This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

37689

Vol. 65, No. 117

Friday, June 16, 2000

SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

Small Business Size Standards;

General Building Contractors, Heavy

Construction, Except Building,

Dredging and Surface Cleanup

Activities, Special Trade Contractors,

Garbage and Refuse Collection,

Without Disposal, and Refuse Systems

AGENCY: Small Business Administration.

ACTION: Final rule.

SUMMARY: The Small Business

Administration (SBA) is establishing a

size standard of $27.5 million in average

annual receipts for all industries in

General Building Contractors, Standard

Industrial Classification (SIC) Major

Group 15, and for all industries except

Dredging and Surface Cleanup

Activities in Heavy Construction Other

Than Building Construction, SIC Major

Group 16; $17.0 million for Dredging

and Surface Cleanup Activities, part of

SIC 1629, Heavy Construction, Not

Elsewhere Classified (NEC); $11.5

million for all industries in Special

Trade Contractors, SIC Major Group 17;

and $10.0 million for Garbage and

Refuse Collection, Without Disposal,

part of SIC 4212, Local Trucking

Without Storage, and Refuse Systems,

SIC 4953. These revisions are being

made to adjust the Construction and

Refuse size standards for the effects of

inflation from the time they were

established in the mid-1980s through

1999, and to address unique costs trends

in the Dredging industry.

DATES: This rule is effective on July 17,

2000.

FOR FURTHER INFORMATION CONTACT:

Robert N. Ray, Office of Size Standards

(202) 205–6618.

SUPPLEMENTARY INFORMATION: On July

26, 1999, SBA proposed increasing the

size standards for the Construction and

Refuse Systems and Related Services

industries (see 64 FR 40311). We

proposed size standards of $25 million

for all industries in General Building

Contractors, SIC Major Group 15,

(referred to as the General Construction

industry) and for all industries except

Dredging and Surface Cleanup

Activities in Heavy Construction Other

Than Building Construction, SIC Major

Group 16, (referred to as the Heavy

Construction industry); $20.0 million

for Dredging and Surface Cleanup

Activities, part of SIC 1629, Heavy

Construction, NEC (referred to as the

Dredging industry ); $10.5 million for all

Special Trade Contractors industries,

SIC Major Group 17 (referred to as the

Special Trades industry); and $9.0

million for Garbage and Refuse

Collection, Without Disposal, part of

SIC 4212, Local Trucking Without

Storage, and Refuse Systems, SIC 4953,

(referred to as the Refuse industries).

These proposed increases were

designed to adjust the current size

standards for the effects of inflation that

had occurred since 1984, when all but

one of these size standards became

effective. (The one exception, the

Dredging industry, first became effective

on December 9, 1985.) Inflation had

increased 48.2% based on the change in

the price level for the Implicit Price

Deflator for Gross Domestic Product

between the third quarter of 1982 and

the fourth quarter of 1993 (the time

period that most other receipts-based

size standards were last adjusted for

inflation). By adjusting the Construction

and Refuse size standards to the same

point in time, we attempted to have all

receipts-based size standards adjusted

for inflation to a common base year of

1994.

In response to the comments received

on the proposed rule, this final rule

adopts different size standards than

proposed. For all of the Construction

industries, except the Dredging

industry, and for the Refuse industries,

the proposed size standards are further

increased to reflect inflation that has

occurred through 1999. For the

Dredging industry, however, a lower

size standard than proposed is adopted

to more realistically reflect inflationary

trends that have occurred since the

establishment of the current $13.5

million Dredging size standard. The

remainder of the final rule discusses the

comments we received on the proposed

rule and our reasons for adopting

different size standards.

Construction and Refuse Size

Standards

We have decided to increase the size

standards for all of the Construction

industries (except for the Dredging

industry) and the Refuse industries to

account for inflation through 1999

rather than through 1994 as proposed.

This decision is based on several

factors. First, comments on the

proposed rule were nearly unanimous

that an inflation adjustment to the

Construction and Refuse size standards

was an acceptable basis for changing

these size standards. Second, about onefourth of the comments to the proposed

Construction and Refuse size standards

argued for higher size standards than

the ones adjusted to the 1994 level.

