Small Business Size Standards; Accommodation and Food Services Industries, 61604-61609 [2010-24857]
Download as PDF
<![CDATA[
61604
Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations
SMALL BUSINESS SIZE STANDARDS BY NAICS INDUSTRY—Continued
NAICS codes
451120
451130
451140
451211
Size standards
in millions of
dollars
NAICS U.S. industry title
Size standards
in number of
employees
25.5
25.5
10.0
25.5
........................
........................
........................
........................
30.0
*
........................
30.0
*
........................
30.0
*
........................
30.0
*
........................
19.0
*
........................
14.0
*
........................
30.0
35.5
35.5
10.0
*
........................
........................
........................
........................
...................
...................
...................
...................
Hobby, Toy and Game Stores ............................................................................................
Sewing, Needlework and Piece Goods Stores ...................................................................
Musical Instrument and Supplies Stores ............................................................................
Book Stores .........................................................................................................................
*
451220 ...................
*
*
*
*
Prerecorded Tape, Compact Disc and Record Stores .......................................................
*
*
452111 ...................
*
*
*
*
Department Stores (except Discount Department Stores) .................................................
*
*
452990 ...................
*
*
*
*
All Other General Merchandise Stores ...............................................................................
*
*
453210 ...................
*
*
*
*
Office Supplies and Stationary Stores ................................................................................
*
*
453910 ...................
*
*
*
*
Pet and Pet Supplies Stores ...............................................................................................
*
*
453930 ...................
*
*
*
*
Manufactured (Mobile) Home Dealers ................................................................................
*
*
...................
...................
...................
...................
*
*
*
*
Electronic Shopping ............................................................................................................
Electronic Auctions ..............................................................................................................
Mail Order Houses ..............................................................................................................
Vending Machine Operators ...............................................................................................
*
454111
454112
454113
454210
*
*
*
*
*
3. In § 121.402 (b), remove the last
sentence and add two new sentences to
the end of the paragraph to read as
follows:
SMALL BUSINESS ADMINISTRATION
§ 121.402 What size standards are
applicable to Federal Government
Contracting programs?
Small Business Size Standards;
Accommodation and Food Services
Industries
■
*
*
*
*
(b) * * *Acquisitions for supplies
must be classified under the appropriate
manufacturing NAICS code, not under a
Wholesale Trade or Retail Trade NAICS
code. A concern that submits an offer or
quote for a contract or subcontract
where the NAICS code assigned to the
contract or subcontract is one for
supplies, and furnishes a product it did
not itself manufacture or produce, is
categorized as a nonmanufacturer and
deemed small if it has 500 or fewer
employees and meets the requirements
of 13 CFR 121.406.
*
*
*
*
*
WReier-Aviles on DSKGBLS3C1PROD with RULES
*
Dated: September 10, 2010.
Marie C. Johns,
Deputy Administrator.
[FR Doc. 2010–24855 Filed 10–5–10; 8:45 am]
BILLING CODE 8025–01–P
VerDate Mar<15>2010
15:06 Oct 05, 2010
Jkt 223001
13 CFR Part 121
RIN: 3245–AF71
AGENCY:
Small Business Administration
(SBA).
ACTION:
Final rule.
The United States Small
Business Administration (SBA) is
increasing small business size standards
for five industries in North American
Industry Classification System (NAICS)
Sector 72, Accommodation and Food
Services—namely NAICS 721110,
Hotels and Motels, from $7.0 million to
$30 million; NAICS 721120, Casino
Hotels, from $7.0 million to $30 million;
NAICS 722211, Limited Service
Restaurants, from $7.0 million to $10
million; NAICS 722212, Cafeterias, from
$7.0 million to $25.5 million; and
NAICS 722310, Food Service
Contractors, from $20.5 million to $35.5
million. As part of its ongoing initiative
to review all size standards, SBA has
evaluated every industry in Sector 72 to
determine whether the existing size
standards should be retained or revised.
SUMMARY:
PO 00000
Frm 00016
Fmt 4700
Sfmt 4700
*
*
This rule is effective November
5, 2010.
FOR FURTHER INFORMATION CONTACT: Carl
Jordan, Program Analyst, Office of Size
Standards, (202) 205–6618 or
sizestandards@sba.gov.
DATES:
SUPPLEMENTARY INFORMATION:
Introduction
To determine eligibility for Federal
small business assistance programs,
SBA establishes small business size
definitions (referred to as size
standards) for private sector industries
in the United States. SBA’s existing size
standards use two primary measures of
business size—annual receipts and
number of employees. Financial assets,
electric output and refining capacity are
used as size measures for a few
specialized industries. In addition,
SBA’s Small Business Investment
Company (SBIC) and the Certified
Development Company (CDC) Programs
determine small business eligibility
using either the industry based size
standards or net worth and net income
based size standards. Currently, SBA’s
size standards consist of 45 different
size levels, covering 1,141 NAICS
industries and 17 sub-industry
activities. Of these size levels, 32 are
based on average annual receipts, eight
E:\FR\FM\06OCR1.SGM
06OCR1
WReier-Aviles on DSKGBLS3C1PROD with RULES
Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations
are based on number of employees, and
five are based on other measures. In
addition, SBA has established 11 other
size standards for its financial and
procurement programs.
