Small Business Size Standards; Adoption of 2017 North American Industry Classification System for Size Standards, 44886-44895 [2017-20705]
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Federal Register / Vol. 82, No. 186 / Wednesday, September 27, 2017 / Rules and Regulations
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AGENCY:
Standards, (202) 205–6618 or
sizestandards@sba.gov.
SUPPLEMENTARY INFORMATION: Effective
October 1, 2000, SBA adopted NAICS
1997 industry definitions as a basis for
its table of small business size
standards, replacing the 1987 Standard
Industrial Classification (SIC) (65 FR
30836 (May 15, 2000)). Since then, OMB
has issued four revisions to NAICS.
SBA’s table of size standards adopted
the OMB’s first revision, NAICS 2002,
effective October 1, 2002 (67 FR 52597
(August 13, 2002)), the second revision,
NAICS 2007, effective October 1, 2007
(72 FR 49639 (August 29, 2007)), and
the third revision, NAICS 2012, effective
October 1, 2012 (77 FR 49991 (August
20, 2012)).
OMB published its fourth and latest
revision, NAICS 2017, ‘‘Notice of NAICS
2017 final decisions’’ in the Federal
Register on August 8, 2016 (81 FR
52584). The OMB notice stated that
Federal statistical establishment data
published for reference years beginning
on or after January 1, 2017, should be
published using NAICS 2017.
As with the previous NAICS
revisions, SBA is adopting the NAICS
2017 revision at the beginning of the
new fiscal year (October 1, 2017)
following the OMB’s release of the
NAICS revision for reasons as set forth
under the Justification for the October 1,
2017 Effective Date section, below:
The U.S. Small Business
Administration (SBA) is adopting,
without change, its proposed revisions
to small business size standards. With
the adoption of the proposed changes,
SBA incorporates the U.S. Office of
Management and Budget’s (OMB) North
American Industry Classification
System (NAICS) revision for 2017,
identified as NAICS 2017, into its table
of small business size standards. NAICS
2017 created 21 new industries by
reclassifying, combining, or splitting 29
existing industries under changes made
to NAICS in 2012 (NAICS 2012). SBA’s
size standards for these 21 new
industries have resulted in an increase
to size standards for six NAICS 2012
industries and part of one industry, a
decrease to size standards for two, a
change in the size standards measure
from average annual receipts to number
of employees for one, and no change in
size standards for twenty industries and
part of one industry.
DATES: This rule is effective October 1,
2017.
FOR FURTHER INFORMATION CONTACT: Dr.
Jorge Laboy-Bruno, Office of Size
Changes in NAICS 2017
NAICS 2017 created 21 new NAICS
industries by reclassifying, splitting, or
merging 29 industries or their parts
under NAICS 2012. Of those 21 new
industries, five were created by merging
two or more of thirteen NAICS 2012
industries in their entirety, while three
were created by combining part of one
industry with another industry. Three
new industries were created by splitting
two industries to two parts each with
one part of each industry defined as a
separate industry and combining other
parts of the two industries to form a
separate new industry. One new
industry was formed by designating part
of one industry as a separate industry.
OMB also changed 6-digit NAICS codes
for eight industries without changing
their definitions and titles and amended
the title of one industry without
changing its 6-digit code. Table 1,
‘‘NAICS 2012 Industries or Their Parts
Matched to NAICS 2017 Industries,’’
below, shows the changes from NAICS
2012 to NAICS 2017.
Complete information on the
relationship between NAICS 2012 and
NAICS 2017 is available on the U.S.
Bureau of the Census (Census Bureau)
Web site at https://www.census.gov/eos/
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[FR Doc. 2017–20710 Filed 9–26–17; 8:45 am]
BILLING CODE 7590–01–P
SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245–AG84
Small Business Size Standards;
Adoption of 2017 North American
Industry Classification System for Size
Standards
U.S. Small Business
Administration.
ACTION: Final rule.
SUMMARY:
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Federal Register / Vol. 82, No. 186 / Wednesday, September 27, 2017 / Rules and Regulations
www/naics/. The Census Bureau’s Web
site also provides detailed
documentation on Federal notices
involving the replacement of SIC with
NAICS, and all subsequent NAICS
updates and revisions, including the
August 8, 2016 ‘‘Notice of NAICS 2017
final decisions,’’ as well as
44887
concordances (i.e., correspondence
tables) between SIC and NAICS 1997
and NAICS 2002, and between
subsequent NAICS revisions.
TABLE 1—NAICS 2012 INDUSTRIES OR THEIR PARTS MATCHED TO NAICS 2017 INDUSTRIES
NAICS 2012
code
NAICS 2012 industry title
Status
code
211111 ........
........
........
........
........
Crude Petroleum and Natural Gas Extraction.
crude petroleum extraction .............................
natural gas extraction .............................................
Natural Gas Liquid Extraction ................................
Lead Ore and Zinc Ore Mining ..............................
Copper Ore and Nickel Ore Mining .......................
Pump and Pumping Equipment Manufacturing .....
...........
pt.
pt.
pt.
pt.
pt.
211120
211130
211130
212230
212230
333914
333913 ........
Measuring and Dispensing Pump Manufacturing ..
pt.
333914
335221 ........
335222 ........
Household Cooking Appliance Manufacturing .......
Household Refrigerator and Home Freezer Manufacturing.
Household Laundry Equipment Manufacturing ......
Other Major Household Appliance Manufacturing
Department Stores (except Discount Department
Stores).
Discount Department Stores.
insignificant perishable grocery sales .............
significant perishable grocery sales ................
Warehouse Clubs and Supercenters .....................
All Other General Merchandise Stores ..................
Electronic Shopping ...............................................
Electronic Auctions .................................................
Mail-Order Houses .................................................
Record Production .................................................
Integrated Record Production/Distribution .............
Wired Telecommunications Carriers ......................
Wireless Telecommunications Carriers (except
Satellite).
Formal Wear and Costume Rental ........................
Video Tape and Disc Rental ..................................
Home Health Equipment Rental ............................
Recreational Goods Rental ....................................
All Other Consumer Goods Rental ........................
Research and Development in Biotechnology.
nanobiotechnologies research and experimental development laboratories.
except nanobiotechnologies research and experimental development laboratories.
Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).
nanotechnology research and experimental
development laboratories.
except nanotechnology research and experimental development laboratories.
pt.
pt.
335220
335220
Crude Petroleum Extraction.
Natural Gas Extraction.
Natural Gas Extraction.
Copper, Nickel, Lead, and Zinc Mining.
Copper, Nickel, Lead, and Zinc Mining.
Measuring, Dispensing, and Other Pumping
Equipment Manufacturing.
Measuring, Dispensing, and Other Pumping
Equipment Manufacturing.
Major Household Appliance Manufacturing.
Major Household Appliance Manufacturing.
pt.
pt.
pt.
335220
335220
452210
Major Household Appliance Manufacturing.
Major Household Appliance Manufacturing.
Department Stores.
pt.
pt.
pt.
nc.
pt.
pt.
pt.
pt.
pt.
nc.
nc.
452210
452311
452311
452319
454110
454110
454110
512250
512250
517311
517312
nc.
nc.
nc.
nc.
nc.
532281
532282
532283
532284
532289
Department Stores.
Warehouse Clubs and Supercenters.
Warehouse Clubs and Supercenters.
All Other General Merchandise Stores.
Electronic Shopping and Mail-Order Houses.
Electronic Shopping and Mail-Order Houses.
Electronic Shopping and Mail-Order Houses.
Record Production and Distribution.
Record Production and Distribution.
Wired Telecommunications Carriers.
Wireless Telecommunications Carriers (except
Satellite).
Formal Wear and Costume Rental.
Video Tape and Disc Rental.
Home Health Equipment Rental.
Recreational Goods Rental.
All Other Consumer Goods Rental.
pt.
541713
Research and Development in Nanotechnology.
...........
541714
Research and Development in Biotechnology (except Nanobiotechnology).
pt.
541713
Research and Development in Nanotechnology.
...........
541715
nt.
721310
Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology).
Rooming and Boarding Houses, Dormitories, and
Workers’ Camps.
211112
212231
212234
333911
335224 ........
335228 ........
452111 ........
452112 ........
452910
452990
454111
454112
454113
512210
512220
517110
517210
........
........
........
........
........
........
........
........
........
532220
532230
532291
532292
532299
541711
........
........
........
........
........
........
541712 ........
721310 ........
Rooming and Boarding Houses .............................
NAICS 2017
code
NAICS 2017 industry title
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Key to Abbreviations.
pt. = Part of 2017 industry.
nc. = 6-digit NAICS codes changed without changing industries’ definitions and titles.
nt. = NAICS industry title amended without changing the 6-digit code.
Size Standards for New Industries in
NAICS 2017
On October 22, 1999, SBA proposed
to replace SIC with NAICS 1997 as the
basis of industry definitions for its table
of small business size standards (64 FR
57188). The proposed rule included a
set of guidelines or rules that SBA
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applied to convert the size standards for
industries under SIC to NAICS. The
guidelines aimed to minimize the
impact of applying a new industry
classification system on SBA’s size
standards and on small businesses that
qualified as small under the SIC based
size standards. SBA received no
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negative comments against the proposed
guidelines. SBA published its final rule
on May 15, 2000 (65 FR 30386)
(corrected on September 5, 2000, 65 FR
53533) adopting the resulting table of
size standards based on NAICS 1997, as
proposed. To be consistent, SBA used
the same guidelines when it updated its
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Federal Register / Vol. 82, No. 186 / Wednesday, September 27, 2017 / Rules and Regulations
table of size standards to adopt NAICS
2002, NAICS 2007, and NAICS 2012
revisions. In those updates as well, SBA
received no adverse comments on using
those guidelines, or on the resulting
changes to the size standards. For the
April 18, 2017 proposed rule to adopt
NAICS 2017 for its size standards table,
SBA also generally followed the same
guidelines, as shown below in Table 2,
‘‘General Guidelines to Establish Size
Standards for New Industries under
NAICS 2017.’’
TABLE 2—GENERAL GUIDELINES TO ESTABLISH SIZE STANDARDS FOR NEW INDUSTRIES UNDER NAICS 2017
If the NAICS 2017 industry is composed of:
The size standard for the NAICS 2017 industry code will be:
1. A single NAICS 2012 industry or part of a single NAICS 2012 industry.
2. Two or more NAICS 2012 industries; two or more parts of an NAICS
2012 industry; parts of two or more NAICS 2012 industries; or one or
more NAICS 2012 industries and part(s) of one or more NAICS 2012
industries, and.
2a. they all have the same size standard .........................................
2b. they all have the same size measure (e.g., receipts, employees, etc.) but do not all have the same size standard.
The same size standard as for the NAICS 2012 industry or part.
2c. they have different size measures (i.e., for example, some are
based on receipts and others on employees) and hence do not
all have the same size standard.
The same size standard as for the NAICS 2012 industries or parts.
The same size standard as for the NAICS 2012 industry or part that
most closely matches the economic activity described by the NAICS
2017 industry, or
The highest size standard among the NAICS 2012 industries and
part(s) that comprise the NAICS 2017 industry, provided that the
highest size standard does not include dominant or potentially dominant firms.
The same size standard as for the NAICS 2012 industry or part that
most closely matches the economic activity described by the NAICS
2017 industry, or
The highest size standard among the NAICS 2012 industries and
part(s) that comprise the NAICS 2017 industry, provided that the
highest size standard does not include dominant or potentially dominant firms.
To apply this rule, SBA converts all size standards to a single measure (e.g., receipts, employees, etc.) using the size measure for the NAICS
2012 industry or part(s) that most closely match the economic activity described by the NAICS 2017 industry or using the size measure that applies to most of the NAICS industries or parts comprising the NAICS 2017 industry.
In addition to the above general
guidelines, in cases where a new
industry is formed by merging multiple
industries or their parts with
substantially different levels or different
measures of size standards, as detailed
in the April 18, 2017 proposed rule,
SBA also examined the relevant latest
industry and Federal procurement data
to determine an appropriate size
standard for the new industry.