Third, SBA is committed to more

frequent inflation adjustments than has

occurred in the past, and five years

would seem to be sufficient time to wait

for an inflationary adjustment.

Considering these factors together, we

conclude that these size standards

should be adjusted for inflation to 1999.

By choosing to inflate its Construction

and Refuse size standards to 1999, SBA

is again positioning its receipts-based

size standards to different base periods.

Most receipts-based size standards were

changed in 1994 using the inflation rate

between 1982 and 1993 (see 59 FR

16513, dated April 7, 1994). This rule,

however, changes the Construction and

Refuse size standards to a 1999 base.

This change results in an additional

10.5% inflation adjustment to these size

standards than the inflation rate applied

in 1994.

We generally prefer to have all

receipts-based size standards adjusted to

the same base year. This achieves

comparability among industry size

standards. Since this rule is inflating a

number of size standards to 1999, we

anticipate that we will propose in the

near future a broad-based inflation

adjustment to our receipts-based size

standards. Since we have already

proposed increases to the Construction

and Refuse size standards and received

overwhelming support for the concept

of increasing these size standards for

inflation, we see no need to go through

a second rulemaking action to make the

changes associated with this final rule.

37690 Federal Register / Vol. 65, No. 117 / Friday, June 16, 2000 / Rules and Regulations

Inflation Adjustment Methodology

To adjust the Construction and Refuse

size standards through 1999, we

calculated an additional inflation

adjustment to the proposed size

standards of July 26, 1999. The

proposed size standards were based on

inflation up to the fourth quarter of

calendar year 1993 (the latest available

data at the time of the 1994 final rule).

Currently, the latest available inflation

data is for the fourth quarter of 1999. In

determining the rate of inflation, we

continue to use the U.S. Department of

Commerce’s Gross Domestic Product

(GDP) Implicit Price Deflator. Currently,

the latest published data show index

values of 94.98 for the fourth quarter of

1993 and 104.99 for the fourth quarter

of 1999. This change records inflation of

10.5% between the two periods

((104.99/94.98)–1)*100)=10.54%,

rounded to 10.5%).

Each of the Construction and Refuse

size standards receives an inflationary

adjustment of 10.5% from the proposed

size standards of $25.0 million for

General and Heavy Construction, $10.5

million for Special Trades and $9.0

million for Refuse. The inflated size

standards are rounded to the nearest

half-million dollar increment similar to

previous inflation adjustments to SBA’s

size standards. This rounding method

produces net increases to most industry

size standards that are slightly above or

below the calculated 10.5% inflation

rate. This method is selected because it

results in an increase to each size

standard that is as close as possible to

the calculated 10.5% inflationary

increase. The following table shows the

calculation of the Construction and

Refuse size standards adjusted to 1999.

Industry

Proposed

size standard in millions of dollars

Inflation

index

New size

standard

calculation

in millions of

dollars (Column 2 times

Column3)

Size standards in millions of dollars after

rounding to

the nearest

$0.5 million

increment

(1) (2) (3) (4) (5)

General and Heavy Construction .................................................................................... $25.0 1.105 $27.625 $27.5

Special Trades industry ................................................................................................... 10.5 1.105 11.603 11.5

Refuse industries ............................................................................................................. 9.0 1.105 9.945 10.0

Discussion of Construction and Refuse

Size Standards

Comments

We received 45 comments to the

proposed rule. Twenty-six comments

addressed the General and Heavy

Construction proposed size standard of

$25 million in average annual receipts.

Eleven of these comments also

addressed the Special Trades size

standard that was proposed to be $10.5

million. All of the comments to the

Special Trades, however, discussed all

of the Construction size standards rather

than narrowly focusing on the Special

Trade industries. When references were

made to Special Trades, all of the

comments except one recommended the

proposed $10.5 million size standard.

The one comment not recommending

this size standard, supported a size

standard in the $7 to $10 million range.

Significantly, no comment primarily

addressing the Construction size

standards opposed some increase to the

Construction size standards.

