[Federal Register Volume 85, Number 229 (Friday, November 27, 2020)]
[Proposed Rules]
[Pages 76390-76417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26312]



[[Page 76389]]

Vol. 85

Friday,

No. 229

November 27, 2020

Part VI





Small Business Administration





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13 CFR Part 121





Small Business Size Standards: Education Services; Health Care and 
Social Assistance; Arts, Entertainment and Recreation; Accommodation 
and Food Services; Other Services; Proposed Rule

Federal Register / Vol. 85 , No. 229 / Friday, November 27, 2020 / 
Proposed Rules

[[Page 76390]]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

RIN 3245-AG88


Small Business Size Standards: Education Services; Health Care 
and Social Assistance; Arts, Entertainment and Recreation; 
Accommodation and Food Services; Other Services

AGENCY: U.S. Small Business Administration.

ACTION: Proposed rule.

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SUMMARY: The U.S. Small Business Administration (SBA) proposes to 
increase its receipts-based small business size definitions (commonly 
referred to as ``size standards'') for North American Industry 
Classification System (NAICS) Sectors related to Education Services; 
Health Care and Social Assistance; Arts, Entertainment and Recreation; 
Accommodation and Food Services; and Other Services. SBA proposes to 
increase size standards for 70 industries in those sectors, including 
14 industries in NAICS Sector 61 (Education Services), 18 industries in 
Sector 62 (Health Care and Social Assistance), 11 industries in Sector 
71 (Arts, Entertainment and Recreation), 4 industries in Sector 72 
(Accommodation and Food Services), and 23 industries in Sector 81 
(Other Services). SBA's proposed revisions rely on its recently revised 
``Size Standards Methodology'' (Methodology). SBA seeks comments on its 
proposed changes to size standards in the above sectors, and the data 
sources it evaluated to develop the proposed size standards.

DATES: SBA must receive comments to this proposed rule on or before 
January 26, 2021.

ADDRESSES: Identify your comments by RIN 3245-AG88 and submit them by 
one of the following methods: (1) Federal eRulemaking Portal: 
www.regulations.gov; follow the instructions for submitting comments; 
or (2) Mail/Hand Delivery/Courier: Khem R. Sharma, Ph.D., Chief, Office 
of Size Standards, 409 Third Street SW, Mail Code 6530, Washington, DC 
20416.
    SBA will post all comments to this proposed rule on 
www.regulations.gov. If you wish to submit confidential business 
information (CBI) as defined in the User Notice at www.regulations.gov, 
you must submit such information to U.S. Small Business Administration, 
Khem R. Sharma, Ph.D., Chief, Office of Size Standards, 409 Third 
Street SW, Mail Code 6530, Washington, DC 20416, or send an email to 
<a href="/cdn-cgi/l/email-protection#a6d5cfdcc3d5d2c7c8c2c7d4c2d5e6d5c4c788c1c9d0"><span class="__cf_email__" data-cfemail="3e4d57445b4d4a5f505a5f4c5a4d7e4d5c5f10595148">[email protected]</span></a>. Highlight the information that you consider to 
be CBI and explain why you believe SBA should hold this information as 
confidential. SBA will review your information and determine whether it 
will make the information public.

FOR FURTHER INFORMATION CONTACT: Jorge Laboy-Bruno, Ph.D., Economist, 
Office of Size Standards, (202) 205-6618 or <a href="/cdn-cgi/l/email-protection#bdced4c7d8cec9dcd3d9dccfd9cefdcedfdc93dad2cb"><span class="__cf_email__" data-cfemail="63100a19061017020d0702110710231001024d040c15">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Discussion of Size Standards

    To determine eligibility for Federal small business assistance, SBA 
establishes small business size definitions (usually referred to as 
``size standards'') for private sector industries in the United States. 
SBA uses 2 primary measures of business size for size standards 
purposes: Average annual receipts and average number of employees. SBA 
uses financial assets for certain financial industries and refining 
capacity, in addition to employees, for the petroleum refining industry 
to measure business size. In addition, SBA's Small Business Investment 
Company (SBIC), Certified Development Company (504), and 7(a) Loan 
Programs use either the industry-based size standards or tangible net 
worth and net income-based alternative size standards to determine 
eligibility for those programs.
    In September 2010, Congress passed the Jobs Act (Pub. L. 111-240, 
124 Stat. 2504, September 27, 2010) requiring SBA to review all size 
standards every 5 years and make necessary adjustments to reflect 
current industry and market conditions. In accordance with the Jobs 
Act, in early 2016 SBA completed the first 5-year review of all size 
standards--except those for agricultural enterprises for which size 
standards were previously set by Congress--and made appropriate 
adjustments to size standards for a number of industries to reflect 
current industry and Federal market conditions.
    During the previous 5-year comprehensive review SBA reviewed the 
receipts-based size standards for 17 industries and 1 exception within 
NAICS Sector 61; 39 industries within Sector 62; 25 industries within 
Sector 71; 15 industries within Sector 72; and 48 industries within 
Sector 81. These reviews of receipts-based size standards occurred from 
October 2010 to December 2013. SBA's analyses of the relevant industry 
and Federal contracting data available at that time supported lowering 
size standards for 41 industries and 1 exception in these sectors. 
However, taking into consideration economic conditions at the time, SBA 
decided to either retain all size standards for which the industry 
analysis suggested a lower size standard at existing levels or bring 
them up to the relevant common size standard. In the final rules, SBA 
increased receipts-based size standards for 77 of those industries, 
including 9 industries in Sector 61 (77 FR 58739, September 24, 2012), 
28 industries in Sector 62 (77 FR 58755, September 24, 2012), 17 
industries in Sector 71 (78 FR 37417, June 20, 2013), 5 industries in 
Sector 72 (75 FR 61604, October 6, 2010), and 18 industries in Sector 
81 (75 FR 61591, October 6, 2010). SBA retained the existing size 
standards for the remaining 68 industries and 1 exception in these 
sectors. Table 1, Size Standards Revisions During the First 5-Year 
Review, provides a summary of these revisions by NAICS sector.

                        Table 1--Size Standards Revisions During the First 5-Year Review
----------------------------------------------------------------------------------------------------------------
                                                  Number of size  Number of size    Number size   Number of size
         NAICS sector              Sector name       standards       standards       standards       standards
                                                     reviewed        increased        lowered       maintained
----------------------------------------------------------------------------------------------------------------
61............................  Education                     18               9               0               9
                                 Services.
62............................  Health Care and               39              28               0              11
                                 Social
                                 Assistance.
71............................  Arts,                         25              17               0               8
                                 Entertainment
                                 and Recreation.
72............................  Accommodation                 15               5               0              10
                                 and Food
                                 Services.
81............................  Other Services..              48              18               0              30
                               ---------------------------------------------------------------------------------
    All Sectors...............  ................             145              77               0              68
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[[Page 76391]]

    Currently, there are 27 different size standards levels covering 
1,023 NAICS industries and 14 subindustry activities (commonly known as 
``exceptions'' in SBA's table of size standards). 16 of these size 
levels are based on average annual receipts, 9 are based on average 
number of employees, and 2 are based on other measures.
    SBA also adjusts its monetary-based size standards for inflation at 
least once every 5 years. An interim final rule on SBA's latest 
inflation adjustment to size standards, effective August 19, 2019, was 
published in the Federal Register on July 18, 2019 (84 FR 34261). SBA 
also updates its size standards, every 5 years to adopt the Office of 
Management and Budget's (OMB) quinquennial NAICS revisions to its table 
of small business size standards. Effective October 1, 2017, SBA 
adopted the OMB's 2017 NAICS revisions to its size standards (82 FR 
44886, September 27, 2017).
    This proposed rule is one of a series of proposed rules that will 
review size standards of industries grouped by various NAICS sectors. 
Rather than review all size standards at one time, SBA is reviewing 
size standards by grouping industries within various NAICS sectors that 
use the same size measure (i.e., employees or receipts). In the current 
review, SBA will review size standards in 6 groups of NAICS sectors. 
(In the prior review, SBA reviewed size standards mostly on a sector-
by-sector basis.) Once SBA completes its review of size standards for a 
group of sectors, it issues for public comments a proposed rule to 
revise size standards for those industries based on the latest 
available data and other factors deemed relevant by the SBA's 
Administrator.
    Below is a discussion of SBA's revised ``Size Standards 
Methodology'' (Methodology), available at www.sba.gov/size, for 
establishing, reviewing, or modifying receipts-based size standards 
that SBA has applied to this proposed rule. SBA examines the structural 
characteristics of an industry as a basis to assess industry 
differences and the overall degree of competitiveness of an industry 
and of firms within the industry. Industry structure is typically 
examined by analyzing 4 primary factors--average firm size, degree of 
competition within an industry, start-up costs and entry barriers, and 
distribution of firms by size. To assess the ability of small 
businesses to compete for Federal contracting opportunities under the 
current size standards, as the fifth primary factor, SBA also examines, 
for each industry averaging $20 million or more in average annual 
Federal contract dollars, the small business share in Federal contract 
dollars relative to the small business share in total industry's 
receipts. When necessary, SBA also considers other secondary factors 
that are relevant to the industries and the interests of small 
businesses, including impacts of size standards changes on small 
businesses.

Size Standards Methodology

    SBA has recently revised its Methodology for establishing, 
reviewing, or modifying size standards when necessary. See the 
notification in the April 11, 2019, edition of the Federal Register (84 
FR 14587). The revised methodology is available on SBA's size standards 
web page at www.sba.gov/size. Prior to finalizing the revised 
Methodology, SBA issued a notification in the April 27, 2018 edition of 
the Federal Register (83 FR 18468) to solicit comments from the public 
and notify stakeholders of the proposed changes to the Methodology. SBA 
considered all public comments in finalizing the revised Methodology. 
For a summary of comments and SBA's responses, refer to the SBA's April 
11, 2019, Federal Register notification.
    The revised Methodology represents a major change from the previous 
methodology, which was issued on October 21, 2009 (74 FR 53940). 
Specifically, in its revised Methodology SBA is replacing the 
``anchor'' approach applied in the previous methodology with a 
``percentile'' approach for evaluating differences in characteristics 
among various industries. Under the ``anchor'' approach, SBA generally 
evaluated the characteristics of individual industries relative to the 
average characteristics of industries with the anchor size standard to 
determine whether they should have a higher or a lower size standard 
than the anchor. In the ``percentile'' approach, SBA ranks each 
industry among all industries with the same measure of size standards 
(such as receipts or employees) in terms of 4 primary industry factors, 
discussed in the Industry Analysis subsection below. The ``percentile'' 
approach is explained more fully elsewhere in this proposed rule. For a 
more detailed explanation please see the revised methodology at 
www.sba.gov/size. Additionally, as the fifth factor, SBA evaluates the 
difference between the small business share in Federal contract dollars 
and the small business share in total industry's receipts to compute 
the size standard for the Federal contracting factor. The overall size 
standard for an industry is then obtained by averaging all size 
standards supported by each primary factor. The evaluation of the 
Federal contracting factor is explained more fully elsewhere in this 
proposed rule.
    SBA does not apply all aspects of its Methodology to all proposed 
rules because not all features are relevant for every industry covered 
by each proposed rule. For example, since all industries covered by 
this proposed rule have receipts-based size standards, the Methodology 
described in this proposed rule applies only to establishing, 
reviewing, or modifying receipts-based size standards. SBA's 
Methodology is available on its website at www.sba.gov/size.

Industry Analysis

    Congress granted SBA's Administrator discretion to establish 
detailed small business size standards (see 15 U.S.C. 632(a)(2)). 
Specifically, section 3(a)(3) of the Small Business Act (15 U.S.C. 
632(a)(3)) requires 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 is 
the basis for establishing, reviewing, or modifying small business size 
standards. In addition, SBA considers current economic conditions, its 
mission and program objectives, the Administration's current policies, 
impacts on small businesses under current size and proposed or revised 
size standards, suggestions from industry groups and Federal agencies, 
and public comments on the proposed rule. SBA also examines whether a 
size standard based on industry and other relevant data successfully 
excludes businesses that are dominant in the industry.
    The goal of SBA's size standards review is to determine whether its 
existing small business size standards reflect the current industry 
structure and Federal market conditions and revise them when the latest 
available data suggest that revisions are warranted. In the past, SBA 
compared the characteristics of each industry with the average 
characteristics of a group of industries associated with the ``anchor'' 
size standard. For example, in the first 5-year comprehensive review of 
size standards under the Jobs Act, $7 million (now $8.0 million due to 
the inflation adjustment in 2019; see 84 FR 34261 (July 18, 2019)) was 
considered the ``anchor'' for receipts-based size standards and 500 
employees was the ``anchor'' for employee-based size standards. If the 
characteristics of a

[[Page 76392]]

specific industry under review were similar to the average 
characteristics of industries in the anchor group, SBA generally 
adopted the anchor size standard for that industry. If the specific 
industry's characteristics were significantly different from those in 
the anchor group, SBA assigned a size standard that was higher or lower 
than the anchor. To determine a size standard above or below the anchor 
size standard, SBA evaluated the characteristics of a second comparison 
group of industries with higher size standards. For industries with 
receipts-based standards, the second comparison group consisted of 
industries with size standards between $23 million and $35.5 million, 
with the weighted average size standard for the group equaling $29 
million. For manufacturing industries and other industries with 
employee-based size standards (except for Wholesale Trade and Retail 
Trade), the second comparison group included industries with a size 
standard of 1,000 employees or 1,500 employees, with the weighted 
average size standard of 1,323 employees. Using the anchor size 
standard and average size standard for the second comparison group, SBA 
computed a size standard for an industry's characteristic (factor) 
based on the industry's position for that factor relative to the 
average values of the same factor for industries in the anchor and 
second comparison groups.
    Under the ``percentile'' approach, for each industry factor, an 
industry is ranked and compared with the 20th percentile and 80th 
percentile values of that factor among the industries sharing the same 
measure of size standards (i.e., receipts or employees). Combining that 
result with the 20th percentile and 80th percentile values of size 
standards among the industries with the same measure of size standards, 
SBA computes a size standard supported by each industry factor for each 
industry. In the previous Methodology, comparison industry groups were 
predetermined independent of the data, while in the revised Methodology 
they are established using the actual data. A more detailed description 
of the percentile method is provided in SBA's Methodology, available at 
www.sba.gov/size.
    The primary factors that SBA evaluates to examine industry 
structure include average firm size, startup costs and entry barriers, 
industry competition, and distribution of firms by size. SBA also 
evaluates, as an additional primary factor, small business success in 
receiving Federal contracting assistance under the current size 
standards. Specifically, for the Federal contracting factor, SBA 
examines the small business share of Federal contract dollars relative 
to small business share of total receipts within an industry. These 
are, generally, the 5 most important factors SBA examines when 
establishing, reviewing, or revising a size standard for an industry. 
However, SBA will also consider and evaluate other secondary factors 
that it believes are relevant to a particular industry (such as 
technological changes, growth trends, SBA financial assistance, and 
other program factors). SBA also considers possible impacts of size 
standard revisions on eligibility for Federal small business 
assistance, current economic conditions, the Administration's policies, 
and suggestions from industry groups and Federal agencies. Public 
comments on proposed rules also provide important additional 
information. SBA thoroughly reviews all public comments before making a 
final decision on its proposed revisions to size standards. Below are 
brief descriptions of each of the 5 primary factors that SBA has 
evaluated for each industry being reviewed in this proposed rule. A 
more detailed description of this analysis is provided in the SBA's 
Methodology, available at www.sba.gov/size.

1. Average Firm Size

    SBA computes 2 measures of average firm size: Simple average and 
weighted average. For industries with receipts-based size standards, 
the simple average is the total receipts of the industry divided by the 
total number of firms in the industry. The weighted average firm size 
is the summation of all the receipts of the firms in an industry 
multiplied by their share of receipts in the industry. The simple 
average weighs all firms within an industry equally regardless of their 
size. The weighted average overcomes that limitation by giving more 
weight to larger firms. The size standard supported by average firm 
size is obtained by averaging size standards supported by simple 
average firm size and weighted average firm size.
    If the average firm size of an industry is higher than the average 
firm size for most other industries, this would generally support a 
size standard higher than the size standards for other industries. 
Conversely, if the industry's average firm size is lower than that of 
most other industries, it would provide a basis to assign a lower size 
standard as compared to size standards for most other industries.

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 an industry 
under review have greater capital requirements than firms in most other 
industries, all other factors remaining the same, this would be a basis 
for a higher size standard. Conversely, if the industry has smaller 
capital needs compared to most other industries, a lower size standard 
would be considered appropriate.
    Given the lack of actual data on startup costs and entry barriers 
by industry, SBA uses average assets as a proxy for startup costs and 
entry barriers. To calculate average assets, SBA begins with the sales 
to total assets ratio for an industry from the Risk Management 
Association's Annual Statement Studies, available at https://rmau.org. 
SBA then applies these ratios to the average receipts of firms in that 
industry obtained from the Economic Census tabulation. An industry with 
average assets that are significantly higher than most other industries 
is likely to have higher startup costs; this in turn will support a 
higher size standard. Conversely, an industry with average assets that 
are similar to or lower than most other industries is likely to have 
lower startup costs; this will support either lowering or maintaining 
the size standard.

3. Industry Competition

    Industry competition is generally measured by the share of total 
industry receipts generated by the largest firms in an industry. SBA 
generally evaluates the share of industry receipts generated by the 4 
largest firms in each industry. This is referred to as the ``4-firm 
concentration ratio,'' a commonly used economic measure of market 
competition. Using the 4-firm concentration ratio, SBA compares the 
degree of concentration within an industry to the degree of 
concentration of the other industries with the same measure of size 
standards. If a significantly higher share of economic activity within 
an industry is concentrated among the 4 largest firms compared to most 
other industries, all else being equal, SBA would set a size standard 
that is relatively higher than for most other industries. Conversely, 
if the market share of the 4 largest firms in an industry is 
appreciably lower than the similar share for most other industries, the 
industry will be assigned a size standard that is lower than those for 
most other industries.

4. Distribution of Firms by Size

    SBA examines the shares of industry total receipts accounted for by 
firms of

[[Page 76393]]

different receipts and employment sizes in an industry. This is an 
additional factor SBA considers in assessing competition within an 
industry besides the 4-firm concentration ratio. If the preponderance 
of an industry's economic activity is attributable to smaller firms, 
this generally indicates that small businesses are competitive in that 
industry, which would support adopting a smaller size standard. A 
higher size standard would be supported for an industry in which the 
distribution of firms indicates that most of the economic activity is 
concentrated among the larger firms.
    Concentration is a measure of inequality of distribution. To 
determine the degree of inequality of distribution in an industry, SBA 
computes the Gini coefficient, using the Lorenz curve. The Lorenz curve 
presents the cumulative percentages of units (firms) along the 
horizontal axis and the cumulative percentages of receipts (or other 
measures of size) along the vertical axis. (For further detail, see 
SBA's Methodology on its website at 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 other industries with the same type of size 
standards. If an industry shows a higher degree of inequality of 
distribution (hence a higher Gini coefficient value) compared to most 
other industries in the group this would, all else being equal, warrant 
a size standard that is higher than the size standards assigned to most 
other industries. Conversely, an industry with lower degree of 
inequality (i.e., a lower Gini coefficient value) than most others will 
be assigned a lower size standard relative to others.

5. Federal Contracting

    As the fifth factor, SBA examines the success small businesses are 
having in winning Federal contracts under the current size standard as 
well as the possible impact a size standard change may have on Federal 
small business contracting opportunities. The Small Business Act 
requires the Federal Government to ensure that small businesses receive 
a ``fair proportion'' of Federal contracts. The legislative history 
also discusses the importance of size standards in Federal contracting. 
To incorporate the Federal contracting factor in the size standards 
analysis, SBA evaluates small business participation in Federal 
contracting in terms of the share of total Federal contract dollars 
awarded to small businesses relative to the small business share of 
industry's total receipts. In general, if the share of Federal contract 
dollars awarded to small businesses in an industry is significantly 
smaller than the small business share of total industry's receipts, all 
else remaining the same, a justification would exist for considering a 
size standard higher than the current size standard. In cases where 
small business share of the Federal market is already appreciably high 
relative to the small business share of the overall market, SBA 
generally assumes that the existing size standard is adequate with 
respect to the Federal contracting factor.
    The disparity between the small business Federal market share and 
industry-wide small business share may be due to various factors, such 
as extensive administrative and compliance requirements associated with 
Federal contracts, the different skill set required to perform Federal 
contracts as compared to typical commercial contracting work, and the 
size of Federal contracts. These, as well as other factors, are likely 
to influence the type of firms within an industry that compete for 
Federal contracts. By comparing the small business Federal contracting 
share with the industry-wide small business share, SBA includes in its 
size standards analysis the latest Federal market conditions.
    Besides the impact on Federal contracting, SBA also examines 
impacts on SBA's loan programs both under the current and revised size 
standards.

Sources of Industry and Program Data

    SBA's primary source of industry data used in this proposed rule 
for evaluating industry characteristics and developing size standards 
is a special tabulation of the Economic Census from the U.S. Census 
Bureau (https://www.census.gov/programs-surveys/economic-census.html). 
The tabulation based on the 2012 Economic Census is the latest 
available. The special tabulation provides industry data on the number 
of firms, number of establishments, number of employees, annual 
payroll, and annual receipts of companies by Industry (6-digit level), 
Industry Group (4-digit level), Subsector (3-digit level), and Sector 
(2-digit level). These data are arrayed by various classes of firms' 
size based on the overall number of employees and receipts of the 
entire enterprise (all establishments and affiliated firms) from all 
industries. The special tabulation also contains information for 
different levels of NAICS categories on average and median firm size in 
terms of both receipts and employment, total receipts generated by the 
4 and 8 largest firms, the Herfindahl-Hirschman Index (HHI), the Gini 
coefficient, and size distributions of firms by various receipts and 
employment size groupings.
    In some cases, where 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's analysis was based only on those factors for 
which data were available or estimates of missing values were possible.
    To evaluate some industries that are not covered by the Economic 
Census, SBA used a similar special tabulation of the latest County 
Business Patterns (CBP) published by the U.S. Census Bureau 
(www.census.gov/programs-surveys/cbp.html). Similarly, to evaluate 
industries in NAICS Sector 11 that are also not covered by the Economic 
Census and CBP, SBA evaluated a similar special tabulation based on the 
2012 Census of Agriculture (www.nass.usda.gov) from the National 
Agricultural Statistics Service (NASS). Besides the Economic Census, 
Agricultural Census and CBP tabulations, SBA also evaluates relevant 
industry data from other sources when necessary, especially for 
industries that are not covered by the Economic Census or CBP. These 
include the Quarterly Census of Employment and Wages (QCEW, also known 
as ES-202 data) (www.bls.gov/cew/) and Business Employment Dynamics 
(BED) data (www.bls.gov/bdm/) from the U.S. Bureau of Labor Statistics. 
Similarly, to evaluate certain financial industries that have assets-
based size standards, SBA examines the data from the Statistics on 
Depository Institutions (SDI) database (www5.fdic.gov/sdi/main.asp) of 
the Federal Depository Insurance Corporation (FDIC). Finally, to 
evaluate the capacity component of the Petroleum Refiners (NAICS 
324110) size standard, SBA evaluates the petroleum production data from 
the Energy Information Administration (www.eia.gov).
    To calculate average assets, SBA used sales to total assets ratios 
from the Risk Management Association's Annual eStatement Studies, 2016-
2018 (https://rmau.org). To evaluate Federal contracting trends, SBA 
examined the data on Federal prime contract awards

[[Page 76394]]

from the Federal Procurement Data System--Next Generation (FPDS-NG) 
(www.fpds.gov) for fiscal years 2016-2018. To assess the impact on 
financial assistance to small businesses, SBA examined its internal 
data on 7(a) and 504 loan programs for fiscal years 2016-2018. For some 
portion of impact analysis, SBA also evaluated the data from the System 
of Award Management (www.sam.gov). Data sources and estimation 
procedures SBA uses in its size standards analysis are documented in 
detail in SBA's Methodology, which is available at www.sba.gov/size.

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 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 or revised size standard as well 
as the distribution of firms by size. Market share and size 
distribution may indicate whether a firm can exercise a major 
controlling influence on a national basis in an industry where a 
significant number of business concerns are engaged. If a contemplated 
size standard includes a dominant firm, SBA will consider a lower size 
standard to exclude the dominant firm from being defined as small.

Selection of Size Standards

    In the 2009 Methodology SBA applied to the first 5-year 
comprehensive review of size standards, SBA adopted a fixed number of 
size standards levels as part of its effort to simplify size standards. 
In response to public comments to the 2009 Methodology white paper, and 
the 2013 amendment to the Small Business Act (section 3(a)(8)) under 
section 1661 of the National Defense Authorization Act for Fiscal Year 
2013 (``NDAA 2013'') (Pub. L. 112-239, January 2, 2013), in the revised 
Methodology, SBA relaxed the limitation on the number of small business 
size standards. Specifically, section 1661 of NDAA 2013 states ``SBA 
cannot limit the number of size standards, and shall assign the 
appropriate size standard to each industry identified by NAICS.''
    In the revised Methodology, SBA calculates a separate size standard 
for each NAICS industry. However, to account for errors and limitations 
associated with various data SBA evaluates in the size standards 
analysis, SBA rounds the calculated size standard value for a receipts-
based size standard to the nearest $500,000, except for agricultural 
industries in Subsectors 111 and 112 for which the calculated size 
standards will be rounded to the nearest $250,000. This rounding 
procedure is applied both in calculating a size standard for each of 
the 5 primary factors and in calculating the overall size standard for 
the industry.
    As a policy decision, SBA continues to maintain the minimum and 
maximum levels for both receipts and employee-based size standards. 
Accordingly, SBA will not generally propose or adopt a size standard 
that is either below the minimum level or above the maximum, even 
though the calculations yield values below the minimum or above the 
maximum. The minimum size standard reflects the size an established 
small business should be to have adequate capabilities and resources to 
be able to compete for and perform Federal contracts (but does not 
account for small businesses that are newly formed or just starting 
operations). On the other hand, the maximum size standard represents 
the level above which businesses, if qualified as small, would 
outcompete much smaller businesses when accessing Federal assistance.
    With respect to receipts-based size standards, SBA has established 
$6 million and $41.5 million, respectively, as the minimum and maximum 
size standard levels (except for most agricultural industries in NAICS 
Subsectors 111 and 112). These levels reflect the current minimum of 
$6.0 million and the current maximum of $41.5 million. The industry 
data suggests that $6 million minimum and $41.5 million maximum size 
standards would be too high for agricultural industries. Accordingly, 
SBA has established $1 million as the minimum size standard and $5 
million as the maximum size standard for industries in Subsector 111 
(Crop Production) and Subsector 112 (Animal Production and 
Aquaculture).

Evaluation of Industry Factors

    As mentioned earlier, to assess the appropriateness of the current 
size standards SBA evaluates the structure of each industry in terms of 
4 economic characteristics or factors, namely average firm size, 
average assets size as a proxy for startup costs and entry barriers, 
the 4-firm concentration ratio as a measure of industry competition, 
and size distribution of firms using the Gini coefficient. For each 
size standard type (i.e., receipts-based or employee-based) SBA ranks 
industries both in terms of each of the 4 industry factors and in terms 
of the existing size standard and computes the 20th percentile and 80th 
percentile values for both. SBA then evaluates each industry by 
comparing its value for each industry factor to the 20th percentile and 
80th percentile values for the corresponding factor for industries 
under a particular type of size standard.
    If the characteristics of an industry under review within a 
particular size standard type are similar to the average 
characteristics of industries within the same size standard type in the 
20th percentile, SBA will consider adopting as an appropriate size 
standard for that industry the 20th percentile value of size standards 
for those industries. For each size standard type, if the industry's 
characteristics are similar to the average characteristics of 
industries in the 80th percentile, SBA will assign a size standard that 
corresponds to the 80th percentile in the size standard rankings of 
industries. A separate size standard is established for each factor 
based on the amount of differences between the factor value for an 
industry under a particular size standard type and 20th percentile and 
80th percentile values for the corresponding factor for all industries 
in the same type. Specifically, the actual level of the new size 
standard for each industry factor is derived by a linear interpolation 
using the 20th percentile and 80th percentile values of that factor and 
corresponding percentiles of size standards. Each calculated size 
standard is bounded between the minimum and maximum size standards 
levels, as discussed before. As noted earlier, the calculated value for 
a receipts-based size standard for each industry factor is rounded to 
the nearest $500,000, except for industries in Subsectors 111 and 112 
for which a calculated size standard is rounded to the nearest 
$250,000.
    Table 2, 20th and 80th Percentiles of Industry Factors for 
Receipts-based Size Standards, shows the 20th percentile and 80th 
percentile values for average firm size (simple and weighted), average 
assets size, 4-firm concentration ratio, and Gini coefficient for 
industries with receipts-based size standards.

[[Page 76395]]



            Table 2--20th and 80th Percentiles of Industry Factors for Receipts-Based Size Standards
----------------------------------------------------------------------------------------------------------------
                                      Simple         Weighted
                                      average         average         Average         4-firm           Gini
     Industries/percentiles        receipts size   receipts size    assets size    concentration    coefficient
                                    ($ million)     ($ million)     ($ million)     ratio  (%)
----------------------------------------------------------------------------------------------------------------
                                  Industries, excluding Subsectors 111 and 112
----------------------------------------------------------------------------------------------------------------
20th percentile.................            0.83           19.42            0.34             7.9           0.686
80th percentile.................            7.52          830.65            5.19            42.4           0.834
----------------------------------------------------------------------------------------------------------------
                                      Industries in Subsectors 111 and 112
----------------------------------------------------------------------------------------------------------------
20th percentile.................            0.06            1.48            0.07             1.7           0.608
80th percentile.................            0.83           13.32            0.88            12.3           0.908
----------------------------------------------------------------------------------------------------------------

Estimation of Size Standards Based on Industry Factors

    An estimated size standard supported by each industry factor is 
derived by comparing its value for a specific industry to the 20th 
percentile and 80th percentile values for that factor. If an industry's 
value for a particular factor is near the 20th percentile value in the 
distribution, the supported size standard will be one that is close to 
the 20th percentile value of size standards for industries in the size 
standards group, which is $8.0 million. If a factor for an industry is 
close to the 80th percentile value of that factor, it would support a 
size standard that is close to the 80th percentile value in the 
distribution of size standards, which is $35.0 million. For a factor 
that is within, above, or below the 20-80th percentile range, the size 
standard is calculated using linear interpolation based on the 20th 
percentile and 80th percentile values for that factor and the 20th 
percentile and 80th percentile values of size standards.
    For example, if an industry's simple average receipts are $1.9 
million, that would support a size standard of $11.5 million. According 
to Table 2, the 20th percentile and 80th percentile values of average 
receipts are $0.83 million and $7.52 million, respectively. The $1.9 
million is 15.9% between the 20th percentile value ($0.83 million) and 
the 80th percentile value ($7.52 million) of simple average receipts 
(($1.9 million-$0.83 million) / ($7.52 million-$0.83 million) = 0.159 
or 15.9%). Applying this percentage to the difference between the 20th 
percentile value ($8 million) and 80th percentile ($35.0 million) value 
of size standards and then adding the result to the 20th percentile 
size standard value ($8.0 million) yields a calculated size standard 
value of $12.32 million ([{$35.0 million-$8.0 million{time}  * 0.159] + 
$8.0 million = $11.49 million). The final step is to round the 
calculated $11.49 million size standard to the nearest $500,000, which 
in this example yields $11.5 million. This procedure is applied to 
calculate size standards supported by other industry factors.
    Detailed formulas involved in these calculations are presented in 
SBA's Methodology,'' which is available on its website at www.sba.gov/size.

Derivation of Size Standards Based on Federal Contracting Factor

    Besides industry structure, SBA also evaluates Federal contracting 
data to assess the success of small businesses in getting Federal 
contracts under the existing size standards. For each industry with $20 
million or more in annual Federal contract dollars, SBA evaluates the 
small business share of total Federal contract dollars relative to the 
small business share of total industry receipts. All other factors 
being equal, if the share of Federal contracting dollars awarded to 
small businesses in an industry is significantly less than the small 
business share of that industry's total receipts, a justification would 
exist for considering a size standard higher than the current size 
standard. Conversely, if the small business share of Federal 
contracting activity is near or above the small business share in total 
industry receipts, this will support the current size standard.
    SBA increases the existing size standards by certain percentages 
when the small business share of total industry receipts exceeds the 
small business share of total Federal contract dollars by 10 or more 
percentage points. Proposed percentage increases generally reflect 
receipts levels needed to bring the small business share of Federal 
contracts on par with the small business share of industry receipts. 
These proposed percentage increases for receipts-based size standards 
are given in Table 3, Proposed Adjustments to Size Standards Based on 
Federal Contracting Factor.

               Table 3--Proposed Adjustments to Size Standards Based on Federal Contracting Factor
----------------------------------------------------------------------------------------------------------------
                                       Percentage difference between the small business  shares of total Federal
                                            contract dollars in an  industry and of total industry receipts
            Size standards            --------------------------------------------------------------------------
                                                >-10%                 -10% to -30%                <-30%
----------------------------------------------------------------------------------------------------------------
Receipts-based standards:
    <$15 million.....................  No change..............  Increase 30%...........  Increase 60%.
    $15 million to <$25 million......  No change..............  Increase 20%...........  Increase 40%.
    $25 million to <$41.5 million....  No change..............  Increase 15%...........  Increase 25%.
----------------------------------------------------------------------------------------------------------------

    For example, if an industry with the current size standard of $8.0 
million had an average of $50 million in Federal contracting dollars, 
of which 15% went to small businesses, and if that small businesses 
accounted for 40% of total receipts of that industry, the small 
business share of total Federal contract dollars would be 25 percentage 
points less than the small business share of total industry receipts 
(40%-15%). According to the above rule, the new

[[Page 76396]]

size standard for the Federal contracting factor for that industry 
would be set by multiplying the current $8.0 million standard by 1.3 
(i.e., 30% increase) and then by rounding the result to the nearest 
$500,000, yielding a size standard of $10.5 million.
    SBA evaluated the small business share of total Federal contract 
dollars for the 54 industries covered by this proposed rule--13 in 
Sector 61, 26 in Sector 62, 2 in Sector 71, 2 in Sector 72, and 11 in 
Sector 81--that had $20 million or more in average annual Federal 
contract dollars during fiscal years 2016-2018. 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) in 29 of these 
industries, prompting an upward adjustment of their existing size 
standards based on that factor. For the remaining 25 industries that 
averaged $20 million or more in average annual contract dollars, the 
Federal contracting factor was not significant, and the existing size 
standard was applied for that factor. For industries with less than $20 
million in average annual contract dollars no size standard was 
calculated for the Federal contracting factor.

Derivation of Overall Industry Size Standard

    The SBA's Methodology presented above results in 5 separate size 
standards based on evaluation of the 5 primary factors (i.e., 4 
industry factors and one Federal contracting factor). SBA typically 
derives an industry's overall size standard by assigning equal weights 
to size standards supported by each of these 5 factors. However, if 
necessary, SBA's Methodology would allow assigning different weights to 
some of these factors in response to its policy decisions and other 
considerations. For detailed calculations, see SBA's Methodology, 
available on its website at www.sba.gov/size.

Calculated Size Standards Based on Industry and Federal Contracting 
Factors

    Table 4, Size Standards Supported by Each Factor for Each Industry 
(Receipts), below, shows the results of analyses of industry and 
Federal contracting factors for each industry and subindustry 
(exception) covered by this proposed rule. NAICS industries in columns 
2, 3, 4, 5, 6, 7, and 8 show 2 numbers. The upper number is the value 
for the industry or Federal contracting factor shown on the top of the 
column and the lower number is the size standard supported by that 
factor. Column 9 shows a calculated new size standard for each 
industry. This is the average of the size standards supported by each 
factor (the size standard for average firm size is an average of size 
standards supported by simple average firm size and weighted average 
firm size), rounded to the nearest $500,000 for non-agriculture 
industries and rounded to the nearest $250,000 for agriculture 
industries. Analytical details involved in the averaging procedure are 
described in SBA's Methodology, which is available on its website at 
www.sba.gov/size. For comparison with the calculated new size 
standards, the current size standards are in column 10 of Table 4.

                                      Table 4--Size Standards Supported by Each Factor for Each Industry (Receipts)
                                        [Upper value = calculated factor, lower value = size standard supported]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Simple      Weighted                                                        Calculated    Current
                                                    average      average      Average     Four-firm       Gini       Federal        size         size
NAICS code NAICS industry title        Type        firm size    firm size   assets size    ratio %    coefficient    contract   standard ($  standard ($
                                                  ($ million)  ($ million)  ($ million)                            factor  (%)    million)     million)
(1)                              (2)............          (3)          (4)          (5)          (6)          (7)          (8)          (9)         (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
611110 Elementary and Secondary  Factor.........         $4.0        $31.8         $6.6          2.0        0.683        -48.4  ...........  ...........
 Schools.                        Size Std.......         20.5          8.5         41.5         $6.0         $7.5        $19.0        $17.5        $12.0
611210 Junior Colleges.........  Factor.........         18.2        291.6         30.3         27.7        0.779         39.0  ...........  ...........
                                 Size Std.......         41.5         17.0         41.5        $23.5        $25.0        $22.0         28.5         22.0
611310 Colleges, Universities,   Factor.........         97.7      1,801.8        244.1          9.8        0.802         -1.2  ...........  ...........
 and Professional Schools.       Size Std.......         41.5         41.5         41.5         $9.5        $29.0        $30.0         30.5         30.0
611410 Business and Secretarial  Factor.........          2.0         14.1          0.8         38.7        0.747  ...........  ...........  ...........
 Schools.                        Size Std.......         13.0          8.0         10.5        $32.0        $19.0                      18.0          8.0
611420 Computer Training.......  Factor.........          1.3         27.3          0.5         18.8        0.774          3.8  ...........  ...........
                                 Size Std.......          9.5          8.5          8.5        $16.5        $24.0        $12.0         14.0         12.0
611430 Professional and          Factor.........          1.2         25.6          0.6          7.8        0.762        -17.1  ...........  ...........
 Management Development          Size Std.......          9.5          8.0          9.5         $8.0        $22.0        $15.5         13.0         12.0
 Training.
611511 Cosmetology and Barber    Factor.........          1.4         28.9          1.1         19.9        0.678  ...........  ...........  ...........
 Schools.                        Size Std.......         10.0          8.5         12.5        $17.5         $6.5                      11.5          8.0
611512 Flight Training.........  Factor.........          3.2        311.3          2.0         53.2        0.831         -3.7  ...........  ...........
                                 Size Std.......         17.5         17.5         17.5        $41.5        $34.5        $30.0         28.0         30.0
611513 Apprenticeship Training.  Factor.........          1.2          8.9          0.7         11.4        0.683        -57.1  ...........  ...........
                                 Size Std.......          9.5          7.5         10.0        $10.5         $7.5        $13.0         10.0          8.0
611519 Other Technical and       Factor.........          2.3        105.2          1.6         18.0        0.815         -9.9  ...........  ...........
 Trade Schools.                  Size Std.......         14.0         11.0         15.0        $16.0        $31.5        $16.5         18.5         16.5
Exception, Job Corps Centers...  Factor.........        166.5      1,031.7        116.2         83.5        0.686         20.3  ...........  ...........
                                 Size Std.......         41.5         41.5         41.5        $41.5        $19.0        $41.5         37.0         41.5
611610 Fine Arts Schools.......  Factor.........          0.3          2.1          0.4          2.2        0.593  ...........  ...........  ...........
                                 Size Std.......          6.0          7.5          8.0         $6.0         $6.0                       7.0          8.0
611620 Sports and Recreation     Factor.........          0.4         12.9          0.1          7.7        0.616  ...........  ...........  ...........
 Instruction.                    Size Std.......          6.0          8.0          7.0         $8.0         $6.0                       7.0          8.0
611630 Language Schools........  Factor.........          1.1         64.3          0.5         35.4        0.804         19.9  ...........  ...........
                                 Size Std.......          9.0          9.5          9.0        $29.5        $29.5        $12.0         18.0         12.0
611691 Exam Preparation and      Factor.........          0.6         33.5          0.3         13.6        0.724        -36.1  ...........  ...........
 Tutoring.                       Size Std.......          7.0          8.5          7.5        $12.5        $15.0        $13.0         11.0          8.0
611692 Automobile Driving        Factor.........          0.3          4.2          0.2         13.5        0.639        -50.3  ...........  ...........
 Schools.                        Size Std.......          6.0          7.5          7.0        $12.5         $6.0        $13.0          9.0          8.0
611699 All Other Miscellaneous   Factor.........          0.7         64.0          0.6         23.6        0.760         -5.5  ...........  ...........
 Schools and Instruction.        Size Std.......          7.5          9.5          9.5        $20.5        $21.5        $12.0         14.5         12.0
611710 Educational Support       Factor.........          1.9        308.3          1.6         28.7        0.829         -1.7  ...........  ...........
 Services.                       Size Std.......         12.0         17.5         15.0        $24.5        $34.0        $16.5         21.0         16.5
621111 Offices of Physicians     Factor.........          2.3        523.8          0.4          5.5        0.739        -37.6  ...........  ...........
 (except Mental Health           Size Std.......         14.0         25.0          8.0         $6.0        $17.5        $19.0         14.0         12.0
 Specialists).
621112 Offices of Physicians,    Factor.........          0.5          4.2          0.1          3.7        0.583        -12.3  ...........  ...........
 Mental Health Specialists.      Size Std.......          6.5          7.5          6.5         $6.0         $6.0        $15.5          8.0         12.0
621210 Offices of Dentists.....  Factor.........          0.8         19.1          0.3          2.0        0.482        -22.5          7.5          8.0
                                 Size Std.......          8.0          8.0          7.5         $6.0         $6.0        $10.5
621310 Offices of Chiropractors  Factor.........          0.3          1.0          0.1          0.8        0.469  ...........          6.5          8.0
                                 Size Std.......          6.0          7.5          6.5         $6.0         $6.0

[[Page 76397]]

 
621320 Offices of Optometrists.  Factor.........          0.6          2.7          0.1          1.4        0.502  ...........          6.5          8.0
                                 Size Std.......          7.0          7.5          7.0         $6.0         $6.0
621330 Offices of Mental Health  Factor.........          0.4          5.5          0.1          3.2        0.681         14.5          7.0          8.0
 Practitioners (except           Size Std.......          6.0          7.5          6.5         $6.0         $7.0         $8.0
 Physicians).
621340 Offices of Physical,      Factor.........          1.0        152.5          0.2         13.4        0.726        -25.2         11.0          8.0
 Occupational and Speech         Size Std.......          8.5         12.5          7.0        $12.5        $15.5        $10.5
 Therapists, and Audiologists.
621391 Offices of Podiatrists..  Factor.........          0.5          1.5          0.1          1.2        0.492  ...........          6.5          8.0
                                 Size Std.......          7.0          7.5          6.5         $6.0         $6.0
621399 Offices of All Other      Factor.........          0.4        111.1          0.1         16.1        0.681         -8.5          9.0          8.0
 Miscellaneous Health            Size Std.......          6.5         11.0          6.5        $14.5         $7.0         $8.0
 Practitioners.
621410 Family Planning Centers.  Factor.........          1.6         32.9          1.1         18.0        0.793  ...........         16.5         12.0
                                 Size Std.......         11.0          8.5         12.5        $16.0        $27.5
621420 Outpatient Mental Health  Factor.........          3.0         19.7          1.7          3.4        0.728        -13.9         14.0         16.5
 and Substance Abuse Centers.    Size Std.......         16.5          8.0         16.0         $6.0        $15.5        $20.0
621491 HMO Medical Centers.....  Factor.........        410.2      3,312.1        157.8         93.6        0.817  ...........         39.0         35.0
                                 Size Std.......         41.5         41.5         41.5        $41.5        $32.0
621492 Kidney Dialysis Centers.  Factor.........         37.2      5,760.6         18.6         86.2        0.870         -6.1         41.5         41.5
                                 Size Std.......         41.5         41.5         41.5        $41.5        $41.5        $41.5
621493 Freestanding Ambulatory   Factor.........          5.3        198.9          2.1         16.3        0.693  ...........         15.5         16.5
 Surgical and Emergency Centers. Size Std.......         26.0         14.0         18.0        $14.5         $9.5
621498 All Other Outpatient      Factor.........          6.6        208.7          3.5          9.5        0.801        -13.4         22.5         22.0
 Care Centers.                   Size Std.......         31.5         14.5         25.5         $9.5        $29.0        $26.5
621511 Medical Laboratories....  Factor.........          9.7      2,287.8          4.1         42.4        0.842        -14.2         36.5         35.0
                                 Size Std.......         41.5         41.5         28.5        $35.0        $36.5        $40.5
621512 Diagnostic Imaging        Factor.........          3.4         56.0          1.5          7.4        0.759         32.3         15.0         16.5
 Centers.                        Size Std.......         18.5          9.0         14.5         $7.5        $21.5        $16.5
621610 Home Health Care          Factor.........          3.0        249.7          0.9          9.4        0.796         17.9         16.5         16.5
 Services.                       Size Std.......         17.0         15.5         11.5         $9.0        $28.0        $16.5
621910 Ambulance Services......  Factor.........          3.9        337.1          1.8         29.1        0.777         -6.5         20.0         16.5
                                 Size Std.......         20.5         18.5         16.0        $24.5        $24.5        $16.5
621991 Blood and Organ Banks...  Factor.........         30.7        607.1         27.9         34.6        0.796        -14.6         34.5         35.0
                                 Size Std.......         41.5         27.5         41.5        $29.0        $28.0        $40.5
621999 All Other Miscellaneous   Factor.........          2.7        119.6          1.4         18.3        0.814         29.4         18.0         16.5
 Ambulatory Health Care          Size Std.......         15.5         11.5         13.5        $16.0        $31.0        $16.5
 Services.
622110 General Medical and       Factor.........        288.5      3,522.1        262.2          8.8        0.733         62.0         30.0         41.5
 Surgical Hospitals.             Size Std.......         41.5         41.5         41.5         $8.5        $16.5        $41.5
622210 Psychiatric and           Factor.........         49.7        414.3         33.2         17.2        0.546  ...........         23.5         41.5
 Substance Abuse Hospitals.      Size Std.......         41.5         21.0         41.5        $15.5         $6.0
622310 Specialty (except         Factor.........        113.3      1,124.0         81.0         27.2        0.713  ...........         30.0         41.5
 Psychiatric and Substance       Size Std.......         41.5         41.5         41.5        $23.0        $13.0
 Abuse) Hospitals.
623110 Nursing Care Facilities   Factor.........         12.7        512.2          8.5         11.2        0.694         -2.8         25.0         30.0
 (Skilled Nursing Facilities).   Size Std.......         41.5         24.5         41.5        $10.5         $9.5        $30.0
623210 Residential Intellectual  Factor.........          3.5         85.6          2.3          9.9        0.749  ...........         15.5         16.5
 and Developmental Disability    Size Std.......         19.0         10.0         19.0         $9.5        $19.5
 Facilities.
623220 Residential Mental        Factor.........          3.2         52.7          2.3          8.9        0.701        -40.4         15.0         16.5
 Health and Substance Abuse      Size Std.......         17.5          9.0         19.0         $9.0        $11.0        $23.0
 Facilities.
623311 Continuing Care           Factor.........          7.9         99.3         19.9          8.5        0.733  ...........         22.5         30.0
 Retirement Communities.         Size Std.......         36.5         10.5         41.5         $8.5        $16.5
623312 Assisted Living           Factor.........          1.8        389.5          2.6         22.7        0.779  ...........         20.5         12.0
 Facilities for the Elderly.     Size Std.......         12.0         20.5         20.5        $19.5        $25.0
623990 Other Residential Care    Factor.........          2.6         24.0          2.0          6.4        0.730        -31.9         14.0         12.0
 Facilities.                     Size Std.......         15.0          8.0         17.5         $7.0        $16.0        $19.0
624110 Child and Youth Services  Factor.........          1.5         23.1          1.1          4.5        0.759        -42.9         13.5         12.0
                                 Size Std.......         11.0          8.0         12.0         $6.0        $21.5        $19.0
624120 Services for the Elderly  Factor.........          1.7         45.3          1.1          3.5        0.761        -27.5         13.0         12.0
 and Persons with Disabilities.  Size Std.......         11.5          9.0         12.0         $6.0        $21.5        $15.5
624190 Other Individual and      Factor.........          1.4         83.1          1.1          6.9        0.777        -20.5         14.0         12.0
 Family Services.                Size Std.......         10.5         10.0         12.0         $7.0        $24.5        $15.5
624210 Community Food Services.  Factor.........          2.6         38.6          2.2          6.0        0.816  ...........         17.0         12.0
                                 Size Std.......         15.0          8.5         18.0         $6.5        $31.5
624221 Temporary Shelters......  Factor.........          1.4         11.0          2.0          5.9        0.623        -55.9         11.5         12.0
                                 Size Std.......         10.0          7.5         17.0         $6.5         $6.0        $19.0
624229 Other Community Housing   Factor.........          1.8         48.0          3.6         14.1        0.692        -54.1         16.5          6.5
 Services.                       Size Std.......         12.0          9.0         26.0        $13.0         $9.0        $23.0
624230 Emergency and Other       Factor.........         13.9        478.8         13.9         37.9        0.878         23.8         36.5         35.0
 Relief Services.                Size Std.......         41.5         23.5         41.5        $31.5        $41.5        $35.0
624310 Vocational                Factor.........          2.9         48.1          1.8          8.3        0.728         24.9         13.0         12.0
 Rehabilitation Services.        Size Std.......         16.5          9.0         16.5         $8.5        $15.5        $12.0
624410 Child Day Care Services.  Factor.........          0.5         93.8          0.2          8.4        0.687  ...........          8.5          8.0
                                 Size Std.......          7.0         10.5          7.0         $8.5         $8.5
711110 Theater Companies and     Factor.........          2.2        106.8          3.2         19.7        0.791  ...........         20.0         22.0
 Dinner Theaters.                Size Std.......         13.5         11.0         23.5        $17.5        $27.0
711120 Dance Companies.........  Factor.........          1.4         15.6          0.7         24.7        0.771  ...........         16.0         12.0
                                 Size Std.......         10.0          8.0         10.0        $21.0        $23.5
711130 Musical Groups and        Factor.........          1.1         20.6          1.0          7.4        0.772  ...........         13.0         12.0
 Artists.                        Size Std.......          9.0          8.0         12.0         $7.5        $23.5
711190 Other Performing Arts     Factor.........          3.9        454.6          2.1         71.4        0.850  ...........         29.5         30.0
 Companies.                      Size Std.......         20.5         22.5         17.5        $41.5        $38.0
711211 Sports Teams and Clubs..  Factor.........         25.9        218.1         21.6          8.2        0.858  ...........         29.5         41.5
                                 Size Std.......         41.5         14.5         41.5         $8.0        $39.5
711212 Racetracks..............  Factor.........         12.8        256.3         10.7         26.0        0.865  ...........         33.5         41.5
                                 Size Std.......         41.5         16.0         41.5        $22.0        $40.5
711219 Other Spectator Sports..  Factor.........          1.3         43.9          0.9         18.8        0.761  ...........         14.5         12.0
                                 Size Std.......          9.5          9.0         11.0        $16.5        $21.5
711310 Promoters of Performing   Factor.........          3.9        173.1          3.6         21.5        0.815  ...........         23.5         35.0
 Arts, Sports, and Similar       Size Std.......         20.5         13.0         26.0        $18.5        $31.5
 Events with Facilities.
711320 Promoters of Performing   Factor.........          2.1        274.6          0.9         29.3        0.791  ...........         19.5         16.5
 Arts, Sports, and Similar       Size Std.......         13.0         16.5         11.0        $25.0        $27.0
 Events without Facilities.

[[Page 76398]]

 
711410 Agents and Managers for   Factor.........          1.6         94.9          0.7         22.3        0.761  ...........         15.5         12.0
 Artists, Athletes,              Size Std.......         11.0         10.5         10.0        $19.5        $21.5
 Entertainers, and Other Public
 Figures.
711510 Independent Artists,      Factor.........          0.7          9.5          0.2          2.0        0.704         10.3          8.0          8.0
 Writers, and Performers.        Size Std.......          7.5          7.5          7.5         $6.0        $11.5         $8.0
712110 Museums.................  Factor.........          1.9         58.9          6.3         10.9        0.811        -16.8         25.5         30.0
                                 Size Std.......         12.5          9.5         41.5        $10.5        $31.0        $34.5
712120 Historical Sites........  Factor.........          0.7          7.5          0.9         15.1        0.716  ...........         11.5          8.0
                                 Size Std.......          7.5          7.5         11.0        $13.5        $13.5
712130 Zoos and Botanical        Factor.........          5.3         52.7         10.7         17.5        0.778  ...........         25.0         30.0
 Gardens.                        Size Std.......         26.0          9.0         41.5        $15.5        $24.5
712190 Nature Parks and Other    Factor.........          1.5         19.2          1.8         26.1        0.748  ...........         17.0          8.0
 Similar Institutions.           Size Std.......         10.5          8.0         16.0        $22.5        $19.5
713110 Amusement and Theme       Factor.........         34.9      2,658.3         29.1         72.1        0.877  ...........         41.5         41.5
 Parks.                          Size Std.......         41.5         41.5         41.5        $41.5        $41.5
713120 Amusement Arcades.......  Factor.........          0.7          7.4          0.5          9.5        0.658  ...........          8.0          8.0
                                 Size Std.......          7.5          7.5          9.0         $9.5         $6.0
713210 Casinos (except Casino    Factor.........         69.1        319.9         57.6         19.4        0.700  ...........         25.0         30.0
 Hotels).                        Size Std.......         41.5         18.0         41.5        $17.0        $10.5
713290 Other Gambling            Factor.........          5.0        191.4          4.5         21.3        0.815  ...........         25.0         35.0
 Industries.                     Size Std.......         24.5         13.5         31.5        $18.5        $31.5
713910 Golf Courses and Country  Factor.........          1.9         35.5          2.8          6.3        0.664  ...........         11.0         16.5
 Clubs.                          Size Std.......         12.5          8.5         21.5         $6.5         $6.0
713920 Skiing Facilities.......  Factor.........          6.5        160.1          7.2         39.6        0.792  ...........         31.0         30.0
                                 Size Std.......         31.0         12.5         41.5        $33.0        $27.5
713930 Marinas.................  Factor.........          1.1          7.3          1.8          5.7        0.612  ...........          9.5          8.0
                                 Size Std.......          9.0          7.5         16.0         $6.5         $6.0
713940 Fitness and Recreational  Factor.........          1.0        220.5          0.9         17.4        0.772  ...........         15.5          8.0
 Sports Centers.                 Size Std.......          8.5         14.5         11.0        $15.5        $23.5
713950 Bowling Centers.........  Factor.........          0.9         65.9          0.7         22.7        0.630  ...........         11.0          8.0
                                 Size Std.......          8.0          9.5         10.0        $19.5         $6.0
713990 All Other Amusement and   Factor.........          0.5          6.5          0.4          3.4        0.658  ...........          7.0          8.0
 Recreation Industries.          Size Std.......          7.0          7.5          8.5         $6.0         $6.0
721110 Hotels (except Casino     Factor.........          3.5      1,805.2          7.0         19.7        0.792          7.4         30.5         35.0
 Hotels) and Motels.             Size Std.......         18.5         41.5         41.5        $17.5        $27.5        $35.0
721120 Casino Hotels...........  Factor.........        241.7      2,353.8        241.7         34.3        0.708  ...........         31.0         35.0
                                 Size Std.......         41.5         41.5         41.5        $28.5        $12.0
721191 Bed-and-Breakfast Inns..  Factor.........          0.4          1.4          0.2          3.9        0.558  ...........          6.5          8.0
                                 Size Std.......          6.0          7.5          7.5         $6.0         $6.0
721199 All Other Traveler        Factor.........          0.5          4.2          0.3         11.2        0.624  ...........          8.0          8.0
 Accommodation.                  Size Std.......          6.5          7.5          7.5        $10.5         $6.0
721211 RV (Recreational          Factor.........          0.6         10.3          0.9         10.4        0.613  ...........          9.0         38.0
 Vehicle) Parks and Campgrounds. Size Std.......          7.0          7.5         11.5        $10.0         $6.0
721214 Recreational and          Factor.........          0.9          5.1          1.0          5.5        0.624  ...........          8.0          8.0
 Vacation Camps (except          Size Std.......          8.5          7.5         12.0         $6.0         $6.0
 Campgrounds).
721310 Rooming and Boarding      Factor.........          0.7         22.8          2.3         21.0        0.639  ...........         12.5          8.0
 Houses, Dormitories, and        Size Std.......          7.5          8.0         18.5        $18.0         $6.0
 Workers' Camps.
722310 Food Service Contractors  Factor.........         12.2      4,854.8          3.4         66.6        0.882         11.5         38.0         41.5
                                 Size Std.......         41.5         41.5         25.0        $41.5        $41.5        $41.5
722320 Caterers................  Factor.........          0.8          5.2          0.2          1.8        0.676  ...........          6.5          8.0
                                 Size Std.......          7.5          7.5          7.0         $6.0         $6.0
722330 Mobile Food Services....  Factor.........          0.2          1.9          0.1          6.8        0.668  ...........          6.5         .8.0
                                 Size Std.......          6.0          7.5          6.5         $7.0         $6.0
722410 Drinking Places           Factor.........          0.5          6.6          0.2          2.5        0.598  ...........          6.5          8.0
 (Alcoholic Beverages).          Size Std.......          6.5          7.5          7.0         $6.0         $6.0
722511 Full-Service Restaurants  Factor.........          1.1        562.0          0.3          7.9        0.668  ...........         10.0          8.0
                                 Size Std.......          9.0         26.0          7.5         $8.0         $6.0
722513 Limited-Service           Factor.........          1.3        293.4          0.4          6.2        0.731  ...........         11.0         12.0
 Restaurants.                    Size Std.......         10.0         17.0          8.5         $6.5        $16.0
722514 Cafeterias, Grill         Factor.........          1.4        208.6          0.4         29.5        0.731  ...........         15.5         30.0
 Buffets, and Buffets.           Size Std.......         10.0         14.5          8.5        $25.0        $16.5
722515 Snack and Nonalcoholic    Factor.........          0.8      2,361.1          0.3         35.9        0.732  ...........         20.0          8.0
 Beverage Bars.                  Size Std.......          8.0         41.5          8.0        $30.0        $16.5
811111 General Automotive        Factor.........          0.5          8.3          0.1          2.0        0.540        -79.9          8.0          8.0
 Repair.                         Size Std.......          7.0          7.5          7.0         $6.0         $6.0        $13.0
811112 Automotive Exhaust        Factor.........          0.4          4.2          0.1          8.9        0.512  ...........          7.0          8.0
 System Repair.                  Size Std.......          6.0          7.5          6.5         $8.5         $6.0
811113 Automotive Transmission   Factor.........          0.5          3.6          0.1          5.0        0.488  ...........          6.5          8.0
 Repair.                         Size Std.......          6.5          7.5          6.5         $6.0         $6.0
811118 Other Automotive          Factor.........          0.5          8.5          0.2         10.6        0.589  ...........          7.5          8.0
 Mechanical and Electrical       Size Std.......          6.5          7.5          7.0        $10.0         $6.0
 Repair and Maintenance.
811121 Automotive Body, Paint,   Factor.........          0.9         21.6          0.2          4.5        0.617  ...........          7.0          8.0
 and Interior Repair and         Size Std.......          8.0          8.0          7.0         $6.0         $6.0
 Maintenance.
811122 Automotive Glass          Factor.........          0.7        333.2          0.3         35.5        0.701  ...........         15.5         12.0
 Replacement Shops.              Size Std.......          7.5         18.5          7.5        $29.5        $11.0
811191 Automotive Oil Change     Factor.........          1.0         49.6          0.4         16.1        0.663  ...........          9.5          8.0
 and Lubrication Shops.          Size Std.......          8.5          9.0          8.5        $14.5         $6.0
811192 Car Washes..............  Factor.........          0.5         17.8          0.7          8.2        0.646  ...........          8.0          8.0
                                 Size Std.......          7.0          8.0         10.0         $8.0         $6.0
811198 All Other Automotive      Factor.........          0.5         17.0          0.2         17.5        0.666  ...........          9.0          8.0
 Repair and Maintenance.         Size Std.......          6.5          8.0          7.0        $15.5         $6.0
811211 Consumer Electronics      Factor.........          1.0        191.4          0.4         50.4        0.802  ...........         22.5          8.0
 Repair and Maintenance.         Size Std.......          8.5         13.5          8.0        $41.5        $29.0
811212 Computer and Office       Factor.........          1.0         50.5          0.4         14.1        0.790         15.8         17.5         30.0
 Machine Repair and Maintenance. Size Std.......          8.5          9.0          8.0        $13.0        $27.0        $30.0
811213 Communication Equipment   Factor.........          1.9        158.3          0.7         38.4        0.791        -27.9         19.5         12.0
 Repair and Maintenance.         Size Std.......         12.5         12.5          9.5        $32.0        $27.0        $15.5
811219 Other Electronic and      Factor.........          2.3        265.7          0.8         35.1        0.795        -19.2         22.0         22.0
 Precision Equipment Repair and  Size Std.......         14.0         16.0         10.5        $29.5        $28.0        $26.5
 Maintenance.