Over the years, SBA has received
comments that its size standards have
not kept up with changes in the
economy and, in particular, that they do
not reflect changes in the Federal
contracting marketplace. The last
overall review of size standards
occurred during the late 1970s and early
1980s. Since then, most reviews of size
standards have been limited to in-depth
analyses of specific industries in
response to requests from the public and
Federal agencies. SBA also makes
periodic inflation adjustments to its
monetary based size standards. The
latest inflation adjustment to size
standards was published in the Federal
Register on July 18, 2008 (73 FR 41237).
SBA recognizes that changes in
industry structure and Federal
marketplace over time have rendered
existing size standards for some
industries no longer supportable by
current data. Accordingly, SBA has
begun a comprehensive review of its
size standards to determine whether
existing size standards have supportable
bases relative to the current data and,
where necessary, to make revisions to
existing size standards. Rather than
review all size standards at one time,
SBA has taken a more manageable
approach to reviewing a group of related
industries within an NAICS Sector. SBA
expects to complete its review of all
NAICS Sectors in two years.
As part of its ongoing effort to review
all small business size standards, SBA
evaluated every industry in NAICS
Sector 72, Accommodation and Food
Services, to determine whether the
existing size standards should be
retained or revised, and published a
proposed rule for public comment in the
October 21, 2009 issue of the Federal
Register (74 FR 53913) to increase the
size standards for five industries in that
Sector. The proposed rule was one of a
series of proposals that will examine
industries grouped by an NAICS Sector.
SBA also published concurrently in the
same October 21, 2009 issue of the
Federal Register proposed rules to
increase small business size standards
for 47 industries in NAICS Sector 44–
45, Retail Trade (74 FR 53924) and for
18 industries in NAICS Sector 81, Other
Services (74 FR 53941). Similarly, SBA
is publishing final rules on NAICS
Sector 44–45 and NAICS Sector 81
elsewhere in this issue of the Federal
Register.
In addition, SBA established its ‘‘Size
Standards Methodology’’ for reviewing
VerDate Mar<15>2010
15:06 Oct 05, 2010
Jkt 223001
small business size standards and
modifying them, where necessary. SBA
published in the October 21, 2009 issue
of the Federal Register (74 FR 53940) a
notice of its availability, for public
comments, on its Web site at https://
www.sba.gov/contractingopportunities/
officials/size/. In addition,
SBA has placed a copy of its ‘‘Size
Standards Methodology’’ in the
electronic docket of the proposed rule
and is available there as well.
In evaluating an industry’s size
standard, SBA examines the industry’s
characteristics (such as average firm
size, startup costs, industry competition
and distribution of firms by size),
Federal government contracting trends,
impact on SBA financial assistance
programs, and dominance in field of
operations. SBA analyzed the
characteristics of each industry in
NAICS Sector 72 mostly using a special
tabulation obtained from the U. S.
Bureau of the Census from its 2002
Economic Census (the latest available).
SBA also evaluated Federal contracting
trends using the data from the Federal
Procurement Data System—Next
Generation (FPDS—NG) for fiscal years
2006–2008.
To evaluate the impact of changes to
size standards on its loan programs,
SBA analyzed internal data on its
guaranteed loan programs for fiscal
years 2006–2008.
SBA’s ‘‘Size Standards Methodology’’
provides a detailed description of
analyses of various industry and
program factors and data sources and
derivation of size standards using the
results. In the proposed rule itself, SBA
detailed how it applied its ‘‘Size
Standards Methodology’’ to review, and
to modify where necessary, the existing
standards for the Sector and Industries
under analysis.
SBA sought comments from the
public on a number of issues about its
‘‘Size Standards Methodology,’’ such as
whether there are alternative
methodologies that SBA should
consider; whether there are alternative
or additional factors or data sources that
SBA should evaluate; whether SBA’s
approach to establishing small business
size standards makes sense in the
current economic environment; whether
SBA’s definitions of anchor size
standards are appropriate in the current
economy; whether there are gaps in
SBA’s methodology because of the lack
of comprehensive data; and whether
there are other facts or issues that SBA
should consider in its methodology.
SBA did not receive any comments on
‘‘Size Standards Methodology.’’ SBA
continues to welcome comments from
interested parties.
PO 00000
Frm 00017
Fmt 4700
Sfmt 4700
61605
In the proposed rule, based on its
analyses of current industry and other
relevant data, SBA proposed to increase
five of the 15 size standards in NAICS
Sector 72. SBA’s analyses supported
retaining the existing size standards for
three industries. As noted in the
proposed rule, SBA’s analyses would
support reducing size standards for the
seven of the remaining industries in the
Sector. However, as the proposed rule
pointed out, SBA believes that lowering
size standards and thereby reducing the
number of firms eligible to participate in
Federal small business assistance
programs would run counter to what the
Agency is doing to help small
businesses. Therefore, SBA proposed to
retain the existing size standards for
those seven industries.
Summary of Comments
The proposed rule sought comments
from the public on SBA’s proposal to
increase size standards for five
Industries in NAICS Sector 72. SBA
received six comments; four strongly
supported the proposed increases in
size standards and two did not. The four
supporting comments stated that the
proposed increases will help more small
hotels participate in Federal
procurement opportunities reserved for
small businesses. It will also help the
Federal government meet its hotel and
conference accommodation needs. The
commenters stated that there are too few
conference hotels under the current size
standards with little competition for
federal business.