Of the 26 comments addressing the

General and Heavy Construction size

standards, 19 supported the proposed

size standard of $25 million and the

concept of an inflationary adjustment,

while six argued for a higher size

standard between $27 million and $32

million, and one comment advocated a

size standard of $17 million for both the

Dredging industry and General and

Heavy Construction (This comment

appeared to be primarily addressing the

Dredging industry size standard rather

than the General Construction size

standard). Most of the comments

arguing for a size standard higher than

proposed believed that the current size

standard should be increased to reflect

inflation through 1999. Four of these

comments also noted that there would

likely be a lengthy delay before the next

inflationary adjustment, and that SBA

should set a size standard that would

consider the amount of time before it

would again propose an inflation

adjustment to the receipts-based size

standards. Of the three associations

commenting on the proposed size

standard revision, two supported a

higher size standard of $30 million to

$32 million in average annual receipts,

and one recommended more frequent

inflation adjustments in the future. The

one comment recommending a $17

million size standard believed that there

is sufficient competition among small

businesses with a $17 million size

standard to justify the retention of this

size standard, however, the comment

primarily focused on the Dredging

industry.

Of the seven comments addressing the

Refuse size standard, three supported

the proposed size standard of $9

million, three argued for a size standard

greater than $9 million and one

contended that it should remain at $6

million. The comments advocating a

higher size standard than $9 million

claimed that businesses had to be larger

than $9 million to be competitive in the

industry. According to these comments,

consolidations and mergers have made

it difficult for small businesses to

compete against the resources of the

largest businesses in the industry. On

the other hand, the comment opposing

the proposed size standard was

concerned that a $9 million size

standard would qualify a business in the

top 100 firms in the industry. Further,

small businesses are competitive given

their lower costs and overhead, as

evidenced by small businesses receiving

more than 40% of Federal refuse

contracts.

The comments received on the

Construction and Refuse industries

overwhelmingly support an inflation

adjustment to the current size standards.

In addition, about one-half of the Refuse

comments and about one-fourth of the

Construction comments presented

reasons supporting a further upward

adjustment to the size standards in

recognition of the additional inflation

that has been present in the economy

over the 1994 to 1999 period. Of these

latter construction comments, two were

from important trade associations

representing large segments of the

industry.

We believe in light of these comments

that we should proceed now with a

further inflation adjustment to 1999

levels and avoid the delay that would

occur from a second rulemaking action.

In the proposed rule, we discussed

Federal Register / Vol. 65, No. 117 / Friday, June 16, 2000 / Rules and Regulations 37691

adjusting these size standards to the

1999 levels as alternative size standards.

We chose not to propose that alternative

since it would result in some size

standards being adjusted to 1999 while

all other receipts-based size standards

adjusted to 1994. We would prefer to

adjust all size standards to the same

period of time. However, the comments

have convinced us that a further

inflation adjustment to these size

standards at this time results in more

appropriate size standards than what we

proposed. We believe that the comments

supporting an inflationary adjustment

through 1994 would not oppose an

adjustment through 1999. We do not

believe, however, that the size standards

should be raised beyond the 1999 level

in anticipation of future inflation, which

in any case is unpredictable.

We are concerned about the trends in

the Refuse industry that were cited by

six of the eight comments. Although one

comment argued that small businesses

were very competitive, the industry

appears to have been consolidating in

recent years. Three comments cited

concerns of vertical integration,

consolidation and buyouts of smaller

firms by larger firms. Three other

comments cited a concern over larger

Federal contracts in recent years—a

trend which normally favors larger

companies. Furthermore, small

businesses have been obtaining a

smaller share of Federal refuse contracts

over the past few years. (See the Small

Business Administration’s report to

Congress ‘‘The Small Business

Competitiveness Demonstration

Program October 1, 1997–September 30,

1998,’’ dated December 1999, Table A–

2b. This report is available on SBA’s

web page at www.sba.gov/opc/pubs/

compdemo/.) We plan to examine these

trends closer to determine the

implications on the size standard in the

future.

