245–AG07 by one of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments; 

or 

• Mail/Hand Delivery/Courier: Khem 

R. Sharma, PhD, Chief, Size Standards 

Division, 409 Third Street, SW., Mail 

Code 6530, Washington, DC 20416. 

SBA will post all comments on 

http://www.regulations.gov. If you wish 

to submit confidential business 

information (CBI) as defined in the User 

Notice at http://www.regulations.gov, 


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14324 Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Proposed Rules 

please submit the information by mail to 

U.S. Small Business Administration, 

Khem R. Sharma, PhD, Chief, Size 

Standards Division, 409 Third Street, 

SW., Mail Code 6530, Washington, DC 

20416, or by e-mail 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 the 

information and make the final 

determination of whether it will publish 

the information or not. 

FOR FURTHER INFORMATION CONTACT: 

Khem R. Sharma, PhD, Chief, Size 

Standards Division, (202) 205–6618 or 

sizestandards@sba.gov. 

SUPPLEMENTARY INFORMATION: To 

determine eligibility for Federal 

government small business assistance 

programs, SBA establishes small 

business size definitions (referred to as 

size standards) for most private sector 

industries in the U.S. SBA’s existing 

size standards use two primary 

measures of business size—receipts and 

number of employees. Financial assets, 

electric output and refining capacity are 

used as size measures for a few 

specialized industries. In addition, 

SBA’s Small Business Investment 

Company (SBIC) and the Certified 

Development Company (CDC) Programs 

determine small business eligibility 

using either the industry based size 

standards or net worth and net income 

based size standards. Currently, SBA’s 

size standards consist of 42 different 

levels, covering 1,141 NAICS industries 

and 18 sub-industry activities. Thirtyone of these size levels are based on 

average annual receipts, eight are based 

on number of employees and three are 

based on other measures. In addition, 

SBA has established 11 other size 

standards for its financial and 

procurement programs. 

Over the years, SBA has received 

comments that its size standards have 

not kept up with changes in the 

economy and, in particular, that they do 

not reflect the changes in the Federal 

contracting marketplace. The last 

overall review of size standards 

occurred during the late 1970s and early 

1980s. Since then, most reviews of size 

standards have been limited to a few 

specific industries in response to 

requests from the public and Federal 

agencies. SBA also makes periodic 

inflation adjustments to its monetary 

based size standards. The latest inflation 

adjustment to size standards was 

published in the Federal Register on 

July 18, 2008 (73 FR 41237). 

SBA recognizes that changes in 

industry structure and the Federal 

marketplace over time have rendered 

existing size standards for some 

industries no longer supportable by 

current data. Accordingly, SBA has 

begun a comprehensive review of its 

size standards to ensure that existing 

size standards have supportable bases 

and to revise them when necessary. 

In addition, on September 27, 2010 

the President of the United States signed 

the Small Business Jobs Act of 2010 

(Jobs Act). The Jobs Act directs SBA to 

conduct a detailed review of all size 

standards and to make appropriate 

adjustments to reflect market 

conditions. Specifically, the Jobs Act 

requires SBA to conduct a detailed 

review of at least one-third of all size 

standards during every 18-month period 

from the date of its enactment and do a 

complete review of all size standards 

not less frequently than once every 5 

years thereafter. Reviewing existing 

small business size standards and 

making appropriate adjustments based 

on current data is also consistent with 

Executive Order 13563 on improving 

regulation and regulatory review. 

Rather than review all size standards 

at one time, SBA has adopted a more 

manageable approach to reviewing a 

group of related industries within an 

NAICS Sector. Except for 

manufacturing, an NAICS Sector 

generally consists of 25 to 75 industries. 

Once SBA completes its review of size 

standards for industries in an NAICS 

Sector, it will issue a proposed rule to 

revise the size standards for industries 

whose data support doing so. 

Below is a discussion of SBA’s size 

standards methodology for establishing 

receipts based size standards that was 

applied to this proposed rule, including 

analyses of industry structure, Federal 

procurement trends and other factors for 

industries reviewed in this proposed 

rule and the impact of the proposed 

revisions to size standards on Federal 

small business assistance. 

Size Standards Methodology 

SBA has recently developed a ‘‘Size 

Standards Methodology’’ that it uses for 

developing, reviewing and modifying 

size standards when necessary. SBA has 

published the document on its Web site 

at http://www.sba.gov/size. SBA does 

not apply all features of its ‘‘Size 

Standards Methodology’’ to all 

industries because not all are 

appropriate. For example, since this 

proposed rule covers all industries with 

receipts based standards in NAICS 

Sector 54, the methodology described 

here mostly applies to establishing 

receipts based standards. However, SBA 

makes the methodology available in its 

entirety for parties who have an interest 

in SBA’s overall approach to 

establishing, evaluating and modifying 

small business size standards. SBA 

always explains its analysis in 

individual proposed and final rules 

relating to size standards for specific 

industries. 

SBA welcomes comments from the 

public on a number of issues regarding 

its ‘‘Size Standards Methodology,’’ such 

as suggestions on alternative approaches 

to establishing, reviewing and 

modifying size standards; whether there 

are alternative or additional factors or 

data sources that SBA should consider; 

whether SBA’s approach to small 

business size standards makes sense in 

the current economic environment; 

whether SBA’s using anchor size 

standards is appropriate in the current 

economy; whether there are gaps in 

SBA’s methodology because of the lack 

of comprehensive data; and whether 

there are other facts or issues that SBA 

should consider in its methodology. 

Comments on the ‘‘Size Standards 

Methodology’’ should be submitted via 

(1) the Federal eRulemaking Portal: 

http://www.regulations.gov; the docket 

number is SBA–2009–0008. Follow the 

instructions for submitting comments; 

or (2) Mail/Hand Delivery/Courier: 

Khem R. Sharma, PhD, Chief, Size 

Standards Division, 409 Third Street, 

SW., Mail Code 6530, Washington, DC 

20416. As with comments received to 

this proposed rule, SBA will post all 

comments on ‘‘Size Standards 

Methodology’’ on http:// 

www.regulations.gov. As of March 16, 

2011, SBA has received two comments 

on ‘‘Size Standards Methodology.’’ The 

comments have been published and are 

available to the public at http:// 

www.regulations.gov. SBA continues to 

welcome comments on its methodology 

from interested parties. 

Congress has authorized SBA’s 

Administrator to establish small 

business size standards. 15 U.S.C. 

632(a)(2). Section 3(a)(3) of the Small 

Business Act (15 U.S.C. 632(a)(3)) states 

that ‘‘* * * the [SBA] Administrator 

shall ensure that the size standard varies 

from industry to industry to the extent 

necessary to reflect the differing 

characteristics of the various industries 

and consider other factors deemed to be 

relevant by the Administrator.’’ 

Accordingly, the economic structure of 

an industry serves as the underlying 

basis for developing and modifying 

small business size standards. SBA 

identifies the small business segment of 

an industry by examining data on the 

economic characteristics defining the 

industry structure itself (as described 

below). In addition to analyzing an 

industry’s structure, SBA considers 


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Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Proposed Rules 14325 

current economic conditions, together 

with its own mission, program 

objectives, the Administration’s current 

policies, suggestions from industry 

groups and Federal Agencies, and 

public comments on the proposed rule 

when it establishes small business size 

standards. SBA also examines whether 

a size standard based on industry and 

other relevant data successfully 

excludes businesses that are dominant 

in the industry. Below is a discussion 

on SBA’s analysis of the economic 

characteristics of each industry 

reviewed in this proposed rule, the 

impact of proposed size standards 

revisions on SBA programs and on 

Federal procurement programs and 

whether a revised size standard 

excludes dominant firms in the industry 

from being considered small. This 

proposed rule affords the public an 

opportunity to review and comment on 

the data and methodology SBA uses to 

evaluate and revise a size standard. 

Industry Analysis 

For the ongoing comprehensive size 

standards review, SBA has established 

three ‘‘base’’ or ‘‘anchor’’ size standards 

that apply to most industries—$7.0 

million in average annual receipts for 

industries that have receipts based size 

standards, 500 employees for 

manufacturing and other industries that 

have employee based size standards 

(except for Wholesale Trade) and 100 

employees for industries in the 

Wholesale Trade Sector. SBA 

established 500 employees as the anchor 

size standard for the manufacturing 

industries at its inception in 1953. 

Shortly thereafter SBA established $1 

million in average annual receipts as the 

anchor size standard for the 

nonmanufacturing industries. The 

receipts based anchor size standard has 

been adjusted periodically for inflation. 

Over the years, SBA has increased the 

anchor for inflation, which stands at 

$7.0 million today. Since 1986, all 

industries in the Wholesale Trade 

Sector have had the 100 employee size 

standard for non-procurement SBA 

programs. For Federal procurement 

purposes, the size standard for all 

industries in both the Wholesale Trade 

(NAICS Sector 42) and the Retail Trade 

(NAICS Sector 44–45) is 500 employees 

under the SBA’s nonmanufacturer rule. 

13 CFR 121.406(b). 

These long standing anchor size 

standards have gained legitimacy 

through practice and general public 

acceptance. An anchor size standard is 

neither a minimum nor a maximum. It 

is a common size standard for a large 

number of industries that have similar 

economic characteristics and serves as a 

reference point in evaluating size 

standards for individual industries. SBA 

uses the anchor in lieu of trying to 

establish a unique small business size 

standard for each industry. Otherwise, 

theoretically, the number of size 

standards might be as high as the 

number of industries at the 6-digit 

NAICS level (1,141) for which SBA 

establishes size standards. The data SBA 

analyzes are generally static, but the 

U.S. economy is not. Hence, absolute 

precision is impossible. Based on 

historical but static data, therefore, SBA 

presumes an anchor size standard is 

appropriate for a particular industry 

unless that industry displays economic 

characteristics that are considerably 

different from those of others with the 

same anchor size standard. 

When evaluating a size standard, SBA 

compares the economic characteristics 

of the specific industry under review to 

the average characteristics of industries 

with one of the three anchor size 

standards (referred to as ‘‘anchor 

comparison group’’). This allows SBA to 

assess the industry structure and to 

determine whether the industry is 

appreciably different from the other 

industries in the anchor comparison 

group. If the characteristics of a specific 

industry under review are similar to the 

average characteristics of the anchor 

comparison group, the anchor size 

standard is considered appropriate for 

that industry. SBA may consider 

adopting a size standard below the 

anchor when (1) all or most of the 

industry characteristics are significantly 

smaller than the average characteristics 

of the anchor comparison group, or (2) 

other industry considerations strongly 

suggest that the anchor size standard 

would be an unreasonably high size 

standard for the industry. 

If the specific industry’s 

characteristics are significantly higher 

than those of the anchor comparison 

group, a size standard higher than the 

anchor size standard may be 

appropriate. The larger the differences 

are between the characteristics of the 

industry under review and those in the 

anchor comparison group, the larger 

will be the difference between the 

appropriate industry size standard and 

the anchor size standard. For industries 

with receipts based size standards, 

including those in NAICS Sector 54 that 

are reviewed in this proposed rule, SBA 

has developed a second comparison 

group consisting of industries with the 

highest levels of receipts based size 

standards. To determine the level of a 

size standard above the anchor size 

standard, SBA analyzes the 

characteristics of this second 

comparison group. The size standards 

for this group of industries range from 

$23 million to $35.5 million in average 

receipts, with the weighted average size 

standard for the group being $29 

million. SBA refers to this comparison 

group as the ‘‘higher level receipts based 

size standard group.’’ 

The primary factors that SBA 

evaluates when analyzing the structural 

characteristics of an industry include 

average firm size, startup costs and 

entry barriers, industry competition and 

distribution of firms by size. 13 CFR 

121.102(a) and (b). As an additional 

factor, SBA evaluates the possible 

impact that revising size standards 

might have on Federal contracting 

assistance to small businesses. These 

five factors are generally the most 

important ones for establishing or 

revising a size standard for an industry. 

However, SBA will also consider and 

evaluate other information that it 

believes is relevant to a particular 

industry (such as technological changes, 

industry growth trends, SBA financial 

assistance and other program objectives, 

etc.). SBA also considers possible 

impacts of size standard revisions on 

eligibility for Federal small business 

assistance, current economic conditions 

and the Administration’s policies. 

Public comments on a proposed size 

standard rule also provide important 

additional information. SBA thoroughly 

reviews all public comments on 

proposed rules and makes adjustments 

to proposed size standards if necessary 

before making a final decision on a 

revised size standard. Below is a brief 

description of each of the five primary 

factors that SBA has evaluated in each 

industry in NAICS Sector 54 being 

reviewed in this proposed rule. A more 

detailed description of this analysis is 

provided in the ‘‘SBA Size Standard 

Methodology’’ White Paper, available on 

its Web site at http://www.sba.gov/size. 

1. Average firm size. SBA computes 

two measures of average firm size: 

Simple average firm size and weighted 

average firm size. For industries with 

receipts based size standards the simple 

average firm size is the total receipts of 

an industry divided by the total number 

of firms in that industry. The weighted 

average firm size is the sum of weighted 

simple average firm sizes in different 

receipts size classes, where weights are 

the shares of total industry receipts for 

respective size classes. The simple 

average firm size weighs all firms within 

an industry equally regardless of their 

size. The weighted average overcomes 

that limitation by giving more weights 

to larger firms. 