Another commenter suggested that
there should be only one maximum
revenue based and one maximum
employee based size standard,
regardless of NAICS industry. While
this would simplify size standards even
more than what SBA had proposed, the
Small Business Act states that ‘‘the
[SBA] Administrator shall ensure that
the size standard varies from industry to
industry to the extent necessary to
reflect the differing characteristics of the
various industries and consider other
factors deemed to be relevant by the
Administrator.’’ (15 U.S.C. 632(a)(3))
The relevant data show significant
differences among industries within
each NAICS Sector, including Sector 72,
and SBA believes that varying the size
standard by industry not only complies
with the Act, but it also serves the best
interests of small businesses in that
Sector. Therefore, SBA does not
presently plan to reduce the number of
receipts based size standard levels
below eight.
Another commenter stated that an
increase from $7 million to $30 million
was ‘‘too drastic,’’ but provided no
E:\FR\FM\06OCR1.SGM
06OCR1
61606
Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations
specifics to support this opinion. SBA
agrees that such an increase might
appear so, but based on its analysis of
the industries in Sector 72, fully
explained in the proposed rule (q.v.),
SBA believes that the increases are
appropriate.
SBA did not receive any comments on
whether it should lower size standards
for the seven industries in NAICS Sector
72 for which SBA’s analyses supported
reducing the existing size standards.
SBA also did not receive any comments
on three industries for which SBA’s
analyses supported retaining the
existing size standards. Therefore, SBA
is retaining the existing size standards
for 10 of the 15 Industries in NAICS
Sector 72.
All comments to the proposed rule are
available for public review at https://
www.regulations.gov.
Conclusion
Based on its analyses of relevant
industry and program data and public
comments it received on the proposed
rule, SBA has decided to increase five
small business size standards in NAICS
Sector 72, as shown in the following
table.
SUMMARY OF REVISED SMALL BUSINESS SIZE STANDARDS FOR NAICS SECTOR 72
Current size
standard
($ million)
NAICS
721110—Hotels (except Casino Hotels) & Motels ..................................................................................................
721120—Casino Hotels ...........................................................................................................................................
722211—Limited Service Restaurants ....................................................................................................................
722212—Cafeterias .................................................................................................................................................
722310—Food Service Contractors ........................................................................................................................
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 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
WReier-Aviles on DSKGBLS3C1PROD with RULES
1. Is there a need for the regulatory
action?
SBA believes that adjustments to
certain size standards in Sector 72,
Accommodation and Food Services, are
needed to better reflect the economic
characteristics of small businesses in
those industries. SBA provides aid and
assistance to small businesses through a
variety of financial, procurement,
business development and advocacy
programs. To assist 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 rule explains SBA’s methodology
for analyzing a size standard for a
particular industry.
VerDate Mar<15>2010
15:06 Oct 05, 2010
Jkt 223001
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
regulations provide 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. In five
industries under Sector 72 for which
SBA had proposed to increase size
standards, about 2,050 additional firms
are estimated to obtain small business
status and become eligible for these
programs.
In the seven industries for which
SBA’s analyses indicated a lower size
standard as appropriate, there are about
450 firms that might have lost their
small business status, had SBA
proposed lowering them. That number
is less than 0.6 percent of the total
number of firms in those industries
defined as small under the current
standards. Thus, the net impact for the
Sector as whole is about 2,050
PO 00000
Frm 00018
Fmt 4700
Sfmt 4700
$7.0
7.0
7.0
7.0
20.5
Revised size
standard
($ million)
$30.0
30.0
10.0
25.5
35.5
additional firms gaining and none losing
small business status under this rule.
This will increase the small business
share of total industry receipts for the
Sector from about 46 percent under the
current size standards to nearly 50
percent under the revised 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 their small business
status from the higher size standards;
and (3) Federal agencies that award
contracts under procurement programs
that require small business status.
Nearly 90 percent of Federal
contracting dollars spent in Sector 72
during fiscal years 2006–2008 was
accounted for by two of five industries
for which size standards have been
increased in this rule. SBA estimates
that additional firms gaining small
business status in those two industries
under the new size standards could
potentially obtain Federal contracts
totaling up to $75 million per year
under the small business set-aside
program, the 8(a), HUBZone, and
SDVOSB Programs, or unrestricted
procurements. This represents about 5.5
percent of the $1.13 billion in average
Federal contract dollars awarded in the
Accommodation and Food Services
Sector during fiscal years 2006–2008.
The added competition for many of
these procurements will also likely
result in a lower price to the
Government for procurements reserved
E:\FR\FM\06OCR1.SGM
06OCR1
WReier-Aviles on DSKGBLS3C1PROD with RULES
Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations
for small businesses, but SBA is not able
to quantify this benefit.
Under SBA’s 7(a) Guaranteed Loan
Program and 504 Certified Development
Company (CDC) Program, SBA estimates
only a few additional loans totaling $1
million to $2 million in 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 temporarily raised
guarantees on its SBA’s 7(a) loan
program and also temporarily
eliminated fees for borrowers on SBA
7(a) loans and for both borrowers and
lenders on 504 CDC 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. 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 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
will also benefit from SBA’s Economic
Injury Disaster Loan (EIDL) Program.
Since this program is contingent on the
occurrence and severity disasters, no
meaningful estimate of benefits can be
projected for future disasters.
To the extent that 2,050 additional
firms 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 the
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
VerDate Mar<15>2010
15:06 Oct 05, 2010
Jkt 223001
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 from additional full and
open contracts awarded to HUBZone
and SDB businesses because of price
evaluation preferences. 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), SDB or HUBZone
Programs only if awards are expected to
be made at fair and reasonable prices.