Dredging Industry Size Standard

SBA received 22 comments to the

proposed $20 million size standard for

the Dredging industry. Seven of the

comments, or about one-third of the

Dredging industry comments, supported

the proposed inflationary adjusted size

standard of $20 million. Another seven

comments opposed any change in the

current $13.5 million Dredging industry

size standard. Three comments

supported a size standard that fell

between the current size standard of

$13.5 million and the proposed size

standard of $20 million. Four comments

argued for a size standard higher than

$20 million. However, three of these

comments appeared to be from firms

primarily engaged in General and Heavy

Construction rather than the Dredging

industry, and they essentially focused

their comments on the Construction size

standards. A comment from a dredging

association took no position on the

proposed Dredging industry size

standard.

Partly in response to these comments,

we have decided to adopt a $17 million

size standard for the Dredging industry

rather than adjusting the size standard

by the proposed inflationary increase (to

$20 million) as applied to the other

industry size standards addressed in

this final rule. The four major issues

raised by the comments and our reason

for adopting a $17 million size standard

are discussed below.

(1) One comment pointed out that

costs per cubic yard have not matched

the general rate of inflation used in the

proposed rule. This view appears to be

supported by three other comments that

seek a size standard that would be less

than a full inflationary adjustment.

While these comments did not directly

address the inflationary issue, their

contention that industry conditions did

not merit a full inflationary increase

suggests a view that cost pressures may

not be as great in the Dredging industry

as in the economy generally. Since the

proposed rule adjusted for inflation

through 1994, dredging costs through

1999, it was argued, did not even match

the 1994 general inflation level.

Based on a further review of costs

trends in the Dredging industry, we

agree that a smaller inflation adjustment

is more appropriate for this industry’s

size standard. While we usually prefer

to apply the same inflation adjustment

to all industries, the Dredging industry

is a relatively small industry and unique

in the sense that most of this industry’s

revenues are derived from U.S. Army

Corps of Engineers dredging contracts.

As such, we believe relevant data exist

for us to more precisely assess inflation

trends in the Dredging industry.

The U.S. Corps of Engineers (the

Corps) collects data on dredging costs.

In lieu of price indexes developed by

Federal statistical agencies, these data

provide the best source of information

to address the impact of inflation in the

Dredging industry. Almost all dredging

work performed by small businesses is

for maintenance dredging. For this

reason, we believe the Corps’ costs data

on maintenance dredging are the most

appropriate data to assess the impact of

dredging inflation trends on small

businesses. The following table shows

the Corps data relating to the costs per

cubic yard of maintenance dredging

from fiscal years 1982 to 1998:

Fiscal year

Maintenance

dollars

(millions)

Cubic yards

(millions)

Cost per

cubic yard

1982 ................................................................................................................................. $76.0 60.0 $1.27

1983 ................................................................................................................................. 64.0 48.0 1.33

1984 ................................................................................................................................. 80.0 49.0 1.63

1985 ................................................................................................................................. 73.0 65.0 1.12

1986 ................................................................................................................................. 80.0 64.0 1.25

1987 ................................................................................................................................. 66.0 47.7 1.38

1988 ................................................................................................................................. 73.4 58.2 1.26

1989 ................................................................................................................................. 68.5 58.7 1.26

1990 ................................................................................................................................. 61.8 35.0 1.17

1991 ................................................................................................................................. 99.6 62.4 1.60

1992 ................................................................................................................................. 89.2 52.4 1.70

1993 ................................................................................................................................. 75.0 38.3 1.96

1994 ................................................................................................................................. 84.3 52.5 1.61

1995 ................................................................................................................................. 88.8 53.8 1.65

1996 ................................................................................................................................. 85.4 52.5 1.63

1997 ................................................................................................................................. 95.9 67.8 1.41

1998 ................................................................................................................................. 76.6 42.4 1.81

Source: U.S. Army Corps of Engineers Navigation Data Center for data used in calculating the cost per cubic yard of maintenance dredged

materials on Corps of Engineers contracts, February 28, 1999 revised data.