If the average firm size of an industry 

under review is significantly higher 

than the average firm size of industries 


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14326 Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Proposed Rules 

in the anchor comparison industry 

group, this will generally support a size 

standard higher than the anchor size 

standard. Conversely, if the industry’s 

average firm size is similar to or 

significantly lower than that of the 

anchor comparison industry group, it 

will be a basis to adopt the anchor size 

standard or, in rare cases, a standard 

lower than the anchor. 

2. Startup costs and entry barriers. 

Startup costs reflect a firm’s initial size 

in an industry. New entrants to an 

industry must have sufficient capital 

and other assets to start and maintain a 

viable business. If firms entering a 

particular industry have greater capital 

requirements than firms in industries in 

the anchor comparison group, this is a 

basis for establishing a size standard 

higher than the anchor standard. In lieu 

of data on actual startup costs, SBA uses 

average assets size as a proxy measure 

to assess the levels of capital 

requirements for new entrants to an 

industry. 

SBA begins with the sales to total 

assets ratios from the Risk Management 

Association’s Annual Statement 

Studies, 2007–2009. SBA then applies 

these ratios to the average receipts size 

of firms in that industry. An industry 

with a significantly higher level of 

average assets than that of the anchor 

comparison group is likely to have 

higher startup costs; this in turn will 

support a size standard higher than the 

anchor. Conversely, if the industry has 

a significantly smaller average assets 

size compared to the anchor comparison 

group, the anchor size standard, or in 

rare cases one lower than the anchor, 

may be appropriate. 

3. Industry competition. Industry 

competition is generally measured by 

the share of total industry receipts 

obtained by firms that are among the 

largest in an industry. In this proposed 

rule, SBA evaluates the share of 

industry receipts generated by the four 

largest firms in the industry. This is 

referred to as the ‘‘four-firm 

concentration ratio.’’ SBA compares the 

four-firm concentration ratio for an 

industry under review to the average 

four-firm concentration ratio for 

industries in the anchor comparison 

group. If a significant share of economic 

activity within the industry is 

concentrated among a few relatively 

large firms, SBA will establish a size 

standard relatively higher than the 

anchor size standard. The four-firm 

concentration ratio is not an important 

factor if its value for an industry under 

review is less than 40 percent. For 

industries in which the four largest 

firms account for 40 percent or more of 

an industry’s total receipts, SBA 

examines the average size of the four 

largest firms in determining a size 

standard. 

4. Distribution of firms by size. SBA 

examines the shares of industry receipts 

accounted for by firms of different 

receipts and employment size classes in 

the industry. SBA evaluates this factor 

in assessing competition within an 

industry. If most of an industry’s 

economic activity is attributable to 

smaller firms, this indicates that small 

businesses are competitive in that 

industry. This supports adopting the 

anchor size standard. If most of an 

industry’s economic activity is 

attributable to larger firms, this 

indicates that small businesses are not 

competitive in that industry. This 

supports adopting a size standard above 

the anchor. 

Concentration among firms is a 

measure of inequality of distribution. To 

evaluate the degree of inequality of 

distribution within an industry, SBA 

computes the Gini coefficient by 

constructing the Lorenz curve. The 

Lorenz curve presents the cumulative 

percentages of units (firms) in the 

horizontal axis and cumulative 

percentages of receipts (or other 

measures of size) in the vertical axis. 

(For further detail, please refer to SBA’s 

‘‘Size Standards Methodology’’ White 

Paper on the SBA Web site at http:// 

www.sba.gov/size.) Gini coefficient 

values vary from zero to one. If receipts 

are distributed equally among all the 

firms in an industry, the value of the 

Gini coefficient will equal zero. If an 

industry’s total receipts are attributed to 

a single firm, the Gini coefficient will 

equal one. 

SBA compares the degree of 

inequality of distribution for an industry 

under review with that for industries in 

the anchor comparison group. If an 

industry shows a higher degree of 

inequality of distribution (i.e., higher 

Gini coefficient) compared to industries 

in the anchor comparison industry 

group this will, all else being equal, 

warrant a higher size standard than the 

anchor. Conversely, for industries with 

similar or more equal distribution (i.e., 

similar or lower Gini coefficient values) 

than the anchor group, the anchor 

standard, or in some cases a standard 

lower than the anchor, may be adopted. 

5. Impact on Federal contracting and 

SBA loan programs. SBA examines the 

possible impact a size standard change 

may have on the level of Federal small 

business assistance. This assessment 

primarily focuses on the share of 

Federal contracting dollars awarded to 

small businesses in the industry in 

question. In general, if the share of 

Federal contracting dollars awarded to 

small businesses in an industry that 

receives a significant amount of Federal 

contracting dollars is significantly less 

than the small business share of the 

industry’s total receipts, this will be 

justification to consider a size standard 

higher than the existing size standard. 

The disparity between the small 

business Federal market share and 

industry-wide share may have a variety 

of causes, such as extensive 

administrative and compliance 

requirements associated with Federal 

contracts, the different skill set required 

on Federal contracts as compared to 

typical commercial contracting work 

and the size of contracting requirements 

of Federal customers. These, as well as 

other factors, are likely to influence the 

type of firms within an industry that 

compete for Federal contracts and, 

hence, the firms receiving such 

contracts are expected to possess 

different characteristics than the average 

characteristics for all firms in that 

industry. To compare the small business 

Federal contracting share with the 

industry-wide small business share, 

SBA analyzes the latest Federal 

contracting trends. This analysis may 

indicate a size standard larger than the 

current standard. 

SBA considers Federal procurement 

trends in its size standards analysis only 

if (1) the small business share of Federal 

contracting dollars is at least 10 percent 

lower than the small business share of 

total industry receipts and (2) the 

amount of total Federal contracting 

averages $100 million or more during 

fiscal years 2007–2009 (the latest years 

for which complete Federal 

procurement data are available). SBA 

selected these thresholds because they 

reflect a significant level of contracting 

in which a revision to a size standard 

may have an impact on expanding small 

business opportunities. 

Besides the impact on small business 

Federal contracting, SBA also evaluates 

the impact of a size standard revision on 

SBA’s loan programs. For this SBA 

examines the volume of SBA guaranteed 

loans within an industry and the size of 

firms obtaining those loans. This allows 

SBA to assess whether the existing or 

the proposed size standard for a 

particular industry may restrict the level 

of financial assistance to small firms. If 

the analysis shows that the current size 

standards reduce financial assistance to 

small businesses, a higher size standard 

would be supportable. However, if small 

businesses have already been receiving 

significant amounts of financial 

assistance through SBA’s loan programs, 

or if the financial assistance has been 

provided mainly to businesses that are 

much smaller than the existing size 


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Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Proposed Rules 14327 

standard, consideration of this factor for 

determining the size standard may not 

be necessary. 

Sources of Industry and Program Data 

SBA’s primary source of industry data 

used in this proposed rule is a special 

tabulation of the 2007 County Business 

Patterns (see http://www.census.gov/ 

econ/cbp/) and data from 2007 

Economic Census (see http:// 

www.census.gov/econ/census07/) 

prepared by the U.S. Bureau of the 

Census (Census Bureau) for SBA. The 

Census tabulation provided SBA with 

industry-specific data on the number of 

firms, number of establishments and 

number of employees for companies by 

the size of firm based on the 2007 

County Business Patterns and estimated 

annual payroll and estimated annual 

receipts of companies by the size of firm 

based on the 2007 Census. That is, the 

data are by the size class of the total 

company; however, the data itself, 

within a particular size class, represents 

the company’s total data for a specific 

industry only. The special tabulation 

enables SBA to evaluate average firm 

size, the four-firm concentration ratio 

and distribution of firms by receipts and 

employment size. 

In some cases, where industry data 

were not available due to disclosure 

prohibitions in the Census Bureau’s 

tabulation, SBA either estimated 

missing values using available relevant 

data or examined data at a higher level 

of industry aggregation, such as at the 

NAICS 2-digit (Sector), 3-digit 

(Subsector), or 4-digit (Industry Group) 

level. In some instances, SBA had to 

base its analysis only on those factors 

for which data were available or 

estimates of missing values were 

possible. 

The data from the Census Bureau’s 

tabulation are limited down only to the 

6-digit NAICS industry level and hence 

do not provide economic characteristics 

at the sub-industry level. Thus, when 

establishing, reviewing, or modifying 

size standards at the sub-industry level 

(that is, one of the ‘‘exceptions’’ in SBA’s 

table of size standards), SBA evaluates 

the data from the U.S. General Service 

Administration’s Federal Procurement 

Data System—Next Generation (FPDS– 

NG) and Central Contractor Registration 

(CCR) following a two-step procedure. 

First, using FPDS–NG SBA identifies 

product service codes (PSCs) that 

correspond to specific sub-industry 

activities or ‘‘exceptions’’ and then 

identifies firms that are active in Federal 

contracting involving those PSCs. Then, 

SBA obtains those firms’ revenue and 

employment data from the CCR 

database. SBA uses that data to evaluate 

the actual size of businesses that FPDS– 

NG identifies for those procurements. In 

this proposed rule, SBA applied this 

approach to determine industry and 

Federal contracting factors for 

‘‘exceptions’’ under NAICS 541330, 

Engineering Services. 

To calculate average assets size, SBA 

used sales to total assets ratios from the 

Risk Management Association’s Annual 

Statement Studies, 2007–2009. 

To evaluate Federal contracting 

trends, SBA examined Federal contract 

award data for fiscal years 2007–2009 

from FPDS–NG. 

Data sources and estimation 

procedures SBA uses in its size 

standards analysis are documented in 

detail in the ‘‘SBA Size Standards 

Methodology’’ White Paper, which is 

available on its Web site at http:// 

www.sba.gov/size. 

To assess the impact on financial 

assistance to small businesses SBA 

examined data on its own guaranteed 

loan programs for fiscal years 2007– 

2009. 

Dominance in Field of Operation 

Section 3(a) of the Small Business Act 

(15 U.S.C. 632(a)) defines a small 

business concern as one that is (1) 

independently owned and operated, (2) 

not dominant in its field of operation 

and (3) within a specific small business 

definition or size standard established 

by the SBA Administrator. SBA 

considers as part of its evaluation 

whether a business concern at a 

proposed size standard would be 

dominant in its field of operation. For 

this, SBA generally examines the 

industry’s market share of firms at the 

proposed standard. Market share and 

other factors may indicate whether a 

firm would or could exercise a major 

controlling influence at the national 

level in an industry that includes a 

significant number of business 

concerns. If a contemplated size 

standard would include a dominant 

firm, SBA would consider a lower size 

standard to exclude the dominant firm 

from the definition of small. 

Selection of Size Standards 

To simplify size standards, for the 

ongoing comprehensive size standards 

review of receipts based size standards, 

SBA proposes to select size standards 

for industries from a limited number of 

levels. For many years, SBA has been 

concerned about the complexity of 

determining small business status 

caused by a large number of varying 

receipts based size standards (see 69 FR 

13130 (March 4, 2004) and 57 FR 62515 

(December 31, 1992)). Currently, there 

are 31 different levels of receipts based 

size standards. They range from $0.75 

million to $35.5 million and many of 

them apply to one or only a few 

industries. SBA believes that size 

standards with such a large number of 

small variations among them are both 

unnecessary and difficult to justify 

analytically. To simplify managing and 

using size standards SBA proposes that 

there be fewer size standard levels. This 

will produce more common size 

standards for businesses operating in 

related industries. There will also be 

greater consistency among the size 

standards for industries that have 

similar economic characteristics. 

The SBA proposes, therefore, to apply 

one of eight receipts based size 

standards to each industry in NAICS 

Sector 54 that has a receipts based 

standard. In this proposed rule, SBA has 

not reviewed the six employee based 

size standards in NAICS Sector 54. 

Those employee based size standards 

will remain on effect until SBA reviews 

industries that have employee based 

size standards. The eight ‘‘fixed’’ 

receipts based size standard levels are 

$5 million, $7 million, $10 million, $14 

million, $19 million, $25.5 million, 

$30.0 million and $35.5 million. To 

establish these eight receipts based size 

standard levels SBA considered the 

current minimum, the current 

maximum and most commonly used 

current receipts based size standards. 

Currently, the most commonly used 

receipts based size standards cluster 

around the following—$2.5 million to 

$4.5 million, $7 million, $9.0 million to 

$10 million, $12.5 million to $14.0 

million, $25.0 million to $25.5 million, 

and $33.5 million to $35.5 million. SBA 

selected $7 million as one of eight fixed 

levels of receipts based size standards 

because this is an anchor standard for 

receipts based standards. The lowest or 

minimum receipts based size level that 

SBA is proposing will be $5 million. 

Other than the size standards for 

agriculture and those based on 

commissions (such as real estate brokers 

and travel agents), $5 million will 

include those industries with the 

currently lowest receipts based 

standards, which range from $2.0 

million to $4.5 million. Among the 

higher levels size clusters, SBA has 

selected $10 million, $14 million, $25.5 

million, and $35.5 million as the other 

four levels of fixed size standards. 

Because of a large gap between two of 

the size standard intervals, SBA 

established intermediate levels of $19 

million between $14 million and $25.5 

million and $30 million between $25.5 

million and $35.5 million. These two 

intermediate size levels reflect roughly 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
14328 Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Proposed Rules 

similar proportional differences 

between the two successive size 

standard levels. 