The increased 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 business
receiving a Federal contract are limited
to identifying small or other than small
businesses, without regard to the exact
size of the business.
The revisions to the existing size
standards for Accommodation and Food
Services industries is 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
PO 00000
Frm 00019
Fmt 4700
Sfmt 4700
61607
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.
Final Regulatory Flexibility Analysis
Under the Regulatory Flexibility Act
(RFA), this rule may have a significant
impact on a substantial number of small
entities in Sector 72, Accommodation
and Food Services. As described above,
this rule may affect small entities
seeking Federal contracts, SBA 7(a) and
504 Guaranteed Loan Programs, SBA
Economic Injury Disaster Loans, and
other Federal small business programs.
Immediately below, SBA sets forth a
final regulatory flexibility analysis of
this 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, record keeping, and
other compliance requirements of the
rule? (4) what are the relevant Federal
rules which may duplicate, overlap or
conflict with the rule? and (5) what
alternatives will allow the Agency to
accomplish its regulatory objectives
while minimizing the impact on small
entities?
(1) What is the need for and objective of
the rule?
Most of SBA’s size standards for
Accommodation and Food Services
industries have not been reviewed since
the early 1980s. Technology,
productivity growth, international
competition, mergers and acquisitions,
E:\FR\FM\06OCR1.SGM
06OCR1
61608
Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations
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.
(2) What is SBA’s description and
estimate of the number of small entities
to which the rule will apply?
SBA estimates that approximately
2,050 additional firms will become
small because of increases in size
standard in five industries. That
represents 1.1 percent of total firms in
those industries. This will result in an
increase in the small business share of
total industry receipts for this Sector
from about 46 percent under the current
size standard to nearly 50 percent under
the revised standards.
(3) What are the projected reporting,
recordkeeping, and other compliance
requirements of the rule and an estimate
of the classes of small entities which
will be subject to the requirements?
A new size standard does not impose
any additional reporting or
recordkeeping requirements on small
entities. However, qualifying for Federal
procurement and a number of other
programs requires that entities register
in the Central Contractor Registration
(CCR) database and certify at least
annually that they are small in the
Online Representations and
Certifications Application (ORCA).
Therefore, businesses opting to
participate in those programs must
comply with CCR and ORCA
requirements. There are no costs
associated with either CCR registration
or ORCA certification. Revising size
standards alters the access to SBA
programs that assist small businesses,
but does not impose a regulatory burden
as they neither regulate nor control
business behavior.
(4) What are the relevant Federal rules
which may duplicate, overlap or conflict
with the rule?
This rule overlaps with other Federal
rules that use SBA’s size standards to
define a small business. Under
§ 3(a)(2)(C) of the Small Business Act,
15 USC 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, 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 alternative exists to the
systems of numerical size standards.
List of Subjects in 13 CFR Part 121
Administrative practice and
procedure, Government procurement,
Government property, Grant programs—
business, Individuals with disabilities,
Loan programs—business, Reporting
and recordkeeping requirements, Small
businesses.
■ For reasons set forth in the preamble,
SBA amends 13 CFR part 121 as
follows:
PART 121—SMALL BUSINESS SIZE
REGULATIONS
1. The authority citation for part 121
continues to read as follows:
■
Authority: 15 U.S.C. 632, 634(b)(6), 636(b),
637(a), 644, 657(a), 657(f), and 662(5); and
Pub. L. 105–135, Sec. 401, et seq., 111 Stat,
2592.
Subpart A—Size Eligibility Provisions
and Standards
2. In § 121.201, in the table, revise the
entries for ‘‘721110’’, ‘‘721120’’,
‘‘722211’’,‘‘722212’’, and ‘‘722310’’ 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
Size
standards in
millions of
dollars
NAICS U.S. industry title
*
721110 ...................
721120 ...................
*
*
*
*
Hotels (except Casino Hotels) and Motels .........................................................................
Casino Hotels ......................................................................................................................
*
*
722211 ...................
722212 ...................
WReier-Aviles on DSKGBLS3C1PROD with RULES
NAICS codes
*
*
*
*
Limited-Service Restaurants ...............................................................................................
Cafeterias, Grill Buffets, and Buffets ..................................................................................
*
*
722310 ...................
*
*
*
*
Food Service Contractors ...................................................................................................
*
*
VerDate Mar<15>2010
*
15:06 Oct 05, 2010
*
Jkt 223001
PO 00000
*
Frm 00020
Fmt 4700
*
Sfmt 4700
E:\FR\FM\06OCR1.SGM
$30.0
30.0
*
........................
........................
10.0
25.5
*
........................
........................
35.5
*
06OCR1
Size
standards in
number of
employees
*
........................
*
Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations
Dated: September 10, 2010.
Marie C. Johns,
Deputy Administrator.
The Rule
[FR Doc. 2010–24857 Filed 10–5–10; 8:45 am]
BILLING CODE 8025–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 71
[Docket No. FAA–2009–1136; Airspace
Docket No. 09–ANM–26]
Establishment and Modification of
Class E Airspace; Deer Park, WA
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
This action will establish and
amend existing Class E airspace at Deer
Park, WA, to accommodate aircraft
using the existing Area Navigation
(RNAV) Global Positioning System
(GPS) Standard Instrument Approach
Procedures (SIAPs) at Deer Park, WA.