37692 Federal Register / Vol. 65, No. 117 / Friday, June 16, 2000 / Rules and Regulations

From FY 1982 to FY 1998,

maintenance dredging costs have

increased 42.5%. However, the high

cost per cubic yard in FY 1998 appears

to be a one year outlier due to a very

low volume of maintenance work in that

year as compared to the typical amount

of maintenance work in previous years.

We’re reluctant to inflate the Dredging

industry size standard by an inflation

rate that may have been partially

influenced by work load in a single

year. To moderate the influence of work

load, we have decided to calculate an

average cost per cubic yard for the last

three fiscal years. For fiscal years 1996–

98, the average cost per cubic yard was

$1.617 (($1.63+$1.41+$1.81)/3). Using

this figure, maintenance dredging costs

have increased 27.3% (($1.617/$1.27)–

1)*100) since FY 1982. Applying this

increase to the current Dredging

industry size standard results in a $17

million size standard ($13.5

*1.273=$17.186, or $17 million rounded

to the nearest $0.5 million increment).

This figure of $17.0 million would

permit a number of businesses presently

in the $9 million to $13.5 million range

to grow without losing eligibility for

SBA preference programs based on size.

We do not believe that there are any

businesses that are primarily in the

Dredging industry that presently fall in

the $13.5 million to $20.0 million size

range directly affected by the proposed

rule or this final rule. Consequently,

there would be no immediate impact

from businesses gaining eligibility

because of their size in the small

business category in which the set-aside

program restricts bidding. There will,

however, be some businesses that will

gain status as emerging small businesses

(a business whose size is one-half or less

than the size standard). This measure

will increase from $6.75 million to $8.5

million. This category is reserved for

dredging contracts that are $400,000 or

less in value. We estimate that only

these dredging businesses will be

directly impacted by this final rule, and

this impact will be limited because

contracts less than $400,000 in size

constitute only a small percentage of

total Federal dredging contracts

expenditures.

(2) Seven comments believe a higher

size standard would hurt other small

businesses. They cited the declining

importance of small businesses in the

Dredging industry in recent years. For

example, they pointed out that 45 small

businesses were awarded contracts in

FY 1991, but only 19 were awarded

contracts in FY 1998. Also, only a few

small businesses received a majority of

Federal contract dollars. A number of

small businesses have gone out of

business while other small businesses

have been bought out by large

businesses or consolidated their

operations in recent years.

We do not agree that the level of the

current size standard has played a role

in reducing the number of small

businesses receiving Federal dredging

contracts. From year to year, variations

will occur in which different size

businesses will receive contracts. Data

for FY 1997 and FY 1999 present a

different picture of small business

trends. For FY 1997, 40 small

businesses received contracts, with 17

of these small businesses receiving more

than one contract award. For FY 1999,

34 small businesses won dredging

contacts, with 14 receiving more than

one contract. These two years were

more similar to the FY 1991 result than

the FY 1998 experience.

Furthermore, a review of the top four

small businesses receiving awards in FY

1998 and FY 1999 does not suggest that

other small businesses are being harmed

due to the size of these firms. The small

business that received the largest

amount of contract dollars in FY 1998

won all of its contracts on an

unrestricted basis. Two of the other

three small businesses were emerging

small businesses (businesses at or below

one-half of the size standard). In FY

1999, the top four small businesses

received 41% of total small businesses

contract dollars—much less than the

54% amount of total small business

contracts dollars obtained in FY 1998.

These trends do not suggest that

smaller businesses have been harmed by

the level of the current Dredging size

standard. Based on the comments from

other small businesses that supported

an increase to size standard, we believe

an increase in the current size standard

to account for inflation is unlikely to

harm smaller dredging businesses.

Also, we generally view a declining

share of contract dollars to small

businesses in an industry as supporting

a higher size standard. Higher size

standards usually result in more eligible

bidders and a somewhat higher

likelihood that preference programs

oriented toward small businesses will

be utilized. This, in turn, could help the

remaining small businesses that are

active in the industry to survive and

expand operations. Although cost trends

in the industry for small firms do not

point to the need of a size standard as

high as the proposed $20 million, they

do support a size standard of $17

million.

