Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations 61591 

§ 1219.38(k) of the Order require the 

Board to evaluate on-going and 

completed programs, plans, and projects 

for Hass avocado promotion, industry 

information, consumer information, or 

related research and to comply with the 

independent evaluation provisions of 

the Federal Agricultural Improvement 

and Reform Act of 1996 (FAIR). The 

Board routinely evaluates its programs 

to ensure their effectiveness, and a 

formal evaluation was conducted under 

the FAIR in 2009. 

Accordingly, USDA has determined 

that the Hass avocado Order should be 

continued. The Order was established to 

help increase the consumption of 

domestic and imported Hass avocados 

in the United States. Concerns raised in 

the comments received were to a great 

extent changes that would require 

congressional action. AMS will 

continue to work with the Hass avocado 

industry in maintaining an effective 

program. 

Dated: October 1, 2010. 

Rayne Pegg, 

Administrator. 

[FR Doc. 2010–25130 Filed 10–5–10; 8:45 am] 

BILLING CODE 3410–02–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 121 

RIN 3245–AF70 

Small Business Size Standards; Other 

Services. 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Final rule. 

SUMMARY: The United States Small 

Business Administration (SBA) is 

increasing the small business size 

standards for 18 industries in North 

American Industry Classification 

System (NAICS) Sector 81, Other 

Services, and retaining the current 

standards for the remaining 30 

industries in the Sector. As part of its 

ongoing initiative to review all size 

standards, SBA has evaluated every 

industry in NAICS Sector 81 to 

determine whether the existing size 

standards should be retained or revised. 

DATES: This rule is effective November 

5, 2010. 

FOR FURTHER INFORMATION CONTACT: Carl 

Jordan, Program Analyst, Office of Size 

Standards, (202) 205–6618 or 

sizestandards@sba.gov. 

SUPPLEMENTARY INFORMATION: 

Introduction 

To determine eligibility for Federal 

small business assistance programs, 

SBA establishes small business size 

definitions (referred to as size 

standards) for private sector industries 

in the United States. SBA’s existing size 

standards use two primary measures of 

business size—receipts and number of 

employees. Financial assets, electric 

output and refining capacity are used as 

size measures for a few specialized 

industries. In addition, SBA’s Small 

Business Investment Company (SBIC) 

and the Certified Development 

Company (CDC) Programs determine 

small business eligibility using either 

the industry based size standards or net 

worth and net income size standards. 

Currently, SBA’s size standards consist 

of 45 different size levels, covering 

1,141 NAICS industries and 17 subindustry activities. Of these size levels, 

32 are based on average annual receipts, 

eight are based on number of 

employees, and five are based on other 

measures. In addition, SBA has 

established 11 other size standards for 

its financial and procurement programs. 

Over the years, SBA has received 

comments that its size standards have 

not kept up with changes in the 

economy and, in particular, that they do 

not reflect changes in the Federal 

contracting marketplace. The last 

overall review of size standards 

occurred during the late 1970s and early 

1980s. Since then, most reviews of size 

standards have been limited to in-depth 

analyses of specific industries in 

response to requests from the public and 

Federal agencies. SBA also makes 

periodic inflation adjustments to its 

monetary based size standards. The 

latest inflation adjustment to size 

standards was published in the Federal 

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

SBA recognizes that changes in 

industry structure and the Federal 

marketplace over time have rendered 

existing size standards for some 

industries no longer supportable by 

current data. Accordingly, SBA has 

begun a comprehensive review of its 

size standards to determine whether 

existing size standards have supportable 

bases relative to the current data, and, 

where necessary, to make revisions to 

current size standards. Rather than 

review all size standards at one time, 

SBA has taken a more manageable 

approach to reviewing a group of related 

industries within an NAICS Sector in 

phases. SBA expects to complete its 

review of all NAICS Sectors in two 

years. 

As part of its ongoing effort to review 

all small business size standards, SBA 

evaluated every industry in NAICS 

Sector 81, Other Services, to determine 

whether the existing size standards 

should be retained or revised, and 

published a proposed rule for public 

comment in the October 21, 2009 issue 

of Federal Register (74 FR 53941) to 

increase the standards for 18 industries 

in that Sector. The proposed rule was 

one of a series of proposals that will 

examine industries grouped by an 

NAICS Sector. SBA also published 

concurrently in the same October 21, 

2009 issue of the Federal Register 

proposed rules to increase 47 small 

business size standards in NAICS Sector 

44–45, Retail Trade, (74 FR 53924) and 

five standards in NAICS Sector 72, 

Accommodation and Food Services (74 

FR 53913). Similarly, SBA is publishing 

final rules on NAICS Sector 44–45 and 

NAICS Sector 72 elsewhere in this issue 

of the Federal Register. 

In addition, SBA established its ‘‘Size 

Standards Methodology’’ for reviewing 

small business size standards and 

modifying them, where necessary. SBA 

published in the October 21, 2009 issue 

of the Federal Register (74 FR 53940) a 

notice of its availability, for public 

comments, on SBA’s Web site at 

http://www.sba.gov/ 

contractingopportunities/officials/size/ 

index.html. In addition, SBA has placed 

a copy of its ‘‘Size Standards 

Methodology’’ in the electronic docket 

of this rule on 

http://www.regulations.gov and is 

available there as well. 

In evaluating an industry’s size 

standard, SBA examines the industry’s 

characteristics (such as average firm 

size, startup costs, industry competition 

and distribution of firms by size), 

Federal government contracting trends, 

impact on SBA financial assistance 

programs, and dominance in field of 

operations. SBA analyzed the 

characteristics of each industry in 

NAICS Sector 81 mostly using a special 

tabulation obtained from the U.S. 

Bureau of the Census from its 2002 

Economic Census (the latest available). 

SBA evaluated Federal contracting 

trends in that Sector using the data from 

the Federal Procurement Data System— 

Next Generation (FPDS–NG) for fiscal 

years 2006–2008. To evaluate the 

impact of changes to size standards on 

its loan programs, SBA analyzed 

internal data on its guaranteed loan 

programs for fiscal years 2006–2008. 

SBA’s ‘‘Size Standards Methodology’’ 

provides a detailed description of 

analyses of various industry and 

program factors and data sources and 

derivation of size standards using the 

results. In the proposed rule itself, SBA 

detailed how it applied its ‘‘Size 

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61592 Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations 

Standards Methodology’’ to review, and 

to modify where necessary, the existing 

standards for the Sector and Industries 

under analysis. 

SBA sought comments from the 

public on a number of issues about its 

‘‘Size Standards Methodology,’’ such as 

whether there are alternative 

methodologies that SBA should 

consider; whether there are alternative 

or additional factors or data sources that 

SBA should evaluate; whether SBA’s 

approach to establishing small business 

size standards makes sense in the 

current economic environment; whether 

SBA’s definitions of anchor size 

standards are appropriate in the current 

economy; whether there are gaps in 

SBA’s methodology because of the lack 

of comprehensive data; and whether 

there are other facts or issues that SBA 

should consider in its methodology. 

SBA did not receive any comments on 

its ‘‘Size Standards Methodology.’’ SBA 

continues to welcome comments from 

interested parties. 

In the proposed rule, based on its 

analyses of the latest industry and 

relevant data SBA proposed to increase 

18 of the 48 size standards in NAICS 

Sector 81. SBA’s analyses supported 

retaining the existing size standards for 

nine industries. As noted in the 

proposed rule, SBA’s analyses would 

support reducing size standards for the 

remaining 20 industries in the Sector. 

However, as the proposed rule pointed 

out, SBA believes that lowering size 

standards and thereby reducing the 

number of firms eligible to participate in 

Federal small business assistance 

programs would run counter to what the 

Agency is doing to help small 

businesses. Therefore, SBA proposed to 

retain the existing size standards for 

those 20 industries. Because of 

similarities between NAICS 811212, 

Computer and Office Machine Repair 

and Maintenance, and several computer 

services related industries in NAICS 

Sector 54, Professional, Technical and 

Scientific Services, SBA decided to 

review the size standard for that 

Industry when it reviews size standards 

for computer related services in NAICS 

Sector 54. SBA proposed to retain the 

current $25 million standard for that 

industry until it reviews that Sector. 

Summary of Comments 

The proposed rule sought comments 

from the public on SBA’s proposal to 

increase size standards for the 18 

industries in NAICS Sector 81, Other 

Services, and retain the size standards 

for remaining 30 industries in that 

Sector. SBA also requested comments 

on whether it should simplify size 

standards by reducing them to eight 

fixed levels. SBA received three 

comments, one of which supported the 

proposed standards and two did not. 

Each of these comments is discussed 

below. 

One commenter supported using 

Federal contracting as one of the factors 

SBA considers when determining size 

standard because it is ‘‘consistent with 

the statutory guidance that encourages 

an industry-by-industry analysis.’’ The 

commenter was referring to the Small 

Business Act (Act) which states in 

§ 3(a)(3) 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.’’ (15 

U.S.C. 632(a)(3)) 

The commenter suggested that SBA 

establish ‘‘a separate size standard for 

Federal procurement within each 

industry category or specific NAICS 

code.’’ SBA does not concur with this 

comment for several reasons. First, SBA 

believes that having separate size 

standards for each industry for Federal 

procurement and other programs would 

create confusion and unnecessary 

complexity, and it would run counter to 

SBA’s ongoing effort to simplify its size 

standards. Second, SBA’s current 

methodology examines the Federal 

procurement market as one of the five 

primary factors in setting size standards 

for most industries. Third, SBA has 

established separate size standards for 

Federal procurement purposes within 

certain NAICS Sectors and Industries. 

For example, for the Retail Trade and 

Wholesale Trade Sectors, the 500 

employee nonmanufacturer size 

standard applies for procurements of 

manufactured products, and industry 

standards in those sectors are generally 

used for SBA financial assistance 

programs. In addition, for those 

industries where there is a need for 

significantly different size standards for 

Federal procurement, they already exist. 

SBA has in the past recognized the need 

for standards that apply only to Federal 

procurement in certain industries, 

because the existing standards, while 

appropriate for other Federal programs, 

were not suitable for procurement 

purposes. Currently there are 18 

‘‘exceptions’’ in the Agency’s table of 

size standards that relate directly to 

Federal procurement opportunities for 

small businesses. Fourth, establishing 

separate size standards within each 

industry for businesses that participate 

in Federal procurement and those that 

participate in other programs is almost 

impractical due to lack of necessary 

data. For example, the Economic Census 

data that SBA uses to evaluate industry 

characteristics are limited to the sixdigit NAICS level. Similarly, the Federal 

procurement data from the FPDS–NG 

are limited to identifying each 

contracting firm as ‘‘small’’ or ‘‘other 

than small’’ only, with no information 

on its specific firm size (i.e., the number 

of employees and average annual 

revenues) that would be needed to 

establish a separate size standard for 

Federal procurement purposes. 

The commenter also addressed the 

size standards for NAICS code 811213, 

Communication Equipment Repair and 

Maintenance, and NAICS code 811212, 

Computer and Office Repair 

Maintenance. SBA had proposed to 

increase the standard for NAICS 811213 

from $7 million to $10 million in 

average annual receipts but did not 

propose to modify the standard for 

NAICS 811212. There are similarities 

among NAICS 811212 and several 

computer services related industries in 

Sector 54 (NAICS 541211, NAICS 

541212, NAICS 541213 and NAICS 

541219), as SBA detailed in the 

proposed rule. Based on those 

similarities those four Sector 54 

industries and NAICS 811212 have 

shared a $25 million size standard since 

SBA last reviewed the computer related 

services industries. SBA will review the 

size standard for NAICS 811212 when it 

next reviews computer related services 

in NAICS Sector 54. Therefore, SBA 

proposed to retain the current $25 

million standard for NAICS 811212 

until it reviews Sector 54. 

The commenter supported the current 

$25 million common size standard for 

NAICS 811212, but requested SBA to 

apply the same $25 million size 

standard to NAICS 811213 and defer 

changing the current $7 million size 

standard for that industry as well until 

the Agency analyzes and reviews size 

standards for the information 

technology industries in Sector 54. SBA 

is adopting the proposed $10 million for 

NAICS 811213 because it believes it 

should not defer its increase on the 

basis of what it might determine is 

appropriate for industries in another 

Sector that it has not yet analyzed. 

Furthermore, for Federal government 

procurement purposes, the size standard 

applicable to a contracting opportunity 

is determined by the principal purpose 

of the procurement. See 13 CFR 

121.402. It is not unusual for companies 

to perform contracts in different NAICS 

codes that have different size standards. 

The Central Contractor Registration 

database shows that many companies 

can be small for some NAICS codes and 

not small for others. 

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Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations 61593 

NAICS is a production oriented 

system and classifies companies by their 

economic activity, that is, by how they 

produce their products and provide 

their services. Therefore, economic 

activities of businesses classified in 

NAICS 811213 are more closely akin to 

businesses classified in NAICS Sector 

81 than they are to businesses classified 

in other Sectors. Larger companies can 

and do perform contracts under NAICS 

codes in different Sectors and Industries 

with various size standards—some 

higher, some lower than others. 

However, SBA believes it cannot 

logically conclude that the lower size 

standards ought to be increased. The 

same reasoning might lead to lowering 

the higher size standards. 

Based on the analysis according to its 

‘‘Size Standards Methodology,’’ SBA has 

determined that $10 million is the 

appropriate size standard for NAICS 

811213. SBA believes that, at this level, 

there exists a sufficient population of 

small firms that can compete among 

themselves for opportunities that 

provide benefits for small businesses. 

Much larger companies can and do 

provide some of the same services as 

smaller companies, but SBA believes 

that raising the size standard to include 

much larger firms would not be 

equitable for those small businesses that 

the Agency seeks to support and protect. 

Based on its analyses of relevant 

industry and Federal contracting data, 

SBA has determined that the proposed 

$10 million size standard is appropriate 

for NAICS 811213. Moreover, a size 

standard higher than the $10 million 

level would create substantial 

competitive disadvantages for small 

businesses below that level in bidding 

for Federal procurement opportunities. 

Therefore, SBA is adopting as final its 

proposed $10 million size standard for 

NAICS 811213. 

Another commenter stated that SBA 

should not raise size standards to enable 

Federal agencies to meet their small 

business contracting goals. However, 

whether Federal agencies meet their 

goals or not is not a factor SBA 

considers in its analysis. Once SBA has 

established small business size 

standards, it is the various agencies’ 

responsibility to structure and monitor 

their contracting activities to meet their 

small business contracting goals. SBA’s 

objective is to assure that there are an 

adequate number of small businesses to 

maintain suitable competition among 

them. At the same time, SBA wants to 

make certain that the pool is not too 

large so that there would be an 

inordinate number of apparently small 

businesses. The commenter stated 

further that a company with $7 million 

in receipts or one that has 500 

employees is not a small business and 

such levels might not suggest smallness 

for many people. SBA draws the line of 

demarcation between small and other 

than small where it will provide 

adequate procurement opportunities for 

businesses below that level. 

In the proposed rule, SBA requested 

comments on whether simplification of 

size standards by reducing them to eight 

fixed levels was appropriate. SBA also 

requested comments on whether it 

should, as a policy, limit the amount of 

increase or decrease to a size standard, 

and whether SBA should, as a policy, 

establish certain minimum or maximum 

values for size standards. 

One commenter suggested that there 

should be only one maximum revenue 

based standard and one maximum 

employee based size standard, 

regardless of NAICS industry. While 

this would simplify size standards even 

more than what SBA had proposed, the 

Act, as noted above, states in § 3(a)(3) 

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.’’ 

(15 U.S.C. 632(a)(3)). The relevant data 

show significant differences among 

industries within each NAICS Sector, 

including Sector 81, and SBA believes 

that varying the size standard by 

industry not only complies with the 

Act, but it also serves the best interests 

of small businesses in that Sector. 

Therefore, SBA does not presently plan 

to reduce the number of receipts based 

size standard levels below eight as 

detailed in the proposed rule. 

SBA did not receive any comments on 

whether it should lower the size 

standards for the 20 industries in NAICS 

Sector 81 for which SBA’s analyses 

supported reducing the existing size 

standards. SBA also did not receive any 

comments on nine industries for which 

SBA’s analyses supported retaining the 

existing size standards and on NAICS 

811212 for which SBA had proposed 

retaining the current standard until it 

reviews NAICS Sector 54. Therefore, 

SBA is retaining the existing size 

standards for 28 of the 48 Industries in 

NAICS Sector 81. All comments to the 

proposed rule are available for public 

review at http://www.regulations.gov. 

Conclusion 

Based on the analyses of relevant 

industry and program data and public 

comments it received on the proposed 

rule, SBA has decided to increase the 

small business size standards for the 18 

industries in NAICS Sector 81 to the 

levels it proposed. The revised size 

standards are shown in the following 

table. 

SUMMARY OF REVISED SIZE STANDARDS IN NAICS SECTOR 81 

NAICS 

Current size 

standard 

($ million) 

Revised size 

standard 

($ million) 

811122—Automotive Glass Replacement Shops ................................................................................................... $7.0 $10.0 

811213—Communication Equipment Repair and Maintenance ............................................................................. 7.0 10.0 

811219—Other Electronic and Precision Equipment Repair and Maintenance ..................................................... 7.0 19.0 

811412—Appliance Repair and Maintenance ......................................................................................................... 7.0 14.0 

812191—Diet and Weight Reducing Centers ......................................................................................................... 7.0 19.0 

812220—Cemeteries and Crematories ................................................................................................................... 7.0 19.0 

812320—Dry-cleaning and Laundry Services (except Coin-Operated) .................................................................. 4.5 5.0 

812331—Linen Supply ............................................................................................................................................ 14.0 30.0 

812332—Industrial Launderers ............................................................................................................................... 14.0 35.5 

812921—Photo Finishing Laboratories (except One-Hour) .................................................................................... 7.0 19.0 

812922—One-Hour Photo Finishing ....................................................................................................................... 7.0 14.0 

812930—Parking Lots and Garages ....................................................................................................................... 7.0 35.5 

813211—Grantmaking Foundations ........................................................................................................................ 7.0 30.0 

813212—Voluntary Health Organizations ............................................................................................................... 7.0 25.5 

813219—Other Grant Making and Giving Services ................................................................................................ 7.0 35.5 

813311—Human Rights Organizations ................................................................................................................... 7.0 25.5 

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61594 Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations 

SUMMARY OF REVISED SIZE STANDARDS IN NAICS SECTOR 81—Continued 

NAICS 

Current size 

standard 

($ million) 

Revised size 

standard 

($ million) 

813312—Environment, Conservation and Wildlife Organizations .......................................................................... 7.0 14.0 

813920—Professional Organizations ...................................................................................................................... 7.0 14.0 

Although there were two comments 

opposing the proposed increases, SBA 

believes that its analyses warrants the 

increases, for the reasons it gave in the 

October 21, 2009 proposed rule. SBA’s 

proposed rule indicated that its analysis 

might justify proposing reductions to 

size standards for 20 industries in this 

Sector. However, SBA has opted not to 

reduce the size standards for these 

industries for the reasons given in the 

proposed rule. Lowering small business 

size standards would be inconsistent 

with its ongoing effort to promote small 

business assistance under the Recovery 

Act. 

Compliance With Executive Orders 

12866, 12988, and 13132, the 

Paperwork Reduction Act (44 U.S.C., 

Ch. 35) and the Regulatory Flexibility 

Act (5 U.S.C. 601–612) 

Executive Order 12866 

The Office of Management and Budget 

(OMB) has determined that this final 

rule is a ‘‘significant’’ regulatory action 

for purposes of Executive Order 12866. 

Accordingly, the next section contains 

SBA’s Regulatory Impact Analysis. This 

is not a major rule, however, under the 

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

Regulatory Impact Analysis 

Is there a need for the regulatory action? 

SBA believes that the adopted 

adjustments to certain size standards in 

Sector 81, Other Services, better reflect 

the changes in economic characteristics 

of small businesses in those industries. 

SBA provides aid and assistance to 

small businesses through a variety of 

financial, procurement, business 

development and advocacy programs. 

To assist the intended beneficiaries of 

these programs effectively, SBA 

establishes distinct definitions to 

determine which businesses are deemed 

small businesses. The Small Business 

Act (15 U.S.C. 632(a)) delegates to SBA’s 

Administrator responsibility for 

establishing small business definitions. 

The Act also requires that small 

business definitions vary to reflect 

industry differences. The 

supplementary information section of 

the proposed rule and this rule 

explained in detail SBA’s methodology 

for analyzing a size standard for a 

particular industry. 

What are the potential benefits and costs 

of this regulatory action? 

The most significant benefit to 

businesses obtaining small business 

status as a result of this rule is eligibility 

for Federal small business assistance 

programs, including SBA’s financial 

assistance programs, economic injury 

disaster loans and Federal procurement 

opportunities reserved for small 

businesses. Federal procurement 

provides opportunities for small 

businesses under SBA’s business 

development programs, such as 8(a) 

participantes, small businesses located 

in Historically Underutilized Business 

Zones (HUBZone), women owned small 

businesses and service disabled veteran 

owned small businesses (SDVOSB). 

Other Federal agencies also may use 

SBA size standards for a variety of 

regulatory and program purposes. 

Through the assistance of these 

programs, small businesses become 

more knowledgeable, stable and 

competitive. 

Of 18 industries in Sector 81 for 

which SBA has increased their size 

standards, 12 are for-profit industries 

and six are non-profits. In the 12 forprofit industries for which SBA has 

increased size standards, the Agency 

estimates that about 325 additional 

firms will obtain small business status 

and become eligible for these programs. 

That represents 0.6 percent of total firms 

and 5.6 percent of total sales in those 

industries. In the six non-profit 

industries for which size standards have 

been increased, SBA estimates that 

about 1,175 additional firms, 

representing 4.2 percent of total firms 

and 16.9 percent of total sales in those 

industries, will qualify as small 

organizations (a non-profit entity cannot 

qualify as a small business concern). 13 

CFR 121.105 In the 20 industries 

(including non-profits) for which SBA’s 

analyses indicated a lower size standard 

is appropriate, about 1,850 firms, 

representing 0.6 percent of total firms 

and 5.1 percent of total sales in those 

industries, might have lost their small 

business status, had SBA lowered their 

size standards. Thus, the net impact for 

the Sector as a whole is about 1,400 

additional firms gaining and none losing 

small business status under this final 

rule. This will increase the small 

business share of total industry receipts 

for the Sector from 59.0 percent under 

the current size standards to 63.5 

percent under the revised standards. 

The benefits of increasing size 

standards to a more appropriate level 

will accrue to three groups: (1) 

Businesses that are above the current 

size standards will benefit by gaining 

small business status under the higher 

size standards, thereby being able to 

participate in Federal small business 

assistance programs; (2) growing small 

businesses that are close to exceeding 

the current size standards will be able 

to retain their small business status 

under the higher size standards, thereby 

being able to continue their 

participation in the programs; and 

(3) Federal agencies that award 

contracts under procurement programs 

that require small business status. 

More than 40 percent of total Federal 

contracting dollars received by 

industries in Sector 81 (excluding 

NAICS 811212 and those in Subsector 

813) during fiscal years 2006–2008 were 

accounted for by two of the 18 

industries for which SBA is increasing 

size standards in this final rule, namely 

NAICS 811213 and NAICS 811219. SBA 

estimates that additional firms gaining 

small business status in those two and 

other industries in Subsectors 811 and 

812 under the proposed size standards 

could potentially obtain Federal 

contracts totaling up to between $25 

million and $30 million per year under 

the small business set-aside program, 

the 8(a), HUBZone, and SDVOSB 

Programs, or unrestricted procurements. 

The added competition for many of 

these procurements also could likely 

result in lower prices to the Government 

for procurements reserved for small 

businesses, but SBA cannot quantify 

this benefit. 

Under SBA’s 7(a) Guaranteed Loan 

Program and CDC Program, SBA 

estimates that approximately 10 

additional loans totaling between $4 

million and $5 million in new Federal 

loan guarantees will be made to newly 

defined small businesses. Because of the 

size of the loan guarantees, however, 

most loans are made to small businesses 

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Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations 61595 

well below the size standard. SBA has 

also applied its CDC alternative size 

standard to its 7(a) Business Loan 

Program, and more capital is therefore 

available to small businesses. Thus, 

increasing the size standards will likely 

result in an increase in small business 

guaranteed loans to small businesses in 

these industries, but it would be 

impractical to try to estimate the extent 

of their number and the total amount 

loaned. 

The newly defined small businesses 

will also benefit from SBA’s Economic 

Injury Disaster Loan (EIDL) Program. 

Since this program is contingent on the 

occurrence and severity of disasters, no 

meaningful estimate of benefits can be 

projected. 

To the extent that 325 additional 

firms in Subsectors 811 and 812 that 

become small under the revised size 

standards could become active in 

Federal procurement programs, this may 

entail some additional administrative 

costs to the Federal Government. 