This will improve the safety and
management of Instrument Flight Rules
(IFR) operations at the airport.
DATES: Effective date, 0901 UTC,
January 13, 2011. The Director of the
Federal Register approves this
incorporation by reference action under
1 CFR Part 51, subject to the annual
revision of FAA Order 7400.9 and
publication of conforming amendments.
FOR FURTHER INFORMATION CONTACT:
Eldon Taylor, Federal Aviation
Administration, Operations Support
Group, Western Service Center, 1601
Lind Avenue, SW., Renton, WA 98057;
telephone (425) 203–4537.
SUPPLEMENTARY INFORMATION:
SUMMARY:
WReier-Aviles on DSKGBLS3C1PROD with RULES
History
On July 19, 2010, the FAA published
in the Federal Register a notice of
proposed rulemaking to amend
controlled airspace at Deer Park, WA (75
FR 41774). Interested parties were
invited to participate in this rulemaking
effort by submitting written comments
on the proposal to the FAA. No
comments were received.
Class E airspace designations are
published in paragraph 6002 and 6005,
respectively, of FAA Order 7400.9U
dated August 18, 2010, and effective
September 15, 2010, which is
incorporated by reference in 14 CFR
Part 71.1. The Class E airspace
designations listed in this document
will be published subsequently in that
Order.
VerDate Mar<15>2010
15:06 Oct 05, 2010
Jkt 223001
This action amends Title 14 Code of
Federal Regulations (14 CFR) Part 71 by
establishing Class E surface airspace,
and adding additional Class E airspace
extending upward from 700 feet above
the surface, at Deer Park Airport, to
accommodate IFR aircraft executing
new RNAV (GPS) SIAPs at the airport.
This action is necessary for the safety
and management of IFR operations.
The FAA has determined this
regulation only involves an established
body of technical regulations for which
frequent and routine amendments are
necessary to keep them operationally
current. Therefore, this regulation: (1) Is
not a ‘‘significant regulatory action’’
under Executive Order 12866; (2) is not
a ‘‘significant rule’’ under DOT
Regulatory Policies and Procedures (44
FR 11034; February 26, 1979); and (3)
does not warrant preparation of a
regulatory evaluation as the anticipated
impact is so minimal. Since this is a
routine matter that will only affect air
traffic procedures and air navigation, it
is certified this rule, when promulgated,
will not have a significant economic
impact on a substantial number of small
entities under the criteria of the
Regulatory Flexibility Act. The FAA’s
authority to issue rules regarding
aviation safety is found in Title 49 of the
U.S. Code. Subtitle 1, Section 106
discusses the authority of the FAA
Administrator. Subtitle VII, Aviation
Programs, describes in more detail the
scope of the agency’s authority. This
rulemaking is promulgated under the
authority described in Subtitle VII, Part
A, Subpart I, Section 40103. Under that
section, the FAA is charged with
prescribing regulations to assign the use
of airspace necessary to ensure the
safety of aircraft and the efficient use of
airspace. This regulation is within the
scope of that authority as it establishes
amends controlled airspace at Deer Park
Airport, Deer Park, WA.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference,
Navigation (air).
Adoption of the Amendment
PART 71—DESIGNATION OF CLASS A,
B, C, D AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND
REPORTING POINTS
1. The authority citation for 14 CFR
Part 71 continues to read as follows:
PO 00000
Frm 00021
Fmt 4700
Sfmt 4700
Authority: 49 U.S.C. 106(g), 40103, 40113,
40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–
1963 Comp., p. 389.
§ 71.1
[Amended]
2. The incorporation by reference in
14 CFR Part 71.1 of the Federal Aviation
Administration Order 7400.9U,
Airspace Designations and Reporting
Points, dated August 18, 2010, and
effective September 15, 2010 is
amended as follows:
■
Paragraph 6002 Class E airspace designated
as surface areas.
*
*
*
*
*
ANM WA E2 Deer Park, WA [New]
Deer Park Airport, WA
(Lat. 47°58′01″ N., long. 117°25′43″ W.)
Within a 4.1-mile radius of Deer Park
Airport. This Class E airspace area is effective
during the specific dates and times
established in advance by a Notice to
Airmen. The effective date and time will
thereafter be continuously published in the
Airport/Facility Directory.
Paragraph 6005 Class E airspace areas
extending upward from 700 feet or more
above the surface of the earth.
*
*
*
*
*
ANM WA, E5 Deer Park, WA [Modified]
Deer Park Airport, WA
(Lat. 47°58′01″ N., long. 117°25′43″ W.)
That airspace extending upward from 700
feet above the surface within a 7-mile radius
of the Deer Park Airport, excluding the
Spokane, WA, Class E airspace area.
Issued in Seattle, Washington, on
September 23, 2010.
Lori Andriesen,
Acting Manager, Operations Support Group,
Western Service Center.
[FR Doc. 2010–24804 Filed 10–5–10; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 71
[Docket No. FAA–2010–0616; Airspace
Docket No. 10–ANM–6]
Modification of Class E Airspace;
Pendleton, OR
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
In consideration of the foregoing, the
Federal Aviation Administration
amends 14 CFR Part 71 as follows:
■
■
61609
This action will amend Class
E airspace at Pendleton, OR.
Decommissioning of the Foris NonDirectional Radio Beacon (NDB) at
Eastern Oregon Regional Airport at
Pendleton has made this necessary for
the safety and management of
Instrument Flight Rules (IFR) operations
SUMMARY:
E:\FR\FM\06OCR1.SGM
06OCR1
]]>Agencies
[Federal Register Volume 75, Number 193 (Wednesday, October 6, 2010)]
[Rules and Regulations]
[Pages 61604-61609]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-24857]
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN: 3245-AF71
Small Business Size Standards; Accommodation and Food Services
Industries
AGENCY: Small Business Administration (SBA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The United States Small Business Administration (SBA) is
increasing small business size standards for five industries in North
American Industry Classification System (NAICS) Sector 72,
Accommodation and Food Services--namely NAICS 721110, Hotels and
Motels, from $7.0 million to $30 million; NAICS 721120, Casino Hotels,
from $7.0 million to $30 million; NAICS 722211, Limited Service
Restaurants, from $7.0 million to $10 million; NAICS 722212,
Cafeterias, from $7.0 million to $25.5 million; and NAICS 722310, Food
Service Contractors, from $20.5 million to $35.5 million. As part of
its ongoing initiative to review all size standards, SBA has evaluated
every industry in Sector 72 to determine whether the existing size
standards should be retained or revised.
DATES: This rule is effective November 5, 2010.
FOR FURTHER INFORMATION CONTACT: Carl Jordan, Program Analyst, Office
of Size Standards, (202) 205-6618 or sizestandards@sba.gov.
SUPPLEMENTARY INFORMATION:
Introduction
To determine eligibility for Federal small business assistance
programs, SBA establishes small business size definitions (referred to
as size standards) for private sector industries in the United States.
SBA's existing size standards use two primary measures of business
size--annual receipts and number of employees. Financial assets,
electric output and refining capacity are used as size measures for a
few specialized industries. In addition, SBA's Small Business
Investment Company (SBIC) and the Certified Development Company (CDC)
Programs determine small business eligibility using either the industry
based size standards or net worth and net income based size standards.
Currently, SBA's size standards consist of 45 different size levels,
covering 1,141 NAICS industries and 17 sub-industry activities. Of
these size levels, 32 are based on average annual receipts, eight
[[Page 61605]]
are based on number of employees, and five are based on other measures.
In addition, SBA has established 11 other size standards for its
financial and procurement programs.
Over the years, SBA has received comments that its size standards
have not kept up with changes in the economy and, in particular, that
they do not reflect changes in the Federal contracting marketplace. The
last overall review of size standards occurred during the late 1970s
and early 1980s. Since then, most reviews of size standards have been
limited to in-depth analyses of specific industries in response to
requests from the public and Federal agencies. SBA also makes periodic
inflation adjustments to its monetary based size standards. The latest
inflation adjustment to size standards was published in the Federal
Register on July 18, 2008 (73 FR 41237).
SBA recognizes that changes in industry structure and Federal
marketplace over time have rendered existing size standards for some
industries no longer supportable by current data. Accordingly, SBA has
begun a comprehensive review of its size standards to determine whether
existing size standards have supportable bases relative to the current
data and, where necessary, to make revisions to existing size
standards. Rather than review all size standards at one time, SBA has
taken a more manageable approach to reviewing a group of related
industries within an NAICS Sector. SBA expects to complete its review
of all NAICS Sectors in two years.
As part of its ongoing effort to review all small business size
standards, SBA evaluated every industry in NAICS Sector 72,
Accommodation and Food Services, to determine whether the existing size
standards should be retained or revised, and published a proposed rule
for public comment in the October 21, 2009 issue of the Federal
Register (74 FR 53913) to increase the size standards for five
industries in that Sector. The proposed rule was one of a series of
proposals that will examine industries grouped by an NAICS Sector. SBA
also published concurrently in the same October 21, 2009 issue of the
Federal Register proposed rules to increase small business size
standards for 47 industries in NAICS Sector 44-45, Retail Trade (74 FR
53924) and for 18 industries in NAICS Sector 81, Other Services (74 FR
53941). Similarly, SBA is publishing final rules on NAICS Sector 44-45
and NAICS Sector 81 elsewhere in this issue of the Federal Register.
In addition, SBA established its ``Size Standards Methodology'' for
reviewing small business size standards and modifying them, where
necessary. SBA published in the October 21, 2009 issue of the Federal
Register (74 FR 53940) a notice of its availability, for public
comments, on its Web site at https://www.sba.gov/contractingopportunities/officials/size/. In addition, SBA
has placed a copy of its ``Size Standards Methodology'' in the
electronic docket of the proposed rule and is available there as well.
In evaluating an industry's size standard, SBA examines the
industry's characteristics (such as average firm size, startup costs,
industry competition and distribution of firms by size), Federal
government contracting trends, impact on SBA financial assistance
programs, and dominance in field of operations. SBA analyzed the
characteristics of each industry in NAICS Sector 72 mostly using a
special tabulation obtained from the U. S. Bureau of the Census from
its 2002 Economic Census (the latest available). SBA also evaluated
Federal contracting trends using the data from the Federal Procurement
Data System--Next Generation (FPDS--NG) for fiscal years 2006-2008.
To evaluate the impact of changes to size standards on its loan
programs, SBA analyzed internal data on its guaranteed loan programs
for fiscal years 2006-2008.