(3) Several comments stated that

Federal dredging contracts have grown

larger in size, while total contracting has

remained the same in dollar terms.

These comments argued that largersized contracts lessen opportunities for

small dredging businesses, and thus,

support the need for a higher size

standard.

We agree that the trend of larger

contracts is one factor that may justify

a higher size standard. To have smaller

businesses in an industry compete for a

greater proportion of larger-sized

dredging contracts, a higher size

standard may be warranted. We believe

a $17 million size standard will assist

currently defined small businesses in

obtaining some additional dredging

opportunities in light of a trend towards

larger-sized contracts.

(4) Four comments cited the fact that

most Federal contracting goes to a few

large businesses that are awarded the

larger contracts as a reason for SBA to

increase the Dredging size standard. We

generally agree, noting that small

dredging businesses have been receiving

about 20% or less of Federal dredging

contracts while the top four businesses

in the industry received 56% in FY

1999. We believe a higher Dredging

industry size standard might result in

greater use of small business preference

programs and partially offset a pattern

in which a majority of Federal

contracting consistently has been

awarded to a few large businesses.

Compliance With Executive Orders

13132, 12988, and 12866, the

Regulatory Flexibility Act, (5 U.S.C.

601–612), and the Paperwork

Reduction Act (44 U.S.C. Ch. 35)

SBA has determined that this rule is

a significant regulatory action within

the meaning of Executive Order 12866

since it is expected to have an annual

economic effect of over $100 million.

For purposes of the Regulatory

Flexibility Act, this rule has a

significant impact on a substantial

number of small businesses.

Immediately below, SBA sets forth a

regulatory flexibility analysis and

economic impact analysis of this final

rule.

1. Description of Entities to Which the

Rule Applies

SBA estimates that 2,548 additional

businesses would be considered small

as a result of this rule. These businesses

would be eligible to seek available SBA

assistance provided that they meet other

program requirements. Many of those

businesses that were in existence in

1984 undoubtedly had small business

status at the time when the size

standards were established, but have

since lost eligibility because of

inflationary increases.

Federal Register / Vol. 65, No. 117 / Friday, June 16, 2000 / Rules and Regulations 37693

Of the additional businesses gaining

eligibility, 654 operate as General

Construction, 394 operate in Heavy

Construction, 1,363 operate in the

Special Trades industries, while 137

operate in Refuse.

Businesses becoming eligible for SBA

assistance as a result of this rule

cumulatively generate $33.7 billion in

annual sales, which represents 6% of

the $564 billion of total sales in these

industries. Of the $33.7 billion in

annual sales for newly eligible

businesses, $13.1 billion are in General

Construction, $7.6 billion are in Heavy

Construction, $12.0 billion are in

Special Trades, and $1.0 billion are in

Refuse.

SBA estimates that out of

approximately $7.85 billion in total

initial Federal contracts per year, an

additional $471 million worth of

contracts could be awarded to

businesses designated as small

businesses in the four industry groups

affected by this rule. (This estimate

assumes the newly categorized small

businesses will receive 6% of the $7.85

billion in total initial Federal contracts

per year.) Of these contracts, $445

million may be awarded to newly

defined small businesses and $26

million to currently defined small

businesses. These contracts could be

obtained through awards under the

small business set-aside Program, the

8(a) Program, the Small Disadvantaged

Business (SDB) Program, the HUBZone

Empowerment Contracting Program, or

on an unrestricted basis.

Also, these newly defined small

businesses would be eligible for SBA’s

financial assistance programs and could

potentially receive an estimated $24.8

million in loans under the 7(a)

Guaranteed Loan Program and $4.6

million in loans under the Certified

Development Company (504) Program.

2. Description of Potential Benefits of

the Rule

This rule will result in an increase in

the number of businesses eligible for

small business set-aside contracts, the

8(a) Program, and SDB and HUBZone

price preferences. For Federal contracts

set aside for small business or competed

under the 8(a) and HUBZone Programs,

this rule will lead to an increase in

competition for these contracts and

lower overall costs to the government.

When an SDB or a HUBZone business

competes for an unrestricted contract,

the Federal government generally allows

them a price preference of up to 10%.

