9126 Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 

1The Board published a technical amendment in 

April 2009 correcting a printing error with respect 

to Sample Form B–10. Depository institutions must 

use Sample Form B–10, or a substantially similar 

form, including the box and gridlines, to provide 

totals for overdraft fees and returned item fees for 

the statement cycle and year-to-date. 74 FR 17768 

(April 17, 2009). 

FEDERAL RESERVE SYSTEM 

12 CFR Part 230 

[Regulation DD; Docket No. R–1315] 

Truth in Savings 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Proposed rule; request for 

public comment. 

SUMMARY: On January 29, 2009, the 

Board published final rules amending 

Regulation DD, which implements the 

Truth in Savings Act, and the official 

staff commentary to the regulation. The 

final rule addressed depository 

institutions’ disclosure practices related 

to overdraft services, including balances 

disclosed to consumers through 

automated systems. The Board proposes 

to amend Regulation DD and the official 

staff commentary to clarify the 

application of the rule to retail sweep 

programs and the terminology for 

overdraft fee disclosures, and to make 

amendments that conform to the Board’s 

final Regulation E amendments 

addressing overdraft services, adopted 

in November 2009. 

DATES: Comments must be received on 

or before March 31, 2010. 

ADDRESSES: You may submit comments, 

identified by Docket No. R–1315, by any 

of the following methods: 

• Agency Web Site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include the docket number in the 

subject line of the message. 

• Fax: (202) 452–3819 or (202) 452– 

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

All public comments are available 

from the Board’s Web site at http:// 

www.federalreserve.gov/generalinfo/ 

foia/ProposedRegs.cfm as submitted, 

unless modified for technical reasons. 

Accordingly, your comments will not be 

edited to remove any identifying or 

contact information. Public comments 

may also be viewed electronically or in 

paper form in Room MP–500 of the 

Board’s Martin Building (20th and C 

Streets, NW) between 9 a.m. and 5 p.m. 

on weekdays. 

FOR FURTHER INFORMATION CONTACT: 

Dana E. Miller or Vivian W. Wong, 

Senior Attorneys, or Ky Tran-Trong, 

Counsel, Division of Consumer and 

Community Affairs, at (202) 452–3667 

or (202) 452–2412, Board of Governors 

of the Federal Reserve System, 20th and 

C Streets, NW., Washington, DC 20551. 

For users of Telecommunications 

Device for the Deaf (TDD) only, contact 

(202) 263–4869. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In December 2008, the Board adopted 

a final rule amending Regulation DD, 

which implements the Truth in Savings 

Act, and the official staff commentary to 

the regulation. The final rule addressed 

depository institutions’ disclosure 

practices related to overdraft services, 

including balances disclosed to 

consumers through automated systems. 

The rule was published in the Federal 

Register on January 29, 2009 and 

became effective January 1, 2010. See 74 

FR 5584 (Regulation DD final rule).1

In November 2009, the Board adopted 

a final rule under Regulation E, which 

implements the Electronic Fund 

Transfer Act, limiting a financial 

institution’s ability to assess fees for 

paying ATM and one-time debit card 

transactions pursuant to the institution’s 

discretionary overdraft service without 

the consumer’s affirmative consent to 

such payment. The Rule was published 

in the Federal Register on November 17, 

2009 and has a mandatory compliance 

date of July 1, 2010. See 74 FR 59033 

(Regulation E final rule). 

Since publication of the two rules, 

institutions and others have requested 

clarification of particular aspects of the 

rule and further guidance regarding 

compliance with the rule. In addition, 

conforming amendments to the 

Regulation DD final rule are necessary 

in light of certain provisions 

subsequently adopted in the Regulation 

E final rule. Accordingly, the Board is 

proposing to amend Regulation DD and 

the official staff commentary, as 

discussed in Section III of this 

SUPPLEMENTARY INFORMATION. Similarly, 

elsewhere in today’s Federal Register, 

the Board has proposed to amend 

certain aspects of the Regulation E final 

rule. 

II. Statutory Authority 

The Truth in Savings Act, 12 U.S.C. 