Developed based on the above
guidelines and analyses of the relevant
data, where necessary, SBA’s size
standards for the new industries under
NAICS 2017 are shown in Table 3, ‘‘Size
Standards for New Industries in NAICS
2017.’’ Also shown in the table are the
current size standards for the affected
NAICS 2012 industries and their parts.
As shown in Table 3, the size
standards for most of the affected
NAICS 2012 industries are not impacted
and therefore remain unchanged under
NAICS 2017. The majority of the
changes consist of revisions to industry
codes or titles, or mergers of two or
more NAICS 2012 industries or their
parts to new industries without
impacting their size standards. Of the 29
NAICS 2012 industries affected by the
revision, adopting NAICS 2017
increases size standards for six
industries and part of one industry and
decreases for two. This would also
result in changing the size standard
measure for one industry from average
annual receipts to number of employees.
Size standards for twenty industries and
part of one industry do not change.
Discussion of Comments
For the April 18, 2017 proposed rule,
SBA provided a 60-day comment period
for the public to comment on proposed
changes to size standards from the
adoption of the NAICS 2017, which
ended on June 19, 2017. SBA received
three comments to the proposed rule,
two of which were outside the scope of
the proposed rule as discussed below.
One commenter recommended that
SBA change the size standard for the
Military and Aerospace Equipment and
Military Weapons exception to NAICS
541330 (Engineering Services) from
average annual revenues to the number
of employees.
TABLE 3—SIZE STANDARDS FOR NEW INDUSTRIES IN NAICS 2017
NAICS 2012 industry title
211111 ............
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NAICS 2012
code
Crude Petroleum and Natural
Gas Extraction.
crude petroleum extraction.
natural gas extraction ....
Natural Gas Liquid Extraction
Lead Ore and Zinc Ore Mining.
Copper Ore and Nickel Ore
Mining.
211112 ............
212231 ............
212234 ............
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Current size
standard
(employees)
Current size
standard
($ million)
NAICS 2017
size standard
(employees)
NAICS 2017
size standard
($ million)
NAICS 2017
code
NAICS 2017 industry title
1,250
1,250
........................
1,250
........................
211120
Crude Petroleum Extraction.
1,250
750
750
........................
1,250
........................
211130
Natural Gas Extraction.
........................
750
........................
212230
Copper, Nickel, Lead, and
Zinc Mining.
1,500
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44889
TABLE 3—SIZE STANDARDS FOR NEW INDUSTRIES IN NAICS 2017—Continued
NAICS 2012
code
NAICS 2012 industry title
Current size
standard
(employees)
333911 ............
Pump and Pumping Equipment Manufacturing.
750
333913 ............
454112 ............
454113 ............
512210 ............
512220 ............
335221 ............
335222 ............
335224 ............
335228 ............
452111 ............
452112 ............
452112 ............
452910 ............
452990 ............
517110 ............
517210 ............
532220 ............
532230 ............
532291 ............
532292 ............
532299 ............
541711 ............
541712 ............
asabaliauskas on DSKBBXCHB2PROD with RULES
NAICS 2017
size standard
(employees)
NAICS 2017
size standard
($ million)
NAICS 2017
code
NAICS 2017 industry title
750
454111 ............
Measuring and Dispensing
Pump Manufacturing.
Household Cooking Appliance Manufacturing.
Household Refrigerator and
Home Freezer Manufacturing.
Household Laundry Equipment Manufacturing.
Other Major Household Appliance Manufacturing.
Department Stores (except
Discount Department
Stores).
Discount Department Stores
insignificant perishable
grocery sales.
Discount Department Stores
significant perishable
grocery sales.
Warehouse Clubs and
Supercenters.
All Other General Merchandise Stores.
Electronic Shopping ..............
Current size
standard
($ million)
721310 ............
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........................
750
........................
333914
Measuring, Dispensing, and
Other Pumping Equipment
Manufacturing.
........................
1,500
........................
335220
Major Household Appliance
Manufacturing.
........................
$32.5
........................
$32.5
452210
Department Stores.
........................
........................
29.5
29.5
........................
........................
29.5
29.5
........................
29.5
452311
Warehouse Clubs and
Supercenters.
........................
29.5
........................
32.5
........................
32.5
452319
........................
32.5
........................
38.5
454110
All Other General Merchandise Stores.
Electronic Shopping and
Mail-Order Houses.
Electronic Auctions ...............
Mail-Order Houses ...............
Record Production ................
........................
........................
........................
38.5
38.5
7.5
250
........................
512250
Record Production and Distribution.
Integrated Record Production/Distribution.
Wired Telecommunications
Carriers.
Wireless Telecommunications Carriers (except
Satellite).
Formal Wear and Costume
Rental.
Video Tape and Disc Rental
Home Health Equipment
Rental.
Recreational Goods Rental ..
All Other Consumer Goods
Rental.
Research and Development
in Biotechnology.
nanobiotechnologies research and experimental development
laboratories.
except
nanobiotechnologies
research and experimental development
laboratories.
Research and Development
in the Physical, Engineering, and Life Sciences (except Biotechnology).
nanotechnology research and experimental development
laboratories.
except nanotechnology
research and experimental development
laboratories.
1,250
1,500
........................
1,500
........................
517311
1,500
........................
1,500
........................
517312
........................
20.5
........................
20.5
532281
........................
........................
27.5
32.5
........................
........................
27.5
32.5
532282
532283
........................
........................
7.5
7.5
........................
........................
7.5
7.5
532284
532289
Wired Telecommunications
Carriers.
Wireless Telecommunications Carriers (except
Satellite).
Formal Wear and Costume
Rental.
Video Tape and Disc Rental.
Home Health Equipment
Rental.
Recreational Goods Rental.
All Other Consumer Goods
Rental.
1,000
........................
1,000
........................
541713
Research and Development
in Nanotechnology.
1,000
........................
1,000
........................
541714
Research and Development
in Biotechnology (except
Nanobiotechnology).
1,000
........................
1,000
........................
541713
Research and Development
in Nanotechnology.
1,000
........................
1,000
........................
541715
Rooming and Boarding
Houses.
........................
7.5
........................
7.5
721310
Research and Development
in the Physical, Engineering, and Life Sciences (except Nanotechnology and
Biotechnology).
Rooming and Boarding
Houses, Dormitories, and
Workers’ Camps.
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1,500
1,250
1,250
1,000
1,000
1,000
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Federal Register / Vol. 82, No. 186 / Wednesday, September 27, 2017 / Rules and Regulations
Similarly, another commenter
recommended that SBA consider
changing the size standard for NAICS
488190 (Other Support Activities for Air
Transportation) from revenues to
employees. The commenters argued that
the change would allow small
businesses providing those services to
continue to compete and succeed in a
market dominated by large businesses
which provide similar services as an
ancillary function to their primary
business. They provided an analysis of
the Federal Procurement Data System—
Next Generation (FPDS–NG) data to
describe the competitive structure of
their respective industries to support
their recommendations.
Since NAICS 541330 and 488190
were not impacted by the NAICS 2017
revision, SBA did not review those
industries nor did it propose any
changes to their size standards in the
April 2017 proposed rule. As part of the
first five-year comprehensive review of
size standards under the Small Business
Jobs Act of 2010 (Jobs Act) (Pub. L. 111–
240, September 27, 2010), in 2012, SBA
increased the size standard for the
Aerospace Equipment and Military
Weapons exception to NAICS 541330
from $27 million to $35.5 million (77 FR
7489, (February 10 2012)) and increased
the size standard for NAICS 488190
from $7 million to $30 million (77 FR
10943, (February 24, 2012)). In 2014,
they were further increased to $38.5
million and $32.5 million, respectively,
for inflation (79 FR 33647 (June 12,
2014)). SBA will review these size
standards again in the coming years as
part of the second five-year review of
size standards, as required by the Jobs
Act. Interested parties, including the
commenters, will have an opportunity
to comment when SBA publishes the
proposed rule for their industries.
The third commenter recommended
that SBA consider raising the small
business size standard for the Home
Health Equipment and Rental industry
from $32.5 million to $35 million, an
increase of 7.7 percent. The commenter
argued the increase reflects the
anticipated inflation and the cost of
doing business over the next five years.
The commenter also noted that a higher
size standard for NAICS 532283 would
allow some large firms to gain small
business status and help some small
firms retain their small business status
into the future. Thus, as a result, that
Federal agencies will have a larger pool
of small businesses from which to draw
for their small business procurement
programs, the commenter concluded.
The NAICS 2017 revision changed the
6-digit code for the Home Health
Equipment and Rental industry from
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532291 to 532283 without changing the
industry definition. Accordingly, for
new NAICS 532283, SBA applied the
same $32.5 million that currently
applies to NAICS 532291. The adoption
of NAICS 2017 led to changes in size
standards only when the new industry
was formed by merging the existing
industries or industry parts with
different size standards, not when only
the 6-digit code changed.
Every five years, SBA reviews all
monetary based size standards for
inflation and makes necessary
adjustments. SBA’s latest inflationary
adjustment to size standards was in
2014, which resulted in an increase to
the size standard for NAICS 532291
from $30 million to $32.5 million. SBA
anticipates issuing the next inflationary
adjustment of all monetary based size
standards sometime in 2019 and
interested parties will have an
opportunity to comment at that time.
Additionally, as part of the second fiveyear review of size standards under the
Jobs Act, SBA will also review all size
standards in the coming years against
the latest available industry and Federal
market data and make appropriate
adjustments. (In the first five-year
review, SBA increased the size standard
for NAICS 532291 from $7 million to
$30 million (77 FR 58747 (September
24, 2012)). The commenter will have an
opportunity to comment when SBA
publishes the proposed rule for NAICS
Sector 53, Real Estate and Rental and
Leasing.
SBA considered each comment and
determined that they were not germane
to the purpose of the proposed rule,
which was to adopt NAICS 2017 as a
basis for its table of size standards. The
intent and methodology of the proposed
rule did not provide for changing the
size standard for an industry whose
NAICS code was not affected by the
NAICS revision, nor did it provide for
adjusting a size standard for inflation or
the cost of doing business. Accordingly,
SBA is not modifying its April 18, 2017
proposed rule based on the comments
received and is adopting the proposed
rule, as published.
Justification for the October 1, 2017
Effective Date
The Administrative Procedure Act
(APA) requires that ‘‘publication or
service of a substantive rule shall be
made not less than 30 days before its
effective date, except * * * as
otherwise provided by the agency for
good cause found and published with
the rule.’’ 5 U.S.C. 553(d)(3). The
purpose of the APA provision delaying
the effective date of a rule for 30 days
after publication is to provide interested
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and affected members of the public
sufficient time to adjust their behavior
before the rule takes effect. For the
reasons set forth below, SBA finds that
good cause exists to make this final rule
become effective on October 1, 2017,
less than 30 days after it is published in
the Federal Register.
• In its August 8, 2016 notice, OMB
stated that Federal statistical
establishment data published for
reference years beginning on or after
January 1, 2017, should be published
using NAICS 2017. October 1, 2017 is
the start of the new Federal Government
fiscal year following OMB’s adoption of
NAICS 2017 effective January 1, 2017,
and is consistent with SBA’s adoption
of previous NAICS revisions effective at
the start of the next fiscal year after the
OMB’s effective date. Federal
contracting data and related statistics
will be more consistent and comparable
with past data for analyzing future small
business activity if the revised size
standards are adopted at the beginning
of a new fiscal year. Similarly, users of
size standards and Federal contracting
data, such as Federal prime contractors
developing their subcontracting plans,
can have more consistent data to
examine the past and future Federal
contracting trends.
• Small business size standards apply
to most Federal agencies and their
programs involving small businesses;
the time lag between the OMB’s
effective date and SBA’s update to its
size standards has already given them
time to implement the changes and
develop training tools, if necessary. For
instance, in July 2017, SBA provided
Integrated Award Environment with an
advance copy of the updated size
standards table to update the Federal
contracting databases such as the
System for Award Management.
• The rule is not significant under
Executive Order 12866 and the impacts
from changes to size standards due to
the adoption of the NAICS 2017 are
minimal. This final rule impacts size
standards for less than 10 industries
involving about 60 firms, with a vast
majority of them gaining small business
status under the revised size standards.
Those firms will benefit from an earlier
effective date.
• The impacted firms have had an
opportunity to review the changes and
submit comments during the notice and
comment period for this rule. None of
the three comments SBA received on
the April 18, 2017 proposed rule
opposed the changes. The affected firms
and other interested parties have had
ample time to adjust their behavior, if
necessary.
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Compliance With Executive Orders
12866, 13563, 13771, 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
OMB has determined that this final
rule is not a ‘‘significant regulatory
action’’ for purposes of Executive Order
12866. This rule incorporates the OMB’s
2017 revisions of NAICS, which SBA
uses to identify industries in the United
States for purposes of establishing small
business size standards. As discussed in
the Supplementary Information above,
the size standard of some industries
would change because of the NAICS
2017 revisions. However, SBA has
determined that virtually all businesses
currently defined as small under the
NAICS 2012 based size standards will
continue to be small under the NAICS
2017 based size standards. This rule
will also affect other Federal
Government programs that provide a
benefit for small businesses. In order to
help explain the need of this rule and
the rule’s potential benefits and costs,
SBA is providing below a Cost Benefit
Analysis. This final rule is also not a
‘‘major rule’’ under the Congressional
Review Act, 5 U.S.C. 800.
asabaliauskas on DSKBBXCHB2PROD with RULES
Cost Benefit Analysis
1. Is there a need for the regulatory
action?
SBA believes that adopting small
business size standards based on NAICS
2017 is in the best interests of small
businesses. SBA’s mission is to aid and
assist small businesses through a variety
of financial, procurement, business
development, and advocacy programs.
To assist the intended beneficiaries of
these programs effectively, SBA
establishes numerical definitions to
determine which businesses are deemed
eligible for Federal small business
assistance. NAICS 2017 provides the
latest industry definitions reflecting the
latest changes in industry structure. The
Small Business Act (the Act) provides
SBA’s Administrator with the
responsibility for establishing
definitions for small business. The Act
also requires that small business
definitions vary from industry to
industry reflecting differences among
the various industries. 15 U.S.C. 632(a).
By analyzing and reviewing size
standards based on the latest NAICS
definitions, SBA can more accurately
and appropriately fulfill its mandate. If
SBA does not use the latest industry
definitions, size standards would not
accurately reflect differences among
industries. In addition, the Jobs Act
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requires SBA to review all size
standards and make necessary
adjustments to reflect current industry
and market conditions at least every five
years. To better serve this mandate, SBA
needs to evaluate industry data based on
the latest NAICS industry definitions
available. In this final rule, SBA
generally followed the same guidelines
that the Agency used for adopting prior
NAICS revisions for its size standards,
as spelled out under the Supplemental
Information section, above. For certain
NAICS 2017 industries involving NAICS
2012 industries with substantially
different size standards, SBA also
analyzed the relevant industry and
program data to determine the size
standards for them. Size standards
based on NAICS 2017 industry
definitions and corresponding data will
serve SBA’s mission more effectively.
2. What are the potential benefits and
costs of this regulatory action?
The vast majority of the changes from
NAICS 2012 to NAICS 2017 consist of
revisions to industry titles or 6-digit
codes or mergers of some NAICS 2012
industries or their parts to form the
industries in NAICS 2017 without
impacting their size standards. Of the 29
affected NAICS 2012 industries or their
parts, SBA’s size standards using NAICS
2017 will result in increases to size
standards for six NAICS 2012 industries
and part of one industry, decreases for
two industries, and the change of size
standard from average annual receipts to
number of employees for one industry.
The size standards will remain
unchanged for other affected industries
or parts.
Based on the 2012 Economic Census
data for the affected NAICS 2012
industries, SBA estimates that
approximately 60 additional businesses
would gain small business status under
the revised size standards. That
represents about 0.1 percent of the
number of small businesses in the
affected industries. For the two
industries for which the size standard
will decrease, SBA also estimates that
fewer than five firms that qualify as
small under current size standards
under NAICS 2012 will no longer
qualify. However, almost all of those
firms do not currently participate in any
small business programs.
The benefits of adopting NAICS 2017
and the resulting revisions to size
standards will accrue to three groups in
the following ways: (1) Some businesses
that are above their current size
standards may gain small business
status, thereby becoming eligible to
participate in Federal small business
assistance programs, including SBA’s
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44891
financial assistance programs, economic
injury disaster loans, and Federal
procurement opportunities intended for
small businesses; (2) growing small
businesses that are close to exceeding
the current size standards for their
NAICS 2012 industry may retain their
small business status under NAICS
2017, and can continue participating in
the above programs; and (3) Federal
agencies will have a larger pool of small
businesses from which to draw for their
small business procurement programs
because they will be able to define more
accurately the principal purposes of
their procurements under NAICS 2017,
as required by 13 CFR 121.402(b).
Additional firms gaining small
business status under NAICS 2017 may
benefit under SBA’s various business
development and contracting programs.
These include the 8(a) Business
Development program and programs
benefiting small businesses located in
Historically Underutilized Business
Zones (HUBZones), Women Owned
Small Businesses (WOSBs), and Service
Disabled Veteran Owned Small
Businesses (SDVOSBs). Added
competition may also result in lower
prices for some Federal contracts
reserved for small businesses, although
SBA cannot quantify this benefit. Based
on data for fiscal years 2013–2015, SBA
estimates that approximately $700,000
in Federal contracts could be awarded
to the newly defined small businesses
under the size standards revisions due
to the adoption of NAICS 2017.
Under SBA’s 7(a) and 504 Loan
Programs, SBA would be able to
guarantee more loans, although, in this
case too, the number and amount of
additional loans cannot be estimated
accurately. Based on the Agency 7(a)
and 504 loan data for fiscal years 2014–
2016, SBA estimates that about two
additional loans, totaling approximately
$200,000, could be made to the newly
defined small businesses under the
NAICS 2017 size standards. Under the
Jobs Act, SBA can now guarantee
substantially larger loans than in the
past. Additionally, the Jobs Act
established an alternative size standard
for SBA’s 7(a) and 504 Loan Programs
for applicants that do not meet the size
standards for their industries.
Specifically, section 1116 of the Jobs
Act provides that if a firm applying for
a 7(a) or 504 loan does not meet the size
standard for its industry, it might still
qualify if it has a tangible net worth that
does not exceed $15 million and an
average net income after Federal income
taxes (excluding any carry-over losses)
for its preceding two completed fiscal
years that does not exceed $5 million.
Thus, the updated size standards may
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result in an increase in SBA’s loan
guarantees to small businesses in the
affected industries, but SBA cannot
quantify this impact.
Newly defined small businesses will
also benefit from SBA’s Economic Injury
Disaster Loan (EIDL) Program. Since this
program is contingent on the occurrence
and severity of a disaster, SBA cannot
make a meaningful estimate of future
EIDL benefit.
To the extent that newly defined
small firms under NAICS 2017 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.
More firms may seek SBA’s guaranteed
loans. More will be enrolled in the
SBA’s Dynamic Small Business Search
database. Since more firms will qualify
as small, more may also seek
certification as 8(a) or HUBZone firms,
or qualify for WOSB, SDVOSB, and/or
small disadvantaged business (SDB)
status. It is important to point out that
most business entities that are already
registered in SAM will not be required
to update their SAM profiles. However,
it will be incumbent on registrants to
review their profiles to ensure that they
have the correct NAICS codes. SAM
requires that registered companies
review and update their profiles
annually, and therefore, businesses will
need to pay particular attention to the
changes to determine if they might
affect them. They will also have to
verify and update, if necessary, their
Representations and Certifications in
SAM. Further, firms are required to
verify that their size representation in
SAM is accurate prior to submitting an
offer for a contract. FAR 52.204–8(d).
Among the newly qualified
businesses seeking SBA’s assistance,
there could be some additional costs
associated with compliance and
verification of small business status and
protests of small business status. These
added costs are likely to be minimal
because mechanisms are already in
place to handle these administrative
requirements.
The costs to the Federal Government
may be higher on some Federal
contracts under the higher revised size
standards under NAICS 2017. With
more businesses defined as small,
Federal agencies might choose to set
aside more contracts for competition
among small businesses rather than
using full and open competition. The
movement from unrestricted to set-aside
contracting will likely result in
competition among fewer total bidders,
although there will be a larger pool of
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small businesses to submit offers. In
addition, higher costs may result when
additional full and open contracts are
awarded to HUBZone businesses
because of a price evaluation preference.
The additional costs associated with
fewer bidders, however, will likely be
minor since, as a matter of law,
procurements may be set aside for small
businesses or reserved for the 8(a),
HUBZone, WOSB, or SDVOSB Programs
only if awards are expected to be made
at fair and reasonable prices.
The revised size standards may have
some distributional effects among large
and small businesses. Although SBA
cannot estimate with certainty the
actual outcome of gains and losses
among small and large businesses, there
are several likely impacts. There may be
a transfer of some Federal contracts
from large businesses to small
businesses. Large businesses may have
fewer Federal contract opportunities as
Federal agencies decide to set aside
more Federal contracts for small
businesses. In addition, some agencies
may award more Federal contracts to
HUBZone firms instead of large
businesses since HUBZone concerns
may be eligible for price evaluation
adjustments when they compete on full
and open procurement opportunities.
Similarly, currently defined small
businesses may receive fewer Federal
contracts due to the increased
competition from more businesses
defined as small under NAICS 2017.
This transfer may be offset by more
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 small businesses under the
existing size standards. SBA cannot
estimate with precision the potential
distributional impacts of these transfers.
SBA’s adoption of NAICS 2017 and
resulting revisions to size standards is
consistent with SBA’s statutory mandate
to assist small business by providing
access to capital and credit, Government
contracts, and management and
technical assistance. Updated size
standards based on the latest industry
definitions ensure that Federal small
business assistance is more effectively
targeted to its intended beneficiaries.
The Small Business Act states that ‘‘the
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.’’ 15 U.S.C. 632(a)(3).
With the adoption of the latest industry
definitions in NAICS 2017, SBA’s size
standards are more consistent with the
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differing characteristics among the
various industries.
Executive Order 13563
A description of the need for this
regulatory action and benefits and costs
associated with this action including
possible distribution impacts that relate
to Executive Order 13563 are included
above in the Cost Benefit Analysis.
To engage interested parties in this
action, SBA reached out to all Federal
agencies advising them that the Agency
plans to update its table of size
standards to NAICS 2017, effective
October 1, 2017, and that agencies must
continue using the current size
standards until that date. Adopting the
updated size standards on October 1,
2017 is consistent with SBA’s adoptions
of previous NAICS revisions at the
beginning of the new fiscal year
following the OMB’s January 1 effective
date of NAICS revisions for Federal
statistical agencies.
Unlike the previous NAICS revisions
which SBA adopted for its size
standards either through a direct final
rule or through an interim final rule, for
the adoption of NAICS 2017 revision,
SBA issued a proposed rule, seeking
comments to better engage the public in
the process. SBA received no germane
adverse comments to the proposed rule.
SBA is adopting the updated table of
size standards, effective October 1,
2017. SBA will also issue a press release
on the publication of the final rule and
update the ‘‘What’s New with Size
Standards’’ page on its Web site at
www.sba.gov/size.
Executive Order 13771
This rule is not an E.O. 13771
regulatory action because this rule is not
significant under Executive Order
12866.
Executive Order 12988
This action meets applicable
standards set forth in Sections 3(a) and
3(b)(2) of Executive Order 12988, Civil
Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce
burden. The action does not have
retroactive or preemptive effect.
Executive Order 13132
For purposes of Executive Order
13132, SBA has determined that this
final rule will not have substantial,
direct effects on the States, on the
relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government. Therefore, SBA
has determined that this final rule has
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no Federalism implications warranting
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 final rule
would not impose any new reporting or
recordkeeping requirements.
asabaliauskas on DSKBBXCHB2PROD with RULES
Final Regulatory Flexibility Analysis
Under the Regulatory Flexibility Act
(RFA), this final rule may have an
impact on some small businesses in
industries for which size standards have
been revised. As described above, this
rule may affect small businesses
applying for Federal government
contracts, loans under SBA’s 7(a), 504,
and Economic Injury Disaster Loan
Programs, and assistance under other
Federal small business programs.
Immediately below, SBA sets forth a
final regulatory flexibility analysis
(FRFA) of this final rule addressing the
following questions: (1) What are the
need for and objectives of the rule?; (2)
What are SBA’s description and
estimate of the number of small
businesses 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
that 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 businesses?
1. What are the need for and objectives
of the rule?
The Small Business Act requires that
small business size standards vary from
industry to industry reflecting the
differing characteristics of the various
industries. SBA uses the latest NAICS as
a basis of industry definitions for its
table of size standards. As part of its
five-year review of and revisions to
NAICS industry definitions, OMB
published its latest NAICS revision,
NAICS 2017, on August 8, 2016.
According to OMB’s notice, Federal
establishment and industry data for
reference years beginning on or after
January 1, 2017 should be published
using NAICS 2017. This rule amends
SBA’s small business size regulations to
incorporate NAICS 2017 into its table of
size standards. This not only makes
SBA’s size standards more reflective of
the latest industry differences but also
makes them more consistent with latest
industry data the Agency uses to
establish, review or adjust size
standards. Updating size standards to
the latest industry definitions also
serves the SBA’s mandate to review all
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44893
size standards and make appropriate
adjustments to reflect market conditions
under the Jobs Act.
regulatory burden because size
standards neither regulate nor control
business behavior.
2. What are SBA’s description and
estimate of the number of small
businesses to which the rule will apply?
With the update of size standards to
the latest industry definitions under
NAICS 2017, Federal small business
assistance is more effectively targeted to
its intended beneficiaries. The adoption
of NAICS 2017 will result in increases
in size standards for six industries and
part of one industry under NAICS 2012
and decreases for two. The size
standards for the rest of the 29 affected
industries will remain unchanged. In
industries whose size standards have
increased due to the adoption of NAICS
2017, about 60 firms above the current
size standards will qualify as small
under the updated size standards,
thereby making them eligible for Federal
small business assistance programs.
Based on the recent data, SBA estimates
that approximately $700,000 in Federal
contracts and about $200,000 in SBA
loans could be awarded to the newly
defined small businesses under the
updated size standards. The updated
size standards will enable more small
businesses to maintain their small
business size status for a longer period.
In the two NAICS 2012 industries for
which the size standard will decrease,
about 3–4 firms below the current size
standards will lose their small business
size status under the NAICS 2017 based
size standards. However, the program
data suggests that this will not cause
much impact on them. Currently, they
are not participating in any small
business programs. Additionally, in
both industries, Federal contracting and
SBA’s loan activities are quite
insignificant.
4. What are the relevant Federal rules,
which may duplicate, overlap, or
conflict with the rule?
3. What are the projected reporting,
recordkeeping and other compliance
requirements of the rule?
The size standard changes due to the
adoption of NAICS 2017 impose no
additional reporting or recordkeeping
requirements on small businesses.
However, qualifying for Federal small
business contracting and other programs
may require businesses to register in
SAM and recertify in SAM that they are
small at least once annually. Therefore,
the newly qualified small businesses
opting to participate in those programs
must comply with SAM requirements.
There are no costs associated with either
SAM registration or annual
recertification. Changing size standards
alters the access to SBA’s financial and
other Federal programs that assist small
businesses, but does not impose a
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Under section 3(a)(2)(C) of the Small
Business Act, 15 U.S.C. 632(a)(2)(c),
Federal agencies must generally use
SBA’s size standards to define a small
business, unless specifically authorized
by statute to do otherwise. 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)). 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 RFA authorizes a
Federal 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)). SBA is
not aware of any Federal rule that
would duplicate or conflict with
establishing or updating size standards.
5. What alternatives will allow the
Agency to accomplish its regulatory
objectives while minimizing the impact
on small entities?
By law, SBA is required to develop
numerical size standards for
establishing eligibility for Federal small
business assistance programs. Other
than varying levels of size standards by
industry and changing the size
measures, no practical alternative exists
to the systems of numerical size
standards. SBA considered continuing
to use NAICS 2012 as a basis of industry
definitions for its table of size standards.
However, that would render SBA’s table
of size standards incompatible with
Federal industry and establishment
statistics and other databases.
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 amends 13 CFR part 121
as follows:
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■
1. The authority citation for part 121
continues to read as follows:
■
Authority: 15 U.S.C. 632, 634(b)(6), 662,
and 694a(9).
2. In § 121.201, amend the table,
‘‘Small Business Size Standards by
NAICS Industry’’ as follows:
■ a. Remove the entries for 211111 and
211112;
■ b. Add entries for 211120 and 211130;
■ c. Remove the entries for 212231 and
212234;
■ d. Add an entry for 212230;
■ e. Remove the entry 333911;
■ f. Remove the entry 333913;
■ g. Add an entry for 333914;
■
h. Add an entry for 335220;
i. Remove the entries for 335221,
335222, 335224, and 335228;
■ j. Remove the entries for 452111,
452112, 452910, and 452990;
■ k. Add entries for 452210, 452311,
and 452319;
■ l. Add an entry for 454110;
■ m. Remove the entries for 454111,
454112, and 454113;
■ n. Remove the entries for 512210 and
512220;
■ o. Add an entry for 512250;
■ p. Remove the entries for 517110 and
517210;
■ q. Add entries for 517311 and 517312;
■ r. Remove the entries for 532220,
532230, 532291, 532292, and 532299;
■
PART 121—SMALL BUSINESS SIZE
REGULATIONS
s. Add entries for 532281, 532282,
532283, 532284, and 532289;
■ t. Remove the entry for 541711;
■ u. Remove the entry for 541712;
■ v. Add entries for 541713 and 541714;
■ w. Add an entry for 541715;
■ x. Revise the NAICS industry title of
the entry for 721310 to read, ‘‘Rooming
and Boarding Houses, Dormitories, and
Workers’ Camps’’; and
■ y. Revise footnote 11 at the end of the
table.
The additions and revisions read as
follows:
■
§ 121.201 What size standards has SBA
identified by North American Industry
Classification System codes?
*
*
*
*
*
NAICS codes
NAICS U.S. industry title
Size standards
in millions of
dollars
*
211120 ...................
211130 ...................
*
*
*
*
Crude Petroleum Extraction ................................................................................................
Natural Gas Extraction ........................................................................................................
*
........................
........................
*
*
212230 ...................
*
*
*
*
Copper, Nickel, Lead, and Zinc Mining ...............................................................................
*
........................
*
*
333914 ...................
*
*
*
*
Measuring, Dispensing, and Other Pumping Equipment Manufacturing ............................
*
........................
*
*
335220 ...................
*
*
*
*
Major Household Appliance Manufacturing ........................................................................
*
........................
*
*
452210 ...................
452311 ...................
452319 ...................
*
*
*
*
Department Stores ..............................................................................................................
Warehouse Clubs and Supercenters ..................................................................................
All Other General Merchandise Stores ...............................................................................
*
*
454110 ...................
*
*
*
*
Electronic Shopping and Mail-Order Houses ......................................................................
*
*
512250 ...................
*
*
*
*
Record Production and Distribution ....................................................................................
*
........................
*
*
517311 ...................
517312 ...................
*
*
*
*
Wired Telecommunications Carriers ...................................................................................
Wireless Telecommunications Carriers (except Satellite) ..................................................
*
........................
........................
*
*
...................
...................
...................
...................
...................
*
*
*
*
Formal Wear and Costume Rental .....................................................................................
Video Tape and Disc Rental ...............................................................................................
Home Health Equipment Rental .........................................................................................
Recreational Goods Rental .................................................................................................
All Other Consumer Goods Rental .....................................................................................
*
541713 ...................
541714 ...................
541715 ...................
*
*
*
*
Research and Technology in Nanotechnology 11 ...............................................................
Research and Technology in Biotechnology (except Nanobiotechnology) 11 ....................
Research and Development in the Physical, Engineering, and Life Sciences (except
Nanotechnology and Biotechnology) 11.
Aircraft, Aircraft Engine and Engine Parts 11 ......................................................................
Other Aircraft Parts and Auxiliary Equipment 11 .................................................................
Guided Missiles and Space Vehicles, Their Propulsion Units and Propulsion Parts 11 .....
asabaliauskas on DSKBBXCHB2PROD with RULES
532281
532282
532283
532284
532289
Except, ...................
Except, ...................
Except, ...................
*
1,250
1,250
750
750
1,500
32.5
29.5
32.5
*
........................
........................
........................
38.5
*
........................
*
20.5
27.5
32.5
7.5
7.5
*
........................
........................
........................
250
1,500
1,500
*
........................
........................
........................
........................
........................
*
11 1,000
11 1,000
11 1,000
11 1,500
........................
........................
........................
11 1,250
11 1,250
*
*
*
*
*
Footnotes
*
*
*
11NAICS codes 541713, 541714, and 541715 —
*
*
*
*
VerDate Sep<11>2014
*
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in number of
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17:24 Sep 26, 2017
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Federal Register / Vol. 82, No. 186 / Wednesday, September 27, 2017 / Rules and Regulations
44895
(a) ‘‘Research and Development’’ means laboratory or other physical research and development. It does not include economic, educational, engineering, operations, systems, or other nonphysical research; or computer programming, data processing, commercial and/or medical laboratory
testing.
(b) For research and development contracts requiring the delivery of a manufactured product, the appropriate size standard is that of the manufacturing industry.
(c) For purposes of the Small Business Innovation Research (SBIR) and Small Business Transfer Technology (STTR) programs, the term ‘‘research’’ or ‘‘research and development’’ means any activity which is (A) a systematic, intensive study directed toward greater knowledge or understanding of the subject studied; (B) a systematic study directed specifically toward applying new knowledge to meet a recognized need; or (C)
a systematic application of knowledge toward the production of useful materials, devices, and systems or methods, including design, development, and improvement of prototypes and new processes to meet specific requirements. See 15 U.S.C. 638(e)(5) and section 3 of the SBIR and
STTR policy directives available at www.sbir.gov. For size eligibility requirements for the SBIR and STTR programs, see § 121.702 of this part.
(d) ‘‘Research and Development’’ for guided missiles and space vehicles includes evaluations and simulation, and other services requiring thorough knowledge of complete missiles and spacecraft.
*
*
*
*
*
Dated: September 8, 2017.
Linda E. McMahon,
Administrator.
[FR Doc. 2017–20705 Filed 9–26–17; 8:45 am]
BILLING CODE 8025–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2016–9386; Product
Identifier 2016–NM–056–AD; Amendment
39–19055; AD 2017–19–25]
RIN 2120–AA64
Airworthiness Directives; Airbus
Defense and Space S.A. (Formerly
Known as Construcciones
Aeronauticas, S.A.) Airplanes
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
AGENCY:
We are adopting a new
airworthiness directive (AD) for all
Airbus Defense and Space S.A. Model
CN–235, CN–235–100, CN–235–200,
and CN–235–300 airplanes; and Model
C–295 airplanes. This AD was prompted
by reports of leakage of motorized crossfeed fuel valves. This AD requires
repetitive inspections and operational
checks of the affected fuel valves, and
corrective actions if necessary. We are
issuing this AD to address the unsafe
condition on these products.
DATES: This AD is effective November 1,
2017.
The Director of the Federal Register
approved the incorporation by reference
of certain publications listed in this AD
as of November 1, 2017.