An increase in the size standard will

increase the number of businesses

competing for these contracts in two

ways. First, the number of SDB and

HUBZone businesses will increase.

Second, with more small businesses

competing on unrestricted contracts, the

government may decide to set aside

more contracts for competition among

all small businesses where they had

previously awarded price preferences.

Any increase in competition that results

in a more efficient or competitive

business being awarded a contract will

result in a benefit.

3. Description of Potential Costs of the

Rule

In areas where the rule acts to

decrease competition for contracts, it

may lead to an increase in costs to the

Federal government. This may occur in

areas where small businesses are

currently not present or are not bidding

on Federal contracts. If, after issuance of

this rule, small businesses bid on these

contracts and require the government to

provide a price preference, or the rule

causes a decision to set aside a size a

contract under one of the procurement

preference programs, it may increase

costs to the Federal government on

some contracts. These additional costs,

however, are likely to be relatively

minor since, as a matter of policy,

procurements may be set aside for small

businesses or under the 8(a), HUBZone

or SDB Programs only if awards are

expected to be made at fair and

reasonable prices

4. Transfers

The primary effect of this rule will be

transfers among the four parties—

Federal government, large businesses,

businesses gaining small business status

under this rule, and businesses that are

currently small businesses. SBA

estimates that of the $471 million

Federal contracts expected to be

awarded to small businesses and the

newly defined small businesses,

approximately 11.3%, or $53.2 million,

may be reallocated from large

businesses to current small businesses

and the newly defined small businesses.

The remaining $417.8 million of

contracts will not change hands, rather,

the businesses holding the contracts

will be reclassified as small under the

rule. In addition, $3.9 billion of initial

contracts awarded to small businesses,

SBA estimates that $52.4 million could

be transferred from small businesses to

larger, more efficient or competitive,

newly defined small businesses.

5. Description of Reasons Why This

Action is Being Taken and Objectives of

Rule

SBA has provided in the

supplementary information a statement

of the reasons why these new size

standards should be established and a

statement of the reasons for and the

objectives of the rule.

For the purposes of the Paperwork

Reduction Act, 44 U.S.C. 3501 et seq.,

SBA has determined that this rule

would not impose new reporting or

record keeping requirements. For

purposes of Executive Order 13132,

SBA has determined that this rule does

not have any federalism implications

warranting the preparation of a

Federalism Assessment. For purposes of

Executive Order 12988, SBA certifies

that this rule is drafted to the extent

practicable, in accordance with the

standards set forth in that order.

List of Subjects in 13 CFR Part 121

Government procurement,

Government property, Grant programs—

business, Loan Programs—business,

Small business.

For the reasons stated in the

preamble, SBA amends 13 CFR part 121

as follows:

PART 121—SMALL BUSINESS SIZE

REGULATIONS

1. The authority citation for part 121

continues to read as follows:

Authority: 15 U.S.C. 632(a), 634(b)(6),

637(a), 644(c), and 662(5); and Sec. 304, Pub.

L. 103—403, 108 Stat. 4175, 4188.

§ 121.201 [Amended]

2. In § 121.201, the table ‘‘SIZE

STANDARDS BY SIC INDUSTRY’’ is

amended as follows:

a. Revise DIVISION C—

CONSTRUCTION

b. Under DIVISION E—

TRANSPORTATION,

COMMUNICATIONS, ELECTRIC, GAS,

AND SANITARY SERVICES, MAJOR

GROUP 42—MOTOR FREIGHT

TRANSPORTATION AND

WAREHOUSING, revise the entry 4212

(Part):

c. Under DIVISION E—

TRANSPORTATION,

COMMUNICATIONS, ELECTRIC, GAS,

AND SANITARY SERVICES, MAJOR

GROUP 49—ELECTRIC, GAS AND

SANITARY SERVICES, revise the entry

4953 to read as follows:

