Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Proposed Rules 53941 

change, competition among industries, 

industry growth trends, and impacts on 

SBA programs. 

SBA conducts a statistical analysis of 

data on the primary factors, and 

secondary factors as appropriate, to 

establish a size standard for a specific 

industry. As a starting point, SBA 

presumes $7.0 million as an appropriate 

size standard for the services, retail 

trade, construction, and other industries 

with receipts based size standards; 500 

employees for the manufacturing, 

mining and other industries with 

employee based size standards; and 100 

employees for the wholesale trade 

industries. These three levels, referred 

to as ‘‘anchor size standards,’’ are not 

minimum size standards, but rather 

benchmarks or starting points. To the 

extent an industry displays ‘‘differing 

industry characteristics,’’ a size 

standard higher, or in some cases lower, 

than an anchor size standard is 

supportable. ‘‘Size Standards 

Methodology’’ includes an extensive 

discussion of the statistical analyses 

involved in size standards 

determination. 

SBA welcomes comments from the 

public on a number of issues. SBA is 

aware that different choices among size 

standards can involve complex tradeoffs 

among relevant variables; SBA invites 

comments on how to identify and weigh 

those variables. Suggestions are invited 

on alternative methodologies for 

determining small businesses; on how 

these size standards affect competition 

in general and within the specific 

industry; on alternative or additional 

factors that SBA should consider; on 

whether SBA’s approach to small 

business size standards makes sense in 

the current economic environment; on 

whether SBA’s using anchor size 

standards is appropriate in the current 

economy; on whether there are gaps in 

SBA’s methodology because of the lack 

of comprehensive data; and on 

alternative datasets SBA should 

consider for a specific sector. 

The concluding section of ‘‘Size 

Standards Methodology’’ raises a 

number of policy questions that SBA 

has to address in developing a robust 

methodology for establishing, evaluating 

and revising its small business size 

standards. Examples include how high 

of a size standard is too high? Should 

there be a single basis for all size 

standards (i.e., employees or annual 

receipts)? Should there be a fixed 

number of ‘‘bands’’ of size standards or 

separate standard for each industry? 

‘‘Size Standards Methodology’’ includes 

several other issues, including some that 

tend to be on-going questions. 

SBA encourages the public to review 

‘‘Size Standards Methodology’’ and to 

comment on it either in whole or in 

part. 

Dated: October 9, 2009. 

Karen G. Mills, 

Administrator. 

[FR Doc. E9–25196 Filed 10–20–09; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 121 

RIN 3245–AF70 

Small Business Size Standards: Other 

Services Industries 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Proposed rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA) proposes to 

increase the small business size 

standards for 18 industries in North 

American Industry Classification 

System (NAICS) Sector 81, Other 

Services, and retain 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 each 

industry in Sector 81 to determine 

whether the existing size standards 

should be retained or revised. This 

proposed rule is one of a series of 

proposals that will examine industries 

grouped by an NAICS Sector. As part of 

this series of proposed rules SBA is 

publishing concurrently in this issue of 

the Federal Register a proposed rule to 

modify small business size standards in 

Sector 44–45, Retail Trade and, in 

Sector 72, Accommodation and Food 

Services. SBA has established its ‘‘Size 

Standards Methodology’’ and published 

elsewhere in this issue of the Federal 

Register a notice of its availability on 

SBA’s Web site at http://www.sba.gov/ 

size. SBA has applied ‘‘Size Standards 

Methodology’’ to this proposed rule. 

DATES: SBA must receive comments to 

this proposed rule on or before 

December 21, 2009. 

ADDRESSES: You may submit comments, 

identified by RIN 3245–AF70 by one of 

the following methods: (1) Federal 

eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments; 

or (2) Mail/Hand Delivery/Courier: 

Khem R. Sharma, Chief, Size Standards 

Division, 409 Third Street, SW., Mail 

Code 6530, Washington, DC 20416. 

SBA will post all comments on 

www.regulations.gov. If you wish to 

submit confidential business 

information (CBI) as defined in the User 

Notice at www.regulations.gov, please 

submit the information to U.S. Small 

Business Administration, Khem R. 

Sharma, Chief, Size Standards Division, 

409 Third Street, SW., Mail Code 6530, 

Washington, DC 20416, or send an email to sizestandards@sba.gov. 

Highlight the information that you 

consider to be CBI and explain why you 

believe SBA should hold this 

information as confidential. SBA will 

review the information and make the 

final determination of whether it will 

publish the information or not. 

FOR FURTHER INFORMATION CONTACT: Carl 

J. Jordan, Program Analyst, Size 

Standards Division, (202) 205–6618 or 

sizestandards@sba.gov. 

SUPPLEMENTARY INFORMATION: To 

determine eligibility for Federal small 

business assistance programs, SBA 

establishes small business definitions 

(referred to as size standards) for private 

sector industries in the U.S. SBA’s 

existing size standards use two primary 

measures of business size—receipts and 

number of employees. Financial assets, 

electric output, and refining capacity are 

used as size measures for a few 

specialized industries. In addition, 

SBA’s Small Business Investment 

Company (SBIC) and the Certified 

Development Company (CDC) Programs 

determine small business eligibility 

using either the industry based size 

standards or net worth and net income 

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 the changes in the Federal 

contracting marketplace. The last 

overall review of size standards 

occurred during the late 1970s to 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). 


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The evaluation of the size standards 

in the Other Services is also necessary 

to account for changes in the industry 

classification. The development of 

NAICS in 1997 included significant 

changes in the definition of industries 

compared to the earlier Standard 

Industrial Classification (SIC) system. 

The NAICS update used in the 2002 

Economic Census included further 

changes in industry definitions from the 

1997 NAICS used in the 1997 Economic 

Census. These changes in the industry 

classification have led SBA to evaluate 

if the existing size standards for the 

Other Services industries are 

appropriate. Most of the size standards 

for industries in Sector 81, Other 

Services, have not been reviewed since 

the 1980s, and many have not been 

changed since the 1960s, except for 

periodic adjustments for inflation. 

SBA recognizes that industrial 

changes over time have rendered 

existing size standards for some 

industries no longer supportable by 

current data. Accordingly, SBA has 

begun a comprehensive review of its 

size standards to ensure that existing 

size standards have supportable bases 

and, where necessary, to make revisions 

to current size standards. This proposed 

rule affords the public an opportunity to 

review and comment on the data and 

methodology SBA uses to evaluate and 

revise a size standard. 

Rather than review all size standards 

at one time, SBA believes that a more 

manageable approach would be to 

examine a group of related industries 

within an NAICS Sector in phases. 

Except for manufacturing, an NAICS 

Sector generally consists of 25 to 75 

industries. Once a review of size 

standards for industries within an 

NAICS Sector is completed, SBA will 

issue a proposed rule for those 

industries in which the analysis of 

industry data supports a change to the 

existing size standards. SBA expects to 

complete a review of all NAICS Sectors 

in two years. 

Below is a discussion of SBA’s size 

standards methodology, including 

analyses of industry structure, Federal 

procurement trends and other factors for 

industries within Sector 81, Other 

Services, and the impact of the 

proposed revisions to size standards on 

Federal small businesses assistance. 

Size Standards Methodology 

SBA has recently developed a ‘‘Size 

Standards Methodology’’ that it uses for 

developing and modifying size 

standards when necessary. SBA has 

published the document which is 

available at http://www.sba.gov/size. 

SBA does not apply all features of its 

‘‘Size Standards Methodology’’ to all 

cases because not all are appropriate. 

However, SBA does make it available in 

its entirety for parties with an interest 

in SBA’s overall approach to evaluating, 

establishing and modifying small 

business size standards. SBA always 

explains its analysis in the proposed 

and final rules that relate to size 

standards for specific industries. The 

following discussion is of SBA’s size 

standard analysis applied to industries 

in Sector 81, Other Services. 

SBA welcomes comments from the 

public on a number of issues. SBA is 

aware that different choices among size 

standards can involve complex tradeoffs 

among relevant variables; SBA invites 

comments on how to identify and weigh 

those variables. Suggestions are invited 

on alternative methodologies for 

determining small businesses; on how 

these size standards affect competition 

in general and within the specific 

industry; on alternative or additional 

factors that SBA should consider; on 

whether SBA’s approach to small 

business size standards makes sense in 

the current economic environment; on 

whether SBA’s using anchor size 

standards is appropriate in the current 

economy; on whether there are gaps in 

SBA’s methodology because of the lack 

of comprehensive data; and on 

alternative datasets SBA should 

consider for a specific sector. 

Congress granted SBA’s Administrator 

discretion to establish detailed small 

business size standards (15 U.S.C. 

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

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

requires that size standards vary by 

industry to the extent necessary to 

reflect differing characteristics among 

various industries. Accordingly, the 

economic structure of an industry serves 

as the underlying basis for developing 

and modifying small business size 

standards. By examining data on 

economic characteristics defining the 

industry structure (as described below), 

the small business segment of an 

industry is identified. In addition to the 

industry structure, SBA also takes into 

consideration its program objectives and 

whether a size standard successfully 

excludes businesses that are dominant 

in the industry. Discussed below is 

SBA’s analysis of the economic 

characteristics of each industry in 

Sector 81, Other Services, the impact of 

proposed size standards on SBA 

programs, and the evaluation of whether 

a revised size standard would exclude 

dominant firms in the industry from 

being considered as small. 

