Small Business Size Standards: Manufacturing and Industries With Employee-Based Size Standards in Other Sectors Except Wholesale Trade and Retail Trade, 9970-10009 [2023-02780]

Agencies

• SMALL BUSINESS ADMINISTRATION

[Federal Register Volume 88, Number 31 (Wednesday, February 15, 2023)]
[Rules and Regulations]
[Pages 9970-10009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02780]



[[Page 9969]]

Vol. 88

Wednesday,

No. 31

February 15, 2023

Part II





Small Business Administration





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13 CFR Part 121





Small Business Size Standards: Manufacturing and Industries With 
Employee-Based Size Standards in Other Sectors Except Wholesale Trade 
and Retail Trade; Final Rule

Federal Register / Vol. 88 , No. 31 / Wednesday, February 15, 2023 / 
Rules and Regulations

[[Page 9970]]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

RIN 3245-AH09


Small Business Size Standards: Manufacturing and Industries With 
Employee-Based Size Standards in Other Sectors Except Wholesale Trade 
and Retail Trade

AGENCY: U.S. Small Business Administration.

ACTION: Final rule.

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SUMMARY: The U.S. Small Business Administration (SBA or the Agency) is 
increasing its employee-based small business size definitions (commonly 
referred to as ``size standards'') for North American Industry 
Classification System (NAICS) sectors related to Mining, Quarrying, and 
Oil and Gas Extraction (Sector 21); Utilities (Sector 22); 
Manufacturing (Sector 31-33); Transportation and Warehousing (Sector 
48-49); Information (Section 51); Finance and Insurance (Sector 52); 
Professional, Scientific and Technical Services (Sector 54); and 
Administrative and Support, Waste Management and Remediation Services 
(Sector 56). Specifically, in terms of industries defined under the 
NAICS 2022 revision, SBA is increasing 144 and retaining 268 employee-
based size standards in those sectors. SBA is also retaining the 
current 500-employee size standard for Federal procurement of supplies 
under the nonmanufacturer rule.

DATES: This rule is effective March 17, 2023.

FOR FURTHER INFORMATION CONTACT: Samuel Castilla, Economist, Office of 
Size Standards, (202) 205-6618 or [email protected].

SUPPLEMENTARY INFORMATION: 

Discussion of Size Standards

    To determine eligibility for Federal small business assistance, SBA 
establishes small business size definitions (usually referred to as 
``size standards'') for private sector industries in the United States. 
SBA uses two primary measures of business size for size standards 
purposes: average annual receipts and average number of employees. SBA 
uses financial assets for certain financial industries and refining 
capacity, in addition to employees, for the petroleum refining industry 
to measure business size. In addition, SBA's Small Business Investment 
Company (SBIC), Certified Development Company (CDC/504), and 7(a) Loan 
Programs use either the industry-based size standards or tangible net 
worth and net income-based alternative size standards to determine 
eligibility for those programs.
    In September 2010, Congress passed the Small Business Jobs Act of 
2010 (Pub. L. 111-240, 124 Stat. 2504, September 27, 2010) (``Jobs 
Act''), requiring SBA to review all size standards every five years and 
make necessary adjustments to reflect current industry and market 
conditions. In accordance with the Jobs Act, in early 2016, SBA 
completed the first five-year review of all size standards--except 
those for agricultural enterprises for which size standards were 
previously set by Congress--and made appropriate adjustments to size 
standards for a number of industries to reflect current industry and 
Federal market conditions. SBA also adjusts its monetary-based size 
standards for inflation at least once every five years. An interim 
final rule on SBA's latest inflation adjustment to size standards, 
effective December 19, 2022, was published in the Federal Register on 
November 17, 2022 (87 FR 69118). SBA also updates its size standards 
every five years to adopt the Office of Management and Budget's (OMB) 
quinquennial North American Industry Classification (NAICS) revisions 
to its table of small business size standards. On December 21, 2021, 
OMB published its ``Notice of NAICS 2022 Final Decisions . . .'' (86 FR 
72277), accepting the Economic Classification Policy Committee (ECPC) 
recommendations, as outlined in the July 2, 2021, Federal Register 
notice (86 FR 35350), for ``the 2022 Revision to the North American 
Industry Classification System (NAICS), . . . .'' On July 5, 2022, SBA 
issued a proposed rule to adopt the OMB's NAICS 2022 revisions for its 
table of size standards (87 FR 40034), which SBA finalized in September 
2022 with an effective date of October 1, 2022 (87 FR 59240; September 
29, 2022).
    This final rule is part of a series of final rules that revised 
size standards of industries grouped by various NAICS sectors. Rather 
than revise all size standards at one time, SBA is revising size 
standards by grouping industries within various NAICS sectors that use 
the same size measure (i.e., employees or receipts). In the prior 
review, SBA revised size standards mostly on a sector-by-sector basis. 
As part of the second five-year review of size standards under the Jobs 
Act, SBA has already issued five final rules reviewing all monetary-
based size standards and all employee-based size standards that are 
part of the Wholesale Trade and Retail Trade sectors.\1\
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    \1\ See Small Business Size Standards: Agriculture, Forestry, 
Fishing and Hunting; Mining, Quarrying, and Oil and Gas Extraction; 
Utilities; Construction (87 FR 18607; March 31, 2022), Small 
Business Size Standards: Transportation and Warehousing; 
Information; Finance and Insurance; Real Estate and Rental and 
Leasing (87 FR 18627; March 31, 2022), Small Business Size 
Standards: Professional, Scientific and Technical Services; 
Management of Companies and Enterprises; Administrative and Support 
and Waste Management and Remediation Services (87 FR 18665; March 
31, 2022), Small Business Size Standards: Education Services; Health 
Care and Social Assistance; Arts, Entertainment and Recreation; 
Accommodation and Food Services; Other Services (87 FR 18646; March 
31, 2022), and Small Business Size Standards: Wholesale Trade and 
Retail Trade (87 FR 35869; June 14, 2022).
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    To complete its second five-year review of size standards, SBA 
reviewed size standards under Sector 31-33 and other sectors with 
employee-based size standards not part of Wholesale and Retail Trade 
sectors to determine whether the existing size standards should be 
retained or revised based on the current industry and Federal market 
data. After its review, SBA published in the April 26, 2022, issue of 
the Federal Register (87 FR 24752) a proposed rule (``April 2022 
proposed rule'') to increase the employee-based size standards for 150 
industries or subindustries (or ``exceptions'') under NAICS 2017, 
including 10 industries in NAICS Sector 21 (Mining, Quarrying, and Oil 
and Gas Extraction), 10 industries in NAICS Sector 22 (Utilities), 120 
industries in NAICS sector 31-33 (Manufacturing), five industries in 
Sector 48-49 (Transportation and Warehousing), three industries in 
Sector 51 (Information), one subindustry (``exception'') in Sector 54 
(Professional, Scientific and Technical Services), and one subindustry 
(``exception'') in Sector 56 (Administrative and Support, Waste 
Management and Remediation Services). SBA also proposed to retain the 
500-employee size standard under its nonmanufacturer rule.
    In this final rule, SBA is adopting the proposed size standards 
from the April 2022 proposed rule without change and applying the 
adopted changes to the recently adopted NAICS 2022 structure following 
the methodology outlined in the NAICS 2022 adoption final rule.
    In conjunction with the current, second five-year comprehensive 
size standards review, SBA developed a revised ``Size Standards 
Methodology'' (Methodology) for developing, reviewing, and modifying 
size standards, when necessary. SBA's revised Methodology provides a 
detailed description of its analyses of various industry and program 
factors

[[Page 9971]]

and data sources, and how the agency uses the results to establish and 
revise size standards. In the proposed rule itself, SBA detailed how it 
applied its revised Methodology to review and modify, where necessary, 
the existing size standards for industries covered in this final rule. 
Prior to finalizing the revised Methodology, SBA issued a notification 
in the April 27, 2018, edition of the Federal Register (83 FR 18468) to 
solicit comments from the public and notify stakeholders of the 
proposed changes to the Methodology. SBA considered all public comments 
in finalizing the revised Methodology. For a summary of comments and 
SBA's responses, refer to the SBA's April 11, 2019, Federal Register 
notification (84 FR 14587) of the issuance of the final revised 
Methodology. SBA's Size Standard Methodology is available on its 
website at www.sba.gov/size.
    In evaluating an industry's size standard, as described in its Size 
Standards Methodology as well as in the April 2022 proposed rule, SBA 
examines its characteristics (such as average firm size, startup costs 
and entry barriers, industry competition and distribution of firms by 
size) and the small business level and share of Federal contract 
dollars in that industry. SBA also examines the potential impact a size 
standard revision might have on its financial assistance programs, and 
whether a business concern under a revised size standard would be 
dominant in its industry. SBA analyzed the characteristics of each 
employee-based industry in NAICS Sector 31-33 and other sectors with 
employee-based size standards, mostly using a special tabulation 
obtained from the U.S. Bureau of the Census from its 2012 Economic 
Census (the latest available when the proposed rule was developed). The 
2012 Economic Census special tabulation contains information for 
different levels of NAICS categories on average and median firm size in 
terms of both receipts and employment, total receipts generated by the 
four and eight largest firms, the Herfindahl-Hirschman Index (HHI), the 
Gini coefficient, and size distributions of firms by various receipts 
and employment size groupings. To evaluate average asset size, SBA 
combines the sales to total assets ratios by industry, obtained from 
the Risk Management Association's (RMA) Annual eStatement Studies 
(https://www.rmahq.org/estatement-studies/) with the simple average 
receipts size by industry from the 2012 Economic Census tabulation to 
estimate the average assets size for each industry. SBA also evaluated 
the small business level and share of Federal contracts in each of the 
industries using data from the Federal Procurement Data System--Next 
Generation (FPDS-NG) for fiscal years 2016-2018. Table 4 of the April 
2022 proposed rule, Size Standards Supported by Each Factor for Each 
Industry (Employees), shows the results of analyses of industry and 
Federal contracting factors for each industry and subindustry 
(``exception'') covered by the proposed rule. Of the 427 industries and 
5 subindustries (i.e., ``exceptions'') reviewed in the proposed rule, 
the results from analyses of the latest available data on the five 
primary factors discussed above supported increasing employee-based 
size standards for 157 industries and 2 subindustries (``exceptions''), 
decreasing size standards for 216 industries, and maintaining size 
standards for 54 industries and 3 subindustries (``exceptions''). Table 
1, Summary of Calculated Size Standards (NAICS 2017), below, summarizes 
the analytical results from the April 2022 proposed rule by NAICS 
sector.

                                  Table 1--Summary of Calculated Size Standards
                                                  [NAICS 2017]
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                                                  Number of size  Number of size  Number of size  Number of size
         NAICS sector             NAICS sector       standards       standards       standards       standards
                                      title          reviewed        increased       decreased      maintained
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21............................  Mining,                       24              15               9               0
                                 Quarrying, and
                                 Oil and Gas
                                 Extraction.
22............................  Utilities.......              11              11               0               0
31-33.........................  Manufacturing...             360             123             187              50
48-49.........................  Transportation                15               5               8               2
                                 and Warehousing.
51............................  Information.....              12               3               7               2
54............................  Professional,                  7               1               3               3
                                 Scientific and
                                 Technical
                                 Services.
Other.........................  Agriculture,                   3               1               2               0
                                 Forestry,
                                 Fishing and
                                 Hunting (Sector
                                 11); Finance
                                 and Insurance
                                 (Sector 52);
                                 Administrative
                                 and Support,
                                 Waste
                                 Management and
                                 Remediation
                                 Services
                                 (Sector 56).
                                                 ---------------------------------------------------------------
    Total.....................  ................             432             159             216              57
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    In the April 2022 proposed rule, SBA discussed the impacts of the 
COVID-19 pandemic on small businesses and greater society. Recognizing 
the wide-ranging economic impacts of the pandemic, SBA decided not to 
lower any size standards for which the analysis suggested lowering 
them. Instead, SBA proposed to maintain all size standards for 
industries in which the analytical results supported a decrease or no 
change to size standards and adopt all size standards for which the 
analytical results supported an increase to size standards, except for 
nine industries where SBA's evaluation of dominance in field of 
operation indicated that size standards should be maintained at the 
current levels to exclude dominant firms and one industry for which SBA 
proposed to adopt a smaller increase to the size standard also to 
exclude dominant firms.
    In the April 2022 proposed rule, SBA also evaluated the 500-
employee size standard applicable to nonmanufacturers participating in 
the Federal contracting market. SBA's regulations at 13 CFR 121.406 
require small business concerns to meet certain requirements when they 
offer to the Government an end item they did not manufacture, process, 
or produce. These requirements are known as the nonmanufacturer rule. 
To qualify for a Federal Government supply contract set aside for small 
business, a nonmanufacturer must have an average of 500 or fewer 
employees over the past 24 months, be primarily engaged in wholesale or 
retail trade activities and supply the product of a U.S. small

[[Page 9972]]

manufacturer.\2\ In the proposed rule, SBA proposed to retain the 500-
employee size standard under the nonmanufacturer rule.
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    \2\ On June 6, 2022, SBA issued a final rule implementing 
section 863 of the National Defense Authorization Act for Fiscal 
Year 2021, Public Law 116-283, which changed the averaging period 
for calculating employees for SBA's employee-based size standards 
from 12 months to 24 months (87 FR 34094).
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    In the Request for Comments section of the proposed rule, SBA 
requested comments on the appropriateness of the current 500-employee 
size standard under the nonmanufacturer rule and suggestions for 
alternative measures to an employee-based size standard that would be 
more appropriate for size determination of nonmanufacturers.
    SBA also sought comments on its proposal to increase size standards 
for 150 industries and retain the current size standards for the 
remaining 282 industries or subindustries (``exceptions'') in Sector 
31-33 and other sectors with employee-based size standards (excluding 
Wholesale Trade and Retail Trade Sectors). Specifically, SBA requested 
comments on whether the proposed revisions are appropriate for the 
industries covered by the proposed rule; whether the decision not to 
lower any size standards is justified by considerations of impacts of 
the COVID-19 pandemic; whether the equal weighting of individual 
factors to derive an industry size standard is appropriate; and whether 
the data sources used in developing proposed size standards were 
appropriate or sufficient. SBA also sought comments on its evaluation 
of specific industries or subindustries (``exceptions''), including the 
Information Technology Value Added Resellers (ITVAR) exception to NAICS 
541519 (Other Computer Related Services), NAICS 482111 (Line Haul 
Railroads), NAICS 482112 (Short Line Railroads), the Environmental 
Remediation Services (ERS) exception to NAICS 562910 (Remediation 
Services), and certain industries for which SBA adjusted calculated 
size standards based on its analysis of dominance in field of 
operation.
    To evaluate the impact of the changes to size standards adopted in 
this final rule on the Federal contracting market and SBA's loan 
programs, SBA analyzed FPDS-NG data for fiscal years 2018-2020 and 
internal data on its guaranteed and disaster loan programs for fiscal 
years 2018-2020. The results of this analysis can be found in the 
Regulatory Impact Analysis section of this final rule.
    In accordance with 13 CFR 121.102(e), SBA advises eligible parties 
of the option to file a petition for reconsideration of a revised, 
modified, or established size standard at SBA's Office of Hearings and 
Appeals (OHA) within 30 calendar days after publication of this final 
rule in accordance with 15 U.S.C. 632(a)(9) and 13 CFR 134 Subpart I. 
OHA can be reached using the following contact information: by mail at 
U.S. Small Business Administration, Office of Hearings and Appeals, 409 
Third St. SW, Eighth Floor, Washington, DC 20416, by email at 
[email protected], by phone at (202) 401-8200 TTY/TRS: 711, or by fax 
at (202) 205-7059.

Discussion of Comments

    SBA received a total of 49 comments on the proposed rule, 37 of 
which pertained to SBA's proposal to increase the size standard for the 
ERS exception to NAICS 562910 from 750 employees to 1,000 employees. Of 
the 37 comments pertaining to the ERS exception, 28 opposed SBA's 
proposed increase to the size standard and nine supported SBA's 
proposal. SBA also received five comments pertaining to general size 
standards issues, two comments that pertained to SBA's proposal to 
retain the 500-employee size standard under its nonmanufacturer rule, 
one comment on the ITVAR exception to NAICS 541519, one comment on 
SBA's proposed size standards for power generation industries, one 
comment on NAICS 315210 (Cut and Sew Apparel Contractors), one comment 
on NAICS 333310 (Commercial and Service Industry Machinery 
Manufacturing), and one comment that was outside the scope of the rule.
    As mandated by section 1344 of the Jobs Act, SBA is required to 
hold not less than two public forums during its quinquennial review of 
size standards. SBA held two virtual public forums on size standards to 
update the public on the status of the ongoing second five-year review 
of size standards and to consider public testimony on changes contained 
in the April 26, 2022, proposed rule. The two virtual public forums on 
size standards were held on June 14, 2022, and on June 16, 2022. The 
comments received during the virtual public forums are included in the 
count of comments above. All comments to the proposed rule, including 
those received as part of the virtual public forums, are available at 
www.regulations.gov (RIN 3245-AH09) and are summarized and discussed by 
topic below.

Comments Received During SBA's Virtual Public Forums on Size Standards

    As explained in the Discussion of Comments section above, on June 
14 and June 16, 2022, SBA held a series of two virtual public forums on 
size standards to update the public on the status of the ongoing second 
five-year review of size standards and to consider public testimony on 
proposed changes contained in the April 26, 2022, proposed rule. Over 
the course of the two days, of 87 total participants, SBA received 
testimony from eight commenters, of which seven provided comments 
pertaining to the SBA's proposal to increase the size standard for the 
ERS exception from 750 employees to 1,000 employees and one provided 
comments pertaining to SBA's increases to size standards generally. Of 
the seven comments that pertained to the ERS exception, one commenter 
expressed support for the SBA's proposed increase to the size standard 
from 750 employees to 1,000 employees, while six commenters opposed the 
proposed increase, asking for a lower size standard.
    Regarding the public forum comments pertaining to the ERS 
exception, one commenter supporting the SBA's proposed change expressed 
that by raising the size standard to 1,000 employees, SBA will support 
the creation of a healthy industrial base of ERS providers for Federal 
clients and make it easier for small businesses to build the strength 
and capabilities needed to grow and successfully graduate from small 
business status. This commenter also urged SBA to consider adopting a 
size standard of 1,200 employees based on SBA's analysis in the 
proposed rule of all firms operating under the ERS exception regardless 
of whether ERS was their primary business activity.
    Commenters opposed to SBA's proposed increase to the size standard 
for the ERS exception expressed that SBA's proposed change would 
adversely impact smaller small businesses. One commenter also argued 
that SBA's reliance on Federal contracting data for fiscal years 2016-
2018 led the Agency to make incorrect conclusions about industry trends 
following SBA's prior increase to the ERS size standard from 500 
employees to 750 employees, which resulted in SBA proposing a size 
standard above what SBA's analysis would support if more recent data 
were used. Specifically, the commenter pointed out that part of SBA's 
rationale for increasing the size standard for the ERS

[[Page 9973]]

exception is to address the decline in small business participation 
that occurred during fiscal years 2016-2018; however, the commenter 
maintained that, based on the latest available data, small business 
participation has increased significantly since that period. The 
commenter further explained that one reason for the lag between SBA's 
previous increase to the size standard for ERS and a corresponding 
increase in small business participation in the Federal market could be 
due to the nature of the Federal Government's procurement process in 
general which in some cases could take months, if not years, to award 
contracts due to protests, shifting agency priorities, funding levels, 
and other issues. Moreover, this commenter raised concerns that the 
Department of Energy's (DOE) reliance on management and operating (M&O) 
contractors, of which most are large businesses, may have skewed SBA's 
results. The commenter argued that if SBA excludes DOE's M&O contracts 
under the ERS exception from its analysis of industry factors, small 
business participation would be far more robust than what SBA reported 
in the proposed rule.
    Another commenter expressing similar concerns about SBA's use of 
data from fiscal years 2016-2018 to measure small business 
participation in the Federal market also urged SBA to consider startup 
costs in its analysis of the industry size standard and utilize more 
recent data from the Engineering News-Record (ENR) (an industry trade 
publication) of the top 200 ENR firms in the industry when describing 
the economic characteristics of ERS firms. Another commenter urged SBA 
to consider the Environmental Protection Agency's (EPA) Region 2 
Superfund program as a representation of the NAICS 562910 remediation 
industry. The commenter argued that these program data demonstrate the 
ability of firms well under the current 750-employee size standard to 
fulfill the Federal Government's small business remediation 
requirements; thus, it is unnecessary for SBA to increase the size 
standard beyond the current threshold as the added competition from 
larger firms could impact the number of opportunities available for 
smaller small firms that are already thriving under the current 750-
employee size standard. SBA received three comments expressing 
agreement with this commenter, specifically in support of the notion 
that the current size standard of 750 employees is already appropriate.
    Besides comments pertaining to the ERS exception, during the public 
forums on size standards, SBA also received one comment from a business 
operating under NAICS 561110 (Office of Administrative Services) 
pertaining to SBA's review of size standards generally. The commenter 
opposed any increases to size standards at this time, citing concerns 
about an impending economic recession, category management impacts, and 
best-in-class requirements, which together, reduce small business 
opportunities and eventually the total number of small businesses 
participating in the Federal market. The commenter urged SBA to help 
small businesses facing these concerns by improving its engagement 
efforts through increased access to financial assistance and other 
support rather than increasing size standards.
    The comments received during the virtual public forums that pertain 
to the ERS exception closely mirror the public submissions received 
electronically through the www.regulations.gov portal. In fact, many 
commenters at the virtual public forums also submitted more detailed 
comments in writing, elaborating on their oral testimony. Thus, SBA is 
addressing these comments as part of its summary and response to 
comments under the Comments to the Exception to NAICS 562910 
(Environmental Remediation Services) section of this final rule. 
Similarly, SBA responds to the comment opposing increases to size 
standards generally as part of its summary and response to comments 
under the General Comments on SBA's Proposed Changes to Size Standards 
section of this final rule.

Comments on SBA's Proposed Changes to Power Generation Industries

    SBA received one comment from a national trade association 
representing nearly 900 local electric cooperatives and other rural 
electric utilities supporting SBA's proposed changes to size standards 
for industries under NAICS Sector 22 (Utilities). Specifically, the 
association agreed with SBA's decision to maintain the current size 
standard for NAICS 221116 and adopt adjusted calculated increases to 
size standards for NAICS 221111, 221112, 221113, 221114, 221115, 
221116, 221117, 221118, and 221210 based on SBA's analysis of dominance 
in field of operation.

SBA Response

    SBA appreciates the association's comments supporting SBA's 
proposed size standards for several select industries under Sector 22, 
Utilities. SBA agrees that the proposed size standards are appropriate 
in terms of industry market conditions in those industries and believes 
that the changes will ensure access to SBA's programs for the intended 
beneficiaries within these industries while excluding the largest and 
potentially dominant firms from being considered small. Thus, in the 
absence of opposing comments, SBA is adopting the proposed size 
standards for Sector 22 industries, as proposed.

Comments on the Federal Procurement Size Standard for Nonmanufacturers

    SBA received one comment, expressing support for SBA's proposal to 
maintain the current 500-employee size standard for nonmanufacturers. 
The commenter expressed concern that if SBA were to adopt a receipt-
based size standard, as explored by SBA in the proposed rule, thousands 
of firms that currently qualify as small under the 500-employee 
nonmanufacturer size standard would lose their eligibility to seek set-
aside procurements for small businesses. The commenter further 
explained that a receipts-based size standard would likely limit sales 
volume for most resellers while also impacting their ability to 
maintain satisfactory employment levels. Thus, the commenter urged SBA 
to retain the current 500-employee size standard for nonmanufacturer 
resellers.
    SBA also received one comment opposing SBA's proposal to maintain 
the current 500-employee size standard for nonmanufacturers. The 
commenter believed that SBA provided an insufficient and non-compelling 
rationale for not adopting the calculated size standard of 550 
employees for nonmanufacturers, and instead proposing to maintain the 
current 500-employee size standard. Specifically, the commenter 
expressed that SBA's rationale to maintain the size standard simply 
because it is familiar to the industry and working well in practice 
sets a bad and arbitrary precedent. Thus, the commenter urged SBA to 
follow the results of its analysis and increase the size standard for 
nonmanufacturers to 550 employees, as suggested by the results. This 
commenter also expressed support for maintaining an employee-based size 
standard for nonmanufacturers rather than adopting a receipts-based 
size standard.