[[Page 76399]]

 
811310 Commercial and            Factor.........          1.6         63.8          0.6          4.9        0.750        -10.7         11.0          8.0
 Industrial Machinery and        Size Std.......         11.0          9.5          9.5         $6.0        $19.5        $10.5
 Equipment (except Automotive
 and Electronic) Repair and
 Maintenance.
811411 Home and Garden           Factor.........          0.3          2.4          0.1          9.2        0.557  ...........          7.0          8.0
 Equipment Repair and            Size Std.......          6.0          7.5          6.5         $9.0         $6.0
 Maintenance.
811412 Appliance Repair and      Factor.........          0.5        137.5          0.2         31.6        0.670  ...........         12.5         16.5
 Maintenance.                    Size Std.......          6.5         12.0          7.0        $26.5         $6.0
811420 Reupholstery and          Factor.........          0.3          1.1          0.1          3.6        0.555  ...........          6.5          8.0
 Furniture Repair.               Size Std.......          6.0          7.5          6.5         $6.0         $6.0
811430 Footwear and Leather      Factor.........          0.2          1.0          0.1         10.4        0.521  ...........          7.5          8.0
 Goods Repair.                   Size Std.......          6.0          7.5          6.5        $10.0         $6.0
811490 Other Personal and        Factor.........          0.3          2.4          0.1          2.9        0.607  ...........          6.5          8.0
 Household Goods Repair and      Size Std.......          6.0          7.5          6.5         $6.0         $6.0
 Maintenance.
812111 Barber Shops............  Factor.........          0.2          7.3          0.0         15.6        0.612  ...........          8.5          8.0
                                 Size Std.......          6.0          7.5          6.5        $14.0         $6.0
812112 Beauty Salons...........  Factor.........          0.3        162.0          0.1         12.3        0.653  ...........          8.5          8.0
                                 Size Std.......          6.0         12.5          6.5        $11.5         $6.0
812113 Nail Salons.............  Factor.........          0.2          0.4          0.0          0.7        0.480  ...........          6.5          8.0
                                 Size Std.......          6.0          7.5          6.5         $6.0         $6.0
812191 Diet and Weight Reducing  Factor.........          1.5        355.8          0.4         61.1        0.814  ...........         24.0         22.0
 Centers.                        Size Std.......         11.0         19.0          8.5        $41.5        $31.5
812199 Other Personal Care       Factor.........          0.3          6.5          0.1          5.5        0.660  ...........          6.5          8.0
 Services.                       Size Std.......          6.0          7.5          6.5         $6.0         $6.0
812210 Funeral Homes and         Factor.........          1.1        205.9          0.9         15.7        0.550  ...........         11.0          8.0
 Funeral Services.               Size Std.......          9.5         14.0         11.0        $14.0         $6.0
812220 Cemeteries and            Factor.........          0.8        121.2          1.2         30.1        0.786  ...........         18.5         22.0
 Crematories.                    Size Std.......          8.0         11.5         12.5        $25.5        $26.0
812310 Coin-Operated Laundries   Factor.........          0.4         87.4          0.2         28.5        0.626  ...........         11.5          8.0
 and Drycleaners.                Size Std.......          6.0         10.5          7.5        $24.0         $6.0
812320 Dry cleaning and Laundry  Factor.........          0.4          2.7          0.2          1.5        0.564        -20.0          7.0          6.0
 Services (except Coin-          Size Std.......          6.0          7.5          7.0         $6.0         $6.0         $8.0
 Operated).
812331 Linen Supply............  Factor.........          8.7        374.0          4.3         46.4        0.808  ...........         32.0         35.0
                                 Size Std.......         39.5         20.0         30.0        $38.0        $30.0
812332 Industrial Launderers...  Factor.........         16.8      1,478.3          9.3         72.2        0.839         32.8         40.5         41.5
                                 Size Std.......         41.5         41.5         41.5        $41.5        $36.0        $41.5
812910 Pet Care (except          Factor.........          0.2          2.3          0.1          3.8        0.575  ...........          6.5          8.0
 Veterinary) Services.           Size Std.......          6.0          7.5          6.5         $6.0         $6.0
812921 Photofinishing            Factor.........          2.6        299.5          0.8         64.4        0.833  ...........         26.0         22.0
 Laboratories (except One-Hour). Size Std.......         15.0         17.5         10.5        $41.5        $34.5
812922 One-Hour Photofinishing.  Factor.........          0.3         10.2          0.1         50.1        0.690  ...........         16.0         16.5
                                 Size Std.......          6.0          7.5          6.5        $41.0         $9.0
812930 Parking Lots and Garages  Factor.........          2.6        211.8          1.6         29.2        0.811          9.7         25.5         41.5
                                 Size Std.......         15.0         14.5         15.0        $24.5        $30.5        $41.5
812990 All Other Personal        Factor.........          0.6         85.4          0.2         21.5        0.745        -56.8         13.0          8.0
 Services.                       Size Std.......          7.0         10.0          7.0        $18.5        $19.0        $13.0
813110 Religious Organizations.  Factor.........          0.7         59.2          2.3          3.2        0.706  ...........         11.5          8.0
                                 Size Std.......          7.5          9.5         19.0         $6.0        $11.5
813211 Grantmaking Foundations.  Factor.........          5.6        815.3         18.8  ...........        0.821  ...........         35.0         35.0
                                 Size Std.......         27.5         34.5         41.5                     $32.5
813212 Voluntary Health          Factor.........          5.9        386.9          3.9         23.5        0.841  ...........         27.0         30.0
 Organizations.                  Size Std.......         28.5         20.0         28.0        $20.0        $36.0
813219 Other Grantmaking and     Factor.........          3.5         97.1          5.0         12.2        0.807  ...........         22.5         41.5
 Giving Services.                Size Std.......         19.0         10.5         34.0        $11.5        $30.0
813311 Human Rights              Factor.........          2.7        352.9          3.4         35.1        0.822        -33.1         28.5         30.0
 Organizations.                  Size Std.......         15.5         19.0         25.0        $29.5        $33.0        $37.5
813312 Environment,              Factor.........          1.6        131.6          2.2         16.4        0.774  ...........         17.0         16.5
 Conservation and Wildlife       Size Std.......         11.0         11.5         18.5        $14.5        $24.0
 Organizations.
813319 Other Social Advocacy     Factor.........          1.4         92.8          1.4         17.5        0.776  ...........         16.0          8.0
 Organizations.                  Size Std.......         10.0         10.5         13.5        $15.5        $24.5
813410 Civic and Social          Factor.........          0.6         12.5          1.1          3.0        0.684  ...........          8.5          8.0
 Organizations.                  Size Std.......          7.0          8.0         12.0         $6.0         $8.0
813910 Business Associations...  Factor.........          1.5         46.1          1.5          5.1        0.772  ...........         13.5          8.0
                                 Size Std.......         10.5          9.0         14.5         $6.0        $23.5
813920 Professional              Factor.........          2.8         92.6          4.0          9.5        0.792        -39.7         20.5         16.5
 Organizations.                  Size Std.......         16.0         10.5         28.5         $9.0        $27.5        $23.0
813930 Labor Unions and Similar  Factor.........          1.2         41.2          1.5          5.1        0.797  ...........         14.5          8.0
 Labor Organizations.            Size Std.......          9.5          8.5         14.5         $6.0        $28.0
813940 Political Organizations.  Factor.........          0.8         19.6          0.7         14.0        0.753  ...........         12.5          8.0
                                 Size Std.......          8.0          8.0         10.0        $12.5        $20.0
813990 Other Similar             Factor.........          1.1        103.8          1.1         10.6        0.729  ...........         12.0          8.0
 Organizations (except           Size Std.......          9.0         11.0         12.0        $10.0        $16.0
 Business, Professional, Labor,
 and Political Organizations).
--------------------------------------------------------------------------------------------------------------------------------------------------------

Evaluation of Size Standards for Subindustry Categories or 
``Exceptions''

    In accordance with SBA's approach to evaluating size standards for 
subindustry categories (or ``exceptions''), SBA has evaluated 1 
exception covered by this rule using the procedures described in the 
revised SBA's Methodology. The results of that analysis are discussed 
in the following subsection.

Exception to NAICS 611519: Job Corps Centers

    The current size standard for Federal contracts for Job Corps 
Centers (exception to NAICS 611519, Other Technical and Trade Schools) 
is $41.5 million in average annual receipts. For Federal procurement 
programs, this size standard applies to Federal contracts that meet 
specific criteria. The criteria required of a Jobs Corps Center 
contract or SBA-recognized operator are detailed in Footnote 16 to 
SBA's table of size standards (13 CFR 121.201): ``For

[[Page 76400]]

classifying a Federal procurement, the purpose of the solicitation must 
be for the management and operation of a U.S. Department of Labor Job 
Corps Center. The activities involved include admissions activities, 
life skills training, educational activities, comprehensive career 
preparation activities, career development activities, career 
transition activities, as well as the management and support functions 
and services needed to operate and maintain the facility. For SBA 
assistance as a small business concern, other than for Federal 
Government procurements, a concern must be primarily engaged in 
providing the services to operate and maintain Federal Job Corps 
Centers.''
    As noted previously, the data from the Economic Census special 
tabulation are limited 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 611519 are 
aggregates of both Other Technical and Trade Schools and the more 
specialized establishments under the Job Corps exception. The lack of 
relevant data at the sub-industry level is a challenge to determining 
whether the size standard for the exception should be revised or left 
unchanged. Thus, the results based on the Economic Census data alone 
may not accurately reflect the characteristics of businesses providing 
specialized services included under the exception.
    To determine whether the Agency should propose revising the 
exception under NAICS 611519, SBA analyzed data from the U.S. 
Department of Labor (DOL) website which includes a listing of Job Corps 
centers and their operators (available at https://www.dol.gov/agencies/eta/jobcorps/contact). SBA found that there were 23 non-governmental 
operators listed on the DOL website. SBA also evaluated the data from 
FPDS-NG and SAM. From FPDS-NG, SBA first identified firms that have a 
principal NAICS code of 611519. SBA then identified Product and Service 
Codes (PSCs) that correspond to the Job Corps Center exception by 
filtering the data for contracts awarded to private firms providing job 
corps services. SBA identified 7 PSCs from this search, namely: M1CZ--
Operation Of Other Educational Buildings, U006--Education/Training- 
Vocational/Technical, M139--Operation of Govt Other Educational 
Buildings, U099--Education/Training- Other, U009--Education/Training- 
General, 7610--Books And Pamphlets and U008--Education/Training- 
Training/Curriculum Development. Using this method, SBA identified 35 
firms (including the firms listed on the DOL website) that had a 
principal NAICS code of 611519 and were active in Federal contracting 
involving the identified PSCs. For fiscal years 2016-2018, the total 
average contract dollars obligated under these PSCs was $436.3 million. 
However, since the additional 11 operators from FPDS-NG were not 
included in the list of operators from the DOL website, SBA did not 
include them in its analysis of industry and Federal procurement 
factors for this NAICS exception. The average total contract dollars 
obligated under the identified PSCs to the list of operators from only 
the DOL website was $401.4 million, which represents 92% of the total 
dollars obligated to Jobs Corps Centers. SBA's analysis did not include 
firms that were considered outliers based on net de-obligations for 
each year of the analysis period and those with extremely large 
operating revenues.
    The results from SBA's analysis are presented in Table 4 of this 
proposed rule. The analysis supports decreasing the current size 
standard to $37.0 million. However, for reasons discussed below in the 
special considerations section, SBA proposes to retain the $41.5 
million size standard.

Summary of Calculated Size Standards

    Of the 144 industries and one subindustry (i.e. exception) reviewed 
in this proposed rule, the results from analyses of the latest 
available data on the 5 primary factors from Table 4, Size Standards 
Supported by Each Factor for Each Industry (millions of dollars), 
above, would support increasing size standards for 70 industries, 
decreasing size standards for 63 industries, and maintaining size 
standards for 12 industries. Table 5, Summary of Calculated Size 
Standards, summarizes these results by NAICS sector.

                                  Table 5--Summary of Calculated Size Standards
----------------------------------------------------------------------------------------------------------------
                                                     Number of       Number of       Number of       Number of
         NAICS sector              Sector name    size standards  size standards  size standards  size standards
                                                      reviewed       increased       decreased       unchanged
----------------------------------------------------------------------------------------------------------------
61............................  Education                     18              14               4               0
                                 Services.
62............................  Health Care and               39              18              18               3
                                 Social
                                 Assistance.
71............................  Arts,                         25              11              11               3
                                 Entertainment
                                 and Recreation.
72............................  Accommodation                 15               4               9               2
                                 and Food
                                 Services.
81............................  Other Services..              48              23              21               4
                               ---------------------------------------------------------------------------------
    All Sectors...............  ................             145              70              63              12
----------------------------------------------------------------------------------------------------------------

Evaluation of SBA Loan Data

    Before proposing or deciding on an industry's size standard 
revision, SBA also considers the impact of size standards revisions on 
SBA's loan programs. Accordingly, SBA examined its internal 7(a) and 
504 loan data for fiscal years 2016-2018 to assess whether the 
calculated size standards in Table 4 (above) need further adjustments 
to ensure credit opportunities for small businesses through those 
programs. For the industries reviewed in this rule, the data shows that 
it is mostly businesses much smaller than the current or proposed size 
standards that receive SBA's 7(a) and 504 loans. For example, for 
industries covered by this rule, more than 99.3% of 7(a) and 504 loans 
in fiscal years 2016-2018 went to businesses below the current or 
proposed size standards.

Proposed Changes to Size Standards

    Based on the analytical results in Table 4 and considerations of 
impacts of calculated size standards in terms of access by currently 
small businesses to SBA's loans, as discussed above, of a total of 145 
industries or subindustries (exceptions) with receipts-based size 
standards in Sectors 61, 62, 71, 72 and 81 that are covered by this 
rule, and considering the current situation due to the COVID-19 related 
national emergency and its impacts on small businesses and the overall 
economy, SBA proposes to increase size standards for 70 industries, and 
retain the current size standards for the remaining 75 industries.