37694 Federal Register / Vol. 65, No. 117 / Friday, June 16, 2000 / Rules and Regulations

SIZE STANDARDS BY SIC INDUSTRY

SIC code and description

Size standards in

number of employees or millions

of dollars

*******

DIVISION C—CONSTRUCTION

MAJOR GROUP 15—BUILDING CONSTRUCTION—GENERAL CONTRACTORS AND OPERATIVE BUILDERS ................. $27.5

MAJOR GROUP 16–HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION—CONTRACTORS .................. 27.5

EXCEPT:

1629 (Part) Dredging and Surface Cleanup Activities ........................................................................................................... 1 17.0

MAJOR GROUP 17—CONSTRUCTION—SPECIAL TRADE CONTRACTORS ......................................................................... 11.5

*******

DIVISION E—TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS, AND SANITARY SERVICES

*******

4212 (Part) Garbage and Refuse Collection, Without Disposal .................................................................................................... 10.0

*******

4953 Refuse Systems ................................................................................................................................................................... 10.0

*******

1SIC code 1629—Dredging: To be considered small for purposes of Government procurement, a firm must perform at least 40 percent of the

volume dredged with its own equipment or equipment owned by another small dredging concern.

Dated: March 27, 2000.

Aida Alvarez,

Administrator.

[FR Doc. 00–15258 Filed 6–15–00; 8:45 am]

BILLING CODE 8025–01–U

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Airspace Dock No. 00–AGL–06]

Modification of Class E Airspace;

Holland, MI

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Final rule.

SUMMARY: This action modifies Class E

airspace at Holland, MI. An Area

Navigation (RNAV) Standard Instrument

Approach Procedure (SIAP) to Runway

(Rwy) 26 has been developed for Tulip

City Airport. Controlled airspace

extending upward from 700 feet or more

above the surface of the earth is needed

to contain aircraft executing this

approach. This action increases the

radius of the existing Class E airspace

for Tulip City Airport.

EFFECTIVE DATE: 0901 UTC, August 10,

2000.

FOR FURTHER INFORMATION CONTACT:

Denis C. Burke, Air Traffic Division,

Airspace Branch, AGL–520, Federal

Aviation Administration, 2300 East

Devon Avenue, Des Plaines, Illinois

60018, telephone (847) 294–7568.

SUPPLEMENTARY INFORMATION:

History

On Tuesday, March 14, 2000, the FAA

proposed to amend 14 CFR part 71 to

modify Class E airspace at Holland, MI

(65 FR 13704). The proposal was to

modify controlled airspace extending

upward from the 700 feet above the

surface to contain Instrument Flight

Rules (IFR) operatoins in controlled

airspace during portions of the terminal

operation and while transiting between

the enroute and terminal environments.

Interested parties were invited to

participate in this rulemaking

proceeding by submitting written

comments on the proposal to the FAA.

No comments objecting to the proposal

were received. Class E airspace areas

extending upward from 700 feet or more

above the surface of the earth are

published in paragraph 6005 of FAA

Order 7400.9G dated September 1, 1999,

and effective September 16, 1999, which

is incorporated by reference in 14 CFR

71.1. The Class E airspace designations

listed in this document will be

published subsequently in the Order.

The Rule

This amendment to 14 CFR part 71

modifies Class E airspace at Holland,

MI, to accommodate aircraft executing

instrument flight procedures into and

out Tulip City Airport. The area will be

depicted on appropriate aeronautical

charts.

The FAA has determined that this

regulation only involves an established

body of technical regulations for which

frequent and routine amendments are

necessary to keep them operationally

current. Therefore, this regulation—(1)

Is not a ‘‘significant rule’’ under

Executive Order 12866; (2) is not a

‘‘significant rule’’ under DOT

Regulatory Policies and Procedures (44

FR 11034; February 26, 1979); and (3)

does not warrant preparation of a

Regulatory Evaluation as the anticipated

impact is so minimal. Since this is a

routine matter that will only affect air

traffic procedures and air navigation, it

is certified that this rule will not have

a significant economic impact on a

substantial number of small entities

under the criteria of the Regulatory

Flexibility Act.

List of Subjects in 14 CFR Part 71

Airspace, incorporation by reference,

Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, the

Federal Aviation Administration

amends 14 CFR part 71 as follows: