Small Business Size Standards for Manufacturing

SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

RIN 3245-AG50

Small Business Size Standards for Manufacturing

AGENCY:

U.S. Small Business Administration.

ACTION:

Proposed rule.

SUMMARY:

The U.S. Small Business Administration (SBA) proposes to increase small business size standards for 209 industries in North American Industry Classification System (NAICS) Sector 31-33, Manufacturing. SBA also proposes to increase the refining capacity component of the Petroleum Refiners (NAICS 324110) size standard to 200,000 barrels per calendar day total capacity for businesses that are primarily engaged in petroleum refining. In addition, SBA proposes to eliminate the requirement that 90 percent of output being delivered is refined by the bidder. As part of its ongoing comprehensive size standards review, SBA evaluated employee based size standards for all 364 industries in NAICS Sector 31-33 to determine whether they should be retained or revised. This proposed rule is one of a series of proposed rules that will review size standards of industries grouped by NAICS Sector.

DATES:

SBA must receive comments to this proposed rule on or before November 10, 2014.

ADDRESSES:

Identify your comments by RIN 3245-AG50 and submit them by one of the following methods:

(1)

Federal eRulemaking Portal: www.regulations.gov,

following the instructions for submitting comments; or

(2)

Mail/Hand Delivery/Courier:

Khem R. Sharma, Ph.D., Chief, Size Standards Division, 409 Third Street SW., Mail Code 6530, Washington, DC 20416. SBA will not accept comments to this proposed rule submitted by email.

SBA will post all comments to this proposed rule on

www.regulations.gov.

If you wish to submit confidential business information (CBI) as defined in the User Notice at

www.regulations.gov,

you must submit such information to U.S. Small Business Administration, Khem R. Sharma, Ph.D., Chief, Size Standards Division, 409 Third Street SW., Mail Code 6530, Washington, DC 20416, or send an email to

sizestandards@sba.gov.

Highlight the information that you consider to be CBI and explain why you believe SBA should hold this information as confidential. SBA will review your information and determine whether it will make the information public.

FOR FURTHER INFORMATION CONTACT:

Jorge Laboy-Bruno, Ph.D., Economist, Size Standards Division, (202) 205-6618 or

sizestandards@sba.gov.

SUPPLEMENTARY INFORMATION:

To determine eligibility for Federal small business assistance, SBA establishes small business size definitions (referred to as size standards) for private sector industries in the United States. SBA uses two primary measures of business size—average annual receipts and average number of employees. SBA uses financial assets, electric output, and refining capacity to measure the size of a few specialized industries. In addition, SBA's Small Business Investment Company (SBIC), Certified Development Company (504), and 7(a) Loan Programs use either the industry based size standards, or net worth and net income based alternative size standards to determine eligibility for those programs. At the start of the SBA's current comprehensive size standards review when the size standards were based on NAICS 2007, there were 41 different size standards covering 1,141 NAICS industries and 18 sub-industry activities (“exceptions” in SBA's table of size standards). Thirty-one of these size levels were based on average annual receipts, seven were based on average number of employees, and three were based on other measures. Presently, under NAICS 2012, there are 28 different size standards covering 1,031 industries and 16 “exceptions”. Of these, 533 are based on average annual receipts, 509 on number of employees (one of which also contains barrels per day total capacity), and five on average assets.

Over the years, SBA has received comments that its size standards have not kept up with changes in the economy, in particular the changes in the Federal contracting marketplace and industry structure. The last time SBA conducted a comprehensive size standards review was during the late 1970s and early 1980s. Since then, most reviews of size standards were limited to a few specific industries, mostly with receipts based size standards, in response to requests from the public and Federal agencies. SBA reviews all monetary based size standards (except for statutorily set size standards in NAICS Sector 11) for inflation at least once every five years. SBA's latest inflation adjustment to size standards was published in the

Federal Register

on June 12, 2014 (79 FR 33647). However, the vast majority of manufacturing size standards have not been reviewed since they were first established.

Because of changes in the Federal marketplace and industry structure since the last comprehensive size standards review, SBA recognizes that current data may no longer support some of its existing size standards. Accordingly, in 2007, SBA began a comprehensive size standards review to determine if they are consistent with current data, and to adjust them when necessary. In addition, on September 27, 2010, the President of the United States signed the Small Business Jobs Act of 2010 (Jobs Act). The Jobs Act directs SBA to conduct a detailed review of all size standards and to make appropriate adjustments to reflect market conditions. Specifically, the Jobs Act requires SBA to conduct a detailed review of at least one-third of all size standards during every 18-month period from the date of its enactment. In addition, the Jobs Act requires that SBA review all size standards not less frequently than once every five years thereafter. Reviewing existing small business size standards and making appropriate adjustments based on the latest available data are also consistent with Executive Order 13563 on improving regulation and regulatory review.

Rather than review all size standards at one time, SBA is reviewing size standards on a Sector by Sector basis. A NAICS Sector generally includes 25 to 75 industries, except for NAICS Sector 31-33, Manufacturing, which has more than 350 industries. As stated above, this proposed rule covers all industries in NAICS Sector 31-33. Once SBA completes its review of size standards for industries in a NAICS Sector, it issues a proposed rule to revise size standards for those industries based on latest industry and program data available and other relevant factors, such as current economic climate and SBA's and other government's programs and policies to help small businesses.

Below is a discussion of SBA's size standards methodology for establishing employee based size standards that the Agency applied to this proposed rule, including analyses of industry structure, Federal contracting factor, the impact of the proposed revisions to size standards on SBA's financial assistance to small businesses, and the evaluation of whether a revised size standard would exclude dominant firms from being considered small.

Size Standards Methodology

In conjunction with the current comprehensive size standards review,

SBA developed a “Size Standards Methodology” for developing, reviewing, and modifying size standards when necessary. SBA published the document on its Web site at

www.sba.gov/size

for public review and comments, and has included it as a supporting document in the electronic docket of this proposed rule at

www.regulations.gov.

It should be noted that SBA does not apply all features of its “Size Standards Methodology” to all industries because not all features are appropriate for every industry. For example, since all industries in Sector 31-33 have employee based size standards, the methodology described in this proposed rule relates only to establishing employee based size standards. However, the methodology is available in its entirety for parties who have an interest in SBA's overall approach to establishing, evaluating, and modifying small business size standards. SBA always explains its methodology and analysis in individual proposed and final rules relating to size standards for specific industries.

SBA welcomes comments from the public on a number of issues concerning its “Size Standards Methodology,” that the Agency has applied in this proposed rule, such as whether there are other approaches to establishing and modifying size standards; whether there are alternative or additional factors that SBA should consider; whether SBA's approach to small business size standards makes sense in the current economic environment; whether SBA's use of anchor size standards is appropriate; whether there are gaps in SBA's methodology because the data it uses are not current or sufficiently comprehensive; and whether there are other data, facts, and/or issues that SBA should consider. Comments on SBA's size standards methodology should be submitted via: (1) The Federal eRulemaking Portal:

www.regulations.gov,

following the instructions for submitting comments; the docket number is SBA-2009-0008, or (2) Mail/Hand Delivery/Courier: Khem R. Sharma, Ph.D., Chief, Size Standards Division, 409 Third Street SW., Mail Code 6530, Washington, DC 20416. As it will do with comments to this and other proposed rules, SBA will post all comments on its methodology on

www.regulations.gov.

As of June 12, 2014, SBA has received 18 comments to its “Size Standards Methodology.” The comments are available to the public at

www.regulations.gov.

SBA continues to welcome comments on its methodology from interested parties. SBA will not accept comments to its “Size Standards Methodology” submitted by email.

Congress granted the SBA's Administrator discretion to establish detailed small business size standards. 15 U.S.C. 632(a)(2). Specifically, Section 3(a)(3) of the Small Business Act (15 U.S.C. 632(a)(3)) requires that “. . . the [SBA] Administrator shall ensure that the size standard varies from industry to industry to the extent necessary to reflect the differing characteristics of the various industries and consider other factors deemed to be relevant by the Administrator.” Accordingly, the economic structure of an industry is the basis for developing and modifying small business size standards. SBA identifies the small business segment of an industry by examining data on the economic characteristics defining the industry structure (as described below). In addition, SBA considers current economic conditions, its mission and program objectives, the Administration's current policies, suggestions from industry groups and Federal agencies, and public comments on the proposed rule. SBA also examines whether a size standard based on industry and other relevant data successfully excludes businesses that are dominant in the industry.

This proposed rule includes information regarding the factors SBA evaluated and the criteria it used to propose adjustments, where necessary, to size standards for industries covered by this rule. This proposed rule affords the public an opportunity to review and to comment on SBA's proposal to revise size standards for certain industries, as well as on the data and methodology it used to evaluate and revise the size standards.

Industry Analysis

For the current comprehensive size standards review, SBA has established three “base” or “anchor” size standards—$7.0 million in average annual receipts for industries that have receipts based size standards, 500 employees for Manufacturing and industries that have employee based size standards in non-manufacturing Sectors (except for Wholesale Trade and Retail Trade), and 100 employees for industries in the Wholesale and Retail Trade Sectors that have employee based size standards. SBA established 500 employees as the anchor size standard for manufacturing industries at its inception in 1953. Shortly thereafter, SBA established $1 million in average annual receipts as the anchor size standard for nonmanufacturing industries. SBA has periodically increased the receipts based anchor size standard for inflation, and today it is $7 million. Since 1986, the size standard for all industries in the Wholesale Trade Sector for SBA's financial assistance and for most Federal programs has been 100 employees. Presently, SBA also has employee based size standards for two industries in Retail Trade, namely NAICS 441110, New Car Dealers (200 employees) and NAICS 454310, Fuel Dealers (50 employees). However, NAICS codes for the Wholesale and Retail Trade Sectors and their size standards do not apply to Federal procurement programs. Rather, for Federal procurement the size standard for all industries in Wholesale Trade (NAICS Sector 42) and for all industries in Retail Trade (NAICS Sector 44-45) is 500 employees under the SBA's nonmanufacturer rule (13 CFR 121.406(b)).