To simplify size standards further, 

SBA may propose a common size 

standard for closely related industries. 

Although the size standard analysis may 

support a specific size standard level for 

each industry, SBA believes that 

establishing different size standards for 

closely related industries may not be 

appropriate. For example, in cases 

where many of the same businesses 

operate in the multiple industries, 

establishing a common size standard 

might better reflect the Federal 

marketplace. This might also make size 

standards among related industries 

more consistent than establishing 

separate size standards for each of those 

industries. This led SBA to establish a 

common size standard for the Computer 

Systems Design and Related Services 

industries (NAICS 541511, NAICS 

541112, NAICS 541513, NAICS 541519 

and NAICS 811212), even though the 

industry data might have supported a 

distinct size standard for each industry. 

57 FR 27906 (June 23, 1992). Businesses 

engaged in computer related services 

typically perform activities in two or 

more other related industries. SBA has 

also established a common size standard 

for certain architectural and engineering 

(A&E) services industries (NAICS 

541310, NAICS 541330 (excluding the 

‘‘exceptions’’), NAICS 541360, NAICS 

541370 and Map Drafting which is an 

‘‘exception’’ under NAICS 541340). As 

described below in this proposed rule 

SBA has considered additional common 

size standards for several related 

industries within NAICS Sector 54, as 

alternatives to industry specific separate 

size standards. Whenever SBA proposes 

a common size standard for closely 

related industries it will provide its 

justification in the proposed rule. 

Evaluation of Industry Structure 

SBA has evaluated the structure of 45 

industries and three sub-industries in 

NAICS Sector 54, Professional, 

Scientific and Technical Services and 

one industry in NAICS Sector 81, Other 

Services, to assess the appropriateness 

of the current size standards. As 

described above, SBA compared data on 

the economic characteristics of each 

industry or sub-industry to the average 

characteristics of industries in two 

comparison groups. The first 

comparison group consists of all 

industries with $7.0 million size 

standards and is referred to as the 

‘‘receipts based anchor comparison 

group.’’ Because the goal of SBA’s size 

review is to assess whether a specific 

industry’s size standard should be the 

same as or different from the anchor size 

standard, this is the most logical group 

of industries to analyze. In addition, this 

group includes a sufficient number of 

firms to provide a meaningful 

assessment and comparison of industry 

characteristics. 

If the characteristics of an industry 

under review are similar to the average 

characteristics of industries in the 

anchor comparison group, the anchor 

size standard is generally appropriate 

for that industry. If an industry’s 

structure is significantly different from 

the others in the anchor group, a size 

standard lower or higher than the 

anchor size standard might be selected. 

The level of the new size standard is 

determined based on the difference 

between the characteristics of the 

anchor comparison group and a second 

industry comparison group. As 

described above, the second comparison 

group for receipts based standards 

consists of industries with the highest 

receipts based size standards, ranging 

from $23 million to $35.5 million. The 

average size standard for the group is 

$29 million. SBA refers to this group of 

industries as the ‘‘higher level receipts 

based size standard comparison group.’’ 

Differences in industry structure 

between an industry under review and 

the industries in the two comparison 

groups are determined by comparing 

data on each of the industry factors, 

including average firm size, average 

assets size, four-firm concentration ratio 

and the Gini coefficient of distribution 

of firms by size. Table 1 shows two 

measures of the average firm size 

(simple and weighted), average assets 

size, four-firm concentration ratio, 

average receipts of the four largest firms 

and the Gini coefficient for both anchor 

level and higher level comparison 

groups for receipts based size standards. 

TABLE 1—AVERAGE CHARACTERISTICS OF RECEIPTS BASED COMPARISON GROUPS

Receipts based comparison group 

Avg. firm size ($ million) 

Avg. assets 

size ($ million) 

Avg. four-firm 

concentration 

ratio (%) 

Avg. receipts 

of four largest 

firms 

($ million) a

Gini coefficient Simple 

average 

Weighted 

average 

Anchor Level ............................................ 1.55 28.91 0.94 18.4 249.3 0.740 

Higher Level ............................................. 6.22 97.10 2.85 27.0 1,773.5 0.826 

aTo be used for industries with a four-firm concentration ratio of 40% or greater. 

Derivation of Size Standards Based on 

Industry Factors 

For each of the industry factors in 

Table 1, SBA derives a separate size 

standard based on the differences 

between the values for an industry 

under review and the values for the two 

comparison groups. If the industry value 

for a particular factor is near the 

corresponding factor for the anchor 

comparison group, SBA will consider 

the $7.0 million anchor size standard 

appropriate for that factor. 

An industry factor with a value 

significantly above or below the anchor 

comparison group will generally 

warrant a size standard above or below 

the $7.0 million anchor. The level of the 

new size standard in these cases is 

based on the proportional difference 

between the industry value and the 

values for the two comparison groups. 

For example, if an industry’s simple 

average receipts is $4.0 million, that 

would support a $19 million size 

standard. The $4.0 million level is 52.5 

percent between the average firm size of 

$1.55 million for the anchor comparison 

group and $6.22 million for the higher 

level comparison group (($4.00 million 

¥ $1.55 million) ÷ ($6.22 million ¥ 

$1.55 million) = 0.525 or 52.5%). This 

proportional difference is applied to the 

difference between the $7.0 million 

anchor size standard and average size 

standard of $29 million for the higher 

level size standard group and then 

added to $7.0 million to estimate a size 

standard of $18.54 million ([{$29.0 

million ¥ $7.0 million} * 0.525] + $7.0 

million = $18.54 million). The final step 

is to round the estimated $18.54 million 

size standard to the nearest fixed size 

standard level, in this example to $19 

million. 

SBA applies the above calculation to 

derive a size standard for each industry 

factor. Detailed formulas involved in 

these calculations are presented in ‘‘SBA 

Size Standards Methodology’’ which is 

available on its Web site at http:// 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Proposed Rules 14329 

www.sba.gov/size. (However, it should 

be noted that figures in the ‘‘Size 

Standards Methodology’’ White Paper 

are based on 2002 Economic Census 

data and are different from those 

presented in this proposed rule). Table 

2 shows ranges of values for each 

industry factor and the levels of size 

standards supported by those values. 

TABLE 2—VALUES OF INDUSTRY FACTORS AND SUPPORTED SIZE STANDARDS

If simple avg. receipts 

size 

($ million) 

Or if 

weighted avg. receipts 

size 

($ million) 

Or if 

avg. assets size 

($ million) 

Or if 

avg. receipts of largest 

four firms 

($ million) 

Or if 

gini coefficient 

Then size 

standard is 

($ million) 

<1.34 ............................. <25.81 ......................... <0.85 ........................... <180.0 ......................... <0.736 ......................... 5.0 

1.34 to 1.87 ................... 25.81 to 33.56 ............. 0.85 to 1.07 ................. 180.0 to 353.2 ............. 0.736 to 0.746 ............. 7.0 

1.88 to 2.61 ................... 33.57 to 44.41 ............. 1.08 to 1.37 ................. 353.3 to 595.7 ............. 0.747 to 0.759 ............. 10.0 

2.62 to 3.57 ................... 44.42 to 58.35 ............. 1.38 to 1.76 ................. 595.8 to 907.5 ............. 0.760 to 0.777 ............. 14.0 

3.58 to 4.79 ................... 58.36 to 76.18 ............. 1.77 to 2.26 ................. 907.6 to 1,305.8 .......... 0.778 to 0.799 ............. 19.0 

4.80 to 5.96 ................... 76.19 to 93.22 ............. 2.27 to 2.74 ................. 1,305.9 to 1,686.9 ....... 0.800 to 0.821 ............. 25.5 

5.97 to 7.02 ................... 93.23 to 108.72 ........... 2.75 to 3.17 ................. 1,687.0 to 2,033.2 ....... 0.822 to 0.840 ............. 30.0 

>7.02 ............................. >108.72 ....................... >3.17 ........................... >2,033.2 ...................... >0.840 ......................... 35.5 

Derivation of Size Standards Based on 

Federal Contracting Factor 

Besides industry structure, SBA also 

evaluates Federal contracting data to 

assess the extent to which small 

businesses are successful in getting 

Federal contracts under the existing size 

standards. However, the available data 

on Federal contracting are limited to 

identifying businesses as small or other 

than small, with no information on 

exact size of businesses receiving 

Federal contracts in order to conduct a 

more precise analysis. 

Given the above limitation of Federal 

contracting data, for the current 

comprehensive size standards review, 

SBA has decided to designate a size 

standard at one level higher than their 

current size standard for industries 

where the small business share of total 

Federal contracting dollars is between 

10 and 30 percentage points lower than 

their shares in total industry receipts 

and at two levels higher than the current 

size standard if the difference is more 

than 30 percentage points. 

SBA has chosen not to designate a 

size standard for the Federal contracting 

factor alone that is higher than two 

levels above the current size standard. 

The FPDS–NG data have a number of 

limitations and there are also complex 

relationships among a number of 

variables affecting small business 

participation in the Federal 

marketplace. SBA believes, therefore, 

that a larger adjustment to size 

standards based on Federal contracting 

activity requires a more detailed 

analysis of the impact of any subsequent 

revision to the current size standard. In 

limited situations, however, SBA may 

conduct a more extensive examination 

of Federal contracting experience to 

support a different size standard than 

indicated by this general rule. That 

would involve SBA’s taking into 

consideration significant and unique 

aspects of small business 

competitiveness in the Federal contract 

market. SBA welcomes comment on its 

methodology of incorporating the 

Federal contracting factor in the size 

standard analysis and suggestions for 

alternative methods and other relevant 

information on small business 

experience in the Federal contract 

market. 

Of the 46 industries reviewed in this 

proposed rule (including 45 industries 

in NAICS Sector 54 and one industry in 

NAICS Sector 81), 26 industries 

received an average of $100 million or 

more annually in Federal contracting 

dollars during fiscal years 2007–2009. 

The Federal contracting factor was 

significant (i.e., the difference between 

the small business share of total 

industry receipts and small business 

share of Federal contracting dollars was 

10 percentage points or more) and a 

separate size standard was derived for 

that factor in 15 of those 26 industries. 

New Size Standards Based on Industry 

and Federal Contracting Factors 

Table 3 shows the results of analyses 

of industry and Federal contracting 

factors for each of the industries covered 

by this proposed rule. Each NAICS 

Industry in columns 2, 3, 4, 6, 7 and 8 

shows two numbers. The upper number 

is the value for the industry or Federal 

contracting factor shown on the top of 

the column; the lower number is the 

size standard supported by that factor. 

For the four-firm concentration ratio, a 

size standard is estimated based on the 

average receipts of the top four firms if 

its value is 40 percent or more. If the 

four-firm concentration ratio for an 

industry (column 5) is less than 40 

percent, no size standard is estimated 

for that factor. Column 9 shows the new 

size standard for each industry, 

calculated as the average of size 

standards supported by each factor and 

rounded to the nearest fixed size level. 

Analytical details involved in the 

averaging procedure are described in the 

SBA ‘‘Size Standard Methodology’’ 

White Paper which is available on its 

Web site at http://www.sba.gov/size. For 

comparison, the current size standards 

are also shown in column 10 of Table 

3. 

TABLE 3—SIZE STANDARDS SUPPORTED BY EACH FACTOR FOR EACH INDUSTRY

[millions of dollars] 

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) 

NAICS code/ 

NAICS industry title 

Simple 

average firm 

size 

Weighted 

average firm 

size 

Average 

assets size 

Four-firm 

ratio (%) 

Four-firm 

average 

size 

Gini 

coefficient 

Federal 

contract 

factor (%) 

Calculated 

size 

standard 

Current size 

standard 

541110 $1.4 $105.8 $0.3 2.5 $1,423.1 0.758 .................... $10.0 $7.0 

Offices of Lawyers ............ 7.0 30.0 5.0 .................... .................... $10.0 

541191 1.0 24.2 0.4 .................... .................... 0.700 .................... 5.0 7.0 

Title Abstract and Settlement Offices.5.0 5.0 5.0 .................... .................... $5.0 

541199 0.9 18.3 .................... 29.0 176.3 0.730 ¥21.5 7.0 7.0 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
14330 Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Proposed Rules 

TABLE 3—SIZE STANDARDS SUPPORTED BY EACH FACTOR FOR EACH INDUSTRY—Continued 

[millions of dollars] 

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) 

NAICS code/ 

NAICS industry title 

Simple 

average firm 

size 

Weighted 

average firm 

size 

Average 

assets size 

Four-firm 

ratio (%) 

Four-firm 

average 

size 

Gini 

coefficient 

Federal 

contract 

factor (%) 

Calculated 

size 

standard 

Current size 

standard 

All Other Legal Services .. 5.0 5.0 .................... .................... .................... $5.0 $10.0 

541211 1.2 116.1 0.4 32.8 5,227.3 0.747 ¥11.7 14.0 8.5 

Offices of Certified Public 

Accountants.