SBA Response

    SBA agrees with commenters that an employee-based size standard is 
most appropriate for nonmanufacturers. In the proposed rule, as an 
alternative, SBA calculated a receipts-based size standard of $27 
million for nonmanufacturers. However, although SBA evaluated a 
receipt-based size standard for nonmanufacturers, SBA

[[Page 9974]]

believes that adopting a receipts-based size standard, instead of an 
employee-based size standard, would be inappropriate for several 
reasons. Specifically, the Small Business Act provides that the size of 
manufacturing firms be based on the number of employees and that the 
size of services firms be based on average annual receipts. Adopting a 
receipts-based size standard under the nonmanufacturer rule, which 
currently applies only to Government acquisitions for supplies, would 
cause many manufacturing concerns supplying products to the Government 
as nonmanufacturers under the nonmanufacturer rule to be evaluated 
under a receipts-based size standard, which would be contrary to the 
requirements of the Small Business Act. Moreover, based on data from 
the 2017 Economic Census, SBA determined that under the calculated $27 
million receipts-based size standard, more than 35,000 firms would lose 
their small business status they currently enjoy under the 500-employee 
nonmanufacturer size standard. Thus, as proposed, SBA is maintaining an 
employee-based size standard for nonmanufacturers.
    With respect to the comment petitioning SBA to adopt 550 employees 
as the size standard for nonmanufacturers as suggested by SBA's 
analytical results, SBA disagrees that its rationale for maintaining 
the 500-employee size standard is arbitrary. As explained in the 
proposed rule, the analytical results support raising the size standard 
for nonmanufacturers from 500 employees to 550 employees. However, to 
maintain continuity with general public familiarity with and long 
acceptability of the 500-employee nonmanufacturer size standard, SBA 
proposed to maintain the current 500-employee size standard. In the 
proposed rule, SBA clarified why it believed that the 500-employee size 
standard is appropriate and working well for the majority of firms to 
which it applies, explaining that the 500-employee size standard for 
nonmanufacturers is also the most common size standard among the 
manufacturing industries (NAICS Sector 31-33) where some manufacturers 
bid on supply contracts under which they do not propose to produce the 
particular product to be supplied with their own labor force, 
notwithstanding that they are capable of doing so, and therefore must 
qualify as small businesses under the nonmanufacturer rule. Thus, SBA 
believes that maintaining 500 employees as the size standard for 
nonmanufacturers would promote consistency in its regulations and 
increase compliance. Therefore, in an effort to minimize the adverse 
consequences on manufacturers who may provide supplies to the Federal 
Government as nonmanufacturers under the nonmanufacturer rule, and to 
promote fair competition among manufacturers and nonmanufacturers, SBA 
is adopting the predominant 500-employee size standard for 
manufacturers as the size standard for nonmanufacturers who desire to 
bid on Federal supply contracts.

Comments on the Application of the Nonmanufacturer Rule to Information 
Technology Value Added Resellers (ITVARs)

    SBA received one comment urging SBA to reconsider whether the 
nonmanufacturer rule should apply to the ITVAR exception to NAICS 
541519 (Other Computer Related Services). The commenter expressed that 
it may be inconsistent for SBA to apply the nonmanufacturer rule to the 
ITVAR exception when most or all of the supplies provided by resellers 
under this exception would fall under one of the NAICS codes for which 
class waivers currently exist.

SBA Response

    As stated in Footnote 18 to SBA's table of size standards at 13 CFR 
121.201, for a Federal contract to be classified under the ITVAR 
exception and its 150-employee size standard, it must consist of at 
least 15 percent, but not more than 50 percent of value-added services. 
In addition, the offeror must comply with the manufacturing performance 
requirements, or comply with the nonmanufacturer rule by supplying the 
products of small business concerns, unless SBA has issued a class or 
contract specific (individual) waiver of the nonmanufacturer rule.
    While SBA agrees with the commenter that class waivers may already 
exist for some IT products commonly purchased using the ITVAR 
exception, SBA also acknowledges that not all IT products procured 
through the ITVAR exception have a waiver of its nonmanufacturer rule. 
Moreover, considering the rapid pace of development in the IT industry, 
SBA believes that it is not unreasonable to assume that there will be 
new products purchased by the Federal Government using the ITVAR 
exception in the future that likewise do not qualify for a waiver. 
Thus, by eliminating the nonmanufacturer rule for the exception, SBA 
could disadvantage small firms who are currently offering, or plan to 
offer products not subject to a class waiver.
    SBA also believes it would be inconsistent with the intent of the 
Small Business Act if ITVAR resellers could provide the supplies 
produced primarily by a large original equipment manufacturer (OEM), or 
other large manufacturers, without a waiver of the nonmanufacturer 
rule. SBA is concerned that without the compliance with the 
nonmanufacturer rule, the ITVAR exception may allow small IT resellers 
to simply serve as ``pass throughs'' for large OEMs and other large 
manufacturers. While SBA recognizes that the nonmanufacturer rule may 
work better for some products than for others, it strongly believes 
that the rule must apply to all supply contracts equally. Thus, like 
all other products and supplies, the nonmanufacturer rule must also 
apply to IT products, including those purchased through the ITVAR 
exception. Therefore, SBA is retaining the requirement that the supply 
component of small business set-aside ITVAR contracts must comply with 
the manufacturing performance requirements or the SBA's nonmanufacturer 
rule.

Comments on NAICS 315210 (Cut and Sew Apparel Contractors)

    SBA received one comment petitioning SBA to increase the size 
standard for NAICS 315210 (Cut and Sew Apparel Contractors) from 750 
employees to 1,500 employees. The commenter maintained that the 
manufacture of personal protection equipment (PPE) by Cut and Sew 
Apparel Contractors and the reliance of the Federal Government on this 
industry to satisfy strategic objectives related to sourcing PPE 
equipment and supplies domestically suggests that the threshold should 
be larger than 750 employees. Elaborating on this idea, the commenter 
explained that increasing the size standard would allow PPE 
manufacturers to sufficiently scale up their operations to meet the 
Federal Government's demand at lower costs. Moreover, the commenter 
presented data to show the high fixed costs of production and relative 
labor intensity of Cut and Sew Apparel Contractors relative to other 
manufacturing industries, which the commenter believed justified an 
increase to the size standard when considering the strategic importance 
of firms within the Cut and Sew Apparel Contractor industry. The 
commenter also argued that, due to the pandemic, the distribution of 
goods being produced by Cut and Sew Apparel Contractors has changed, 
and as a result,

[[Page 9975]]

these companies must invest significantly more in property, plant, and 
equipment if they are to become more cost-efficient producers of PPE. 
The commenter explained that in order to meet the Federal Government's 
demands for quality and quantity of goods for PPE purchases, companies 
must be larger, both in terms of capital investment and employment 
size. However, the commenter did not provide any data on industry and 
Federal contracting factors showing why the size standard for the Cut 
and Sew Apparel Contractor industry should be increased from 750 
employees to 1,500 employees.

SBA Response

    SBA disagrees with the commenter's argument that SBA should 
increase the size standard for NAICS 315210 based on the industry's 
importance to Government purchases of PPE. Specifically, SBA believes 
that the commenter may have mis-identified the proper NAICS code for 
which Government purchases of PPE normally fall under. Based on the 
NAICS manual, available at www.census.gov/naics, NAICS 315210 comprises 
firms that are commonly referred to as contractors that are primarily 
engaged in (1) cutting materials owned by others for apparel and 
accessories and/or (2) sewing materials owned by others for apparel and 
accessories. Normally, Federal Government purchases of PPE do not fall 
under this NAICS code as Government purchases of PPE are normally to 
acquire new materials and equipment, and not to modify materials and 
equipment already owned by the Federal Government. Instead, Government 
purchases of PPE usually fall under NAICS 339112 (Surgical and Medical 
Instrument Manufacturing), NAICS 339113 (Surgical Appliance and 
Supplies Manufacturing), or NAICS 423450 (Medical, Dental, and Hospital 
Equipment and Supplies Merchant Wholesalers) \3\ with Product Service 
Code (PSC) 6515 (Medical and Surgical Instruments, Equipment, and 
Supplies). Based on an analysis of FPDS-NG data for fiscal years 2018-
2020, SBA found that less than 0.1 percent of Government purchases 
under PSC 6515 fall under NAICS 315210 while nearly 80 percent of 
Government purchases under PSC 6515 occur under one of the three 
aforementioned NAICS codes. Since PSC 6515 includes a broad range of 
supplies, SBA also analyzed the data by keywords to identify contracts 
for PPE, including respirators, masks, surgical gowns, and other PPE. 
SBA again found that NAICS 315210 was insignificant in terms of the 
total dollars obligated towards purchases of these PPE items. Thus, SBA 
does not agree that the industry's importance to Federal Government 
purchases of PPE warrants an increase to the size standard in NAICS 
315210 in order to enable the industry to meet greater demand for PPE.
---------------------------------------------------------------------------

    \3\ Per the requirements at 13 CFR 121.402(b)(2), acquisitions 
for supplies must be classified under the appropriate manufacturing 
or supply NAICS code, not under a Wholesale Trade or Retail Trade 
NAICS code, however, FPDS-NG data shows that some contracting 
activity may be misclassified under these NAICS codes.
---------------------------------------------------------------------------

    Moreover, SBA's analysis of industry factors, as presented in Table 
4 of the April 2022 proposed rule, supported a calculated size standard 
of only 450 employees for NAICS 315210. However, in response to the 
economic challenges presented by the COVID-19 pandemic and the measures 
taken by Federal Government to protect public health, SBA decided to 
adopt a policy to not lower size standards during the ongoing second 
five-year review of size standards in order to reduce the economic 
impacts to small businesses. Thus, SBA proposed to retain the current 
size standard for NAICS 315210 at 750 employees even though the data 
supported 450 employees. Based on the 2017 Economic Census data, 99.8 
percent of firms are already small under the current 750-employee size 
standard for NAICS 315210. Increasing the size standard to 1,500 
employees might include the largest and potentially dominant firms as 
small, which would run counter to the Small Business Act requirement 
that the size standards must exclude dominant firms from being 
qualified as small.
    Regarding the industries that most accurately classify purchases of 
PPE, namely NAICS 339112 and NAICS 339113, SBA has proposed to retain 
the current size standard for NAICS 339112 at 1,000 employees and 
increase the size standard for NAICS 339113 to 800 employees based on 
the analysis of industry and Federal contracting factors. While the 
commenter submitted data on the costs of employment for firms operating 
under NAICS 315210 relative to other manufacturing industries, the 
provided data are not at the 6-digit industry level and do not 
demonstrate that SBA's analysis of NAICS 339112 and 339113 is 
insufficient. Thus, for the above reasons, SBA is not adopting the 
commenter's recommendation to increase the size standard for NAICS 
315210 from 750 employees to 1,500 employees, nor is SBA adopting 1,500 
employees as the size standard for other three NAICS codes under which 
solicitations for PPE are normally categorized.

Comments on the Exception to NAICS 562910 (Environmental Remediation 
Services)

    As explained above in the Discussion of Comments section of this 
final rule, SBA received a total of 37 comments pertaining to SBA's 
proposal to increase the size standard for the Environmental 
Remediation Services (ERS) exception to NAICS 562910 from 750 employees 
to 1,000 employees. Of the 37 comments pertaining to the ERS exception, 
28 (including six comments opposing SBA's proposal received during 
SBA's virtual public forums on size standards) opposed SBA's proposed 
increase and nine (including one comment supporting SBA's proposal 
during the virtual public forums) supported SBA's proposal. Below, SBA 
summarizes and responds to comments supporting the SBA's proposed 
change to the ERS size standard, then summarizes and responds to 
comments opposing the SBA's proposed change.

Comments Supporting SBA's Proposed Change to the ERS Exception

    A total of nine comments were received supporting SBA's proposal to 
increase the size standard for the ERS exception from 750 employees to 
1,000 employees. One commenter supporting SBA's proposed increase to 
the size standard argued that SBA's current 750-employee size standard 
is too restrictive and has been a detriment to many companies in the 
industry. The commenter expressed that adopting a 1,000-employee size 
standard would remove the restraint and allow for further growth for 
companies without forcing them to prematurely graduate from the small 
business status and to compete with larger firms with more resources 
when they exceed the size standard.
    An additional four commenters, submitting nearly identical 
comments, supported SBA's proposed increase to the ERS size standard 
for similar reasons, expressing that SBA's proposed increase would 
allow additional firms to participate in Federal contracting as small 
businesses, increase small business competition, and ultimately reverse 
the downward trend in small business share of ERS contract dollars from 
fiscal years 2013 to 2018. These commenters further expressed that 
their business would benefit from SBA's proposed change due to the 
increased capabilities they could achieve under a larger size standard 
which would allow them to take on larger and more complex remediation 
projects. One

[[Page 9976]]

commenter also supported SBA's proposal based on the belief that the 
Federal Government will have access to an expanded pool of more capable 
small businesses to meet the demand for the surge in ERS requirements 
expected as part of the implementation of the Infrastructure Investment 
and Jobs Act (Pub. L. 117-58, November 15, 2021). Three commenters 
petitioned SBA to increase the size standard for the ERS exception to 
1,200 employees based on SBA's analysis in the proposed rule which 
showed support for a size standard as high as 1,200 employees when 
including data from the largest firms whose principal business 
activities were generally unrelated to ERS.
    Referring to an opposing comment received during SBA's virtual 
public forums on size standards that urged SBA to exclude the 
Department of Energy (DOE) contracts from its analysis of the ERS 
exception due to DOE's unique reliance on large M&O contractors, one 
commenter expressed that the notion of excluding such procurements, 
which are often related to nuclear remediation, is in direct 
contradiction to the definition of the ERS subindustry, as stated in 
Footnote 14 of SBA's Table of Size Standards at 13 CFR 121.201. The 
commenter explained that this footnote specifically lists nuclear 
remediation as an eligible activity and further argued that the 
justification for excluding DOE contracts from the analysis simply 
because they are dominated by large businesses is not sufficient. This 
commenter also opposed using the Engineering News-Record (ENR) top 200 
environmental firms list as a source of industry data for evaluation of 
the ERS size standard as suggested by one commenter at the virtual 
public forums, because the data do not cover the whole industry and may 
contain subjective measures of revenue that do not comport with SBA's 
definitions.

SBA Response

    SBA agrees with commenters supporting SBA's proposed increase to 
the size standard for the ERS exception that adopting a size standard 
of 1,000 employees would extend the runway for firms to grow while 
still allowing access to SBA's contracting and financial assistance 
programs. SBA also believes that increasing the size standard to 1,000 
employees would improve competition in the industry and help small 
businesses to earn more Federal contracting dollars and compete for 
more complex environmental remediation projects, including those that 
may become newly available as a result of the Infrastructure Investment 
and Jobs Act.
    As explained in the proposed rule, the procurement data analyzed by 
SBA showed that the dollars awarded by firms' employment size were 
concentrated among the largest firms. Specifically, small firms with 
less than or equal to 750 employees received about 37 percent of the 
total ERS dollar awards during fiscal years 2016-2018, while firms with 
more than 5,000 employees accounted for about 60 percent of the total 
ERS contract awards, with two firms alone accounting for almost 40 
percent of the total awards under ERS activities. Firms between 750 
employees and 5,000 employees accounted for 3.5 percent of the total 
ERS contract dollars. Procurement data from FPDS-NG for fiscal years 
2019-2021 analyzed by SBA showed an increase in the small business 
share of ERS contract dollars to 43.5 percent and a decrease in the 
share of the largest firms (i.e., those with more than 5,000 employees) 
to 54 percent, with two of them alone accounting for about 34 percent 
of total ERS dollars during that period. Firms between 750 employees 
and 5,000 employees accounted for remaining 2.5 percent. While the 
small business share of ERS contract dollars increased from about 37 
percent during fiscal years 2016-2018 to about 43.5 percent during 
fiscal years 2019-2021, this is still smaller than the corresponding 
share of about 50 percent during fiscal years 2013-2015.
    Thus, SBA believes that the large skewness in the distribution of 
ERS firms by the number of employees, the large percentage of ERS 
contracting dollars being concentrated among very large firms, a 
decrease in the small business share of total ERS awards compared with 
fiscal years 2013-2015, and the analysis of industry factors according 
to the SBA's Size Standards Methodology outlined in the proposed rule 
support SBA's proposal to increase the ERS size standard to 1,000 
employees. SBA believes that its proposal to increase the size standard 
to 1,000 employees will further increase small business participation 
in the industry over time.
    Regarding the adoption of a higher calculated size standard of 
1,200 employees for the ERS industry, SBA does not believe that the 
calculated size standard of 1,200 employees accurately reflects the 
economic characteristics of firms primarily engaged in the business 
activities related to the ERS exception since this calculation was 
based on untrimmed data, and thus, included very large firms whose 
primary activity was likely unrelated to the ERS exception. Moreover, 
in response to comments pertaining to using the ENR data on the top 200 
environmental firms, SBA agrees with commenters supporting SBA's 
increase to the ERS size standard that this dataset is not 
comprehensive enough for SBA's size standards purposes. For example, 
SBA's analysis of the ERS industry included 974 firms participating in 
Federal contracting under the exception to NAICS 562910 during fiscal 
years 2019-2021, while the ENR dataset suggested by the commenters only 
includes the top 200 environmental firms.\4\ In order to reliably 
evaluate the size standard of any industry, SBA must rely on 
comprehensive data that is representative of the economic trends of the 
entire industry, rather than only the top firms.
---------------------------------------------------------------------------

    \4\ 974 is the number of firms after the removal of entities 
with null revenue and null number of employees as well as the 
identified Government entities and manufacturing firms. This number 
is the total entities participating in the ERS activity before 
trimming the data.
---------------------------------------------------------------------------

Comments Opposing SBA's Proposed Change to the ERS Exception

    Of the 28 comments opposing SBA's proposed change to the size 
standard for the ERS exception, 27 comments expressed similar arguments 
for why SBA should retain the current 750-employee size standard for 
the ERS exception, including 21 comments submitted through the 
regulations.gov rulemaking portal, of which 20 were nearly identical, 
and six comments submitted orally through SBA's Virtual Public Forum on 
Size Standards. Many of these 27 commenters, including the 20 
commenters that submitted nearly identical comments, and at least two 
commenters at SBA's Virtual Public Forum on Size Standards were part of 
a group of firms using data from FEDMINE, a business intelligence 
provider specializing in Federal Government contracting, as the basis 
for their comments. One commenter whose comment was also based on the 
FEDMINE report provided a list of 52 other firms that endorsed their 
comment. The remaining commenters that did not reference FEDMINE data 
provided similar reasons as those outlined by commenters using FEDMINE 
data for opposing SBA's proposed increase to the ERS size standard.
    One commenter opposed to SBA's proposed size standard increase for 
the ERS exception raised issues other than those identified by the 
above 27 commenters, including establishing a separate NAICS industry 
specifically for munitions and unexploded ordnance

[[Page 9977]]

services. Below, SBA summarizes and responds to these opposing comments 
separately.

Comments Opposing SBA's Proposed Change to the ERS Exception for 
Similar Reasons

    SBA received 27 comments petitioning SBA to retain the current 750-
employee size standard for the ERS exception based on similar 
arguments, including six comments received during the virtual public 
forums on size standards and 21 comments received through the 
www.regulations.gov rulemaking portal of which 20 were almost 
identical. The commenters commissioned FEDMINE, a business intelligence 
provider specializing in Federal Government contracting, to prepare a 
report on their behalf regarding Federal spending under the ERS 
exception for fiscal years 2016-2021.
    The commenters objected to SBA's proposed increase to the ERS size 
standard on the grounds that more recent data shows that SBA's 
calculation of the small business share of the Federal market under 
NAICS 562910 is understated, and therefore, undermines SBA's 
justification for increasing the size standard in order to help small 
businesses better compete for contracting opportunities. Specifically, 
according to the commenters' analysis, the amount of Federal dollars 
awarded to small businesses under the ERS exception increased nearly 50 
percent, from about $1.4 billion in 2016 to about $2.1 billion in 2021. 
The commenters also provided data showing that the small business share 
of the ERS Federal spend increased from 35 percent in 2018 to 46 
percent in 2021. The commenters argued that increasing the share of ERS 
Federal dollars obligated to small firms demonstrates, contrary to 
SBA's analysis, that the prior increase in the size standard for the 
exception from 500 employees to 750 employees was effective in 
increasing competition in the Federal market under the ERS exception 
(81 FR 4436 (January 26, 2016)). The commenters contended that SBA 
should evaluate data beyond fiscal year 2018 for purposes of analyzing 
the ERS exception because most Federal dollar obligations under the 
exception are awarded under indefinite delivery contracts (IDCs), and 
as such, SBA should recognize that there was a lapse of time between 
when the ERS size standard was increased in 2016 until IDCs were 
awarded and significant dollars were obligated to small businesses 
under the new size standard.
    These commenters also maintained that the DOE's unique procurement 
methods, including the Agency's reliance on management and operating 
(M&O) contracts which are typically awarded to large firms, have a 
significant influence on SBA's calculations due to DOE's high 
proportion of total dollars obligated under the ERS exception. Thus, 
commenters urged SBA to exclude DOE contracts from the analysis since 
they do not accurately reflect market conditions outside of the DOE.
    Regarding the influence of DOE's procurement trends on SBA's 
calculations, the commenters presented data showing the percent of 
DOE's ERS contracts dollars obligated to small businesses and the 
proportion of total ERS awards attributable to the DOE. The data 
submitted by commenters showed that for fiscal years 2016-2021, on 
average, DOE awarded only about seven percent of ERS contracting 
dollars to small businesses while comprising nearly 50 percent of total 
Federal ERS spending. The commenters maintained that unlike other 
Federal agencies, DOE awards nearly all ERS work through its M&O 
contractors, which are exclusively large businesses. For example, the 
commenters added, in fiscal year 2021, of the $1.2 billion that DOE 
awarded under the exception, only $3.2 million (0.3%) was awarded to 
non-M&O contracts. Subtracting the large business M&O dollars from the 
DOE's total ERS dollars, the commenters found that the small business 
share of total dollars was 97.8 percent. The commenters also argued 
that since most M&O contractors are joint ventures between two or more 
large businesses, each with employee counts far in excess of the SBA's 
size threshold, no reasonable increase in the ERS size standard would 
influence the ability of small businesses to compete at the prime level 
in the DOE M&O market and that the contracting dollars awarded to small 
business is not likely to increase simply because the number of 
businesses considered small under the exception has grown.
    Regarding the dollars obligated to small businesses outside of DOE, 
the commenters presented data showing that since fiscal year 2016, the 
share of non-DOE ERS contract dollars awarded to small businesses 
increased from an average of 53 percent in fiscal years 2013-2015 to an 
average of 63 percent in fiscal years 2016-2018, and to an average of 
78 percent in fiscal years 2019-2021.
    Moreover, the commenters expressed concern with SBA's impact 
analysis which showed that two additional small businesses would gain 
access to small business set aside opportunities under the proposed 
1,000-employee size standard for the ERS exception. Specifically, the 
commenters expressed that these newly eligible firms may adversely 
impact smaller small businesses competing for Federal contracts under 
the exception. The commenters argued that the addition of larger and 
more experienced firms may take away future opportunities from 
currently small firms that are adequately meeting small business 
procurement needs of Federal agencies.
    During SBA's virtual public forums on size standards, SBA received 
comments expressing similar concerns as those outlined above regarding 
SBA's use of data from fiscal years 2016-2018 to measure small business 
participation in the Federal ERS market. One commenter also urged SBA 
to consider startup costs in its analysis of the industry size standard 
and utilize more recent data from the ENR, an industry trade 
publication, which describes the economic characteristics and primary 
business activities of the top 200 engineering/environmental firms in 
the industry down to the subsector level. Another commenter urged SBA 
to consider Environmental Protection Agency's (EPA) Region 2 Superfund 
program as a representation of the ERS industry. The commenter argued 
that these program data demonstrate the ability of small firms well 
under the current 750-employee size standard to fulfill the Federal 
Government's remediation requirements; thus, it is unnecessary for SBA 
to increase the size standard beyond the current threshold as the added 
competition from larger firms could impact the number of opportunities 
available for smaller small firms that are already thriving under the 
current size standard. Additional commenters at the virtual public 
forums agreed with the commenter's assertion that the current 750-
employee size standard for the ERS exception is adequate.
    For the above reasons, these commenters concluded that SBA's 2016 
increase in the ERS size standard from 500 employees to 750 employees 
successfully increased small business participation in ERS contracts 
and preserved competition within the industry. As such, the commenters 
urged SBA to maintain the current 750-employee threshold instead of 
adopting 1,000 employees, as proposed.