These long-standing anchor size standards have stood the test of time and gained legitimacy through practice and general public acceptance. An anchor is neither a minimum nor a maximum size standard. It is a common size standard for a large number of industries that have similar economic characteristics and serves as a reference point in evaluating size standards for individual industries. SBA uses the anchor in lieu of trying to establish precise small business size standards for each industry. Otherwise, theoretically, the number of size standards might be as high as the number of industries for which SBA establishes size standards (i.e., more than 1,000). Furthermore, the data SBA analyzes are static, while the U.S. economy is not. Hence, absolute precision is impossible. Similarly, because of the disclosure problem in getting the distribution of firms by more granular size classes, the 2007 Economic Census tabulation (the latest available when this proposed rule was prepared) that SBA received from the U.S. Census Bureau for current size standards review would not allow an accurate regulatory impact analysis of size standards changes if precise, separate size standards were established for each industry. SBA presumes an anchor size standard is appropriate for a particular industry unless that industry displays economic characteristics that are considerably different from other industries with the same anchor size standard.

When evaluating a size standard, SBA compares the economic characteristics of the industry under review to the average characteristics of industries with one of the three anchor size standards (referred to as the “anchor comparison group”). This allows SBA to assess the industry structure and to

determine whether the industry is appreciably different from the other industries in the anchor comparison group. If the characteristics of a specific industry under review are similar to the average characteristics of the anchor comparison group, the anchor size standard is generally appropriate for that industry. SBA may consider adopting a size standard below the anchor when: (1) All or most of the industry characteristics are significantly smaller than the average characteristics of the anchor comparison group; or (2) other industry considerations strongly suggest that the anchor size standard would be an unreasonably high size standard for the industry.

If the specific industry's characteristics are significantly higher than those of the anchor comparison group, then a size standard higher than the anchor size standard may be appropriate. The larger the differences are between the characteristics of the industry under review and those in the anchor comparison group, the larger will be the difference between the appropriate industry size standard and the anchor size standard. To determine a size standard above the anchor size standard, SBA analyzes the characteristics of a second comparison group.

For industries with employee based size standards in manufacturing and industries not in Sector 42 (Wholesale Trade) or Sector 44-45 (Retail Trade), SBA has developed a second comparison group consisting of industries that have the highest of employee based size standards. To determine a size standard above the 500-employee anchor size standard, SBA analyzes the characteristics of this second comparison group. The industries in this group have size standards of either 1,000 employees or 1,500 employees; the weighted average size standard for the group is 1,323 employees. SBA refers to this comparison group as the “higher level employee based size standard group.”

To examine industry structure, SBA evaluates average firm size, startup costs and entry barriers, industry competition, and distribution of firms by size. SBA also evaluates the level and small business share of total Federal contracting dollars. These are, generally, the five primary factors SBA examines when establishing or revising a size standard for an industry. However, SBA will also consider and evaluate other information that it believes is relevant to a particular industry (such as technological changes, growth trends, SBA financial assistance, other program factors, etc.). SBA also considers possible impacts of size standard revisions on eligibility for Federal small business assistance, current economic conditions, the Administration's policies, and suggestions from industry groups and Federal agencies. Public comments on a proposed rule also provide important additional information. SBA thoroughly reviews all public comments before making a final decision on its proposed size standards. Below are brief descriptions of each of the five primary factors that SBA has evaluated for each industry and sub-industry covered by this proposed rule. A more detailed description of these factors is provided in SBA's “Size Standards Methodology,” available at

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

1.

Average firm size.

SBA computes two measures of average firm size: Simple average and weighted average. For industries with employee based size standards, the simple average firm size is the total number of employees in an industry divided by the total number of firms in that industry. The weighted average firm size is the sum of weighted simple average firm sizes in different employee size classes, where weights are the shares of total industry employees for respective employee size classes. The simple average firm size weighs all firms within an industry equally regardless of their size. The weighted average firm size overcomes that limitation by giving more weight to larger firms.

If the average firm size of an industry is significantly higher than the average firm size of industries in the anchor comparison industry group, this will generally support a size standard higher than the anchor size standard. Conversely, if the industry's average firm size is similar to or significantly lower than that of the anchor comparison industry group, it will be a basis to adopt the anchor size standard, or, in rare cases, a standard lower than the anchor.

2.

Startup costs and entry barriers.

Startup costs reflect a firm's initial size in an industry. New entrants to an industry must have sufficient capital and other assets to start and maintain a viable business. If new firms entering a particular industry have greater capital requirements than firms in industries in the anchor comparison group, this can be a basis for establishing a size standard higher than the anchor size standard. In lieu of actual startup cost data, SBA uses average assets as a proxy to measure the capital requirements for new entrants to an industry.

To calculate average assets, SBA begins with the sales to total assets ratio for an industry from the Risk Management Association's Annual eStatement Studies. SBA then applies these ratios to the average receipts of firms in that industry. An industry with average assets that are significantly higher than those of the anchor comparison group is likely to have higher startup costs; this in turn will support a size standard higher than the anchor. Conversely, an industry with average assets that are similar to or lower than those of the anchor comparison group is likely to have lower startup costs; this will support the anchor standard or one lower than the anchor.

3.

Industry competition.

Industry competition is generally measured by the share of total industry receipts generated by the largest firms in an industry. SBA generally evaluates the share of industry receipts generated by the four largest firms in each industry. This is referred to as the “four-firm concentration ratio,” a commonly used economic measure of market competition. If a significant share of economic activity within the industry is concentrated among a few relatively large companies, all else being equal, SBA will establish a size standard higher than the anchor size standard. SBA does not consider the four-firm concentration ratio as an important factor in assessing a size standard if its share of economic activity of the largest four firms within the industry is less than 40 percent. For an industry with a four-firm concentration ratio of 40 percent or more, SBA compares the average employee size of the four largest firms in the industry with the average employee size of the four largest firms in the anchor and higher level size comparison groups to determine an employee size standard for that industry.

4.

Distribution of firms by size.

For employee based size standards, SBA examines the shares of industry total receipts accounted for by firms of various employment size classes in an industry. This is an additional factor SBA examines in assessing industry competition. If most of an industry's economic activity is attributable to smaller firms, this generally indicates that small businesses are competitive in that industry. This can, generally, support adopting the anchor size standard. If most of an industry's economic activity is attributable to larger firms, this indicates that small businesses are not competitive in that industry. This can support adopting a size standard above the anchor.

Concentration is a measure of inequality of distribution. To determine the degree of inequality of distribution

in an industry, SBA computes the Gini coefficient by constructing the Lorenz curve. The Lorenz curve presents the cumulative percentages of units (firms) in various employee size classes along the horizontal axis and the cumulative percentages of receipts (or other measures of size) in the same employee size classes along the vertical axis. (For further detail, please refer to SBA's “Size Standards Methodology” on its Web site at

www.sba.gov/size.

) Gini coefficient values vary from zero to one. If receipts are distributed equally among all the firms in an industry, the value of the Gini coefficient will equal zero. If an industry's total receipts are attributed to a single firm, the Gini coefficient will equal one.

SBA compares the Gini coefficient value for an industry with that for industries in the anchor comparison group. If the Gini coefficient value for an industry is higher than it is for industries in the anchor comparison industry group this may, all else being equal, warrant a size standard higher than the anchor. Conversely, if an industry's Gini coefficient is similar to or lower than that for the anchor group, the anchor standard, or in some cases a standard lower than the anchor, may be adopted.

5.

Impact on Federal contracting and SBA loan programs.

SBA examines the possible impact a size standard change may have on Federal small business assistance. This most often focuses on the level and small business share of total Federal contracting dollars in the industry in question. In general, if the small business share of total Federal contracting dollars in an industry with significant Federal contracting is appreciably less than the small business share of the industry's total receipts, this could justify considering a size standard higher than the existing size standard. If the small business share of an industry's total Federal contracting dollars is similar to or higher than the small business share of its total receipts, this would support the existing size standard for that industry. By comparing the small business share in the Federal market with the small business share in the industry-wide market, SBA accounts for conditions in the Federal market in its size standards analysis. The disparity between the small business Federal market share and small business industry-wide share may be due to various factors, such as extensive administrative and compliance requirements associated with Federal contracts, the different skill set required for Federal contracts as compared to typical commercial contracting work, and the size of Federal contracts. Data permitting, SBA will also examine these, as well as other factors that are likely to influence the type of firms within an industry that compete for Federal contracts.

SBA considers the Federal contracting factor in an industry's size standards analysis only if the industry's total Federal contracting dollars average $100 million or more annually during the latest three fiscal years. SBA believes that this threshold reflects a significant level of contracting where a revision to a size standard may have an impact on contracting opportunities to small businesses. For industries where total contracting dollars average $100 million or more annually, SBA establishes a size standard higher than the existing size standard if the small business share of total industry receipts is 10 percent or higher than the small business share of total industry receipts. If this difference is less than 10 percent, this would support the existing size standard.