Additional firms will likely participate 

in Federal procurement opportunities 

reserved for small businesses, seek SBA 

guaranteed loans and SBA guaranteed 

surety bonds in connection with Federal 

projects, register in the Central 

Contractor Registration, be listed in the 

Dynamic Small Business Search 

databases, and seek certification as 8(a) 

or HUBZone firms. Among businesses 

in this group seeking SBA assistance, 

there could be additional costs 

associated with compliance and 

verification of small business status and 

protests of businesses that claim small 

business standing. These additional 

costs are likely to be minimal because 

mechanisms are already in place to 

handle these administrative 

requirements. 

The costs to the Federal Government 

may be higher on some Federal 

contracts. With a greater number of 

businesses defined as small, Federal 

agencies may choose to set aside more 

contracts for competition among small 

businesses rather than using full and 

open competition. The movement from 

unrestricted to set-aside contracting will 

likely result in competition among 

fewer bidders. In addition, higher costs 

may result when additional full and 

open contracts are awarded to HUBZone 

businesses because of a price evaluation 

preference. The additional costs 

associated with fewer bidders, however, 

will likely be minor since, as a matter 

of law, procurements may be set aside 

for small businesses or reserved for the 

8(a) or HUBZone Programs only if 

awards are expected to be made at fair 

and reasonable prices. 

The adopted size standards may have 

some distributional effects among large 

and small businesses. Although the 

actual outcome of the gains and losses 

among small and large businesses 

cannot be estimated with certainty, 

several likely impacts can be identified. 

There will likely be a transfer of some 

Federal contracts from large businesses 

to small businesses. Large businesses 

may have fewer Federal contract 

opportunities as Federal agencies decide 

to set aside more Federal contracts for 

small businesses. Also, some Federal 

contracts may be awarded to HUBZone 

concerns instead of large businesses 

since HUBZone concerns may be 

eligible for an evaluation adjustment for 

contracts competed on a full and open 

basis. Similarly, currently defined small 

businesses may obtain fewer Federal 

contracts due to the increased 

competition from more businesses 

defined as small under the revised size 

standards. This transfer may be offset by 

a greater number of Federal 

procurements set aside for all small 

businesses. The number of newly 

defined and expanding small businesses 

that are willing and able to sell to the 

Federal Government will limit the 

potential transfer of contracts away from 

large and currently defined small 

businesses. The potential distributional 

impacts of these transfers may not be 

estimated with any degree of precision 

because the currently available data on 

the size of business receiving a Federal 

contract are limited to identifying small 

or other than small businesses, without 

regard to the exact size of the business. 

The revisions to the existing size 

standards for Other Services industries 

are consistent with SBA’s statutory 

mandate to assist small business. This 

regulatory action promotes the 

Administration’s objectives. One of 

SBA’s goals in support of the 

Administration’s objectives is to help 

individual small businesses succeed 

through fair and equitable access to 

capital and credit, Government 

contracts, and management and 

technical assistance. Reviewing and 

modifying size standards, when 

appropriate, ensures that intended 

beneficiaries have access to small 

business programs designed to assist 

them. 

Executive Order 12988: For purposes 

of Executive Order 12988, Civil Justice 

Reform, SBA has determined that this 

rule is crafted, to the extent practicable, 

in accordance with the standards set 

forth in §§ 3(a) and 3(b)(2), to minimize 

litigation, eliminate ambiguity and 

reduce burden. 

Executive Order 13132: For purposes 

of Executive Order 13132, SBA has 

determined that this rule has no 

federalism implications warranting 

preparation of a federalism assessment. 

Paperwork Reduction Act: This 

interim final rule does not impose any 

additional reporting or recordkeeping 

requirements under the Paperwork 

Reduction Act, 44 USC Chapter 35. 

Final Regulatory Flexibility Analysis 

Under the Regulatory Flexibility Act 

(RFA), this rule may have a significant 

impact on a substantial number of small 

entities in NAICS Sector 81, Other 

Services. As described above, this rule 

may affect small entities seeking Federal 

contracts, SBA (7a) and 504 Guaranteed 

Loan Programs, SBA Economic Injury 

Disaster Loans, and other Federal small 

business programs. 

Immediately below, SBA sets forth a 

final regulatory flexibility analysis of 

this final rule addressing the following 

questions: (1) What is the need for and 

objective of the rule? (2) what is SBA’s 

description and estimate of the number 

of small entities to which the rule will 

apply? (3) what are the projected 

reporting, record keeping, and other 

compliance requirements of the rule? 

(4) what are the relevant Federal rules 

which may duplicate, overlap or 

conflict with the rule? and (5) what 

alternatives will allow the Agency to 

accomplish its regulatory objectives 

while minimizing the impact on small 

entities? 

(1) What is the need for and objective of 

the rule? 