5.0 35.5 5.0 .................... .................... $10.0 $14.0 

541213 0.5 131.5 .................... .................... .................... 0.681 .................... 14.0 7.0 

Tax Preparation Services 5.0 35.5 .................... .................... .................... $5.0 

541214 7.7 113.9 6.6 .................... .................... 0.886 .................... 35.5 8.5 

Payroll Services ................ 35.5 35.5 35.5 .................... .................... $35.5 

541219 0.5 6.1 0.2 .................... .................... 0.618 ¥22.4 7.0 8.5 

Other Accounting Services 5.0 5.0 5.0 .................... .................... $5.0 $14.0 

541310 1.6 25.1 0.6 5.2 489.3 0.727 ¥13.3 7.0 4.5 

Architectural Services ....... 7.0 5.0 5.0 .................... .................... $5.0 $7.0 

541320 0.8 6.3 0.3 6.1 80.6 0.586 .................... 5.0 7.0 

Landscape Architectural 

Services.

5.0 5.0 5.0 .................... .................... $5.0 

541330 4.0 112.0 1.5 .................... .................... 0.868 ¥0.1 25.5 4.5 

Engineering Services ....... 19.0 35.5 14.0 .................... .................... $35.5 

Except Military and Aerospace Equipment and 

Military Weapons.

3,086.3 

35.5 

9,073.4 

35.5 

1,187.1 

35.5 

36.0 149,375.0 0.660 

$5.0 

.................... 25.5 27.0 

Except Contracts and 

Subcontracts for Engineering Services Awarded Under the National 

Energy Policy Act of 

1992.

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

27.0 

Except Marine Engineering and Naval Architecture.4,088.8 

35.5 

12,295.3 

35.5 

1,572.6 

35.5 

38.5 64,100.0 0.668 

$25.0 

.................... 25.5 18.5 

541340 0.8 68.0 .................... .................... .................... 0.752 .................... 14.0 7.0 

Drafting Services .............. 5.0 19.0 .................... .................... .................... $10.0 

Except Map Drafting ......... NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

4.5 

541350 0.4 6.4 .................... 13.7 72.8 0.569 ¥31.1 7.0 7.0 

Building Inspection Services.5.0 5.0 .................... .................... .................... $5.0 $14.0 

541360 2.7 60.4 .................... 37.4 256.1 0.853 .................... 25.5 4.5 

Geophysical Surveying 

and Mapping Services.

14.0 19.0 .................... .................... .................... $35.5 

541370 0.7 6.5 0.3 7.6 120.9 0.554 ¥25.4 5.0 4.5 

Surveying and Mapping 

(except Geophysical) 

Services.

5.0 5.0 5.0 .................... .................... $5.0 $7.0 

541380 2.6 19.2 1.2 .................... .................... 0.759 1.0 10.0 12.0 

Testing Laboratories ......... 10.0 5.0 $10.0 .................... .................... $10.0 

541410 0.8 5.1 0.2 .................... .................... 0.557 .................... 5.0 7.0 

Interior Design Services ... 5.0 5.0 5.0 .................... .................... $5.0 

541420 1.3 9.5 .................... .................... .................... 0.714 .................... 5.0 7.0 

Industrial Design Services 5.0 5.0 .................... .................... .................... $5.0 

541430 0.6 4.1 0.2 3.3 79.7 0.560 .................... 5.0 7.0 

Graphic Design Services .. 5.0 5.0 5.0 .................... .................... $5.0 

541490 0.8 6.0 .................... 11.1 45.7 0.623 .................... 5.0 7.0 

Other Specialized Design 

Services.

5.0 5.0 .................... .................... .................... $5.0 

541511 2.0 51.0 0.7 7.4 1,862.3 0.839 ¥5.2 14.0 25.0 

Custom Computer Programming Services.10.0 14.0 5.0 .................... .................... $30.0 

541512 2.9 145.9 1.0 20.0 6,243.2 0.885 ¥7.3 25.5 25.0 

Computer Systems Design 

Services.

14.0 35.5 7.0 .................... .................... $35.5 

541513 7.2 150.6 .................... .................... .................... 0.918 23.0 35.5 25.0 

Computer Facilities Management Services.35.5 35.5 .................... .................... .................... $35.5 

541519 2.6 100.0 0.9 28.6 1,912.1 0.893 15.2 19.0 25.0 

Other Computer Related 

Services.

14.0 30.0 7.0 .................... .................... $35.5 

Except Information Technology Value Added Resellers.NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

NA 

150 employees 

541611 1.4 59.9 0.5 17.2 3,482.1 0.817 ¥12.8 14.0 7.0 

Administrative Management and General Management Consulting 

Services.

7.0 19.0 5.0 .................... .................... $25.5 $10.0 

541612 1.7 56.3 0.4 23.6 1,365.4 0.803 ¥5.3 14.0 7.0 

Human Resources Consulting Services.7.0 14.0 5.0 .................... .................... $25.5 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Proposed Rules 14331 

TABLE 3—SIZE STANDARDS SUPPORTED BY EACH FACTOR FOR EACH INDUSTRY—Continued 

[millions of dollars] 

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) 

NAICS code/ 

NAICS industry title 

Simple 

average firm 

size 

Weighted 

average firm 

size 

Average 

assets size 

Four-firm 

ratio (%) 

Four-firm 

average 

size 

Gini 

coefficient 

Federal 

contract 

factor (%) 

Calculated 

size 

standard 

Current size 

standard 

541613 1.1 20.6 0.4 7.3 489.1 0.753 ¥26.1 7.0 7.0 

Marketing Consulting 

Services.

5.0 5.0 5.0 .................... .................... $10.0 $10.0 

541614 3.4 86.6 0.9 .................... .................... 0.886 ¥0.5 19.0 7.0 

Process, Physical Distribution and Logistics Consulting Services.14.0 25.5 7.0 .................... .................... $35.5 

541618 0.8 19.5 0.3 17.5 226.2 0.698 ¥39.3 7.0 7.0 

Other Management Consulting Services.5.0 5.0 5.0 .................... .................... $5.0 $14.0 

541620 1.3 16.5 0.5 6.1 160.6 0.727 ¥8.9 5.0 7.0 

Environmental Consulting 

Services.

5.0 5.0 5.0 .................... .................... $5.0 

541690 1.1 54.3 0.4 .................... .................... 0.775 ¥13.6 10.0 7.0 

Other Scientific and Technical Consulting Services.5.0 14.0 5.0 .................... .................... $14.0 $10.0 

541720 2.9 24.5 1.8 26.6 451.3 0.811 1.5 19.0 7.0 

Research and Development in the Social 

Sciences and Humanities.

14.0 5.0 14.0 .................... .................... $25.5 

541810 2.5 53.0 0.7 26.5 2,156.7 0.812 ¥13.4 14.0 7.0 

Advertising Agencies ........ 10.0 14.0 5.0 .................... .................... $25.5 $10.0 

541820 1.2 13.7 0.4 19.3 403.7 0.698 ¥21.6 7.0 7.0 

Public Relations Agencies 5.0 5.0 5.0 .................... .................... $5.0 $10.0 

541830 4.3 65.3 .................... 36.0 320.1 0.834 .................... 25.5 7.0 

Media Buying Agencies .... 19.0 19.0 .................... .................... .................... $30.0 

541840 1.9 18.2 0.8 .................... .................... 0.758 .................... 7.0 7.0 

Media Representatives ..... 10.0 5.0 5.0 .................... .................... $10.0 

541850 3.9 134.2 2.2 44.9 928.8 0.881 .................... 25.5 7.0 

Display Advertising ........... 19.0 35.5 19.0 .................... 19.0 $35.5 

541860 4.0 45.7 1.4 .................... .................... 0.799 .................... 19.0 7.0 

Direct Mail Advertising ..... 19.0 14.0 14.0 .................... .................... $19.0 

541870 3.2 52.4 1.3 32.7 201.1 0.849 .................... 19.0 7.0 

Advertising Material Distribution Services.14.0 14.0 10.0 .................... .................... $35.5 

541890 1.6 26.2 0.5 12.5 383.0 0.746 .................... 7.0 7.0 

Other Services Related to 

Advertising.

7.0 7.0 5.0 .................... .................... $10.0 

541910 3.2 51.7 1.1 .................... .................... 0.832 5.4 19.0 7.0 

Marketing Research and 

Public Opinion Polling.

14.0 14.0 7.0 .................... .................... $30.0 

541921 0.5 50.9 0.2 .................... .................... 0.563 .................... 7.0 7.0 

Photography Studios, Portrait.5.0 14.0 5.0 .................... .................... $5.0 

541922 0.5 3.3 0.2 6.5 31.8 0.494 .................... 5.0 7.0 

Commercial Photography 5.0 5.0 5.0 .................... .................... $5.0 

541930 1.0 23.8 .................... 26.9 123.8 0.752 1.6 7.0 7.0 

Translation and Interpretation Services.5.0 5.0 .................... .................... .................... $10.0 

541940 0.9 17.4 0.2 .................... .................... 0.431 .................... 5.0 7.0 

Veterinary Services .......... 5.0 5.0 5.0 .................... .................... $5.0 

541990 0.9 24.1 0.3 16.7 696.2 0.740 ¥34.7 $7.0 $7.0 

All Other Professional, 

Scientific and Technical 

Services.

5.0 5.0 5.0 .................... .................... $7.0 $14.0 

811212 1.7 49.0 0.5 .................... .................... 0.832 ¥11.2 $19.0 $25.0 

Computer and Office Repair and Maintenance.7.0 14.0 5.0 .................... .................... $30.0 $30.0 

Common Size Standards 

When many of the same businesses 

operate in multiple industries, SBA 

believes that a common size standard 

can be appropriate for these industries 

even if the industry and relevant 

program data support different size 

standards. SBA has established a 

common size standard for Computer 

Systems Design and Related Services 

industries (NAICS 541511, NAICS 

541112, NAICS 541513, NAICS 541519 

(excluding the ‘‘exception’’), and NAICS 

811212. 

In response to public comments to its 

1998 proposed rule (63 FR 5480), SBA 

also established a common size standard 

for certain Architectural, Engineering 

(A&E) and Related Services industries 

(NAICS 541310, NAICS 541330 

(excluding the ‘‘exceptions’’), Map 

Drafting which is identified as 

‘‘exception’’ under NAICS 541340, 

NAICS 541360 and NAICS 541370). It is 

very likely that firms that have expertise 

in architectural, engineering and 

surveying activities are also likely to be 

capable of performing drafting work. 

Similarly, general architectural firms are 

very likely to have expertise in 


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landscape architectural services. 

Industry data also show a lot of 

similarities among architectural, 

landscape architectural, engineering, 

drafting and surveying industries. 

Therefore, in this proposed rule, SBA 

applies the A&E common size standard 

to the rest of the industries in the A&E 

Industry Group (NAICS 5413), including 

NAICS 541320, NAICS 541340, NAICS 

541350 and NAICS 541380. 

In addition to Computer Systems 

Design and Related Services and A&E 

and Related Services, in this proposed 

rule, SBA considers, as an alternative to 

a separate size standard for each 

industry, common size standards for 

industries under several other NAICS 

Industry Groups as shown in Table 4. 

SBA evaluated industry and Federal 

contracting factors and derived a 

common size standard for each Industry 

Group using the same method as 

described above. These results are 

provided in Table 5. 

TABLE 4—INDUSTRY GROUPS FOR COMMON SIZE STANDARDS

Industry group: NAICS 

codes Industry group title Industries: 6-digit NAICS codes 

5411 ..................................... Legal Services ................................................................. 541110, 451191, 541199. 

5412 ..................................... Accounting, Tax Preparation, Bookkeeping and Payroll 

Services.

541211, 541213, 541214, 541219. 

5413 ..................................... Architectural, Engineering and Related Services ........... 541310, 541320, 541330 (excluding ‘‘exceptions’’), 

541340, 541350, 541360, 541370, 541380. 

5414 ..................................... Specialized Design Services ........................................... 541410, 541420, 541430, 541490. 

5415, 811212 ....................... Computer Systems Design and Related Services + 

Computer and Office Machine Repair and Maintenance.

541511, 541512, 541513, 541519 (excluding ‘‘exception’’), 811212. 

5416 ..................................... Management, Scientific and Technical Consulting Services.541611, 541612, 541613, 541614, 541618, 541620, 

541690. 

5418 ..................................... Advertising and Related Services ................................... 541810, 541820, 541830, 541840, 541850, 541860, 

541870, 541890. 

5419 ..................................... Other Professional, Scientific, and Technical Services .. 541910, 541921, 541922, 541930, 541940, 541990. 

TABLE 5—SIZE STANDARDS SUPPORTED BY EACH FACTOR FOR EACH INDUSTRY GROUP (MILLIONS OF DOLLARS) 

(1) (2) (3) (4) (5) (6) (7) (8) (9) 

NAICS code/Industry title Simple 

average firm 

size 

Weighted 

average firm 

size 

Average 

assets size 

Four-firm 

ratio 

(%) 

Four-firm 

average 

size 

Gini 

coefficient 

Federal 

contract 

factor 

(%) 

Calculated 

size 

standard 

5411 .................................................................. $1.3 $90.0 $0.3 2.4% $1,423.1 0.755 ¥14.6% 10.0 

Legal Services ................................................... 5.0 25.5 5.0 .................... .................... $10.0 $10.0 ....................

5412 .................................................................. 1.1 66.1 0.5 20.3% 6,033.6 0.781 ¥1.6% 14.0 

Accounting, Tax Preparation, Bookkeeping and 

Payroll Services ............................................. 5.0 19.0 5.0 .................... .................... $19.0 .................... ....................