Industry Analysis 

For the current comprehensive size 

review, SBA has established three 

‘‘base’’ or ‘‘anchor’’ size standards that 

apply to most industries—$7.0 million 

in average annual receipts for industries 

that have receipts based size standards, 

500 employees for manufacturing and 

other industries that have employee 

based size standards (except for 

Wholesale Trade), and 100 employees 

for industries in the Wholesale Trade 

Sector. SBA established 500 employees 

as the anchor size standard for the 

manufacturing industries at SBA’s 

inception in 1953 and shortly thereafter 

established a receipts based anchor size 

standard of $1 million in average annual 

receipts for the nonmanufacturing 

industries. The receipts based anchor 

size standard has been adjusted 

periodically for inflation. The inflation 

adjustment over the years has increased 

it to $7.0 million today. Since 1986, all 

industries in the Wholesale Trade 

Sector have had the 100-employee size 

standard for all non-procurement SBA 

programs. For procurement purposes, 

the size standard for a non-manufacturer 

is 500 employees. 

These long-standing anchor size 

standards have gained legitimacy 

through practice and general public 

acceptance. An anchor size standard is 

neither a minimum nor a maximum size 

standard. It is a common size standard 

for a large number of industries that 

have similar economic characteristics 

and serves as a reference point in 

evaluating size standards for individual 

industries. SBA uses the anchor in lieu 

of trying to establish precise small 

business size standards for each 

industry. Otherwise, theoretically, that 

could require that the number of size 

standards be as high as the number of 

industries for which SBA establishes 

size standards. SBA presumes an anchor 

size standard is appropriate size 

standard for a particular industry unless 

that industry displays significantly 

different economic characteristics, as 

compared to the characteristics of 

industries with the anchor size 

standard, thereby suggesting a need for 

revision to an existing size standard. 

When evaluating a size standard, the 

economic characteristics of a specific 

industry under review are compared to 

the average characteristics of industries 

with one of the three anchor size 

standards (referred to as ‘‘anchor 

comparison group’’) to assess industry 

structure and to determine whether the 

industry displays significant differences 

relative to the industries in the anchor 

size standard group. If the 

characteristics of a specific industry 


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under review are similar to the average 

characteristics of the anchor comparison 

group, the anchor size standard would 

be considered appropriate for that 

industry. SBA will consider adopting a 

size standard below the anchor size 

standard only when (1) all or most of 

the industry characteristics are 

significantly smaller than the average 

characteristics of the anchor comparison 

group, or (2) other industry 

considerations strongly suggest that the 

anchor size standard would be an 

unreasonably high size standard for the 

industry. 

If the specific industry’s 

characteristics are significantly higher 

than those of the anchor comparison 

group, a size standard higher than the 

anchor size standard may be considered 

appropriate. The larger the differences 

are between the characteristics of the 

industry under review and those in the 

anchor comparison group, the larger 

will be the difference between the 

appropriate industry size standard and 

the anchor size standard. To determine 

the level of a size standard above the 

anchor size standard, the characteristics 

of a second comparison group are 

analyzed. For industries with receipts 

based size standards, SBA has 

developed a second comparison group 

consisting of industries with the highest 

levels of receipts based size standards. 

The size standards for this group of 

industries range from $23 million to 

$35.5 million in average receipts, with 

the weighted average size standard for 

the group equaling $29 million. SBA 

refers to this comparison group as the 

‘‘higher level receipts based size 

standard group.’’ 

The primary factors that SBA 

evaluates in analyzing the structural 

characteristics of an industry include 

average firm size, startup costs and 

entry barriers, industry competition, 

and distribution of firms by size (13 CFR 

121.102(a) and (b)). SBA also evaluates 

the possible impact of both existing and 

revised size standards on Federal 

contracting assistance to small 

businesses as an additional primary 

factor. SBA generally considers these 

five factors as the most important ones 

for establishing or revising a size 

standard for an industry. However, SBA 

will also consider and evaluate other 

information that it believes relevant to 

the decision on a size standard for a 

particular industry (such as 

technological changes, growth trends, 

SBA financial assistance and other 

program factors, etc.). Public comments 

on a proposed size standard rule also 

provide important additional 

information. SBA thoroughly reviews all 

public comments before making a final 

decision on its proposed size standard. 

Below is a brief description of each of 

the five primary evaluation factors. A 

more detailed description of this 

analysis is provided in the ‘‘SBA Size 

Standards Methodology’’ paper which is 

available at http://www.sba.gov/size. 

1. Average firm size. SBA computes 

two measures of average firm size: 

simple average firm size and weighted 

average firm size. For industries with 

receipts based standards (including 

Other Services industries), the simple 

average firm size is calculated as total 

receipts of an industry divided by the 

total number of firms in that industry. 

The weighted average firm size is 

computed as the sum of weighted 

simple average firm size in different 

receipts size classes where weights are 

the shares of total industry receipts for 

respective size classes. The simple 

average firm size weighs all firms within 

an industry equally regardless of their 

size. The weighted average overcomes 

that limitation by giving more weights 

to larger firms. 

If the average firm size of an industry 

under review is significantly higher 

than the average firm size of industries 

in the anchor comparison industry 

group, this would generally support a 

size standard higher than the anchor 

size standard. Conversely, if the 

industry’s average firm size is similar to 

or significantly lower than that of the 

anchor comparison industry group, it 

would be a basis to adopt the anchor 

size standard or, in rare cases, a 

standard lower than the anchor. 

2. Startup costs. Startup costs reflect 

a firm’s initial size in an industry. New 

entrants to an industry must have 

sufficient capital to start and maintain a 

viable business. If firms entering a 

particular industry have greater capital 

requirements than firms do in industries 

in the anchor comparison group, this 

will form a basis for establishing a size 

standard higher than the anchor 

standard. In lieu of data on actual 

startup costs, SBA uses average assets 

size as a proxy measure to assess the 

levels of capital requirements for new 

entrants to an industry. 

SBA calculates the average assets size 

within a particular industry by applying 

the sales to total assets ratios from the 

Risk Management Association’s Annual 

Statement Studies, 2006–2008 to the 

average receipts size of firms in that 

industry. An industry with a 

significantly higher level of average 

assets size than that of the anchor 

comparison group is likely to have 

higher startup costs, which would 

support a size standard higher than the 

anchor size standard. Conversely, if the 

industry has a significantly smaller 

average assets size compared to the 

anchor comparison group, the anchor 

size standard, or in rare cases one lower 

than the anchor, would be considered 

appropriate. 

3. Industry competition. Industry 

competition is generally assessed by 

measuring the share of total industry 

receipts obtained by firms that are 

among the largest in an industry. In this 

proposed rule, SBA evaluates the share 

of industry receipts generated by the 

four largest firms in the industry. This 

is referred to as the ‘‘four-firm 

concentration ratio.’’ SBA then 

compares the four-firm concentration 

ratio for an industry under review to the 

average four-firm concentration ratio for 

industries in the anchor comparison 

group. If a significant share of economic 

activity within the industry is 

concentrated among a few relatively 

large companies, SBA would establish a 

size standard relatively higher than the 

anchor size standard. SBA would not 

consider the four-firm concentration 

ratio as an important factor in assessing 

a size standard if its value for an 

industry under review is less than 40 

percent. For industries in which the 

four largest firms account for 40 percent 

or more of an industry’s total receipts, 

SBA examines the average size of the 

four largest firms in determining a size 

standard. 

4. Distribution of firms by size. SBA 

examines the shares of industry total 

receipts accounted for by firms of 

different receipts and employment size 

classes in an industry. This is an 

additional factor SBA evaluates in 

assessing competition within an 

industry. If the preponderance of an 

industry’s economic activity is 

attributable to smaller firms, this would 

indicate that small businesses are 

competitive in that industry and 

supports adopting the anchor size 

standard. A size standard higher than 

the anchor size standard would be 

supported for an industry in which the 

distribution of firms indicates that most 

of the economic activity is concentrated 

among the larger firms. 

Concentration among firms is a 

measure of inequality of distribution. To 

evaluate the degree of inequality of 

distribution within an industry, SBA 

computes the Gini coefficient by 

constructing the Lorenz curve. The Gini 

coefficient values vary between zero and 

one. If receipts are distributed perfectly 

equally among all the firms in an 

industry, the value of the Gini 

coefficient would equal to zero. If an 

industry’s total receipts are attributed to 

a single firm, the Gini coefficient would 

equal to one. 


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SBA compares the degree of 

inequality of distribution for an industry 

under review with that for industries in 

the anchor comparison group. If an 

industry shows a higher degree of 

inequality of distribution (i.e., higher 

Gini coefficient) compared to industries 

in the anchor comparison industry 

group this would, all else being equal, 

warrant a higher size standard than the 

anchor. Conversely, for industries with 

similar or more equal distribution (i.e., 

similar or lower Gini coefficient values) 

than the anchor group, the anchor 

standard, or in some cases a standard 

lower than the anchor, would be 

adopted. 

5. Impact on SBA programs. SBA 

examines the possible impact a size 

standard change may have on the level 

of Federal small business assistance. 

This assessment most often focuses on 

the share of Federal contracting dollars 

awarded to small businesses in the 

industry in question. In general, if the 

share of Federal contracting dollars 

awarded to small businesses in an 

industry that receives a significant 

amount of Federal contracting dollars is 

significantly less than the small 

business share of the industry’s total 

receipts, a justification would exist for 

considering a size standard higher than 

the existing size standard. The disparity 

between the small business Federal 

market share and industry-wide share 

may be attributed to a variety of reasons, 

such as extensive administrative and 

compliance requirements associated 

with Federal contracts, the different 

skill set required on Federal contracts as 

compared to typical commercial 

contracting work, and the size of 

contracting requirements of Federal 

customers. These, as well as other 

factors, are likely to influence the type 

of firms within an industry that compete 

for Federal contracts and, hence, the 

firms receiving such contracts are 

expected to possess different 

characteristics than the average 

characteristics for all firms in that 

industry. By comparing the small 

business Federal contracting share with 

the industry-wide small business share, 

SBA includes in its size standards 

analysis the latest Federal contracting 

trends. This analysis may indicate a size 

standard larger than the current 

standard. 

For this proposed rule, SBA 

considered Federal procurement trends 

in the size standards analysis only if (1) 

the small business share of Federal 

contracting dollars is at least 10 

percentage points lower than the small 

business share of total industry receipts 

and (2) the amount of total Federal 

contracting averages $100 million or 

more during fiscal years 2006–2008 (the 

latest years for which complete Federal 

procurement data are available). SBA 

has selected these thresholds because 

they reflect a significant level of 

contracting in which a revision to a size 

standard may have an impact on 

expanding small business opportunities. 

Another factor that SBA evaluates is 

the impact of a proposed size standard 

on SBA’s loan programs, that is, the 

volume of SBA guaranteed loans within 

an industry and the size of firms 

obtaining those loans. This factor is 

examined to assess whether the existing 

or the proposed size standard for a 

particular industry may be restricting 

the level of financial assistance to small 

firms in that industry. If the analysis 

shows a reduction in financial 

assistance to small businesses, a higher 

size standard would be supportable. If 

small businesses have already been 

receiving significant amounts of 

financial assistance through SBA’s loan 

programs, or if the financial assistance 

has been provided mainly to businesses 

that are much smaller in size than the 

existing size standard, consideration of 

this factor for determining the size 

standard may not be necessary. 

Sources of Industry and Program Data 

The primary source of data for SBA’s 

industry analysis is a special tabulation 

of the 2002 Economic Census (see 

http://www.census.gov/econ/census02/) 

prepared by the U.S. Bureau of the 

Census (Census Bureau) for SBA. The 

special tabulation provides SBA with 

industry-specific data on the number of 

firms, number of establishments, 

number of employees, annual payroll 

and annual receipts of companies by the 

size of firm reporting the data to Census. 

That is, the data are by the size class of 

the total company; however, the data 

itself, within a particular size class, 

represents the company’s total data in 

that industry only. The special 

tabulation enables SBA to evaluate 

average firm size, the four-firm 

concentration ratio, and distribution of 

firms by receipts and employment size. 

In some cases, where Census data 

were not available due to disclosure 

prohibitions, SBA either estimated 

missing values using available relevant 

data or, examined data at a higher level 

of industry aggregation, such as at the 2- 

or 3-digit NAICS level. In some 

instances, SBA had to base its analysis 

only on those factors for which data 

were available or missing values could 

be estimated. Data sources and 

estimation procedures SBA uses in its 

size standards analysis are documented 

in detail in the ‘‘SBA Size Standards 

Methodology’’ paper, which is available 

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

Sales to total assets ratios used to 

calculate average assets size are from the 

Risk Management Association’s Annual 

Statement Studies, 2006–2008. 

To evaluate Federal contracting 

trends, SBA examined Federal contract 

award data for fiscal years 2006–2008 

from the U.S. General Service 

Administration’s Federal Procurement 

Data System—Next Generation (FPDS– 

NG). SBA’s internal data on its 

guaranteed loan programs for fiscal 

years 2006–2008 were analyzed to 

assess the impact on financial assistance 

to small businesses. 

Dominant in Field of Operation 

Section 3(a) of the Small Business Act 

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

business concern as one that is (1) 

independently owned and operated, (2) 

not dominant in its field of operation, 

and (3) within a specific small business 

definition or size standard established 

by the SBA Administrator. SBA 

considers as part of its evaluation of a 

size standard whether a business 

concern at a proposed size standard 

would be considered dominant in its 

field of operation. For this, SBA 

generally examines the industry’s 

market share of firms at the proposed 

standard or other factors that may 

indicate whether a firm can exercise a 

major controlling influence on a 

national basis in which significant 

numbers of business concerns are 

engaged. If SBA’s analysis indicates that 

a proposed size standard would include 

a dominant firm, a lower size standard 

would be considered to exclude the 

dominant firm from being defined as 

small. 

Selection of Size Standards 

To simplify size standards, for the 

ongoing comprehensive size standards 

review, SBA has proposed to select a 

size standard for an industry from a 

limited number of receipts based size 

standard levels. For many years, SBA 

has been concerned about the 

complexity of determining small 

business status caused by a large 

number of varying receipts based size 

standards (see 69 FR 13130, March 4, 

2004, and 57 FR 62515, December 31, 

1992). Currently, there are 32 different 

levels of receipts based size standards, 

ranging from $0.75 million to $35.5 

million, with many of those levels 

applying to one or just a few industries 

only. SBA believes that such a large 

number of variations with small 

variations are both unnecessary and 

difficult to justify analytically. 

Simplifying the administration of SBA’s 


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size standards to a fewer number of size 

standard levels will produce more 

common size standards for businesses 

operating in multiple related industries 

and greater consistency in the size 

standards among industries that are 

similar in their economic 

characteristics. 

This proposed rule, therefore, applies 

one of eight receipts based size 

standards to each industry in Sector 81, 

Other Services. These eight ‘‘fixed’’ size 

standard levels are $5 million, $7 

million, $10 million, $14 million, $19 

million, $25.5 million, $30.0 million 

and $35.5 million. These eight receipts 

based size standard levels are 

established by taking into consideration 

the minimum, maximum, and the more 

commonly used receipts based size 

standards. Currently, the more 

commonly used receipts based size 

standards cluster around the following 

six levels –$2.5 million to $4.5 million, 

$7 million, $9.0 million to $10 million, 

$12.5 million to $14.0 million, $25.0 

million to $25.5 million, and $33.5 

million to $35.5 million. SBA has 

selected $7 million as one of eight fixed 

levels of receipts based size standards 

because this is also an anchor standard 

for receipts based standards. A lower or 

minimum receipts based size level is 

established at $5 million. Excluding 

monetary standards for agriculture and 

those based on net commissions (such 

as real estate brokers and travel agents), 

$5 million is in the close neighborhood 

of the current minimum receipts based 

standard of $4.5 million. Among the 

higher levels size clusters, $10 million, 

$14 million, $25.5 million, and $35.5 

million are selected as other four levels 

of the fixed size standards. Because of 

a large gap between two of the size 

standard intervals, SBA has established 

intermediate levels of $19 million 

between $14 million and $25.5 million, 

and $30 million between $25.5 million 

and $35.5 million. These two 

intermediate size levels reflect roughly 

similar proportional differences 

between the two successive size 

standard levels. 

In a further effort to simplify size 

standards, SBA may propose a common 

size standard for certain closely related 

group of industries. Although the size 

standard analysis may support a specific 

size standard level for each industry, 

SBA believes that establishing different 

size standards for closely related 

industries may not be appropriate. For 

example, in cases where many of the 

same businesses operate in the same 

two industries, establishing the common 

size standard would better reflect the 

industry marketplace than establishing 

separate size standards for each of those 

industries. This situation has led SBA to 

establish a common size standard for 

the information technology (IT) services 

industries (NAICS 541511, NAICS 

541112, NAICS 541513 and NAICS 

541519), even though the industry data 

might support a distinct size standard 

for each industry. Businesses engaged in 

IT related services typically perform 

activities in two or more other related 

industries. Consequently, SBA has 

continued to use a common size 

standard for Computer and Office 

Machine Repair Maintenance industry 

in the Other Services Sector (NAICS 

811211) and Computer Systems Design 

and Related Services sector (NAICS 

541511–541519). Whenever SBA 

proposes a common size standard for 

closely related industries it will provide 

a justification for that in the proposed 

rule. 

Evaluation of Industry Structure 

SBA has evaluated the structure of 

each industry in the Other Services 

Sector to assess the appropriateness of 

the current size standards. As described 

above, SBA compared data on the 

economic characteristics of each 

industry in that Sector to the average 

characteristics of industries in two 

comparison groups. The first 

comparison group is comprised of all 

industries with $7.0 million size 

standards—referred to as the ‘‘receipts 

based anchor comparison group.’’ 

Because the goal of SBA’s size review is 

to assess whether a specific industry’s 

size standard should be at or different 

from the anchor size standard, this is 

the most logical set of industries to 

group together for the industry analysis. 

In addition, this group includes a 

sufficient number of firms to provide a 

meaningful assessment and comparison 

of industry characteristics. 

If the characteristics of an industry 

under review are similar to the average 

characteristics of industries in the 

anchor comparison group, the anchor 

size standard would be considered an 

appropriate standard for that industry. If 

an individual industry’s structure is 

significantly different from that of the 

anchor group, a size standard lower or 

higher than the anchor size standard 

would be selected. The level of the new 

size standard is determined based on 

the difference between the 

characteristics of the anchor comparison 

group and a second industry 

comparison group. As described above, 

the second comparison group for 

receipts based standards consists of 

industries with the highest receipts 

based size standards, ranging from $23 

million to $35.5 million, with the 

average size standard for the group 

equaling $29 million. SBA refers to this 

group of industries as the ‘‘higher level 

receipts based size standard comparison 

group.’’ Differences in industry 

structure between an industry under 

review and the industries in the two 

comparison groups are determined by 

comparing data on each of the industry 

factors, including average firm size, 

average assets size, four-firm 

concentration ratio, and the Gini 

coefficient of distribution of firms by 

size. Table 1 shows two measures of the 

average firm size (simple and weighted), 

average assets size, four-firm 

concentration ratio, average receipts of 

the four largest firms, and the Gini 

coefficient for both anchor level and 

higher level comparison groups for 

receipts based size standards. 

TABLE 1—AVERAGE CHARACTERISTICS OF RECEIPTS BASED COMPARISON GROUPS

Receipts based comparison group 

Avg. firm size 

($ million) Avg. assets 

size 

($ million) 

Avg. four-firm 

concentration 

ratio (%) 

Avg. receipts of 

four largest 

firms 

($ million) a

Gini coefficient Simple 

Average 

Weighted 

Average 

Anchor Level ............................................................ 1.19 17.64 0.71 18.7 189.9 0.599 

Higher Level ............................................................. 4.77 52.27 2.05 22.3 639.4 0.725 

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


pwalker on DSK8KYBLC1PROD with PROPOSALS
53946 Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Proposed Rules 

Derivation of Size Standards Based on 

Industry Factors 

For each of the industry factors shown 

in Table 1, SBA derives a separate size 

standard based on the amount of 

differences between their values for an 

industry under review and those for the 

two comparison groups. An estimated 

size standard that is supported by each 

industry factor is derived by comparing 

its value for a specific industry under 

review to the corresponding value for 

the two comparison groups. If the 

industry value for a particular factor is 

near that for the anchor comparison 

group, the $7.0 million anchor size 

standard would be considered 

appropriate for that factor. 

If an industry’s value for a factor is 

significantly above or below the anchor 

comparison group value, a size standard 

above or below the $7.0 million anchor 

size would be warranted. The level of 

the new size standard in these cases is 

derived based on the proportional 

difference between the industry value 

and the values for the two comparison 

groups. 

For example, if an industry’s simple 

average receipts size equals $3.0 

million, SBA’s analysis would support a 

size standard of $19 million. The $3.0 

million level is 50.6 percent between 

the average firm size of $1.19 million for 

the anchor comparison group and $4.77 

million for the higher level comparison 

group (($3.00 million ¥ $1.19 million) 

÷ ($4.77 million ¥ $1.19 million) = 

0.506 or 50.6%). This proportional 

difference is applied to the difference 

between the $7.0 million anchor size 

standard and average size standard of 

$29 million for the higher level size 

standard group and then added to $7.0 

million to estimate a size standard of 

$18.12 million ([{$29.0 million ¥ $7.0 

million} * 0.506] + $7.0 million = 

$18.12 million). The final step rounds 

the estimated size standard of $18.12 

million to the nearest fixed size 

standard level, in this case to $19 

million. 

SBA applies the above method of 

calculation to derive a size standard for 

each industry factor. Detailed formulas 

involved in these calculations are 

presented in ‘‘SBA Size Standards 

Methodology’’ which is available at 

http://www.sba.gov/size. Table 2 shows 

ranges of values for each industry factor 

and the levels of size standards 

supported by those values. 

TABLE 2—VALUES OF INDUSTRY FACTORS AND SUPPORTED SIZE STANDARDS

If simple avg. receipts size 

($ million) 

Or if weighted avg. 

receipts size 

($ million) 

Or if avg. assets 

size 

($ million) 

Or if avg. receipts 

of largest four firms 

($ million) 

Or if Gini coefficient 

Then size standard 

is 

($ million) 

<1.03 ............................................ <16.07 <0.65 <169.4 <0.593 5.0 

1.03 to1.43 ................................... 16.07 to 20.00 0.65 to 0.80 169.4 to 220.5 0.593 to 0.608 7.0 

1.44 to 2.00 .................................. 20.01 to 25.51 0.81 to 1.02 220.6 to 292.0 0.609 to 0.628 10.0 

2.01 to 2.74 .................................. 25.52 to 32.59 1.03 to 1.29 292.1 to 384.0 0.629 to 0.653 14.0 

2.75 to 3.67 .................................. 32.60 to 41.65 1.30 to 1.64 384.1 to 501.5 0.654 to 0.686 19.0 

3.68 to 4.57 .................................. 41.66 to 50.30 1.65 to 1.97 501.6 to 613.8 0.687 to 0.718 25.5 

4.58 to 5.38 .................................. 50.31 to 58.17 1.98 to 2.28 613.9 to 716.1 0.719 to 0.746 30.0 

>5.38 ............................................ >58.17 >2.28 >716.1 >0.746 35.5 

Table 3 shows the results of analyses 

of industry data and latest Federal 

contracting trends for each industry in 

Sector 81, Other Services. Each NAICS 

industry row in columns 2, 3, 4, 6, 7, 

and 8 shows two numbers. The upper 

number is the value for the industry 

factor shown on the top of the column, 

while the lower number is the size 

standard supported by that factor. For 

the four-firm concentration ratio, a size 

standard is estimated based on the 

average receipts of the top four firms if 

its value is 40 percent or more. If the 

four-firm concentration ratio for an 

industry is less than 40 percent, no size 

standard is estimated for that factor and 

column 5 is left blank. The value for 

Federal contracting factor in column 8 

is shown only for industries that 

averaged $100 million or more annually 

in Federal contracting dollars during 

fiscal years 2006–2008. A size standard 

for that factor is derived only if the 

small business share of total Federal 

contracting dollars is 10 percentage 

points less than the small business share 

of industry’s total receipts. Otherwise 

column 8 is also left blank. Column 9 

shows the proposed or revised size 

standard for each industry in the Other 

Services Sector, calculated as the 

average of size standards supported by 

each industry factor and rounded to the 

nearest fixed size level. Analytical 

details involved in the averaging 

procedure are described in the SBA 

‘‘Size Standards Methodology’’ paper 

which is available at http:// 

www.sba.gov/size. For comparison, the 

current size standards for industries in 

Sector 81 are also shown in column 10 

of Table 3. 

TABLE 3—SIZE STANDARDS SUPPORTED BY EACH INDUSTRY FACTOR

[In millions of dollars] 

(1) 

NAICS 

(2) 

Simple average firm 

size 

(3) 

Weighted 

average 

firm size 

(4) 

Average 

assets 

size 

(5) 

Four-firm 

ratio 

(%) 

(6) 

Four-firm 

average 

size 

(7) 

Gini coefficient 

(8) 

Federal 

contract 

factor (%) 

(9) 

Revised 

size 

standard 

(10) 

Current 

size 

standard 

811111 ....................................... $0.4 $1.3 $0.1 1.9 $150.8 0.154 ................ $5.0 $7.0 

General Automotive Repair ....... $5.0 $5.0 $5.0 ................ ................ $5.0 ................ ................ ................

811112 ....................................... $0.4 $1.4 $0.1 4.6 $14.3 0.142 ................ $5.0 $7.0 

Automotive Exhaust System Repair .......................................... $5.0 $5.0 $5.0 ................ ................ $5.0 ................ ................ ................

811113 ....................................... $0.4 $1.0 0.066 $5.0 $7.0 

Automotive Transmission Repair $5.0 $5.0 $5.0 

811118 ....................................... $0.4 $2.0 $0.1 5.8 $39.5 0.210 ¥86.6 $7.0 $7.0 


pwalker on DSK8KYBLC1PROD with PROPOSALS
Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Proposed Rules 53947 

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

[In millions of dollars] 

(1) 

NAICS 

(2) 

Simple average firm 

size 

(3) 

Weighted 

average 

firm size 

(4) 

Average 

assets 

size 

(5) 

Four-firm 

ratio 

(%) 

(6) 

Four-firm 

average 

size 

(7) 

Gini coefficient 

(8) 

Federal 

contract 

factor (%) 

(9) 

Revised 

size 

standard 

(10) 

Current 

size 

standard 

Other Automotive Mechanical 

and Electrical Repair and 

Maintenance ........................... $5.0 $5.0 $5.0 $5.0 $14.0 

811121 ....................................... $0.7 $2.3 $0.2 2.5 $142.2 0.252 $5.0 $7.0 

Automotive Body, Paint, and Interior Repair and Maintenance $5.0 $5.0 $5.0 $5.0 

811122 ....................................... $0.8 $51.3 $0.3 27.6 $260.8 0.533 $10.0 $7.0 

Automotive Glass Replacement 

Shops ..................................... $5.0 $30.0 $5.0 $5.0 

811191 ....................................... $0.8 $13.2 17.3 $169.5 0.473 $5.0 $7.0 

Automotive Oil Change and Lubrication Shops ....................... $5.0 $5.0 $5.0 

811192 ....................................... $0.4 $2.0 $0.5 6.1 $78.2 0.262 $5.0 $7.0 

Car Washes ............................... $5.0 $5.0 $5.0 $5.0 

811198 ....................................... $0.7 $11.8 $0.2 24.0 $95.6 0.535 ¥18.5 $7.0 $7.0 

All Other Automotive Repair and 

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

811211 ....................................... $0.4 $6.9 27.4 $101.7 0.482 $5.0 $7.0 

Consumer Electronics Repair 

and Maintenance .................... $5.0 $5.0 $5.0 

811212 ....................................... $1.2 $18.1 $0.4 22.4 $356.8 0.678 ¥25 $14.0 $25.0 

Computer and Office Machine 

Repair and Maintenance ........ $7.0 $7.0 $5.0 $19.0 $30.0 

811213 ....................................... $1.3 $11.5 0.587 ¥38.0 $10.0 $7.0 

Communication Equipment Repair and Maintenance ............. $7.0 $5.0 23.8 $120.5 $5.0 $14.0 

811219 ....................................... $1.9 $30.6 $0.8 42.4 $540.1 0.731 ¥11.6 $19.0 $7.0 

Other Electronic and Precision 

Equipment Repair and Maintenance ...................................... $10.0 $14.0 $7.0 $25.5 $30.0 $10.0 

811310 ....................................... $0.8 $6.5 $0.3 4.8 $233.8 0.494 ¥27.4 $7.0 $7.0 

Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance ...................................... $5.0 $5.0 $5.0 $5.0 10.0 

811411 ....................................... $0.3 $0.6 3.7 $6.0 0.064 $5.0 $7.0 

Home and Garden Equipment 

Repair and Maintenance ........ $5.0 $5.0 $5.0 

811412 ....................................... $0.8 $52.4 $0.2 0.0 $0.0 0.646 $14.0 $7.0 

Appliance Repair and Maintenance ...................................... $5.0 $30.0 $5.0 $14.0 

811420 ....................................... $0.2 $0.7 2.1 $6.8 0.067 $5.0 $7.0 

Reupholstery and Furniture Repair .......................................... $5.0 $5.0 $5.0 

811430 ....................................... $0.1 $0.5 7.7 $3.6 0.044 $5.0 $7.0 

Footwear and Leather Goods 

Repair ..................................... $5.0 $5.0 $5.0 

811490 ....................................... $0.3 $1.6 $0.1 0.0 $0.0 0.263 $5.0 $7.0 

Other Personal and Household 

Goods Repair and Maintenance ...................................... $5.0 $5.0 $5.0 

812111 ....................................... $0.1 $7.7 16.2 $20.4 0.207 $5.0 $7.0 

Barber Shops ............................. $5.0 $5.0 $5.0 

812112 ....................................... $0.2 $23.0 $0.1 10.4 $391.6 0.246 $5.0 $7.0 

Beauty Salons ............................ $5.0 $10.0 $5.0 $5.0 

812113 ....................................... $0.1 $0.3 1.9 $4.2 0.019 $5.0 $7.0 

Nail Salons ................................. $5.0 $5.0 $5.0 

812191 ....................................... $1.3 $101.0 60.2 $253.9 0.802 $19.0 $7.0 

Diet and Weight Reducing Centers .......................................... $7.0 $35.5 $10.0 35.5 

812199 ....................................... $0.2 $1.8 5.5 $27.5 0.175 $5.0 $7.0 

Other Personal Care Services ... $5.0 $5.0 $5.0 

812210 ....................................... $1.0 $48.9 $0.6 19.4 $536.7 0.353 $7.0 $7.0 

Funeral Homes and Funeral 

Services .................................. $5.0 $25.5 $5.0 $5.0 

812220 ....................................... $0.7 $54.8 $1.4 36.6 $295.8 0.668 $19.0 $7.0 

Cemeteries and Crematories ..... $5.0 $30.0 $19.0 $19.0 


pwalker on DSK8KYBLC1PROD with PROPOSALS
53948 Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Proposed Rules 

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

[In millions of dollars] 

(1) 

NAICS 

(2) 

Simple average firm 

size 

(3) 

Weighted 

average 

firm size 

(4) 

Average 

assets 

size 

(5) 

Four-firm 

ratio 

(%) 

(6) 

Four-firm 

average 

size 

(7) 

Gini coefficient 

(8) 

Federal 

contract 

factor (%) 

(9) 

Revised 

size 

standard 

(10) 

Current 

size 

standard 

812310 ....................................... $0.3 $36.3 $0.2 28.6 $247.6 0.427 $7.0 $7.0 

Coin-Operated Laundries and 

Drycleaners ............................ $5.0 $19.0 $5.0 $5.0 

812320 ....................................... $0.3 $1.7 $0.1 2.6 $50.9 0.187 $5.0 $4.5 

Drycleaning and Laundry Services (except Coin-Operated) .. $5.0 $5.0 $5.0 $5.0 

812331 ....................................... $3.9 $38.3 $1.9 31.6 $243.8 0.768 $30.0 $14.0 

Linen Supply .............................. $25.5 $19.0 $25.5 $35.5 

812332 ....................................... $9.7 $157.3 $5.7 61.1 $938.1 0.864 $35.5 $14.0 

Industrial Launderers ................. $35.5 $35.5 $35.5 $35.5 $35.5 

812910 ....................................... $0.2 $2.0 6.3 $23.3 0.118 $5.0 $7.0 

Pet Care (except Veterinary) 

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

812921 ....................................... $1.7 $103.5 $0.7 45.3 $354.3 0.725 $19.0 $7.0 

Photo Finishing Laboratories 

(except One-Hour) .................. $10.0 $35.5 $7.0 $14.0 $30.0 

812922 ....................................... $0.5 $74.5 34.0 $61.3 0.391 $14.0 $7.0 

One-Hour Photo Finishing ......... $5.0 $35.5 $5.0 

812930 ....................................... $2.8 $122.2 $2.7 47.4 $819.1 0.833 $35.5 $7.0 

Parking Lots and Garages ......... $19.0 $35.5 $35.5 $35.5 $35.5 

812990 ....................................... $0.4 $11.8 $0.2 19.7 $248.3 0.422 $5.0 $7.0 

All Other Personal Services ....... $5.0 $5.0 $5.0 $5.0 

813211 ....................................... $3.5 $47.6 $15.0 15.3 $1,021.8 0.795 $30.0 $7.0 

Grantmaking Foundations .......... $19.0 $25.5 $35.5 $35.5 

813212 ....................................... $3.1 $18.4 $2.3 24.0 $464.2 0.730 $25.5 $7.0 

Voluntary Health Organizations $19.0 $7.0 $35.5 $30.0 

813219 ....................................... $4.7 $84.5 14.6 $432.8 0.821 $35.5 $7.0 

Other Grant Making and Giving 

Services .................................. $30.0 $35.5 35.5 

813311 ....................................... $2.3 $189.8 46.5 $460.7 0.794 $25.5 $7.0 

Human Rights Organizations ..... $14.0 $35.5 $19.0 35.5 

813312 ....................................... $1.1 $43.6 $1.5 22.8 $249.5 0.644 $14.0 $7.0 

Environment, Conservation and 

Wildlife Organizations ............. $7.0 $25.5 $19.0 14.0 

813319 ....................................... $0.8 $8.2 $0.7 11.8 $109.9 0.537 $5.0 $7.0 

Other Social Advocacy Organizations .................................... $5.0 $5.0 $7.0 $5.0 

813410 ....................................... $0.5 $5.7 $0.7 2.6 $96.4 0.393 $5.0 $7.0 

Civic and Social Organizations .. $5.0 $5.0 $7.0 $5.0 

813910 ....................................... $1.0 $13.8 $0.9 3.9 $168.7 0.601 $7.0 $7.0 

Business Associations ............... $7.0 $5.0 $10.0 $7.0 

813920 ....................................... $1.6 $17.2 $1.6 6.4 $176.6 0.672 $14.0 $7.0 

Professional Organizations ........ $10.0 $7.0 $19.0 $19.0 

813990 ....................................... $0.7 $19.0 $0.8 8.3 $315.6 0.465 $7.0 $7.0 

Other Similar Organizations (except Business, Professional, 

Labor, and Political Organizations) ....................................... $5.0 $7.0 $10.0 $5.0 

As can be seen in Table 3, the results 

of SBA analyses of industry and Federal 

contracting data would support 

reducing the current size standards for 

20 of 48 industries in the Other Services 

Sector. However, SBA believes that 

lowering size standard for those 

industries would not be in the best 

interests of small businesses in these 

difficult times when the economy is in 

a deep recession. 

Aiming to promote economic recovery 

and to preserve and create jobs the U.S. 

Congress passed and the President 

signed the American Recovery and 

Reinvestment Act of 2009 (Recovery 

Act). The purposes and goals of the 

Recovery Act are to promote economic 

recovery and to preserve and create jobs. 

Under the Recovery Act, SBA has 

changed its various programs to assist 

small businesses, including the 

following: (1) Temporary reduction or 

elimination of fees in the 7(a) and 504 

loan guarantee programs; (2) creation of 

a temporary 90 percent guarantee loan 

program; (3) creation of a temporary 

Secondary Market Guarantee Authority 

to provide a Federal guarantee for pools 

of first lien 504 loans that are to be sold 

to third-party investors; (4) new 

authority for refinancing community 

development loans under the 504 

program; (5) revision of the job creation 

goals of the 504 program; (6) 

simplification of the maximum leverage 

limits and aggregate investment limits 

required of Small Business Investment 

Companies; (7) temporary authority to 

provide loans on a deferred basis to 

viable small business concerns that have 

a qualifying small business loan and are 

experiencing immediate financial 

hardship; (8) temporary increase in the 

surety bond maximum amount; (9) 


pwalker on DSK8KYBLC1PROD with PROPOSALS
Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Proposed Rules 53949 

establishment of a Secondary Market 

Lending Authority to make loans to 

systemically important broker dealers in 

SBA’s 7(a) secondary market; and 10) 

application of SBA’s Certified 

Development Company (CDC) 

alternative size standard to its 7(a) 

Business Loan Program (see 13 CFR 

121.301). 

SBA believes that to reduce size 

standards and thereby reduce eligibility 

for those programs, or to reduce the 

number of firms that can participate in 

financial and Federal contracting 

assistance programs would run counter 

to what it is trying to do for small 

businesses. Reducing size eligibility for 

Federal contracting opportunities would 

not preserve or create more jobs; rather, 

it would have the opposite effect. 

Therefore, SBA has decided not to 

propose to reduce the size standards for 

those industries. SBA has decided to 

retain the current size standards for 

those industries. Further, SBA does not 

anticipate that it will propose to lower 

size standards after the Recovery Act 

terminates on September 30, 2010. SBA 

intends for the proposed size standards, 

if adopted, to remain in effect unless 

and until it receives information or data 

that suggests a change is needed. 

Evaluation of Federal Contracting and 

SBA Loan Data 

Besides industry structure, SBA also 

evaluates Federal contracting data to 

assess the extent to which small 

businesses are successful in getting 

Federal contracts under the existing size 

standards. However, the available data 

on Federal contracting are limited to 

identifying businesses as small or other 

than small, with no information on 

exact size of businesses receiving 

Federal contracts in order to conduct a 

more precise analysis. 

Given limited data, for the current 

comprehensive size review, SBA has 

decided to designate a size standard at 

one level higher than their current size 

standard for industries where the small 

business share of total Federal 

contracting dollars is between 10 and 30 

percentage points lower than their 

shares in total industry receipts and at 

two levels higher than the current size 

standard if the difference is higher than 

30 percentage points. 

SBA has chosen not to designate a 

size standard for the Federal contracting 

factor alone that is higher than two 

levels above the current size standard 

because doing so would result in most 

cases of designating a size standard 

more than twice the current size 

standard. Given the limitations of the 

FPDS data, and the complex 

relationships among a number of 

variables affecting small business 

participation in the Federal 

marketplace, SBA believes that a larger 

adjustment to size standards based on 

Federal contracting activity should be 

based on a more detailed analysis of the 

impact of any subsequent revision to the 

current size standard. In limited 

situations, however, SBA may conduct 

a more extensive examination of Federal 

contracting experience to support a 

different size standard than indicated by 

this general rule to take into 

consideration significant and unique 

aspects of small business 

competitiveness in the Federal contract 

market. SBA welcomes comment on its 

methodology of incorporating the 

Federal contracting factor in the size 

standard analysis and suggestions for 

alternative methods and other relevant 

information on small business 

experience in the Federal contract 

market. 

Five industries in Sector 81, Other 

Services, received an average of $100 

million or more annually in Federal 

contracting dollars during fiscal years 

2006–2008. These industries include 

NAICS 811118, NAICS 811198, NAICS 

811213, NAICS 811219, and NAICS 

811310. Those are the industries that 

have a Federal contracting factor in 

column 8 of Table 3. In each of these 

five industries, the small business share 

of Federal contracting dollars was more 

than 10 percentage points lower than 

small business share of industry’s total 

receipts. Therefore, as shown in Table 3, 

a separate size standard was estimated 

for the Federal contracting factor for 

industries. In all cases, the estimated 

size standard for the Federal contracting 

market was higher than the current 

standard. The latest data show that 

Federal contracting activity is 

insignificant for most of the industries 

in Sector 81 and, for a few industries 

where it is significant, small businesses 

seem to be struggling in the Federal 

marketplace relative to their share in 

industry’s total sales. 

Before deciding on an industry’s size 

standard, SBA also considers the impact 

of new or revised standards on SBA’s 

loan programs. SBA examined 7(a) Loan 

Program data for fiscal years 2006–2008 

to assess whether the existing or 

proposed size standards need further 

adjustments to ensure credit 

opportunities for small businesses 

though that program. For the Other 

Services industries, primarily small 

businesses that are much smaller than 

the current size standards use the 7(a) 

Loan Program. Based on that analysis 

and SBA’s decision not to reduce any 

size standards in the proposed rule 

under the current economic conditions, 

no size standard needs an adjustment. 

Other Considerations 

SBA has decided not to review the 

size standard for NAICS 811212, the 

Computer and Office Machine Repair 

and Maintenance industry, at this time 

and will continue to apply the current 

$25 million size standard. The history of 

the Computer and Office Machine 

Repair industry explains the reasons for 

this decision. Under the former 

Standard Industrial Classification (SIC) 

System, SBA had established a common 

size standard for all industries in Sector 

737, ‘‘Computer Programming, Data 

Processing, and Other Computer Related 

Services’’ (56 FR 38364, August 13, 

1991 and 57 FR 27907, June 23, 1992). 

In 1997, the NAICS replaced the SIC 

System and moved most of the 

industries in Sector 737 industry to the 

Sector 54, ‘‘Professional, Scientific, and 

Technical Services.’’ However, the 

Computer Maintenance and Repair 

activity was moved to Sector 81 and was 

combined with Computer and Office 

Machine Repair Maintenance services to 

form NAICS 811212. Because Computer 

Maintenance and Repair was the largest 

component of the new industry, SBA 

continued to apply the size standard for 

computer services (64, FR 57188. 

October 22, 1999 and 65 FR 30836, May 

15, 2000). SBA continues to believe that 

a common size standard should apply to 

all of the computer services related 

industries. 

SBA plans to analyze the industries 

within the NAICS Sector 54 in the near 

future and will examine at that time 

whether to retain the current $25 

million size standard for the Computer 

Services related industries (NAICS 

541511–541519) or to propose a 

different size standard. SBA welcomes 

comments on whether it should 

continue to apply the same size 

standard for computer services to the 

Computer and Office Machine Repair 

Maintenance industry or consider a 

different size standard based on its 

industry characteristics. 

SBA does not have industry data for 

three industries in Sector 81—Religious 

Organizations (NAICS 813110), Labor 

Unions and Similar Labor Organizations 

(NAICS 813930), and Political 

Organizations (NAICS 813940). SBA’s 

primary source of industry data is a 

special tabulation of 2002 Economic 

Census obtained from the Census 

Bureau. However, the Census Bureau 

does not collect data on these industries 

as part of the Economic Census (See 

‘‘Religious, Grantmaking, Civic, 

Professional, and Similar Organizations, 

2002’’, Other Services (Except Public 


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53950 Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Proposed Rules 

Administration), Industry Series, EC02– 

811–03, November 2004). In the absence 

of relevant industry data on 

organizations operating in these 

industries, SBA is proposing to retain 

the $7 million current size standard. 

Although entities in these industries are 

not-for-profit concerns, a need exists for 

a numerical size standard for purposes 

of the Regulatory Flexibility Act. SBA 

welcomes comments on the suitability 

of continuing the $7 million size 

standard for these industries and 

possible sources of alternative data. 