SBA's ``Size Standards Methodology'' provides a detailed
description of analyses of various industry and program factors and
data sources and derivation of size standards using the results. In the
proposed rule itself, SBA detailed how it applied its ``Size Standards
Methodology'' to review, and to modify where necessary, the existing
standards for the Sector and Industries under analysis.
SBA sought comments from the public on a number of issues about its
``Size Standards Methodology,'' such as whether there are alternative
methodologies that SBA should consider; whether there are alternative
or additional factors or data sources that SBA should evaluate; whether
SBA's approach to establishing small business size standards makes
sense in the current economic environment; whether SBA's definitions of
anchor size standards are appropriate in the current economy; whether
there are gaps in SBA's methodology because of the lack of
comprehensive data; and whether there are other facts or issues that
SBA should consider in its methodology.
SBA did not receive any comments on ``Size Standards Methodology.''
SBA continues to welcome comments from interested parties.
In the proposed rule, based on its analyses of current industry and
other relevant data, SBA proposed to increase five of the 15 size
standards in NAICS Sector 72. SBA's analyses supported retaining the
existing size standards for three industries. As noted in the proposed
rule, SBA's analyses would support reducing size standards for the
seven of the remaining industries in the Sector. However, as the
proposed rule pointed out, SBA believes that lowering size standards
and thereby reducing the number of firms eligible to participate in
Federal small business assistance programs would run counter to what
the Agency is doing to help small businesses. Therefore, SBA proposed
to retain the existing size standards for those seven industries.
Summary of Comments
The proposed rule sought comments from the public on SBA's proposal
to increase size standards for five Industries in NAICS Sector 72. SBA
received six comments; four strongly supported the proposed increases
in size standards and two did not. The four supporting comments stated
that the proposed increases will help more small hotels participate in
Federal procurement opportunities reserved for small businesses. It
will also help the Federal government meet its hotel and conference
accommodation needs. The commenters stated that there are too few
conference hotels under the current size standards with little
competition for federal business.
Another commenter suggested that there should be only one maximum
revenue based and one maximum employee based size standard, regardless
of NAICS industry. While this would simplify size standards even more
than what SBA had proposed, the Small Business Act states that ``the
[SBA] Administrator shall ensure that the size standard varies from
industry to industry to the extent necessary to reflect the differing
characteristics of the various industries and consider other factors
deemed to be relevant by the Administrator.'' (15 U.S.C. 632(a)(3)) The
relevant data show significant differences among industries within each
NAICS Sector, including Sector 72, and SBA believes that varying the
size standard by industry not only complies with the Act, but it also
serves the best interests of small businesses in that Sector.
Therefore, SBA does not presently plan to reduce the number of receipts
based size standard levels below eight.
Another commenter stated that an increase from $7 million to $30
million was ``too drastic,'' but provided no
[[Page 61606]]
specifics to support this opinion. SBA agrees that such an increase
might appear so, but based on its analysis of the industries in Sector
72, fully explained in the proposed rule (q.v.), SBA believes that the
increases are appropriate.
SBA did not receive any comments on whether it should lower size
standards for the seven industries in NAICS Sector 72 for which SBA's
analyses supported reducing the existing size standards. SBA also did
not receive any comments on three industries for which SBA's analyses
supported retaining the existing size standards. Therefore, SBA is
retaining the existing size standards for 10 of the 15 Industries in
NAICS Sector 72.
All comments to the proposed rule are available for public review
at https://www.regulations.gov.
Conclusion
Based on its analyses of relevant industry and program data and
public comments it received on the proposed rule, SBA has decided to
increase five small business size standards in NAICS Sector 72, as
shown in the following table.
Summary of Revised Small Business Size Standards for NAICS Sector 72
------------------------------------------------------------------------
Current size Revised size
NAICS standard ($ standard ($
million) million)
------------------------------------------------------------------------
721110--Hotels (except Casino Hotels) & $7.0 $30.0
Motels.................................
721120--Casino Hotels................... 7.0 30.0
722211--Limited Service Restaurants..... 7.0 10.0
722212--Cafeterias...................... 7.0 25.5
722310--Food Service Contractors........ 20.5 35.5
------------------------------------------------------------------------
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
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
72, Accommodation and Food Services, are needed to better reflect the
economic characteristics of small businesses in those industries. SBA
provides aid and assistance to small businesses through a variety of
financial, procurement, business development and advocacy programs. To
assist 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 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
regulations provide 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. In five industries under Sector 72 for which
SBA had proposed to increase size standards, about 2,050 additional
firms are estimated to obtain small business status and become eligible
for these programs.
In the seven industries for which SBA's analyses indicated a lower
size standard as appropriate, there are about 450 firms that might have
lost their small business status, had SBA proposed lowering them. That
number is less than 0.6 percent of the total number of firms in those
industries defined as small under the current standards. Thus, the net
impact for the Sector as whole is about 2,050 additional firms gaining
and none losing small business status under this rule. This will
increase the small business share of total industry receipts for the
Sector from about 46 percent under the current size standards to nearly
50 percent under the revised 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 their small business status from the higher
size standards; and (3) Federal agencies that award contracts under
procurement programs that require small business status.
Nearly 90 percent of Federal contracting dollars spent in Sector 72
during fiscal years 2006-2008 was accounted for by two of five
industries for which size standards have been increased in this rule.