4301 et seq., is implemented by the 

Board’s Regulation DD (12 CFR part 

230). The purpose of the act and 

regulation is to assist consumers in 

comparing deposit accounts offered by 

depository institutions, principally 

through the disclosure of fees, the 

annual percentage yield, the interest 

rate, and other account terms. An 

official staff commentary interprets the 

requirements of Regulation DD (12 CFR 

part 230 (Supp. I)). Credit unions are 

governed by a substantially similar 

regulation issued by the National Credit 

Union Administration. In the 

SUPPLEMENTARY INFORMATION to the 

Regulation DD final rule, the Board 

described its statutory authority and 

applied that authority to the 

requirements of the rule. For purposes 

of this rulemaking, the Board continues 

to rely on that legal authority and 

analysis. 

III. Section-by-Section Analysis 

A. Section 230.6(a)—Periodic Statement 

Disclosures; General Rule 

Section 230.6(a) describes disclosures 

that are required to be made when 

statements are provided, including 

certain fees or charges. The Board is 

proposing two technical amendments to 

§ 230.6(a) and the related staff 

commentary. First, the Board is 

proposing to add a new § 230.6(a)(5) to 

clarify that the periodic statement 

aggregate fee disclosures required by 

§ 230.11(a), discussed below, are among 

the disclosures that are required to be 

provided on periodic statements for 

purposes of § 230.6(a). Second, the 

Board is proposing to revise comment 

6(a)(3)–2, which contains a crossreference to § 230.11(a) that references 

institutions that promote the payment of 

overdrafts. Because the Regulation DD 

final rule extended the aggregate fee 

disclosure requirement to all 

institutions, and not just those 

institutions that promote the payment of 

overdrafts, the proposed revision 

eliminates the promotion reference. 

B. Section 230.11(a)—Disclosure of 

Total Fees on Periodic Statements 

Section 230.11(a)(1)(i) requires 

institutions to disclose on each periodic 

statement, as applicable, the total dollar 

amount of all fees or charges imposed 

on the account for paying checks or 

other items when there are insufficient 

or unavailable funds and the account 

becomes overdrawn. Sample Form B–10 

displays this total as ‘‘Total Overdraft 

Fees.’’ Some institutions may use terms 

other than ‘‘overdraft fee,’’ such as ‘‘NSF 

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Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 9127 

2The official staff commentary to Regulation DD 

provides that institutions should not use the generic 

term ‘‘insufficient funds fee’’ or ‘‘NSF fee’’ to 

describe both fees for paying overdrafts and fees for 

returning items unpaid. See, e.g., comment 6(a)(3)– 

2(iv) (institutions may group itemized fees, but may 

not group together fees for paying overdrafts and 

fees for returning checks or other items unpaid). 

items-paid’’ to describe per-item 

overdraft fees in their account 

agreements. Under Regulation DD, 

comment 3(a)–2 requires institutions to 

use consistent terminology in their 

account-opening disclosures, periodic 

statements, and other disclosures. In 

light of this comment, questions have 

been raised as to whether institutions 

may use terminology other than ‘‘Total 

Overdraft Fees’’ in the periodic 

statement aggregate fee disclosure to 

describe the total amount of all fees or 

charges imposed on the account for 

paying overdrafts.2

Under § 230.11(a)(1), institutions are 

required to provide a fee total that 

includes all overdraft fees, including 

any additional daily or sustained 

overdraft, negative balance, or similar 

fees or charges imposed by the 

institution. See comment 11(a)(1)–2. 

Thus, the use of terminology other than 

‘‘Total Overdraft Fees’’ may not capture 

the various fees associated with the 

discretionary overdraft service. 

Moreover, the purpose of the aggregate 

fee disclosure is to provide consumers 

who use overdraft services with 

additional information about fees to 

help them better understand the costs 

associated with the service. Permitting 

the use of other terminology could be 

confusing to consumers and potentially 

undermines their ability to compare 

costs, particularly if a consumer has 

accounts at different institutions that 

each use different terminology. 

Accordingly, the Board is proposing 

to revise § 230.11(a)(1)(i) to clarify that 

the periodic statement aggregate fee 

disclosure must disclose the total dollar 

amount for all fees or charges imposed 

on the account for paying overdrafts, 

using the term ‘‘Total Overdraft Fees.’’ 

Proposed comment 11(a)–2 would 

explain that this provision supersedes 

comment 3(a)–2. As explained in 

comment 11(a)(1)–3, institutions may 

use terminology such as ‘‘returned item 

fee’’ or ‘‘NSF fee’’ to describe the fees for 

returning items unpaid. 