5413 .................................................................. 2.5 84.3 1.0 .................... .................... 0.837 ¥6.0% 19.0 

Architectural, Engineering and Related Services ................................................................ 10.0 25.5 7.0 .................... .................... $30.0 .................... ....................

5414 .................................................................. 0.7 5.0 0.2 2.2% 130.0 0.583 ¥40.3% 7.0 

Specialized Design Services ............................. 5.0 5.0 5.0 .................... .................... $5.0 $14.0 ....................

5415 + 811212 .................................................. 2.6 122.3 0.9 .................... .................... 0.876 1.3% 25.5 

Computer Systems Design and Related Services + Computer and Office Machine Repair 

and Maintenance ........................................... 10.0 35.5 7.0 .................... .................... $35.5 .................... ....................

5416 .................................................................. 1.4 57.1 0.4 .................... .................... 0.805 ¥14.8% 14.0 

Management, Scientific and Technical Consulting Services ............................................. 7.0 14.0 5.0 .................... .................... $25.5 $10.0 ....................

5418 .................................................................. 2.3 51.5 0.7 13.7% 2,854.1 0.806 ¥5.3% 14.0 

Advertising and Related Services ..................... 10.0 14.0 5.0 .................... .................... $25.5 .................... ....................

5419 .................................................................. 1.0 25.1 0.3 6.7% 1,085.4 0.650 ¥44.9% 7.0 

Other Professional, Scientific, and Technical 

Services ......................................................... 5.0 5.0 5.0 .................... .................... $5.0 $14.0 ....................

Special Considerations 

1. Three Sub-Industry Categories (or 

‘‘exceptions’’) under NAICS 541330, 

Engineering Services 

Currently, NAICS 541330 has four 

size standards that apply to Federal 

contracts for different types of 

engineering services. The $4.5 million 

size standard is for general engineering 

services, while the other three (i.e., 

‘‘exceptions’’) apply to specialized types 

of engineering services that the Federal 

government procures. They apply only 

to Federal contracts for those services. 

The lack of relevant data at the subindustry level is a challenge to 

determine whether these size standards 

(‘‘exceptions’’) should be revised or left 

unchanged. Because of that, SBA did 

not review those exceptions in the 

February 3, 1998 proposed rule (63 FR 

5480) and SBA did not change these 

size standards in the May 14, 1999 final 

rule (64 FR 26275). However, SBA has 

increased these size standards over the 

years for inflation. The latest inflation 

adjustment was effective August 18, 

2008 (73 FR 41237 (July 18, 2008)). 

As noted previously, the data from the 

Economic Census special tabulation are 

limited down to the 6-digit NAICS 

industry level and hence do not provide 

data to assess economic characteristics 

at the sub-industry level. For example, 

the Economic Census data for NAICS 

541330 are aggregates of both general 

engineering services and specialized 

engineering services under the three 


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‘‘exceptions.’’ Thus, the results based on 

the Economic Census data may not 

accurately reflect the characteristics of 

businesses providing specialized 

services included under those 

‘‘exceptions.’’ 

To determine whether the Agency 

should propose revising the three 

exceptions under NAICS 541330, SBA 

evaluated the data from FPDS–NG and 

CCR. From FPDS–NG, SBA first 

identified PSCs that correspond to each 

specific sub-industry activity or 

‘‘exception’’ under that NAICS code and 

then identified firms that are active in 

Federal contracting involving those 

PSCs. The data for fiscal year 2008 (the 

latest year for which the detailed CCR 

data are available) showed numerous 

firms doing contracts under Military 

and Aerospace Equipment and Military 

Weapons and Marine Engineering and 

Naval Architecture. SBA analyzed those 

firms’ revenue and employment data 

from CCR and contract dollars from 

FPDS–NG to evaluate industry and 

Federal procurement factors. These 

results in Table 3 support a size 

standard of $25.5 million for both 

Military and Aerospace Equipment and 

Military Weapons and Marine 

Engineering and Naval Architecture. 

However, SBA proposes to retain the 

current standard of $27.0 million for 

Military and Aerospace Equipment and 

Military Weapons as SBA is not 

proposing to lower any size standards in 

view of the current economic 

conditions. The FPDS–NG showed very 

few actions involving Contracts and 

Subcontracts for Engineering Services 

Awarded Under the National Energy 

Policy Act of 1992. This made it 

difficult to evaluate industry and 

Federal contracting factors and to derive 

a separate size standard for that subindustry category. Currently, both 

Contracts and Subcontracts for 

Engineering Services Awarded Under 

the National Energy Policy Act of 1992 

and contracts for Military and 

Aerospace Equipment and Military 

Weapons both have the same $27.0 

million size standard. Thus, SBA 

proposes to retain the current $27.0 

million size standard for Contracts and 

Subcontracts for Engineering Services 

Awarded Under the National Energy 

Policy Act of 1992. SBA proposes to 

increase the size standard for Marine 

Engineering and Naval Architecture to 

$25.5 million as supported by the data. 

SBA invites comments along with 

supporting information on this 

proposal. 

2. Map Drafting Services 

Map Drafting Services is currently 

identified as an ‘‘exception’’ under 

NAICS 541340, Drafting Services. Prior 

to adopting NAICS for its size standards, 

SBA had established separate but 

common size standards for Map Drafting 

Services, Mapmaking (Including Aerial) 

and Photogrammetric Mapping Services 

as exceptions under Standard Industrial 

Classification (SIC) code 7389, Business 

Services, N.E.C. (Not Elsewhere 

Classified). Size standards at the subindustry levels (‘‘exceptions’’) are 

primarily intended for Federal 

government procurement purposes. 

However, for NAICS 541340 (which 

includes Map Drafting Services), there 

were less than $10 million total 

contracting dollars annually during 

fiscal years 2007–2009, as compared to 

more than $2 billion in total revenue for 

the industry. Therefore, SBA feels that 

there is no need for a separate size 

standard for Map Drafting Services for 

Federal procurement and proposes to 

remove it as an exception to NAICS 

541340. The proposed $14.0 million 

common A&E size standard will apply 

to Drafting Services, including Map 

Drafting Services. SBA invites 

comments along with supporting 

information on this proposal. 

3. Information Technology Value Added 

Resellers 

On July 24, 2002 SBA proposed 

establishing a 500 employee size 

standard for Information Technology 

Value Added Resellers (ITVAR) as a 

new sub-industry (‘‘exception’’) under 

NAICS 541519 (67 FR 48419). This was 

to better reflect the Federal 

government’s acquisition of computer 

hardware and software services. In 

response to public comments and the 

results from further analyses of relevant 

industry data, on December 29, 2003, 

SBA published the final rule adopting 

150 employee size standard for ITVAR 

(68 FR 74833). In this proposed rule, 

SBA proposes to retain the current 150 

employee size standard for ITVAR. SBA 

invites comments along with supporting 

information on this proposal. 

4. Computer and Office Machine Repair 

and Maintenance (NAICS 811212) 

The Computer and Office Machine 

Repair and Maintenance industry 

(NAICS 811212) currently has the same 

size standard as the Computer Design 

and Related Services Industry Group 

(NAICS 5415). Therefore, in its October 

21, 2009 proposed rule for Other 

Services Sector (74 FR 53941), SBA did 

not review the size standard for NAICS 

811212 and proposed to retain the 

current $25 million size standard until 

it reviews the Computer Design and 

Related Services Industries in NAICS 

Sector 54. The history of the Computer 

and Office Machine Repair industry 

supports this decision. Under the SIC 

System, SBA had established a common 

size standard for all industries in SIC 

Industry Group 737, ‘‘Computer 

Programming, Data Processing and 

Other Computer Related Services’’ (56 

FR 38364 (August 13, 1991) and 57 FR 

27907 (June 23, 1992)). In 1997, SBA 

replaced the SIC System with the 

NAICS and moved most of the 

industries in SIC Sector 737 to NAICS 

Sector 54, Professional, Scientific and 

Technical Services. However, the 

Computer Maintenance and Repair 

activity was moved to NAICS Sector 81, 

Other Services, and was combined with 

Computer and Office Machine Repair 

Maintenance services to form NAICS 

811212. Because Computer Maintenance 

and Repair was the largest component of 

the new industry, SBA continued to 

apply the size standard for computer 

services (64 FR 57188 (October 22, 

1999) and 65 FR 30836 (May 15, 2000)). 

SBA continues to believe that a common 

size standard should apply to all of the 

computer services related industries, 

including NAICS 811212. SBA 

welcomes comments on whether it 

should continue to apply the same size 

standard for computer services to the 

Computer and Office Machine Repair 

Maintenance industry or consider a 

different size standard based on its 

industry characteristics. 

5. Research and Development (R&D) in 

Biotechnology (NAICS 541711) and R&D 

in the Physical, Engineering and Life 

Sciences (Except Biotechnology) (NAICS 

541712) 

The current size standards for NAICS 

541711 and NAICS 541712 (including 

three sub-industry groups or 

‘‘exceptions’’) are based on number of 

employees. Moreover, footnote #11 to 

SBA’s Table of Size Standards states 

that for R&D contracts requiring the 

delivery of a manufactured product, the 

appropriate size standard is that of the 

manufacturing industry. For example, 

the size standard for aircraft related R&D 

contracts under NAICS 541712 is 1,500 

employees, the same as that for Aircraft 

Manufacturing (NAICS 336411). 

Therefore, SBA plans to review the size 

standards for NAICS 541711 and NAICS 

541712 when it reviews the size 

standards for the Manufacturing Sector 

(NAICS Sector 31–33). SBA proposes, 

therefore, to leave the size standards for 

those two industries at their current 

levels until it reviews NAICS Sector 31– 

33. 

Evaluation of SBA Loan Data 

Before deciding on an industry’s size 

standard, SBA also considers the impact 


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of new or revised standards on SBA’s 

loan programs. SBA examined 7(a) 

Business Loan Program data for fiscal 

years 2007–2009 to assess whether the 

existing or proposed size standards need 

further adjustments to ensure credit 

opportunities for small businesses 

through that program. For the industries 

reviewed in this proposed rule, users of 

SBA’s 7(a) Business Loan Program are 

mostly much smaller than the current 

size standards. Based on that analysis, 

none of the size standards for these 

industries needs an adjustment based on 

this factor. 

Proposed Changes to Size Standards 

The results of SBA analyses of 

industry specific size standards from 

Table 3 and results for common size 

standards from Table 5 are summarized 

in Table 6. In terms of industry specific 

size standards, the results support 

increases in size standards in 22 

industries and one sub-industry, 

decreases in 14 industries and one subindustry and no changes in 10 

industries. Similarly based on common 

size standards, the results would 

support increases in 36 industries and 

one sub-industry, decreases in two subindustries and no changes in 10 

industries. 

SBA believes that lowering small 

business size standards is not in the best 

interests of small businesses under 

current economic conditions. The U.S. 

economy was in recession from 

December 2007 to June 2009, the longest 

and deepest of any recessions since 

World War II. The economy lost a total 

of nearly 8.5 million non-farm jobs 

during 2008–2009. In response, 

Congress passed and the President 

signed 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 has been 

9.4 percent or higher since May 2009 

and is forecast to remain above 9 

percent through the end of 2011. More 

recently, Congress passed and the 

President signed the Small Business 

Jobs Act of 2010 (Jobs Act) to promote 

small business job creation. The Jobs 

Act puts more capital into the hands of 

entrepreneurs and small business 

owners; strengthens small businesses’ 

ability to compete for contracts, 

including recommendations from the 

President’s Task Force on Federal 

Contracting Opportunities for Small 

Business; creates a better playing field 

for small businesses; promotes small 

business exporting, building on the 

President’s National Export Initiative; 

expands training and counseling; and 

provides $12 billion in tax relief to help 

small businesses invest in their firms 

and create jobs. 

TABLE 6—SUMMARY OF SIZE STANDARDS ANALYSIS

NAICS codes NAICS industry title 

Calculated 

industry specific 

size standard ($ 

million) 

Calculated 

common size 

standard 

($ million) 

Current size 

standard 

($ million) 

541110 ........ Offices of Lawyers ........................................................................................ $10.0 $10.0 $7.0 

541191 ........ Title Abstract and Settlement Offices ........................................................... 5.0 10.0 7.0 

541199 ........ All Other Legal Services ............................................................................... 7.0 10.0 7.0 

541211 ........ Offices of Certified Public Accountants ........................................................ 14.0 14.0 8.5 

541213 ........ Tax Preparation Services ............................................................................. 14.0 14.0 7.0 

541214 ........ Payroll Services ............................................................................................ 35.5 14.0 8.5 

541219 ........ Other Accounting Services ........................................................................... 7.0 14.0 8.5 

541310 ........ Architectural Services ................................................................................... 7.0 19.0 4.5 

541320 ........ Landscape Architectural Services ................................................................ 5.0 19.0 7.0 

541330 ........ Engineering Services .................................................................................... 25.5 19.0 4.5 

Except ......... Military and Aerospace Equipment and Military Weapons ........................... 25.5 ........................ 27.0 

Except ......... Contracts and Subcontracts for Engineering Services Awarded Under the 

National Energy Policy Act of 1992.