[[Page 76401]]

Special Considerations
    On March 13, 2020, the ongoing Coronavirus Disease 2019 (COVID-19) 
was declared a pandemic of enough severity and magnitude to warrant an 
emergency declaration for all states, territories, and the District of 
Columbia. With the COVID-19 emergency, many small businesses nationwide 
are experiencing economic hardship as a direct result of the Federal, 
State, and local public health measures that are being taken to 
minimize the public's exposure to the virus. These measures, some of 
which are Government-mandated, are being implemented nationwide and 
include the closures of restaurants, bars, and gyms. In addition, based 
on the advice of public health officials, other measures, such as 
keeping a safe distance from others or even stay-at-home orders, are 
being implemented, resulting in a dramatic decrease in economic 
activity as the public avoids malls, retail stores, and other 
businesses.
    The Coronavirus Aid, Relief, and Economic Security Act (the CARES 
Act or the Act) (Pub. L. 116-136) was signed on March 27, 2020, to 
provide emergency assistance and health care response for individuals, 
families, and businesses affected by the coronavirus pandemic. Section 
1102 of the Act temporarily permits SBA to guarantee 100% of 7(a) loans 
under a new program titled the Paycheck Protection Program (PPP). 
Section 1106 of the Act provides for forgiveness of up to the full 
principal amount of qualifying loans guaranteed under the PPP. The PPP 
and loan forgiveness are intended to provide economic relief to small 
businesses nationwide adversely impacted under the COVID-19. On April 
24, 2020, additional funding for the CARES Act, including for the PPP, 
was provided.
    The Agency is following closely the development of the pandemic and 
the economic situation and recovery. The consequence of the initial 
response of the public to the COVID-19 pandemic as well as the 
different measures taken by the Government to contain it (e.g. stay at 
home orders, social distancing, etc.) have resulted in the present 
economic decline. A variety of economic indicators such as the Gross 
Domestic Product (GDP) and the unemployment rate shows that this 
recession is significantly worse than any other recession since World 
War II. The GDP decreased nearly 5%, and the personal consumption in 
goods and services decreased 6.9% in the first quarter of 2020. The 
Bureau of Economic Analysis (BEA) third estimate for the second quarter 
of 2020 shows that the GDP decreased 31.4%, and the personal 
consumption in goods and services decreased 33.2%; In August 2020, 
personal income decreased 2.7%, after having decreased by a lower 
percentage in June (1.2%) and slightly increased in July 2020 (0.5%). 
In September 2020, the unemployment rate declined to 7.9% from August 
2020, when the unemployment rate was 8.4%. After reaching 14.7% in 
April 2020, the unemployment rate has been decreasing from May to 
September 2020, but still it is greater than in February 2020 when it 
was 3.5%. For the month of September 2020, non-farm payroll increased 
661,000 from August 2020, but the decrease in employment since February 
2020 is about 10.5 million. Specifically, for the sectors evaluated in 
this proposed rule, in September 2020 the unemployment rate for 
Education and Health Services industries was 5.1%, the Leisure and 
Hospitality industries showed an unemployment rate of 19.0% and the 
Other Services sector, In September 2019, the unemployment rates for 
these sectors were 2.2%, 4.8% and 3.2%, respectively. The latest 
Federal Reserve Board's Monetary Policy Report shows that in general 
the most impacted firms in these sectors are the small businesses.\1\
---------------------------------------------------------------------------

    \1\ Board of Governors of the Federal Reserve System (June 
2020), Monetary Policy Report, p. 24 (see https://www.federalreserve.gov/monetarypolicy/files/20200612_mprfullreport.pdf) and U.S. Census Bureau, see https://portal.census.gov/pulse/data. The latest is a recent survey created 
by the Census Bureau to provide high-frequency, detailed information 
on participation in small business-specific initiatives such as the 
PPP.
---------------------------------------------------------------------------

    Accordingly, in view of above impacts on small businesses from the 
COVID-19 pandemic and Federal Government efforts to provide relief to 
small businesses and support to the overall economy, SBA proposes to 
adopt increases to size standards for 70 industries and retain the 
current size standards for 63 industries for which analytical results 
suggested their size standards could be lowered.
    The proposed size standards are presented in Table 6, Proposed Size 
Standards Revisions. Also presented in Table 6 are current and 
calculated size standards for comparison.

                                   Table 6--Proposed Size Standards Revisions
----------------------------------------------------------------------------------------------------------------
                                                                    Calculated     Proposed size   Current size
            NAICS code                  NAICS industry title       size standard   standard  ($    standard  ($
                                                                    ($ million)      million)        million)
----------------------------------------------------------------------------------------------------------------
611110............................  Elementary and Secondary               $17.5           $17.5           $12.0
                                     Schools.
611210............................  Junior Colleges.............            28.5            28.5            22.0
611310............................  Colleges, Universities, and             30.5            30.5            30.0
                                     Professional Schools.
611410............................  Business and Secretarial                18.0            18.0             8.0
                                     Schools.
611420............................  Computer Training...........            14.0            14.0            12.0
611430............................  Professional and Management             13.0            13.0            12.0
                                     Development Training.
611511............................  Cosmetology and Barber                  11.5            11.5             8.0
                                     Schools.
611512............................  Flight Training.............            28.0            30.0            30.0
611513............................  Apprenticeship Training.....            10.0            10.0             8.0
611519............................  Other Technical and Trade               18.5            18.5            16.5
                                     Schools.
Exception 611519..................  Job Corps Centers...........            37.0            41.5            41.5
611610............................  Fine Arts Schools...........             7.0             8.0             8.0
611620............................  Sports and Recreation                    7.0             8.0             8.0
                                     Instruction.
611630............................  Language Schools............            18.0            18.0            12.0
611691............................  Exam Preparation and                    11.0            11.0             8.0
                                     Tutoring.
611692............................  Automobile Driving Schools..             9.0             9.0             8.0
611699............................  All Other Miscellaneous                 14.5            14.5            12.0
                                     Schools and Instruction.
611710............................  Educational Support Services            21.0            21.0            16.5
621111............................  Offices of Physicians                   14.0            14.0            12.0
                                     (except Mental Health
                                     Specialists).
621112............................  Offices of Physicians,                   8.0            12.0            12.0
                                     Mental Health Specialists.

[[Page 76402]]

 
621210............................  Offices of Dentists.........             7.5             8.0             8.0
621310............................  Offices of Chiropractors....             6.5             8.0             8.0
621320............................  Offices of Optometrists.....             6.5             8.0             8.0
621330............................  Offices of Mental Health                 7.0             8.0             8.0
                                     Practitioners (except
                                     Physicians).
621340............................  Offices of Physical,                    11.0            11.0             8.0
                                     Occupational and Speech
                                     Therapists, and
                                     Audiologists.
621391............................  Offices of Podiatrists......             6.5             8.0             8.0
621399............................  Offices of All Other                     9.0             9.0             8.0
                                     Miscellaneous Health
                                     Practitioners.
621410............................  Family Planning Centers.....            16.5            16.5            12.0
621420............................  Outpatient Mental Health and            14.0            16.5            16.5
                                     Substance Abuse Centers.
621491............................  HMO Medical Centers.........            39.0            39.0            35.0
621492............................  Kidney Dialysis Centers.....            41.5            41.5            41.5
621493............................  Freestanding Ambulatory                 15.5            16.5            16.5
                                     Surgical and Emergency
                                     Centers.
621498............................  All Other Outpatient Care               22.5            22.5            22.0
                                     Centers.
621511............................  Medical Laboratories........            36.5            36.5            35.0
621512............................  Diagnostic Imaging Centers..            15.0            16.5            16.5
621610............................  Home Health Care Services...            16.5            16.5            16.5
621910............................  Ambulance Services..........            20.0            20.0            16.5
621991............................  Blood and Organ Banks.......            34.5            35.0            35.0
621999............................  All Other Miscellaneous                 18.0            18.0            16.5
                                     Ambulatory Health Care
                                     Services.
622110............................  General Medical and Surgical            30.0            41.5            41.5
                                     Hospitals.
622210............................  Psychiatric and Substance               23.5            41.5            41.5
                                     Abuse Hospitals.
622310............................  Specialty (except                       30.0            41.5            41.5
                                     Psychiatric and Substance
                                     Abuse) Hospitals.
623110............................  Nursing Care Facilities                 25.0            30.0            30.0
                                     (Skilled Nursing
                                     Facilities).
623210............................  Residential Intellectual and            15.5            16.5            16.5
                                     Developmental Disability
                                     Facilities.
623220............................  Residential Mental Health               15.0            16.5            16.5
                                     and Substance Abuse
                                     Facilities.
623311............................  Continuing Care Retirement              22.5            30.0            30.0
                                     Communities.
623312............................  Assisted Living Facilities              20.5            20.5            12.0
                                     for the Elderly.
623990............................  Other Residential Care                  14.0            14.0            12.0
                                     Facilities.
624110............................  Child and Youth Services....            13.5            13.5            12.0
624120............................  Services for the Elderly and            13.0            13.0            12.0
                                     Persons with Disabilities.
624190............................  Other Individual and Family             14.0            14.0            12.0
                                     Services.
624210............................  Community Food Services.....            17.0            17.0            12.0
624221............................  Temporary Shelters..........            11.5            12.0            12.0
624229............................  Other Community Housing                 16.5            16.5            16.5
                                     Services.
624230............................  Emergency and Other Relief              36.5            36.5            35.0
                                     Services.
624310............................  Vocational Rehabilitation               13.0            13.0            12.0
                                     Services.
624410............................  Child Day Care Services.....             8.5             8.5             8.0
711110............................  Theater Companies and Dinner            20.0            22.0            22.0
                                     Theaters.
711120............................  Dance Companies.............            16.0            16.0            12.0
711130............................  Musical Groups and Artists..            13.0            13.0            12.0
711190............................  Other Performing Arts                   29.5            30.0            30.0
                                     Companies.
711211............................  Sports Teams and Clubs......            29.5            41.5            41.5
711212............................  Racetracks..................            33.5            41.5            41.5
711219............................  Other Spectator Sports......            14.5            14.5            12.0
711310............................  Promoters of Performing                 23.5            35.0            35.0
                                     Arts, Sports, and Similar
                                     Events with Facilities.
711320............................  Promoters of Performing                 19.5            19.5            16.5
                                     Arts, Sports, and Similar
                                     Events without Facilities.
711410............................  Agents and Managers for                 15.5            15.5            12.0
                                     Artists, Athletes,
                                     Entertainers, and Other
                                     Public Figures.
711510............................  Independent Artists,                     8.0             8.0             8.0
                                     Writers, and Performers.
712110............................  Museums.....................            25.5            30.0            30.0
712120............................  Historical Sites............            11.5            11.5             8.0
712130............................  Zoos and Botanical Gardens..            25.0            30.0            30.0
712190............................  Nature Parks and Other                  17.0            17.0             8.0
                                     Similar Institutions.
713110............................  Amusement and Theme Parks...            41.5            41.5            41.5
713120............................  Amusement Arcades...........             8.0             8.0             8.0
713210............................  Casinos (except Casino                  25.0            30.0            30.0
                                     Hotels).
713290............................  Other Gambling Industries...            25.0            35.0            35.0
713910............................  Golf Courses and Country                11.0            16.5            16.5
                                     Clubs.
713920............................  Skiing Facilities...........            31.0            31.0            30.0
713930............................  Marinas.....................             9.5             9.5             8.0
713940............................  Fitness and Recreational                15.5            15.5             8.0
                                     Sports Centers.
713950............................  Bowling Centers.............            11.0            11.0             8.0
713990............................  All Other Amusement and                  7.0             8.0             8.0
                                     Recreation Industries.
721110............................  Hotels (except Casino                   30.5            35.0            35.0
                                     Hotels) and Motels.
721120............................  Casino Hotels...............            31.0            35.0            35.0
721191............................  Bed-and-Breakfast Inns......             6.5             8.0             8.0
721199............................  All Other Traveler                       8.0             8.0             8.0
                                     Accommodation.

[[Page 76403]]

 
721211............................  RV (Recreational Vehicle)                9.0             9.0             8.0
                                     Parks and Campgrounds.
721214............................  Recreational and Vacation                8.0             8.0             8.0
                                     Camps (except Campgrounds).
721310............................  Rooming and Boarding Houses,            12.5            12.5             8.0
                                     Dormitories, and Workers'
                                     Camps.
722310............................  Food Service Contractors....            38.0            41.5            41.5
722320............................  Caterers....................             6.5             8.0             8.0
722330............................  Mobile Food Services........             6.5             8.0             8.0
722410............................  Drinking Places (Alcoholic               6.5             8.0             8.0
                                     Beverages).
722511............................  Full-Service Restaurants....            10.0            10.0             8.0
722513............................  Limited-Service Restaurants.            11.0            12.0            12.0
722514............................  Cafeterias, Grill Buffets,              15.5            30.0            30.0
                                     and Buffets.
722515............................  Snack and Nonalcoholic                  20.0            20.0             8.0
                                     Beverage Bars.
811111............................  General Automotive Repair...             8.0             8.0             8.0
811112............................  Automotive Exhaust System                7.0             8.0             8.0
                                     Repair.
811113............................  Automotive Transmission                  6.5             8.0             8.0
                                     Repair.
811118............................  Other Automotive Mechanical              7.5             8.0             8.0
                                     and Electrical Repair and
                                     Maintenance.
811121............................  Automotive Body, Paint, and              7.0             8.0             8.0
                                     Interior Repair and
                                     Maintenance.
811122............................  Automotive Glass Replacement            15.5            15.5            12.0
                                     Shops.
811191............................  Automotive Oil Change and                9.5             9.5             8.0
                                     Lubrication Shops.
811192............................  Car Washes..................             8.0             8.0             8.0
811198............................  All Other Automotive Repair              9.0             9.0             8.0
                                     and Maintenance.
811211............................  Consumer Electronics Repair             22.5            22.5             8.0
                                     and Maintenance.
811212............................  Computer and Office Machine             17.5            30.0            30.0
                                     Repair and Maintenance.
811213............................  Communication Equipment                 19.5            19.5            12.0
                                     Repair and Maintenance.
811219............................  Other Electronic and                    22.0            22.0            22.0
                                     Precision Equipment Repair
                                     and Maintenance.
811310............................  Commercial and Industrial               11.0            11.0             8.0
                                     Machinery and Equipment
                                     (except Automotive and
                                     Electronic) Repair and
                                     Maintenance.
811411............................  Home and Garden Equipment                7.0             8.0             8.0
                                     Repair and Maintenance.
811412............................  Appliance Repair and                    12.5            16.5            16.5
                                     Maintenance.
811420............................  Reupholstery and Furniture               6.5             8.0             8.0
                                     Repair.
811430............................  Footwear and Leather Goods               7.5             8.0             8.0
                                     Repair.
811490............................  Other Personal and Household             6.5             8.0             8.0
                                     Goods Repair and
                                     Maintenance.
812111............................  Barber Shops................             8.5             8.5             8.0
812112............................  Beauty Salons...............             8.5             8.5             8.0
812113............................  Nail Salons.................             6.5             8.0             8.0
812191............................  Diet and Weight Reducing                24.0            24.0            22.0
                                     Centers.
812199............................  Other Personal Care Services             6.5             8.0             8.0
812210............................  Funeral Homes and Funeral               11.0            11.0             8.0
                                     Services.
812220............................  Cemeteries and Crematories..            18.5            22.0            22.0
812310............................  Coin-Operated Laundries and             11.5            11.5             8.0
                                     Drycleaners.
812320............................  Drycleaning and Laundry                  7.0             7.0             6.0
                                     Services (except Coin-
                                     Operated).
812331............................  Linen Supply................            32.0            35.0            35.0
812332............................  Industrial Launderers.......            40.5            41.5            41.5
812910............................  Pet Care (except Veterinary)             6.5             8.0             8.0
                                     Services.
812921............................  Photofinishing Laboratories             26.0            26.0            22.0
                                     (except One-Hour).
812922............................  One-Hour Photofinishing.....            16.0            16.5            16.5
812930............................  Parking Lots and Garages....            25.5            41.5            41.5
812990............................  All Other Personal Services.            13.0            13.0             8.0
813110............................  Religious Organizations.....            11.5            11.5             8.0
813211............................  Grantmaking Foundations.....            35.0            35.0            35.0
813212............................  Voluntary Health                        27.0            30.0            30.0
                                     Organizations.
813219............................  Other Grantmaking and Giving            22.5            41.5            41.5
                                     Services.
813311............................  Human Rights Organizations..            28.5            30.0            30.0
813312............................  Environment, Conservation               17.0            17.0            16.5
                                     and Wildlife Organizations.
813319............................  Other Social Advocacy                   16.0            16.0             8.0
                                     Organizations.
813410............................  Civic and Social                         8.5             8.5             8.0
                                     Organizations.
813910............................  Business Associations.......            13.5            13.5             8.0
813920............................  Professional Organizations..            20.5            20.5            16.5
813930............................  Labor Unions and Similar                14.5            14.5             8.0
                                     Labor Organizations.
813940............................  Political Organizations.....            12.5            12.5             8.0
813990............................  Other Similar Organizations             12.0            12.0             8.0
                                     (except Business,
                                     Professional, Labor, and
                                     Political Organizations).
----------------------------------------------------------------------------------------------------------------

    Table 7, Summary of Proposed Size Standards Revisions by Sector, 
below, summarizes the proposed changes to size standards by NAICS 
sector.

[[Page 76404]]



                         Table 7--Summary of Proposed Size Standards Revisions by Sector
----------------------------------------------------------------------------------------------------------------
                                                                  Size standards  Size standards  Size standards
           NAICS sector                      Sector name             increased        lowered       maintained
----------------------------------------------------------------------------------------------------------------
61................................  Education Services..........              14               0               4
62................................  Health Care and Social                    18               0              21
                                     Assistance.
71................................  Arts, Entertainment and                   11               0              14
                                     Recreation.
72................................  Accommodation and Food                     4               0              11
                                     Services.
81................................  Other Services..............              23               0              25
                                   -----------------------------------------------------------------------------
    All Sectors...................  ............................              70               0              75
----------------------------------------------------------------------------------------------------------------

Evaluation of Dominance in Field of Operation

    SBA has determined that for the industries which it has evaluated 
in this proposed rule, no individual firm at or below the proposed size 
standard would be large enough to dominate its field of operation. At 
the proposed size standards levels, if adopted, the small business 
share of total industry receipts among those industries would be, on 
average, 0.63%, varying from 0.003% to 22.3%. These market shares 
effectively preclude a firm at or below the proposed size standards 
from exerting control on any of the industries.

Alternatives Considered

    By law, SBA is required to develop numerical size standards for 
establishing eligibility for Federal small business assistance programs 
and to review every 5 years all size standards and make necessary 
adjustments to reflect the current industry structure and Federal 
market conditions. Other than varying the levels of size standards by 
industry and changing the measures of size standards (e.g., using 
annual receipts vs. the number of employees), no practical alternatives 
exist to the systems of numerical size standards.
    The proposal is to increase size standards where the data suggested 
increases are warranted, and to retain, in response to COVID-19 
emergency and resultant economic impacts on small businesses, all 
current size standards where the data suggested lowering is 
appropriate.
    Nonetheless, SBA considered 2 other alternatives. Alternative 
option one was to propose changes exactly as suggested by the 
analytical results. Alternative option two was to retain all current 
size standards.
    Alternative option one would cause a substantial number of 
currently small businesses to lose their small business status and 
hence to lose their access to Federal small business assistance, 
especially small business set-aside contracts and SBA's financial 
assistance in some cases.
    During the first 5-year review of size standards, some commenters 
had expressed concerns about the SBA's policy of not lowering size 
standards based on the analytical results. In response to these 
comments, SBA considered as part of option one (i.e. to adopt changes 
exactly as suggested by the analytical results) to mitigate the impact 
of the decreases to size standards. The mitigation would provide 
additional adjustments to the calculated sizes after evaluation of the 
impact of the potential reductions on small business access to Federal 
contracting and loans. However, due to the global COVID-19 pandemic 
resulting in high levels of risk and dramatic reductions in economic 
activity of unprecedented nature, SBA is not considering any mitigation 
to decreases in size standards as part of option one. SBA will adopt 
this approach temporarily and may reevaluate this approach as the 
economic situation evolves. Under option two, given the current COVID-
19 pandemic, SBA considered retaining the current level of all size 
standards even though the current analysis may suggest changing them. 
SBA considers that the option of retaining all size standards at this 
moment provides the opportunity to reassess the economic situation once 
the economic recovery starts. Under this option, as the current 
situation develops, SBA will be able to assess new data available on 
economic indicators, federal procurement, and SBA loans as well, before 
adopting changes to size standards. However, SBA is not adopting option 
two because the Regulatory Impact Analysis shows that retaining all 
size standards at their current levels is more onerous for the small 
businesses than the option of adopting 70 increases and retaining 75 
size standards. SBA may reevaluate this approach as the current 
economic situation evolves.