Besides the impact on small business Federal contracting, SBA also evaluates the impact of a proposed size standard revision on SBA's loan programs. For this, SBA examines the data on volume and number of its guaranteed loans within an industry and the size of firms obtaining those loans. This allows SBA to assess whether the existing, proposed, or revised size standard for a particular industry may restrict the level of financial assistance to small firms. If existing size standards are found to have impeded financial assistance to small businesses, higher size standards may be justified. However, if small businesses under existing size standards have been receiving significant amounts of financial assistance through SBA's loan programs, or if the financial assistance has been provided mainly to businesses that are much smaller than the existing size standards, SBA does not consider this factor when determining the size standard.

Sources of Industry and Program Data

SBA's primary source of industry data used in this proposed rule is a special tabulation of the 2007 Economic Census (see

www.census.gov/econ/census07/

) prepared by the U.S. Bureau of the Census (Census Bureau) for SBA. The 2007 Economic Census data are the latest Economic Census data available at the time of drafting this proposed rule. SBA expects to receive the special tabulation from the 2012 Economic Census in 2016 for the next round of comprehensive size standards review. The special tabulation provides SBA with data on the number of firms, number of establishments, number of employees, annual payroll, and annual receipts of companies by Industry (6-digit level), Industry Group (4-digit level), Subsector (3-digit level), and Sector (2-digit level). These data are arrayed by various classes of firms' size based on the overall number of employees and receipts of the entire enterprise (all establishments and affiliated firms) from all industries. The special tabulation enables SBA to evaluate average firm size, the four-firm concentration ratio, and distribution of firms by various receipts and employment size classes. It should be noted that the Economic Census tabulation data on the number of firms, number of establishments, number of employees, annual payroll, and annual receipts for a particular NAICS Industry category relate to establishments and firms that are primarily engaged in that Industry. To mitigate this limitation of the Economic Census tabulation data, SBA also examines the data from the System of Award Management (SAM) (formerly Central Contractor Registration (CCR)) and FPDS-NG which provides more recent data on Federal contract awards by NAICS code and the actual size of the concerns receiving the contract awards.

In some cases, where data were not available at the 6-digit industry level due to disclosure prohibitions in the Census Bureau's tabulation, SBA either estimates missing values using available relevant data or examines data at a higher level of industry aggregation, such as at the NAICS 2-digit (Sector), 3-digit (Subsector), or 4-digit (Industry Group) level. In some instances, SBA's analysis is based only on those factors for which data are available or estimates of missing values are possible.

To evaluate the refining capacity component of the size standard for NAICS 324110, Petroleum Refiners, SBA evaluated a special tabulation of refinery production data obtained from Energy Information Administration (EIA). SBA obtained the data on number of employees for petroleum refining companies in the EIA tabulation from Duns and Bradstreet (

www.dnb.com

) and those companies' SAM (CCR) profiles.

To calculate average assets, SBA used sales to total assets ratios from the Risk Management Association's Annual eStatement Studies, 2009-2011, available at

www.statementstudies.org.

To evaluate the Federal contracting factor, SBA examined the data from FPDS-NG for fiscal years 2009-2011, available at

https://www.fpds.gov

and 2007 Economic Census tabulation, which is the latest available as stated elsewhere in the rule.

To assess the impact on financial assistance to small businesses, SBA examined its internal data on 7(a) and 504 loan programs for fiscal years 2010-2012.

Data sources and estimation procedures SBA uses in its size standards analysis are documented in detail in SBA's “Size Standards Methodology” White Paper, which is available at

www.sba.gov/size.

Dominance in Field of Operation

Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) defines a small business concern as one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets a specific small business definition or size standard established by SBA's Administrator. SBA considers as part of its evaluation whether a business concern at a proposed or revised size standard would be dominant in its field of operation. For this, SBA generally examines the industry's market share of firms at the proposed or revised standard. SBA also examines distribution of firms by size to ensure that a contemplated size standard derived from its size standards analysis excludes the largest firms within an industry. Market share, the size distribution and other factors may indicate whether a firm can exercise a major controlling influence on a national basis in an industry where a significant number of business concerns are engaged. If a contemplated size standard includes dominant or the largest firms in an industry, SBA will consider a lower size standard than the one suggested by the analytical results to exclude the dominant and largest firms from being defined as small.

Selection of Size Standards

In NAICS Sector 31-33 (Manufacturing), currently there are four levels of employee based size standards: 500 employees (minimum), 750 employees, 1,000 employees, and 1,500 employees (maximum). In this proposed rule, SBA has applied its “Size Standards Methodology” for employee based size standards with two modifications. First, to be consistent with its policy of not lowering any size standards in all recent proposed and final rules on receipts based size standards, SBA is retaining the current 500-employee minimum and 1,500-employee maximum size standards for all industries in the Manufacturing Sector. In its “Size Standards Methodology,” SBA had proposed setting the minimum size standard for manufacturing industries at 250 employees and the maximum size standard at 1,000 employees. However, doing so would mean lowering existing size standards, thereby making currently small businesses ineligible to continue their participation in Federal small business programs. This would run counter to what SBA and the Administration are doing to help small businesses to create jobs and boost economic growth. Further, lowering a manufacturing size standard below 500 employees would conflict with the existing 500-employee size standard for non-manufacturers under the SBA's non-manufacturer's rule. Second, SBA is proposing a new 1,250-employee size standard between 1,000 employees and 1,500 employees. This new size standard level maintains the same 250-employee increment between the two successive levels that SBA has below 1,000 employees (500, 750, 1,000). SBA proposes, therefore, to apply one of these five employee based size standards to the analysis of size standards for industries in the Manufacturing Sector: 500 employees, 750 employees, 1,000 employees, 1,250 employees, and 1,500 employees.

To simplify size standards and for other reasons, SBA may propose a common size standard for closely related industries. Although the size standard analysis may support a separate size standard for each industry, SBA believes that establishing different size standards for closely related industries may not always be appropriate. For example, in cases where many of the same businesses operate in the same multiple industries, a common size standard for those industries might better reflect the Federal marketplace. This might also make size standards among related industries more consistent than separate size standards for each of those industries. Whenever SBA proposes a common size standard for closely related industries it will provide its justification.

Evaluation of Industry Structure

In this proposed rule, SBA evaluated 364 industries in NAICS Sectors 31-33 to assess the appropriateness of their current size standards. As described above, SBA compared data on the economic characteristics of each of those industries to the average characteristics of industries in two comparison groups. The first comparison group consists of all industries in Manufacturing and industries not in Wholesale Trade or Retail Trade with 500-employee size standards. SBA refers this group of industries to as the “employee based anchor comparison group.” Because the goal of SBA's review is to assess whether a specific industry's size standard should be the same as or different from the anchor size standard, this is the most logical group of industries to analyze. In addition, this group includes a sufficient number of firms to provide a meaningful assessment and comparison of industry characteristics.

As stated previously, if the characteristics of an industry are similar to the average characteristics of industries in the anchor comparison group, the anchor size standard is generally appropriate for that industry. If an industry's structure is significantly different from industries in the anchor group, a size standard lower or higher than the anchor size standard might be appropriate. The proposed new size standard is based on the difference between the characteristics of the anchor comparison group and a second industry comparison group. As described above, the second comparison group for employee based standards consists of industries with either 1,000-employee or 1,500-employee size standards. The weighted average size standard for this group is 1,323 employees. SBA refers this group of industries to as the “higher level employee based size standard comparison group.” SBA determines differences in industry structure between an industry under review and the industries in the two comparison groups by comparing data on each of the industry factors, including average firm size, average assets size, the four-firm concentration ratio, and the Gini coefficient of distribution of firms by size. Table 1, Average Characteristics of Employee Based Comparison Groups, shows the average firm size (both simple and weighted), average assets size, four-firm concentration ratio, average employees of the four largest firms, and the Gini coefficient for both anchor level and higher level comparison groups for employee based size standards.

Table 1—Average Characteristics of Employee Based Comparison Groups

Employee based

comparison group

Average firm size

(number of employees)

Simple

average

Weighted

average

Average assets size

($ million)

Four-firm

concentration ratio

(%)

Average

employees of four largest firms

*

Gini coefficient

Anchor Level

51

322

$6.4

35.9

1,267

0.765

Higher Level

136

602

37.0

64.3

2,033

0.808

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

Derivation of Size Standards Based on Industry Factors

For each industry factor in Table 1, Average Characteristics of Employee Based Comparison Groups, SBA derives a separate size standard based on the differences between the values for an industry under review and the values for the two comparison groups. If the industry value for a particular factor is near the corresponding factor for the anchor comparison group, the 500-employee anchor size standard is appropriate for that factor.

An industry factor significantly above or below the anchor comparison group will generally imply a size standard for that industry above or below the 500-employee anchor. The new size standard in these cases is based on the proportional difference between the industry value and the values for the two comparison groups.

For example, an industry's simple average firm size of 75 employees will support a 750-employee size standard. The 75-employee level is 28.2 percent between 51 employees for the anchor comparison group and 136 employees for the higher level comparison group ((75 employees − 51 employees) ÷ (136 employees − 51 employees) = 0.282 or 28.2%). This proportional difference is applied to the difference between the size standard of 500 employees for the anchor level size standard group and average size standard of 1,323 employees for the higher level size standard group and then added to 500 employees to estimate a size standard of 733 employees ([{1,323 employees − 500 employees} * 0.282] + 500 employees = 733 employees). The final step is to round the estimated 733-employee size standard to the nearest size standard level, which in this example is 750 employees.