SBA Response

    SBA has reviewed the data provided by the above commenters and has 
determined that the results largely agree with the latest available 
data that SBA evaluated in response to the commenters' arguments, as we

[[Page 9978]]

discussed in the section Comments Supporting SBA's Proposed Change to 
the ERS Exception above. Moreover, consistent with the commenters, SBA 
found that DOE awards accounted for 49.2 percent of total dollars 
obligated under the ERS exception, of which only about 8.5 percent were 
awarded to small businesses through prime contracts.
    However, although SBA's further analysis of the ERS industry 
confirmed some of the data submitted by commenters as presented above, 
SBA also found important differences in the commenter's position and 
SBA's evaluation, particularly in regards to SBA's evaluation of size 
standards generally and the proportion of dollars awarded by DOE under 
the exception through M&O contracts, a special class of contracts under 
which the Federal Government contracts for the operation, management, 
or support, on its behalf, of a government-owned or -controlled 
establishment devoted to one or more major government programs.
    Regarding SBA's evaluation of size standards generally, in the 
proposed rule, SBA described its methodology for evaluating industry 
structure to derive size standards based on five primary factors 
including: average firm size (simple and weighted average firm size 
factors), startup costs and entry barriers (average assets size 
factor), industry competition (four-firm ratio factor), distribution of 
firms by size (Gini coefficient factor), and small business success in 
receiving Federal contracts under the current size standard (Federal 
contracting factor). As detailed in Table 4 of the April 2022 proposed 
rule, based on the data for fiscal years 2016-2018, SBA found that 
three of the five industry factors analyzed supported raising the size 
standard for the ERS industry above the current 750 employee threshold. 
Specifically, the factors for simple and weighted average firm size 
supported a size standard of 1,500 employees while the average assets 
size and Gini coefficient supported size standards of 850 employees and 
1,250 employees, respectively. Only the four-firm ratio supported a 
size standard lower than 750 employees.
    With respect to the Federal contracting factor, which measures 
small business participation in the Federal market in terms of the 
share of total Federal contract dollars awarded to small businesses 
relative to the small business share of an industry's total receipts, 
SBA found that the 750-employee size standard was appropriate. Based on 
SBA's Size Standards Methodology, if the share of Federal contract 
dollars awarded to small businesses in an industry is significantly 
smaller than the small business share of total industry's receipts, all 
else remaining the same, a justification would exist for considering a 
size standard higher than the current size standard. In cases, where 
small business share of the Federal market is already appreciably high 
relative to the small business share of the overall market, SBA 
generally assumes that the existing size standard is adequate with 
respect to the Federal contracting factor. Thus, regarding the ERS 
exception specifically, using the FPDS-NG data for fiscal years 2016-
2018, SBA calculated a Federal contracting factor to be 64.2 percent, 
indicating the small business share of the Federal market is 
appreciably high relative to the small business share of industry 
receipts, which supported a size standard of 750 employees. Based on 
this result, SBA agrees with commenters that small businesses in the 
ERS industry are well-represented in the Federal contracting 
marketplace under the current 750-employee size standard and have 
adequate Federal contracting opportunities.
    In the proposed rule, as an additional indicator, SBA also 
considered the change in the share of total ERS contract dollars 
awarded to small businesses from fiscal years 2013-2015 (under the 500-
employee size standard) to fiscal years 2016-2018 (under the 750-
employee size standard), finding that the small business share 
decreased from about 50 percent during fiscal years 2013-2015 to about 
37 percent during fiscal years 2016-2018. This result, alongside SBA's 
analysis of industry factors demonstrated that an additional increase 
to the ERS size standard was warranted in order to optimize and protect 
the number of opportunities available to small businesses in the ERS 
industry. However, SBA notes that this additional indicator was not the 
primary basis for SBA's proposed increase to the size standard for the 
ERS exception. SBA's further analysis of data from fiscal years 2019-
2021 showed that the small business share of total ERS contract dollars 
increased to 43.5 percent from 37 percent in fiscal years 2016-2018; 
however as previously stated, this is not a primary factor in SBA's 
comprehensive analysis of the ERS industry nor is it the sole basis for 
prescribing the size standard for the industry.
    Based solely on the Federal contracting data, SBA agrees that the 
750-employee size standard is appropriate for the ERS industry. 
However, while SBA believes that analyzing Federal contracting trends, 
including the Federal contracting factor, are an important component of 
SBA's evaluation of industry size standards, SBA's size standards 
methodology does not provide for the weighting of one factor more than 
others. In other words, the methodology establishes that SBA will give 
equal weights to all five primary factors that are considered in the 
evaluation of an industry size standard. Thus, SBA believes that the 
proposed size standard for the ERS industry, which is based on SBA's 
comprehensive evaluation of industry and Federal contracting factors, 
accurately reflects the economic characteristics of the industry, 
including the high level of small business participation in the Federal 
marketplace.
    Regarding DOE's M&O contracts, SBA generally recognizes the special 
nature of M&O contracts which have received special regulatory 
treatment under Subpart 17.6 of the FAR. For example, when evaluating 
agency contracting performance under SBA's procurement scorecard 
assessment tool, starting from fiscal year 2015, SBA evaluates DOE's 
prime contracting performance by including M&O first tier subcontracts 
pursuant to 15 U.S.C. 644(g)(3). Thus, SBA believes commenters may be 
justified in requesting that SBA count DOE's M&O first tier 
subcontracts as prime contracts consistent with SBA's procurement 
scorecard methodology. However, SBA does not agree with commenters that 
the dollars obligated through DOE's M&O contracts should be excluded 
altogether from the evaluation of the industry size standard since M&O 
contracts are a valid and important part of the overall Federal 
contracting landscape, and because the DOE accounts for roughly half of 
total ERS contract dollars. SBA believes that excluding M&O contracts 
from the evaluation of size standards, particularly for purposes of 
calculating the Federal contracting factor, would lead to unreliable 
results in industries where M&O contracts are used prominently.
    Moreover, SBA found that, contrary to the commenter's suggestion, 
it is not true that the majority of DOE contracts classified under the 
ERS exception are M&O contracts.\5\ SBA obtained data from the DOE 
listing its M&O contractors and showing the proportion of total dollars 
awarded under the ERS exception to M&O contractors for fiscal years 
2016-2021. The data showed that the DOE did not award any contracts

[[Page 9979]]

under the ERS exception to firms classified as an M&O contractor.
---------------------------------------------------------------------------

    \5\ See Guidance on the Department of Energy Subcontracting 
Program, Section 1.2 Background.
---------------------------------------------------------------------------

    Based on data from the Electronic Subcontracting Reporting System 
(eSRS), SBA found that small businesses were well represented in DOE's 
first tier subcontracts classified under NAICS 562910. Specifically, 
SBA analyzed the data from fiscal years 2016-2021 and found that, when 
accounting for the dollars awarded to small businesses through first-
tier subcontracts, about 57 percent of total dollars awarded by DOE 
under the ERS exception passed through to small businesses. Thus, even 
if SBA considered all DOE awards under the exception as M&O contracts 
and therefore counted the first-tier subcontracts as prime contracts, 
SBA believes that the evaluation would reflect a high degree of small 
business participation under the ERS exception, which, as explained 
above, is consistent with SBA's results under the proposed rule.
    Nonetheless, in response to the commenters' petition, SBA conducted 
an analysis of the ERS industry using updated FPDS-NG data from fiscal 
years 2019-2021 following the same methodology as detailed in the 
proposed rule and in the SBA's Size Standards Methodology. SBA's 
analysis using the more recent data did not support a size standard 
lower than the SBA's proposed 1,000-employee size standard. In fact, 
except for the weighted average firm size, values of each industry 
factor based on the data for fiscal years 2019-2021 were higher than 
those based on the data for fiscal years 2016-2018. Although the 
weighted average firm size was lower in fiscal years 2016-2018, 
weighted average firm size still supported a 1,500-employee size 
standard. The Federal contracting factor based on the data for fiscal 
years 2019-2021 continued to support the 750-employee size standard.
    Regarding petitions by commenters for SBA to use alternative 
sources of data to evaluate industry characteristics, specifically data 
from the ENR on the top 200 environmental firms and EPA's Region 2 
Superfund program, SBA disagrees that these sources would provide the 
best representation of the ERS industry. SBA believes these data are 
not comprehensive enough for SBA's purposes. For example, SBA's 
analysis of the ERS industry included 974 firms participating in 
Federal contracting under the exception to NAICS 562910 during fiscal 
years 2019-2021, while the ENR dataset only includes the top 200 
environmental firms. In order to reliably evaluate the size standard of 
any industry, SBA must rely on comprehensive data that is 
representative of the economic trends of the entire industry, rather 
than only the top firms, or those associated with one agency's 
contracting program.
    SBA does not agree with the commenters that a few larger firms that 
would qualify as small under the proposed 1,000-employee size standard 
would have significant adverse impacts on small businesses under the 
current 750-employee size standard in terms of access to Federal 
opportunities to smaller small firms. The relevant data does not 
demonstrate that the previous increase in size standard from 500 
employees to 750 employees had a significant adverse impact on small 
businesses below 500 employees in terms of accessing Federal small 
business opportunities. For example, firms below 500 employees 
accounted for 84 percent of total ERS dollars awarded to small 
businesses during fiscal years 2019-2021.
    SBA believes that increasing the size standard to the proposed 
1,000-employee level based on its comprehensive evaluation of industry 
and Federal contracting factors may increase the number of set-asides 
in this industry and further benefit the small firms that are already 
well-represented in the Federal contracting market at the current 750-
employee size standard. SBA believes that increasing the size standard 
to 1,000 employees will expand the runway for small businesses to 
compete for more complex remediation projects while also ensuring that 
the Federal Government has access to a larger pool of qualified small 
businesses to select from when issuing solicitations for ERS. As such, 
based on SBA's evaluation of the above public comments pertaining to 
the ERS exception and SBA's analyses of industry and Federal 
contracting factors, SBA is adopting 1,000 employees as the size 
standard for ERS as proposed in the April 2022 proposed rule.

Comments Opposing SBA's Proposed Change to the ERS Exception for Other 
Reasons

    One commenter opposing SBA's proposed increase to the size standard 
for the ERS exception from 750 employees to 1,000 employees argued that 
since SBA's analysis of Federal procurement data from fiscal years 
2016-2018 in the proposed rule showed that the dollars obligated to 
small businesses decreased significantly despite an increase to the 
size standard from 500 employees to 750 employees in 2016, SBA should 
forego increasing the size standard again, and instead, pursue other 
methods of increasing small business participation. Specifically, the 
commenter petitioned SBA to task, demand, encourage and/or impose on 
Federal agencies higher small business participation goals. The 
commenter also argued that SBA's proposed size standard increase would 
adversely impact competition because currently small firms would find 
it difficult to compete with larger firms with more advanced 
capabilities. The commenter also urged SBA to implement rules and/or 
programs to support smaller firms within the ERS industry, for example, 
by creating a class of set-aside opportunities reserved for firms with 
fewer than 50 employees. The commenter also expressed concerns over 
what they viewed as discriminatory and inconsistent application of 
NAICS code selection by contracting officers when determining the 
applicable NAICS code for munitions response services, which are 
sometimes misclassified under the ERS exception rather than the general 
NAICS 562910 or some other more appropriate NAICS codes. The commenter 
maintained that while some munitions remediation projects may require 
engineers for planning purposes (i.e., NAICS 541330) and geophysical 
survey and mapping services (i.e., NAICS 541360), these services 
represent only a small portion of the contract dollars spent (usually 
10-20%) on a munitions remediation project. The commenter further 
explained that the overwhelming majority of funds allocated to 
munitions remediation projects are spent on unexploded object (UXO) 
technicians and labor to remove and dispose of the UXOs. Thus, citing 
the requirements of ERS solicitations under Footnote 14, the commenter 
argued that, since greater than 50 percent of the work related to 
munitions remediation would be attributable to a single NAICS code, the 
requirements for classifying the solicitation under the ERS exception 
are not met. To remedy the misclassification of contracts for munitions 
remediation services, the commenter recommended that SBA create a 
separate NAICS code for munitions and UXO services and issue guidance 
to contracting officers on the appropriate use of the ERS exception.

SBA Response

    SBA disagrees with the comment that SBA should forego increasing 
the size standard for the ERS exception and instead pursue other 
methods of increasing small business participation, including higher 
small business goals for Federal agencies and creating separate set-
aside opportunities for smaller small firms. SBA believes that 
establishing appropriate size standards

[[Page 9980]]

for industries based on its Size Standards Methodology is not mutually 
exclusive to conducting other engagement efforts to increase small 
business participation.
    Moreover, SBA believes that the aforementioned comment is largely 
beyond the scope of this rulemaking as the proposed rule did not 
propose any changes to SBA's goaling guidelines for Federal agencies, 
nor did SBA propose establishing a separate class of set-aside 
opportunities for smaller small businesses. By increasing the size 
standard for the ERS exception to 1,000 employees, SBA will extend the 
runway for firms to grow while also ensuring that small businesses 
retain access to SBA's contracting and financial assistance programs. 
Increasing the size standard to 1,000 employees will also improve 
competition in the industry and help small businesses to earn more 
Federal contracting dollars and compete for and perform more complex 
environmental remediation projects.
    Regarding the misclassification of munitions remediation projects 
under the ERS exception rather than the general NAICS 562910, or some 
other more appropriate NAICS codes, SBA notes that it is ultimately the 
responsibility of the contracting officer to designate the proper NAICS 
code based on the principal purpose of the product or service being 
acquired (13 CFR 121.402(b)). SBA does not believe that changes to size 
standards, including the creation of new NAICS industries or 
exceptions, is an appropriate tool to address incorrect NAICS code 
selections by contracting officers. More importantly, SBA does not have 
authority to create new NAICS codes. SBA has established a process for 
affected parties to appeal with SBA's Office of Hearings and Appeal 
(OHA) a contracting officer's NAICS code designation in its regulations 
at 13 CFR 121.1101. SBA encourages impacted firms to use this process 
when they believe that a contracting officer has miscategorized a 
solicitation under an improper NAICS code.
    For the reasons stated above, SBA is not adopting the 
recommendations of the commenter and is instead adopting 1,000 
employees as the size standard for the ERS exception, as proposed in 
the proposed rule.

General Comments on SBA's Proposed Changes to Size Standards

    SBA received four comments pertaining to its proposed changes to 
size standards generally, including one comment submitted orally as 
part of SBA's virtual public forum on size standards. Of the four 
comments received, two commenters supported SBA's proposed changes to 
size standards while two commenters opposed the SBA's proposal. One 
commenter supported SBA's increases to size standards, specifically for 
industries under NAICS Sector 54, but only for agencies other than the 
Department of Defense (DOD). The commenter expressed concern that 
complex compliance requirements and other factors make it too costly 
for small businesses to compete against larger established businesses 
and that increases in the size thresholds would only exacerbate this 
problem. The commenter did not specify which size levels would be more 
appropriate for the Sector 54 industries covered under this rule or 
offer data in support of their position. Another commenter supported 
SBA's proposed changes to size standards because they believed the 
changes would be beneficial to all small businesses, particularly to 
those involved in government contracting.
    Regarding the opposing comments, one commenter expressed opposition 
to SBA's increases to size standards in general, specifically for dump 
truck operators due to the increased competition that small operators 
face from larger mid-sized trucking firms. The commenter also urged SBA 
to look into the commercial insurance industry which has, according to 
the commenter, more than doubled insurance rates over a timespan of 
just a few months. The commenter did not specify which NAICS codes were 
the subject of their comment, nor did they recommend any actions SBA 
should take to address their comment on the commercial insurance 
industry.
    SBA also received one comment opposed to SBA's changes to size 
standards from a business operating under NAICS 561110 (Office 
Administrative Services). The commenter opposed any increases to size 
standards at this time, citing concerns about an impending economic 
recession, category management impacts, and best-in-class requirements 
which together reduce small business opportunities and the total number 
of small businesses. The commenter urged SBA to help small businesses 
facing these concerns by improving its engagement efforts through 
increased access to financial assistance and other support rather than 
increasing size standards.

SBA Response

    SBA agrees with commenters supporting SBA's proposed changes to 
size standards that the proposed changes are beneficial to small 
businesses and will increase the number of Federal contracting 
opportunities available for small businesses. However, SBA disagrees 
with the comment supporting SBA's proposed changes in Sector 54, but 
only for agencies other than DOD. SBA does not believe that size 
standards should differ among Federal agencies based on the contracting 
preferences or requirements of each agency as this would result in a 
complicated regime of size standards that may fluctuate along with an 
agency's budget and priorities instead of the economic characteristics 
of the industry in which a firm operates. Moreover, to evaluate the 
size standards for industries within Sector 54, SBA relied on its size 
standards methodology. SBA's size standards methodology describes how 
its analyses of various industry and program factors are used to 
establish and revise size standards based on the latest data available. 
Thus, SBA believes that the size standards adopted in this final rule, 
including for industries within Sector 54, appropriately reflect the 
intended beneficiaries of SBA programs. Thus, SBA is adopting the size 
standards for industries in Sector 54 without change.
    SBA also disagrees with the comment that expressed opposition to 
SBA's increases to size standards in general, but specifically for dump 
truck operators, urging SBA to take action to address increased 
insurance costs imposed by the commercial insurance industry. SBA 
believes that this comment is out of the scope of this rulemaking as 
dump truck operators normally operate under NAICS 484220 (Specialized 
Freight (except Used Goods) Trucking, Local), NAICS 532120 (Truck, 
Utility Trailer, and RV (Recreational Vehicle) Rental and Leasing), or 
NAICS 562119 (Other Waste Collection), all of which have receipts-based 
size standards and were not covered under the proposed rule. Moreover, 
SBA does not have the authority to regulate the commercial insurance 
industry, which operates mostly under industries with receipt-based 
size standards not covered under this rule. It is also unclear how an 
adjustment to size standards within the commercial insurance industry 
would translate to lower insurance premiums for small business owners. 
Thus, SBA is not adjusting the size standards for any industries in 
response to this comment.
    SBA also disagrees with the comment opposing any increases to size 
standards based on various concerns including the broader economic 
environment and certain Federal contracting trends that are reducing 
opportunities for small businesses. SBA believes that all small

[[Page 9981]]

businesses will benefit under a size standard that is appropriate to 
their industry. SBA's changes to size standards help small businesses 
to remain competitive in the Federal market and ensure that SBA's 
services go to their intended beneficiaries. Moreover, Table 9 of this 
final rule, Impacts of Increasing Size Standards, below, demonstrates 
the benefits of size standards increases, which would remain unrealized 
if SBA were to not adopt any increases to size standards. For example, 
based on its impact analysis, SBA estimates that increasing size 
standards would result in additional contracting opportunities for more 
than 100 small businesses worth nearly $257 million. Thus, based on 
SBA's estimation of the positive net benefits accruing to small 
businesses as a result of the changes to size standards, SBA disagrees 
with the commenter that increases to size standards are harmful to 
small businesses. Therefore, SBA is adopting proposed increases to size 
standards as presented in the proposed rule.

Comments Pertaining to Other Issues

    SBA received three comments pertaining to issues other than those 
already discussed above. One commenter, representing an optics 
manufacturer, in anticipation of SBA's adoption of Office of Management 
and Budget's (OMB) NAICS 2022 industry structure, petitioned SBA to 
adopt 1,000 employees as the size standard for NAICS 333310, which is a 
newly defined industry under NAICS 2022 encompassing elements from 
NAICS 333314, 333316, and 333318. The commenter argued that adopting 
the higher size standard would expand the runway for small businesses 
in this industry to compete against a greater number of large 
competitors with greater resources. Another commenter petitioned SBA to 
require all United States Department of Agriculture (USDA) regulated 
entities with current USDA certification status to be available for 
periodic surveys and questionnaires regarding their ability to spot, 
detect and report human trafficking. Another commenter petitioned SBA 
to reconsider the current minimum and maximum size threshold values for 
employee-based size standards. The commenter expressed concern with 
SBA's language in the proposed rule describing the minimum size 
standard as the size an established small business should be to have 
adequate capabilities and resources to be able to compete for and 
perform Federal contracts, but does not account for small businesses 
that are newly formed or just starting operations. The commenter 
maintained that, contrary to SBA's language, as small businesses adopt 
new technologies and innovation, it is possible to have adequate 
capabilities and resources to perform Federal contracts without a high 
employee count. Thus, the commenter urged SBA to explore measures such 
as financial statements, sales revenue, years in business and other 
applicable methods to determine capability and competency. The 
commenter also argued that SBA's minimum thresholds affect small 
business access to Federal procurement.

SBA Response

    SBA agrees with the comment petitioning SBA to adopt 1,000 
employees as the size standard for NAICS 333310 under the NAICS 2022 
industry structure. On July 5, 2022, SBA published a proposed rule in 
the Federal Register with proposed revisions to size standards based on 
OMB's NAICS 2022 structure (87 FR 40034). In the proposed rule, SBA 
proposed 1,000 employees as the size standard for NAICS 333310 and 
adopted the proposed size standard in a final rule, effective October 
1, 2022 (87 FR 59240; September 29, 2022). In this final rule, SBA is 
adopting changes to size standards based on the NAICS 2017 structure 
and applying the adopted changes to the recently adopted NAICS 2022 
structure. SBA's NAICS adoption analysis, presented in this final rule 
under the section ``Applying the Adopted Changes to the NAICS 2022 
Structure,'' supports adopting 1,000 employees as the size standard for 
NAICS 333310 based on SBA's established NAICS adoption methodology.
    Regarding the comment petitioning SBA to establish reporting 
requirements for certain operators under USDA's regulations, SBA notes 
that it does not have authority to regulate the trucking industry, nor 
does the Agency have purview over any USDA's certification programs. 
Thus, SBA has determined that this comment is totally outside the scope 
of this final rule.
    Regarding the comment petitioning SBA to reconsider the current 
minimum and maximum threshold values for employee-based size standards, 
SBA evaluated employee-based size standards under this rule using its 
``Size Standards Methodology'' (Methodology), issued on April 11, 2019, 
and available at www.sba.gov/size. SBA's Methodology provides a 
detailed description of its analyses of various industry and program 
factors and data sources, and how the agency uses the results to 
establish and revise size standards. Prior to finalizing the revised 
Methodology, SBA issued a notification in the April 27, 2018, edition 
of the Federal Register (83 FR 18468) to solicit comments from the 
public and notify stakeholders of the proposed changes to the 
Methodology. SBA considered all public comments in finalizing the 
revised Methodology. For a summary of comments and SBA's responses, 
refer to the SBA's April 11, 2019, Federal Register notification of the 
issuance of the final revised Methodology (84 FR 14587).
    Pursuant to the Methodology, SBA has established 250 employees and 
1,500 employees, respectively, as the minimum and maximum size standard 
levels for Manufacturing and other industries (excluding Wholesale and 
Retail Trade) with employee-based size standards. Accordingly, SBA will 
not generally propose or adopt a size standard that is either below the 
minimum level or above the maximum, even though the calculations yield 
values below the minimum or above the maximum levels. As stated in the 
proposed rule, the minimum size standard reflects the size an 
established small business should be to have adequate capabilities and 
resources to be able to compete for and perform Federal contracts (but 
does not account for small businesses that are newly formed or just 
starting operations). On the other hand, the maximum size standard 
represents the level above which businesses, if qualified as small, 
would outcompete much smaller businesses when accessing Federal small 
business assistance. SBA notes that SBA's table of size standards at 13 
CFR 121.201 only defines the largest a business can be and still be 
considered small. As such, although SBA uses 250 employees as the 
minimum size threshold for SBA's analysis of size standards, firms with 
less than 250 employees may still qualify as small businesses since 
they would be below the size threshold for their respective industry. 
Thus, SBA does not agree with the commenter that maintaining a minimum 
threshold for purposes of analysis of industry factors disadvantages 
small firms below the minimum threshold or excludes them from 
contracting opportunities. Moreover, SBA believes that this comment is 
likely beyond the scope of this rulemaking as the proposed rule did not 
propose any changes to SBA's Size Standards Methodology, which was 
finalized through notice and comment process in April 2019. SBA notes 
that the size standards reflect the maximum

[[Page 9982]]

size a business can be to be considered small.

Summary of Adopted Revisions to Size Standards

    Based on the evaluation of public comments it received on the 
proposed rule and on its analyses of industry and Federal contracting 
factors using the latest available data when the proposed rule was 
prepared along with considerations of impacts of the ongoing COVID-19 
pandemic, in this final rule, SBA is adopting the size standards as 
proposed in the April 26, 2022, proposed rule. Thus, SBA is increasing 
size standards for 150 industries under NAICS 2017, including 10 
industries in NAICS Sector 21 (Mining, Quarrying, and Oil and Gas 
Extraction), 10 industries in NAICS Sector 22 (Utilities), 120 
industries in NAICS Sector 31-33 (Manufacturing), five industries in 
Sector 48-49 (Transportation and Warehousing), three industries in 
NAICS Sector 51 (Information), and one subindustry (or ``exception'') 
each in NAICS Sector 54 (Professional, Scientific and Technical 
Services) and in NAICS Sector 56 (Administrative and Support, Waste 
Management and Remediation Services). SBA's size standards revisions 
adopted in this rule can be found in Table 2, Adopted Size Standards 
Revisions (NAICS 2017). Also presented in Table 2 are current and 
calculated size standards for comparison.