NA ........................ 27.0 

Except ......... Marine Engineering and Naval Architecture ................................................. 25.5 ........................ 18.5 

541340 ........ Drafting Services ........................................................................................... 14.0 19.0 7.0 

Except ......... Map Drafting ................................................................................................. NA ........................ 4.5 

541350 ........ Building Inspection Services ......................................................................... 7.0 19.0 7.0

541360 ........ Geophysical Surveying and Mapping Services ............................................ 25.5 19.0 4.5 

541370 ........ Surveying and Mapping (except Geophysical) Services .............................. 5.0 19.0 4.5 

541380 ........ Testing Laboratories ..................................................................................... 10.0 19.0 12.0 

541410 ........ Interior Design Services ................................................................................ 5.0 7.0 7.0 

541420 ........ Industrial Design Services ............................................................................ 5.0 7.0 7.0

541430 ........ Graphic Design Services .............................................................................. 5.0 7.0 7.0 

541490 ........ Other Specialized Design Services .............................................................. 5.0 7.0 7.0 

541511 ........ Custom Computer Programming Services ................................................... 14.0 25.5 25.0 

541512 ........ Computer Systems Design Services ............................................................ 25.5 25.5 25.0 

541513 ........ Computer Facilities Management Services .................................................. 35.5 25.5 25.0 

541519 ........ Other Computer Related Services ................................................................ 19.0 25.5 25.0 

Except ......... Information Technology Value Added Resellers .......................................... NA ........................ 150 employees 

541611 ........ Administrative Management and General Management Consulting Services.14.0 14.0 7.0 

541612 ........ Human Resources Consulting Services ....................................................... 14.0 14.0 7.0 

541613 ........ Marketing Consulting Services ..................................................................... 7.0 14.0 7.0 

541614 ........ Process, Physical Distribution and Logistics Consulting Services ............... 19.0 14.0 7.0 

541618 ........ Other Management Consulting Services ...................................................... 7.0 14.0 7.0 

541620 ........ Environmental Consulting Services .............................................................. 5.0 14.0 7.0 

541690 ........ Other Scientific and Technical Consulting Services ..................................... 10.0 14.0 7.0 

541720 ........ Research and Development in the Social Sciences and Humanities .......... 19.0 ........................ 7.0 

541810 ........ Advertising Agencies .................................................................................... 14.0 14.0 7.0 

541820 ........ Public Relations Agencies ............................................................................ 7.0 14.0 7.0

541830 ........ Media Buying Agencies ................................................................................ 25.5 14.0 7.0 

541840 ........ Media Representatives ................................................................................. 7.0 14.0 7.0 


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TABLE 6—SUMMARY OF SIZE STANDARDS ANALYSIS—Continued 

NAICS codes NAICS industry title 

Calculated 

industry specific 

size standard ($ 

million) 

Calculated 

common size 

standard 

($ million) 

Current size 

standard 

($ million) 

541850 ........ Display Advertising ....................................................................................... 25.5 14.0 7.0 

541860 ........ Direct Mail Advertising .................................................................................. 19.0 14.0 7.0 

541870 ........ Advertising Material Distribution Services .................................................... 19.0 14.0 7.0 

541890 ........ Other Services Related to Advertising ......................................................... 7.0 14.0 7.0 

541910 ........ Marketing Research and Public Opinion Polling .......................................... 19.0 7.0 7.0 

541921 ........ Photography Studios, Portrait ....................................................................... 7.0 7.0 7.0 

541922 ........ Commercial Photography ............................................................................. 5.0 7.0 7.0 

541930 ........ Translation and Interpretation Services ........................................................ 7.0 7.0 7.0 

541940 ........ Veterinary Services ....................................................................................... 5.0 7.0 7.0 

541990 ........ All Other Professional, Scientific and Technical Services ............................ 7.0 7.0 7.0 

811212 ........ Computer and Office Repair and Maintenance ............................................ 19.0 25.5 25.0 

Reducing size standards would 

decrease the number of firms that can 

participate in Federal financial and 

procurement assistance. Furthermore, 

lowering size standards for those 14 

industries would cut off nearly 1,200 

currently eligible small business firms 

from those very programs, which would 

run counter to what the Federal 

government is trying to do for small 

businesses. Reducing size eligibility for 

Federal procurement opportunities, 

especially under current economic 

conditions, would not preserve or create 

more jobs; rather, it would have the 

opposite effect. Therefore, SBA has 

decided not to propose to reduce the 

size standards for those industries. SBA 

has decided to retain the current size 

standards in this proposed rule. SBA 

invites comments and suggestions on 

whether it should lower size standards 

as suggested by analyses of industry and 

program data or retain the current 

standards for those industries in view of 

current economic conditions. SBA 

intends for the proposed size standards, 

if adopted, to remain in effect unless 

and until it receives information or data 

that suggests a change is needed. 

Based on comparisons between 

industry specific size standards and 

common size standards within each 

Industry Group, SBA finds that common 

size standards are more appropriate for 

several reasons. First, analyzing 

industries at a more aggregated Industry 

Group level simplifies size standards 

analysis and the results are more 

consistent among related industries. 

Second, in most cases, industries within 

each Industry Group currently have the 

same size standards and it is better to 

keep the revised size standards also the 

same. Third, within each Industry 

Group many of the same businesses 

tend to operate in the same multiple 

industries. Establishing the common 

size standard would, therefore, better 

reflect the Federal marketplace in those 

industries than establishing different 

size standards for each industry. Fourth, 

industry specific size standards and 

common size standards are mostly 

within a reasonably close range. 

For industries where both industry 

specific size standards and common size 

standards have been derived, SBA, for 

the above reasons, proposes to apply 

common size standards. For industries 

(including sub-industries) where 

common size standards have not been 

estimated, SBA proposes to apply 

industry specific size standards. 

As discussed above, SBA has decided 

that lowering small business size 

standards would be inconsistent with 

what the Federal government is doing to 

stimulate the economy and encourage 

job growth through the Recovery Act 

and Jobs Act. Therefore, SBA proposes 

to retain the current size standards for 

those industries for which its analyses 

suggested decreasing their size 

standards. Thus, of the 45 industries 

and three sub-industries in NAICS 

Sector 54 and one industry in NAICS 

Sector 81 that were reviewed in this 

proposed rule, SBA proposes to increase 

size standards for 36 industries and one 

sub-industry and retain current 

standards for 10 industries and two subindustries. As discussed above, SBA 

also proposes to eliminate Map Drafting 

Services as an ‘‘exception’’ to NAICS 

541340, Drafting Services. Industries 

and their proposed size standards are 

shown in Table 7. 

TABLE 7—SUMMARY OF PROPOSED REVISIONS TO SIZE STANDARDS

NAICS codes NAICS industry title 

Proposed size 

standard 

($ million) 

Current size 

standard 

($ million) 

541110 Offices of Lawyers ................................................................................................................ $10.0 $7.0 

541191 Title Abstract and Settlement Offices ................................................................................... 10.0 7.0 

541199 All Other Legal Services ....................................................................................................... 10.0 7.0 

541211 Offices of Certified Public Accountants ................................................................................ 14.0 8.5 

541213 Tax Preparation Services ...................................................................................................... 14.0 7.0 

541214 Payroll Services .................................................................................................................... 14.0 8.5 

541219 Other Accounting Services ................................................................................................... 14.0 8.5 

541310 Architectural Services ........................................................................................................... 19.0 4.5 

541320 Landscape Architectural Services ......................................................................................... 19.0 7.0 

541330 Engineering Services ............................................................................................................ 19.0 4.5 

Except Marine Engineering and Naval Architecture ......................................................................... 25.5 18.5 

541340 Drafting Services ................................................................................................................... 19.0 7.0 

541350 Building Inspection Services ................................................................................................. 19.0 7.0 

541360 Geophysical Surveying and Mapping Services .................................................................... 19.0 4.5 

541370 Surveying and Mapping (except Geophysical) Services ...................................................... 19.0 4.5 


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TABLE 7—SUMMARY OF PROPOSED REVISIONS TO SIZE STANDARDS—Continued 

NAICS codes NAICS industry title 

Proposed size 

standard 

($ million) 

Current size 

standard 

($ million) 

541380 Testing Laboratories ............................................................................................................. 19.0 12.0 

541511 Custom Computer Programming Services ........................................................................... 25.5 25.0

541512 Computer Systems Design Services .................................................................................... 25.5 25.0 

541513 Computer Facilities Management Services .......................................................................... 25.5 25.0 

541519 Other Computer Related Services ........................................................................................ 25.5 25.0 

541611 Administrative Management and General Management Consulting Services ..................... 14.0 7.0 

541612 Human Resources Consulting Services ............................................................................... 14.0 7.0 

541613 Marketing Consulting Services ............................................................................................. 14.0 7.0 

541614 Process, Physical Distribution and Logistics Consulting Services ....................................... 14.0 7.0 

541618 Other Management Consulting Services .............................................................................. 14.0 7.0 

541620 Environmental Consulting Services ...................................................................................... 14.0 7.0 

541690 Other Scientific and Technical Consulting Services ............................................................. 14.0 7.0 

541720 Research and Development in the Social Sciences and Humanities .................................. 19.0 7.0 

541810 Advertising Agencies ............................................................................................................. 14.0 7.0 

541820 Public Relations Agencies .................................................................................................... 14.0 7.0 

541830 Media Buying Agencies ........................................................................................................ 14.0 7.0 

541840 Media Representatives ......................................................................................................... 14.0 7.0 

541850 Display Advertising ................................................................................................................ 14.0 7.0 

541860 Direct Mail Advertising .......................................................................................................... 14.0 7.0 

541870 Advertising Material Distribution Services ............................................................................ 14.0 7.0 

541890 Other Services Related to Advertising .................................................................................. 14.0 7.0 

811212 Computer and Office Repair and Maintenance .................................................................... 25.5 25.0 

Evaluation of Dominance in Field of 

Operation 

In the industries and sub-industries 

for which SBA proposes to revise size 

standards, there are no individual firms 

at or below the proposed size standard 

large enough to dominate their field of 

operation. A firm at the proposed size 

standard in each of these industries 

generates less than two percent of total 

industry receipts. This level of market 

share effectively precludes a firm at or 

below the proposed size standard from 

exerting a controlling effect on the 

industry. 

Request for Comments 

SBA invites public comments on the 

proposed rule, especially on the 

following areas. 

1. To simplify size standards, SBA 

proposes eight fixed size levels for 

receipts based size standards: $5.0 

million, $7.0 million, $10.0 million, 

$14.0 million, $19.0 million, $25.5 

million, $30.0 million and $35.5 

million. SBA invites comments on 

whether simplification of size standards 

in this way is necessary and if these 

proposed fixed size levels are 

appropriate, or suggestions on 

alternative approaches to simplifying 

small business size standards. 

2. SBA seeks feedback on whether the 

proposed levels of size standards are 

appropriate given the economic 

characteristics of each industry or subindustry. SBA also seeks feedback and 

suggestions on alternative standards, if 

they would be more appropriate, 

including whether an employee based 

standard for certain industries or subindustries is a more suitable measure of 

size and what that employee level 

should be. 

3. For industries within several 

Industry Groups, including Legal 

Services (NAICS 5411), Accounting and 

Related Services (NAICS 5412), A&E 

and Related Services (NAICS 5413, 

except for the exceptions), Specialized 

Design Services (NAICS 5414), 

Computer Related Services (NAICS 5415 

and NAICS 811212), Consulting 

Services (NAICS 5416), Advertising and 

Related Services (NAICS 5418) and 

Other Professional, Scientific, and 

Technical Services (NAICS 5419), SBA 

proposes a common size standard. SBA 

invites comments or suggestions along 

with supporting information with 

respect to the following: 

a. Whether SBA should adopt a 

common size standard for those 

industries or establish a separate size 

standard for each industry. 

b. Whether the proposed common size 

standards for those industries are at the 

correct levels or what are more 

appropriate size standards if the 

proposed standards are not suitable. 

4. SBA proposes to increase the size 

standard for Marine Engineering and 

Naval Architecture, one of the three 

exceptions under NAICS 541330, to 

$25.5 million from $18.5 million. For 

the other two exceptions under NAICS 

541330, namely Military and Aerospace 

Equipment and Military Weapons and 

the Contracts and Subcontracts for 

Engineering Services Awarded Under 

the National Energy Policy Act of 1992, 

SBA proposes to retain the current $27.0 

million size standard. SBA requests 

comments, along with supporting 

information, on whether the proposed 

size standards are appropriate or 

suggestions on alternative size standards 

if the proposed standards are 

inappropriate. 

5. SBA feels that there is no need for 

a separate size standard for Map 

Drafting Services for Federal 

procurement and proposes to remove it 

as an exception to NAICS 541340. As 

stated above, there were less than $10 

million in total contracting dollars 

annually during fiscal years 2007–2009, 

as compared to more than $2 billion in 

total revenue for the industry in this 

NAICS code. Given this relatively 

insignificant level of Federal contracting 

for Map Drafting Services (an 

‘‘exception’’ under NAICS 541340, 

Drafting Services), SBA proposes to 

eliminate this exception. SBA invites 

comments on whether SBA should 

remove or retain the Map Drafting 

Services as an exception under NAICS 

541340. 

6. SBA’s proposed size standards are 

based on its evaluation of five primary 

factors—average firm size, average 

assets size (as a proxy of startup costs 

and entry barriers), four-firm 

concentration ratio, distribution of firms 

by size and the level and small business 

share of Federal contracting dollars. 