SBA applies the above calculation to derive a size standard for each industry factor. Detailed formulas involved in these calculations are presented in SBA's “Size Standards Methodology” which is available on its Web site at

www.sba.gov/size.

As stated above, SBA has also included its “Size Standards Methodology” as a supporting document in the electronic docket of this proposed rule at

www.regulations.gov.

(However, it should be noted that figures in the “Size Standards Methodology” White Paper are based on 2002 Economic Census data and are different from those presented in this proposed rule. That is because when SBA prepared its “Size Standards Methodology,” the 2007 Economic Census data were not yet available). Table 2, Values of Industry Factors and Supported Size Standards, below, shows ranges of values for each industry factor and the levels of size standards supported by those values.

Table 2—Values of Industry Factors and Supported Size Standards

If

simple average firm size (number of

employees)

Or if

weighted average firm size (number of employees)

Or if

average

assets size

($ million)

Or if

average number employees of largest four firms

Or if

Gini coefficient

Then implied size standard

is (number of employees)

< 63.9

< 364.5

< 11.1

< 1,383.3

< 0.772

500

63.9 to < 89.7

364.5 to < 449.6

11.1 to < 20.3

1,383.3 to < 1,616.0

0.772 to < 0.785

750

89.7 to < 115.6

449.6 to < 534.6

20.3 to < 29.6

1,616.0 to < 1,848.7

0.785 to < 0.798

1,000

115.6 to < 141.4

534.6 to < 619.7

29.6 to < 38.9

1,848.7 to < 2,081.4

0.798 to < 0.811

1,250

≥ 141.4

≥ 619.7

≥ 38.9

≥ 2,081.4

≥ 0.811

1,500

Derivation of Size Standard Based on Federal Contracting Factor

Besides industry structure, SBA also evaluates Federal contracting data to assess the success of small businesses in getting Federal contracts under the existing size standards. For industries where Federal contract dollars average $100 million or more annually and the small business share of total Federal contracting dollars is 10 to 30 percent lower than the small business share of total industry receipts, SBA has designated a size standard one level higher than their current size standard. For industries where the small business share of total Federal contracting dollars is more than 30 percent lower than the small business share of total industry receipts, SBA has designated a size standard two levels higher than the current size standard. For industries, where this difference is less than 10 percent, SBA applies the existing size standard for the Federal contracting factor.

Because of the complex relationships among several variables affecting small business participation in the Federal marketplace, SBA has chosen not to designate a size standard for the Federal contracting factor alone that is more than two levels above the current size standard. SBA believes that a larger adjustment to size standards based on Federal contracting activity should be based on a more detailed analysis of the impact of any subsequent revision to the current size standard. In limited situations, however, SBA may conduct a more extensive examination of Federal contracting experience. This may support a different size standard than indicated by this general rule and take into consideration significant and unique aspects of small business competitiveness in the Federal contract market. SBA welcomes comments on its methodology for incorporating the Federal contracting factor in its size standard analysis and suggestions for

alternative methods and other relevant information on small business experience in the Federal contract market that SBA should consider.

When SBA adopted NAICS 2012 for its size standards, a number of industries under NAICS 2007 were merged to form new industries or combined with other existing industries. SBA adopted the highest size standard among the merged or combined industries under NAICS 2007 as the size standard for the new industry or modified industry under NAICS 2012. As a result, the size standard increased, effective October 1, 2012, for a number of industries in NAICS Sector 31-33. However, FPDS-NG data for fiscal years 2009-2011 that SBA analyzed to derive the Federal contracting factor were based on older size standards under NAICS 2007. Thus, for industries for which the size standard increased due to the adoption of NAICS 2012, the Federal contracting factor was based on the size standard that was on effect prior to October 1, 2012. Similarly, where multiple industries were merged to a new, single industry, the size standard for Federal contract factor for the new industry was the weighted average size standard of the merged industries prior to October 1, 2012, rounded to the nearest size level. The shares of contract dollars of individual merged industries served as the weights in computing the weighted average size standard.

Of the 364 industries reviewed in this proposed rule, 119 averaged $100 million or more annually in Federal contracting during fiscal years 2009-2011 and thus, the Federal contracting factor was significant for those industries. Of the 119 industries, the difference between the small business share of total industry receipts and small business share of Federal contracting dollars was less than 10 percent for 78 industries and in this proposed rule, SBA applied the existing size standard to each. This difference was between 10 and 30 percent for 29 industries for which a size standard one level higher than the existing size standard was applied. Finally, in 12 industries, this difference was more than 30 percent and a size standard that was two levels higher than the existing size standard was applied.

New Size Standards Based on Industry and Federal Contracting Factors

Table 3, Size Standards Supported by Each Factor for Each Industry (No. of Employees), below, shows the results of analyses of industry and Federal contracting factors for each industry covered by this proposed rule. Many NAICS industries in columns 2, 3, 4, 6, and 7 show two numbers. The upper number is the value for the industry factor shown on the top of the column and the lower number is the size standard supported by that factor. For the four-firm concentration ratio, SBA estimates a size standard only if its value is 40 percent or more. If the four-firm concentration ratio for an industry is less than 40 percent, SBA does not estimate a size standard for that factor. If the four-firm concentration ratio is 40 percent or more, SBA indicates in column 6 the average size of the industry's four largest firms together with a size standard based on that average. Column 9 shows a calculated new size standard for each industry. This is the average of the size standards supported by each factor, rounded to the nearest fixed size level. However, the size standards for the simple average and weighted average firm size are averaged together, and therefore receive a single weight. Analytical details involved in the averaging procedure are described in SBA's “Size Standard Methodology.” For comparison with the new standards, the current size standards are in column 10 of Table 3.

Table 3—Size Standards Supported by Each Factor for Each Industry (Number of Employees)

[Upper Value = Calculated Factor, Lower Value = Size Standard Supported]

NAICS code

NAICS industry title

Simple

average firm size

(number of employees)

Weighted average firm size

(number of employees)

Average assets size

($ million)

Four-firm ratio

%

Four-firm average size

(number of employees)

Gini

coefficient

Federal contract factor

(%)

Calculated size

standard

(number of employees)

Current size

standard

(number of employees)