ADDRESSES: For service information
identified in this final rule, contact
Airbus Defense and Space Services/
Engineering Support, Avenida de
´
Aragon 404, 28022 Madrid, Spain;
telephone +34 91 585 55 84; fax +34 91
585 31 27; email
MTA.TechnicalService@airbus.com.;
asabaliauskas on DSKBBXCHB2PROD with RULES
SUMMARY:
VerDate Sep<11>2014
17:24 Sep 26, 2017
Jkt 241001
Internet https://www.eads.net. You may
view this referenced service information
at the FAA, Transport Standards
Branch, 1601 Lind Avenue SW., Renton,
WA. For information on the availability
of this material at the FAA, call 425–
227–1221. It is also available on the
Internet at https://www.regulations.gov
by searching for and locating Docket No.
FAA–2016–9386.
Examining the AD Docket
You may examine the AD docket on
the Internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2016–
9386; or in person at the Docket
Management Facility between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket
contains this AD, the regulatory
evaluation, any comments received, and
other information. The street address for
the Docket Office (telephone 800–647–
5527) is Docket Management Facility,
U.S. Department of Transportation,
Docket Operations, M–30, West
Building Ground Floor, Room W12–140,
1200 New Jersey Avenue SE.,
Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT:
Shahram Daneshmandi, Aerospace
Engineer, International Section,
Transport Standards Branch, FAA, 1601
Lind Avenue SW., Renton, WA 98057–
3356; telephone 425–227–1112; fax
425–227–1149.
SUPPLEMENTARY INFORMATION:
Discussion
We issued a supplemental notice of
proposed rulemaking (SNPRM) to
amend 14 CFR part 39 by adding an AD
that would apply to all Airbus Defense
and Space S.A. Model CN–235, CN–
235–100, CN–235–200, and CN–235–
300 airplanes; and Model C–295
airplanes. The SNPRM published in the
Federal Register on June 21, 2017 (82
FR 28274) (‘‘the SNPRM’’). We preceded
the SNPRM with a notice of proposed
rulemaking that published in the
Federal Register on November 25, 2016
(81 FR 85169) (‘‘the NPRM’’). The
NPRM proposed to require an
inspection of motorized cross-feed fuel
PO 00000
Frm 00017
Fmt 4700
Sfmt 4700
valves and, depending on findings,
applicable corrective action(s). The
NPRM was prompted by leakage of a
motorized cross-feed fuel valve. The
SNPRM proposed to require a reduced
compliance time for the initial
inspection, the addition of repetitive
inspections and operational checks, and
corrective actions if necessary. We are
issuing this AD to detect and correct
leaks in a motorized fuel valve, which
could lead to failure of the fuel valve
and consequent improper fuel system
functioning or, in case of the presence
of an ignition source, an airplane fire.
The European Aviation Safety Agency
(EASA), which is the Technical Agent
for the Member States of the European
Union, has issued EASA Airworthiness
Directive 2017–0004, dated January 9,
2017 (referred to after this as the
Mandatory Continuing Airworthiness
Information, or ‘‘the MCAI’’), to correct
an unsafe condition for all Airbus
Defense and Space S.A. Model CN–235,
CN–235–100, CN–235–200, and CN–
235–300 airplanes; and Model C–295
airplanes. The MCAI states:
Leakage of a motorised cross-feed fuel
valve Part Number (P/N) 7923227F was
reported on a CN–235–100M aeroplane. The
leakage was observed through the valve
electrical connectors and detected during
accomplishment of a functional check in
accordance with task 28.007 of the CN–235
Maintenance Review Board Report (MRB
CN–235–PV01). Identical motorised fuel
valves are installed on civilian CN–235 and
C–295 aeroplanes, as cross-feed, shut-off and
defueling valves.
This condition, if not detected and
corrected, could lead to failure of a motorised
fuel valve and consequent improper
functioning of the fuel system or, in case of
an ignition source, could lead to a fire,
possibly resulting in damage to the aeroplane
and injury to occupants.
To address this potentially unsafe
condition, Airbus Defence & Space (D&S)
issued Alert Operators Transmission (AOT)–
CN235–28–0001 and AOT–C295–28–0001 to
provide inspection instructions.
Consequently, EASA issued AD 2016–0071
to require a one-time inspection of the
affected motorised fuel valves and,
depending on findings, accomplishment of
applicable corrective action(s).
Since that [EASA] AD was issued, new
occurrences of fuel leakage involving the
E:\FR\FM\27SER1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 186 (Wednesday, September 27, 2017)]
[Rules and Regulations]
[Pages 44886-44895]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20705]
=======================================================================
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245-AG84
Small Business Size Standards; Adoption of 2017 North American
Industry Classification System for Size Standards
AGENCY: U.S. Small Business Administration.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Small Business Administration (SBA) is adopting,
without change, its proposed revisions to small business size
standards. With the adoption of the proposed changes, SBA incorporates
the U.S. Office of Management and Budget's (OMB) North American
Industry Classification System (NAICS) revision for 2017, identified as
NAICS 2017, into its table of small business size standards. NAICS 2017
created 21 new industries by reclassifying, combining, or splitting 29
existing industries under changes made to NAICS in 2012 (NAICS 2012).
SBA's size standards for these 21 new industries have resulted in an
increase to size standards for six NAICS 2012 industries and part of
one industry, a decrease to size standards for two, a change in the
size standards measure from average annual receipts to number of
employees for one, and no change in size standards for twenty
industries and part of one industry.
DATES: This rule is effective October 1, 2017.
FOR FURTHER INFORMATION CONTACT: Dr. Jorge Laboy-Bruno, Office of Size
Standards, (202) 205-6618 or sizestandards@sba.gov.
SUPPLEMENTARY INFORMATION: Effective October 1, 2000, SBA adopted NAICS
1997 industry definitions as a basis for its table of small business
size standards, replacing the 1987 Standard Industrial Classification
(SIC) (65 FR 30836 (May 15, 2000)). Since then, OMB has issued four
revisions to NAICS. SBA's table of size standards adopted the OMB's
first revision, NAICS 2002, effective October 1, 2002 (67 FR 52597
(August 13, 2002)), the second revision, NAICS 2007, effective October
1, 2007 (72 FR 49639 (August 29, 2007)), and the third revision, NAICS
2012, effective October 1, 2012 (77 FR 49991 (August 20, 2012)).
OMB published its fourth and latest revision, NAICS 2017, ``Notice
of NAICS 2017 final decisions'' in the Federal Register on August 8,
2016 (81 FR 52584). The OMB notice stated that Federal statistical
establishment data published for reference years beginning on or after
January 1, 2017, should be published using NAICS 2017.
As with the previous NAICS revisions, SBA is adopting the NAICS
2017 revision at the beginning of the new fiscal year (October 1, 2017)
following the OMB's release of the NAICS revision for reasons as set
forth under the Justification for the October 1, 2017 Effective Date
section, below:
Changes in NAICS 2017
NAICS 2017 created 21 new NAICS industries by reclassifying,
splitting, or merging 29 industries or their parts under NAICS 2012. Of
those 21 new industries, five were created by merging two or more of
thirteen NAICS 2012 industries in their entirety, while three were
created by combining part of one industry with another industry. Three
new industries were created by splitting two industries to two parts
each with one part of each industry defined as a separate industry and
combining other parts of the two industries to form a separate new
industry. One new industry was formed by designating part of one
industry as a separate industry. OMB also changed 6-digit NAICS codes
for eight industries without changing their definitions and titles and
amended the title of one industry without changing its 6-digit code.
Table 1, ``NAICS 2012 Industries or Their Parts Matched to NAICS 2017
Industries,'' below, shows the changes from NAICS 2012 to NAICS 2017.
Complete information on the relationship between NAICS 2012 and
NAICS 2017 is available on the U.S. Bureau of the Census (Census
Bureau) Web site at https://www.census.gov/eos/
[[Page 44887]]
www/naics/. The Census Bureau's Web site also provides detailed
documentation on Federal notices involving the replacement of SIC with
NAICS, and all subsequent NAICS updates and revisions, including the
August 8, 2016 ``Notice of NAICS 2017 final decisions,'' as well as
concordances (i.e., correspondence tables) between SIC and NAICS 1997
and NAICS 2002, and between subsequent NAICS revisions.
Table 1--NAICS 2012 Industries or Their Parts Matched to NAICS 2017 Industries
----------------------------------------------------------------------------------------------------------------
NAICS 2012 industry NAICS 2017 NAICS 2017 industry
NAICS 2012 code title Status code code title
----------------------------------------------------------------------------------------------------------------
211111................... Crude Petroleum and
Natural Gas Extraction.
crude petroleum ................. 211120 Crude Petroleum
extraction. Extraction.
natural gas extraction.. pt. 211130 Natural Gas Extraction.
211112................... Natural Gas Liquid pt. 211130 Natural Gas Extraction.
Extraction.
212231................... Lead Ore and Zinc Ore pt. 212230 Copper, Nickel, Lead,
Mining. and Zinc Mining.
212234................... Copper Ore and Nickel pt. 212230 Copper, Nickel, Lead,
Ore Mining. and Zinc Mining.
333911................... Pump and Pumping pt. 333914 Measuring, Dispensing,
Equipment Manufacturing. and Other Pumping
Equipment
Manufacturing.
333913................... Measuring and Dispensing pt. 333914 Measuring, Dispensing,
Pump Manufacturing. and Other Pumping
Equipment
Manufacturing.
335221................... Household Cooking pt. 335220 Major Household
Appliance Manufacturing. Appliance
Manufacturing.
335222................... Household Refrigerator pt. 335220 Major Household
and Home Freezer Appliance
Manufacturing. Manufacturing.
335224................... Household Laundry pt. 335220 Major Household
Equipment Manufacturing. Appliance
Manufacturing.
335228................... Other Major Household pt. 335220 Major Household
Appliance Manufacturing. Appliance
Manufacturing.
452111................... Department Stores pt. 452210 Department Stores.
(except Discount
Department Stores).
452112................... Discount Department
Stores.
insignificant pt. 452210 Department Stores.
perishable grocery
sales.
significant pt. 452311 Warehouse Clubs and
perishable grocery Supercenters.
sales.
452910................... Warehouse Clubs and pt. 452311 Warehouse Clubs and
Supercenters. Supercenters.
452990................... All Other General nc. 452319 All Other General
Merchandise Stores. Merchandise Stores.
454111................... Electronic Shopping..... pt. 454110 Electronic Shopping and
Mail-Order Houses.
454112................... Electronic Auctions..... pt. 454110 Electronic Shopping and
Mail-Order Houses.
454113................... Mail-Order Houses....... pt. 454110 Electronic Shopping and
Mail-Order Houses.
512210................... Record Production....... pt. 512250 Record Production and
Distribution.
512220................... Integrated Record pt. 512250 Record Production and
Production/Distribution. Distribution.
517110................... Wired Telecommunications nc. 517311 Wired Telecommunications
Carriers. Carriers.
517210................... Wireless nc. 517312 Wireless
Telecommunications Telecommunications
Carriers (except Carriers (except
Satellite). Satellite).
532220................... Formal Wear and Costume nc. 532281 Formal Wear and Costume
Rental. Rental.
532230................... Video Tape and Disc nc. 532282 Video Tape and Disc
Rental. Rental.
532291................... Home Health Equipment nc. 532283 Home Health Equipment
Rental. Rental.
532292................... Recreational Goods nc. 532284 Recreational Goods
Rental. Rental.
532299................... All Other Consumer Goods nc. 532289 All Other Consumer Goods
Rental. Rental.
541711................... Research and Development
in Biotechnology.
nanobiotechnologies pt. 541713 Research and Development
research and in Nanotechnology.
experimental
development
laboratories.
except ................. 541714 Research and Development
nanobiotechnologies in Biotechnology
research and (except
experimental Nanobiotechnology).
development
laboratories.
541712................... Research and Development
in the Physical,
Engineering, and Life
Sciences (except
Biotechnology).
nanotechnology pt. 541713 Research and Development
research and in Nanotechnology.
experimental
development
laboratories.
except nanotechnology ................. 541715 Research and Development
research and in the Physical,
experimental Engineering, and Life
development Sciences (except
laboratories. Nanotechnology and
Biotechnology).
721310................... Rooming and Boarding nt. 721310 Rooming and Boarding
Houses. Houses, Dormitories,
and Workers' Camps.
----------------------------------------------------------------------------------------------------------------
Key to Abbreviations.
pt. = Part of 2017 industry.
nc. = 6-digit NAICS codes changed without changing industries' definitions and titles.
nt. = NAICS industry title amended without changing the 6-digit code.
Size Standards for New Industries in NAICS 2017
On October 22, 1999, SBA proposed to replace SIC with NAICS 1997 as
the basis of industry definitions for its table of small business size
standards (64 FR 57188). The proposed rule included a set of guidelines
or rules that SBA applied to convert the size standards for industries
under SIC to NAICS. The guidelines aimed to minimize the impact of
applying a new industry classification system on SBA's size standards
and on small businesses that qualified as small under the SIC based
size standards. SBA received no negative comments against the proposed
guidelines. SBA published its final rule on May 15, 2000 (65 FR 30386)
(corrected on September 5, 2000, 65 FR 53533) adopting the resulting
table of size standards based on NAICS 1997, as proposed. To be
consistent, SBA used the same guidelines when it updated its
[[Page 44888]]
table of size standards to adopt NAICS 2002, NAICS 2007, and NAICS 2012
revisions. In those updates as well, SBA received no adverse comments
on using those guidelines, or on the resulting changes to the size
standards. For the April 18, 2017 proposed rule to adopt NAICS 2017 for
its size standards table, SBA also generally followed the same
guidelines, as shown below in Table 2, ``General Guidelines to
Establish Size Standards for New Industries under NAICS 2017.''
Table 2--General Guidelines To Establish Size Standards for New
Industries Under NAICS 2017
------------------------------------------------------------------------
The size standard for the NAICS
If the NAICS 2017 industry is composed 2017 industry code will be:
of:
------------------------------------------------------------------------
1. A single NAICS 2012 industry or part The same size standard as for
of a single NAICS 2012 industry. the NAICS 2012 industry or
part.
2. Two or more NAICS 2012 industries; ...............................
two or more parts of an NAICS 2012
industry; parts of two or more NAICS
2012 industries; or one or more NAICS
2012 industries and part(s) of one or
more NAICS 2012 industries, and.
2a. they all have the same size The same size standard as for
standard. the NAICS 2012 industries or
parts.
2b. they all have the same size The same size standard as for
measure (e.g., receipts, the NAICS 2012 industry or
employees, etc.) but do not all part that most closely matches
have the same size standard. the economic activity
described by the NAICS 2017
industry, or
The highest size standard among
the NAICS 2012 industries and
part(s) that comprise the
NAICS 2017 industry, provided
that the highest size standard
does not include dominant or
potentially dominant firms.
2c. they have different size The same size standard as for
measures (i.e., for example, some the NAICS 2012 industry or
are based on receipts and others part that most closely matches
on employees) and hence do not all the economic activity
have the same size standard. described by the NAICS 2017
industry, or
The highest size standard among
the NAICS 2012 industries and
part(s) that comprise the
NAICS 2017 industry, provided
that the highest size standard
does not include dominant or
potentially dominant firms.
------------------------------------------------------------------------
To apply this rule, SBA converts all size standards to a single measure
(e.g., receipts, employees, etc.) using the size measure for the NAICS
2012 industry or part(s) that most closely match the economic activity
described by the NAICS 2017 industry or using the size measure that
applies to most of the NAICS industries or parts comprising the NAICS
2017 industry.
In addition to the above general guidelines, in cases where a new
industry is formed by merging multiple industries or their parts with
substantially different levels or different measures of size standards,
as detailed in the April 18, 2017 proposed rule, SBA also examined the
relevant latest industry and Federal procurement data to determine an
appropriate size standard for the new industry. Developed based on the
above guidelines and analyses of the relevant data, where necessary,
SBA's size standards for the new industries under NAICS 2017 are shown
in Table 3, ``Size Standards for New Industries in NAICS 2017.'' Also
shown in the table are the current size standards for the affected
NAICS 2012 industries and their parts.
As shown in Table 3, the size standards for most of the affected
NAICS 2012 industries are not impacted and therefore remain unchanged
under NAICS 2017. The majority of the changes consist of revisions to
industry codes or titles, or mergers of two or more NAICS 2012
industries or their parts to new industries without impacting their
size standards. Of the 29 NAICS 2012 industries affected by the
revision, adopting NAICS 2017 increases size standards for six
industries and part of one industry and decreases for two. This would
also result in changing the size standard measure for one industry from
average annual receipts to number of employees. Size standards for
twenty industries and part of one industry do not change.
Discussion of Comments
For the April 18, 2017 proposed rule, SBA provided a 60-day comment
period for the public to comment on proposed changes to size standards
from the adoption of the NAICS 2017, which ended on June 19, 2017. SBA
received three comments to the proposed rule, two of which were outside
the scope of the proposed rule as discussed below.
One commenter recommended that SBA change the size standard for the
Military and Aerospace Equipment and Military Weapons exception to
NAICS 541330 (Engineering Services) from average annual revenues to the
number of employees.
Table 3--Size Standards for New Industries in NAICS 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current size Current size NAICS 2017 NAICS 2017
NAICS 2012 code NAICS 2012 industry standard standard ($ size standard size standard NAICS 2017 NAICS 2017 industry
title (employees) million) (employees) ($ million) code title
--------------------------------------------------------------------------------------------------------------------------------------------------------
211111.................. Crude Petroleum and 1,250
Natural Gas
Extraction.
crude petroleum 1,250 .............. 1,250 .............. 211120 Crude Petroleum
extraction. Extraction.
natural gas 1,250 .............. 1,250 .............. 211130 Natural Gas
extraction. Extraction.
211112.................. Natural Gas Liquid 750
Extraction.
212231.................. Lead Ore and Zinc Ore 750 .............. 750 .............. 212230 Copper, Nickel, Lead,
Mining. and Zinc Mining.
212234.................. Copper Ore and Nickel 1,500
Ore Mining.
[[Page 44889]]
333911.................. Pump and Pumping 750 .............. 750 .............. 333914 Measuring, Dispensing,
Equipment and Other Pumping
Manufacturing. Equipment
Manufacturing.
333913.................. Measuring and 750
Dispensing Pump
Manufacturing.
335221.................. Household Cooking 1,500 .............. 1,500 .............. 335220 Major Household
Appliance Appliance
Manufacturing. Manufacturing.
335222.................. Household Refrigerator 1,250
and Home Freezer
Manufacturing.
335224.................. Household Laundry 1,250
Equipment
Manufacturing.
335228.................. Other Major Household 1,000
Appliance
Manufacturing.
452111.................. Department Stores .............. $32.5 .............. $32.5 452210 Department Stores.
(except Discount
Department Stores).
452112.................. Discount Department .............. 29.5
Stores.
insignificant .............. 29.5
perishable grocery
sales.
452112.................. Discount Department .............. 29.5
Stores.
significant .............. 29.5 .............. 29.5 452311 Warehouse Clubs and
perishable grocery Supercenters.
sales.
452910.................. Warehouse Clubs and .............. 29.5
Supercenters.
452990.................. All Other General .............. 32.5 .............. 32.5 452319 All Other General
Merchandise Stores. Merchandise Stores.
454111.................. Electronic Shopping... .............. 32.5 .............. 38.5 454110 Electronic Shopping
and Mail-Order
Houses.
454112.................. Electronic Auctions... .............. 38.5
454113.................. Mail-Order Houses..... .............. 38.5
512210.................. Record Production..... .............. 7.5 250 .............. 512250 Record Production and
Distribution.
512220.................. Integrated Record 1,250
Production/
Distribution.
517110.................. Wired 1,500 .............. 1,500 .............. 517311 Wired
Telecommunications Telecommunications
Carriers. Carriers.
517210.................. Wireless 1,500 .............. 1,500 .............. 517312 Wireless
Telecommunications Telecommunications
Carriers (except Carriers (except
Satellite). Satellite).
532220.................. Formal Wear and .............. 20.5 .............. 20.5 532281 Formal Wear and
Costume Rental. Costume Rental.
532230.................. Video Tape and Disc .............. 27.5 .............. 27.5 532282 Video Tape and Disc
Rental. Rental.
532291.................. Home Health Equipment .............. 32.5 .............. 32.5 532283 Home Health Equipment
Rental. Rental.
532292.................. Recreational Goods .............. 7.5 .............. 7.5 532284 Recreational Goods
Rental. Rental.
532299.................. All Other Consumer .............. 7.5 .............. 7.5 532289 All Other Consumer
Goods Rental. Goods Rental.
541711.................. Research and 1,000
Development in
Biotechnology.
nanobiotechnologies 1,000 .............. 1,000 .............. 541713 Research and
research and Development in
experimental Nanotechnology.
development
laboratories.
except 1,000 .............. 1,000 .............. 541714 Research and
nanobiotechnologie Development in
s research and Biotechnology (except
experimental Nanobiotechnology).
development
laboratories.
541712.................. Research and 1,000
Development in the
Physical,
Engineering, and Life
Sciences (except
Biotechnology).
nanotechnology 1,000 .............. 1,000 .............. 541713 Research and
research and Development in
experimental Nanotechnology.
development
laboratories.
except 1,000 .............. 1,000 .............. 541715 Research and
nanotechnology Development in the
research and Physical,
experimental Engineering, and Life
development Sciences (except
laboratories. Nanotechnology and
Biotechnology).
721310.................. Rooming and Boarding .............. 7.5 .............. 7.5 721310 Rooming and Boarding
Houses. Houses, Dormitories,
and Workers' Camps.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 44890]]
Similarly, another commenter recommended that SBA consider changing
the size standard for NAICS 488190 (Other Support Activities for Air
Transportation) from revenues to employees. The commenters argued that
the change would allow small businesses providing those services to
continue to compete and succeed in a market dominated by large
businesses which provide similar services as an ancillary function to
their primary business. They provided an analysis of the Federal
Procurement Data System--Next Generation (FPDS-NG) data to describe the
competitive structure of their respective industries to support their
recommendations.
Since NAICS 541330 and 488190 were not impacted by the NAICS 2017
revision, SBA did not review those industries nor did it propose any
changes to their size standards in the April 2017 proposed rule. As
part of the first five-year comprehensive review of size standards
under the Small Business Jobs Act of 2010 (Jobs Act) (Pub. L. 111-240,
September 27, 2010), in 2012, SBA increased the size standard for the
Aerospace Equipment and Military Weapons exception to NAICS 541330 from
$27 million to $35.5 million (77 FR 7489, (February 10 2012)) and
increased the size standard for NAICS 488190 from $7 million to $30
million (77 FR 10943, (February 24, 2012)). In 2014, they were further
increased to $38.5 million and $32.5 million, respectively, for
inflation (79 FR 33647 (June 12, 2014)). SBA will review these size
standards again in the coming years as part of the second five-year
review of size standards, as required by the Jobs Act. Interested
parties, including the commenters, will have an opportunity to comment
when SBA publishes the proposed rule for their industries.
The third commenter recommended that SBA consider raising the small
business size standard for the Home Health Equipment and Rental
industry from $32.5 million to $35 million, an increase of 7.7 percent.
The commenter argued the increase reflects the anticipated inflation
and the cost of doing business over the next five years. The commenter
also noted that a higher size standard for NAICS 532283 would allow
some large firms to gain small business status and help some small
firms retain their small business status into the future. Thus, as a
result, that Federal agencies will have a larger pool of small
businesses from which to draw for their small business procurement
programs, the commenter concluded.
The NAICS 2017 revision changed the 6-digit code for the Home
Health Equipment and Rental industry from 532291 to 532283 without
changing the industry definition. Accordingly, for new NAICS 532283,
SBA applied the same $32.5 million that currently applies to NAICS
532291. The adoption of NAICS 2017 led to changes in size standards
only when the new industry was formed by merging the existing
industries or industry parts with different size standards, not when
only the 6-digit code changed.
Every five years, SBA reviews all monetary based size standards for
inflation and makes necessary adjustments. SBA's latest inflationary
adjustment to size standards was in 2014, which resulted in an increase
to the size standard for NAICS 532291 from $30 million to $32.5
million. SBA anticipates issuing the next inflationary adjustment of
all monetary based size standards sometime in 2019 and interested
parties will have an opportunity to comment at that time. Additionally,
as part of the second five-year review of size standards under the Jobs
Act, SBA will also review all size standards in the coming years
against the latest available industry and Federal market data and make
appropriate adjustments. (In the first five-year review, SBA increased
the size standard for NAICS 532291 from $7 million to $30 million (77
FR 58747 (September 24, 2012)). The commenter will have an opportunity
to comment when SBA publishes the proposed rule for NAICS Sector 53,
Real Estate and Rental and Leasing.
SBA considered each comment and determined that they were not
germane to the purpose of the proposed rule, which was to adopt NAICS
2017 as a basis for its table of size standards. The intent and
methodology of the proposed rule did not provide for changing the size
standard for an industry whose NAICS code was not affected by the NAICS
revision, nor did it provide for adjusting a size standard for
inflation or the cost of doing business. Accordingly, SBA is not
modifying its April 18, 2017 proposed rule based on the comments
received and is adopting the proposed rule, as published.
Justification for the October 1, 2017 Effective Date
The Administrative Procedure Act (APA) requires that ``publication
or service of a substantive rule shall be made not less than 30 days
before its effective date, except * * * as otherwise provided by the
agency for good cause found and published with the rule.'' 5 U.S.C.
553(d)(3). The purpose of the APA provision delaying the effective date
of a rule for 30 days after publication is to provide interested and
affected members of the public sufficient time to adjust their behavior
before the rule takes effect. For the reasons set forth below, SBA
finds that good cause exists to make this final rule become effective
on October 1, 2017, less than 30 days after it is published in the
Federal Register.
In its August 8, 2016 notice, OMB stated that Federal
statistical establishment data published for reference years beginning
on or after January 1, 2017, should be published using NAICS 2017.
October 1, 2017 is the start of the new Federal Government fiscal year
following OMB's adoption of NAICS 2017 effective January 1, 2017, and
is consistent with SBA's adoption of previous NAICS revisions effective
at the start of the next fiscal year after the OMB's effective date.
Federal contracting data and related statistics will be more consistent
and comparable with past data for analyzing future small business
activity if the revised size standards are adopted at the beginning of
a new fiscal year. Similarly, users of size standards and Federal
contracting data, such as Federal prime contractors developing their
subcontracting plans, can have more consistent data to examine the past
and future Federal contracting trends.
Small business size standards apply to most Federal
agencies and their programs involving small businesses; the time lag
between the OMB's effective date and SBA's update to its size standards
has already given them time to implement the changes and develop
training tools, if necessary. For instance, in July 2017, SBA provided
Integrated Award Environment with an advance copy of the updated size
standards table to update the Federal contracting databases such as the
System for Award Management.
The rule is not significant under Executive Order 12866
and the impacts from changes to size standards due to the adoption of
the NAICS 2017 are minimal. This final rule impacts size standards for
less than 10 industries involving about 60 firms, with a vast majority
of them gaining small business status under the revised size standards.
Those firms will benefit from an earlier effective date.
The impacted firms have had an opportunity to review the
changes and submit comments during the notice and comment period for
this rule. None of the three comments SBA received on the April 18,
2017 proposed rule opposed the changes. The affected firms and other
interested parties have had ample time to adjust their behavior, if
necessary.
[[Page 44891]]
Compliance With Executive Orders 12866, 13563, 13771, 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
OMB has determined that this final rule is not a ``significant
regulatory action'' for purposes of Executive Order 12866. This rule
incorporates the OMB's 2017 revisions of NAICS, which SBA uses to
identify industries in the United States for purposes of establishing
small business size standards. As discussed in the Supplementary
Information above, the size standard of some industries would change
because of the NAICS 2017 revisions. However, SBA has determined that
virtually all businesses currently defined as small under the NAICS
2012 based size standards will continue to be small under the NAICS
2017 based size standards. This rule will also affect other Federal
Government programs that provide a benefit for small businesses. In
order to help explain the need of this rule and the rule's potential
benefits and costs, SBA is providing below a Cost Benefit Analysis.
This final rule is also not a ``major rule'' under the Congressional
Review Act, 5 U.S.C. 800.
Cost Benefit Analysis
1. Is there a need for the regulatory action?
SBA believes that adopting small business size standards based on
NAICS 2017 is in the best interests of small businesses. SBA's mission
is to aid and assist small businesses through a variety of financial,
procurement, business development, and advocacy programs. To assist the
intended beneficiaries of these programs effectively, SBA establishes
numerical definitions to determine which businesses are deemed eligible
for Federal small business assistance. NAICS 2017 provides the latest
industry definitions reflecting the latest changes in industry
structure. The Small Business Act (the Act) provides SBA's
Administrator with the responsibility for establishing definitions for
small business. The Act also requires that small business definitions
vary from industry to industry reflecting differences among the various
industries. 15 U.S.C. 632(a). By analyzing and reviewing size standards
based on the latest NAICS definitions, SBA can more accurately and
appropriately fulfill its mandate. If SBA does not use the latest
industry definitions, size standards would not accurately reflect
differences among industries. In addition, the Jobs Act requires SBA to
review all size standards and make necessary adjustments to reflect
current industry and market conditions at least every five years. To
better serve this mandate, SBA needs to evaluate industry data based on
the latest NAICS industry definitions available. In this final rule,
SBA generally followed the same guidelines that the Agency used for
adopting prior NAICS revisions for its size standards, as spelled out
under the Supplemental Information section, above. For certain NAICS
2017 industries involving NAICS 2012 industries with substantially
different size standards, SBA also analyzed the relevant industry and
program data to determine the size standards for them. Size standards
based on NAICS 2017 industry definitions and corresponding data will
serve SBA's mission more effectively.
2. What are the potential benefits and costs of this regulatory action?
The vast majority of the changes from NAICS 2012 to NAICS 2017
consist of revisions to industry titles or 6-digit codes or mergers of
some NAICS 2012 industries or their parts to form the industries in
NAICS 2017 without impacting their size standards. Of the 29 affected
NAICS 2012 industries or their parts, SBA's size standards using NAICS
2017 will result in increases to size standards for six NAICS 2012
industries and part of one industry, decreases for two industries, and
the change of size standard from average annual receipts to number of
employees for one industry. The size standards will remain unchanged
for other affected industries or parts.
Based on the 2012 Economic Census data for the affected NAICS 2012
industries, SBA estimates that approximately 60 additional businesses
would gain small business status under the revised size standards. That
represents about 0.1 percent of the number of small businesses in the
affected industries. For the two industries for which the size standard
will decrease, SBA also estimates that fewer than five firms that
qualify as small under current size standards under NAICS 2012 will no
longer qualify. However, almost all of those firms do not currently
participate in any small business programs.
The benefits of adopting NAICS 2017 and the resulting revisions to
size standards will accrue to three groups in the following ways: (1)
Some businesses that are above their current size standards may gain
small business status, thereby becoming eligible to participate in
Federal small business assistance programs, including SBA's financial
assistance programs, economic injury disaster loans, and Federal
procurement opportunities intended for small businesses; (2) growing
small businesses that are close to exceeding the current size standards
for their NAICS 2012 industry may retain their small business status
under NAICS 2017, and can continue participating in the above programs;
and (3) Federal agencies will have a larger pool of small businesses
from which to draw for their small business procurement programs
because they will be able to define more accurately the principal
purposes of their procurements under NAICS 2017, as required by 13 CFR
121.402(b).
Additional firms gaining small business status under NAICS 2017 may
benefit under SBA's various business development and contracting
programs. These include the 8(a) Business Development program and
programs benefiting small businesses located in Historically
Underutilized Business Zones (HUBZones), Women Owned Small Businesses
(WOSBs), and Service Disabled Veteran Owned Small Businesses (SDVOSBs).
Added competition may also result in lower prices for some Federal
contracts reserved for small businesses, although SBA cannot quantify
this benefit. Based on data for fiscal years 2013-2015, SBA estimates
that approximately $700,000 in Federal contracts could be awarded to
the newly defined small businesses under the size standards revisions
due to the adoption of NAICS 2017.
Under SBA's 7(a) and 504 Loan Programs, SBA would be able to
guarantee more loans, although, in this case too, the number and amount
of additional loans cannot be estimated accurately. Based on the Agency
7(a) and 504 loan data for fiscal years 2014-2016, SBA estimates that
about two additional loans, totaling approximately $200,000, could be
made to the newly defined small businesses under the NAICS 2017 size
standards. Under the Jobs Act, SBA can now guarantee substantially
larger loans than in the past. Additionally, the Jobs Act established
an alternative size standard for SBA's 7(a) and 504 Loan Programs for
applicants that do not meet the size standards for their industries.
Specifically, section 1116 of the Jobs Act provides that if a firm
applying for a 7(a) or 504 loan does not meet the size standard for its
industry, it might still qualify if it has a tangible net worth that
does not exceed $15 million and an average net income after Federal
income taxes (excluding any carry-over losses) for its preceding two
completed fiscal years that does not exceed $5 million. Thus, the
updated size standards may
[[Page 44892]]
result in an increase in SBA's loan guarantees to small businesses in
the affected industries, but SBA cannot quantify this impact.
Newly defined small businesses will also benefit from SBA's
Economic Injury Disaster Loan (EIDL) Program. Since this program is
contingent on the occurrence and severity of a disaster, SBA cannot
make a meaningful estimate of future EIDL benefit.
To the extent that newly defined small firms under NAICS 2017 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. More firms may seek SBA's guaranteed loans. More will be
enrolled in the SBA's Dynamic Small Business Search database. Since
more firms will qualify as small, more may also seek certification as
8(a) or HUBZone firms, or qualify for WOSB, SDVOSB, and/or small
disadvantaged business (SDB) status. It is important to point out that
most business entities that are already registered in SAM will not be
required to update their SAM profiles. However, it will be incumbent on
registrants to review their profiles to ensure that they have the
correct NAICS codes. SAM requires that registered companies review and
update their profiles annually, and therefore, businesses will need to
pay particular attention to the changes to determine if they might
affect them. They will also have to verify and update, if necessary,
their Representations and Certifications in SAM. Further, firms are
required to verify that their size representation in SAM is accurate
prior to submitting an offer for a contract. FAR 52.204-8(d).
Among the newly qualified businesses seeking SBA's assistance,
there could be some additional costs associated with compliance and
verification of small business status and protests of small business
status. These added costs are likely to be minimal because mechanisms
are already in place to handle these administrative requirements.
The costs to the Federal Government may be higher on some Federal
contracts under the higher revised size standards under NAICS 2017.
With more businesses defined as small, Federal agencies might choose to
set aside more contracts for competition among small businesses rather
than using full and open competition. The movement from unrestricted to
set-aside contracting will likely result in competition among fewer
total bidders, although there will be a larger pool of small businesses
to submit offers. In addition, higher costs may result when additional
full and open contracts are awarded to HUBZone businesses because of a
price evaluation preference. The additional costs associated with fewer
bidders, however, will likely be minor since, as a matter of law,
procurements may be set aside for small businesses or reserved for the
8(a), HUBZone, WOSB, or SDVOSB Programs only if awards are expected to
be made at fair and reasonable prices.
The revised size standards may have some distributional effects
among large and small businesses. Although SBA cannot estimate with
certainty the actual outcome of gains and losses among small and large
businesses, there are several likely impacts. There may be a transfer
of some Federal contracts from large businesses to small businesses.
Large businesses may have fewer Federal contract opportunities as
Federal agencies decide to set aside more Federal contracts for small
businesses. In addition, some agencies may award more Federal contracts
to HUBZone firms instead of large businesses since HUBZone concerns may
be eligible for price evaluation adjustments when they compete on full
and open procurement opportunities. Similarly, currently defined small
businesses may receive fewer Federal contracts due to the increased
competition from more businesses defined as small under NAICS 2017.
This transfer may be offset by more 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
small businesses under the existing size standards. SBA cannot estimate
with precision the potential distributional impacts of these transfers.
SBA's adoption of NAICS 2017 and resulting revisions to size
standards is consistent with SBA's statutory mandate to assist small
business by providing access to capital and credit, Government
contracts, and management and technical assistance. Updated size
standards based on the latest industry definitions ensure that Federal
small business assistance is more effectively targeted to its intended
beneficiaries. The Small Business Act states that ``the 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.'' 15 U.S.C. 632(a)(3). With the adoption of the
latest industry definitions in NAICS 2017, SBA's size standards are
more consistent with the differing characteristics among the various
industries.
Executive Order 13563
A description of the need for this regulatory action and benefits
and costs associated with this action including possible distribution
impacts that relate to Executive Order 13563 are included above in the
Cost Benefit Analysis.
To engage interested parties in this action, SBA reached out to all
Federal agencies advising them that the Agency plans to update its
table of size standards to NAICS 2017, effective October 1, 2017, and
that agencies must continue using the current size standards until that
date. Adopting the updated size standards on October 1, 2017 is
consistent with SBA's adoptions of previous NAICS revisions at the
beginning of the new fiscal year following the OMB's January 1
effective date of NAICS revisions for Federal statistical agencies.
Unlike the previous NAICS revisions which SBA adopted for its size
standards either through a direct final rule or through an interim
final rule, for the adoption of NAICS 2017 revision, SBA issued a
proposed rule, seeking comments to better engage the public in the
process. SBA received no germane adverse comments to the proposed rule.
SBA is adopting the updated table of size standards, effective October
1, 2017. SBA will also issue a press release on the publication of the
final rule and update the ``What's New with Size Standards'' page on
its Web site at www.sba.gov/size.
Executive Order 13771
This rule is not an E.O. 13771 regulatory action because this rule
is not significant under Executive Order 12866.
Executive Order 12988
This action meets applicable standards set forth in Sections 3(a)
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden. The action does not
have retroactive or preemptive effect.
Executive Order 13132
For purposes of Executive Order 13132, SBA has determined that this
final rule will not have substantial, direct effects on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government. Therefore, SBA has determined that this final rule has
[[Page 44893]]
no Federalism implications warranting 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 final rule would not impose any new
reporting or recordkeeping requirements.
Final Regulatory Flexibility Analysis
Under the Regulatory Flexibility Act (RFA), this final rule may
have an impact on some small businesses in industries for which size
standards have been revised. As described above, this rule may affect
small businesses applying for Federal government contracts, loans under
SBA's 7(a), 504, and Economic Injury Disaster Loan Programs, and
assistance under other Federal small business programs.
Immediately below, SBA sets forth a final regulatory flexibility
analysis (FRFA) of this final rule addressing the following questions:
(1) What are the need for and objectives of the rule?; (2) What are
SBA's description and estimate of the number of small businesses 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 that 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 businesses?
1. What are the need for and objectives of the rule?
The Small Business Act requires that small business size standards
vary from industry to industry reflecting the differing characteristics
of the various industries. SBA uses the latest NAICS as a basis of
industry definitions for its table of size standards. As part of its
five-year review of and revisions to NAICS industry definitions, OMB
published its latest NAICS revision, NAICS 2017, on August 8, 2016.
According to OMB's notice, Federal establishment and industry data for
reference years beginning on or after January 1, 2017 should be
published using NAICS 2017. This rule amends SBA's small business size
regulations to incorporate NAICS 2017 into its table of size standards.
This not only makes SBA's size standards more reflective of the latest
industry differences but also makes them more consistent with latest
industry data the Agency uses to establish, review or adjust size
standards. Updating size standards to the latest industry definitions
also serves the SBA's mandate to review all size standards and make
appropriate adjustments to reflect market conditions under the Jobs
Act.
2. What are SBA's description and estimate of the number of small
businesses to which the rule will apply?
With the update of size standards to the latest industry
definitions under NAICS 2017, Federal small business assistance is more
effectively targeted to its intended beneficiaries. The adoption of
NAICS 2017 will result in increases in size standards for six
industries and part of one industry under NAICS 2012 and decreases for
two. The size standards for the rest of the 29 affected industries will
remain unchanged. In industries whose size standards have increased due
to the adoption of NAICS 2017, about 60 firms above the current size
standards will qualify as small under the updated size standards,
thereby making them eligible for Federal small business assistance
programs. Based on the recent data, SBA estimates that approximately
$700,000 in Federal contracts and about $200,000 in SBA loans could be
awarded to the newly defined small businesses under the updated size
standards. The updated size standards will enable more small businesses
to maintain their small business size status for a longer period. In
the two NAICS 2012 industries for which the size standard will
decrease, about 3-4 firms below the current size standards will lose
their small business size status under the NAICS 2017 based size
standards. However, the program data suggests that this will not cause
much impact on them. Currently, they are not participating in any small
business programs. Additionally, in both industries, Federal
contracting and SBA's loan activities are quite insignificant.
3. What are the projected reporting, recordkeeping and other compliance
requirements of the rule?
The size standard changes due to the adoption of NAICS 2017 impose
no additional reporting or recordkeeping requirements on small
businesses. However, qualifying for Federal small business contracting
and other programs may require businesses to register in SAM and
recertify in SAM that they are small at least once annually. Therefore,
the newly qualified small businesses opting to participate in those
programs must comply with SAM requirements. There are no costs
associated with either SAM registration or annual recertification.
Changing size standards alters the access to SBA's financial and other
Federal programs that assist small businesses, but does not impose a
regulatory burden because size standards neither regulate nor control
business behavior.
4. What are the relevant Federal rules, which may duplicate, overlap,
or conflict with the rule?
Under section 3(a)(2)(C) of the Small Business Act, 15 U.S.C.
632(a)(2)(c), Federal agencies must generally use SBA's size standards
to define a small business, unless specifically authorized by statute
to do otherwise. 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)). 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 RFA authorizes a Federal 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)). SBA is not aware of any Federal rule that would
duplicate or conflict with establishing or updating size standards.
5. What alternatives will allow the Agency to accomplish its regulatory
objectives while minimizing the impact on small entities?
By law, SBA is required to develop numerical size standards for
establishing eligibility for Federal small business assistance
programs. Other than varying levels of size standards by industry and
changing the size measures, no practical alternative exists to the
systems of numerical size standards. SBA considered continuing to use
NAICS 2012 as a basis of industry definitions for its table of size
standards. However, that would render SBA's table of size standards
incompatible with Federal industry and establishment statistics and
other databases.
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 amends 13 CFR part
121 as follows:
[[Page 44894]]
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), 662, and 694a(9).
0
2. In Sec. 121.201, amend the table, ``Small Business Size Standards
by NAICS Industry'' as follows:
0
a. Remove the entries for 211111 and 211112;
0
b. Add entries for 211120 and 211130;
0
c. Remove the entries for 212231 and 212234;
0
d. Add an entry for 212230;
0
e. Remove the entry 333911;
0
f. Remove the entry 333913;
0
g. Add an entry for 333914;
0
h. Add an entry for 335220;
0
i. Remove the entries for 335221, 335222, 335224, and 335228;
0
j. Remove the entries for 452111, 452112, 452910, and 452990;
0
k. Add entries for 452210, 452311, and 452319;
0
l. Add an entry for 454110;
0
m. Remove the entries for 454111, 454112, and 454113;
0
n. Remove the entries for 512210 and 512220;
0
o. Add an entry for 512250;
0
p. Remove the entries for 517110 and 517210;
0
q. Add entries for 517311 and 517312;
0
r. Remove the entries for 532220, 532230, 532291, 532292, and 532299;
0
s. Add entries for 532281, 532282, 532283, 532284, and 532289;
0
t. Remove the entry for 541711;
0
u. Remove the entry for 541712;
0
v. Add entries for 541713 and 541714;
0
w. Add an entry for 541715;
0
x. Revise the NAICS industry title of the entry for 721310 to read,
``Rooming and Boarding Houses, Dormitories, and Workers' Camps''; and
0
y. Revise footnote 11 at the end of the table.
The additions and revisions read as follows:
Sec. 121.201 What size standards has SBA identified by North American
Industry Classification System codes?
* * * * *
----------------------------------------------------------------------------------------------------------------
Size standards Size standards
NAICS codes NAICS U.S. industry title in millions of in number of
dollars employees
----------------------------------------------------------------------------------------------------------------
* * * * * * *
211120................................... Crude Petroleum Extraction........... .............. 1,250
211130................................... Natural Gas Extraction............... .............. 1,250
* * * * * * *
212230................................... Copper, Nickel, Lead, and Zinc Mining .............. 750
* * * * * * *
333914................................... Measuring, Dispensing, and Other .............. 750
Pumping Equipment Manufacturing.
* * * * * * *
335220................................... Major Household Appliance .............. 1,500
Manufacturing.
* * * * * * *
452210................................... Department Stores.................... 32.5 ..............
452311................................... Warehouse Clubs and Supercenters..... 29.5 ..............
452319................................... All Other General Merchandise Stores. 32.5 ..............
* * * * * * *
454110................................... Electronic Shopping and Mail-Order 38.5 ..............
Houses.
* * * * * * *
512250................................... Record Production and Distribution... .............. 250
* * * * * * *
517311................................... Wired Telecommunications Carriers.... .............. 1,500
517312................................... Wireless Telecommunications Carriers .............. 1,500
(except Satellite).
* * * * * * *
532281................................... Formal Wear and Costume Rental....... 20.5 ..............
532282................................... Video Tape and Disc Rental........... 27.5 ..............
532283................................... Home Health Equipment Rental......... 32.5 ..............
532284................................... Recreational Goods Rental............ 7.5 ..............
532289................................... All Other Consumer Goods Rental...... 7.5 ..............
* * * * * * *
541713................................... Research and Technology in .............. \11\ 1,000
Nanotechnology \11\.
541714................................... Research and Technology in .............. \11\ 1,000
Biotechnology (except
Nanobiotechnology) \11\.
541715................................... Research and Development in the .............. \11\ 1,000
Physical, Engineering, and Life
Sciences (except Nanotechnology and
Biotechnology) \11\.
Except,.................................. Aircraft, Aircraft Engine and Engine .............. \11\ 1,500
Parts \11\.
Except,.................................. Other Aircraft Parts and Auxiliary .............. \11\ 1,250
Equipment \11\.
Except,.................................. Guided Missiles and Space Vehicles, .............. \11\ 1,250
Their Propulsion Units and
Propulsion Parts \11\.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Footnotes
* * * * * * *
\11\NAICS codes 541713, 541714, and 541715 --
[[Page 44895]]
\(a)\ ``Research and Development'' means laboratory or other physical research and development. It does not
include economic, educational, engineering, operations, systems, or other nonphysical research; or computer
programming, data processing, commercial and/or medical laboratory testing.
\(b)\ For research and development contracts requiring the delivery of a manufactured product, the appropriate
size standard is that of the manufacturing industry.
\(c)\ For purposes of the Small Business Innovation Research (SBIR) and Small Business Transfer Technology
(STTR) programs, the term ``research'' or ``research and development'' means any activity which is (A) a
systematic, intensive study directed toward greater knowledge or understanding of the subject studied; (B) a
systematic study directed specifically toward applying new knowledge to meet a recognized need; or (C) a
systematic application of knowledge toward the production of useful materials, devices, and systems or
methods, including design, development, and improvement of prototypes and new processes to meet specific
requirements. See 15 U.S.C. 638(e)(5) and section 3 of the SBIR and STTR policy directives available at
www.sbir.gov. For size eligibility requirements for the SBIR and STTR programs, see Sec. 121.702 of this
part.
\(d)\ ``Research and Development'' for guided missiles and space vehicles includes evaluations and simulation,
and other services requiring thorough knowledge of complete missiles and spacecraft.
* * * * *
Dated: September 8, 2017.
Linda E. McMahon,
Administrator.
[FR Doc. 2017-20705 Filed 9-26-17; 8:45 am]
BILLING CODE 8025-01-P