                                    Table 2--Adopted Size Standards Revisions
                                                  [NAICS 2017]
----------------------------------------------------------------------------------------------------------------
                                                                                                     Proposed/
                                           NAICS 2017 industry     Current size     Calculated     adopted size
            NAICS 2017 code                       title              standard      size standard     standard
                                                                    (employees)     (employees)     (employees)
----------------------------------------------------------------------------------------------------------------
212113................................  Anthracite Mining.......             250             600             250
212210................................  Iron Ore Mining.........             750           1,400           1,400
212222................................  Silver Ore Mining.......             250           1,100             250
212230................................  Copper, Nickel, Lead,                750           1,400           1,400
                                         and Zinc Mining.
212291................................  Uranium-Radium-Vanadium              250             900             250
                                         Ore Mining.
212299................................  All Other Metal Ore                  750           1,250           1,250
                                         Mining.
212313................................  Crushed and Broken                   750             850             850
                                         Granite Mining and
                                         Quarrying.
212319................................  Other Crushed and Broken             500             550             550
                                         Stone Mining and
                                         Quarrying.
212322................................  Industrial Sand Mining..             500             750             750
212324................................  Kaolin and Ball Clay                 750           1,050             750
                                         Mining.
212325................................  Clay and Ceramic and                 500             650             650
                                         Refractory Minerals
                                         Mining.
212391................................  Potash, Soda, and Borate             750           1,050           1,050
                                         Mineral Mining.
212392................................  Phosphate Rock Mining...           1,000           1,350           1,000
212393................................  Other Chemical and                   500             600             600
                                         Fertilizer Mineral
                                         Mining.
212399................................  All Other Nonmetallic                500             600             600
                                         Mineral Mining.
221111................................  Hydroelectric Power                  500             750             750
                                         Generation.
221112................................  Fossil Fuel Electric                 750             950             950
                                         Power Generation.
221113................................  Nuclear Electric Power               750           1,150           1,150
                                         Generation.
221114................................  Solar Electric Power                 250             700             500
                                         Generation.
221115................................  Wind Electric Power                  250           1,150           1,150
                                         Generation.
221116................................  Geothermal Electric                  250           1,050             250
                                         Power Generation.
221117................................  Biomass Electric Power               250             550             550
                                         Generation.
221118................................  Other Electric Power                 250             650             650
                                         Generation.
221121................................  Electric Bulk Power                  500             950             950
                                         Transmission and
                                         Control.
221122................................  Electric Power                     1,000           1,100           1,100
                                         Distribution.
221210................................  Natural Gas Distribution           1,000           1,150           1,150
311111................................  Dog and Cat Food                   1,000           1,250           1,250
                                         Manufacturing.
311119................................  Other Animal Food                    500             650             650
                                         Manufacturing.
311211................................  Flour Milling...........           1,000           1,050           1,050
311212................................  Rice Milling............             500             750             750
311213................................  Malt Manufacturing......             500             900             500
311221................................  Wet Corn Milling........           1,250           1,300           1,300
311224................................  Soybean and Other                  1,000           1,250           1,250
                                         Oilseed Processing.
311225................................  Fats and Oils Refining             1,000           1,100           1,100
                                         and Blending.
311230................................  Breakfast Cereal                   1,000           1,300           1,300
                                         Manufacturing.
311313................................  Beet Sugar Manufacturing             750           1,150           1,150
311314................................  Cane Sugar Manufacturing           1,000           1,050           1,050
311411................................  Frozen Fruit, Juice, and           1,000           1,100           1,100
                                         Vegetable Manufacturing.
311422................................  Specialty Canning.......           1,250           1,400           1,400
311511................................  Fluid Milk Manufacturing           1,000           1,150           1,150
311512................................  Creamery Butter                      750           1,000             750
                                         Manufacturing.
311514................................  Dry, Condensed, and                  750           1,000           1,000
                                         Evaporated Dairy
                                         Product Manufacturing.
311611................................  Animal (except Poultry)            1,000           1,150           1,150
                                         Slaughtering.
311824................................  Dry Pasta, Dough, and                750             850             850
                                         Flour Mixes
                                         Manufacturing from
                                         Purchased Flour.
311920................................  Coffee and Tea                       750           1,000           1,000
                                         Manufacturing.
311930................................  Flavoring Syrup and                1,000           1,100           1,100
                                         Concentrate
                                         Manufacturing.
311941................................  Mayonnaise, Dressing,                750             850             850
                                         and Other Prepared
                                         Sauce Manufacturing.
311942................................  Spice and Extract                    500             650             650
                                         Manufacturing.
311991................................  Perishable Prepared Food             500             700             700
                                         Manufacturing.
311999................................  All Other Miscellaneous              500             700             700
                                         Food Manufacturing.

[[Page 9983]]

 
312111................................  Soft Drink Manufacturing           1,250           1,400           1,400
312112................................  Bottled Water                      1,000           1,100           1,100
                                         Manufacturing.
312140................................  Distilleries............           1,000           1,100           1,100
313220................................  Narrow Fabric Mills and              500             550             550
                                         Schiffli Machine
                                         Embroidery.
313230................................  Nonwoven Fabric Mills...             750             850             850
314999................................  All Other Miscellaneous              500             550             550
                                         Textile Product Mills.
315190................................  Other Apparel Knitting               750             850             850
                                         Mills.
315990................................  Apparel Accessories and              500             600             600
                                         Other Apparel
                                         Manufacturing.
316110................................  Leather and Hide Tanning             500             800             800
                                         and Finishing.
316992................................  Women's Handbag and                  750             850             750
                                         Purse Manufacturing.
321113................................  Sawmills................             500             550             550
321114................................  Wood Preservation.......             500             550             550
321211................................  Hardwood Veneer and                  500             600             600
                                         Plywood Manufacturing.
322110................................  Pulp Mills..............             750           1,050           1,050
322122................................  Newsprint Mills.........             750           1,050           1,050
323111................................  Commercial Printing                  500             650             650
                                         (except Screen and
                                         Books).
323120................................  Support Activities for               500             550             550
                                         Printing.
324122................................  Asphalt Shingle and                  750           1,100           1,100
                                         Coating Materials
                                         Manufacturing.
324191................................  Petroleum Lubricating                750             900             900
                                         Oil and Grease
                                         Manufacturing.
324199................................  All Other Petroleum and              500             950             950
                                         Coal Products
                                         Manufacturing.
325110................................  Petrochemical                      1,000           1,300           1,300
                                         Manufacturing.
325120................................  Industrial Gas                     1,000           1,200           1,200
                                         Manufacturing.
325130................................  Synthetic Dye and                  1,000           1,050           1,050
                                         Pigment Manufacturing.
325220................................  Artificial and Synthetic           1,000           1,050           1,050
                                         Fibers and Filaments
                                         Manufacturing.
325311................................  Nitrogenous Fertilizer             1,000           1,050           1,050
                                         Manufacturing.
325312................................  Phosphatic Fertilizer                750           1,350           1,350
                                         Manufacturing.
325314................................  Fertilizer (Mixing Only)             500             550             550
                                         Manufacturing.
325320................................  Pesticide and Other                1,000           1,150           1,150
                                         Agricultural Chemical
                                         Manufacturing.
325412................................  Pharmaceutical                     1,250           1,300           1,300
                                         Preparation
                                         Manufacturing.
325520................................  Adhesive Manufacturing..             500             550             550
325611................................  Soap and Other Detergent           1,000           1,100           1,100
                                         Manufacturing.
325612................................  Polish and Other                     750             900             900
                                         Sanitation Good
                                         Manufacturing.
325613................................  Surface Active Agent                 750           1,100           1,100
                                         Manufacturing.
325910................................  Printing Ink                         500             750             750
                                         Manufacturing.
325991................................  Custom Compounding of                500             600             600
                                         Purchased Resins.
325998................................  All Other Miscellaneous              500             650             650
                                         Chemical Product and
                                         Preparation
                                         Manufacturing.
326121................................  Unlaminated Plastics                 500             600             600
                                         Profile Shape
                                         Manufacturing.
326130................................  Laminated Plastics                   500             650             650
                                         Plate, Sheet (except
                                         Packaging), and Shape
                                         Manufacturing.
326220................................  Rubber and Plastics                  750             800             800
                                         Hoses and Belting
                                         Manufacturing.
326299................................  All Other Rubber Product             500             650             650
                                         Manufacturing.
327211................................  Flat Glass Manufacturing           1,000           1,100           1,100
327410................................  Lime Manufacturing......             750           1,050           1,050
327910................................  Abrasive Product                     750             900             900
                                         Manufacturing.
327992................................  Ground or Treated                    500             600             600
                                         Mineral and Earth
                                         Manufacturing.
327999................................  All Other Miscellaneous              500             750             750
                                         Nonmetallic Mineral
                                         Product Manufacturing.
331313................................  Alumina Refining and               1,000           1,300           1,300
                                         Primary Aluminum
                                         Production.
331315................................  Aluminum Sheet, Plate,             1,250           1,400           1,400
                                         and Foil Manufacturing.
331420................................  Copper Rolling, Drawing,           1,000           1,050           1,050
                                         Extruding, and Alloying.
331491................................  Nonferrous Metal (except             750             900             900
                                         Copper and Aluminum)
                                         Rolling, Drawing, and
                                         Extruding.
331492................................  Secondary Smelting,                  750             850             850
                                         Refining, and Alloying
                                         of Nonferrous Metal
                                         (except Copper and
                                         Aluminum).
331512................................  Steel Investment                   1,000           1,050           1,050
                                         Foundries.
331513................................  Steel Foundries (except              500             700             700
                                         Investment).
331523................................  Nonferrous Metal Die-                500             700             700
                                         Casting Foundries.
331524................................  Aluminum Foundries                   500             550             550
                                         (except Die-Casting).
332112................................  Nonferrous Forging......             750             950             950
332114................................  Custom Roll Forming.....             500             600             600
332117................................  Powder Metallurgy Part               500             550             550
                                         Manufacturing.
332215................................  Metal Kitchen Cookware,              750           1,000           1,000
                                         Utensil, Cutlery, and
                                         Flatware (except
                                         Precious) Manufacturing.
332439................................  Other Metal Container                500             600             600
                                         Manufacturing.
332613................................  Spring Manufacturing....             500             600             600
332722................................  Bolt, Nut, Screw, Rivet,             500             600             600
                                         and Washer
                                         Manufacturing.

[[Page 9984]]

 
332812................................  Metal Coating, Engraving             500             600             600
                                         (except Jewelry and
                                         Silverware), and Allied
                                         Services to
                                         Manufacturers.
332992................................  Small Arms Ammunition              1,250           1,300           1,300
                                         Manufacturing.
332996................................  Fabricated Pipe and Pipe             500             550             550
                                         Fitting Manufacturing.
333131................................  Mining Machinery and                 500             900             900
                                         Equipment Manufacturing.
333243................................  Sawmill, Woodworking,                500             550             550
                                         and Paper Machinery
                                         Manufacturing.
333314................................  Optical Instrument and               500             600             600
                                         Lens Manufacturing.
333924................................  Industrial Truck,                    750             900             900
                                         Tractor, Trailer, and
                                         Stacker Machinery
                                         Manufacturing.
333991................................  Power-Driven Hand Tool               500             950             950
                                         Manufacturing.
333993................................  Packaging Machinery                  500             600             600
                                         Manufacturing.
333995................................  Fluid Power Cylinder and             750             800             800
                                         Actuator Manufacturing.
333997................................  Scale and Balance                    500             700             700
                                         Manufacturing.
334290................................  Other Communications                 750             800             800
                                         Equipment Manufacturing.
334416................................  Capacitor, Resistor,                 500             550             550
                                         Coil, Transformer, and
                                         Other Inductor
                                         Manufacturing.
334511................................  Search, Detection,                 1,250           1,350           1,350
                                         Navigation, Guidance,
                                         Aeronautical, and
                                         Nautical System and
                                         Instrument
                                         Manufacturing.
334512................................  Automatic Environmental              500             650             650
                                         Control Manufacturing
                                         for Residential,
                                         Commercial, and
                                         Appliance Use.
334514................................  Totalizing Fluid Meter               750             850             850
                                         and Counting Device
                                         Manufacturing.
334517................................  Irradiation Apparatus              1,000           1,200           1,200
                                         Manufacturing.
334519................................  Other Measuring and                  500             600             600
                                         Controlling Device
                                         Manufacturing.
335122................................  Commercial, Industrial,              500             600             600
                                         and Institutional
                                         Electric Lighting
                                         Fixture Manufacturing.
335129................................  Other Lighting Equipment             500             550             550
                                         Manufacturing.
335311................................  Power, Distribution, and             750             800             800
                                         Specialty Transformer
                                         Manufacturing.
335912................................  Primary Battery                    1,000           1,300           1,300
                                         Manufacturing.
335931................................  Current-Carrying Wiring              500             600             600
                                         Device Manufacturing.
335991................................  Carbon and Graphite                  750             900             900
                                         Product Manufacturing.
335999................................  All Other Miscellaneous              500             600             600
                                         Electrical Equipment
                                         and Component
                                         Manufacturing.
336310................................  Motor Vehicle Gasoline             1,000           1,050           1,050
                                         Engine and Engine Parts
                                         Manufacturing.
336414................................  Guided Missile and Space           1,250           1,300           1,300
                                         Vehicle Manufacturing.
336419................................  Other Guided Missile and           1,000           1,050           1,050
                                         Space Vehicle Parts and
                                         Auxiliary Equipment
                                         Manufacturing.
336611................................  Ship Building and                  1,250           1,300           1,300
                                         Repairing.
336991................................  Motorcycle, Bicycle, and           1,000           1,050           1,050
                                         Parts Manufacturing.
337125................................  Household Furniture                  750             950             950
                                         (except Wood and Metal)
                                         Manufacturing.
337214................................  Office Furniture (except           1,000           1,100           1,100
                                         Wood) Manufacturing.
339113................................  Surgical Appliance and               750             800             800
                                         Supplies Manufacturing.
339910................................  Jewelry and Silverware               500             700             700
                                         Manufacturing.
339930................................  Doll, Toy, and Game                  500             700             700
                                         Manufacturing.
339991................................  Gasket, Packing, and                 500             600             600
                                         Sealing Device
                                         Manufacturing.
339994................................  Broom, Brush, and Mop                500             750             750
                                         Manufacturing.
339999................................  All Other Miscellaneous              500             550             550
                                         Manufacturing.
483111................................  Deep Sea Freight                     500           1,050           1,050
                                         Transportation.
483113................................  Coastal and Great Lakes              750             800             800
                                         Freight Transportation.
483114................................  Coastal and Great Lakes              500             550             550
                                         Passenger
                                         Transportation.
483211................................  Inland Water Freight                 750           1,050           1,050
                                         Transportation.
483212................................  Inland Water Passenger               500             550             550
                                         Transportation.
511199................................  All Other Publishers....             500             550             550
512230................................  Music Publishers........             750             900             900
512250................................  Record Production and                250             900             900
                                         Distribution.
541715 (Exception 3)..................  Guided Missiles and                1,250           1,300           1,300
                                         Space Vehicles, Their
                                         Propulsion Units and
                                         Propulsion Parts.
562910 (Exception.....................  Environmental                        750           1,000           1,000
                                         Remediation Services.
----------------------------------------------------------------------------------------------------------------

    Table 3, Summary of Adopted Size Standards Revisions by Sector 
(NAICS 2017), summarizes the adopted changes to size standards by NAICS 
sector.

[[Page 9985]]



                                             Table 3--Summary of Adopted Size Standards Revisions by Sector
                                                                      [NAICS 2017]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Number of size    Number of size    Number of size    Number of size
                    Sector                                 Sector name                standards         standards         standards         standards
                                                                                      reviewed          increased         decreased        maintained
--------------------------------------------------------------------------------------------------------------------------------------------------------
21............................................  Mining, Quarrying, and Oil and                  24                10                 0                14
                                                 Gas Extraction.
22............................................  Utilities.......................                11                10                 0                 1
31-33.........................................  Manufacturing...................               360               120                 0               240
48-49.........................................  Transportation and Warehousing..                15                 5                 0                10
51............................................  Information.....................                12                 3                 0                 9
54............................................  Professional, Scientific and                     7                 1                 0                 6
                                                 Technical Services.
Other Sectors.................................  Agriculture, Forestry, Fishing                   3                 1                 0                 2
                                                 and Hunting; Finance and
                                                 Insurance; Administrative and
                                                 Support, Waste Management and
                                                 Remediation Services.
                                                                                 -----------------------------------------------------------------------
    Total.....................................  ................................               432               150                 0               282
--------------------------------------------------------------------------------------------------------------------------------------------------------

Applying the Adopted Changes to the NAICS 2022 Structure

    Under this final rule, SBA has reviewed the size standards for 56 
NAICS 2017 industries or their parts with employee-based size standards 
(excluding employee-based size standards in Sectors 42 and 44-45) and 
one industry with a receipts-based size standard that were split, 
merged, or modified to become part of 36 new industries under OMB's 
NAICS 2022 changes. Overall, OMB's NAICS 2022 revisions created 111 new 
industries by reclassifying, combining, or splitting 156 NAICS 2017 
industries or their parts.\6\
---------------------------------------------------------------------------

    \6\ Complete information on the relationship between NAICS 2017 
and NAICS 2022 is available on the U.S. Bureau of the Census (Census 
Bureau) website at https://www.census.gov/naics/. The Census 
Bureau's website also provides detailed documentation on Federal 
notices involving the replacement of SIC with NAICS, and all 
subsequent NAICS updates and revisions, including both the July 2, 
2021, and December 21, 2021, Federal notices regarding the NAICS 
2022 revision.
---------------------------------------------------------------------------

    Prior to issuing this final rule on employee-based size standards, 
SBA incorporated OMB's NAICS 2022 changes into its Table of Size 
Standards at 13 CFR 121.201 in a final rule, effective October 1, 2022 
(87 FR 59240; September 29, 2022), using the newly adopted size 
standards under SBA's review of size standards under the Jobs Act. 
Specifically, as stated above, as part of SBA's second five-year review 
of size standards under the Jobs Act, SBA revised all monetary-based 
size standards and employee-based size standards under NAICS Sectors 42 
(Wholesale Trade) and 44-45 (Retail Trade).
    Of the 36 new industries with employee-based size standards 
(excluding Sectors 42 and 44-45) that were created under the NAICS 2022 
revision, 27 were formed by combining more than one NAICS 2017 industry 
or industry part, often with new 6-digit codes and industry titles. 
Three new industries were formed by changing the 6-digit code without 
changing the industry title, two industries were formed by changing the 
title without changing the 6-digit code, and four remaining industries 
had either their content, definition, or content changed, usually 
involving parts of NAICS 2017 industries.
    SBA's methodology for incorporating OMB's NAICS revisions into size 
standards is generally well-established. On October 22, 1999, SBA 
proposed to replace the Standard Industrial Classification (SIC) System 
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 industries under NAICS. The 
guidelines primarily 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. 
Thus, 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 structure, as proposed. To 
be consistent, SBA generally applied the same guidelines when it 
updated its table of size standards to adopt NAICS 2002, NAICS 2007, 
NAICS 2012, NAICS 2017, and NAICS 2022 revisions. In those updates as 
well, SBA received no adverse comments against using those guidelines, 
or against the resulting changes to the size standards. These 
guidelines to adopt OMB's NAICS revisions were also included in the 
SBA's ``Size Standards Methodology'' white paper and SBA received no 
adverse comments when the revised methodology was open for public 
comments. The applicable guidelines are shown below in Table 4, 
``General Guidelines to Establish Size Standards for New Industries 
under NAICS 2022.''

     Table 4--General Guidelines To Establish Size Standards for New
                       Industries Under NAICS 2022
------------------------------------------------------------------------
                                         The size standard for the NAICS
 If the NAICS 2022 industry is composed    2022 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 2017 industries;    ...............................
 two or more parts of an NAICS 2017
 industry; parts of two or more NAICS
 2017 industries; or one or more NAICS
 2017 industries and part(s) of one or
 more NAICS 2017 industries, and
    2a. they all have the same size      The same size standard as for
     standard.                            the NAICS 2017 industries or
                                          parts.

[[Page 9986]]

 
    2b. they all have the same size      The same size standard as for
     measure (e.g., receipts,             the NAICS 2017 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 2022
                                          industry, or
                                         The highest size standard among
                                          the NAICS 2017 industries and
                                          part(s) that comprise the
                                          NAICS 2022 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 2017 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 2022
                                          industry, or
                                         The highest size standard among
                                          the NAICS 2017 industries and
                                          part(s) that comprise the
                                          NAICS 2022 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 2017 industry or part(s)
                                          that most closely match the
                                          economic activity described by
                                          the NAICS 2022 industry or
                                          using the size measure that
                                          applies to most of the NAICS
                                          industries or parts comprising
                                          the NAICS 2022 industry.
------------------------------------------------------------------------

    Thus, in this final rule, SBA is incorporating the adopted size 
standards, as presented in Table 2 (above), into the table of size 
standards based on NAICS 2022 following the guidelines prescribed in 
Table 4 (above).
    SBA identified 56 NAICS 2017 unique industries or their parts 
reviewed under this final rule that became part of 37 new industries 
under NAICS 2022. New size standards for the 37 new NAICS 2022 
industries resulted in a reduction in size standard for eight 
industries under NAICS 2017, an increase to size standard for 12 
industries and 2 parts of one industry, change in the size standard 
from employees to receipts for one industry, and no change in size 
standards for the remaining 35 NAICS 2017 industries or their parts. 
Among the 37 new industries under NAICS 2022 evaluated in this final 
rule, compared to the size standards adopted in the September 2022 
NAICS 2022 adoption final rule, size standards increased for 10 
industries and remained the same for the remaining 27 industries. Table 
5, Size Standards for Industries Under NAICS 2017 Matched to NAICS 
2022, below, presents these results.

                                                          Table 5--Size Standards for Industries Under NAICS 2017 Matched to NAICS 2022
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              NAICS 2017 industry                                                         NAICS 2017
                                                                              title (and specific      NAICS 2017 standard       NAICS 2022 standard       standard
                                       NAICS 2022 industry     Concordance     piece of the NAICS      prior to NAICS 2022        after NAICS 2022       adopted under     NAICS 2022 standard
          NAICS 2022 code                     title            with NAICS    2017 industry that is  adoption (employees or $  adoption (employees or $    this final      under this final rule
                                                                2017 code       contained in the            million)                  million)               rule       (employees or $ million)
                                                                              NAICS 2022 industry)                                                        (employees)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
212114.............................  Surface Coal Mining...          212111  Bituminous Coal and    1,250...................  1,250...................           1,250  1,250.
                                                                              Lignite Surface
                                                                              Mining.
                                                                     212113  Anthracite Mining--    250.....................  ........................             250
                                                                              Anthracite surface
                                                                              mining.
212115.............................  Underground Coal                212112  Bituminous Coal        1,500...................  1,500...................           1,500  1,500.
                                      Mining.                                 Underground Mining.
                                                                     212113  Anthracite Mining--    250.....................  ........................             250
                                                                              Anthracite
                                                                              underground mining.
212220.............................  Gold Ore and Silver             212221  Gold Ore Mining......  1,500...................  1,500...................           1,500  1,500.
                                      Ore Mining.                    212222  Silver Ore Mining....  250.....................                                       250
212290.............................  Other Metal Ore Mining          212291  Uranium-Radium-        250.....................  750.....................             250  1,250.
                                                                              Vanadium Ore Mining.
                                                                     212299  All Other Metal Ore    750.....................  ........................           1,250
                                                                              Mining.
212323.............................  Kaolin, Clay, and               212324  Kaolin and Ball Clay   750.....................  500.....................             750  650.
                                      Ceramic and                             Mining.
                                      Refractory Minerals
                                      Mining.
                                                                     212325  Clay and Ceramic and   500.....................  ........................             650
                                                                              Refractory Minerals
                                                                              Mining.
212390.............................  Other Nonmetallic               212391  Potash, Soda, and      750.....................  500.....................           1,050  600.
                                      Mineral Mining and                      Borate Mineral
                                      Quarrying.                              Mining.
                                                                     212392  Phosphate Rock Mining  1,000...................  ........................           1,000
                                                                     212393  Other Chemical and     500.....................  ........................             600
                                                                              Fertilizer Mineral
                                                                              Mining.
                                                                     212399  All Other Nonmetallic  500.....................  ........................             600
                                                                              Mineral Mining.
311221.............................  Wet Corn Milling and            311221  Wet Corn Milling.....  1,250...................  1,250...................           1,300  1,300.
                                      Starch Manufacturing.
315120.............................  Apparel Knitting Mills          315110  Hosiery and Sock       750.....................  750.....................             750  850.
                                                                              Mills.
                                                                     315190  Other Apparel          750.....................  ........................             850
                                                                              Knitting Mills.