SBA welcomes comments on these 

factors and/or suggestions on other 

factors that it should consider for 

assessing industry characteristics when 

evaluating or revising size standards. 


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SBA also seeks information on relevant 

data sources, if available. 

7. SBA gives equal weight to each of 

the five primary factors in all industries. 

SBA seeks feedback on whether it 

should continue giving equal weight to 

each factor or whether it should give 

more weight to one or more factors for 

certain industries. Recommendations to 

weigh some factors more than others 

should include suggestions on specific 

weights for each factor for those 

industries along with supporting 

information. 

8. For some industries, SBA proposes 

to increase the existing size standards 

by a large amount (e.g., for certain A&E 

industries, proposed size standards are 

more than three times the current size 

standards) while for others the proposed 

increases are modest. SBA seeks 

feedback on whether it should, as a 

policy, limit the increase to a size 

standard and/or whether it should, as a 

policy, establish minimum or maximum 

values for its size standards. SBA seeks 

suggestions on appropriate levels of 

changes to size standards and on their 

minimum or maximum levels. 

9. SBA requests comments on 

whether it should lower size standards. 

SBA has proposed not to reduce small 

business size standards where applying 

its ‘‘Size Standards Methodology,’’ might 

suggest lowering them. Rather, SBA 

opted to retain the current standards for 

those industries. SBA explained its 

reasons for this in the Supplementary 

Information above. SBA seeks 

comments, as it does in its ‘‘Size 

Standards Methodology’’ (see Policy 

Issue i on page 47) on whether it should 

reduce size standards at all. Because 

this is a policy issue, please provide 

documentation to reinforce your 

comments either in support of or 

opposition to this issue. 

10. For analytical simplicity and 

efficiency, in this proposed rule, SBA 

has refined its size standard 

methodology to obtain a single value as 

a proposed size standard instead of a 

range of values in its past size 

regulations. SBA welcomes any 

comments on this procedure and 

suggestions on alternative methods. 

Public comments on the above issues 

are very valuable to SBA for validating 

its size standard methodology and 

proposed revisions to size standards in 

this proposed rule. This will help SBA 

to move forward with its review of size 

standards for other NAICS Sectors. 

Commenters addressing size standards 

for a specific industry or a group of 

industries should include relevant data 

and/or other information supporting 

their comments. If comments relate to 

using size standards for Federal 

procurement programs, SBA suggests 

that commenters provide information on 

the size of contracts awarded, the size 

of businesses that can undertake the 

contracts, start-up costs, equipment and 

other asset requirements, the amount of 

subcontracting, other direct and indirect 

costs associated with the contracts, the 

use of mandatory sources of supply for 

products and services and the degree to 

which contractors can mark up those 

costs. 

Compliance With Executive Orders 

12866, 12988, 13132 and 13563, 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 

proposed rule is a ‘‘significant’’ 

regulatory action for purposes of 

Executive Order 12866. Accordingly, 

the next section contains SBA’s 

Regulatory Impact Analysis. This is not 

a major rule, however, under the 

Congressional Review Act, 5 U.S.C. 800. 

Regulatory Impact Analysis 

1. Is there a need for the regulatory 

action? 

SBA believes that proposed size 

standards for a number of industries in 

NAICS Sector 54, Professional, 

Scientific and Technical Services, will 

better reflect the economic 

characteristics of small businesses and 

the Federal government marketplace. 

SBA’s 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, SBA must establish 

distinct definitions of which businesses 

are deemed small businesses. The Small 

Business Act (15 U.S.C. 632(a)) 

delegates to SBA’s Administrator the 

responsibility for establishing small 

business definitions. The Act also 

requires that small business definitions 

vary to reflect industry differences. The 

supplementary information section of 

this proposed rule explains SBA’s 

methodology for analyzing a size 

standard for a particular industry. 

2. What are the potential benefits and 

costs of this regulatory action? 

The most significant benefit to 

businesses obtaining small business 

status because of this rule is gaining 

eligibility for Federal small business 

assistance programs. These include 

SBA’s financial assistance programs, 

economic injury disaster loans and 

Federal procurement programs intended 

for small businesses. Federal 

procurement provides 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), and servicedisabled veteran-owned small business 

concerns (SDVO SBC). Other Federal 

agencies also may use SBA size 

standards for a variety of regulatory and 

program purposes. Through the 

assistance of these programs, small 

businesses become more 

knowledgeable, stable and competitive. 

In 36 industries and one sub-industry 

for which SBA has proposed increasing 

size standards, SBA estimates that about 

9,450 additional firms will obtain small 

business status and become eligible for 

these programs. That number is 1.2 

percent of the total number of firms in 

those industries defined as small under 

the current standards. If adopted as 

proposed, this would increase the small 

business share of total industry receipts 

in those industries from about 35.0 

percent under the current size standards 

to 41.0 percent. 

The benefits of SBA’s proposed 

increased size standards will accrue to 

three groups: (1) Businesses that are 

above the current size standards will 

gain small business status under the 

higher size standards, thereby being able 

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 

being able 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. 

During fiscal years 2007–2009, nearly 

90 percent of Federal contracting dollars 

spent in industries reviewed in this 

proposed rule were accounted for by the 

36 industries for which SBA has 

proposed to increase size standards. 

SBA estimates that additional firms 

gaining small business status in those 

industries under the proposed size 

standards could potentially obtain 

Federal contracts totaling up to $650 

million per year under SBA’s small 

business, 8(a), HUBZone, WOSB, and 

SDVO SBC Programs and other 

unrestricted procurements. The added 

competition for many of these 

procurements also could result in lower 

prices to the Government for 

procurements reserved for small 


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businesses, but SBA cannot quantify 

this benefit. 

Under SBA’s 7(a) Business Loan and 

504 Programs, SBA estimates 75–100 

additional loans totaling $15 million to 

$20 million in Federal loan guarantees 

could be made to these newly defined 

small businesses under the proposed 

standards. Increasing the size standards 

will likely result in an increase in small 

business guaranteed loans to businesses 

in these industries, but it would be 

impractical to try to estimate exactly the 

extent of their number and the total 

amount loaned. 

The newly defined small businesses 

would also benefit from SBA’s 

Economic Injury Disaster Loan (EIDL) 

Program. Since this program is 

contingent upon the occurrence and 

severity of a disaster, no meaningful 

estimate of benefits can be projected for 

future disasters. 

To the extent that 9,450 additional 

firms could become active in Federal 

procurement programs, this may entail 

some additional administrative costs to 

the Federal Government associated with 

additional bidders for Federal small 

business procurement opportunities, 

additional firms seeking SBA 

guaranteed lending programs, additional 

firms eligible for enrollment in the 

Central Contractor Registration’s 

Dynamic Small Business Search 

database and additional firms seeking 

certification as 8(a) or HUBZone firms 

or those qualifying for small business, 

WOSB, SDVO SBC, and SDB status. 

Among businesses in this group seeking 

SBA assistance, there could be some 

additional costs associated with 

compliance and verification of small 

business status and protests of small 

business status. These added costs are 

likely to be minimal because 

mechanisms are already in place to 

handle these administrative 

requirements. 

The costs to the Federal Government 

may be higher on some Federal 

contracts. With a greater number of 

businesses defined as small, Federal 

agencies may choose to set aside more 

contracts for competition among small 

businesses 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. In addition, 

higher costs may result when more full 

and open contracts are awarded to 

HUBZone and SDB businesses that 

receive price evaluation preferences. 

The additional costs associated with 

fewer bidders, however, are likely to be 

minor since, as a matter of law, 

procurements may be set aside for small 

businesses or reserved for the 8(a), 

HUBZone, WOSB, or SDVO SBC 

Programs only if awards are expected to 

be made at fair and reasonable prices. 

The proposed size standards may 

have distributional effects among large 

and small businesses. Although SBA 

cannot estimate the actual outcome of 

the gains and losses among small and 

large businesses with certainty, it can 

identify several likely impacts. There 

will likely 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 Federal contracts for small 

businesses. In addition, some Federal 

contracts may be awarded to HUBZone 

or SDB concerns instead of large 

businesses since those two categories of 

small businesses may be eligible for an 

evaluation adjustment for contracts 

when they compete on a full and open 

basis. Similarly, currently defined small 

businesses may obtain fewer Federal 

contracts due to the increased 

competition from more businesses 

defined as small. 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 away from 

large and currently defined small 

businesses. SBA cannot estimate the 

potential distributional impacts of these 

transfers with any degree of precision 

because FPDS–NG data only identify the 

size of businesses receiving Federal 

contracts as small business or other than 

small businesses; FPDS–NG does not 

provide the exact size of the business. 

The proposed revisions to the existing 

size standards for Professional, 

Scientific and Technical Services 

industries is consistent with SBA’s 

statutory mandate to assist small 

business. This regulatory action 

promotes the Administration’s 

objectives. One of SBA’s goals in 

support of the Administration’s 

objectives is to help individual small 

businesses succeed through fair and 

equitable access to capital and credit, 

Government contracts and management 

and technical assistance. Reviewing and 

modifying size standards, when 

appropriate, ensures 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 Regulatory Impact 

Analysis under Executive Order 12866. 

In an effort to engage interested 

parties in this action, SBA has presented 

its methodology (discussed above under 

Supplementary Information) to various 

industry associations and trade groups, 

representing various industry Sectors 

including Professional Scientific and 

Technical Services. SBA also met with 

various industry groups to get their 

feedback on its methodology and other 

size standards issues. Several of these 

groups expressed concerns and 

suggestions for size standards for a 

number of industries in NAICS Sector 

54. 

Also, SBA sent letters to the Directors 

of the Offices of Small and 

Disadvantaged Business Utilization 

(OSDBU) and a several Federal agencies 

with considerable procurement 

responsibilities requesting their 

feedback on how the agencies use SBA 

size standards and whether current 

standards meet their programmatic 

needs (both procurement and nonprocurement). SBA gave appropriate 

consideration to all input, suggestions, 

recommendations, and relevant 

information obtained from industry 

groups, individual businesses, and 

Federal agencies in preparing this 

proposed rule. 

The review of NAICS Sector 54, 

Professional, Scientific and Technical 

Services, is consistent with Sector 6 of 

EO 13653, 6. calling for retrospective 

analyses of existing rules. The last 

overall review of size standards 

occurred during the late 1970s and early 

1980s. Since then, except for periodic 

adjustments for monetary based size 

standards, most reviews of size 

standards have been limited to a few 

specific industries in response to 

requests from the public and Federal 

agencies. SBA recognizes that changes 

in industry structure and the Federal 

marketplace over time have rendered 

existing size standards for some 

industries no longer supportable by 

current data. Accordingly, SBA has 

begun a comprehensive review of its 

size standards to ensure that existing 

size standards have supportable bases 

and to revise them when necessary. In 

addition, on September 27, 2010 the 

President of the United States signed the 

Small Business Jobs Act of 2010 (Jobs 

Act). The Jobs Act directs SBA to 

conduct a detailed review of all size 

standards and to make appropriate 

adjustments to reflect market 

conditions. Specifically, the Jobs Act 

requires SBA to conduct a detailed 


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review of at least one-third of all size 

standards during every 18-month period 

from the date of its enactment and do a 

complete review of all size standards 

not less frequently than once every 5 

years thereafter. 

Executive Order 12988 

For purposes of Executive Order 

12988, SBA has determined that this 

rule is drafted, to the extent practicable, 

in accordance with the standards set 

forth in that Order. 

Executive Order 13132 

For purposes of Executive Order 

13132, SBA has determined that this 

rule does not have any Federalism 

implications warranting the preparation 

of a federalism assessment. 

Paperwork Reduction Act 

For the purpose of the Paperwork 

Reduction Act, 44 U.S.C. Ch. 35, SBA 

has determined that this rule would not 

impose new reporting or record keeping 

requirements, other than those required 

of SBA. 

Initial Regulatory Flexibility Analysis 

Under the Regulatory Flexibility Act 

(RFA), this rule, if finalized, may have 

a significant impact on a substantial 

number of small entities in NAICS 

Sector 54, Professional, Scientific and 

Technical Services. As described above, 

this rule may affect small entities 

seeking Federal contracts, SBA (7a) and 

504 Guaranteed Loan Programs, SBA 

Economic Injury Disaster Loans and 

other Federal small business programs. 

Immediately below, SBA sets forth an 

initial regulatory flexibility analysis 

(IRFA) of this proposed rule addressing 

the following questions: (1) What is the 

need for and objective of the rule? (2) 

what is SBA’s description and estimate 

of the number of small entities 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 which 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 

entities? 

(1) What is the need for and objective of 

the rule? 

As described above in the 

supplementary section, SBA reviewed 

and modified size standards for NAICS 

541310, NAICS 541330, NAICS 541340, 

NAICS 541360 and NAICS 541370 in 

1998 and 1999. Most of the remaining 

size standards in NAICS Sector 54, 

Professional, Scientific and Technical 

Services, have not been reviewed since 

the early 1980s. Technology, 

productivity growth, international 

competition, mergers and acquisitions 

and updated industry definitions may 

have changed the structure of many 

industries in that Sector. Such changes 

can be sufficient to support a revision to 

size standards for some industries. 