C. Section 230.11(c)—Disclosure of 

Account Balances 

Comment 11(c)–2—Retail Sweep 

Programs 

Under the Regulation DD final rule, 

§ 230.11(c) requires institutions that 

disclose balance information to a 

consumer through an automated system 

to disclose a balance that does not 

include additional amounts that the 

institution may provide to cover an item 

when there are insufficient or 

unavailable funds in the consumer’s 

account, including under a service to 

transfer funds from another account of 

the consumer. The Board adopted this 

provision to ensure that consumers 

receive accurate information about their 

account balances and to help avoid 

consumer confusion as to whether an 

account has sufficient funds to cover a 

transaction. 

Questions have been raised about the 

application of the rule to retail sweep 

programs. In a retail sweep program, an 

institution establishes two legally 

distinct subaccounts, a transaction 

subaccount and a savings subaccount, 

which together make up the consumer’s 

account. The institution allocates and 

transfers funds between the two 

subaccounts in order to maximize the 

balance in the savings subaccount while 

complying with the monthly limitations 

on transfers out of savings accounts 

established under the Board’s 

Regulation D, 12 CFR 204.2(d)(2). 

Retail sweep programs are 

distinguishable from overdraft 

protection plans that transfer funds from 

a consumer’s linked accounts in several 

respects. In particular, retail sweep 

programs are generally not established 

for the purpose of covering overdrafts. 

Rather, institutions typically establish 

retail sweep programs by agreement 

with the consumer, in order for the 

institution to minimize its transaction 

account reserve requirements and, in 

some cases, to provide a higher interest 

rate for the consumer than the consumer 

would earn on a transaction account 

alone. Furthermore, most retail sweep 

programs are structured so that the 

consumer (or person acting on behalf of 

the consumer) cannot independently 

access the funds in the savings 

subaccount; all transfers out of, and 

deposits or transfers into, the savings 

subaccount component of a retail sweep 

program are effected through the 

transaction subaccount. 

Notwithstanding the establishment of 

two legally distinct subaccounts under a 

retail sweep program, the account 

statements that consumers receive 

under such a program show a single 

consumer account balance, and a single 

account on which all transactions into 

and out of the account are reflected. 

By contrast, linked accounts can be 

used and funded independently of one 

another. For example, a consumer can 

directly make deposits to, and 

withdrawals from, a savings account 

whether or not it is linked to a checking 

account. The link between accounts 

under an overdraft protection program 

is primarily established for purposes of 

providing funds from the savings 

account in the event that the consumer 

has insufficient funds in the checking 

account. Additionally, retail sweep 

programs typically do not impose fees 

on transfers between the savings 

subaccount and the transaction 

subaccount, while institutions typically 

charge fees for transfers from linked 

accounts to cover an overdraft. 

Based on the foregoing, consumers 

under a retail sweep program may 

reasonably expect to see a single balance 

combining the funds in the transaction 

subaccount and the savings subaccount 

when they request an account balance. 

Consumers could be confused if a 

balance that only includes funds in the 

transaction subaccount were displayed 

because, in some cases, the balance in 

the transaction subaccount could be 

zero (to the extent funds had been 

transferred to the savings subaccount at 

the time of the balance inquiry). In 

recognition of the distinct 

characteristics of retail sweep programs, 

the Board is proposing to add a new 

comment 11(c)–2 to clarify that 

§ 230.11(c) does not require an 

institution to exclude from the 

consumer’s balance funds that may be 

transferred from another account 

pursuant to a retail sweep program 

when disclosing a transaction account 

balance under such a program. 

Comment 11(c)–3—Additional Balance 

Section 230.11(c) of the Regulation 

DD final rule permitted institutions to 

disclose an additional balance including 

overdraft funds, so long as the 

institution prominently states that the 

balance contains additional overdraft 

funds. Comment 11(c)–2 of the final rule 

provided guidance on how institutions 

could appropriately identify the 

additional funds. However, the 

comment only addressed opt-outs. 

Subsequent to the adoption of the 

Regulation DD final rule, however, the 

Board adopted the Regulation E final 

rule, which requires institutions to 

obtain a consumer’s affirmative consent, 

or opt-in, to the institution’s overdraft 

service, before charging any fee for 

paying ATM and one-time debit card 

transactions. In light of the final 

Regulation E opt-in requirement, the 

Board is proposing to renumber current 

comment 11(c)–2 as comment 11(c)–3 

and amend it to include references to 

the opt-in requirement. References to 

opt-outs have been retained in some 

instances because some institutions may 

provide an opt-out choice with respect 

to checks, ACH, and other types of 

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9128 Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 

transactions not subject to the 

Regulation E final rule restrictions. 

The Board is also proposing to extend 

the requirement to indicate, when 

applicable, that funds in the additional 

balance may not be available for all 

transactions to circumstances under 

which funds from overdraft services 

subject to the Board’s Regulation Z or 

from services that transfer funds from 

another account are not available for all 

transactions. For example, if a consumer 

has an overdraft line of credit, but under 

the terms of the agreement with the 

institution, the consumer cannot access 

the line of credit when using a debit 

card at a point-of-sale transaction, the 

proposed comment would state that any 

additional balance displayed through an 

automated system should indicate that 

the overdraft funds are not available for 

all transactions. 

D. Effective Date 

Because some depository institutions 

may be using terminology other than 

‘‘Total Overdraft Fees’’ in their aggregate 

fee disclosure under § 230.11(a)(1), the 

Board is proposing to make the 

proposed revisions to § 230.11(a)(1)(i) 

effective approximately 90 days after 

publication of the final rule in the 

Federal Register. The Board solicits 

comment on whether this time frame 

would be an appropriate time period for 

implementation. The Board is proposing 

to make the remaining revisions 

effective approximately 30 days after 

publication of the final rule in the 

Federal Register. 

IV. Regulatory Analysis 

Sections VI and VII of the 

SUPPLEMENTARY INFORMATION to the 

Regulation DD final rule set forth the 

Board’s analyses under the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) and 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3506; 5 CFR part 1320 

Appendix A.1). See 74 FR 5591–5593. 

Because the proposed amendments are 

clarifications and would not, if adopted, 

alter the substance of the analyses and 

determinations accompanying the 

Regulation DD final rule, the Board 

continues to rely on those analyses and 

determinations for purposes of this 

rulemaking. 

Text of Proposed Revisions 

Certain conventions have been used 

to highlight the proposed revisions. 

New language is shown inside flboldtype arrowsfi while language that 

would be deleted is set off with øboldtype brackets¿. 

List of Subjects in 12 CFR Part 230 

Advertising, Banks, Banking, 

Consumer protection, Reporting and 

recordkeeping requirements, Truth in 

savings. 

Authority and Issuance 

For the reasons discussed in the 

preamble, the Board proposes to amend 

12 CFR part 230 and the Official Staff 

Commentary, as set forth below: 

1. The authority citation for part 230 

continues to read as follows: 

Authority: 12 U.S.C. 4301 et seq. 

2. Section 230.6 is amended by 

adding paragraph (a)(5) to read as 

follows: 

(a) General rule. * * * 

fl(5) Aggregate fee disclosure. The 

disclosure of total overdraft and 

returned item fees required by 

§ 230.11(a).fi 

* * * * * 

3. Section 230.11 is amended by 

revising paragraph (a)(1)(i) to read as 

follows: 

(a) Disclosure of total fees on periodic 

statements—(1) * * * 

(i) The total dollar amount for all fees 

or charges imposed on the account for 

paying checks or other items when there 

are insufficient or unavailable funds and 

the account becomes overdrawnfl, 

using the term ‘‘Total Overdraft 

Fees.’’fiø.¿ 

* * * * * 

4. In Supplement I to part 230, 

a. In Section 230.6(a)(3), paragraph 2. 

is revised. 

b. In Section 230.11(a)(1), paragraph 

2. is revised. 

c. In Section 230.11(c), paragraphs 2. 

and 3. are redesignated as paragraphs 3. 

and 4., respectively. 

d. In Section 230.11(c), new 

paragraph 2. is added. 

e. In Section 230.11(c), newly 

redesignated paragraph 3. is revised. 

Supplement I to Part 230—Official Staff 

Interpretations 

* * * * * 

§ 230.6 Periodic Statement Disclosures. 

(a) General Rule 

(a)(3) Fees Imposed 

* * * * * 

2. Itemizing fees by type. In itemizing 

fees imposed more than once in the 

period, institutions may group fees if 

they are the same type. (See 230.11(a)(1) 

of this part regarding certain fees that 

are required to be grouped øwhen an 

institution promotes the payment of 

overdrafts¿.) * * * 

* * * * * 

§ 230.11 Additional Disclosures Regarding 

the Payment of Overdrafts. 

(a) Disclosure of total fees on periodic 

statements 

(a)(1) General 

* * * * * 

2. Fees for paying overdrafts. 

Institutions must disclose on periodic 

statements a total dollar amount for all 

fees or charges imposed on the account 

for paying overdrafts. The institution 

must disclose separate totals for the 

statement period and for the calendar 

year-to-date. The total dollar amount 

includes per-item fees as well as interest 

charges, daily or other periodic fees, or 

fees charged for maintaining an account 

in overdraft status, whether the 

overdraft is by check or by other means. 

It also includes fees charged when there 

are insufficient funds because 

previously deposited funds are subject 

to a hold or are uncollected. It does not 

include fees for transferring funds from 

another account of the consumer to 

avoid an overdraft, or fees charged 

under a service subject to the Board’s 

Regulation Z (12 CFR part 226). 

flUnder § 230.11(a)(1)(i), the disclosure 

must describe the total dollar amount 

for all fees or charges imposed on the 

account for paying overdrafts using the 

term ‘‘Total Overdraft Fees.’’ This 

requirement supersedes comment 3(a)– 

2.fi 

* * * * * 

(c) Disclosure of account balances 

* * * * * 

fl2. Retail sweep programs. In a retail 

sweep program, an institution 

establishes two legally distinct 

subaccounts, a transaction subaccount 

and a savings subaccount, which 

together make up the consumer’s 

account. The institution allocates and 

transfers funds between the two 

subaccounts in order to maximize the 

balance in the savings account while 

complying with the monthly limitations 

on transfers out of savings accounts 

established under the Board’s 

Regulation D, 12 CFR 204.2(d)(2). Retail 

sweep programs are generally not 

established for the purpose of covering 

overdrafts. Rather, institutions typically 

establish retail sweep programs by 

agreement with the consumer, in order 

for the institution to minimize its 

transaction account reserve 

requirements and, in some cases, to 

provide a higher interest rate for the 

consumer than the consumer would 

earn on a transaction account alone. 

Section 230.11(c) does not require an 

institution to exclude from the 

consumer’s balance funds that may be 

transferred from another account 

pursuant to a retail sweep program that 

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Federal Register / Vol. 75, No. 39 / Monday, March 1, 2010 / Proposed Rules 9129 

are established for such purposes and 

that have the following characteristics: 

(1) The classification of the accounts 

involved complies with the Board’s 

Regulation D, 12 CFR 204.2(d)(2), (2) the 

consumer does not have direct access to 

the non-transaction subaccount that is 

part of the retail sweep program, and (3) 

the consumer’s monthly statement 

shows the account balance as the 

combined balance in the subaccounts. 

3fiø2¿. Additional balance. The 

institution may disclose additional 

balances supplemented by funds that 

may be provided by the institution to 

cover an overdraft, whether pursuant to 

a discretionary overdraft service, a 

service subject to the Board’s Regulation 

Z (12 CFR part 226), or a service that 

transfers funds from another account 

held individually or jointly by the 

consumer, so long as the institution 

prominently states that any additional 

balance includes these additional 

overdraft amounts. The institution may 

not simply state, for instance, that the 

second balance is the consumer’s 

‘‘available balance,’’ or contains 

‘‘available funds.’’ Rather, the institution 

should provide enough information to 

convey that the second balance includes 

these amounts. For example, the 

institution may state that the balance 

includes ‘‘overdraft funds.’’ Where a 

consumer flhas not opted into, or as 

applicable,fi has opted out of the 

institution’s discretionary overdraft 

service, any additional balance 

disclosed should not include funds 

øinstitutions¿ provided under that 

service. Where a consumer flhas not 

opted intofiøhas opted out of ¿ the 

institution’s discretionary overdraft 

service for some, but not all transactions 

(e.g., the consumer has flnot opted 

intofiøopted out¿ overdraft services for 

ATM and flone-time fidebit card 

transactions), an institution that 

includes flthese additional overdraft 

fifunds øfrom its discretionary 

overdraft service¿ in the flsecond 

fibalance should convey that the 

overdraft funds are not available for all 

transactions. For example, the 

institution could state that overdraft 

funds are not available for ATM and 

flone-time (or everyday) fidebit card 

transactions.fl Similarly, if funds are 

not available for all transactions 

pursuant to a service subject to the 

Board’s Regulation Z (12 CFR part 226) 

or a service that transfers funds from 

another account, a second balance that 

includes such funds should also 

indicate this fact.fi 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, February 18, 2010. 