[[Page 9987]]

 
315250.............................  Cut and Sew Apparel             315220  Men's and Boys' Cut    750.....................  750.....................             750  750.
                                      Manufacturing (except                   and Sew Apparel
                                      Contractors).                           Manufacturing.
                                                                     315240  Women's, Girls', and   750.....................  ........................             750
                                                                              Infants' Cut and Sew
                                                                              Apparel
                                                                              Manufacturing.
                                                                     315280  Other Cut and Sew      750.....................  ........................             750
                                                                              Apparel
                                                                              Manufacturing.
316990.............................  Other Leather and               316992  Women's Handbag and    750.....................  500.....................             750  500.
                                      Allied Product                          Purse Manufacturing.
                                      Manufacturing.
                                                                     316998  All Other Leather      500.....................  ........................             500
                                                                              Good and Allied
                                                                              Product
                                                                              Manufacturing.
321215.............................  Engineered Wood Member          321213  Engineered Wood        750.....................  500.....................             750  500.
                                      Manufacturing.                          Member (except
                                                                              Truss) Manufacturing.
                                                                     321214  Truss Manufacturing..  500.....................  ........................             500
322120.............................  Paper Mills...........          322121  Paper (except          1,250...................  1,250...................           1,250  1,250.
                                                                              Newsprint) Mills.
                                                                     322122  Newsprint Mills......  750.....................  ........................           1,050
325314.............................  Fertilizer (Mixing              325314  Fertilizer (Mixing     500.....................  500.....................             550  550.
                                      Only) Manufacturing.                    Only) Manufacturing--
                                                                              except compost
                                                                              manufacturing.
325315.............................  Compost Manufacturing.          325314  Fertilizer (Mixing     500.....................  500.....................             550  550.
                                                                              Only) Manufacturing--
                                                                              compost
                                                                              manufacturing.
325992.............................  Photographic Film,              325992  Photographic Film,     1,500...................  1,500...................           1,500  1,500.
                                      Paper, Plate,                           Paper, Plate, and
                                      Chemical, and Copy                      Chemical
                                      Toner Manufacturing.                    Manufacturing.
333248.............................  All Other Industrial            333244  Printing Machinery     750.....................  750.....................             750  750.
                                      Machinery                               and Equipment
                                      Manufacturing.                          Manufacturing.
                                                                     333249  Other Industrial       500.....................  ........................             500
                                                                              Machinery
                                                                              Manufacturing.
333310.............................  Commercial and Service          333314  Optical Instrument     500.....................  1,000...................             600  1,000.
                                      Industry Machinery                      and Lens
                                      Manufacturing.                          Manufacturing.
                                                                     333316  Photographic and       1,000...................  1,000...................  ..............
                                                                              Photocopying
                                                                              Equipment
                                                                              Manufacturing.
                                                                     333318  Other Commercial and   1,000...................  ........................           1,000
                                                                              Service Industry
                                                                              Machinery
                                                                              Manufacturing.
333998.............................  All Other                       333997  Scale and Balance      500.....................  500.....................             700  700.
                                      Miscellaneous General                   Manufacturing.
                                      Purpose Machinery
                                      Manufacturing.
                                                                     333999  All Other              500.....................  ........................             500
                                                                              Miscellaneous
                                                                              General Purpose
                                                                              Machinery
                                                                              Manufacturing.
334610.............................  Manufacturing and               334613  Blank Magnetic and     1,000...................  1,250...................           1,000  1,250.
                                      Reproducing Magnetic                    Optical Recording
                                      and Optical Media.                      Media Manufacturing.
                                                                     334614  Software and Other     1,250...................  ........................           1,250
                                                                              Prerecorded Compact
                                                                              Disc, Tape, and
                                                                              Record Reproducing.
335131.............................  Residential Electric            335121  Residential Electric   750.....................  750.....................             750  750.
                                      Lighting Fixture                        Lighting Fixture
                                      Manufacturing.                          Manufacturing.
335132.............................  Commercial,                     335122  Commercial,            500.....................  500.....................             600  600.
                                      Industrial, and                         Industrial, and
                                      Institutional                           Institutional
                                      Electric Lighting                       Electric Lighting
                                      Fixture Manufacturing.                  Fixture
                                                                              Manufacturing.
335139.............................  Electric Lamp Bulb and          335110  Electric Lamp Bulb     1,250...................  1,250...................           1,250  1,250.
                                      Other Lighting                          and Part
                                      Equipment                               Manufacturing.
                                      Manufacturing.
                                                                     335129  Other Lighting         500.....................  ........................             550
                                                                              Equipment
                                                                              Manufacturing.
335910.............................  Battery Manufacturing.          335911  Storage Battery        1,250...................  1,250...................           1,250  1,250.
                                                                              Manufacturing.
                                                                     335912  Primary Battery        1,000...................  ........................           1,300
                                                                              Manufacturing.
336110.............................  Automobile and Light            336111  Automobile             1,500...................  1,500...................           1,500  1,500.
                                      Duty Motor Vehicle                      Manufacturing.
                                      Manufacturing.

[[Page 9988]]

 
                                                                     336112  Light Truck and        1,500...................  ........................           1,500
                                                                              Utility Vehicle
                                                                              Manufacturing.
337126.............................  Household Furniture             337124  Metal Household        750.....................  750.....................             750  950.
                                      (except Wood and                        Furniture
                                      Upholstered)                            Manufacturing.
                                      Manufacturing.
                                                                     337125  Household Furniture    750.....................  ........................             950
                                                                              (except Wood and
                                                                              Metal) Manufacturing.
513110.............................  Newspaper Publishers..          511110  Newspaper Publishers.  1,000...................  1,000...................           1,000  1,000.
                                                                     519130  Internet Publishing    1,000...................  ........................           1,000
                                                                              and Broadcasting and
                                                                              Web Search Portals--
                                                                              Internet newspaper
                                                                              publishers.
513120.............................  Periodical Publishers.          511120  Periodical Publishers  1,000...................  1,000...................           1,000  1,000.
                                                                     519130  Internet Publishing    1,000...................  ........................           1,000
                                                                              and Broadcasting and
                                                                              Web Search Portals --
                                                                              Internet periodical
                                                                              publishers.
513130.............................  Book Publishers.......          511130  Book Publishers......  1,000...................  1,000...................           1,000  1,000.
                                                                     519130  Internet Publishing    1,000...................  ........................           1,000
                                                                              and Broadcasting and
                                                                              Web Search Portals--
                                                                              Internet book
                                                                              publishers.
513140.............................  Directory and Mailing           511140  Directory and Mailing  1,250...................  1,000...................           1,250  1,000.
                                      List Publishers.                        List Publishers.
                                                                     519130  Internet Publishing    1,000...................  ........................           1,000
                                                                              and Broadcasting and
                                                                              Web Search Portals--
                                                                              Internet directory
                                                                              and mailing list
                                                                              publishers.
513191.............................  Greeting Card                   511191  Greeting Card          1,500...................  1,000...................           1,500  1,000.
                                      Publishers.                             Publishers.
                                                                     519130  Internet Publishing    1,000...................  ........................           1,000
                                                                              and Broadcasting and
                                                                              Web Search Portals--
                                                                              Internet greeting
                                                                              card publishers.
513199.............................  All Other Publishers..          511199  All Other Publishers.  500.....................  1,000...................             550  1,000.
                                                                     519130  Internet Publishing    1,000...................  ........................           1,000
                                                                              and Broadcasting and
                                                                              Web Search Portals--
                                                                              All other Internet
                                                                              publishers.
516210.............................  Media Streaming                 515111  Radio Networks.......  $41.5 million...........  $41.5 million...........  ..............  $41.5 million.
                                      Distribution
                                      Services, Social
                                      Networks, and Other
                                      Media Networks and
                                      Content Providers.
                                                                     515120  Television             $41.5 million...........  ........................  ..............
                                                                              Broadcasting--televi
                                                                              sion networks.
                                                                     515210  Cable and Other        $41.5 million...........  ........................  ..............
                                                                              Subscription
                                                                              Programming.
                                                                     519110  News Syndicates......  $32.0 million...........  ........................  ..............
                                                                     519130  Internet Publishing    1,000...................  ........................           1,000
                                                                              and Broadcasting and
                                                                              Web Search Portals--
                                                                              Internet
                                                                              broadcasting.
517111.............................  Wired                           517311  Wired                  1,500...................  1,500...................           1,500  1,500.
                                      Telecommunications                      Telecommunications
                                      Carriers.                               Carriers.
517112.............................  Wireless                        517312  Wireless               1,500...................  1,500...................           1,500  1,500.
                                      Telecommunications                      Telecommunications
                                      Carriers (except                        Carriers (except
                                      Satellite).                             Satellite)--Except
                                                                              agents for wireless
                                                                              telecommunications
                                                                              carriers.
517121.............................  Telecommunications              517911  Telecommunications     1,500...................  1,500...................           1,500  1,500.
                                      Resellers.                              Resellers--Except
                                                                              agents for wireless
                                                                              telecommunications
                                                                              resellers.
517122.............................  Agents for Wireless             517312  Wireless               1,500...................  1,500...................           1,500  1,500.
                                      Telecommunications                      Telecommunications
                                      Services.                               Carriers (except
                                                                              Satellite)--Agents
                                                                              for wireless
                                                                              telecommunications
                                                                              carriers.
                                                                     517911  Telecommunications     1,500...................  ........................           1,500
                                                                              Resellers--Agents
                                                                              for wireless
                                                                              telecommunications
                                                                              resellers.

[[Page 9989]]

 
519290.............................  Web Search Portals and          519130  Internet Publishing    1,000...................  1,000...................           1,000  1,000.
                                      All Other Information                   and Broadcasting and
                                      Services.                               Web Search Portals--
                                                                              Web search portals.
                                                                     519190  All Other Information  $30.0 million...........
                                                                              Services.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    By combining the results of Table 2 and Table 5 (above), in Table 6 
(below), Adopted Size Standard Revisions (NAICS 2022), SBA presents 
revisions to size standards resulting from the incorporation of the 
adopted size standards into the NAICS 2022 structure.

                                    Table 6--Adopted Size Standards Revisions
                                                  [NAICS 2022]
----------------------------------------------------------------------------------------------------------------
                                                                                   Current size    Adopted size
              2022 NAICS Code                     NAICS 2022 industry title          standards       standards
                                                                                    (employees)     (employees)
----------------------------------------------------------------------------------------------------------------
212210.....................................  Iron Ore Mining....................             750           1,400
212230.....................................  Copper, Nickel, Lead, and Zinc                  750           1,400
                                              Mining.
212290.....................................  Other Metal Ore Mining.............             750           1,250
212313.....................................  Crushed and Broken Granite Mining               750             850
                                              and Quarrying.
212319.....................................  Other Crushed and Broken Stone                  500             550
                                              Mining and Quarrying.
212322.....................................  Industrial Sand Mining.............             500             750
212323.....................................  Kaolin, Clay, and Ceramic and                   500             650
                                              Refractory Minerals Mining.
212390.....................................  Other Nonmetallic Mineral Mining                500             600
                                              and Quarrying.
221111.....................................  Hydroelectric Power Generation.....             500             750
221112.....................................  Fossil Fuel Electric Power                      750             950
                                              Generation.
221113.....................................  Nuclear Electric Power Generation..             750           1,150
221114.....................................  Solar Electric Power Generation....             250             500
221115.....................................  Wind Electric Power Generation.....             250           1,150
221117.....................................  Biomass Electric Power Generation..             250             550
221118.....................................  Other Electric Power Generation....             250             650
221121.....................................  Electric Bulk Power Transmission                500             950
                                              and Control.
221122.....................................  Electric Power Distribution........           1,000           1,100
221210.....................................  Natural Gas Distribution...........           1,000           1,150
311111.....................................  Dog and Cat Food Manufacturing.....           1,000           1,250
311119.....................................  Other Animal Food Manufacturing....             500             650
311211.....................................  Flour Milling......................           1,000           1,050
311212.....................................  Rice Milling.......................             500             750
311221.....................................  Wet Corn Milling and Starch                   1,250           1,300
                                              Manufacturing.
311224.....................................  Soybean and Other Oilseed                     1,000           1,250
                                              Processing.
311225.....................................  Fats and Oils Refining and Blending           1,000           1,100
311230.....................................  Breakfast Cereal Manufacturing.....           1,000           1,300
311313.....................................  Beet Sugar Manufacturing...........             750           1,150
311314.....................................  Cane Sugar Manufacturing...........           1,000           1,050
311411.....................................  Frozen Fruit, Juice, and Vegetable            1,000           1,100
                                              Manufacturing.
311422.....................................  Specialty Canning..................           1,250           1,400
311511.....................................  Fluid Milk Manufacturing...........           1,000           1,150
311514.....................................  Dry, Condensed, and Evaporated                  750           1,000
                                              Dairy Product Manufacturing.
311611.....................................  Animal (except Poultry)                       1,000           1,150
                                              Slaughtering.
311824.....................................  Dry Pasta, Dough, and Flour Mixes               750             850
                                              Manufacturing from Purchased Flour.
311920.....................................  Coffee and Tea Manufacturing.......             750           1,000
311930.....................................  Flavoring Syrup and Concentrate               1,000           1,100
                                              Manufacturing.
311941.....................................  Mayonnaise, Dressing, and Other                 750             850
                                              Prepared Sauce Manufacturing.
311942.....................................  Spice and Extract Manufacturing....             500             650
311991.....................................  Perishable Prepared Food                        500             700
                                              Manufacturing.
311999.....................................  All Other Miscellaneous Food                    500             700
                                              Manufacturing.
312111.....................................  Soft Drink Manufacturing...........           1,250           1,400
312112.....................................  Bottled Water Manufacturing........           1,000           1,100
312140.....................................  Distilleries.......................           1,000           1,100
313220.....................................  Narrow Fabric Mills and Schiffli                500             550
                                              Machine Embroidery.
313230.....................................  Nonwoven Fabric Mills..............             750             850
314999.....................................  All Other Miscellaneous Textile                 500             550
                                              Product Mills.
315120.....................................  Apparel Knitting Mills.............             750             850
315990.....................................  Apparel Accessories and Other                   500             600
                                              Apparel Manufacturing.
316110.....................................  Leather and Hide Tanning and                    500             800
                                              Finishing.

[[Page 9990]]

 
321113.....................................  Sawmills...........................             500             550
321114.....................................  Wood Preservation..................             500             550
321211.....................................  Hardwood Veneer and Plywood                     500             600
                                              Manufacturing.
322110.....................................  Pulp Mills.........................             750           1,050
323111.....................................  Commercial Printing (except Screen              500             650
                                              and Books).
323120.....................................  Support Activities for Printing....             500             550
324122.....................................  Asphalt Shingle and Coating                     750           1,100
                                              Materials Manufacturing.
324191.....................................  Petroleum Lubricating Oil and                   750             900
                                              Grease Manufacturing.
324199.....................................  All Other Petroleum and Coal                    500             950
                                              Products Manufacturing.
325110.....................................  Petrochemical Manufacturing........           1,000           1,300
325120.....................................  Industrial Gas Manufacturing.......           1,000           1,200
325130.....................................  Synthetic Dye and Pigment                     1,000           1,050
                                              Manufacturing.
325220.....................................  Artificial and Synthetic Fibers and           1,000           1,050
                                              Filaments Manufacturing.
325311.....................................  Nitrogenous Fertilizer                        1,000           1,050
                                              Manufacturing.
325312.....................................  Phosphatic Fertilizer Manufacturing             750           1,350
325314.....................................  Fertilizer (Mixing Only)                        500             550
                                              Manufacturing.
325315.....................................  Compost Manufacturing..............             500             550
325320.....................................  Pesticide and Other Agricultural              1,000           1,150
                                              Chemical Manufacturing.
325412.....................................  Pharmaceutical Preparation                    1,250           1,300
                                              Manufacturing.
325520.....................................  Adhesive Manufacturing.............             500             550
325611.....................................  Soap and Other Detergent                      1,000           1,100
                                              Manufacturing.
325612.....................................  Polish and Other Sanitation Good                750             900
                                              Manufacturing.
325613.....................................  Surface Active Agent Manufacturing.             750           1,100
325910.....................................  Printing Ink Manufacturing.........             500             750
325991.....................................  Custom Compounding of Purchased                 500             600
                                              Resins.
325998.....................................  All Other Miscellaneous Chemical                500             650
                                              Product and Preparation
                                              Manufacturing.
326121.....................................  Unlaminated Plastics Profile Shape              500             600
                                              Manufacturing.
326130.....................................  Laminated Plastics Plate, Sheet                 500             650
                                              (except Packaging), and Shape
                                              Manufacturing.
326220.....................................  Rubber and Plastics Hoses and                   750             800
                                              Belting Manufacturing.
326299.....................................  All Other Rubber Product                        500             650
                                              Manufacturing.
327211.....................................  Flat Glass Manufacturing...........           1,000           1,100
327410.....................................  Lime Manufacturing.................             750           1,050
327910.....................................  Abrasive Product Manufacturing.....             750             900
327992.....................................  Ground or Treated Mineral and Earth             500             600
                                              Manufacturing.
327999.....................................  All Other Miscellaneous Nonmetallic             500             750
                                              Mineral Product Manufacturing.
331313.....................................  Alumina Refining and Primary                  1,000           1,300
                                              Aluminum Production.
331315.....................................  Aluminum Sheet, Plate, and Foil               1,250           1,400
                                              Manufacturing.
331420.....................................  Copper Rolling, Drawing, Extruding,           1,000           1,050
                                              and Alloying.
331491.....................................  Nonferrous Metal (except Copper and             750             900
                                              Aluminum) Rolling, Drawing, and
                                              Extruding.
331492.....................................  Secondary Smelting, Refining, and               750             850
                                              Alloying of Nonferrous Metal
                                              (except Copper and Aluminum).
331512.....................................  Steel Investment Foundries.........           1,000           1,050
331513.....................................  Steel Foundries (except Investment)             500             700
331523.....................................  Nonferrous Metal Die-Casting                    500             700
                                              Foundries.
331524.....................................  Aluminum Foundries (except Die-                 500             550
                                              Casting).
332112.....................................  Nonferrous Forging.................             750             950
332114.....................................  Custom Roll Forming................             500             600
332117.....................................  Powder Metallurgy Part                          500             550
                                              Manufacturing.
332215.....................................  Metal Kitchen Cookware, Utensil,                750           1,000
                                              Cutlery, and Flatware (except
                                              Precious) Manufacturing.
332439.....................................  Other Metal Container Manufacturing             500             600
332613.....................................  Spring Manufacturing...............             500             600
332722.....................................  Bolt, Nut, Screw, Rivet, and Washer             500             600
                                              Manufacturing.
332812.....................................  Metal Coating, Engraving (except                500             600
                                              Jewelry and Silverware), and
                                              Allied Services to Manufacturers.
332992.....................................  Small Arms Ammunition Manufacturing           1,250           1,300
332996.....................................  Fabricated Pipe and Pipe Fitting                500             550
                                              Manufacturing.
333131.....................................  Mining Machinery and Equipment                  500             900
                                              Manufacturing.
333243.....................................  Sawmill, Woodworking, and Paper                 500             550
                                              Machinery Manufacturing.
333924.....................................  Industrial Truck, Tractor, Trailer,             750             900
                                              and Stacker Machinery
                                              Manufacturing.
333991.....................................  Power-Driven Hand Tool                          500             950
                                              Manufacturing.
333993.....................................  Packaging Machinery Manufacturing..             500             600
333995.....................................  Fluid Power Cylinder and Actuator               750             800
                                              Manufacturing.
333998.....................................  All Other Miscellaneous General                 500             700
                                              Purpose Machinery Manufacturing.
334290.....................................  Other Communications Equipment                  750             800
                                              Manufacturing.
334416.....................................  Capacitor, Resistor, Coil,                      500             550
                                              Transformer, and Other Inductor
                                              Manufacturing.
334511.....................................  Search, Detection, Navigation,                1,250           1,350
                                              Guidance, Aeronautical, and
                                              Nautical System and Instrument
                                              Manufacturing.

[[Page 9991]]

 
334512.....................................  Automatic Environmental Control                 500             650
                                              Manufacturing for Residential,
                                              Commercial, and Appliance Use.
334514.....................................  Totalizing Fluid Meter and Counting             750             850
                                              Device Manufacturing.
334517.....................................  Irradiation Apparatus Manufacturing           1,000           1,200
334519.....................................  Other Measuring and Controlling                 500             600
                                              Device Manufacturing.
335132.....................................  Commercial, Industrial, and                     500             600
                                              Institutional Electric Lighting
                                              Fixture Manufacturing.
335311.....................................  Power, Distribution, and Specialty              750             800
                                              Transformer Manufacturing.
335931.....................................  Current-Carrying Wiring Device                  500             600
                                              Manufacturing.
335991.....................................  Carbon and Graphite Product                     750             900
                                              Manufacturing.
335999.....................................  All Other Miscellaneous Electrical              500             600
                                              Equipment and Component
                                              Manufacturing.
336310.....................................  Motor Vehicle Gasoline Engine and             1,000           1,050
                                              Engine Parts Manufacturing.
336414.....................................  Guided Missile and Space Vehicle              1,250           1,300
                                              Manufacturing.
336419.....................................  Other Guided Missile and Space                1,000           1,050
                                              Vehicle Parts and Auxiliary
                                              Equipment Manufacturing.
336611.....................................  Ship Building and Repairing........           1,250           1,300
336991.....................................  Motorcycle, Bicycle, and Parts                1,000           1,050
                                              Manufacturing.
337126.....................................  Household Furniture (except Wood                750             950
                                              and Upholstered) Manufacturing.
337214.....................................  Office Furniture (except Wood)                1,000           1,100
                                              Manufacturing.
339113.....................................  Surgical Appliance and Supplies                 750             800
                                              Manufacturing.
339910.....................................  Jewelry and Silverware                          500             700
                                              Manufacturing.
339930.....................................  Doll, Toy, and Game Manufacturing..             500             700
339991.....................................  Gasket, Packing, and Sealing Device             500             600
                                              Manufacturing.
339994.....................................  Broom, Brush, and Mop Manufacturing             500             750
339999.....................................  All Other Miscellaneous                         500             550
                                              Manufacturing.
483111.....................................  Deep Sea Freight Transportation....             500           1,050
483113.....................................  Coastal and Great Lakes Freight                 750             800
                                              Transportation.
483114.....................................  Coastal and Great Lakes Passenger               500             550
                                              Transportation.
483211.....................................  Inland Water Freight Transportation             750           1,050
483212.....................................  Inland Water Passenger                          500             550
                                              Transportation.
512230.....................................  Music Publishers...................             750             900
512250.....................................  Record Production and Distribution.             250             900
541715 (Exception 3).......................  Guided Missiles and Space Vehicles,           1,250           1,300
                                              Their Propulsion Units and
                                              Propulsion Parts.
562910 (Exception).........................  Environmental Remediation Services.             750           1,000
----------------------------------------------------------------------------------------------------------------

    Table 7, Summary of Adopted Size Standards Revisions by Sector 
(NAICS 2022), summarizes the adopted changes to size standards in this 
final rule by NAICS sector. Accordingly, of 412 NAICS 2022 employee-
based size standards reviewed in this rule, SBA is increasing 144, 
including 117 in Sector 31-33, ten in Sector 22, eight in Sector 21, 
five in Sector 48-49, two in Sector 51, and one each in Sector 54 and 
Sector 56. SBA is retaining the remaining 268 employee-based size 
standards in those sectors, including 204 size standards that would 
decrease based on analytical results. In the April 2022 proposed rule 
as well as other rulemakings as part of the second five-year review of 
size standards, in response to the impact of the COVID-19 pandemic, SBA 
maintained current size standards where the analytical results 
supported decreases. SBA is also retaining the remaining 64 size 
standards for which the results suggested no changes.

                                             Table 7--Summary of Adopted Size Standards Revisions by Sector
                                                                      [NAICS 2022]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Number of size  Number of size  Number of size  Number of size
                  NAICS sector                                 Sector name                   standards       standards       standards       standards
                                                                                             reviewed        increased       decreased      maintained
--------------------------------------------------------------------------------------------------------------------------------------------------------
21.............................................  Mining, Quarrying, and Oil and Gas                   17               8               0               9
                                                  Extraction.
22.............................................  Utilities..............................              11              10               0               1
31-33..........................................  Manufacturing..........................             346             117               0             229
48-49..........................................  Transportation and Warehousing.........              15               5               0              10
51.............................................  Information............................              13               2               0              11
54.............................................  Professional, Scientific and Technical                7               1               0               6
                                                  Services.
Other Sectors..................................  Agriculture, Forestry, Fishing and                    3               1               0               2
                                                  Hunting; Finance and Insurance;
                                                  Administrative and Support, Waste
                                                  Management and Remediation Services.
                                                                                         ---------------------------------------------------------------
    Total......................................  .......................................             412             144               0             268
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 9992]]

Evaluation of Dominance in Field of Operation

    SBA determined that for the industries evaluated under this final 
rule, no individual firm at or below the revised size standards in 
Table 6 (above) would be large enough to dominate its field of 
operation. At the size standard levels adopted in this final rule, 
based on 2017 Economic Census, an individual firm's share of total 
industry receipts among those industries would be, on average, 2.3 
percent, varying from 0.1 percent to 21.4 percent. Generally, SBA 
believes the shares below 40 percent would preclude dominant firms from 
qualifying as small and exerting control on any industry. Thus, the 
above market shares effectively preclude a firm at or below the revised 
size standards from exerting control on any of the industries.

Alternatives Considered

    In response to the unprecedented economic impacts of the COVID-19 
pandemic on small businesses and government response, SBA is adopting 
increases to size standards where the data suggests increases are 
warranted; and retaining all current size standards where the data 
suggested lowering is appropriate. SBA is also retaining all current 
size standards where the data suggested no changes to the current size 
standards.
    Nonetheless, SBA considered two other alternatives. Alternative 
Option One was to adopt changes to size standards exactly as suggested 
by the analytical results. In other words, Alternative Option One would 
entail increasing size standards for 144 industries or subindustries, 
decreasing size standards for 204 industries or subindustries, and 
retaining size standards at their current levels for 64 industries or 
subindustries. Alternative Option Two was to retain all current size 
standards.
    SBA is not adopting Alternative Option One because it would cause a 
substantial number of currently small businesses to lose their small 
business status and hence to lose their access to Federal small 
business assistance, especially small business set-aside contracts and 
SBA's financial assistance in some cases. Impacts of lowering size 
standards under Alternative Option One are discussed in detail in the 
Regulatory Impact Analysis section of this rule. Lowering size 
standards in the current environment would also run counter to various 
measures the Federal Government has implemented to help small 
businesses and the overall economy recover from the ongoing COVID-19 
pandemic. Given the effects of the 2007-2009 Great Recession, and the 
resulting government actions to support small businesses and the 
overall economy, SBA also adopted a policy of not decreasing size 
standards during the first five-year review of size standards, even 
though the data supported decreases.
    Under Alternative Option Two, given the current COVID-19 pandemic, 
SBA considered retaining the current levels of all size standards even 
though the analysis of relevant data suggested changing them. Under 
this option, as the current situation develops, SBA will be able to 
assess new data available on economic indicators, Federal procurement, 
and SBA loans before adopting changes to size standards. However, SBA 
is not adopting Alternative Option Two because results discussed in the 
Regulatory Impact Analysis section, below, show that retaining all size 
standards at their current levels would cause otherwise qualified small 
businesses to forgo various small business benefits becoming available 
to them under the option of increasing 144 and retaining 268 employee-
based size standards. Such benefits would include access to Federal 
contracts set aside for small businesses and capital through SBA's loan 
and SBIC programs, and exemptions from paperwork and other compliance 
requirements.

Federal Procurement Size Standard for Nonmanufacturers

    In the April 2022 proposed rule, SBA proposed to maintain the 500-
employee size standard for nonmanufacturers. Based on the evaluation of 
public comments pertaining to SBA's proposed size standard, its 
analyses of industry factors using the latest available data when the 
proposed rule was prepared, and SBA's considerations of other factors 
outlined in the proposed rule as well as public comments discussed 
above, in this final rule, SBA is adopting 500 employees as the size 
standard applicable to nonmanufacturers under 13 CFR 121.406 as 
proposed in the April 26, 2022, proposed rule.

Compliance With Executive Orders 12866, the Congressional Review Act (5 
U.S.C. 801-808), the Regulatory Flexibility Act (5 U.S.C. 601-612), 
Executive Orders 13563, 12988, and 13132, and the Paperwork Reduction 
Act (44 U.S.C. Ch. 35)

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
final rule is a significant regulatory action for purposes of Executive 
Order 12866. Accordingly, in the next section SBA provides a Regulatory 
Impact Analysis of this final rule, including (1) A statement of the 
need for the regulatory action, (2) An examination of alternative 
regulatory approaches, and (3) An estimate of the benefits and costs--
both quantitative and qualitative--of the regulatory action and the 
alternatives considered.

Regulatory Impact Analysis

    1. What is the need for this regulatory action?
    SBA's mission is to aid and assist small businesses through a 
variety of financial, procurement, business development and counseling, 
and disaster assistance programs. To determine the actual intended 
beneficiaries of these programs, SBA establishes numerical size 
standards by industry to identify businesses that are deemed small. 
Under the Small Business Act (Act) (15 U.S.C. 632(a)), SBA's 
Administrator is responsible for establishing small business size 
definitions (or ``size standards'') and ensuring that such definitions 
vary from industry to industry to reflect differences among various 
industries. The Jobs Act requires SBA to review every five years all 
size standards and make necessary adjustments to reflect current 
industry and Federal market conditions. This final rule is part of the 
second five-year review of size standards in accordance with the Jobs 
Act. The first five-year review of size standards was completed in 
early 2016. Such periodic reviews of size standards provide SBA with an 
opportunity to incorporate ongoing changes to industry structure and 
Federal market environment into size standards and to evaluate the 
impacts of prior revisions to size standards on small businesses. This 
also provides SBA with an opportunity to seek and incorporate public 
input to the size standards review and analysis. SBA believes that the 
size standards revisions adopted for industries being reviewed in this 
final rule will make size standards more reflective of the current 
economic characteristics of businesses in those industries and the 
latest trends in Federal marketplace.
    The revisions to the existing size standards for 144 industries or 
subindustries (or ``exceptions''), including 117 industries in Sector 
31-33 and 27 industries and subindustries in other sectors are 
consistent with SBA's statutory mandate to help small businesses grow 
and create jobs and to review and adjust size standards every five 
years. This regulatory action

[[Page 9993]]

promotes the Administration's goals and objectives as well as meets the 
SBA's statutory responsibility. One of SBA's goals in support of 
promoting the Administration's objectives is to help small businesses 
succeed through fair and equitable access to capital and credit, 
Federal Government contracts and purchases, and management and 
technical assistance. Reviewing and modifying size standards, when 
appropriate, ensures that intended beneficiaries are able to access 
Federal small business programs that are designed to assist them to 
become competitive and create jobs.
    2. What are the potential benefits and costs of this regulatory 
action?
    OMB directs agencies to establish an appropriate baseline to 
evaluate any benefits, costs, or transfer impacts of regulatory actions 
and alternative approaches considered. The baseline should represent 
the agency's best assessment of what the world would look like absent 
the regulatory action. For a new regulatory action promulgating 
modifications to an existing regulation (such as modifying the existing 
size standards), a baseline assuming no change to the regulation (i.e., 
making no changes to current size standards) generally provides an 
appropriate benchmark for evaluating benefits, costs, or transfer 
impacts of regulatory changes and their alternatives.
Changes to Size Standards
    Based on the results from the analyses of the latest industry and 
Federal contracting data, evaluation of the public comments on the 
proposed rule, as well as consideration of the impact of size standards 
changes on small businesses and significant adverse impacts of the 
COVID-19 emergency on small businesses and the overall economic 
activity, of the total of 412 industries and subindustries (or 
``exceptions'') in Sector 31-33 and other sectors that have employee-
based size standards, SBA increases size standards for 144 industries 
or subindustries (``exceptions'') and maintain current size standards 
for the remaining 268 industries or subindustries (``exceptions'').
The Baseline
    For purposes of this regulatory action, the baseline represents 
maintaining the ``status quo,'' i.e., making no changes to the current 
size standards. Using the number of small businesses and levels of 
benefits (such as set-aside contracts, SBA's loans, disaster 
assistance, etc.) they receive under the current size standards as a 
baseline, one can examine the potential benefits, costs, and transfer 
impacts of changes to size standards on small businesses and on the 
overall economy.
    Based on the 2017 Economic Census, of a total of about 333,213 
businesses in industries in Sectors 31-33 and other sectors with 
employee-based size standards, 96.8 percent are considered small under 
the current size standards. That percentage varies from 88.0 percent in 
NAICS Sector 22 to 99.8 percent in Sector 11. Based on the data from 
FPDS-NG for fiscal years 2018-2020, about 41,838 unique firms in those 
industries received at least one Federal contract during that period, 
of which 84.3 percent were small under the current size standards. A 
total of $231.6 billion in average annual contract dollars were awarded 
to businesses in those industries during the period of evaluation, and 
18.6 percent of the dollars awarded went to small businesses. For 
industries and subindustries (``exceptions'') reviewed in this final 
rule, providing contract dollars to small business through set-asides 
is quite important. From the total small business contract dollars 
awarded during the period considered, 47.1 percent were awarded through 
various small business set-aside programs and 52.9 percent were awarded 
through non-set aside contracts. Based on the SBA's internal data on 
its loan programs for fiscal years 2018-2020, small businesses in those 
industries received, on an annual basis, a total of 4,877 7(a) and 504 
loans in that period, totaling about $3.1 billion, of which 75.8 
percent was issued through the 7(a) program and 24.2 percent was issued 
through the 504/CDC program. During fiscal years 2018-2020, small 
businesses in those industries also received 255 loans through the 
SBA's Economic Injury Disaster Loan (EIDL) program, totaling about 
$11.4 million on an annual basis.\7\ Table 8, Baseline for All 
Industries (NAICS 2022), below, provides these baseline results for 
Manufacturing (Sector 31-33) and all other sectors.
---------------------------------------------------------------------------

    \7\ The analysis of the disaster loan data excludes physical 
disaster loans that are available to anyone regardless of size, 
disaster loans issued to nonprofit entities, and EIDLs issued under 
the COVID-19 relief program. Effective January 1, 2022, SBA stopped 
accepting applications for new COVID EIDL loans or advances. Thus, 
the disaster loan analysis presented here pertains to the regular 
EIDL loans only.
    SBA estimates impacts of size standards changes on EIDL loans by 
calculating the ratio of businesses getting EIDL loans to total 
small businesses (based on the Economic Census data) and multiplying 
it by the number of impacted small firms. Due to data limitations, 
for FY 2019-20, some loans with both physical and EIDL loan 
components could not be broken into the physical and EIDL loan 
amounts. In such cases, SBA applied the ratio of EIDL amount to 
total (physical loan + EIDL) amount using FY 2016-18 data to the FY 
2019-20 data to obtain the amount attributable to the EIDL loans.

                                      Table 8--Baseline for All Industries
                                                  [NAICS 2022]
----------------------------------------------------------------------------------------------------------------
                                                                   Sector 31-33    Other sectors       Total
----------------------------------------------------------------------------------------------------------------
Number of industries or subindustries (``exceptions'') reviewed              346              66             412
 in this proposed rule..........................................
Total firms in industries reviewed in this proposed rule (2017           259,377          73,836         333,213
 Economic Census) \1\...........................................
Total small firms in those industries under current size                 250,804          71,813         322,617
 standards (2017 Economic Census \1\............................
Small firms as % of total firms (2017 Economic Census) \1\......           96.7%           97.3%           96.8%
Total contract dollars ($ million) (FPDS-NG FY 2018-2020).......        $181,818         $49,758        $231,576
Total small business contract dollars under current standards ($         $28,713         $14,364         $43,078
 million) (FPDS-NG FY2018-2020).................................
Small business dollars as % of total dollars (FPDS-NG FY 2018-             15.8%           28.9%           18.6%
 2020)..........................................................
Total number of unique firms getting federal contracts (FPDS-NG           34,225           9,312          41,838
 FY 2018-2020)..................................................
Total number of unique small firms getting small business                 29,056           7,291          35,268
 contracts (FPDS-NG FY 2018-2020)...............................
Small firms getting federal contracts as % of total firms                  84.9%           78.3%           84.3%
 getting federal contracts (FPDS-NG FY 2018-2020)...............
Number of 7(a) and CDC/504 loans (FY 2018-2020).................           4,362             515           4,877
Amount of 7(a) and CDC/504 loans ($ million) (FY 2018-2020).....          $2,863            $248          $3,111
Number of EIDL loans (FY 2018-2020) \2\.........................             202              53             255

[[Page 9994]]

 
Amount of EIDL loans ($million) (FY 2018-2020) \2\..............            $8.3            $3.1           $11.4
----------------------------------------------------------------------------------------------------------------
\1\ These figures do not include two 6-digit NAICS industries and 5 subindustries or ``exceptions'' for which
  Economic Census data is not available.
\2\ Excludes COVID-19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped
  accepting applications for new COVID EIDL loans or advances.

Increases to Size Standards

    As stated above, in terms of NAICS 2022, of 412 employee-based size 
standards in Sectors 31-33 and other sectors that are reviewed in this 
rule, based on the results from analyses of latest industry and Federal 
market data as well as impacts of size standards changes on small 
businesses and considerations for the impacts from the COVID-19 
pandemic, SBA increases 144 size standards, including 117 in Sector 31-
33 and 27 in other sectors. Below are descriptions of the benefits, 
costs, and transfer impacts of these increases to size standards.

Benefits of Increases to Size Standards

    The most significant benefit to businesses from increases to size 
standards is gaining eligibility for Federal small business assistance 
programs or retaining that eligibility for a longer period. These 
include SBA's business loan programs, EIDL program, and Federal 
procurement programs intended for small businesses. Federal procurement 
programs provide targeted, set-aside opportunities for small businesses 
under SBA's various business development and contracting programs. 
These include the 8(a)/Business Development (BD) Program, the 
Historically Underutilized Business Zones (HUBZone) Program, the Women-
Owned Small Businesses (WOSB) Program, the Economically Disadvantaged 
Women-Owned Small Businesses (EDWOSB) Program, and the Service-Disabled 
Veteran-Owned Small Businesses (SDVOSB) Program.
    Besides set-aside contracting and financial assistance discussed 
above, small businesses also benefit through reduced fees, less 
paperwork, and fewer compliance requirements that are available to 
small businesses through the Federal Government programs. However, SBA 
has no data to estimate the number of small businesses receiving such 
benefits.
    Based on the 2017 Economic Census, SBA estimates that in 144 
industries or subindustries (``exceptions'') in NAICS Sector 31-33 and 
other sectors with employee-based size standards for which it is 
increasing size standards, 242 firms (see Table 9, Impacts of 
Increasing Size Standards, below), not small under the current size 
standards, will become small under the adopted size standards increases 
and therefore become eligible for these programs. That represents about 
0.3 percent of all firms classified as small under the current size 
standards in industries for which SBA is adopting increases to size 
standards. SBA's revised size standards would result in an increase to 
the small business share of total receipts in those industries from 
27.4 percent to 29.3 percent.
    With more businesses qualifying as small under the adopted 
increases to size standards, Federal agencies will have a larger pool 
of small businesses from which to draw for their small business 
procurement programs. Growing small businesses that are close to 
exceeding the current size standards will be able to retain their small 
business status for a longer period under the higher size standards, 
thereby enabling them to continue to benefit from the small business 
programs.
    Based on the FPDS-NG data for fiscal years 2018-2020, SBA estimates 
that 109 firms that are active in Federal contracting in those 
industries would gain small business status under the adopted size 
standards. Based on the same data, SBA estimates that those newly-
qualified small businesses under the higher size standards, if adopted, 
could receive Federal small business contracts totaling $256.6 million 
annually. That represents a 2.4 percent increase to small business 
contract dollars from the baseline. Table 9 provides these results by 
NAICS sector.
    The added competition from more businesses qualifying as small can 
result in lower prices to the Government for procurements set aside or 
reserved for small businesses, but SBA cannot quantify this impact. 
Costs could be higher when full and open contracts are awarded to 
HUBZone businesses that receive price evaluation preferences. However, 
with agencies likely setting aside more contracts for small businesses 
in response to the availability of a larger pool of small businesses 
under the proposed increases to size standards, HUBZone firms might 
receive more set-aside contracts and fewer full and open contracts, 
thereby resulting in some cost savings to agencies. SBA cannot estimate 
such cost savings as it is impossible to determine the number and value 
of unrestricted contracts to be otherwise awarded to HUBZone firms as 
set-asides. However, such cost savings are likely to be relatively 
small as only a small fraction of full and open contracts are awarded 
to HUBZone businesses.
    As shown in Table 9, under SBA's 7(a) and 504 loan programs, based 
on the data for fiscal years 2018-2020, SBA estimates that there will 
be no impact to the number of firms receiving 7(a) and 504 loans.

                                  Table 9--Impacts of Increasing Size Standards
----------------------------------------------------------------------------------------------------------------
                                                                   Sector 31-33    Other sectors       Total
----------------------------------------------------------------------------------------------------------------
Number of industries or subindustries (``exceptions'') with                  117              27             144
 proposed increases to size standards...........................
Total current small businesses in industries with proposed                66,066           5,252          71,318
 increases to size standards (2017 Economic Census) \1\.........
Additional firms qualifying as small under proposed increases to             197              45             242
 size standards (2017 Economic Census) \1\......................
% of additional firms qualifying as small relative to current               0.3%            0.9%            0.3%
 small businesses in industries with proposed increases to size
 standards (2017 Economic Census) \1\...........................

[[Page 9995]]

 
Number of current unique small firms getting small business               13,854             603          14,320
 contracts in industries with proposed increases to size
 standards (FPDS-NG FY 2018-2020) \2\...........................
Additional number of small business firms gaining small business              89              22             109
 status under proposed increases to size standards (FPDS-NG FY
 2018-2020).....................................................
% increase to number of small businesses relative to current                0.6%            3.6%            0.8%
 unique small firms getting small business contracts in
 industries with proposed increases to size standards (FPDS-NG
 FY 2018-2020)..................................................
Total small business contract dollars under current size                  $9,617          $1,032         $10,648
 standards in industries or subindustries with proposed
 increases to size standards ($ million) (FPDS-NG FY 2018-2020).
Estimated small business dollars available to newly-qualified              $75.9          $180.6          $256.6
 small firms ($ million) (FPDS-NG FY 2018-2020) \3\.............
% increase to small business dollars relative to total small                0.8%           17.5%            2.4%
 business contract dollars under current standards in industries
 with proposed increases to size standards......................
Total number of 7(a) and 504 loans to small business in                    1,120              44           1,164
 industries with proposed increases to size standards (FY 2018-
 2020)..........................................................
Total amount of 7(a) and 504 loans to small businesses in                   $751             $30            $781
 industries with proposed increases to size standards ($
 million) (FY 2018-2020)........................................
Estimated number of 7(a) and 504 loans to newly-qualified small                0               0               0
 firms..........................................................
Estimated 7(a) and 504 loan amount to newly-qualified small                 $0.0            $0.0            $0.0
 firms ($ million)..............................................
% increase to 7(a) and 504 loan amount relative to the total                0.0%            0.0%            0.0%
 amount of 7(a) and 504 loans in industries with proposed
 increases to size standards....................................
Total number of EIDL loans to small businesses in industries                  65              10              75
 with proposed increases to size standards (FY 2018-2020) \4\...
Total amount of EIDL loans to small businesses in industries                $2.9            $0.7            $3.5
 with proposed increases to size standards ($ million) (FY 2018-
 2020) \ 4\.....................................................
Estimated no. of EIDL loans to newly-qualified small firms \4\..               0               0               0
Estimated EIDL loan amount to newly-qualified small firms ($                $0.0            $0.0            $0.0
 million) \ 4\..................................................
% increase to EIDL loan amount relative to the total amount of              0.0%            0.0%            0.0%
 disaster loans in industries with proposed increases to size
 standards \4\..................................................
----------------------------------------------------------------------------------------------------------------
\1\ These figures do not include two 6-digit NAICS industries and 5 subindustries or ``exceptions'' for which
  Economic Census data is not available.
\2\ Total impact represents total unique number of firms impacted to avoid double counting as some firms
  participate in more than one industry.
\3\ Additional dollars are calculated multiplying average small business dollars obligated per unique firm times
  change in number of firms. Numbers of firms are calculated using the SBA's current size standards, not the
  contracting officer's size designation.
\4\ Excludes COVID-19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped
  accepting applications for new COVID EIDL loans or advances.

    Newly-qualified small businesses may also benefit from the SBA's 
EIDL program. Since the benefit provided through this program is 
contingent on the occurrence and severity of a disaster in the future, 
SBA cannot make a precise estimate of this impact. However, based on 
the disaster loan program data for fiscal years 2018-2020, SBA 
estimates that, on an annual basis, the newly-defined small businesses 
under the adopted increases to size standards would not be impacted by 
SBA's changes to size standards.
    Additionally, the newly-defined small businesses would also benefit 
through reduced fees, less paperwork, and fewer compliance requirements 
that are available to small businesses through the Federal Government, 
but SBA has no data to quantify this impact.

Costs of Increases to Size Standards

    Besides having to register in the System of Award Management (SAM) 
to be eligible to participate in Federal contracting and update the SAM 
profile annually, small businesses incur no direct costs to gain or 
retain their small business status as a result of the adopted increases 
to size standards. All businesses willing to do business with the 
Federal Government must register in SAM and update their SAM profiles 
annually, regardless of their size status. SBA believes that a vast 
majority of impacted businesses that are willing to participate in 
Federal contracting are already registered in SAM and update their SAM 
profiles annually. More importantly, this final rule does not establish 
the new size standards for the very first time; rather it intends to 
modify the existing size standards in accordance with a statutory 
requirement, the latest data, and other relevant factors.
    To the extent that the newly-qualified small businesses could 
become active in Federal procurement, the adopted increases to size 
standards may entail some additional administrative costs to the 
Federal Government as a result of more businesses qualifying as small 
for Federal small business programs. For example, there will be more 
firms seeking SBA's loans, more firms eligible for enrollment in the 
Dynamic Small Business Search (DSBS) database or in certify.sba.gov, 
more firms seeking certification as 8(a)/BD or HUBZone firms or 
qualifying for small business, WOSB, EDWOSB, and SDVOSB status, and 
more firms applying for SBA's 8(a)/BD mentor-prot[eacute]g[eacute] 
programs. With an expanded pool of small businesses, it is likely that 
Federal agencies would set aside more contracts for small businesses 
under the increases to size standards. One may surmise that this might 
result in a higher number of small business size protests and 
additional processing costs to agencies. However, the SBA's historical 
data on the number of size protests processed shows that the number of 
size protests decreased following the increases to size standards as 
part of the first five-year review of size standards. Specifically, on 
an annual basis, the number of size protests fell from about 600 during 
fiscal years 2011-2013 (review of most receipts-based size standards 
was completed by the end of FY 2013), as compared to about 500 during 
fiscal years 2018-2020 when size standard increases were in effect. 
That represents a 17 percent decline.
    Among those newly-defined small businesses seeking SBA's loans, 
there

[[Page 9996]]

could be some additional costs associated with verification of their 
small business status. However, small business lenders have an option 
of using the tangible net worth and net income based alternative size 
standard instead of using the industry-based size standards to 
establish eligibility for SBA's loans. For these reasons, SBA believes 
that these added administrative costs will be minor because necessary 
mechanisms are already in place to handle these added requirements.
    Additionally, some Federal contracts may possibly have higher 
costs. With a greater number of businesses defined as small due to the 
adopted increases to size standards, Federal agencies may choose to set 
aside more contracts for competition among small businesses only 
instead of using a full and open competition. The movement of contracts 
from unrestricted competition to small business set-aside contracts 
might result in competition among fewer total bidders, although there 
will be more small businesses eligible to submit offers under the 
adopted size standards. However, the additional costs associated with 
fewer bidders are expected to be minor since, by law, procurements may 
be set aside for small businesses under the 8(a)/BD, HUBZone, WOSB, 
EDWOSB, or SDVOSB programs only if awards are expected to be made at 
fair and reasonable prices.
    Costs may also be higher when full and open contracts are awarded 
to HUBZone businesses that receive price evaluation preferences. 
However, with agencies likely setting aside more contracts for small 
businesses in response to the availability of a larger pool of small 
businesses under the adopted increases to size standards, HUBZone firms 
might end up getting fewer full and open contracts, thereby resulting 
in some cost savings to agencies. However, such cost savings are likely 
to be minimal as only a small fraction of unrestricted contracts are 
awarded to HUBZone businesses.

Transfer Impacts of Increases to Size Standards

    The adopted increases to 144 employee-based size standards may 
result in some redistribution of Federal contracts between the newly-
qualified small businesses and large businesses and between the newly-
qualified small businesses and small businesses under the current 
standards. However, it would have no impact on the overall economic 
activity since total Federal contract dollars available for businesses 
to compete for will not change with changes to size standards. While 
SBA cannot quantify with certainty the actual outcome of the gains and 
losses from the redistribution contracts among different groups of 
businesses, it can identify several probable impacts in qualitative 
terms. With the availability of a larger pool of small businesses under 
the adopted increases to size standards, some unrestricted Federal 
contracts which would otherwise be awarded to large businesses may be 
set aside for small businesses. As a result, large businesses may lose 
some Federal contracting opportunities. Similarly, some small 
businesses under the current size standards may obtain fewer set aside 
contracts due to the increased competition from larger businesses 
qualifying as small under the adopted size standards. This impact may 
be offset by a greater number of procurements being set aside for all 
small businesses. With larger businesses qualifying as small under the 
higher size standards, smaller small businesses could face some 
disadvantage in competing for set aside contracts against their larger 
counterparts. However, SBA cannot quantify these impacts.
    3. What alternatives have been considered?
    Under OMB Circular A-4, SBA is required to consider regulatory 
alternatives to the adopted changes in this final rule. In this 
section, SBA describes and analyzes two such alternatives. Alternative 
Option One to the final rule, a more stringent alternative to the 
adopted change, would propose adopting size standards based solely on 
the analytical results. In other words, the size standards of 144 
industries or subindustries (or ``exceptions'') for which the 
analytical results, as presented in Table 4 of the April 2022 proposed 
rule, suggested raising size standards would be raised. However, the 
size standards of 204 industries for which the analytical results 
suggest lowering size standards would be lowered. For the 64 remaining 
industries or subindustries for which the results suggested no changes, 
size standards would be maintained at their current levels. Alternative 
Option Two would propose retaining existing size standards for all 
industries, given the uncertainty generated by the ongoing COVID-19 
pandemic. Below, SBA discusses benefits, costs and net impacts of each 
option.

Alternative Option One: Adopting All Calculated Size Standards

    As discussed in the Alternatives Considered section of this final 
rule, Alternative Option One would cause a substantial number of 
currently small businesses to lose their small business status and 
hence to lose their access to Federal small business assistance, 
especially small business set-aside contracts and SBA's financial 
assistance in some cases. These consequences could be mitigated. For 
example, in response to the 2008 Financial Crisis and economic 
conditions that followed, SBA adopted a general policy in the first 
five-year review of size standards to not lower any size standard 
(except to exclude one or more dominant firms) even when the analytical 
results suggested the size standard should be lowered. Currently, 
because of the economic challenges presented by the COVID-19 pandemic 
and the measures taken to protect public health, SBA has decided to 
adopt the same general policy of not lowering size standards in the 
ongoing second five-year review of size standards review as well.
    The primary benefits of adopting Alternative Option One would 
include: (1) SBA's procurement, management, technical and financial 
assistance resources would be targeted to their intended beneficiaries 
according to the analytical results; (2) Adopting the size standards 
based on the analytical results would also promote consistency and 
predictability of SBA's implementation of its authority to set or 
adjust size standards; and (3) Firms who would remain small would face 
less competition from larger small firms for the remaining set aside 
opportunities. In the proposed rule, SBA sought comments on the impact 
of adopting size standards based on the analytical results.
    As explained in the ``Size Standards Methodology'' white paper, in 
addition to adopting all results of the analysis of the primary 
factors, SBA evaluates other relevant factors as needed such as the 
impact of the reductions or increases of size standards on the 
distribution of contracts awarded to small businesses and may adopt 
different results with the intention of mitigating potential negative 
impacts.
    We have already discussed the benefits, costs and transfer impacts 
of increasing 144 and retaining 268 size standards. Below we discuss 
the benefits, costs, and transfer impacts of increasing 144, decreasing 
204, and retaining 64 size standards based on the analytical results.