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

311111 Dog and Cat Food Manufacturing

85

750

551

1,250

71.0

1,591

750

0.884

1,500

1,000

500

311119 Other Animal Food Manufacturing

29

500

146

500

$8.3

500

30.1

0.784

750

500

500

311211 Flour Milling

60

500

427

750

25.9

1,000

54.5

957

500

0.821

1,500

−14.9

750

1,000

500

311212 Rice Milling

66

750

256

500

45.6

419

500

0.693

500

500

500

311213 Malt Manufacturing

68

750

123

500

73.2

145

500

0.559

500

500

500

311221 Wet Corn Milling

248

1,500

1,101

1,500

83.8

1,384

750

0.823

1,500

1,250

750

311224 Soybean and Other Oilseed Processing

76

750

347

500

0.824

1,500

8.8

500

1,000

1,000

311225 Fats and Oils Refining and Blending

116

1,000

337

500

54.4

855

500

0.725

500

62.3

1,000

750

1,000

311230 Breakfast Cereal Manufacturing

392

1,500

1,214

1,500

80.4

1,817

1,000

0.754

500

1,000

1,000

311313 Beet Sugar Manufacturing

550

1,500

796

1,500

81.5

1,233

500

0.325

500

750

750

311314 Cane Sugar Manufacturing

227

1,500

430

750

0.567

500

1,000

750

311340 Nonchocolate Confectionery Manufacturing

44

500

329

500

38.2

0.840

1,500

1,000

500

311351 Chocolate and Confectionery Manufacturing from Cacao Beans

50

500

464

1,000

0.895

1,500

1,250

500

311352 Confectionery Manufacturing from Purchased Chocolate

29

500

485

1,000

4.0

500

0.913

1,500

1,000

500

311411 Frozen Fruit, Juice, and Vegetable Manufacturing

231

1,500

911

1,500

45.3

1,500

41.1

3,213

1,500

0.737

500

22.3

500

1,000

500

311412 Frozen Specialty Food Manufacturing

150

1,500

879

1,500

16.6

750

29.4

0.819

1,500

1,250

500

311421 Fruit and Vegetable Canning

102

1,000

656

1,500

20.6

1,000

24.4

0.831

1,500

6.8

500

1,000

500

311422 Specialty Canning

139

1,250

970

1,500

75.9

1,664

1,000

0.876

1,500

1,250

1,000

311423 Dried and Dehydrated Food Manufacturing

101

1,000

388

750

20.6

1,000

35.9

0.720

500

750

500

311511 Fluid Milk Manufacturing

196

1,500

896

1,500

35.2

1,250

46.0

6,316

1,500

0.774

750

29.6

500

1,000

500

311512 Creamery Butter Manufacturing

67

750

145

500

30.1

1,250

78.9

225

500

0.589

500

750

500

311513 Cheese Manufacturing

121

1,250

729

1,500

34.7

1,250

31.5

0.818

1,500

−0.7

500

1,250

500

311514 Dry, Condensed, and Evaporated Dairy Product Manufacturing

108

1,000

403

750

41.9

1,195

500

0.726

500

750

500

311520 Ice Cream and Frozen Dessert Manufacturing

53

500

445

750

12.1

750

52.7

1,818

1,000

0.863

1,500

1,000

500

311611 Animal (except Poultry) Slaughtering

96

1,000

7,661

1,500

12.2

750

59.4

20,844

1,500

0.953

1,500

18.3

500

1,000

500

311612 Meat Processed from Carcasses

85

750

936

1,500

9.1

500

27.9

0.848

1,500

1,000

500

311613 Rendering and Meat Byproduct Processing

78

750

517

1,000

10.3

500

42.8

974

500

0.691

500

750

500

311615 Poultry Processing

749

1,500

7,247

1,500

57.4

1,500

45.7

26,713

1,500

0.875

1,500

−3.6

500

1,250

500

311710 Seafood Product Preparation and Packaging

69

750

547

1,250

7.9

500

0.786

1,000

750

500

311811 Retail Bakeries

9

500

27

500

0.2

500

3.7

0.396

500

500

500

311812 Commercial Bakeries

61

500

1,180

1,500

4.5

500

37.3

0.886

1,500

−12.6

750

1,000

500

311813 Frozen Cakes, Pies, and Other Pastries Manufacturing

96

1,000

322

500

32.4

0.753

500

750

500

311821 Cookie and Cracker Manufacturing

100

1,000

1,267

1,500

14.8

750

69.3

3,372

1,500

0.918

1,500

1,250

750

311824 Dry Pasta, Dough, and Flour Mixes Manufacturing from Purchased Flour

50

500

242

500

0.781

750

750

500

311830 Tortilla Manufacturing

48

500

932

1,500

57.4

1,726

1,000

0.850

1,500

1,250

500

311911 Roasted Nuts and Peanut Butter Manufacturing

74

750

346

500

13.9

750

33.5

0.727

500

750

500

311919 Other Snack Food Manufacturing

113

1,000

986

1,500

24.5

1,000

71.1

3,695

1,500

0.905

1,500

1,250

500

311920 Coffee and Tea Manufacturing

38

500

270

500

9.3

500

43.3

677

500

0.867

1,500

750

500

311930 Flavoring Syrup and Concentrate Manufacturing

45

500

222

500

29.1

1,000

80.3

583

500

0.896

1,500

1,000

500

311941 Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing

53

500

304

500

9.7

500

36.2

0.801

1,250

750

500

311942 Spice and Extract Manufacturing

58

500

222

500

12.7

750

29.6

0.743

500

500

500

311991 Perishable Prepared Food Manufacturing

56

500

280

500

5.4

500

27.8

0.775

750

500

500

311999 All Other Miscellaneous Food Manufacturing

43

500

262

500

5.7

500

18.7

0.761

500

−29.0

750

500

500

312111 Soft Drink Manufacturing

207

1,500

1,599

1,500

76.6

1,500

58.1

5,557

1,500

0.861

1,500

6.0

500

1,250

500

312112 Bottled Water Manufacturing

43

500

552

1,250

12.4

750

71.9

1,528

750

0.891

1,500

57.1

500

1,000

500

312113 Ice Manufacturing

16

500

555

1,250

63.6

703

500

0.720

500

750

500

312120 Breweries

60

500

4,594

1,500

33.4

1,250

89.5

3,929

1,500

0.942

1,500

1,250

500

312130 Wineries

18

500

357

500

9.6

500

42.3

1,753

1,000

0.845

1,500

1,000

500

312140 Distilleries

110

1,000

690

1,500

69.5

1,225

500

0.867

1,500

1,000

750

312230 Tobacco Manufacturing

245

1,500

978

1,500

195.8

1,500

0.840

1,500

−5.0

1,000

1,500

1,000

313110 Fiber, Yarn, and Thread Mills

133

1,250

1,041

1,500

15.1

750

0.832

1,500

1,250

500

313210 Broadwoven Fabric Mills

79

750

482

1,000

8.5

500

22.2

0.806

1,250

1,000

1,000

313220 Narrow Fabric Mills and Schiffli Machine Embroidery

36

500

146

500

2.1

500

0.720

500

500

500

313230 Nonwoven Fabric Mills

94

1,000

352

500

45.3

1,443

750

0.774

750

750

500

313240 Knit Fabric Mills

45

500

227

500

0.724

500

500

500

313310 Textile and Fabric Finishing Mills

33

500

211

500

3.0

500

0.758

500

500

1,000

313320 Fabric Coating Mills

49

500

120

500

7.1

500

21.6

0.599

500

500

1,000

314110 Carpet and Rug Mills

137

1,250

1,779

1,500

24.9

1,000

63.6

4,751

1,500

0.905

1,500

1,500

500

314120 Curtain and Linen Mills

18

500

194

500

1.2

500

0.802

1,250

750

500

314910 Textile Bag and Canvas Mills

15

500

96

500

0.9

500

0.658

500

−13.7

750

500

500

314994 Rope, Cordage, Twine, Tire Cord, and Tire Fabric Mills

49

500

286

500

0.821

1,500

1,000

1,000

314999 All Other Miscellaneous Textile Product Mills

17

500

152

500

1.0

500

20.7

0.765

500

−23.6

750

500

500

315110 Hosiery and Sock Mills

75

750

415

750

5.3

500

0.795

1,000

750

500

315190 Other Apparel Knitting Mills

28

500

138

500

2.8

500

0.791

1,000

750

500

315210 Cut and Sew Apparel Contractors

13

500

73

500

0.4

500

0.488

500

−64.0

1,000

750

500

315220 Men's and Boys' Cut and Sew Apparel Manufacturing

50

500

416

750

2.7