Jennifer J. Johnson, 

Secretary of the Board. 

[FR Doc. 2010–3719 Filed 2–26–10; 8:45 am] 

BILLING CODE 6210–01–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Parts 121, 124, 125, 126, and 

134 

RIN 3245–AF65 

Small Business, Small Disadvantaged 

Business, HUBZone, and ServiceDisabled Veteran-Owned Protest and 

Appeal Regulations 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Proposed rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA or Agency) 

proposes to amend its regulations to 

clarify the effect, across all small 

business programs, of initial and appeal 

eligibility decisions on the procurement 

in question; increase the amount of time 

that SBA has to render formal size 

determinations; require that SBA’s 

Office of Hearings and Appeals (OHA) 

issue a size appeal decision within 60 

calendar days of the close of the record, 

if possible; increase the amount of time 

that SBA has to file North American 

Industry Classification System (NAICS) 

code appeals; alter the NAICS code 

appeal procedures to comply with a 

Federal Court decision; clarify that 

contracting officers must reflect final 

agency eligibility decisions in federal 

procurement databases and goaling 

statistics; clarify how a contracting 

officer assigns a NAICS code and size 

standard to a multiple award 

procurement; and make other changes to 

size status protest and appeal rules. 

DATES: Comments must be received on 

or before March 31, 2010. 

ADDRESSES: You may submit comments, 

identified by RIN: 3245–AF65, by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail, for paper, disk, or CD/ROM 

submissions: Khem Sharma, Chief, 

Office of Size Standards, U.S. Small 

Business Administration, Office of 

Government Contracting, 409 Third 

Street, SW., Washington, DC 20416. 

• Hand Delivery/Courier: Khem 

Sharma, Chief, Office of Size Standards, 

U.S. Small Business Administration, 

Office of Government Contracting, 409 

Third Street, SW., Washington, DC 

20416. 

SBA will post all comments on 

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

to submit confidential business 

information (CBI) as defined in the User 

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

please submit the information to Khem 

Sharma, Chief, Size Standards Division, 

U.S. Small Business Administration, 

Office of Government Contracting, 409 

Third Street, SW., Washington, DC 

20416, or send an e-mail to 

khem.sharma@sba.gov. Highlight the 

information that you consider to be CBI 

and explain why you believe SBA 

should hold this information as 

confidential. SBA will review the 

information and make the final 

determination on whether it will 

publish the information or not. 

FOR FURTHER INFORMATION CONTACT: Carl 

Jordan, Program Analyst, Size Standards 

Division, Office of Government 

Contracting, (202) 205–7189 or at 

carl.jordan@sba.gov. 

SUPPLEMENTARY INFORMATION: SBA is 

proposing to delete the reference to 

other factors to be considered when 

assigning a NAICS code to a 

procurement in 13 CFR 121.402. SBA’s 

regulations currently provide that a 

contracting officer should consider the 

principal purpose of the product or 

service to be acquired, and that a 

procurement is usually classified 

according to the component which 

accounts for the greatest percentage of 

contact value. SBA’s regulations further 

provide that contracting officers may 

consider previous Government 

procurement classifications of the same 

or similar products or services and 

which classification would best serve 

the purposes of the Small Business Act. 

SBA believes these additional factors 

are unnecessary. A repeated error is not 

persuasive evidence, especially since 

such classifications are almost never 

reviewed or challenged. As discussed 

above, SBA receives very few NAICS 

code appeals because of the short appeal 

timelines. Further, it is unclear how a 

contracting officer can determine which 

NAICS code and size standard can best 

serve the purposes of the Small 

Business Act. Thus, we are proposing to 

delete reference to prior government 

classifications and the purpose of the 

Small Business Act. Each solicitation 

should be classified based on the 

principal purpose of that particular 

solicitation, and the contracting officer 

only needs to make a reasonable choice. 

SBA is proposing to delete a provision 

in § 121.404 that requires a concern to 

recertify its size where a solicitation is 

modified so that initial offers are no 

longer responsive. Generally, a firm 

must be small at the time of initial offer, 

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