Benefits of Decreases to Size Standards

    The most significant benefit to businesses from decreases to size 
standards when SBA's analysis suggests such decreases is to ensure that 
size standards are more reflective of latest industry structure and 
Federal market trends and that Federal small business assistance is 
more effectively targeted to

[[Page 9997]]

its intended beneficiaries. These include SBA's loan programs, EIDL 
program, and Federal procurement programs intended for small 
businesses. Federal procurement programs provide targeted, set-aside 
opportunities for small businesses under SBA's business development 
programs, such as small business, 8(a)/BD, HUBZone, WOSB, EDWOSB, and 
SDVOSB programs. The adoption of smaller size standards when the 
results support them diminishes the risk of awarding contracts to firms 
which are not small anymore.
    Decreasing size standards may reduce the administrative costs of 
the Government, because the risk of awarding set aside contracts to 
other than small businesses may diminish when the size standards 
reflect better the structure of the market. This may also reduce the 
risks of providing SBA's loans to firms that are not needing them the 
most or of allowing firms that are not eligible for small business set-
asides to participate on the SBA procurement programs, which might 
provide a better chance for smaller firms to grow and benefit from the 
opportunities available on the Federal market and strengthen the small 
business industrial base for the Federal Government.

Costs of Decreases to Size Standards

    Table 10, Impacts of Decreases to Size Standards Under Alternative 
Option One, shows the various impacts of lowering size standards in 204 
industries based solely on the analytical results. Based on the 2017 
Economic Census, about 658 (0.3%) firms would lose their small business 
status under Alternative Option One. Similarly, based on the FPDS-NG 
data for fiscal years 2018-2020, 172 (0.7%) small businesses 
participating in Federal contracting would lose their small status and 
become ineligible to compete for set-aside contracts. With fewer 
businesses qualifying as small under the decreases to size standards, 
Federal agencies will have a smaller pool of small businesses from 
which to draw for their small business procurement programs. For 
example, in Alternative Option One, during fiscal years 2018-2020, 
agencies awarded, on an annual basis, about $28.3 billion in small 
business contracts in those 204 industries for which this option 
considered decreasing size standards. Table 10 shows that lowering size 
standards in 204 industries would reduce Federal contract dollars 
awarded to small businesses by $248 million or about 0.9 percent 
relative to the baseline level. Because of the importance of these 
industries for the Federal procurement, SBA may adopt mitigating 
measures to reduce the negative impact. SBA could take one or more of 
the following three actions: (1) Accept decreases in size standards as 
suggested by the analytical results; (2) Decrease size standards by a 
smaller amount than the calculated threshold; or (3). Retain the size 
standards at their current levels.

                  Table 10--Impacts of Decreases to Size Standards Under Alternative Option One
----------------------------------------------------------------------------------------------------------------
                                                                   Sector 31-33    Other sectors       Total
----------------------------------------------------------------------------------------------------------------
Number of industries for which SBA considered decreasing size                180              24             204
 standards......................................................
Total current small businesses in industries for which SBA               163,803          43,056         206,856
 considered decreasing size standards (2017 Economic Census)....
Estimated number of firms losing small status in industries for              572              86             658
 which SBA considered decreasing size standards (2017 Economic
 Census)........................................................
% of firms losing small status relative to current small                    0.4%            0.2%            0.3%
 businesses in industries for which SBA considered decreasing
 size standards (2017 Economic Census)..........................
Number of current unique small firms getting small business               19,687           5,731          24,839
 contracts in industries for which SBA considered decreasing
 size standards (FPDS-NG FY 2018-2020) \1\......................
Estimated number of small business firms that would have lost                132              50             172
 small business status in industries for which SBA considered
 decreasing size standards (FPDS-NG FY 2018-2020) \1\...........
% decrease to small business firms relative to current unique               0.7%            0.9%            0.7%
 small firms getting small business contracts in industries for
 which SBA considered decreasing size standards (FPDS-NG FY 2018-
 2020) \1\......................................................
Total small business contract dollars under current size                 $15,325          12,932         $28,256
 standards in industries for which SBA considered decreasing
 size standards ($ million) (FPDS-NG FY 2018-2020)..............
Estimated small business dollars not available to firms losing            $128.6          $119.5          $248.0
 small business status in industries for which SBA considered
 decreasing size standards ($ million) (FPDS-NG FY 2018-2020)
 \2\............................................................
% decrease to small business dollars relative to total small                0.8%            0.9%            0.9%
 business contract dollars under current size standards in
 industries for which SBA considered decreasing size standards..
Total number of 7(a) and 504 loans to small businesses in                  2,875             325           3,200
 industries for which SBA considered decreasing size standards
 (FY 2018-2020).................................................
Total amount of 7(a) and 504 loans to small businesses in                 $1,851            $147          $1,999
 industries for which SBA considered decreasing size standards
 ($ million) (FY 2018-2020).....................................
Estimated number of 7(a) and 504 loans not available to firms                  1               0               1
 that would have lost small business status in industries for
 which SBA considered decreasing size standards.................
Estimated 7(a) and 504 loan amount not available to firms that              $0.2            $0.0            $0.2
 would have lost small status ($ million).......................
% decrease to 7(a) and 504 loan amount relative to the total                0.0%            0.0%            0.0%
 amount of 7(a) and 504 loans in industries for which SBA
 considered decreasing size standards...........................
Total number of EIDL loans to small businesses in industries for             115              17             132
 which SBA considered decreasing size standards (FY 2018-2020)
 \3\............................................................
Total amount of EIDL loans to small businesses in industries for            $4.1            $1.1            $5.2
 which SBA considered decreasing size standards ($ million) (FY
 2018-2020) \3\.................................................
Estimated number of EIDL loans not available to firms that would               0            $0.0               0
 have lost small business status in industries for which SBA
 considered decreasing size standards \3\.......................
Estimated EIDL loan amount not available to firms that would                $0.0            $0.0            $0.0
 have lost small business status ($ million) \3\................
% decrease to EIDL loan amount relative to the baseline \3\.....            0.0%            0.0%            0.0%
----------------------------------------------------------------------------------------------------------------
\1\ Total impact represents total unique number of firms impacted to avoid double counting as some firms
  participate in more than one industry.

[[Page 9998]]

 
\2\ Additional dollars are calculated multiplying average small business dollars obligated per unique small firm
  times change in number of firms. Numbers of firms are calculated using the SBA's current size standards, not
  the contracting officer's size designation.
\3\ Excludes COVID-19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped
  accepting applications for new COVID EIDL loans or advances.

    Nevertheless, since Federal agencies are still required to meet the 
statutory small business contracting goal of 23 percent, actual impacts 
on the overall set-aside activity are likely to be smaller as agencies 
are likely to award more set-aside contracts to small businesses that 
continue to remain small under the reduced size standards so that they 
could meet their small business contracting goals.
    With fewer businesses qualifying as small, the decreased 
competition can also result in higher prices to the Government for 
procurements set aside or reserved for small businesses, but SBA cannot 
quantify this impact. Lowering size standards may cause current small 
business contract or option holders to lose their small business 
status, thereby making those dollars unavailable to count toward the 
agencies' small business procurement goals. Additionally, impacted 
small businesses will be unable to compete for upcoming options as 
small businesses.
    As shown in Table 10, decreases to size standards would have a very 
minor impact on small businesses applying for SBA's 7(a) and 504 loans 
because a vast majority of such loans are issued to businesses that are 
far below the current or calculated size standards. For example, based 
on the loan data for fiscal years 2018-2020, SBA estimates that about 
one of SBA's 7(a) and 504 loans with total amounts of $0.2 million 
could not be made to those small businesses that would lose eligibility 
under the calculated size standards. That represents about 0.01 percent 
decrease to the loan amount compared to the baseline. However, the 
actual impact on businesses seeking SBA's loans could be much less as 
businesses losing small business eligibility under the decreases to 
industry-based size standards could still qualify for SBA's 7(a) and 
CDC/504 loans under the tangible net worth and net income-based 
alternative size standard.
    Businesses losing small business status would also be impacted in 
terms of access to loans through the SBA's EIDL program. However, SBA 
expects such impact to be minimal as only a small number of businesses 
in those industries received such loans during fiscal years 2018-2020. 
Additionally, all those businesses were below the calculated size 
standards. Since this program is contingent on the occurrence and 
severity of a disaster in the future, SBA cannot make a precise 
estimate of this impact. However, based on the disaster loan data for 
fiscal years 2018-2020, SBA estimates that, under Alternative Option 
One, no small businesses would lose eligibility under the calculated 
size standards (see Table 10).
    Small businesses becoming other than small if size standards were 
decreased might lose benefits through reduced fees, less paperwork, and 
fewer compliance requirements that are available to small businesses 
through the Federal Government programs, but SBA has no data to 
quantify this impact. However, if agencies determine that SBA's size 
standards do not adequately serve such purposes, they can establish a 
different size standard with an approval from SBA if they are required 
to use SBA's size standards for their programs.

Transfer Impacts of Decreases to Size Standards

    If the size standards were decreased under alternative option one, 
it may result in a redistribution of Federal contracts between small 
businesses losing their small business status and large businesses and 
between small businesses losing their small business status and small 
businesses remaining small under the reduced size standards. However, 
as under the adopted increases to size standards, it would have no 
impact on the overall economic activity since the total Federal 
contract dollars available for businesses to compete for will stay the 
same. While SBA cannot estimate with certainty the actual outcome of 
the gains and losses among different groups of businesses from contract 
redistribution resulting from decreases to size standards, it can 
identify several probable impacts. With a smaller pool of small 
businesses under the decreases to size standards, some set-aside 
Federal contracts to be otherwise awarded to small businesses may be 
competed on an unrestricted basis. As a result, large businesses may 
have more Federal contracting opportunities. However, because agencies 
are still required by law to award 23 percent of Federal dollars to 
small businesses, SBA expects the movement of set-aside contracts to 
unrestricted competition to be limited. For the same reason, small 
businesses under the reduced size standards are likely to obtain more 
set-aside contracts due to the reduced competition from fewer 
businesses qualifying as small under the decreases to size standards. 
With some larger small businesses losing small business status under 
the decreases to size standards, smaller small businesses would likely 
become more competitive in obtaining set-aside contracts. However, SBA 
cannot quantify these impacts.

Net Impact of Alternative Option One

    To estimate the net impacts of Alternative Option One, SBA followed 
the same methodology used to evaluate the impacts increasing size 
standards (see Table 9). However, under Alternative Option One, SBA 
used the calculated size standards instead of the adopted increases to 
determine the impacts of changes to current thresholds. The impact of 
increases to size standards were shown in Table 9 (above). Table 10 
(above) and Table 11, Net Impacts of Size Standards Changes under 
Alternative Option One, below, present the impact of the decreases of 
size standards and the net impact of adopting the calculated results 
under alternative option one, respectively. Net impacts are generally 
obtained by subtracting impacts of decreases to size standards in Table 
10 from impacts of increases to size standards in Table 9.
    Based on the 2017 Economic Census (the latest available when the 
proposed rule was developed), SBA estimates that in 349 industries and 
subindustries (``exceptions'') reviewed in this final rule for which 
the analytical results suggested to change size standards, about 415 
firms (see Table 11), would become other than small under Alternative 
Option One. That represents about 0.2 percent of all firms classified 
as small under the current size standards.
    Based on the FPDS-NG data for fiscal years 2018-2020, SBA estimates 
that about 83 unique active firms in Federal contracting in those 
industries would lose their small business status under alternative 
option one, most of them from Sector 31-33. This represents a decrease 
of about 0.3 percent of the total number of small businesses 
participating in Federal contracting under the current size standards. 
Based on the same data, SBA estimates that about $8.6 million of 
Federal procurement dollars would become available to all small firms, 
including those gaining small status. This represents an increase of 
0.02 percent from the baseline. SBA estimates that the dollars 
obligated to small businesses

[[Page 9999]]

will increase despite a reduction in the total number of small firms 
because the contract dollars to newly qualified small businesses in 
sectors other than manufacturing with increases to size standards is 
higher than the contract dollars to small businesses losing small 
business status in sectors other than manufacturing with decreases to 
size standards.
    Based on the SBA's loan data for fiscal years 2018-2020, the total 
number of 7(a) and 504 loans may decrease by about one loan, and the 
loan amount by about $0.2 million. This represents a 0.01 percent 
decrease of the loan amount relative to the baseline.
    Firms' participation under the SBA's EIDL program may be affected 
as well. Since the benefit provided through this program is contingent 
on the occurrence and severity of a disaster in the future, SBA cannot 
make a meaningful estimate of this impact. However, based on the 
disaster loan program data for fiscal years 2018-2020, SBA estimates 
that the total number of EIDL loans will not be impacted.

                  Table 11--Net Impacts of Size Standards Changes Under Alternative Option One
----------------------------------------------------------------------------------------------------------------
                                                                   Sector 31-33    Other sectors       Total
----------------------------------------------------------------------------------------------------------------
Number of industries or subindustries (``exceptions'') with                  299              50             349
 changes to size standards......................................
Total number of small firms under the current size standards in          229,933          48,322         278,255
 industries with changes to size standards (2017 Economic
 Census) \1\....................................................
Additional number of firms qualifying as small under size                   -375             -40            -415
 standards changes (2017 Economic Census) \1\...................
% of additional firms qualifying as small relative to total                -0.2%           -0.1%           -0.2%
 current small firms (2017 Economic Census) \1\.................
Number of current unique small firms getting small business               26,771           6,295          32,164
 contracts in industries with changes to size standards (FPDS-NG
 FY 2018-2020)..................................................
Additional number of unique small firms gaining small business               -59             -29             -83
 status in industries with changes to size standards (FPDS-NG FY
 2018-2020) \2\.................................................
% increase to small firms relative to current unique small firms           -0.2%           -0.5%           -0.3%
 gaining small business status (FPDS-NG FY 2018-2020)...........
Total small business contract dollars under current size                 $24,942         $13,962         $38,904
 standards in industries with changes to size standards ($
 million) (FPDS-NG FY 2018-2020)................................
Estimated small business dollars available to newly-qualified             -$52.6          $61.20            $8.6
 small firms ($ million) FPDS-NG FY 2018-2020)..................
% increase to dollars relative to total small business contract            -0.2%            0.4%           0.02%
 dollars under current size standards...........................
Total number of 7(a) and 504 loans to small businesses (FY 2018-           3,995             368           4,363
 2020)..........................................................
Total amount of 7(a) and 504 loans to small businesses (FY 2018-          $2,603            $177          $2,780
 2020)..........................................................
Estimated number of additional 7(a) and 504 loans available to                -1               0              -1
 newly-qualified small firms....................................
Estimated additional 7(a) and 504 loan amount to newly-qualified           -$0.2            $0.0           -$0.2
 small firms ($ million)........................................
% increase to 7(a)and 504 loan amount relative to the total                 0.0%            0.0%            0.0%
 amount of 7(a) and 504 loans to small businesses...............
Total number of EIDL loans to small businesses (FY 2018-2020)                180           $27.0             207
 \4\............................................................
Total amount of EIDL loans to small businesses (FY 2018-2020)               $7.0            $1.7            $8.7
 \4\............................................................
Estimated number of additional EIDL loans to newly qualified                   0            $0.0               0
 small firms \4\................................................
Estimated additional EIDL loan amount to newly qualified small              $0.0            $0.0            $0.0
 firms ($ million) \4\..........................................
% increase to EIDL loan amount relative to the total amount of              0.0%            0.0%            0.0%
 disaster loans to small businesses \4\.........................
----------------------------------------------------------------------------------------------------------------
\1\ These figures do not include two 6-digit NAICS industries and 5 subindustries or ``exceptions'' for which
  Economic Census data is not available.
\2\ Total impact represents total unique number of firms impacted to avoid double counting as some firms
  participate in more than one industry.
\3\ Additional dollars are calculated multiplying average small business dollars obligated per unique firm times
  change in number of firms. Numbers of firms are calculated using the SBA's current size standards, not the
  contracting officer's size designation.
\4\ Excludes COVID-19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped
  accepting applications for new COVID EIDL loans or advances.

Alternative Option Two: Retaining All Current Size Standards

    Under this option, given the current COVID-19 pandemic, as 
discussed elsewhere, SBA considered retaining the current levels of all 
size standards even though the analytical results suggested changing 
them. Under this option, as the current situation develops, SBA will be 
able to assess new data available on economic indicators, Federal 
procurement, and SBA loans as well. When compared to the baseline, 
there is a net impact of zero (i.e., zero benefit and zero cost) for 
retaining all size standards. However, this option would cause 
otherwise qualified small businesses to forgo various small business 
benefits (e.g., access to set-aside contracts and capital) that become 
available to them under the option of increasing 144 and retaining 268 
size standards adopted under this final rule. Moreover, retaining all 
size standards under Alternative Option Two would also be contrary to 
the SBA's statutory mandate to review and adjust, every five years, all 
size standards to reflect current industry and Federal market 
conditions. Retaining all size standards without required periodic 
adjustments would increasingly exclude otherwise eligible small firms 
from small business benefits.

Congressional Review Act, 5 U.S.C. 801-808

    Subtitle E of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (codified at 5 U.S.C. 801-808), also known as the 
Congressional Review Act or CRA, generally provides that before a rule 
may take effect, the agency promulgating the rule must submit a rule 
report, which includes a copy of the rule, to each House of the 
Congress and to the Comptroller General of the United States. SBA will 
submit a report containing this rule and other required information to 
the U.S. Senate, the U.S. House of Representatives, and the Comptroller 
General of the United

[[Page 10000]]

States. A major rule under the CRA cannot take effect until 60 days 
after it is published in the Federal Register. The OMB's Office of 
Information and Regulatory Affairs has determined that this is not a 
major rule under 5 U.S.C. 804(2).

Final Regulatory Flexibility Analysis

    According to the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-
612, when an agency issues a rulemaking, it must prepare a regulatory 
flexibility analysis to address the impact of the rule on small 
entities. This final rule may have a significant impact on a 
substantial number of small businesses in the industries covered by 
this final rule. As described above, this final rule may affect small 
businesses seeking Federal contracts, loans under SBA's 7(a), 504, and 
EIDL 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 is the need for and objective of the rule?; (2) What are 
significant issues raised by the public comments in response to the 
initial regulatory flexibility analysis, assessment of the agency of 
such issues, and any changes made in the proposed rule as a result of 
such comments?; (3) What's the agency's response to any comments filed 
by the Chief Counsel for Advocacy of the Small Business Administration 
in response to the proposed rule and description of any change made to 
the proposed rule in the final rule as a result of the comments?; (4) 
What is SBA's description and estimate of the number of small 
businesses to which the rule will apply?; (5) What are the projected 
reporting, record keeping, and other compliance requirements of the 
rule?; (6) What are the relevant Federal rules that may duplicate, 
overlap, or conflict with the rule; and (7) What alternatives will 
allow SBA to accomplish its regulatory objectives while minimizing the 
impact on small businesses?
    1. What is the need for and objective of the rule?
    Changes in industry structure, technological changes, productivity 
growth, mergers and acquisitions, and updated industry definitions have 
changed the structure of many industries covered by this final rule. 
Such changes can be enough to support revisions to current size 
standards for some industries. Based on the analysis of the latest data 
available, SBA believes that the size standards adopted in this final 
rule more appropriately reflect the size of businesses that need 
Federal assistance. The 2010 Jobs Act also requires SBA to review all 
size standards and make necessary adjustments to reflect market 
conditions.
    2. What are significant issues raised by the public comments in 
response to the initial regulatory flexibility analysis, assessment of 
the agency of such issues, and any changes made in the proposed rule as 
a result of such comments?
    SBA did not receive any public comments to the initial regulatory 
flexibility analysis it provided in the April 26, 2022, proposed rule.
    3. What's the agency's response to any comments filed by the Chief 
Counsel for Advocacy of the Small Business Administration in response 
to the proposed rule and description of any change made to the proposed 
rule in the final rule as a result of the comments?
    SBA did not receive any comments from the Chief Counsel for 
Advocacy of the Small Business Administration in response to the April 
26, 2022, proposed rule.
    4. What is SBA's description and estimate of the number of small 
businesses to which the rule will apply?
    Based on data from the 2017 Economic Census, SBA estimates that 
there are nearly 71,318 small firms covered under this rulemaking in 
industries with changes to size standards. Under this final rule, SBA 
estimates that nearly 242 additional businesses will become small.
    5. What are the projected reporting, record keeping and other 
compliance requirements of the rule?
    The size standard changes in this final rule impose no additional 
reporting or record keeping requirements on small businesses. However, 
qualifying for Federal procurement and a number of other programs 
requires that businesses register in SAM and self-certify that they are 
small at least once annually (Federal Acquisition Regulation (FAR) 
52.204-13). For existing contracts, small business contractors are 
required to update their SAM registration as necessary to ensure that 
they reflect the contractor's current status (FAR 52.219-28). 
Businesses are also required to verify that their SAM registration is 
current, accurate, and complete with the submission of an offer for 
every new contract (FAR 52.204-7 and 52.204-8). Therefore, businesses 
opting to participate in those programs must comply with SAM 
requirements. There are no new costs associated with SAM registration 
or annal re-certification. Changing size standards alters the access to 
SBA's programs that assist small businesses but does not impose a 
regulatory burden because they neither regulate nor control business 
behavior.
    6. 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 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)). SBA is not aware of any 
Federal rule that would duplicate or conflict with establishing size 
standards.
    However, the Small Business Act and SBA's regulations allow Federal 
agencies to establish different size standards if they believe that 
SBA's size standards are not appropriate for their programs, with the 
approval of SBA's Administrator (13 CFR 121.903). The Regulatory 
Flexibility Act authorizes an Agency to establish an alternative small 
business definition, after consultation with the Office of Advocacy of 
the U.S. Small Business Administration (5 U.S.C. 601(3)).
    7. What alternatives will allow SBA to accomplish its regulatory 
objectives while minimizing the impact on small entities?
    By law, SBA is required to develop numerical size standards for 
establishing eligibility for Federal small business assistance 
programs. Other than varying size standards by industry and changing 
the size measures, no practical alternative exists to the systems of 
numerical size standards.
    However, SBA considered two alternatives to increasing 144 and 
maintaining 268 size standards at their current levels. The first 
alternative SBA considered was adopting size standards based solely on 
the analytical results, including the results from the evaluation of 
dominance and field of operation. In other words, the size standards of 
144 industries for which the analytical results suggest raising size 
standards would be raised. However, the size standards of 204 
industries for which the analytical results suggest lowering size 
standards would be lowered. This would cause a significant number of 
small businesses to lose their small business status, particularly in 
Sector 31-33 (see Table 10). Under the second alternative, in view of 
the COVID-19 pandemic, SBA considered retaining all size standards at 
the current levels, even though the analytical results may suggest 
increasing

[[Page 10001]]

144 and decreasing 204 size standards. SBA believes retaining all size 
standards at their current levels would be more onerous for small 
businesses than the option of increasing 144 and retaining 268 size 
standards. Postponing the adoption of the higher calculated size 
standards would be detrimental for otherwise small businesses in terms 
of access to various small business benefits, including access to set-
aside contracts and capital through SBA contracting and financial 
programs, and exemptions from paperwork and other compliance 
requirements.