Most of SBA’s size standards for the 

Other Services industries have not been 

reviewed since the early 1980s, and 

many have not been changed since the 

1960s, except for periodic adjustments 

for inflation. Technology, productivity 

growth, international competition, 

mergers and acquisitions, and updated 

industry definitions may have changed 

the structure of many industries. Such 

changes can be sufficient to support a 

revision to size standards for some 

industries. Based on an analysis of the 

latest data available to the Agency, SBA 

believes that the revised standards in 

this final rule more appropriately reflect 

the size of businesses in those industries 

that need Federal assistance. 

(2) What is SBA’s description and 

estimate of the number of small entities 

to which the rule will apply? 

In this final rule, SBA estimates that 

approximately 1,400 additional firms 

will become small because of increases 

in size standards in the 18 industries 

within Sector 81. That represents about 

1.8 percent of approximately 75,500 

total firms in those industries. This will 

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61596 Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations 

result in an increase in the small 

business share of total industry receipts 

for that Sector from 59.0 percent under 

the current size standards to 63.5 

percent under the revised standards. 

(3) What are the projected reporting, 

recordkeeping, and other compliance 

requirements of the rule and an estimate 

of the classes of small entities which 

will be subject to the requirements? 

A new size standard does not impose 

any additional reporting or 

recordkeeping requirements on small 

entities. However, qualifying for Federal 

procurement and a number of other 

programs requires that entities register 

in the Central Contractor Registration 

(CCR) database and certify at least 

annually that they are small in the 

Online Representations and 

Certifications Application (ORCA). 

Therefore, businesses opting to 

participate in those programs must 

comply with CCR and ORCA 

requirements. There are no costs 

associated with either CCR registration 

or ORCA certification. Revising size 

standards alters the access to SBA 

programs that assist small businesses, 

but does not impose a regulatory burden 

as they neither regulate nor control 

business behavior. 

(4) What are the relevant Federal rules 

which may duplicate, overlap or 

conflict with the rule? 

This rule overlaps with other Federal 

rules that use SBA’s size standards to 

define a small business. Under 

§ 3(a)(2)(C) of the Small Business Act, 

15 U.S.C. 632(a)(2)(C), Federal agencies 

must use SBA’s size standards to define 

a small business, unless specifically 

authorized by statute. In 1995, SBA 

published in the Federal Register a list 

of statutory and regulatory size 

standards that identified the application 

of SBA’s size standards as well as other 

size standards used by Federal agencies 

(60 FR 57988, dated 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)). Thus, there may be instances 

where this rule conflicts with other 

rules. 

(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 

alternative exists to the systems of 

numerical size standards. 

List of Subjects in 13 CFR Part 121 

Administrative practice and 

procedure, Government procurement, 

Government property, Grant programs— 

business, Individuals with disabilities, 

Loan programs—business, Reporting 

and recordkeeping requirements, Small 

businesses. 

■ For reasons set forth in the preamble, 

SBA amends 13 CFR part 121 as 

follows: 

PART 121—SMALL BUSINESS SIZE 

REGULATIONS 

Subpart A—Size Eligibility Provisions 

and Standards 

■ 1. The authority citation for part 121 

continues to read as follows: 

Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 

637(a), 644, 657(a), 657(f), and 662(5); and 

Pub. L. 105–135, Sec. 401, et seq., 111 Stat, 

2592. 

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

entries for ‘‘811122’’, ‘‘811213’’, 

‘‘811219’’, ‘‘811412’’, ‘‘812191’’, ‘‘812220’’, 

‘‘812320’’, ‘‘812331’’, ‘‘812332’’, ‘‘812921’’, 

‘‘812922’’, ‘‘812930’’, ‘‘813211’’, ‘‘813212’’, 

‘‘813219’’, ‘‘813311’’, ‘‘813312’’, and 

‘‘813920’’ to read as follows: 

§ 121.201 What size standards has SBA 

identified by North American Industry 

Classification System codes? 

* * * * * 

SMALL BUSINESS SIZE STANDARDS BY NAICS INDUSTRY

NAICS 

codes NAICS U.S. industry title 

Size 

standards in 

millions of 

dollars 

Size 

standards in 

number of 

employees 

*******

811122 ..... Automotive Glass Replacement Shops ............................................................................................. $10.0 ........................

* * * * * * * 

811213 ..... Communication Equipment Repair and Maintenance ....................................................................... 10.0 ........................

811219 ..... Other Electronic and Precision Equipment Repair and Maintenance ............................................... 19.0 ........................

* * * * * * * 

811412 ..... Appliance Repair and Maintenance .................................................................................................. 14.0 ........................

* * * * * * * 

812191 ..... Diet and Weight Reducing Centers ................................................................................................... 19.0 ........................

* * * * * * * 

812220 ..... Cemeteries and Crematories ............................................................................................................ 19.0 ........................

* * * * * * * 

812320 ..... Dry-cleaning and Laundry Services (except Coin-Operated) ........................................................... 5.0 ........................

812331 ..... Linen Supply ...................................................................................................................................... 30.0 ........................

812332 ..... Industrial Launderers ......................................................................................................................... 35.5 ........................

* * * * * * * 

812921 ..... Photo Finishing Laboratories (except One-Hour) ............................................................................. 19.0 ........................