Summary of size standards changes 

Based on the analyses of currently 

available data industry structure and 

Federal contracting data, SBA proposes 

to increase size standards for 18 of 47 

industries in Sector 81, Other Services, 

reviewed in this proposed rule. These 

industries and their proposed size 

standards are shown in Table 4. The 

analyses supported retaining the 

existing standards for 10 industries in 

that Sector. 

SBA’s analyses supported a decrease 

to the current size standard for 19 

industries in Other Services. However, 

as discussed above, SBA feels that 

proposing to lower small business size 

standards would be inconsistent with its 

ongoing effort to promote small business 

assistance under the Recovery Act. 

Therefore, SBA proposes to retain the 

current size standards for those 

industries. SBA intends for the 

proposed size standards, if adopted, to 

remain in effect unless and until it 

receives information or data that 

suggests a change is needed. 

TABLE 4—SUMMARY OF PROPOSED SIZE STANDARD REVISIONS

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 

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

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

Evaluation of Dominance in Field of 

Operation 

SBA has determined that for each 

industry in Sector 81, Other Services, no 

firm at or below the proposed size 

standard would be large enough to 

dominate its field of operation. A firm 

at the proposed size standard in each of 

these industries generates less than one 

percent of total industry receipts. This 

level of market share effectively 

precludes a firm at or below the 

proposed size standard from exerting a 

controlling effect on this industry. 

Request for Comments 

SBA invites public comments on the 

proposed rule, especially on the 

following areas. 

1. In an effort to simplify size 

standards, for this proposed rule, SBA 

has proposed a set of eight fixed size 

levels for receipts based size standards: 

$5.0 million, $7.0 million, $10.0 

million, $14.0 million, $19.0 million, 

$25.5 million, $30.0 million, and $35.5 

million. SBA invites comments on 

whether simplification of size standards 

in this way is necessary and if these 

proposed fixed size levels are 

appropriate, or suggestions on 

alternative approaches to simplifying 

small business size standards. 

2. For industries in Sector 81, Other 

Services, SBA has proposed receipts 

based size standards ranging from $5 

million to $35.5 million. SBA seeks 

feedback on whether the levels of size 

standards it proposes seem right given 

the economic characteristics of each 

industry. SBA also seeks feedback and 

suggestions on alternative standards, if 

they would be more appropriate, 

including whether an employee based 

standard for certain industries is a more 

suitable measure of size, and what that 

employee level should be. 

3. SBA’s proposed standards are 

based on its evaluation of five primary 

factors—average firm size, average 

assets size (as proxy of startup costs and 

entry barriers), four-firm concentration 

ratio, distribution of firms by size, and 

the level and small business share of 

Federal contracting dollars. SBA 

welcomes comments on these and other 

factors that interested parties believe are 

important to consider for describing 

industry characteristics when SBA 

evaluates its size standards. Please 

provide relevant data sources, if 

available. 

4. SBA derives its proposed standards 

by applying equal weights to each of the 

five primary factors in all industries. 

Should SBA continue with the equal 

weighting of each factor or should it 

give more weight to one or more factors 

in size standard determination of certain 

industries? If it is more appropriate to 

weigh some factors more than others, 

SBA welcomes suggestions on specific 

weights for each factor along with 

supporting information. 

5. For some industries, SBA proposes 

to increase the existing size standards 

by a large amount, while for others the 

proposed increase is less. Should SBA, 

as a policy, limit the amount of increase 

or decrease to a size standard? Also 

should SBA, as a policy, establish 

certain minimum or maximum values 

for its size standards? SBA seeks 

suggestions on appropriate levels of 

change to size standards and on their 

minimum or maximum levels. 


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6. For analytical simplicity and 

efficiency, SBA has refined its size 

standard methodology to obtain a single 

value as a proposed size standard 

instead of a range of values as was 

SBA’s methodology in its past size 

regulations. SBA welcomes any 

comments on this procedure and 

suggestions for alternative methods. 

Public comments on above issues are 

very critical for SBA to validate its size 

standard methodology and move 

forward in a timely manner with review 

of size standards of other industry 

groups under the two-year 

comprehensive size review. 

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 

proposed rule is a ‘‘significant’’ 

regulatory action for purposes of 

Executive Order 12866. Accordingly, 

the next section contains SBA’s 

Regulatory Impact Analysis. This is not 

a major rule, however, under the 

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

Regulatory Impact Analysis 

1. Is there a need for the regulatory 

action? 

SBA believes that adjustments to 

certain size standards in Sector 81, 

Other Services, are needed to better 

reflect the economic characteristics of 

small businesses in those industries. 

SBA’s mission is to aid and assist small 

businesses through a variety of 

financial, procurement, business 

development, and advocacy programs. 

To assist effectively the intended 

beneficiaries of these programs, SBA 

must establish distinct definitions of 

which businesses are deemed small 

businesses. The Small Business Act (15 

U.S.C. 632(a)) delegates to SBA’s 

Administrator the responsibility for 

establishing small business definitions. 

The Act also requires that small 

business definitions vary to reflect 

industry differences. The 

supplementary information section of 

this proposed rule explains SBA’s 

methodology for analyzing a size 

standard for a particular industry. 

2. What are the potential benefits and 

costs of this regulatory action? 

The most significant benefit to 

businesses obtaining small business 

status 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 

preference programs for small 

businesses. Federal procurement 

provides opportunities for small 

businesses under SBA’s business 

development programs, such as 8(a), 

Small Disadvantaged Businesses (SDB), 

small businesses located in Historically 

Underutilized Business Zones 

(HUBZone), women owned small 

businesses, 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 businesses. 

Of 18 industries in Sector 81 for 

which SBA has proposed to increase 

their size standards, 12 are for-profit 

industries and six are non-profits. In the 

12 for-profit industries for which SBA 

has proposed to increase their size 

standards, about 325 additional firms 

are estimated to 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, about 1,175 additional firms, 

representing 4.2 percent of total firms 

and 16.9 percent of total sales in those 

industries, are estimated to qualify as 

small organizations (a non-profit cannot 

qualify as a small business). 13 CFR 

121.105. In the 19 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 proposed 

lowering 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 

the proposed 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 proposed standards. 

The benefits of increasing certain size 

standards to a more appropriate level 

would accrue to three groups: (1) 

Businesses that benefit by gaining small 

business status from the higher size 

standard that also use small business 

assistance programs; (2) growing small 

businesses that may exceed the current 

size standards in the near future and 

that will retain small business status 

from the higher size standard; 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 was 

accounted for by two of the 18 

industries for which size standards have 

been proposed to increase, 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 would likely 

result in a lower price to the 

Government for procurements reserved 

for small businesses, but SBA is not able 

to quantify this benefit. 

Under SBA’s 7(a) Guaranteed Loan 

Program and Certified Development 

Company (504) Program, SBA estimates 

that approximately 10 additional loans 

totaling between $4 million and $5 

million in new Federal loan guarantees 

could be made to these newly defined 

small businesses. Because of the size of 

the loan guarantees, however, most 

loans are made to small businesses well 

below the size standard. Moreover, 

under the Recovery Act, effective 

February 17, 2009, SBA is temporarily 

raising guarantees on its SBA 7(a) loan 

program and also temporarily 

eliminating fees for borrowers on SBA 

7(a) loans and for both borrowers and 

lenders on 504 Certified Development 

Company loans, through calendar year 

2009, or until the funds are exhausted. 

The fee elimination is retroactive to 

February 17, 2009, the day the Recovery 

Act was signed. Furthermore, SBA is 

developing a mechanism for refunding 

fees paid on loans since then. In 

addition, since SBA has applied its CDC 

alternative size standard to its 7(a) 

Business Loan Program, more capital is 

available to small businesses. Thus, 

increasing the size standards will likely 

result in an increase in small business 

guaranteed loans to businesses in these 

industries, but it would be impractical 

to try to estimate the extent of their 

number and the total amount loaned. 

The newly defined small businesses 

would also benefit from SBA’s 

Economic Injury Disaster Loan (EIDL) 

Program. Since this program is 

contingent upon the occurrence and 

severity of a disaster, no meaningful 

estimate of benefits can be projected for 

future disasters. 


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To the extent that 325 additional 

firms in Subsectors 811 and 812 that 

become small under the proposed size 

standards could become active in 

Federal procurement programs, this may 

entail some additional administrative 

costs to the Federal Government 

associated with additional bidders for 

Federal small business procurement 

opportunities, additional firms seeking 

SBA guaranteed lending programs, 

additional firms eligible for enrollment 

in Central Contractor Registration’s 

Dynamic Small Business Search 

database, and additional firms seeking 

certification as 8(a) or HUBZone firms 

or qualifying for SDB status. Among 

businesses in this group seeking SBA 

assistance, there could be some 

additional costs associated with 

compliance and verification of small 

business status and protests of small 

business status. These additional costs 

are likely to be minimal because 

mechanisms are already in place to 

handle these additional 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 is 

likely to result in competition among 

fewer bidders. In addition, higher costs 

may result if additional full and open 

contracts are awarded to HUBZone and 

SDB businesses because of a price 

evaluation preference. The additional 

costs associated with fewer bidders, 

however, are likely to be minor since, as 

a matter of law, procurements may be 

set aside for small businesses or 

reserved for the 8(a) or HUBZone 

Programs only if awards are expected to 

be made at fair and reasonable prices. 