SBA estimates that additional firms gaining small business status in
those two industries under the new size standards could potentially
obtain Federal contracts totaling up to $75 million per year under the
small business set-aside program, the 8(a), HUBZone, and SDVOSB
Programs, or unrestricted procurements. This represents about 5.5
percent of the $1.13 billion in average Federal contract dollars
awarded in the Accommodation and Food Services Sector during fiscal
years 2006-2008. The added competition for many of these procurements
will also likely result in a lower price to the Government for
procurements reserved
[[Page 61607]]
for small businesses, but SBA is not able to quantify this benefit.
Under SBA's 7(a) Guaranteed Loan Program and 504 Certified
Development Company (CDC) Program, SBA estimates only a few additional
loans totaling $1 million to $2 million in 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 temporarily raised guarantees on
its SBA's 7(a) loan program and also temporarily eliminated fees for
borrowers on SBA 7(a) loans and for both borrowers and lenders on 504
CDC 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. 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 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 will also benefit from SBA's
Economic Injury Disaster Loan (EIDL) Program. Since this program is
contingent on the occurrence and severity disasters, no meaningful
estimate of benefits can be projected for future disasters.
To the extent that 2,050 additional firms 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 the 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 from additional full and open contracts awarded to HUBZone and
SDB businesses because of price evaluation preferences. 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), SDB or HUBZone Programs only if
awards are expected to be made at fair and reasonable prices.
The increased 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
business receiving a Federal contract are limited to identifying small
or other than small businesses, without regard to the exact size of the
business.
The revisions to the existing size standards for Accommodation and
Food Services industries is 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.
Final Regulatory Flexibility Analysis
Under the Regulatory Flexibility Act (RFA), this rule may have a
significant impact on a substantial number of small entities in Sector
72, Accommodation and Food Services. As described above, this rule may
affect small entities seeking Federal contracts, SBA 7(a) and 504
Guaranteed Loan Programs, SBA Economic Injury Disaster Loans, and other
Federal small business programs.
Immediately below, SBA sets forth a final regulatory flexibility
analysis of this 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, record keeping,
and other compliance requirements of the rule? (4) what are the
relevant Federal rules which may duplicate, overlap or conflict with
the rule? and (5) what alternatives will allow the Agency to accomplish
its regulatory objectives while minimizing the impact on small
entities?
(1) What is the need for and objective of the rule?
Most of SBA's size standards for Accommodation and Food Services
industries have not been reviewed since the early 1980s. Technology,
productivity growth, international competition, mergers and
acquisitions,
[[Page 61608]]
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.
(2) What is SBA's description and estimate of the number of small
entities to which the rule will apply?
SBA estimates that approximately 2,050 additional firms will become
small because of increases in size standard in five industries. That
represents 1.1 percent of total firms in those industries. This will
result in an increase in the small business share of total industry
receipts for this Sector from about 46 percent under the current size
standard to nearly 50 percent under the revised standards.
(3) What are the projected reporting, recordkeeping, and other
compliance requirements of the rule and an estimate of the classes of
small entities which will be subject to the requirements?
A new size standard does not impose any additional reporting or
recordkeeping requirements on small entities. However, qualifying for
Federal procurement and a number of other programs requires that
entities register in the Central Contractor Registration (CCR) database
and certify at least annually that they are small in the Online
Representations and Certifications Application (ORCA). Therefore,
businesses opting to participate in those programs must comply with CCR
and ORCA requirements. There are no costs associated with either CCR
registration or ORCA certification. Revising size standards alters the
access to SBA programs that assist small businesses, but does not
impose a regulatory burden as they neither regulate nor control
business behavior.
(4) What are the relevant Federal rules which may duplicate, overlap or
conflict with the rule?
This rule overlaps with other Federal rules that use SBA's size
standards to define a small business. Under Sec. 3(a)(2)(C) of the
Small Business Act, 15 USC 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, 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 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.
0
For reasons set forth in the preamble, SBA amends 13 CFR part 121 as
follows:
PART 121--SMALL BUSINESS SIZE REGULATIONS
0
1. The authority citation for part 121 continues to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 637(a), 644,
657(a), 657(f), and 662(5); and Pub. L. 105-135, Sec. 401, et seq.,
111 Stat, 2592.
Subpart A--Size Eligibility Provisions and Standards
0
2. In Sec. 121.201, in the table, revise the entries for ``721110'',
``721120'', ``722211'',``722212'', and ``722310'' to read as follows:
Sec. 121.201 What size standards has SBA identified by North American
Industry Classification System codes?
* * * * *
Small Business Size Standards by NAICS Industry
----------------------------------------------------------------------------------------------------------------
Size standards Size standards
NAICS codes NAICS U.S. industry title in millions of in number of
dollars employees
----------------------------------------------------------------------------------------------------------------
* * * * * * *
721110................................... Hotels (except Casino Hotels) and $30.0 ..............
Motels.
721120................................... Casino Hotels........................ 30.0 ..............
* * * * * * *
722211................................... Limited-Service Restaurants.......... 10.0 ..............
722212................................... Cafeterias, Grill Buffets, and 25.5 ..............
Buffets.
* * * * * * *
722310................................... Food Service Contractors............. 35.5 ..............
* * * * * * *
----------------------------------------------------------------------------------------------------------------
[[Page 61609]]
Dated: September 10, 2010.
Marie C. Johns,
Deputy Administrator.
[FR Doc. 2010-24857 Filed 10-5-10; 8:45 am]
BILLING CODE 8025-01-P