Based on the analysis of the latest data 

available to the Agency, SBA believes 

that the revised standards in this 

proposed rule more appropriately reflect 

the size of businesses in those industries 

that need Federal assistance. 

(2) What is SBA’s description and 

estimate of the number of small entities 

to which the rule will apply? 

If the proposed rule is adopted in its 

present form, SBA estimates that about 

9,450 additional firms will become 

small because of increases in size 

standards in 36 industries and one subindustry. That represents 1.2 percent of 

total firms in those industries and subindustries. This will result in an 

increase in the small business share of 

total industry receipts for this Sector 

from about 35.0 percent under the 

current size standard to 41.0 percent 

under the proposed standards. SBA 

does not anticipate a significant 

competitive impact on smaller 

businesses in these industries because 

businesses in this Sector have been 

requesting SBA to increase these 

standards. The proposed standards, if 

adopted, will enable more small 

businesses to retain their small business 

status for a longer period. Many have 

lost their eligibility and find it difficult 

to compete at such low levels 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; other entities are other than 

small. 

(3) What are the projected reporting, 

record keeping and other compliance 

requirements of the rule and an estimate 

of the classes of small entities, which 

will be subject to the requirements? 

Proposed size standards changes do 

not impose any additional reporting or 

record keeping requirements on small 

entities. However, qualifying for Federal 

procurement and a number of other 

programs requires that entities register 

in the CCR database and certify at least 

annually that they are small in the 

Online Representations and 

Certifications Application (ORCA). 

Therefore, businesses opting to 

participate in those programs must 

comply with CCR and ORCA 

requirements. There are no costs 

associated with either CCR registration 

or ORCA certification. Changing size 

standards alters the access to SBA 

programs that assist small businesses, 

but does not impose a regulatory burden 

as they neither regulate nor control 

business behavior. 

(4) What are the relevant Federal rules, 

which may duplicate, overlap or conflict 

with the rule? 

Under § 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. In 1995, SBA published in the 

Federal Register a list of statutory and 

regulatory size standards that identified 

the application of SBA’s size standards 

as well as other size standards used by 

Federal agencies (60 FR 57988 

(November 24, 1995)). 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, 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. 

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, Reporting 

and recordkeeping requirements, Small 

businesses. 

For the reasons set forth in the 

preamble, SBA proposes to amend part 

13 CFR Part 121 as follows. 


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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), 636(b), 

637(a), 644 and 662(5); and Pub. L. 105–135, 

sec. 401 et seq., 111 Stat. 2592. 

2. In § 121.201, in the table, revise the 

entries for ‘‘541110’’, ‘‘541191’’, 

‘‘541199’’, ‘‘541211’’, ‘‘541213’’, ‘‘541214’’, 

‘‘541219’’, ‘‘541310’’, ‘‘541320’’, ‘‘541330 

introductory entry and third sub-entry’’, 

‘‘541340’’, ‘‘541350’’, ‘‘541360’’, ‘‘541370’’, 

‘‘541380’’, ‘‘541511’’, ‘‘541512’’, ‘‘541513’’, 

‘‘541519 introductory entry’’, ‘‘541611’’, 

‘‘541612’’, ‘‘541613’’, ‘‘541614’’, ‘‘541618’’, 

‘‘541620’’, ‘‘541690’’, ‘‘541720’’, ‘‘541810’’, 

‘‘541820’’, ‘‘541830’’, ‘‘541840’’, ‘‘541850’’, 

‘‘541860’’, ‘‘541870’’, ‘‘541890’’, and 

‘‘811212’’ to read as follows: 

§ 121.201 What size standards has SBA 

identified by North American Industry 

Classification System codes? 

* * * * * 

NAICS codes NAICS U.S. industry title 

Size standards 

in millions of 

dollars 

Size standards 

in number of 

employees 

*******

541110 ........ Offices of Lawyers .......................................................................................................................... $10.0 ........................

541191 ........ Title Abstract and Settlement Offices ............................................................................................. 10.0 ........................

541199 ........ All Other Legal Services ................................................................................................................. 10.0 ........................

541211 ........ Offices of Certified Public Accountants .......................................................................................... 14.0 ........................

541213 ........ Tax Preparation Services ............................................................................................................... 14.0 ........................

541214 ........ Payroll Services .............................................................................................................................. 14.0 ........................

541219 ........ Other Accounting Services ............................................................................................................. 14.0 ........................

541310 ........ Architectural Services ..................................................................................................................... 19.0 ........................

541320 ........ Landscape Architectural Services .................................................................................................. 19.0 ........................

541330 ........ Engineering Services ...................................................................................................................... 19.0 ........................

* * * * * * * 

Except, ........ Marine Engineering and Naval Architecture .................................................................................. 25.5 ........................

541340 ........ Drafting Services ............................................................................................................................ 19.0 ........................

541350 ........ Building Inspection Services .......................................................................................................... 19.0 ........................

541360 ........ Geophysical Surveying and Mapping Services .............................................................................. 19.0 ........................

541370 ........ Surveying and Mapping (except Geophysical) Services ............................................................... 19.0 ........................

541380 ........ Testing Laboratories ....................................................................................................................... 19.0 ........................

* * * * * * * 

541511 ........ Custom Computer Programming Services ..................................................................................... 25.5 ........................

541512 ........ Computer Systems Design Services .............................................................................................. 25.5 ........................

541513 ........ Computer Facilities Management Services .................................................................................... 25.5 ........................

541519 ........ Other Computer Related Services ................................................................................................. 25.5 ........................

* * * * * * * 

541611 ........ Administrative Management and General Management Consulting Services .............................. 14.0 ........................

541612 ........ Human Resources Consulting Services ......................................................................................... 14.0 ........................

541613 ........ Marketing Consulting Services ....................................................................................................... 14.0 ........................

541614 ........ Process, Physical Distribution and Logistics Consulting Services ................................................ 14.0 ........................

541618 ........ Other Management Consulting Services ....................................................................................... 14.0 ........................

541620 ........ Environmental Consulting Services ................................................................................................ 14.0 ........................

541690 ........ Other Scientific and Technical Consulting Services ...................................................................... 14.0 ........................

* * * * * * * 

541720 ........ Research and Development in the Social Sciences and Humanities ........................................... 19.0 ........................

541810 ........ Advertising Agencies 10 .................................................................................................................. 10 14.0 ........................

541820 ........ Public Relations Agencies .............................................................................................................. 14.0 ........................

541830 ........ Media Buying Agencies .................................................................................................................. 14.0 ........................

541840 ........ Media Representatives ................................................................................................................... 14.0 ........................

541850 ........ Display Advertising ......................................................................................................................... 14.0 ........................

541860 ........ Direct Mail Advertising .................................................................................................................... 14.0 ........................

541870 ........ Advertising Material Distribution Services ...................................................................................... 14.0 ........................

541890 ........ Other Services Related to Advertising ........................................................................................... 14.0 ........................

* * * * * * * 

811212 ........ Computer and Office Repair and Maintenance ............................................................................. 25.5 ........................

* * * * * * * 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Proposed Rules 14341 

Dated: March 9, 2011. 

Karen G. Mills, 

Administrator. 

[FR Doc. 2011–5876 Filed 3–15–11; 8:45 am] 

BILLING CODE 8025–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 25 

[Docket No. NM400 Special Conditions No. 

25–11–09–SC] 

Special Conditions: Boeing Model 747– 

8/–8F Airplanes, Interaction of Systems 

and Structures 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed special 

conditions. 

SUMMARY: This notice proposes to 

amend Special Conditions No. 25–388– 

SC for the Boeing Model 747–8/–8F 

airplanes. These special conditions were 

previously issued July 29, 2009, and 

became effective September 10, 2009. 

These special conditions are being 

amended to include additional criteria 

addressing the Outboard Aileron Modal 

Suppression System. The 747–8/–8F 

will have novel or unusual design 

features when compared to the state of 

technology envisioned in the 

airworthiness standards for transport 

category airplanes. These design 

features include their effects on the 

structural performance. These proposed 

special conditions contain the 

additional safety standards that the 

Administrator considers necessary to 

establish a level of safety equivalent to 

that established by the existing 

airworthiness standards. Additional 

special conditions will be issued for 

other novel or unusual design features 

of the 747–8/–8F airplanes. 

DATES: Comments must be received on 

or before April 15, 2011. 

ADDRESSES: Comments on this proposal 

may be mailed in duplicate to: Federal 

Aviation Administration, Transport 

Airplane Directorate, Attention: Rules 

Docket (ANM–113), Docket No. NM400, 

1601 Lind Avenue SW., Renton, 

Washington 98057–3356; or delivered in 

duplicate to the Transport Airplane 

Directorate at the above address. All 

comments must be marked Docket No. 

NM400. Comments may be inspected in 

the Rules Docket weekdays, except 

Federal holidays, between 7:30 a.m. and 

4 p.m. 

FOR FURTHER INFORMATION CONTACT: Carl 

Niedermeyer, FAA, Airframe & Cabin 

Safety Branch, ANM–115, Transport 

Airplane Directorate, Aircraft 

Certification Service, 1601 Lind Avenue 

SW., Renton, Washington 98057–3356; 

telephone (425) 227–2279; e-mail 

Carl.Niedermeyer@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

The FAA invites interested persons to 

participate in this rulemaking by 

submitting written comments, data, or 

views. The most helpful comments 

reference a specific portion of the 

proposed special conditions, explain the 

reason for any recommended change, 

and include supporting data. We ask 

that you send us two copies of written 

comments. 

We will file in the docket all 

comments we receive as well as a report 

summarizing each substantive public 

contact with FAA personnel concerning 

these proposed special conditions. The 

docket is available for public inspection 

before and after the comment closing 

date. If you wish to review the docket 

in person, go to the address in the 

ADDRESSES section of this notice 

between 7:30 a.m. and 4 p.m., Monday 

through Friday, except Federal holidays. 

We will consider all comments we 

receive on or before the closing date for 

comments. We will consider comments 

filed late if it is possible to do so 

without incurring expense or delay. We 

may change the proposed special 

conditions based on comments we 

receive. 

If you want the FAA to acknowledge 

receipt of your comments on this 

proposal, include with your comments 

a pre-addressed, stamped postcard on 

which the docket number appears. We 

will stamp the date on the postcard and 

mail it back to you. 

Background 

On November 4, 2005, The Boeing 

Company, PO Box 3707, Seattle, WA 

98124, applied for an amendment to 

Type Certificate Number A20WE to 

include the new Model 747–8 passenger 

airplane and the new Model 747–8F 

freighter airplane. The Model 747–8 and 

the Model 747–8F are derivatives of the 

747–400 and the 747–400F, 

respectively. Both the Model 747–8 and 

the Model 747–8F are four-engine jet 

transport airplanes that will have a 

maximum takeoff weight of 970,000 

pounds and new General Electric GEnx 

–2B67 engines. The Model 747–8 will 

have two flight crew and the capacity to 

carry 605 passengers. The Model 747– 

8F will have two flight crew and a zero 

passenger capacity, although Boeing has 

submitted a petition for exemption to 

allow the carriage of supernumeraries. 

These special conditions were 

originally issued July 29, 2009, and 

published in the Federal Register on 

August 12, 2009 (74 FR 40479). 

Type Certification Basis 

Under the provisions of Title 14, Code 

of Federal Regulations (14 CFR) 21.101, 

Boeing must show that Model 747–8 

and 747–8F airplanes (hereafter referred 

as 747–8/–8F) meet the applicable 

provisions of part 25, as amended by 

Amendments 25–1 through 25–117, 

except for earlier amendments as agreed 

upon by the FAA. These regulations 

will be incorporated into Type 

Certificate No. A20WE after type 

certification approval of the 747–8/–8F. 

In addition, the certification basis 

includes other regulations, special 

conditions and exemptions that are not 

relevant to these proposed special 

conditions. Type Certificate No. A20WE 

will be updated to include a complete 

description of the certification basis for 

these model airplanes. 

If the Administrator finds that the 

applicable airworthiness regulations 

(i.e., 14 CFR part 25) do not contain 

adequate or appropriate safety standards 

for the 747–8/–8F because of a novel or 

unusual design feature, special 

conditions are prescribed under the 

provisions of § 21.16. 

Special conditions are initially 

applicable to the model for which they 

are issued. Should the type certificate 

for that model be amended later to 

include any other model that 

incorporates the same or similar novel 

or unusual design feature, or should any 

other model already included on the 

same type certificate be modified to 

incorporate the same or similar novel or 

unusual design feature, the special 

conditions would also apply to the other 

model under § 21.101. 

In addition to the applicable 

airworthiness regulations and special 

conditions, the 747–8/–8F must comply 

with the fuel vent and exhaust emission 

requirements of 14 CFR part 34 and the 

noise certification requirements of 14 

CFR part 36. 

Special conditions, as defined in 

§ 11.19, are issued under § 11.38, and 

become part of the type certification 

basis under § 21.101. 

Novel or Unusual Design Features 

The Boeing Model 747–8/–8F is 

equipped with systems that affect the 

airplane’s structural performance, either 

directly or as a result of failure or 

malfunction. That is, the airplane’s 

systems affect how it responds in 

maneuver and gust conditions, and 

thereby affect its structural capability. 

These systems may also affect the 


jlentini on DSKJ8SOYB1PROD with PROPOSALS