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Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations 61597 

SMALL BUSINESS SIZE STANDARDS BY NAICS INDUSTRY—Continued 

NAICS 

codes NAICS U.S. industry title 

Size 

standards in 

millions of 

dollars 

Size 

standards in 

number of 

employees 

812922 ..... One-Hour Photo Finishing ................................................................................................................. $14.0 ........................

812930 ..... Parking Lots and Garages ................................................................................................................ 35.5 ........................

* * * * * * * 

813211 ..... Grantmaking Foundations ................................................................................................................. 30.0 ........................

813212 ..... Voluntary Health Organizations ......................................................................................................... 25.5 ........................

813219 ..... Other Grant Making and Giving Services ......................................................................................... 35.5 ........................

813311 ..... Human Rights Organizations ............................................................................................................ 25.5 ........................

813312 ..... Environment, Conservation and Wildlife Organizations .................................................................... 14.0 ........................

* * * * * * * 

813920 ..... Professional Organizations ................................................................................................................ 14.0 ........................

* * * * * * * 

Dated: September 10, 2010. 

Marie C. Johns, 

Deputy Administrator. 

[FR Doc. 2010–24860 Filed 10–5–10; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 121 

RIN 3245–AF69 

Small Business Size Standards: Retail 

Trade 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Final rule. 

SUMMARY: The United States Small 

Business Administration (SBA) is 

modifying 47 small business size 

standards for industries in North 

American Industry Classification 

System (NAICS) Sector 44–45, Retail 

Trade, and retaining the current 

standards for the remaining industries 

in the Sector. In this final rule, SBA is 

increasing 46 of the size standards and 

converting the measure of size for one 

industry (NAICS 441110, New Car 

Dealers) from annual receipts to number 

of employees. As part of its ongoing 

initiative to review all size standards, 

SBA has evaluated every industry in 

NAICS Sector 44–45 to determine 

whether the existing size standards 

should be retained or revised. This rule 

also modifies SBA’s Small Business Size 

Regulations to clarify that an NAICS 

code that represents a Wholesale Trade 

(NAICS Sector 42) or Retail Trade 

(NAICS Sector 44–45) Industry shall not 

be used for the Federal government’s 

procurement of supplies. 

DATES: This rule is effective November 

5, 2010. 

FOR FURTHER INFORMATION CONTACT: Carl 

Jordan, Program Analyst, Office of Size 

Standards, (202) 205–6618 or 

sizestandards@sba.gov. 

SUPPLEMENTARY INFORMATION: 

Introduction 

To determine eligibility for Federal 

small business assistance programs, 

SBA establishes small business size 

definitions (referred to as size 

standards) for private sector industries 

in the United States. SBA’s existing size 

standards use two primary measures of 

business size—annual receipts and 

number of employees. Financial assets, 

electric output and refining capacity are 

used as size measures for a few 

specialized industries. In addition, 

SBA’s Small Business Investment 

Company (SBIC) and the Certified 

Development Company (CDC) Programs 

determine small business eligibility 

using either the industry based size 

standards or net worth and net income 

based size standards. Currently, SBA’s 

size standards consist of 45 different 

size levels, covering 1,141 NAICS 

industries and 17 sub-industry 

activities. Of these size levels, 32 are 

based on average annual receipts, eight 

are based on number of employees, and 

five are based on other measures. In 

addition, SBA has established 11 other 

size standards for its financial and 

procurement programs. 

Over the years, SBA has received 

comments that its size standards have 

not kept up with changes in the 

economy and, in particular, that they do 

not reflect changes in the Federal 

contracting marketplace. The last 

overall review of size standards 

occurred during the late 1970s and early 

1980s. Since then, most reviews of size 

standards have been limited to in-depth 

analyses of specific industries in 

response to requests from the public and 

Federal agencies. SBA also makes 

periodic inflation adjustments to its 

monetary based size standards. The 

latest inflation adjustment to size 

standards was published in the Federal 

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

SBA recognizes that changes in 

industry structure and the Federal 

marketplace over time have rendered 

existing size standards for some 

industries no longer supportable by 

current data. Accordingly, SBA has 

begun a comprehensive review of its 

size standards to determine whether 

existing size standards have supportable 

bases relative to the current data and, 

where necessary, to make revisions to 

existing size standards. Rather than 

review all size standards at one time, 

SBA has taken a more manageable 

approach to reviewing a group of related 

industries within an NAICS Sector. SBA 

expects to complete its review of all 

NAICS Sectors in two years. 

As part of its ongoing effort to review 

all small business size standards, SBA 

evaluated every industry in NAICS 

Sector 44–45, Retail Trade, to determine 

whether the existing size standards 

should be retained or revised, and 

published a proposed rule for public 

comment in the October 21, 2009 issue 

of the Federal Register (74 FR 53924) to 

increase the size standards for 47 

industries in that Sector. The proposed 

rule was one of a series of proposals that 

will examine industries grouped by an 

NAICS Sector. SBA also published 

concurrently in the same October 21, 

2009 issue of the Federal Register 

proposed rules to increase small 

business size standards for five 

industries in NAICS Sector 72, 

Accommodation and Food Services (74 

FR 53913) and for 18 industries in 

NAICS Sector 81, Other Services (74 FR 

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