Executive Order 13563

    Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, reducing costs, harmonizing rules, and promoting 
flexibility. A description of the need for this regulatory action and 
benefits and costs associated with this action, including possible 
distributional impacts that relate to Executive Order 13563, is 
included above in the Regulatory Impact Analysis under Executive Order 
12866. Additionally, Executive Order 13563, section 6, calls for 
retrospective analyses of existing rules.
    The review of size standards in the industries covered by this 
final rule is consistent with section 6 of Executive Order 13563 and 
the 2010 Jobs Act which requires SBA to review every five years all 
size standards and make necessary adjustments to reflect market 
conditions. Specifically, the 2010 Jobs Act requires SBA to review at 
least one-third of all size standards during every 18-month period from 
the date of its enactment (September 27, 2010) and to review all size 
standards not less frequently than once every five years, thereafter. 
In accordance with the Jobs Act, in early 2016, SBA completed the first 
five-year review of the small business size standard for each industry, 
except those for agricultural enterprises previously set by Congress, 
and made appropriate adjustments to size standards for a number of 
industries to reflect current Federal and industry market conditions.
    SBA issued a revised white paper entitled ``Size Standards 
Methodology'' and published a notice in the April 27, 2018, edition of 
the Federal Register (83 FR 18468) to advise the public that the 
document is available for public review and comments. The ``Size 
Standards Methodology'' white paper explains how SBA establishes, 
reviews, and modifies its receipts-based and employee-based small 
business size standards. SBA considered all input, suggestions, 
recommendations, and relevant information obtained from industry 
groups, individual businesses, and federal agencies before finalizing 
and adopting the revised Methodology. For a summary of comments 
received and SBA's responses, see the notice published in the Federal 
Register on April 11, 2019 (84 FR 14587). As part of the second five-
year review of size standards under the Jobs Act, SBA has already 
issued five final rules reviewing all monetary-based size standards and 
all employee-based size standards that are part of the Wholesale Trade 
and Retail Trade sectors (see Footnote 1, above). This final rule is 
reviewing size standards under Sector 31-33 and other sectors with 
employee-based size standards not part of Wholesale and Retail Trade 
sectors completes SBA's second five-year review of size standards under 
the Jobs Act. SBA considered all input, suggestions, recommendations, 
and relevant information obtained from industry groups, individual 
businesses, and federal agencies in developing size standards for those 
industries covered by this final rule. As required by the Jobs Act, SBA 
held two virtual public forums on size standards on June 14 and June 
16, 2022, to update the public on the second five-year review of size 
standards and to consider public testimony on proposed size standards 
in the April 26, 2022, proposed rule. SBA received a total of 49 
comments (including seven comments received during the public forums on 
size standards) to the proposed rule. In the Discussion of Comments 
section of this final rule, SBA summarizes and provides responses to 
the comments received on the proposed rule.

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 
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 rule will not impose any new reporting or 
record keeping requirements.

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:

PART 121--SMALL BUSINESS SIZE REGULATIONS

0
1. The authority citation for part 121 continues to read as follows:

    Authority:  15 U.S.C. 632, 634(b)(6), 636(a)(36), 662, and 
694a(9); Pub. L. 116-136, Section 1114.


0
2. In Sec.  121.201, amend the table ``Small Business Size Standards by 
NAICS Industry'' by revising entries ''212210,'' ``212230,'' 
``212290,'' ``212313,'' ``212319,'' ``212322,'' ``212323,'' ``212390,'' 
entries ``221111'' through ``221115,'' ``221117,'' ``221118,'' 
``221121,'' ``221122,'' ``221210,'' ``311111,'' ``311119,'' ``311211,'' 
``311212,'' ``311221,'' ``311224,'' ``311225,'' ``311230,'' ``311313,'' 
``311314,'' ``311411,'' ``311422,'' ``311511,'' ``311514,'' ``311611,'' 
``311824,'' ``311920,'' ``311930,'' ``311941,'' ``311942,'' ``311991,'' 
``311999,'' ``312111,'' ``312112,'' ``312140,'' ``313220,'' ``313230,'' 
``314999,'' ``315120,'' ``315990,'' ``316110,'' ``321113,'' ``321114,'' 
``321211,'' ``322110,'' ``323111,'' ``323120,'' ``324122,'' ``324191,'' 
``324199,'' ``325110,'' ``325120,'' ``325130,'' ``325220,'' ``325311,'' 
``325312,'' ``325314,'' ``325315,'' ``325320,'' ``325412,'' ``325520,'' 
entries ``325611'' through ``325613,'' ``325910,'' ``325991,'' 
``325998,'' ``326121,'' ``326130,'' ``326220,'' ``326299,'' ``327211,'' 
``327410,'' ``327910,'' ``327992,'' ``327999,'' ``331313,'' ``331315,'' 
``331420,'' ``331491,'' ``331492,'' ``331512,'' ``331513,'' ``331523,'' 
``331524,'' ``332112,'' ``332114,'' ``332117,'' ``332215,'' ``332439,'' 
``332613,'' ``332722,'' ``332812,'' ``332992,'' ``332996,'' ``333131,'' 
``333243,'' ``333924,'' ``333991,'' ``333993,'' ``333995,'' ``333998,'' 
``334290,'' ``334416,'' ``334511,'' ``334512,'' ``334514,'' ``334517,'' 
``334519,'' ``335132,''

[[Page 10002]]

``335311,'' ``335931,'' ``335991,'' ``335999,'' ``336310,'' ``336414,'' 
``336419,'' ``336611,'' ``336991,'' ``337126,'' ``337214,'' ``339113,'' 
``339910,'' ``339930,'' ``339991,'' ``339994,'' ``339999,'' ``483111,'' 
``483113,'' ``483114,'' ``483211,'' ``483212,'' ``512230,'' ``512250,'' 
``541715,'' and ``562910 (Exception)'' to read as follows:


Sec.  121.201  What size standards has SBA identified by North American 
Industry Classification System codes?

* * * * *

                                 Small Business Size Standards by NAICS Industry
----------------------------------------------------------------------------------------------------------------
                                                                               Size standards    Size standards
               NAICS code                     NAICS U.S. industry title        in millions of     in number of
                                                                                   dollars          employees
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                            Sector 21--Mining, Quarrying, and Oil and Gas Extraction
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                   Subsector 212--Mining (except Oil and Gas)
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
212210.................................  Iron Ore Mining....................  ................             1,400
 
                                                  * * * * * * *
212230.................................  Copper, Nickel, Lead, and Zinc       ................             1,400
                                          Mining.
 
                                                  * * * * * * *
212290.................................  Other Metal Ore Mining.............  ................             1,250
 
                                                  * * * * * * *
212313.................................  Crushed and Broken Granite Mining    ................               850
                                          and Quarrying.
212319.................................  Other Crushed and Broken Stone       ................               550
                                          Mining and Quarrying.
 
                                                  * * * * * * *
212322.................................  Industrial Sand Mining.............  ................               750
 
                                                  * * * * * * *
212323.................................  Kaolin, Clay, and Ceramic and        ................               650
                                          Refractory Minerals Mining.
 
                                                  * * * * * * *
212390.................................  Other Nonmetallic Mineral Mining     ................               600
                                          and Quarrying.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                              Sector 22--Utilities
----------------------------------------------------------------------------------------------------------------
                                            Subsector 221--Utilities
----------------------------------------------------------------------------------------------------------------
221111.................................  Hydroelectric Power Generation.....  ................               750
221112.................................  Fossil Fuel Electric Power           ................               950
                                          Generation.
221113.................................  Nuclear Electric Power Generation..  ................             1,150
221114.................................  Solar Electric Power Generation....  ................               500
221115.................................  Wind Electric Power Generation.....  ................             1,150
 
                                                  * * * * * * *
221117.................................  Biomass Electric Power Generation..  ................               550
221118.................................  Other Electric Power Generation....  ................               650
221121.................................  Electric Bulk Power Transmission     ................               950
                                          and Control.
221122.................................  Electric Power Distribution........  ................             1,100
221210.................................  Natural Gas Distribution...........  ................             1,150
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                           Sector 31-33--Manufacturing
----------------------------------------------------------------------------------------------------------------
                                        Subsector 311--Food Manufacturing
----------------------------------------------------------------------------------------------------------------
311111.................................  Dog and Cat Food Manufacturing.....  ................             1,250
311119.................................  Other Animal Food Manufacturing....  ................               650
311211.................................  Flour Milling......................  ................             1,050
311212.................................  Rice Milling.......................  ................               750
 
                                                  * * * * * * *
311221.................................  Wet Corn Milling and Starch          ................             1,300
                                          Manufacturing.

[[Page 10003]]

 
311224.................................  Soybean and Other Oilseed            ................             1,250
                                          Processing.
311225.................................  Fats and Oils Refining and Blending  ................             1,100
311230.................................  Breakfast Cereal Manufacturing.....  ................             1,300
311313.................................  Beet Sugar Manufacturing...........  ................             1,150
311314.................................  Cane Sugar Manufacturing...........  ................             1,050
 
                                                  * * * * * * *
311411.................................  Frozen Fruit, Juice, and Vegetable   ................             1,100
                                          Manufacturing.
 
                                                  * * * * * * *
311422.................................  Specialty Canning..................  ................             1,400
 
                                                  * * * * * * *
311511.................................  Fluid Milk Manufacturing...........  ................             1,150
 
                                                  * * * * * * *
311514.................................  Dry, Condensed, and Evaporated       ................             1,000
                                          Dairy Product Manufacturing.
 
                                                  * * * * * * *
311611.................................  Animal (except Poultry)              ................             1,150
                                          Slaughtering.
 
                                                  * * * * * * *
311824.................................  Dry Pasta, Dough, and Flour Mixes    ................               850
                                          Manufacturing from Purchased Flour.
 
                                                  * * * * * * *
311920.................................  Coffee and Tea Manufacturing.......  ................             1,000
311930.................................  Flavoring Syrup and Concentrate      ................             1,100
                                          Manufacturing.
311941.................................  Mayonnaise, Dressing, and Other      ................               850
                                          Prepared Sauce Manufacturing.
311942.................................  Spice and Extract Manufacturing....  ................               650
311991.................................  Perishable Prepared Food             ................               700
                                          Manufacturing.
311999.................................  All Other Miscellaneous Food         ................               700
                                          Manufacturing.
----------------------------------------------------------------------------------------------------------------
                            Subsector 312--Beverage and Tobacco Product Manufacturing
----------------------------------------------------------------------------------------------------------------
312111.................................  Soft Drink Manufacturing...........  ................             1,400
312112.................................  Bottled Water Manufacturing........  ................             1,100
 
                                                  * * * * * * *
312140.................................  Distilleries.......................  ................             1,100
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                          Subsector 313--Textile Mills
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
313220.................................  Narrow Fabric Mills and Schiffli     ................               550
                                          Machine Embroidery.
313230.................................  Nonwoven Fabric Mills..............  ................               850
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                      Subsector 314--Textile Product Mills
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
314999.................................  All Other Miscellaneous Textile      ................               550
                                          Product Mills.
----------------------------------------------------------------------------------------------------------------
                                      Subsector 315--Apparel Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
315120.................................  Apparel Knitting Mills.............  ................               850
 
                                                  * * * * * * *
315990.................................  Apparel Accessories and Other        ................               600
                                          Apparel Manufacturing.
----------------------------------------------------------------------------------------------------------------
                             Subsector 316--Leather and Allied Product Manufacturing
----------------------------------------------------------------------------------------------------------------
316110.................................  Leather and Hide Tanning and         ................               800
                                          Finishing.
 

[[Page 10004]]

 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                    Subsector 321--Wood Product Manufacturing
----------------------------------------------------------------------------------------------------------------
321113.................................  Sawmills...........................  ................               550
321114.................................  Wood Preservation..................  ................               550
321211.................................  Hardwood Veneer and Plywood          ................               600
                                          Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                       Subsector 322--Paper Manufacturing
----------------------------------------------------------------------------------------------------------------
322110.................................  Pulp Mills.........................  ................             1,050
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                             Subsector 323--Printing and Related Support Activities
----------------------------------------------------------------------------------------------------------------
323111.................................  Commercial Printing (except Screen   ................               650
                                          and Books).
 
                                                  * * * * * * *
323120.................................  Support Activities for Printing....  ................               550
----------------------------------------------------------------------------------------------------------------
                            Subsector 324--Petroleum and Coal Products Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
324122.................................  Asphalt Shingle and Coating          ................             1,100
                                          Materials Manufacturing.
324191.................................  Petroleum Lubricating Oil and        ................               900
                                          Grease Manufacturing.
324199.................................  All Other Petroleum and Coal         ................               950
                                          Products Manufacturing.
----------------------------------------------------------------------------------------------------------------
                                      Subsector 325--Chemical Manufacturing
----------------------------------------------------------------------------------------------------------------
325110.................................  Petrochemical Manufacturing........  ................             1,300
325120.................................  Industrial Gas Manufacturing.......  ................             1,200
325130.................................  Synthetic Dye and Pigment            ................             1,050
                                          Manufacturing.
 
                                                  * * * * * * *
325220.................................  Artificial and Synthetic Fibers and  ................             1,050
                                          Filaments Manufacturing.
325311.................................  Nitrogenous Fertilizer               ................             1,050
                                          Manufacturing.
325312.................................  Phosphatic Fertilizer Manufacturing  ................             1,350
325314.................................  Fertilizer (Mixing Only)             ................               550
                                          Manufacturing.
325315.................................  Compost Manufacturing..............  ................               550
325320.................................  Pesticide and Other Agricultural     ................             1,150
                                          Chemical Manufacturing.
 
                                                  * * * * * * *
325412.................................  Pharmaceutical Preparation           ................             1,300
                                          Manufacturing.
 
                                                  * * * * * * *
325520.................................  Adhesive Manufacturing.............  ................               550
325611.................................  Soap and Other Detergent             ................             1,100
                                          Manufacturing.
325612.................................  Polish and Other Sanitation Good     ................               900
                                          Manufacturing.
325613.................................  Surface Active Agent Manufacturing.  ................             1,100
 
                                                  * * * * * * *
325910.................................  Printing Ink Manufacturing.........  ................               750
 
                                                  * * * * * * *
325991.................................  Custom Compounding of Purchased      ................               600
                                          Resins.
 
                                                  * * * * * * *
325998.................................  All Other Miscellaneous Chemical     ................               650
                                          Product and Preparation
                                          Manufacturing.
----------------------------------------------------------------------------------------------------------------
                            Subsector 326--Plastics and Rubber Products Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
326121.................................  Unlaminated Plastics Profile Shape   ................               600
                                          Manufacturing.
 
                                                  * * * * * * *
326130.................................  Laminated Plastics Plate, Sheet      ................               650
                                          (except Packaging), and Shape
                                          Manufacturing.

[[Page 10005]]

 
 
                                                  * * * * * * *
326220.................................  Rubber and Plastics Hoses and        ................               800
                                          Belting Manufacturing.
 
                                                  * * * * * * *
326299.................................  All Other Rubber Product             ................               650
                                          Manufacturing.
----------------------------------------------------------------------------------------------------------------
                            Subsector 327--Nonmetallic Mineral Product Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
327211.................................  Flat Glass Manufacturing...........  ................             1,100
 
                                                  * * * * * * *
327410.................................  Lime Manufacturing.................  ................             1,050
 
                                                  * * * * * * *
327910.................................  Abrasive Product Manufacturing.....  ................               900
 
                                                  * * * * * * *
327992.................................  Ground or Treated Mineral and Earth  ................               600
                                          Manufacturing.
 
                                                  * * * * * * *
327999.................................  All Other Miscellaneous Nonmetallic  ................               750
                                          Mineral Product Manufacturing.
----------------------------------------------------------------------------------------------------------------
                                   Subsector 331--Primary Metal Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
331313.................................  Alumina Refining and Primary         ................             1,300
                                          Aluminum Production.
 
                                                  * * * * * * *
331315.................................  Aluminum Sheet, Plate, and Foil      ................             1,400
                                          Manufacturing.
 
                                                  * * * * * * *
331420.................................  Copper Rolling, Drawing, Extruding,  ................             1,050
                                          and Alloying.
331491.................................  Nonferrous Metal (except Copper and  ................               900
                                          Aluminum) Rolling, Drawing, and
                                          Extruding.
331492.................................  Secondary Smelting, Refining, and    ................               850
                                          Alloying of Nonferrous Metal
                                          (except Copper and Aluminum).
 
                                                  * * * * * * *
331512.................................  Steel Investment Foundries.........  ................             1,050
331513.................................  Steel Foundries (except Investment)  ................               700
331523.................................  Nonferrous Metal Die-Casting         ................               700
                                          Foundries.
331524.................................  Aluminum Foundries (except Die-      ................               550
                                          Casting).
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                              Subsector 332--Fabricated Metal Product Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
332112.................................  Nonferrous Forging.................  ................               950
332114.................................  Custom Roll Forming................  ................               600
332117.................................  Powder Metallurgy Part               ................               550
                                          Manufacturing.
 
                                                  * * * * * * *
332215.................................  Metal Kitchen Cookware, Utensil,     ................             1,000
                                          Cutlery, and Flatware (except
                                          Precious) Manufacturing.
 
                                                  * * * * * * *
332439.................................  Other Metal Container Manufacturing  ................               600
 
                                                  * * * * * * *
332613.................................  Spring Manufacturing...............  ................               600
 
                                                  * * * * * * *
332722.................................  Bolt, Nut, Screw, Rivet, and Washer  ................               600
                                          Manufacturing.
 

[[Page 10006]]

 
                                                  * * * * * * *
332812.................................  Metal Coating, Engraving (except     ................               600
                                          Jewelry and Silverware), and
                                          Allied Services to Manufacturers.
 
                                                  * * * * * * *
332992.................................  Small Arms Ammunition Manufacturing  ................             1,300
 
                                                  * * * * * * *
332996.................................  Fabricated Pipe and Pipe Fitting     ................               550
                                          Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                  Subsector 333--Machinery Manufacturing \(6)\
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
333131.................................  Mining Machinery and Equipment       ................               900
                                          Manufacturing.
 
                                                  * * * * * * *
333243.................................  Sawmill, Woodworking, and Paper      ................               550
                                          Machinery Manufacturing.
 
                                                  * * * * * * *
333924.................................  Industrial Truck, Tractor, Trailer,  ................               900
                                          and Stacker Machinery
                                          Manufacturing.
333991.................................  Power-Driven Hand Tool               ................               950
                                          Manufacturing.
 
                                                  * * * * * * *
333993.................................  Packaging Machinery Manufacturing..  ................               600
 
                                                  * * * * * * *
333995.................................  Fluid Power Cylinder and Actuator    ................               800
                                          Manufacturing.
 
                                                  * * * * * * *
333998.................................  All Other Miscellaneous General      ................               700
                                          Purpose Machinery Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                       Subsector 334--Computer and Electronic Product Manufacturing \(6)\
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
334290.................................  Other Communications Equipment       ................               800
                                          Manufacturing.
 
                                                  * * * * * * *
334416.................................  Capacitor, Resistor, Coil,           ................               550
                                          Transformer, and Other Inductor
                                          Manufacturing.
 
                                                  * * * * * * *
334511.................................  Search, Detection, Navigation,       ................             1,350
                                          Guidance, Aeronautical, and
                                          Nautical System and Instrument
                                          Manufacturing.
334512.................................  Automatic Environmental Control      ................               650
                                          Manufacturing for Residential,
                                          Commercial, and Appliance Use.
 
                                                  * * * * * * *
334514.................................  Totalizing Fluid Meter and Counting  ................               850
                                          Device Manufacturing.
 
                                                  * * * * * * *
334517.................................  Irradiation Apparatus Manufacturing  ................             1,200
334519.................................  Other Measuring and Controlling      ................               600
                                          Device Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                 Subsector 335--Electrical Equipment, Appliance and Component Manufacturing (6)
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
335132.................................  Commercial, Industrial, and          ................               600
                                          Institutional Electric Lighting
                                          Fixture Manufacturing.
 
                                                  * * * * * * *
335311.................................  Power, Distribution, and Specialty   ................               800
                                          Transformer Manufacturing.
 
                                                  * * * * * * *
335931.................................  Current-Carrying Wiring Device       ................               600
                                          Manufacturing.

[[Page 10007]]

 
 
                                                  * * * * * * *
335991.................................  Carbon and Graphite Product          ................               900
                                          Manufacturing.
335999.................................  All Other Miscellaneous Electrical   ................               600
                                          Equipment and Component
                                          Manufacturing.
----------------------------------------------------------------------------------------------------------------
                           Subsector 336--Transportation Equipment Manufacturing \(6)\
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
336310.................................  Motor Vehicle Gasoline Engine and    ................             1,050
                                          Engine Parts Manufacturing.
 
                                                  * * * * * * *
336414.................................  Guided Missile and Space Vehicle     ................             1,300
                                          Manufacturing.
 
                                                  * * * * * * *
336419.................................  Other Guided Missile and Space       ................             1,050
                                          Vehicle Parts and Auxiliary
                                          Equipment Manufacturing.
 
                                                  * * * * * * *
336611.................................  Ship Building and Repairing........  ................             1,300
 
                                                  * * * * * * *
336991.................................  Motorcycle, Bicycle, and Parts       ................             1,050
                                          Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                           Subsector 337--Furniture and Related Product Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
337126.................................  Household Furniture (except Wood     ................               950
                                          and Upholstered) Manufacturing.
 
                                                  * * * * * * *
337214.................................  Office Furniture (except Wood)       ................             1,100
                                          Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                   Subsector 339--Miscellaneous Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
339113.................................  Surgical Appliance and Supplies      ................               800
                                          Manufacturing.
 
                                                  * * * * * * *
339910.................................  Jewelry and Silverware               ................               700
                                          Manufacturing.
 
                                                  * * * * * * *
339930.................................  Doll, Toy, and Game Manufacturing..  ................               700
 
                                                  * * * * * * *
339991.................................  Gasket, Packing, and Sealing Device  ................               600
                                          Manufacturing.
 
                                                  * * * * * * *
339994.................................  Broom, Brush, and Mop Manufacturing  ................               750
 
                                                  * * * * * * *
339999.................................  All Other Miscellaneous              ................               550
                                          Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                  Sector 48-49--Transportation and Warehousing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                       Subsector 483--Water Transportation
----------------------------------------------------------------------------------------------------------------
483111.................................  Deep Sea Freight Transportation....  ................             1,050
 
                                                  * * * * * * *
483113.................................  Coastal and Great Lakes Freight      ................               800
                                          Transportation.

[[Page 10008]]

 
483114.................................  Coastal and Great Lakes Passenger    ................               550
                                          Transportation.
483211.................................  Inland Water Freight Transportation  ................             1,050
483212.................................  Inland Water Passenger               ................               550
                                          Transportation.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                             Sector 51--Information
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                          Subsector 512--Motion Picture and Sound Recording Industries
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
512230.................................  Music Publishers...................  ................               900
 
                                                  * * * * * * *
512250.................................  Record Production and Distribution.  ................               900
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                           Sector 54--Professional, Scientific and Technical Services
----------------------------------------------------------------------------------------------------------------
                         Subsector 541--Professional, Scientific and Technical Services
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
541715.................................  Research and Development in the      ................        \11\ 1,000
                                          Physical, Engineering, and Life
                                          Sciences (except Nanotechnology
                                          and Biotechnology) \11\.
541715 (Exception 1)...................  Aircraft, Aircraft Engine and        ................        \11\ 1,500
                                          Engine Parts \11\.
541715 (Exception 2)...................  Other Aircraft Parts and Auxiliary   ................        \11\ 1,250
                                          Equipment \11\.
541715 (Exception 3)...................  Guided Missiles and Space Vehicles,  ................        \11\ 1,300
                                          Their Propulsion Units and
                                          Propulsion Parts \11\.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
               Sector 56--Administrative and Support and Waste Management and Remediation Services
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                            Subsector 562--Waste Management and Remediation Services
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
562910 (Exception).....................  Environmental Remediation Services   ................        \14\ 1,000
                                          \14\.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
Footnotes
 * * * * * * *
\6\ NAICS Subsectors 333, 334, 335 and 336--For rebuilding machinery or equipment on a factory basis, or
  equivalent, use the NAICS code for a newly manufactured product. Concerns performing major rebuilding or
  overhaul activities do not necessarily have to meet the criteria for being a ``manufacturer'' although the
  activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are
  not considered rebuilding.
 * * * * * * *
\11\ NAICS code 541713, 541714, and 541715--
(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.
 * * * * * * *

[[Page 10009]]

 
\14\ NAICS 562910--Environmental Remediation Services:
(a) For SBA assistance as a small business concern in the industry of Environmental Remediation Services, other
  than for Government procurement, a concern must be engaged primarily in furnishing a range of services for the
  remediation of a contaminated environment to an acceptable condition including, but not limited to,
  preliminary assessment, site inspection, testing, remedial investigation, feasibility studies, remedial
  design, containment, remedial action, removal of contaminated materials, storage of contaminated materials and
  security and site closeouts. If one of such activities accounts for 50 percent or more of a concern's total
  revenues, employees, or other related factors, the concern's primary industry is that of the particular
  industry and not the Environmental Remediation Services Industry.
(b) For purposes of classifying a Government procurement as Environmental Remediation Services, the general
  purpose of the procurement must be to restore or directly support the restoration of a contaminated
  environment (such as, preliminary assessment, site inspection, testing, remedial investigation, feasibility
  studies, remedial design, remediation services, containment, removal of contaminated materials, storage of
  contaminated materials or security and site closeouts), although the general purpose of the procurement need
  not necessarily include remedial actions. Also, the procurement must be composed of activities in three or
  more separate industries with separate NAICS codes or, in some instances (e.g., engineering), smaller sub-
  components of NAICS codes with separate, distinct size standards. These activities may include, but are not
  limited to, separate activities in industries such as: Heavy Construction; Specialty Trade Contractors;
  Engineering Services; Architectural Services; Management Consulting Services; Hazardous and Other Waste
  Collection; Remediation Services, Testing Laboratories; and Research and Development in the Physical,
  Engineering and Life Sciences. If any activity in the procurement can be identified with a separate NAICS
  code, or component of a code with a separate distinct size standard, and that industry accounts for 50 percent
  or more of the value of the entire procurement, then the proper size standard is the one for that particular
  industry, and not the Environmental Remediation Service size standard.
 * * * * * * *


Isabella Casillas Guzman,
Administrator.
[FR Doc. 2023-02780 Filed 2-14-23; 8:45 am]
BILLING CODE 8026-09-P