Request for Comments

    SBA invites public comments on this proposed rule, especially on 
the following issues:
    1. SBA seeks feedback on whether SBA's proposal to increase 70 size 
standards and retain 75 size standards is appropriate given the results 
from the latest available industry and Federal contracting data of each 
industry and subindustry (exception) reviewed in this proposed rule, 
along with ongoing uncertainty and dramatic contraction in economic 
activity due to the global COVID-19 pandemic. SBA also seeks 
suggestions, along with supporting facts and analysis, for alternative 
size standards, if they would be more appropriate than the proposed 
size standards.
    2. SBA also seeks comments on whether SBA should not lower any size 
standards in view of the COVID-19 pandemic and its adverse impacts on 
small businesses as well as on the overall economic situation when 
analytical results suggest some size standards could be lowered. SBA 
believes that lowering size standards under the current economic 
environment would run counter to what Congress and Federal Government 
are doing to aid and provide relief to the nation's small businesses 
impacted by the COVID-19 pandemic.
    3. Given the uncertainty produced by the global COVID-19 pandemic 
and the economic consequences, SBA would like to receive comments from 
the public on the possibility of lowering size standards while 
mitigating the consequences of the lower standards, instead of not 
lowering any size standards.
    4. In calculating the overall industry size standard, SBA has 
assigned equal weight to each of the 5 primary factors in all 
industries and subindustries covered by this proposed rule. SBA seeks 
feedback on whether it should assign equal weight to each factor or on 
whether it should give more weight to one or more factors for certain 
industries or subindustries. Recommendations to weigh some factors 
differently than others should include suggested weights for each 
factor along with supporting facts and analysis.

[[Page 76405]]

    5. Finally, SBA seeks comments on data sources it used to examine 
industry and Federal market conditions, as well as suggestions on 
relevant alternative data sources that the Agency should evaluate in 
reviewing or modifying size standards for industries covered by this 
proposed rule.
    Public comments on the above issues are very valuable to SBA for 
validating its proposed size standards revisions in this proposed rule. 
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 the application of 
size standards for Federal procurement programs, SBA suggests that 
commenters provide information on the size of contracts in their 
industries, 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 and 13771, the Regulatory 
Flexibility Act (5 U.S.C. 601-612), Executive Orders 13563, 12988, and 
13132, and the Paperwork Reduction Act (44 U.S.C. Ch. 35)

Executive Order 12866

    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, in the next section SBA provides a 
Regulatory Impact Analysis of this proposed rule, including: (1) A 
statement of the need for the proposed action, (2) an examination of 
alternative approaches, and (3) an evaluation of the benefits and 
costs--both quantitative and qualitative--of the proposed action and 
the alternatives considered. However, this rule is not a ``major rule'' 
under the Congressional Review Act, 5 U.S.C. 800.

Regulatory Impact Analysis

1. What is a need for this regulatory action?

    Under the Small Business Act (Act) (15 U.S.C. 632(a)), SBA's 
Administrator is responsible for establishing small business size 
definitions (or ``size standards'') and ensuring that such definitions 
vary from industry to industry to reflect differences among various 
industries. The Jobs Act requires SBA to review every 5 years all size 
standards and make necessary adjustments to reflect current industry 
and Federal market conditions. This proposed rule is part of the second 
5-year review of size standards in accordance with the Jobs Act. The 
first 5-year review of size standards was completed in early 2016. Such 
periodic reviews of size standards provide SBA with an opportunity to 
incorporate ongoing changes to industry structure and Federal market 
environment into size standards and to evaluate the impacts of prior 
revisions to size standards on small businesses. This also provides SBA 
with an opportunity to seek and incorporate public input to the size 
standards review and analysis. SBA believes that proposed size 
standards revisions for industries being reviewed in this rule will 
make size standards more reflective of the current economic 
characteristics of businesses in those industries and the latest trends 
in Federal marketplace.
    SBA's mission is to aid and assist small businesses through a 
variety of financial, procurement, business development and counseling, 
and disaster assistance programs. To determine the actual intended 
beneficiaries of these programs, SBA establishes numerical size 
standards by industry to identify businesses that are deemed small.
    The proposed revisions to the existing size standards for 70 
industries in NAICS Sectors 61, 62, 71, 72 and 81 are consistent with 
SBA's statutory mandates to help small businesses grow and create jobs 
and to review and adjust size standards every 5 years. This regulatory 
action promotes the Administration's goals and objectives as well as 
meets the SBA's statutory responsibility. One of SBA's goals in support 
of promoting the Administration's objectives is to help small 
businesses succeed through fair and equitable access to capital and 
credit, Federal Government contracts and purchases, and management and 
technical assistance. Reviewing and modifying size standards, when 
appropriate, ensures that intended beneficiaries are able to access 
Federal small business programs that are designed to assist them to 
become competitive and create jobs.

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

    OMB directs agencies to establish an appropriate baseline to 
evaluate any benefits, costs, or transfer impacts of regulatory actions 
and alternative approaches considered. The baseline should represent 
the agency's best assessment of what the world would look like absent 
the regulatory action. For a new regulatory action promulgating 
modifications to an existing regulation (such as modifying the existing 
size standards), a baseline assuming no change to the regulation (i.e., 
making no changes to current size standards) generally provides an 
appropriate benchmark for evaluating benefits, costs, or transfer 
impacts of proposed regulatory changes and their alternatives.
Proposed Changes to Size Standards
    Based on the results from analyses of latest industry and Federal 
contracting data, as well as consideration of impact of size standards 
changes on small businesses and significant adverse impacts of the 
COVID-19 pandemic on small businesses and the overall economic 
activity, of the total of 145 industries in Sectors 61, 62, 71, 72 and 
81 that have receipts-based size standards, SBA proposes to increase 
size standards for 70 industries, and maintain current size standards 
for the remaining 75 industries.
The Baseline
    For purposes of this regulatory action, the baseline represents 
maintaining the ``status quo,'' i.e., making no changes to the current 
size standards. Using the number of small businesses and levels of 
benefits (such as set-aside contracts, SBA's loans, disaster 
assistance, etc.) they receive under the current size standards as a 
baseline, one can examine the potential benefits, costs and transfer 
impacts of proposed changes to size standards on small businesses and 
on the overall economy.
    Based on the 2012 Economic Census (the latest available), of a 
total of about 2.0 million businesses in industries in Sectors 61, 62, 
71, 72, and 81, 98% are considered small under the current size 
standards. That percentage varies from 95.9% in Sector 61 to 98.8% in 
Sectors 72 and 81. Based on the data from FPDS-NG for fiscal years 
2016-2018, about 26,174 unique firms in those industries received at 
least one Federal contract during that period, of which 78.2% were 
small under the current size standards. A total of $15.2 billion in 
average annual contract dollars were awarded to businesses in those 
industries during the period of evaluation, and 30.7% of the dollars 
awarded went to small businesses. For these sectors, providing contract 
dollars to small business through set-asides is quite important. From 
the total small business contract dollars awarded during the period 
considered, 65.0% were awarded through various small business set-aside 
programs and 35.0% were awarded through non-set aside

[[Page 76406]]

contracts. Based on the SBA's internal data on its loan programs for 
fiscal years 2016-2018, small businesses in those industries received, 
on an annual basis, a total of 25,070 7(a) and 504 loans in that 
period, totaling about $12.9 billion, of which 83.2% was issued through 
the 7(a) program and 16.8% was issued through the 504/CDC program. 
During fiscal years 2016-2018, small businesses in those industries 
also received 1,612 loans through the SBA's Economic Injury Disaster 
Loan (EIDL) program, totaling about $186 million on an annual basis. 
Table 8, Baseline for All Industries, below, provides these baseline 
results by sector.

                                      Table 8--Baseline for All Industries
----------------------------------------------------------------------------------------------------------------
                                     Sector 61    Sector 62    Sector 71    Sector 72    Sector 81      Total
----------------------------------------------------------------------------------------------------------------
Baseline All Industries (current             18           39           25           15           48          145
 size standards)..................
Total firms (Economic Census).....       84,084      653,143      114,926      496,856      667,318    2,016,327
Total small firms under current          80,620      632,077      112,612      490,773      659,559    1,975,640
 size standards (Economic Census).
Small firms as % of total firms...         95.9         96.8         98.0         98.8         98.8         98.0
Total contract dollars ($ million)     $3,548.9     $8,474.5       $157.4       $785.2     $2,848.9    $15,814.9
 (FPDS-NG FY2016-2018)............
Total small business contract          $1,257.0     $2,335.5       $114.7       $356.9       $784.6     $4,848.7
 dollars under current standards
 ($ million) (FPDS-NG FY2016-2018)
Small business dollars as % of             35.4         27.6         72.9         45.5         27.5         30.7
 total dollars (FPDS-NG FY2016-
 2018)............................
Total No. of unique firms getting         4,425        6,853        1,128        3,733       10,786       26,174
 contracts (FPDS-NG FY2016-2018)..
Total No. of unique small firms           3,514        5,758        1,023        3,088        7,476       20,475
 getting small business contracts
 (FPDS-NG FY2016-2018)............
Small business firms as % of total         79.4         84.0         90.7         82.7         69.3         78.2
 firms............................
No. of 7(a) and 504/CDC loans               993        6,251        2,280        9,313        6,233       25,070
 (FY2016-2018)....................
Amount of 7(a) and 504 loans ($          $371.8     $3,324.0     $1,104.6     $5,826.6     $2,301.6    $12,928.7
 million) (FY2016-2018)...........
No. of EIDL loans (FY2016-2018)...           68          376          140          382          646        1,612
Amount of EIDL loans ($ million)           $6.1        $41.7        $17.8        $48.7        $72.0       $186.4
 (FY2016-2018)....................
----------------------------------------------------------------------------------------------------------------

Increases to Size Standards
    As stated above, of 145 receipts-based size standards in Sectors 
61, 62, 71, 72 and 81 that are reviewed in this rule, based on the 
results from analyses of latest industry and Federal market data as 
well as impacts of size standards changes on small businesses, in this 
rule, SBA proposes to increase 70 size standards. Below are 
descriptions of the benefits, costs and transfer impacts of these 
proposed increases to size standards.
Benefits of Increases to Size Standards
    The most significant benefit to businesses from proposed increases 
to size standards is gaining eligibility for Federal small business 
assistance programs or retaining that eligibility for a longer period. 
These include SBA's business loan programs, EIDL program, and Federal 
procurement programs intended for small businesses. Federal procurement 
programs provide targeted, set-aside opportunities for small businesses 
under the SBA's various business development and contracting programs. 
These include the 8(a)/BD (business development) Program, the Small 
Disadvantaged Businesses (SDB) Program, the Historically Underutilized 
Business Zones (HUBZone) Program, the Women-Owned Small Businesses 
(WOSB) Program, the Economically Disadvantaged Women-Owned Small 
Businesses (EDWOSB) Program, and the Service-Disabled Veteran-Owned 
Small Businesses (SDVOSB) Program.
    Besides set-aside contracting and financial assistance discussed 
above, small businesses also benefit through reduced fees, less 
paperwork, and fewer compliance requirements that are available to 
small businesses through the Federal Government. However, SBA has no 
data to estimate the number of small businesses receiving such 
benefits.
    Based on the 2012 Economic Census (latest available), SBA estimates 
that in 70 industries in NAICS Sectors 61, 62, 71, 72 and 81 for which 
it has proposed to increase size standards, more than 4,708 firms (see 
Table 9, below), not small under the current size standards, will 
become small under the proposed size standards increases and therefore 
become eligible for these programs. That represents about 0.4% of all 
firms classified as small under the current size standards in 
industries for which SBA has proposed increasing size standards. If 
adopted, proposed size standards would result in an increase to the 
small business share of total receipts in those industries from 37.4% 
to 38.5%.
    With more businesses qualifying as small under the proposed 
increases to size standards, Federal agencies will have a larger pool 
of small businesses from which to draw for their small business 
procurement programs. Growing small businesses that are close to 
exceeding the current size standards will be able to retain their small 
business status for a longer period under the higher size standards, 
thereby enabling them to continue to benefit from the small business 
programs.
    Based on the FPDS-NG data for fiscal years 2016-2018, SBA estimates 
that about 233 firms that are active in Federal contracting in those 
industries would gain small business status under the proposed size 
standards. Based on the same data, SBA estimates that those newly-
qualified small businesses under the proposed increases to size 
standards, if adopted, could receive Federal small business contracts 
totaling about $47.0 million annually. That represents a 1.9% increase 
to small business dollars from the sector baseline.
    The added competition from more businesses qualifying as small can 
result in lower prices to the Government for procurements set aside or 
reserved for small businesses, but SBA cannot quantify this impact. 
Costs could be higher when full and open contracts are awarded to 
HUBZone businesses that receive price evaluation preferences. However, 
with agencies likely setting aside more contracts for small businesses 
in response to the availability of a larger pool of small

[[Page 76407]]

businesses under the proposed increases to size standards, HUBZone 
firms might actually end up getting more set-aside contracts and fewer 
full and open contracts, thereby resulting in some cost savings to 
agencies. While SBA cannot estimate such costs savings as it is 
impossible to determine the number and value of unrestricted contracts 
to be otherwise awarded to HUBZone firms will be awarded as set-asides, 
such cost savings are likely to be relatively small as only a small 
fraction of full and open contracts are awarded to HUBZone businesses.
    Under SBA's 7(a) and 504 loan programs, based on the data for 
fiscal years 2016-2018, SBA estimates up to about 54 of SBA's 7(a) and 
504 loans totaling about $23.0 million could be made to these newly-
qualified small businesses in those industries under the proposed size 
standards. That represents a 0.4% increase to the loan amount compared 
to the baseline for all industries covered by this proposed rule.
    Newly-qualified small businesses will also benefit from the SBA's 
EIDL program. Since the benefit provided through this program is 
contingent on the occurrence and severity of a disaster in the future, 
SBA cannot make a meaningful estimate of this impact. However, based on 
the historical trends of the EIDL data, SBA estimates that, on an 
annual basis, the newly defined small businesses under the proposed 
increases to size standards, if adopted, could receive six (6) EIDL 
loans, totaling about $0.7 million. Additionally, the newly-defined 
small businesses would also benefit through reduced fees, less 
paperwork, and fewer compliance requirements that are available to 
small businesses through the Federal Government, but SBA has no data to 
quantify this impact. Table 9, Impacts of Proposed Increases to Size 
Standards, provides these results by NAICS sector.

                            Table 9--Impacts of Proposed Increases to Size Standards
----------------------------------------------------------------------------------------------------------------
                                     Sector 61    Sector 62    Sector 71    Sector 72    Sector 81      Total
----------------------------------------------------------------------------------------------------------------
No. of industries with proposed              14           18           11            4           23           70
 increases to size standards......
Total current small businesses in        53,788      350,287       47,893      243,299      428,410    1,123,676
 industries with Proposed
 increases to size standards
 (Economic Census 2012)...........
Additional firms qualifying as            707.9       1464.4        264.9        599.3       1671.3        4,708
 small under proposed standards
 (2012 Economic Census)...........
Percentage of additional firms             1.32         0.42         0.55         0.25         0.39         0.42
 qualifying as small relative to
 current small businesses in
 industries with proposed
 increases to size standards......
No. of current unique small firms         3,365        3,482          395          722        3,300       11,080
 getting small business contracts
 in industries with proposed
 increases to size standards (FPDS-
 NG FY2016-2018) \1\..............
Additional small business firms              33           30            8            1          168          233
 getting small business status
 (FPDS-NG FY2016-2018)............
% increase to small businesses             0.98         0.86         2.03         0.14         5.09         2.10
 relative to current unique small
 firms getting small business
 contracts in industries with
 proposed increases to size
 standards (FPDS-NG FY2016-2018)
 \1\..............................
Total small business contract          $1,091.7     $1,094.3        $26.6        $12.4       $233.0     $2,458.0
 dollars under current standards
 in industries with proposed
 increases to size standards ($
 million) (FPDS-NG FY2016-2018)...
Estimated small business dollars          $19.4        $14.8         $0.9         $0.0        $11.8        $47.0
 available to newly-qualified
 small firms (Using avg dollars
 obligated to SBs) ($ million)
 FPDS-NG FY 2016-2018) \1\........
% increase to small business               1.78         1.35         3.28         0.31         5.08         1.91
 dollars relative to total small
 business contract dollars under
 current standards in industries
 with proposed increases to size
 standards........................
Total no. of 7(a) and 504 loans to          565        3,209        1,502        4,437        2,856       12,569
 small business in industries with
 proposed increases to size
 standards (FY2016-2018)..........
Total amount of 7(a) and 504 loans       $208.0     $1,827.2       $652.6     $1,688.3       $943.1     $5,319.3
 to small businesses in industries
 with proposed increases to size
 standards ($ million) (FY2016-
 2018)............................
Estimated no. of 7(a) and 504                 8           14            9           11           12           54
 loans to newly-qualified small
 firms............................
Estimated 7(a) and 504 loan amount         $2.9         $8.0         $3.9         $4.2         $4.0        $23.0
 to newly-qualified small firms ($
 million).........................
% increase to 7(a) and 504 loan            1.4%         0.4%         0.6%         0.2%         0.4%         0.4%
 amount relative to the total
 amount of 7(a) and 504 loans in
 industries with proposed
 increases to size standards......
Total no. of EIDL loans to small             49          213           51          197          423          933
 businesses in industries with
 proposed increases to size
 standards (FY2016-2018)..........
Total amount of EIDL loans to              $5.0        $20.8         $6.2        $23.8        $56.9       $112.7
 small businesses in industries
 with proposed increases to size
 standards ($ million) (FY2016-
 2018)............................
Estimated no. of EIDL loans to                1            1            1            1            2            6
 newly-qualified small firms......
Estimated EIDL loan amount to             $0.10        $0.10        $0.12        $0.12        $0.27        $0.71
 newly-qualified small firms ($
 million).........................

[[Page 76408]]

 
% increase to EIDL loan amount             2.0%         0.5%         2.0%         0.5%         0.5%         0.6%
 relative to the total amount of
 EIDL loans in industries with
 proposed increases to size
 standards........................
----------------------------------------------------------------------------------------------------------------
\1\ Additional dollars are calculated multiplying average small business dollars obligated per DUNS times change
  in number of firms. Numbers of firms are calculated using the SBA current size standard, not the contracting
  officer's size designation.
\2\ Total impact represents total unique number of firms impacted to avoid double counting as some firms are
  participating in more than one industry.

Costs of Increases to Size Standards
    Besides having to register in SAM to be able to participate in 
Federal contracting and update the SAM profile annually,\2\ small 
businesses incur no direct costs to gain or retain their small business 
status as a result of increases to size standards. All businesses 
willing to do business with Federal Government must register in SAM and 
update their SAM profiles annually, regardless of their size status. 
SBA believes that a vast majority of businesses that are willing to 
participate in Federal contracting are already registered in SAM and 
update their SAM profiles annually. More importantly, this proposed 
rule does not establish the new size standards for the very first time; 
rather it intends to modify the existing size standards in accordance 
with a statutory requirement and the latest data and other relevant 
factors.
---------------------------------------------------------------------------

    \2\ For a clarification of what the FAR's annual representation 
in SAM requirement is, see number 3 under the Initial Regulatory 
Flexibility Analysis section on page 92.
---------------------------------------------------------------------------

    To the extent that the newly-qualified small businesses could 
become active in Federal procurement, the proposed increases to size 
standards, if adopted, may entail some additional administrative costs 
to the Government as a result of more businesses qualifying as small 
for Federal small business programs. For example, there will be more 
firms seeking SBA's loans, more firms eligible for enrollment in the 
Dynamic Small Business Search (DSBS) database or in certify.sba.gov, 
more firms seeking certification as 8(a)/BD or HUBZone firms or 
qualifying for small business, SDB, WOSB, EDWOSB, and SDVOSB status, 
and more firms applying for SBA's 8(a)/BD and all small business 
mentor-prot[eacute]g[eacute] programs. With an expanded pool of small 
businesses, it is likely that Federal agencies would set aside more 
contracts for small businesses under the proposed increases to size 
standards. One may surmise that this might result in a higher number of 
small business size protests and additional processing costs to 
agencies. However, the SBA's historical data on size protests shows 
that the number of size protests decreased following the increases to 
receipts-based size standards as part of the first 5-year review of 
size standards. Specifically, on an annual basis, the number of size 
protests fell from about 600 during fiscal years 2011-2013 (review of 
most receipts-based size standards was completed by the end of FY 
2013), as compared to about 500 during fiscal years 2014-2016 when size 
standards increases were in effect. That represents a 17% decline. 
Among those newly-defined small businesses seeking SBA's loans, there 
could be some additional costs associated with verification of their 
small business status. However, small business lenders have an option 
of using the tangible net worth and net income based alternative size 
standard instead of using the industry-based size standards to 
establish eligibility for SBA's loans. For these reasons, SBA believes 
that these added administrative costs will be minor because necessary 
mechanisms are already in place to handle these added requirements.
    Additionally, some Federal contracts may possibly have higher 
costs. With a greater number of businesses defined as small due to the 
proposed increases to size standards, Federal agencies may choose to 
set aside more contracts for competition among small businesses only 
instead of using a full and open competition. The movement of contracts 
from unrestricted competition to small business set-aside contracts 
might result in competition among fewer total bidders, although there 
will be more small businesses eligible to submit offers under the 
proposed size standards. However, the additional costs associated with 
fewer bidders are expected to be minor since, by law, procurements may 
be set aside for small businesses under the 8(a)/BD, SDB, HUBZone, 
WOSB, EDWOSB, or SDVOSB programs only if awards are expected to be made 
at fair and reasonable prices.
    Costs may also be higher when full and open contracts are awarded 
to HUBZone businesses that receive price evaluation preferences. 
However, with agencies likely setting aside more contracts for small 
businesses in response to the availability of a larger pool of small 
businesses under the proposed increases to size standards, HUBZone 
firms might actually end up getting fewer full and open contracts, 
thereby resulting in some cost savings to agencies. However, such cost 
savings are likely to be minimal as only a small fraction of 
unrestricted contracts are awarded to HUBZone businesses.
Transfer Impacts of Increases to Size Standards
    The proposed increases to size standards, if adopted, may result in 
some redistribution of Federal contracts between the newly qualified 
small businesses and large businesses and between the newly-qualified 
small businesses and small businesses under the current standards. 
However, it would have no impact on the overall economic activity since 
total Federal contract dollars available for businesses to compete for 
will not change with changes to size standards. While SBA cannot 
quantify with certainty the actual outcome of the gains and losses from 
the redistribution of contracts among different groups of businesses, 
it can identify several probable impacts in qualitative terms. With the 
availability of a larger pool of small businesses under the proposed 
increases to size standards, some unrestricted Federal contracts which 
would otherwise be awarded to large businesses may be set aside for 
small businesses. As a result, large businesses may lose some Federal 
contracting opportunities. Similarly, some small businesses under the 
current size standards may obtain fewer set-aside contracts due to the 
increased competition from larger businesses qualifying as small under 
the proposed increases to size standards. This impact may be offset by 
a greater number of procurements being set aside for all small 
businesses. With larger businesses qualifying as small under the higher 
size standards, smaller small businesses could face some disadvantage 
in competing for set aside contracts against their larger counterparts. 
However, SBA cannot quantify these impacts.

[[Page 76409]]

3. What alternatives have been considered?

    Under OMB Circular A-4, SBA is required to consider regulatory 
alternatives to the proposed changes in the proposed rule. In this 
section, SBA describes and analyzes 2 such alternatives to the proposed 
rule. Alternative Option One to the proposed rule, a more stringent 
alternative to the proposed rule, would propose adopting size standards 
based solely on the analytical results. In other words, the size 
standards of 70 industries for which the analytical results suggest 
raising size standards would be raised. However, the size standards of 
63 industries for which the analytical results suggest lowering size 
standards would be maintained. Alternative Option Two would propose 
retaining all size standards for all industries, given the uncertainty 
generated by the ongoing COVID-19 pandemic. Below, SBA discusses and 
presents the net impacts of each option.
Alternative Option One: Consider Adopting All Calculated Size Standards
    As discussed elsewhere in this proposed rule, Alternative Option 
One would cause a substantial number of currently small businesses to 
lose their small business status and hence to lose their access to 
Federal small business assistance, especially small business set-aside 
contracts and SBA's financial assistance in some cases. SBA could adopt 
one or more of the following three actions with respect to adopting 
size standards for which the analytical results suggest a decrease is 
appropriate: (1) To accept decreases in size standards as suggested by 
the analytical results, (2) to decrease size standards by a smaller 
amount than the calculated threshold, and (3) to retain the size 
standards at their current levels. Actions 2 and 3 would mitigate the 
impacts of a decrease to size standards.
    SBA has adopted action 3 in previous size reviews. For example, in 
response to the 2008 Financial Crisis and economic conditions that 
followed, SBA adopted a general policy in the first 5-year 
comprehensive size standards review to not lower any size standard 
(except to exclude one or more dominant firms) even when the analytical 
results suggested the size standard should be lowered. Currently, 
because of the economic challenges presented by the COVID-19 pandemic 
and the measures taken to protect public health, SBA has decided to 
adopt same general policy of not lowering size standards in the ongoing 
second 5-year comprehensive size standards review as well.
    The primary benefit of adopting all changes in size standards as 
suggested by the analytical results is that SBA's procurement, 
management, technical and financial assistance resources would be 
targeted to the most appropriate beneficiaries of such programs 
according to the analytical results. Adopting the size standards 
suggested by the analytical results would also promote consistency with 
analytical results in SBA's exercise of its authority to determine size 
standards. SBA seeks public comment on the impact of adopting the size 
standard as suggested by the analytical results.
    We have discussed already the benefits and costs of increasing 70 
size standards. Below we discuss the benefits and costs of decreasing 
63 size standards.
Benefits of Decreases to Size Standards
    The most significant benefit to businesses from decreases to size 
standards when the SBA's analysis suggests such decreases is to ensure 
that size standards are more reflective of latest industry structure 
and Federal market trends and that Federal small business assistance is 
more effectively targeted to its intended beneficiaries. These include 
SBA's loan programs, EIDL program, and Federal procurement programs 
intended for small businesses. Federal procurement programs provide 
targeted, set-aside opportunities for small businesses under SBA's 
business development programs, such as small business, 8(a)/BD, SDB 
HUBZone, WOSB, EDWOSB, and SDVOSB programs. The adoption of smaller 
size standards when the results support them diminishes the risk of 
awarding contracts to firms which are not small anymore.
    Decreasing size standards may reduce the administrative costs of 
the Government, because the risk of awarding contracts to other than 
small businesses may diminish when the size standards reflect better 
the structure of the market. The risks of providing SBA's loans to 
firms that are not needing them the most, or allowing firms that are 
not eligible for small business set-asides or to participate on the SBA 
procurement programs will provide for a better chance for smaller firms 
to grow and benefit from the opportunities available in the Federal 
market, and strengthen the small business industrial base for the 
Federal Government.
Costs of Decreases to Size Standards
    With fewer businesses qualifying as small under the decreases to 
size standards, Federal agencies will have a smaller pool of small 
businesses from which to draw for their small business procurement 
programs. For example, in Option One, during fiscal years 2016-2018, 
agencies awarded, on an annual basis, about $2,004 million in small 
business contracts in those 63 industries for which this Option 
considered decreasing size standards. Table 10 below shows that 
lowering 63 size standards would reduce Federal contract dollars 
awarded to small businesses by $76.4 million or about 3.8% relative to 
the baseline level. Nevertheless, since Federal agencies are still 
required to meet the statutory small business contracting goal of 23%, 
actual impacts on the overall set aside activity is likely to be 
smaller as agencies are likely to award more set aside contracts to 
small businesses that continue to remain small under the reduced size 
standards.
    With fewer businesses qualifying as small, the decreased 
competition can also result in higher prices to the Government for 
procurements set aside or reserved for small businesses, but SBA cannot 
quantify this impact. However, SBA estimates an almost null impact or 
non-significant reduction in dollars obligated to small businesses, if 
mitigation measures are adopted. Decreases to size standards would have 
a very minor impact on small businesses applying for SBA's 7(a) and 504 
loans because a vast majority of such loans are issued to businesses 
that are far below the reduced size standards. For example, based on 
the loan data for fiscal years 2016-2018, Option One estimates that 
about 26 SBA's 7(a) and 504 loans with total amounts of $19.8 million 
could not be made to those small businesses that would lose eligibility 
under the reduced size standards (before mitigation). That represents 
about a 0.3% decrease of the loan amounts compared to the baseline. 
Table 10 Impacts of Decreases to Size Standards Under Alternative 
Option One, below, shows these results by sector. However, the actual 
impact could be much less as businesses losing small business 
eligibility under the decreases to industry-based size standards could 
still qualify for SBA's loans under the tangible net worth and net 
income-based alternative size standard.
    Businesses losing small business status would also be impacted in 
terms of access to loans through the SBA's EIDL program. However, SBA 
expects such impact to be minimal as only a small number of businesses 
in those industries received such loans during fiscal years 2016-2018. 
Since this

[[Page 76410]]

program is contingent on the occurrence and severity of a disaster in 
the future, SBA cannot make a meaningful estimate of this impact.
    Small businesses becoming other than small if size standards were 
decreased might lose benefits through reduced fees, less paperwork, and 
fewer compliance requirements that are available to small businesses 
through Federal Government, but SBA has no data to quantify this 
impact. However, if agencies determine that SBA's size standards do not 
adequately serve such purposes, they can establish a different size 
standard with an approval from SBA if they are required to use SBA's 
size standards for their programs.

                  Table 10--Impacts of Decreases to Size Standards Under Alternative Option One
----------------------------------------------------------------------------------------------------------------
                                     Sector 61    Sector 62    Sector 71    Sector 72    Sector 81      Total
----------------------------------------------------------------------------------------------------------------
No. of industries for which SBA               4           18           11            9           21           63
 considered decreasing size
 standards (2012 Economic Census).
Total current small businesses in        26,832      257,179       39,737      243,637      129,388      696,774
 industries for which SBA
 considered decreasing size
 standards (EC 2012)..............
Estimated no. of firms losing                21          828          259          399          211        1,718
 small status for which SBA
 considered decreasing size
 standards (2012 Economic Census).
% of Firms losing small status             0.08         0.32         0.65         0.16         0.16         0.25
 relative to current small
 businesses in industries for
 which SBA considered decreasing
 size standards...................
No. of current unique small firms           167        2,300          290        2,351        2,541        7,611
 getting small business contracts
 in industries for which SBA
 considered decreasing size
 standards (FPDS-NG FY2016-2018)
 \1\..............................
Estimated number of small business            1           45            3           31          105          183
 firms that would have lost small
 business status in the decreases
 that SBA considered..............
% decrease to small business firms         0.60         1.96         1.03         1.32         4.13         2.40
 relative to current unique small
 firms getting small business
 contracts in industries for which
 SBA considered decreasing size
 standards (FPDS-NG FY2016-2018) \
 1\...............................
Total small business contract            $165.2     $1,190.7        $19.4       $343.5       $284.9     $2,003.8
 dollars under current size
 standards in industries for which
 SBA considered decreasing size
 standards ($ million) (FPDS-NG
 FY2016-2018).....................
Estimated small business dollars           $0.1        $52.8         $0.2         $2.6        $20.8        $76.4
 not available to firms losing
 small business status (Using avg
 dollars obligated to SBs) ($
 million)\ 1\ (FPDS-NG FY 2016-
 2018)............................
% decrease to small business               0.04         4.43         1.02         0.75         7.30         3.81
 dollars relative to total small
 business contract dollars under
 current size standards in
 industries for which SBA
 considered decreasing size
 standards........................
Total no. of 7(a) and 504 loans to          428        2,604          593        4,835        1,899       10,359
 small businesses in industries
 for which SBA considered
 decreasing size standards (FY2016-
 2018)............................
Total amount of 7(a) and 504 loans       $163.8     $1,317.2       $375.7     $4,119.1       $566.6     $6,542.3
 to small businesses in industries
 for which SBA considered
 decreasing size standards ($
 million) (FY2016-2018)...........
Estimated no. of 7(a) and 504                 1            9            4            8            4           26
 loans not available to firms that
 would have lost small business
 status...........................
Estimated 7(a) and 504 loan amount         $0.4         $4.6         $6.8         $6.8         $1.2        $19.8
 not available to firms that would
 have lost small status ($
 million).........................
% decrease to 7(a) and 504 loan            0.2%         0.3%         1.8%         0.2%         0.2%         0.3%
 amount relative to the total
 amount of 7(a) and 504 loans in
 industries for which SBA
 considered decreasing size
 standards........................
Total no. of EIDL loans to small             19          142           64          171          133          529
 businesses in industries for
 which SBA considered decreasing
 size standards (FY2016-2018).....
Total amount of EIDL loans to              $1.1        $18.4        $10.3        $22.5         $8.9        $61.2
 small businesses in industries
 for which SBA considered
 decreasing size standards ($
 million) (FY2016-2018)...........
Estimated no. of EIDL loans not               1            1            1            1            1            5
 available to firms that would
 have lost small business status..
Estimated EIDL loan amount not            $0.06        $0.13        $0.16        $0.13        $0.07        $0.55
 available to firms that would
 have lost small business status
 ($ million)......................
% decrease to EIDL loan amount             5.3%         0.7%         1.6%         0.6%         0.8%         0.9%
 relative to the baseline.........
----------------------------------------------------------------------------------------------------------------
\1\ Additional dollars are calculated multiplying average small business dollars obligated per DUNS times change
  in number of firms.
\2\ Total impact represents total unique industries impacted to avoid double counting as some industries have
  large firms gaining small business status and small firms extending small business status.


[[Page 76411]]

Transfer Impacts of Decreases to Size Standards
    If the size standards were decreased under Alternative Option One, 
it may result in a redistribution of Federal contracts between small 
businesses losing the small business status and large businesses and 
between small businesses losing the small business status and small 
businesses remaining small under the reduced size standards. However, 
as under the proposed increases to size standards, it would have no 
impact on the overall economic activity since total Federal contract 
dollars available for businesses to compete for will stay the same. 
While SBA cannot estimate with certainty the actual outcome of the 
gains and losses among different groups of businesses from contract 
redistribution resulting from decreases to size standards, it can 
identify several probable impacts. With a smaller pool of small 
businesses under the decreases to size standards, some set-aside 
Federal contracts to be otherwise awarded to small businesses may be 
competed in unrestricted basis. As a result, large businesses may have 
more Federal contracting opportunities. However, because agencies are 
still required by law to award 23 percent of dollars to small 
businesses, SBA expects the movement of set-aside contracts to 
unrestricted competition to be limited. For the same reason, small 
businesses remaining small under the reduced size standards are likely 
to obtain more set aside contracts due to the reduced competition from 
fewer businesses qualifying as small under the decreases to size 
standards. With some larger small businesses losing small business 
status under the decreases to size standards, smaller small businesses 
would likely become more competitive in obtaining set aside contracts. 
However, SBA cannot quantify these impacts.
Net Impact of Alternative Option One
    To estimate the net impacts of Alternative Option One, SBA followed 
the same methodology used to evaluate the impacts of the proposed size 
standards (see Table 9 above). However, under Alternative Option One, 
SBA used the calculated size standards instead of the proposed ones to 
determine the impacts of changes to current thresholds. The impact of 
the increases of the calculated size standards were already shown in 
Table 9 above. Table 10 (above) and Table 11, Net Impacts of Size 
Standards Changes under Alternative Option One, below, present the 
impact of the decreases of size standards and the net impact of 
adopting the calculated results under Alternative Option One, 
respectively.
    Based on the 2012 Economic Census, SBA estimates that in 132 
industries in NAICS Sectors 61, 62, 71, 72 and 81 for which the 
analytical results suggested to change size standards, about 2,990 
firms (see Table 11, below), would become small under the Option One. 
That represents about 0.2 percent of all firms classified as small 
under the current size standards.
    Based on the FPDS-NG data for fiscal years 2016-2018, SBA estimates 
that about 38 active firms in Federal contracting in those industries 
would gain small business status under Option One. This represents an 
increase of about 0.2% of the total number of small businesses 
participating in Federal contracting under the current size standards. 
Based on the same data, SBA estimates that about $29.5 million of 
Federal procurement dollars would not be available to firms losing 
their small status. This represents a decrease of 0.7% from the 
baseline for all industries covered by this proposed rule.
    Based on the SBA's loan data for fiscal years 2016-2018, the total 
number of 7(a) and 504 loans may experience an overall increase by 
about 28 loans, and the loan amounts by about $3.2 million. This 
represents a 0.02% increase in the loan amounts relative to the 
baseline for all industries covered by this proposed rule.
    Firms' participation under the SBA's EIDL program will be affected 
as well. Since the benefit provided through this program is contingent 
on the occurrence and severity of a disaster in the future, SBA cannot 
make a meaningful estimate of this impact. However, based on the 
historical trends of the EIDL data, SBA estimates that, on an annual 
basis, the net impact of the Option One is 1 additional loan, and an 
additional loan amount of about $0.16 million relative to the baseline 
for all industries covered by this proposed rule. Table 11, below, 
provides these results by NAICS sector.

                  Table 11--Net Impacts of Size Standards Changes Under Alternative Option One
----------------------------------------------------------------------------------------------------------------
                                     Sector 61    Sector 62    Sector 71    Sector 72    Sector 81      Total
----------------------------------------------------------------------------------------------------------------
No. of industries with proposed              17           36           22           13           44          132
 changes to size standards........
Total no. of small business under        80,620      607,466       87,630      486,936      557,798    1,820,450
 the current size standards (2012
 Economic Census).................
Additional firms qualifying as              687          636            6          200        1,460        2,990
 small under proposed size
 standards (2012 Economic Census).
% of additional firms qualifying           0.85         0.10         0.01         0.04         0.26         0.16
 as small relative to total
 current small businesses.........
No. of current unique small firms         3,514        5,566          672        3,069        5,672       18,184
 getting small business contracts
 (FPDS-NG FY2016-2018) \1\........
Additional small firms getting               32          -14            5          -30           50           38
 small business status (FPDS-NG
 FY2016-2018).....................
% increase to small firms relative         0.91        -0.25         0.74        -0.98         0.88         0.21
 to current unique small firms
 getting small business contracts
 (FPDS-NG FY2016-2018) \1\........
Total small business small             $1,257.0     $2,285.1        $46.1       $355.9       $517.9     $4,461.8
 business contract dollars under
 current size standards ($
 million) (FPDS-NG FY2016-2018)...
Estimated small business dollars          $19.3       -$38.0         $0.7        -$2.6        -$9.0       -$29.5
 available to newly-qualified
 small firms ($ million) (FPDS-NG
 FY 2016-2018) \1\................
% increase to dollars relative to          1.54        -1.66         1.47        -0.72        -1.73        -0.66
 total small business contract
 dollars under current size
 standards........................
Total no. of 7(a) and 504 loans to          993        6,251        2,280        9,313        6,233       25,070
 small businesses (FY2016-2018)...

[[Page 76412]]

 
Total amount of 7(a) and 504 loans       $371.8     $3,324.0     $1,104.6     $5,826.6     $2,301.6    $12,928.7
 to small businesses (FY2016-2018)
Estimated no. of additional 7(a)              7            5            5            3            8           28
 and 504 loans to newly-qualified
 small firms......................
Estimated additional 7(a) and 504          $2.6         $3.4        -$2.9        -$2.6         $2.8         $3.2
 loan amount to newly-qualified
 small firms ($ million)..........
% increase to 7(a)and 504 loan             0.7%         0.1%        -0.3%         0.0%         0.1%        0.02%
 amount relative to the total
 amount of 7(a) and 504 loans to
 small businesses.................
Total no. of EIDL loans to small             68          376          140          382          646        1,612
 businesses (FY2016-2018).........
Total amount of EIDL loans to              $6.1        $41.7        $17.8        $48.7        $72.0       $186.4
 small businesses (FY2016-2018)...
Estimated no. of additional EIDL              0            0            0            0            1            1
 loans to newly-qualified small
 firms............................
Estimated additional EIDL loan            $0.04       -$0.03       -$0.04       -$0.01        $0.20        $0.16
 amount to newly-qualified small
 firms ($ million)................
% increase to EIDL loan amount             0.7%        -0.1%        -0.2%         0.0%         0.3%         0.1%
 relative to the total amount of
 EIDL loans to small businesses...
----------------------------------------------------------------------------------------------------------------
\1\ Additional dollars are calculated multiplying average small business dollars obligated per DUNS times change
  in number of firms.
\2\ Total impact represents total unique industries impacted to avoid double counting as some industries have
  large firms gaining small business status and small firms extending small business status.

Alternative Option Two: To Retain All Current Size Standards
    Under this option, given the current COVID-19 pandemic, as 
discussed elsewhere, SBA considered retaining the current levels of all 
size standards even though the analytical results may suggest changing 
them. SBA considers that the option of retaining all size standards at 
this moment provides the opportunity to reassess the economic situation 
once the economic recovery starts. Under this option, as the current 
situation develops, SBA will be able to assess new data available on 
economic indicators, federal procurement, and SBA loans as well. SBA 
estimates a net impact of zero for this option, when compared to the 
baseline. However, if we compare the proposal of increasing 70 size 
standards and retaining 75 with this alternative approach, the benefits 
for small businesses of adopting the proposal will not be attained, 
because of which SBA is not proposing the Alternative Option Two.

Executive Order 13771

    SBA has determined, subject to the approval of the Office of 
Information and Regulatory Affairs (OIRA) of the Office of Management 
and Budget (OMB), that this proposed rule is not subject to the 
requirements of Executive Order 13771, because most of the rule's 
impacts are income transfers between small and other than small 
businesses. According to the Executive Order 13771 guidance in OMB M-
17-21, dated April 5, 2017 (E.O. 13771 Guidance), ``transfers'' are not 
covered by Executive Order 13771. The E.O. 13771 Guidance also states 
that ``in some cases, [transfer rules] may impose requirements apart 
from transfers, or transfers may distort markets causing 
inefficiencies. In those cases, the actions would need to be offset to 
the extent they impose more than de minimis costs.'' SBA estimates that 
this rulemaking would impose only de minimis costs on small businesses 
and would result in negligible compliance costs. Thus, SBA has 
determined that this rulemaking is exempt from the requirements of 
Executive Order 13771. Details on the estimated costs of this proposed 
rule can be found in the Regulatory Impact Analysis above.

Regulatory Flexibility Act

    According to the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-
612, when an agency issues a rulemaking, it must prepare a regulatory 
flexibility analysis to address the impact of the rule on small 
entities.
    This proposed rule, if adopted, may have a significant impact on a 
substantial number of small businesses in the industries covered by 
this proposed rule. As described above, this rule may affect small 
businesses seeking Federal contracts, loans under SBA's 7(a), 504 and 
Economic Injury Disaster Loan Programs, and assistance under other 
Federal small business programs.

Initial Regulatory Flexibility Analysis

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

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

    Changes in industry structure, technological changes, productivity 
growth, mergers and acquisitions, and updated industry definitions have 
changed the structure of many the industries covered by this proposed 
rule. Such changes can be enough to support revisions to current size 
standards for some industries. Based on the analysis of the latest data 
available, SBA believes that the revised standards in this proposed 
rule more appropriately reflect the size of businesses that need 
Federal assistance. The 2010 Jobs Act also requires SBA to review all 
size standards and make necessary adjustments to reflect market 
conditions.

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

    Based on data from the 2012 Economic Census, SBA estimates that 
there are about 1.1 million small firms covered by this rulemaking 
under industries with proposed changes to size standards. If the 
proposed rule is adopted in its present form, SBA

[[Page 76413]]

estimates that an additional 4,708 businesses will become small.

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

    The proposed size standard changes impose no additional reporting 
or record keeping requirements on small businesses. However, qualifying 
for Federal procurement and a number of other programs requires that 
businesses register in SAM and self-certify that they are small in that 
system frequently enough to ensure that their SAM registration is 
current, accurate, and complete with the submission of an offer for 
every new contract (FAR 52.204-7 and 52.204-8). For existing contracts, 
small business contractors are generally required to update their SAM 
registration at least annually (FAR 52.204-13). Therefore, businesses 
opting to participate in those programs must comply with SAM 
requirements. There are no costs associated with SAM registration or 
certification. Changing size standards alters the access to SBA's 
programs that assist small businesses but does not impose a regulatory 
burden because they neither regulate nor control business behavior.

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

    Under section 3(a)(2)(C) of the Small Business Act, 15 U.S.C. 
632(a)(2)(c), Federal agencies must use SBA's size standards to define 
a small business, unless specifically authorized by statute to do 
otherwise. In 1995, SBA published in 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.
    However, SBA considered two alternatives to its proposal to 
increase 70 size standards and maintain 75 size standards at their 
current levels. The first alternative SBA considered was adopting size 
standards based solely on the analytical results. In other words, the 
size standards of 70 industries for which the analytical results 
suggest raising size standards would be raised. However, the size 
standards of 63 industries for which the analytical results suggest 
lowering size standards would be lowered. This would cause a 
significant number of small businesses to lose their small business 
status. Under the second alternative, in view of the COVID-19 pandemic, 
SBA considered retaining all size standards at the current levels, even 
though the analytical results may suggest increasing 70 and decreasing 
63 size standards. Retaining all size standards at their current levels 
would be more onerous for the small businesses than the option of 
adopting 70 increases and retaining the rest of size standards.

Executive Order 13563

    Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, reducing costs, harmonizing rules, and promoting 
flexibility. A description of the need for this regulatory action and 
benefits and costs associated with this action including possible 
distributional impacts that relate to Executive Order 13563 is included 
above in the Regulatory Impact Analysis under Executive Order 12866. 
Additionally, Executive Order 13563, section 6, calls for retrospective 
analyses of existing rules.
    The review of size standards in the industries covered by this 
proposed rule is consistent with section 6 of Executive Order 13563 and 
the 2010 Jobs Act which requires SBA to review all size standards and 
make necessary adjustments to reflect market conditions. Specifically, 
the 2010 Jobs Act requires SBA to review at least one-third of all size 
standards during every 18-month period from the date of its enactment 
(September 27, 2010) and to review all size standards not less 
frequently than once every 5 years, thereafter. SBA had already 
launched a comprehensive review of size standards in 2007. In 
accordance with the Jobs Act, SBA completed the comprehensive review of 
the small business size standard for each industry, except those for 
agricultural enterprises previously set by Congress, and made 
appropriate adjustments to size standards for a number of industries to 
reflect current Federal and industry market conditions. The first 
comprehensive review was completed in 2015. Prior to 2007, the last 
time SBA conducted a comprehensive review of all size standards was 
during the late 1970s and early 1980s.
    SBA issued a White Paper entitled ``Size Standards Methodology'' 
and published a notice in the April 11, 2019, edition of the Federal 
Register (84 FR 14587) to advise the public that the document is 
available 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. SBA gave appropriate consideration to all input, 
suggestions, recommendations, and relevant information obtained from 
industry groups, individual businesses, and Federal agencies in 
developing size standards for those industries covered by this proposed 
rule.

Executive Order 12988

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

Executive Order 13132

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

Paperwork Reduction Act

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

[[Page 76414]]

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 13 
CFR part 121 as follows:

PART 121--SMALL BUSINESS SIZE REGULATIONS

0
1. The authority citation for part 121 continues to read as follows:

    Authority:  15 U.S.C. 632, 634(b)(6), 636(a)(36), 662, and 
694a(9); Pub. L. 116-136, Section 1114.

0
2. In Sec.  121.201, amend the table ``Small Business Size Standards by 
NAICS Industry'' by revising entries ``611110'', ``611210'', 
``611310'', ``611410'', ``611420'', ``611430'', ``611511'', ``611513'', 
``611519'', ``611630'', ``611691'', ``611692'', ``611699'', ``611710'', 
``621111'', ``621340'', ``621399'', ``621410'', ``621491'', ``621498'', 
``621511'', ``621910'', ``621999'', ``623312'', ``623990'', ``624110'', 
``624120'', ``624190'', ``624210'', ``624230'', ``624310'', ``624410'', 
``711120'', ``711130'', ``711219'', ``711320'', ``711410'', ``712120'', 
``712190'', ``713920'', ``713930'', ``713940'', ``713950'', ``721211'', 
``721310'', ``722511'', ``722515'', ``811122'', ``811191'', ``811198'', 
``811211'', ``811213'', ``811310'', ``812111'', ``812112'', ``812191'', 
``812210'', ``812310'', ``812320'', ``812921'', ``812990'', ``813110'', 
``813312'', ``813319'', ``813410'', ``813910'', ``813920'', ``813930'', 
``813940'', and ``813990'' to read as follows:


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

* * * * *

                                 Small Business Size Standards by NAICS Industry
----------------------------------------------------------------------------------------------------------------
                                                                                       Size            Size
                                                                                   standards  in   standards  in
            NAICS codes                       NAICS U.S. industry title            millions  of     number  of
                                                                                      dollars        employees
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                         Sector 61--Educational Services
                                       Subsector 611--Educational Services
----------------------------------------------------------------------------------------------------------------
611110............................  Elementary and Secondary Schools............           $17.5  ..............
611210............................  Junior Colleges.............................            28.5  ..............
611310............................  Colleges, Universities and Professional                 30.5  ..............
                                     Schools.
611410............................  Business and Secretarial Schools............            18.0  ..............
611420............................  Computer Training...........................            14.0  ..............
611430............................  Professional and Management Development                 13.0  ..............
                                     Training.
611511............................  Cosmetology and Barber Schools..............            11.5  ..............
 
                                                  * * * * * * *
611513............................  Apprenticeship Training.....................            10.0  ..............
611519............................  Other Technical and Trade Schools...........            18.5  ..............
Except............................  Job Corps Centers\16\.......................       \16\ 41.5  ..............
 
                                                  * * * * * * *
611630............................  Language Schools............................            18.0  ..............
611691............................  Exam Preparation and Tutoring...............            11.0  ..............
611692............................  Automobile Driving Schools..................             9.0  ..............
611699............................  All Other Miscellaneous Schools and                     14.5  ..............
                                     Instruction.
611710............................  Educational Support Services................           $21.0  ..............
----------------------------------------------------------------------------------------------------------------
                                  Sector 62--Health Care and Social Assistance
                                 Subsector 621--Ambulatory Health Care Services
----------------------------------------------------------------------------------------------------------------
621111............................  Offices of Physicians (except Mental Health             14.0  ..............
                                     Specialists).
 
                                                  * * * * * * *
621340............................  Offices of Physical, Occupational and Speech            11.0  ..............
                                     Therapists and Audiologists.
 
                                                  * * * * * * *
621399............................  Offices of All Other Miscellaneous Health                9.0  ..............
                                     Practitioners.
621410............................  Family Planning Centers.....................            16.5  ..............
 
                                                  * * * * * * *
621491............................  HMO Medical Centers.........................            39.0  ..............
 
                                                  * * * * * * *
621498............................  All Other Outpatient Care Centers...........            22.5  ..............
621511............................  Medical Laboratories........................           $36.5  ..............
 
                                                  * * * * * * *
621910............................  Ambulance Services..........................            20.0  ..............
 

[[Page 76415]]

 
                                                  * * * * * * *
621999............................  All Other Miscellaneous Ambulatory Health               18.0  ..............
                                     Care Services.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                             Subsector 623--Nursing and Residential Care Facilities
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
623312............................  Assisted Living Facilities for the Elderly..            20.5  ..............
623990............................  Other Residential Care Facilities...........            14.0  ..............
----------------------------------------------------------------------------------------------------------------
                                        Subsector 624--Social Assistance
----------------------------------------------------------------------------------------------------------------
624110............................  Child and Youth Services....................            13.5  ..............
624120............................  Services for the Elderly and Persons with               13.0  ..............
                                     Disabilities.
624190............................  Other Individual and Family Services........            14.0  ..............
624210............................  Community Food Services.....................            17.0  ..............
 
                                                  * * * * * * *
624230............................  Emergency and Other Relief Services.........            36.5  ..............
624310............................  Vocational Rehabilitation Services..........            13.0  ..............
624410............................  Child Day Care Services.....................             8.5  ..............
----------------------------------------------------------------------------------------------------------------
                                  Sector 71--Arts, Entertainment and Recreation
                     Subsector 711--Performing Arts, Spectator Sports and Related Industries
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
711120............................  Dance Companies.............................            16.0  ..............
711130............................  Musical Groups and Artists..................            13.0  ..............
 
                                                  * * * * * * *
711219............................  Other Spectator Sports......................            14.5  ..............
 
                                                  * * * * * * *
711320............................  Promoters of Performing Arts, Sports and                19.5  ..............
                                     Similar Events without Facilities.
711410............................  Agents and Managers for Artists, Athletes,             $15.5  ..............
                                     Entertainers and Other Public Figures.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                        Subsector 712--Museums, Historical Sites and Similar Institutions
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
712120............................  Historical Sites............................            11.5  ..............
 
                                                  * * * * * * *
712190............................  Nature Parks and Other Similar Institutions.            17.0  ..............
----------------------------------------------------------------------------------------------------------------
                          Subsector 713--Amusement, Gambling and Recreation Industries
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
713920............................  Skiing Facilities...........................            31.0  ..............
713930............................  Marinas.....................................             9.5  ..............
713940............................  Fitness and Recreational Sports Centers.....            15.5  ..............
713950............................  Bowling Centers.............................            11.0  ..............
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                   Sector 72--Accommodation and Food Services
                                          Subsector 721--Accommodation
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
721211............................  RV (Recreational Vehicle) Parks and                      9.0  ..............
                                     Campgrounds.
 

[[Page 76416]]

 
                                                  * * * * * * *
721310............................  Rooming and Boarding Houses, Dormitories,               12.5  ..............
                                     and Workers' Camps.
----------------------------------------------------------------------------------------------------------------
                                Subsector 722--Food Services and Drinking Places
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
722511............................  Full-Service Restaurants....................            10.0  ..............
 
                                                  * * * * * * *
722515............................  Snack and Nonalcoholic Beverage Bars........            20.0  ..............
----------------------------------------------------------------------------------------------------------------
                                            Sector 81--Other Services
                                      Subsector 811--Repair and Maintenance
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
811122............................  Automotive Glass Replacement Shops..........            15.5  ..............
811191............................  Automotive Oil Change and Lubrication Shops.             9.5  ..............
 
                                                  * * * * * * *
811198............................  All Other Automotive Repair and Maintenance.             9.0  ..............
811211............................  Consumer Electronics Repair and Maintenance.            22.5  ..............
 
                                                  * * * * * * *
811213............................  Communication Equipment Repair and                      19.5  ..............
                                     Maintenance.
 
                                                  * * * * * * *
811310............................  Commercial and Industrial Machinery and                 11.0  ..............
                                     Equipment (except Automotive and
                                     Electronic) Repair and Maintenance.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                  Subsector 812--Personal and Laundry Services
----------------------------------------------------------------------------------------------------------------
812111............................  Barber Shops................................             8.5  ..............
812112............................  Beauty Salons...............................             8.5  ..............
 
                                                  * * * * * * *
812191............................  Diet and Weight Reducing Centers............            24.0  ..............
 
                                                  * * * * * * *
812210............................  Funeral Homes and Funeral Services..........            11.0  ..............
 
                                                  * * * * * * *
812310............................  Coin[dash]Operated Laundries and Drycleaners            11.5  ..............
812320............................  Dry cleaning and Laundry Services (except                7.0  ..............
                                     Coin[dash]Operated).
 
                                                  * * * * * * *
812921............................  Photofinishing Laboratories (except                     26.0  ..............
                                     One[dash]Hour).
 
                                                  * * * * * * *
812990............................  All Other Personal Services.................            13.0  ..............
----------------------------------------------------------------------------------------------------------------
              Subsector 813--Religious, Grantmaking, Civic, Professional and Similar Organizations
----------------------------------------------------------------------------------------------------------------
813110............................  Religious Organizations.....................            11.5  ..............
 
                                                  * * * * * * *
813312............................  Environment, Conservation and Wildlife                  17.0  ..............
                                     Organizations.
813319............................  Other Social Advocacy Organizations.........            16.0  ..............
813410............................  Civic and Social Organizations..............             8.5  ..............
813910............................  Business Associations.......................            13.5  ..............
813920............................  Professional Organizations..................            20.5  ..............
813930............................  Labor Unions and Similar Labor Organizations            14.5  ..............
813940............................  Political Organizations.....................            12.5  ..............
813990............................  Other Similar Organizations (except                     12.0  ..............
                                     Business, Professional, Labor, and
                                     Political Organizations).
 

[[Page 76417]]

 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
Footnotes
16. NAICS code 611519--Job Corps Centers. For classifying a Federal procurement, the purpose of the solicitation
  must be for the management and operation of a U.S. Department of Labor Job Corps Center. The activities
  involved include admissions activities, life skills training, educational activities, comprehensive career
  preparation activities, career development activities, career transition activities, as well as the management
  and support functions and services needed to operate and maintain the facility. For SBA assistance as a small
  business concern, other than for Federal Government procurements, a concern must be primarily engaged in
  providing the services to operate and maintain Federal Job Corps Centers.

* * * * *

Jovita Carranza,
Administrator.
[FR Doc. 2020-26312 Filed 11-25-20; 8:45 am]
BILLING CODE 8026-03-P


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