The proposed size standards may 

have distributional effects among large 

and small businesses. Although 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 to small businesses 

from large businesses. Large businesses 

may have fewer Federal contract 

opportunities as Federal agencies decide 

to set aside more Federal contracts for 

small businesses. Also, some Federal 

contracts may be awarded to HUBZone 

or SDB concerns instead of large 

businesses since those two categories of 

small businesses may be eligible for an 

evaluation adjustment for contracts 

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. 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 data on the size of 

businesses receiving a Federal contract 

are limited to identifying small or other 

than small businesses, without regard to 

the exact size of the business. 

As mentioned above, in addition to 

the estimated 325 businesses that may 

qualify as small if this proposed rule is 

adopted, an additional 1,175 non-profit 

organizations may also be designated as 

small organizations within the 

industries in Subsector 813—Religious, 

Grantmaking, Civic, Professional and 

Similar Organizations. Non-profit 

organizations do not qualify for SBA 

small business programs or for Federal 

contracts reserved for small business (13 

CFR 121.105). However, Federal 

agencies pursuant to the Regulatory 

Flexibility Act must consider the impact 

of their regulations on small entities, 

which by definition include small 

businesses, small organizations, and 

small governmental jurisdictions (5 

U.S.C. 601(b)). SBA’s Office of 

Advocacy advises Federal agencies to 

use SBA’s numerical size standards by 

NAICS industry when assessing the 

impact of a regulation on small 

organizations. 

The proposed revisions to the existing 

size standards for the 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, SBA has determined that this 

rule is drafted, to the extent practicable, 

in accordance with the standards set 

forth in that Order. 

Executive Order 13132 

For purposes of Executive Order 

13132, SBA has determined that this 

rule does not have any Federalism 

implications warranting the preparation 

of a federalism assessment. 

Paperwork Reduction Act 

For the purpose of the Paperwork 

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

has determined that this rule would not 

impose new reporting or recordkeeping 

requirements, other than those required 

of SBA. 

Initial Regulatory Flexibility Analysis 

Under the Regulatory Flexibility Act 

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

a significant impact on a substantial 

number of small entities in 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 an 

initial regulatory flexibility analysis 

(IRFA) of this proposed rule addressing 

the following questions: (1) What is the 

need for and objective of the rule? (2) 

what is SBA’s description and estimate 

of the number of small entities to which 

the rule will apply? (3) what are the 

projected reporting, recordkeeping, 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 proposed rule more appropriately 

reflect the size of businesses in those 

industries that need Federal assistance. 


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(2) What is SBA’s description and 

estimate of the number of small entities 

to which the rule will apply? 

If this rule is adopted in its present 

form, SBA estimates that approximately 

1,400 additional firms will become 

small because of proposed 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 

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 proposed standards. 

(3) What are the projected reporting, 

record keeping, and other compliance 

requirements of the rule and an estimate 

of the classes of small entities which 

will be subject to the requirements? 

A new size standard does not impose 

any additional reporting, recordkeeping 

or compliance requirements on small 

entities. 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 proposed rule overlaps with 

other Federal rules that use SBA’s size 

standards to define a small business. 

Under section 3(a)(2)(C) of the Small 

Business Act, 15 U.S.C. 632(a)(2)(c), 

Federal agencies must use SBA’s size 

standards to define a small business, 

unless specifically authorized by 

statute. 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 57988–57991, 

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? 

SBA is required to develop numerical 

size standards for identifying businesses 

eligible for Federal small business 

programs. Other than varying the size 

standards, no viable alternative exists to 

the systems of numerical size standards. 

List of Subjects in 13 CFR Part 121 

Administrative practice and 

procedure, Government procurement, 

Government property, Grant programs— 

business, Individuals with disabilities, 

Loan programs—business, Reporting 

and recordkeeping requirements, Small 

businesses. 

For the reasons set forth in the 

preamble, SBA proposes to amend 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, 634(b)(6), 636(b), 

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

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

2. Amend the table in § 121.201 by 

revising all entries under Sector 81 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 

Sector 81—Other Services (Except Public Administration) 

Subsector 811—Repair and Maintenance 

811111 ......... General Automotive Repair ........................................................................................................... $7.0 

811112 ......... Automotive Exhaust System Repair ............................................................................................. $7.0 

811113 ......... Automotive Transmission Repair .................................................................................................. $7.0 

811118 ......... Other Automotive Mechanical and Electrical Repair and Maintenance ....................................... $7.0 

811121 ......... Automotive Body, Paint and Interior Repair and Maintenance .................................................... $7.0 

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

811191 ......... Automotive Oil Change and Lubrication Shops ............................................................................ $7.0 

811192 ......... Car Washes ................................................................................................................................... $7.0 

811198 ......... All Other Automotive Repair and Maintenance ............................................................................ $7.0 

811211 ......... Consumer Electronics Repair and Maintenance .......................................................................... $7.0 

811212 ......... Computer and Office Machine Repair and Maintenance ............................................................. $25.0 

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

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

811310 ......... Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance.$7.0 

811411 ......... Home and Garden Equipment Repair and Maintenance ............................................................. $7.0 

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

811420 ......... Reupholstery and Furniture Repair ............................................................................................... $7.0 

811430 ......... Footwear and Leather Goods Repair ........................................................................................... $7.0 

811490 ......... Other Personal and Household Goods Repair and Maintenance ................................................ $7.0 

Subsector 812—Personal and Laundry Services 

812111 ......... Barber Shops ................................................................................................................................ $7.0 


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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 

812112 ......... Beauty Salons ............................................................................................................................... $7.0 

812113 ......... Nail Salons .................................................................................................................................... $7.0 

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

812199 ......... Other Personal Care Services ...................................................................................................... $7.0 

812210 ......... Funeral Homes and Funeral Services .......................................................................................... $7.0 

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

812310 ......... Coin-Operated Laundries and Drycleaners .................................................................................. $7.0 

812320 ......... Drycleaning and Laundry Services (except Coin-Operated) ........................................................ $5.0 

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

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

812910 ......... Pet Care (except Veterinary) Services ......................................................................................... $7.0 

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

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

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

812990 ......... All Other Personal Services .......................................................................................................... $7.0 

Subsector 813—Religious, Grantmaking, Civic, Professional and Similar Organizations 

813110 ......... Religious Organizations ................................................................................................................ $7.0 

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

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

813219 ......... Other Grantmaking and Giving Services ...................................................................................... $35.5 

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

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

813319 ......... Other Social Advocacy Organizations .......................................................................................... $7.0 

813410 ......... Civic and Social Organizations ..................................................................................................... $7.0 

813910 ......... Business Associations ................................................................................................................... $7.0 

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

813930 ......... Labor Unions and Similar Labor Organizations ............................................................................ $7.0 

813940 ......... Political Organizations ................................................................................................................... $7.0 

813990 ......... Other Similar Organizations (except Business, Professional, Labor, and Political Organizations).$7.0 

* * * * * 

Dated October 9, 2009. 

Karen G. Mills, 

Administrator. 

[FR Doc. E9–25199 Filed 10–20–09; 8:45 am] 

BILLING CODE 8025–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Parts 230 and 240 

[Release Nos. 33–9073; 34–60825; IC– 

28946; File No. S7–22–09] 

RIN 3235–AK25 

Amendments to Rules Requiring 

Internet Availability of Proxy Materials 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Proposed rule. 

SUMMARY: We are proposing changes to 

the proxy rules under the Securities 

Exchange Act of 1934 to improve the 

notice and access model for furnishing 

proxy materials to shareholders. 

Specifically, we are proposing revisions 

to our rules to provide additional 

flexibility regarding the format of the 

Notice of Internet Availability of Proxy 

Materials that is sent to shareholders. 

We are also providing guidance about 

the current requirement for the Notice to 

identify the matters intended to be acted 

on at the shareholders’ meeting. In 

addition to the proposed changes and 

guidance regarding the format of the 

Notice, we are proposing a new rule that 

will permit issuers and soliciting 

shareholders to include explanatory 

materials regarding the process of 

receiving and reviewing proxy materials 

and voting. Finally, we are proposing 

revisions to the timeframe for delivering 

a Notice to shareholders when a 

soliciting person other than the issuer 

relies on the notice-only option. 

DATES: Comments should be received on 

or before November 20, 2009. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/proposed.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number S7–22–09 on the subject line; 

or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number S7–22–09. This file number 

should be included on the subject line 

if e-mail is used. To help us process and 

review your comments more efficiently, 

please use only one method. The 

Commission will post all comments on 

the Commission’s Web site (http:// 

www.sec.gov/rules/proposed.shtml). 

Comments are also available for public 

inspection and copying in the 

Commission’s Public Reference Room, 

100 F Street, NE., Washington, DC 

20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

All comments received will be posted 

without change; we do not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. 


pwalker on DSK8KYBLC1PROD with PROPOSALS