500

0.817

1,500

−5.1

500

750

500

315240 Women's, Girls', and Infants' Cut and Sew Apparel Manufacturing

26

500

225

500

2.9

500

0.794

1,000

750

500

315280 Other Cut and Sew Apparel Manufacturing

25

500

129

500

1.3

500

0.747

500

−41.2

1,000

750

500

315990 Apparel Accessories and Other Apparel Manufacturing

19

500

205

500

0.9

500

0.773

750

−8.3

500

500

500

316110 Leather and Hide Tanning and Finishing

19

500

110

500

2.6

500

38.5

0.751

500

500

500

316210 Footwear Manufacturing

55

500

550

1,250

0.827

1,500

7.8

500

1,000

1,000

316992 Women's Handbag and Purse Manufacturing

18

500

173

500

85.9

251

500

0.886

1,500

750

500

316998 All Other Leather Good and Allied Product Manufacturing

21

500

184

500

0.739

500

500

500

321113 Sawmills

27

500

272

500

4.2

500

14.6

0.765

500

500

500

321114 Wood Preservation

32

500

211

500

6.4

500

31.1

0.722

500

500

500

321211 Hardwood Veneer and Plywood Manufacturing

66

750

408

750

6.3

500

30.4

0.683

500

500

500

321212 Softwood Veneer and Plywood Manufacturing

244

1,500

1,313

1,500

55.7

2,684

1,500

0.747

500

1,250

500

321213 Engineered Wood Member (except Truss) Manufacturing

58

500

383

750

64.0

892

500

0.802

1,250

750

500

321214 Truss Manufacturing

45

500

214

500

2.6

500

14.3

0.643

500

500

500

321219 Reconstituted Wood Product Manufacturing

115

1,000

384

750

27.7

0.682

500

750

500

321911 Wood Window and Door Manufacturing

59

500

776

1,500

4.4

500

32.6

0.837

1,500

1,000

500

321912 Cut Stock, Resawing Lumber, and Planning

30

500

139

500

3.5

500

16.3

0.681

500

500

500

321918 Other Millwork (including Flooring)

21

500

156

500

1.6

500

18.6

0.725

500

500

500

321920 Wood Container and Pallet Manufacturing

22

500

196

500

1.0

500

11.3

0.590

500

500

500

321991 Manufactured Home (Mobile Home) Manufacturing

179

1,500

1,995

1,500

14.8

750

47.7

4,539

1,500

0.824

1,500

64.6

500

1,250

500

321992 Prefabricated Wood Building Manufacturing

35

500

228

500

3.0

500

21.9

0.736

500

500

500

321999 All Other Miscellaneous Wood Product Manufacturing

19

500

107

500

1.5

500

0.706

500

500

500

322110 Pulp Mills

242

1,500

652

1,500

53.9

874

500

0.534

500

750

750

322121 Paper (except Newsprint) Mills

559

1,500

2,866

1,500

155.0

1,500

49.8

7,418

1,500

0.824

1,500

−1.6

750

1,250

750

322122 Newsprint Mills

307

1,500

517

1,000

58.1

651

500

0.393

500

750

750

322130 Paperboard Mills

476

1,500

1,367

1,500

193.7

1,500

45.8

3,598

1,500

0.685

500

1,250

750

322211 Corrugated and Solid Fiber Box Manufacturing

118

1,250

2,033

1,500

15.5

750

40.7

8,642

1,500

0.852

1,500

1,250

500

322212 Folding Paperboard Box Manufacturing

115

1,000

587

1,250

16.0

750

33.5

0.732

500

750

750

322219 Other Paperboard Container Manufacturing

87

750

485

1,000

11.1

750

0.813

1,500

1,000

750

322220 Paper Bag and Coated and Treated Paper Manufacturing

83

750

269

500

13.6

750

0.723

500

11.4

500

750

500

322230 Stationery Product Manufacturing

68

750

438

750

6.8

500

0.801

1,250

750

500

322291 Sanitary Paper Product Manufacturing

151

1,500

716

1,500

43.7

1,500

62.2

1,838

1,000

0.812

1,500

1,500

500

322299 All Other Converted Paper Product Manufacturing

40

500

138

500

5.0

500

20.5

0.697

500

500

500

323111 Commercial Printing (except Screen and Books)

20

500

266

500

1.6

500

0.780

750

500

500

323113 Commercial Screen Printing

15

500

106

500

0.8

500

12.2

0.695

500

500

500

323117 Books Printing

59

500

851

1,500

5.1

500

42.5

3,177

1,500

0.832

1,500

1,250

500

323120 Support Activities for Printing

20

500

146

500

1.1

500

0.718

500

500

500

324110 Petroleum Refineries

662

1,500

2,356

1,500

1,849.6

1,500

47.5

6,459

1,500

0.746

500

0.1

1,500

1,250

1,500

324121 Asphalt Paving Mixture and Block Manufacturing

34

500

109

500

11.9

750

21.8

0.662

500

500

500

324122 Asphalt Shingle and Coating Materials Manufacturing

92

1,000

480

1,000

67.0

1,755

1,000

0.769

500

750

750

324191 Petroleum Lubricating Oil and Grease Manufacturing

29

500

96

500

12.6

750

42.5

348

500

0.814

1,500

750

500

324199 All Other Petroleum and Coal Products Manufacturing

34

500

129

500

15.7

750

45.5

173

500

0.596

500

500

500

325110 Petrochemical Manufacturing

243

1,500

577

1,250

79.6

1,362

500

0.696

500

750

1,000

325120 Industrial Gas Manufacturing

115

1,000

599

1,250

67.6

1,335

500

0.832

1,500

7.9

1,000

1,000

1,000

325130 Synthetic Dye and Pigment Manufacturing

81

750

324

500

0.742

500

750

1,000

325180 Other Basic Inorganic Chemical Manufacturing

91

1,000

298

500

37.0

1,250

0.734

500

11.5

1,000

1,000

1,000

325193 Ethyl Alcohol Manufacturing

45

500

156

500

72.7

1,500

25.3

0.485

500

750

1,000

325194 Cyclic Crude, Intermediate, and Gum and Wood Chemical Manufacturing

77

750

323

500

86.9

1,500

0.803

1,250

1,250

750

325199 All Other Basic Organic Chemical Manufacturing

125

1,250

474

1,000

98.1

1,500

32.0

0.773

750

1,250

1,000

325211 Plastics Material and Resin Manufacturing

88

750

356

500

52.8

1,500

31.8

0.834

1,500

1,250

750

325212 Synthetic Rubber Manufacturing

73

750

239

500

43.0

763

500

0.703

500

500

1,000

325220 Artificial and Synthetic Fibers and Filaments Manufacturing

161

1,500

612

1,250

0.739

500

1,000

1,000

325311 Nitrogenous Fertilizer Manufacturing

29

500

151

500

21.4

1,000

61.4

364

500

0.785

1,000

750

1,000

325312 Phosphatic Fertilizer Manufacturing

123

1,250

643

1,500

82.9

1,093

500

0.725

500

750

500

325314 Fertilizer (Mixing Only) Manufacturing

24

500

85

500

6.6

500

29.6

0.687

500

500

500

325320 Pesticide and Other Agricultural Chemical Manufacturing

53

500

254

500

33.6

1,250

58.2

805

500

0.835

1,500

1,000

500

325411 Medicinal and Botanical Manufacturing

64

750

382

750

16.3

750

53.5

1,730

1,000

0.828

1,500

−26.8

1,000

1,000

750

325412 Pharmaceutical Preparation Manufacturing

208

1,500

1,611

1,500

124.8

1,500

34.5

0.897

1,500

−7.4

750

1,250

750

325413 In-Vitro Diagnostic Substance Manufacturing

144

1,500

876

1,500

48.6

1,784

1,000

0.857

1,500

9.3

500

1,250

500

Table 3—Size Standards Supported by Each Factor for Each Industry (Number of Employees)

[Upper Value = Calculated Factor, Lower Value = Size Standard Supported]

NAICS code

NAICS industry title

Simple

average firm size

(number of employees)

Weighted average firm size

(number of employees)

Average assets size

($ million)

Four-firm ratio

%

Four-firm average size

(number of employees)

Gini

coefficient

Federal contract factor

(%)

Calculated size

standard

(number of employees)

Current size

standard

(number of employees)

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

325414 Biological Product (except Diagnostic) Manufacturing

147

1,500

746

1,500

51.9

2,461

1,500

0.830

1,500

0.8

500

1,250

500

325510 Paint and Coating Manufacturing

37

500

395

750

9.9

500

38.9

0.868

1,500

1,000

500

325520 Adhesive Manufacturing

50

500

161

500

11.0

500

23.2

0.742

500

500

500

325611 Soap and Other Detergent Manufacturing

35

500

465

1,000

18.9

750

67.1

1,619

1,000

0.859

1,500

−13.1

1,000

1,000

750

325612 Polish and Other Sanitation Good Manufacturing

36

500

231

500

8.7

500

60.2

1,235

500

0.850

1,500

750

500

325613 Surface Active Agent Manufacturing

48

500

192

500

60.5

510

500

0.812

1,500

750

500

325620 Toilet Preparation Manufacturing

74

750

576

1,250

26.9

1,000

49.9

2,568

1,500

0.879

1,500

1,250

500

325910 Printing Ink Manufacturing

51

500

296

500

8.9

500

49.9

1,045

500

0.765

500

500

500

325920 Explosives Manufacturing

117

1,250

402

750

52.2

757

500

0.650

500

−20.2

1,000

750

750

325991 Custom Compounding of Purchased Resins

43

500

178

500

9.5

500

27.6

0.749

500

500

500

325992 Photographic Film, Paper, Plate, and Chemical Manufacturing

67

750

1,623

1,500

67.6

4,055

1,500

0.942

1,500

1,500

500

325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing

34

500

147

500

7.2

500

18.9

0.761

500

−17.9

750

500

500

326111 Plastics Bag and Pouch Manufacturing

93

1,000

404

750

12.6

750

26.5

0.762

500

750

500

326112 Plastics Packaging Film and Sheet (including Laminated) Manufacturing

92

1,000

347

500

17.0

750

48.5

2,364

1,500

0.733

500

1,000

500

326113 Unlaminated Plastics Film and Sheet (except Packaging) Manufacturing

73

750

267

500

12.2

750

19.3

0.746

500

750

500

326121 Unlaminated Plastics Profile Shape Manufacturing

49

500

167

500

6.5

500

29.2

0.739

500

500

500

326122 Plastics Pipe and Pipe Fitting Manufacturing

83

750

243

500

16.1

750

30.8

0.679

500

750

500

326130 Laminated Plastics Plate, Sheet (except Packaging), and Shape Manufacturing

53

500

241

500

7.6

500

34.5

0.760

500

500

500

326140 Polystyrene Foam Product Manufacturing

81

750

571

1,250

10.5

500

45.9

2,624

1,500

0.803

1,250

1,000

500

326150 Urethane and Other Foam Product (except Polystyrene) Manufacturing

74

750

395

750

28.0

0.774

750

750

500

326160 Plastics Bottle Manufacturing

186

1,500

883

1,500

33.4

1,250

46.3

3,257

1,500

0.796

1,000

1,250

500

326191 Plastics Plumbing Fixture Manufacturing

53

500

399

750

4.2

500

32.2

0.796

1,000

750

500

326199 All Other Plastics Product Manufacturing

67

750

366

750

6.7

500

0.780

750

750

750

326211 Tire Manufacturing (except Retreading)

552

1,500

6,344

1,500

77.6

9,879

1,500

0.895

1,500

7.4

1,000

1,500

1,000

326212 Tire Retreading

21

500

137

500

1.6

500

28.2

0.641

500

500

500

326220 Rubber and Plastics Hoses and Belting Manufacturing

100

1,000

471

1,000

12.4

750

38.6

0.738

500

750

500

326291 Rubber Product Manufacturing for Mechanical Use

86

750

412

750

8.9

500

25.5

0.777

750

750

500

326299 All Other Rubber Product Manufacturing

52

500

160

500

6.4

500

26.9

0.744

500

500

500

327110 Pottery, Ceramics, and Plumbing Fixture Manufacturing

22

500

263

500

0.846

1,500

1,000

750

327120 Clay Building Material and Refractories Manufacturing

59

500

314

500

10.0

500

0.769

500

500

750

327211 Flat Glass Manufacturing

519

1,500

1,086

1,500

78.3

1,500

68.9

1,586

750

0.571

500

1,000

1,000

327212 Other Pressed and Blown Glass and Glassware Manufacturing

48

500

656

1,500

34.4

0.895

1,500

1,250

750

327213 Glass Container Manufacturing

641

1,500

2,038

1,500

87.1

3,040

1,500

0.709

500

1,250

750

327215 Glass Product Manufacturing Made of Purchased Glass

41

500

584

1,250

4.1

500

29.8

0.870

1,500

1,000

500

327310 Cement Manufacturing

120

1,250

626

1,500

40.8

1,721

1,000

0.770

500

1,000

750

327320 Ready-Mix Concrete Manufacturing

44

500

368

750

8.9

500

22.6

0.764

500

500

500

327331 Concrete Block and Brick Manufacturing

42

500

236

500

9.2

500

32.3

0.694

500

500

500

327332 Concrete Pipe Manufacturing

69

750

460

1,000

13.2

750

54.0

1,328

500

0.745

500

750

500

327390 Other Concrete Product Manufacturing

35

500

213

500

3.6

500

19.2

0.760

500

500

500

327410 Lime Manufacturing

108

1,000

507

1,000

69.0

673

500

0.624

500

750

500

327420 Gypsum Product Manufacturing

68

750

1,272

1,500

73.6

2,108

1,500

0.901

1,500

1,500

1,000

327910 Abrasive Product Manufacturing

49

500

424

750

8.7

500

58.4

1,348

500

0.824

1,500

750

500

327991 Cut Stone and Stone Product Manufacturing

16

500

57

500

1.1

500

6.9

0.525

500

500

500

327992 Ground or Treated Mineral and Earth Manufacturing

41

500

101

500

43.7

374

500

0.698

500

500

500

327993 Mineral Wool Manufacturing

96

1,000

889

1,500

55.3

2,210

1,500

0.841

1,500

1,500

750

327999 All Other Miscellaneous Nonmetallic Mineral Product Manufacturing

29

500

271

500

6.2

500

40.8

898

500

0.743

500

500

500

331110 Iron and Steel Mills and Ferroalloy Manufacturing

425

1,500

2,108

1,500

199.2

1,500

0.798

1,250

1,500

1,000

331210 Iron and Steel Pipe and Tube Manufacturing from Purchased Steel

162

1,500

299

500

36.5

1,250

34.2

0.536

500

1,000

1,000

331221 Rolled Steel Shape Manufacturing

87

750

165

500

26.5

1,000

30.8

0.545

500

750

1,000

331222 Steel Wire Drawing

70

750

246

500

11.4

750

25.2

0.710

500

750

1,000

331313 Alumina Refining and Primary Aluminum Production

234

1,500

656

1,500

0.686

500

1,000

1,000

331314 Secondary Smelting and Alloying of Aluminum

69

750

306

500

24.1

1,000

54.8

776

500

0.716

500

750

750

331315 Aluminum Sheet, Plate, and Foil Manufacturing

197

1,500

1,462

1,500

70.5

2,445

1,500

0.866

1,500

3.6

750

1,250

750

331318 Other Aluminum Rolling, Drawing, and Extruding

120

1,250

378

750

18.7

750

0.700

500

750

750

331410 Nonferrous Metal (except Aluminum) Smelting and Refining

61

500

259

500

0.823

1,500

1,000

1,000

331420 Copper Rolling, Drawing, Extruding, and Alloying

132

1,250

408

750

55.1

1,500

0.751

500

−16.6

1,000

1,000

1,000

331491 Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding

65

750

281

500

17.8

750

48.5

1,545

750

0.784

750

−11.0

1,000

750

750

331492 Secondary Smelting, Refining, and Alloying of Nonferrous Metal (except Copper and Aluminum)

54

500

153

500

14.0

750

28.2

0.617

500

500

750

331511 Iron Foundries

128

1,250

675

1,500

16.3

750

29.4

0.768

500

1,000

500

331512 Steel Investment Foundries

145

1,500

631

1,500

61.9

2,055

1,250

0.752

500

1,000

500

331513 Steel Foundries (except Investment)

86

750

343

500

9.0

500

30.5

0.742

500

500

500

331523 Nonferrous Metal Die-Casting Foundries

84

750

335

500

9.9

500

0.744

500

500

500

331524 Aluminum Foundries (except Die-Casting)

47

500

242

500

4.2

500

27.5

0.778

750

500

500

331529 Other Nonferrous Metal Foundries (except Die-Casting)

35

500

137

500

3.5

500

0.688

500

500

500

332111 Iron and Steel Forging

64

750

230

500

11.3

750

20.8

0.719

500

750

500

332112 Nonferrous Forging

128

1,250

421

750

51.5

687

500

0.672

500

750

500

332114 Custom Roll Forming

51

500

152

500

36.9

0.732

500

500

500

332117 Powder Metallurgy Part Manufacturing

76

750

204

500

8.4

500

37.5

0.656

500

500

500

332119 Metal Crown, Closure, and Other Metal Stamping (except Automotive)

41

500

131

500

4.3

500

0.676

500

500

500

332215 Metal Kitchen Cookware, Utensil, Cutlery, and Flatware (except Precious) Manufacturing

44

500

221

500

9.0

500

0.806

1,250

750

500

332216 Saw Blade and Handtool Manufacturing

35

500

240

500

4.2

500

0.791

1,000

14.3

500

750

500

332311 Prefabricated Metal Building and Component Manufacturing

42

500

386

750

4.5

500

27.6

0.787

1,000

3.5

500

750

500

332312 Fabricated Structural Metal Manufacturing

34

500

196

500

4.5

500

10.4

0.726

500

−21.9

750

500

500

332313 Plate Work Manufacturing

28

500

92

500

2.8

500

8.6

0.640

500

−68.5

1,000

750

500

332321 Metal Window and Door Manufacturing

65

750

385

750

5.3

500

12.7

0.788

1,000

750

500

332322 Sheet Metal Work Manufacturing

29

500

135

500

2.4

500

7.4

0.693

500

500

500

332323 Ornamental and Architectural Metal Work Manufacturing

17

500

127

500

1.5

500

15.9

0.707

500

500

500

332410 Power Boiler and Heat Exchanger Manufacturing

84

750

296

500

27.2

0.665

500

−43.5

1,000

750

500

332420 Metal Tank (Heavy Gauge) Manufacturing

60

500

228

500

17.4

0.700

500

−42.8

1,000

750

500

332431 Metal Can Manufacturing

281

1,500

1,425

1,500

76.5

3,349

1,500

0.824

1,500

1,500

1,000

332439 Other Metal Container Manufacturing

40

500

177

500

5.2

500

28.8

0.717

500

−10.4

750

500

500

332510 Hardware Manufacturing

56

500

400

750

7.6

500

24.1

0.813

1,500

14.0

500

750

500

332613 Spring Manufacturing

49

500

271

500

5.6

500

0.749

500

500

500

332618 Other Fabricated Wire Product Manufacturing

30

500

119

500

2.9

500

9.6

0.700

500

500

500

332710 Machine Shops

13

500

50

500

0.9

500

1.7

0.590

500

500

500

332721 Precision Turned Product Manufacturing

30

500

85

500

2.5

500

4.3

0.601

500

500

500

332722 Bolt, Nut, Screw, Rivet, and Washer Manufacturing

54

500

302

500

7.0

500

21.1

0.732

500

−20.8

750

500

500

332811 Metal Heat Treating

36

500

149

500

4.2

500

26.2

0.692

500

500

750

332812 Metal Coating, Engraving (except Jewelry and Silverware), and Allied Services to Manufacturers

24

500

102

500

3.0

500

22.0

0.768

500

500

500

332813 Electroplating, Plating, Polishing, Anodizing, and Coloring

23

500

70

500

1.4

500

10.5

0.624

500

500

500

332911 Industrial Valve Manufacturing

100

1,000

462

1,000

14.2

750

27.1

0.781

750

750

500

332912 Fluid Power Valve and Hose Fitting Manufacturing

111

1,000

654

1,500

16.1

750

38.9

0.798

1,250

1,000

500

332913 Plumbing Fixture Fitting and Trim Manufacturing

92

1,000

627

1,500

19.1

750

58.1

1,171

500

0.820

1,500

1,000

500

332919 Other Metal Valve and Pipe Fitting Manufacturing

71

750

211

500

11.5

750

17.9

0.668

500

750

500

332991 Ball and Roller Bearing Manufacturing

234

1,500

994

1,500

40.7

1,500

58.9

3,423

1,500

0.800

1,250

30.8

750

1,250

750

332992 Small Arms Ammunition Manufacturing

93

1,000

935

1,500

79.3

1,886

1,250

0.878

1,500

−11.6

1,250

1,250

1,000

332993 Ammunition (except Small Arms) Manufacturing

151

1,500

585

1,250

80.2

795

500

0.808

1,250

−17.6

1,500

1,250

1,500

332994 Small Arms, Ordnance, and Ordnance Accessories Manufacturing

54

500

518

1,000

0.855

1,500

−17.7

1,000

1,000

1,000

332996 Fabricated Pipe and Pipe Fitting Manufacturing

44

500

164

500

4.9

500

24.1

0.715

500

500

500

332999 All Other Miscellaneous Fabricated Metal Product Manufacturing

22

500

88

500

2.3

500

0.674

500

−34.1

1,000

750

750

333111 Farm Machinery and Equipment Manufacturing

50

500

681

1,500

11.1

750

59.0

4,290

1,500

0.899

1,500

1,250

500

333112 Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing

142

1,500

1,010

1,500

33.5

1,250

71.1

3,059

1,500

0.860

1,500

1,500

500

333120 Construction Machinery Manufacturing

99

1,000

1,086

1,500

36.6

1,250

53.6

5,741

1,500

0.890

1,500

−9.5

750

1,250

750

333131 Mining Machinery and Equipment Manufacturing

51

500

310

500

9.1

500

38.0

0.747

500

500

500

333132 Oil and Gas Field Machinery and Equipment Manufacturing

86

750

709

1,500

21.2

1,000

32.4

0.837

1,500

1,250

500

333241 Food Product Machinery Manufacturing

36

500

127

500

5.1

500

0.681

500

500

500

333242 Semiconductor Machinery Manufacturing

122

1,250

871

1,500

0.861

1,500

1,500

500

333243 Sawmill, Woodworking, and Paper Machinery Manufacturing

31

500

204

500

4.3

500

0.721

500

500

500

333244 Printing Machinery and Equipment Manufacturing

32

500

177

500

4.0

500

0.708

500

−55.6

1,000

750

500

333249 Other Industrial Machinery Manufacturing

30

500

115

500

3.9

500

0.704

500

−20.7

750

500

500

333314 Optical Instrument and Lens Manufacturing

42

500

204

500

5.5

500

26.9

0.761

500

−11.4

750

500

500

333316 Photographic and Photocopying Equipment Manufacturing

43

500

300

500

7.9

500

29.9

0.820

1,500

−5.8

1,000

1,000

1,000

333318 Other Commercial and Service Industry Machinery Manufacturing

46

500

274

500

0.781

750

−22.2

750

750

1,000

333413 Industrial and Commercial Fan and Blower and Air Purification Equipment Manufacturing

61

500

244

500

5.9

500

0.714

500

500

500

333414 Heating Equipment (except Warm Air Furnaces) Manufacturing

49

500

202

500

6.4

500

21.1

0.732

500

500

500

333415 Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing

139

1,250

1,352

1,500

18.7

750

39.3

0.868

1,500

28.5

750

1,250

750

333511 Industrial Mold Manufacturing

21

500

63

500

1.6

500

4.6

0.586

500

500

500

333514 Special Die and Tool, Die Set, Jig, and Fixture Manufacturing

17

500

67

500

1.5

500

11.9

0.647

500

500

500

333515 Cutting Tool and Machine Tool Accessory Manufacturing

20

500

143

500

1.9

500

19.2

0.696

500

500

500

333517 Machine Tool Manufacturing

52

500

230

500

7.2

500

0.695

500

24.9

500

500

500

333519 Rolling Mill and Other Metalworking Machinery Manufacturing

32

500

101

500

4.4

500

0.638

500

500

500

333611 Turbine and Turbine Generator Set Units Manufacturing

159

1,500

920

1,500

68.4

3,126

1,500

0.823

1,500

−6.9

1,000

1,500

1,000

333612 Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing

68

750

273

500

9.6

500

29.5

0.725

500

−30.7

1,000

750

500

333613 Mechanical Power Transmission Equipment Manufacturing

79

750

330

500

12.0

750

26.9

0.716

500

22.8

500

750

500

333618 Other Engine Equipment Manufacturing

169

1,500

1,217

1,500

55.9

4,909

1,500

0.869

1,500

33.1

1,000

1,500

1,000

333911 Pump and Pumping Equipment Manufacturing

76

750

382

750

14.2

750

30.5

0.797

1,000

14.7

500

750

500

333912 Air and Gas Compressor Manufacturing

84

750

419

750

19.5

750

26.8

0.808

1,250

1,000

500

333913 Measuring and Dispensing Pump Manufacturing

121

1,250

404

750

72.7

653

500

0.745

500

750

500

333921 Elevator and Moving Stairway Manufacturing

55

500

440

750

56.1

1,028

500

0.813

1,500

1,000

500

333922 Conveyor and Conveying Equipment Manufacturing

44

500

167

500

5.1

500

17.0

0.672

500

500

500

333923 Overhead Traveling Crane, Hoist, and Monorail System Manufacturing

81

750

768

1,500

13.0

750

62.5

2,738

1,500

0.852

1,500

1,250

500

333924 Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing

70

750

411

750

12.1

750

40.2

1,743

1,000

0.789

1,000

−9.3

750

750

750

333991 Power-Driven Handtool Manufacturing

56

500

431

750

45.2

674

500

0.771

500

500

500

333992 Welding and Soldering Equipment Manufacturing

55

500

1,042

1,500

11.4

750

55.7

1,897

1,250

0.855

1,500

1,250

500

333993 Packaging Machinery Manufacturing

36

500

135

500

4.4

500

24.0

0.696

500

500

500

333994 Industrial Process Furnace and Oven Manufacturing

36

500

179

500

3.9

500

21.8

0.659

500

500

500

333995 Fluid Power Cylinder and Actuator Manufacturing

74

750

341

500

43.3

1,582

750

0.788

1,000

750

500

333996 Fluid Power Pump and Motor Manufacturing

101

1,000

715

1,500

69.1

2,002

1,250

0.825

1,500

1,250

500

333997 Scale and Balance Manufacturing

41

500

264

500

51.9

408

500

0.735

500

500

500

333999 All Other Miscellaneous General Purpose Machinery Manufacturing

29

500

144

500

3.7

500

15.9

0.723

500

−11.9

750

500

500

334111 Electronic Computer Manufacturing

88

750

1,322

1,500

46.4

1,500

86.9

6,047

1,500

0.946

1,500

21.7

1,000

1,250

1,000

334112 Computer Storage Device Manufacturing

143

1,500

1,450

1,500

75.6

2,068

1,250

0.883

1,500

−3.4

1,000

1,250

1,000

334118 Computer Terminal and Other Computer Peripheral Equipment Manufacturing

52

500

376

750

9.2

500

31.0

0.818

1,500

−6.4

1,000

1,000

1,000

334210 Telephone Apparatus Manufacturing

95

1,000

462

1,000

29.9

1,250

60.5

2,244

1,500

0.853

1,500

8.3

1,000

1,250

1,000

334220 Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

113

1,000

1,170

1,500

30.2

1,250

45.2

7,609

1,500

0.889

1,500

−5.5

750

1,250

750

334290 Other Communications Equipment Manufacturing

41

500

273

500

6.0

500

43.6

1,339

500

0.806

1,250

−26.2

1,000

750

750

334310 Audio and Video Equipment Manufacturing

34

500

377

750

7.5

500

40.5

953

500

0.763

500

30.9

750

500

750

334412 Bare Printed Circuit Board Manufacturing

57

500

385

750

4.5

500

36.7

0.777

750

−34.6

1,000

750

500

334413 Semiconductor and Related Device Manufacturing

168

1,500

1,372

1,500

55.4

1,500

55.7

11,153

1,500

0.899

1,500

45.9

500

1,250

500

334416 Capacitor, Resistor, Coil, Transformer, and Other Inductor Manufacturing

55

500

244

500

4.0

500

0.710

500

500

500

334417 Electronic Connector Manufacturing

119

1,250

485

1,000

13.0

750

48.8

2,190

1,500

0.764

500

−13.3

750

1,000

500

334418 Printed Circuit Assembly (Electronic Assembly) Manufacturing

84

750

436

750

33.3

0.801

1,250

−7.7

500

750

500

334419 Other Electronic Component Manufacturing

46

500

211

500

4.4

500

0.744

500

−47.4

1,250

750

750

334510 Electromedical and Electrotherapeutic Apparatus Manufacturing

119

1,250

909

1,500

26.6

1,000

35.0

0.863

1,500

−3.7

500

1,250

500

334511 Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

300

1,500

5,370

1,500

61.6

1,500

47.0

18,216

1,500

0.919

1,500

−1.5

750

1,250

750

334512 Automatic Environmental Control Manufacturing for Residential, Commercial, and Appliance Use

46

500

288

500

4.4

500

38.6

0.779

750

500

500

334513 Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables

46

500

287

500

6.8

500

30.4

0.807

1,250

7.9

500

750

500

334514 Totalizing Fluid Meter and Counting Device Manufacturing

67

750

324

500

14.2

750

44.1

1,006

500

0.801

1,250

750

500

334515 Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

53

500

312

500

9.0

500

37.9

0.820

1,500

15.1

500

750

500

334516 Analytical Laboratory Instrument Manufacturing

66

750

396

750

13.8

750

32.3

0.835

1,500

6.0

500

1,000

500

334517 Irradiation Apparatus Manufacturing

76

750

588

1,250

58.2

1,398

750

0.845

1,500

5.9

500

1,000

500

334519 Other Measuring and Controlling Device Manufacturing

37

500

183

500

6.4

500

0.766

500

−1.5

500

500

500

334613 Blank Magnetic and Optical Recording Media Manufacturing

54

500

1,092

1,500

84.7

1,121

500

0.889

1,500

1,000

1,000

334614 Software and Other Prerecorded Compact Disc, Tape, and Record Reproducing

34

500

519

1,000

0.819

1,500

1,250

750

335110 Electric Lamp Bulb and Part Manufacturing

136

1,250

1,057

1,500

75.4

1,497

750

0.848

1,500

1,250

1,000

335121 Residential Electric Lighting Fixture Manufacturing

30

500

320

500

3.5

500

46.1

847

500

0.814

1,500

750

500

335122 Commercial, Industrial, and Institutional Electric Lighting Fixture Manufacturing

56

500

373

750

5.9

500

32.0

0.763

500

500

500

335129 Other Lighting Equipment Manufacturing

54

500

243

500

7.1

500

21.6

0.749

500

500

500

335210 Small Electrical Appliance Manufacturing

104

1,000

579

1,250

0.816

1,500

1,500

750

335221 Household Cooking Appliance Manufacturing

145

1,500

1,611

1,500

72.3

2,734

1,500

0.870

1,500

1,500

750

335222 Household Refrigerator and Home Freezer Manufacturing

735

1,500

2,956

1,500

91.6

3,010

1,500

0.764

500

1,250

1,000

335224 Household Laundry Equipment Manufacturing

746

1,500

3,165

1,500

98.3

2,549

1,500

0.768

500

1,250

1,000

335228 Other Major Household Appliance Manufacturing

310

1,500

1,116

1,500

63.6

1,614

750

0.744

500

1,000

500

335311 Power, Distribution, and Specialty Transformer Manufacturing

88

750

493

1,000

13.7

750

39.9

0.771

500

22.0

750

750

750

335312 Motor and Generator Manufacturing

98

1,000

587

1,250

15.0

750

34.3

0.837

1,500

−7.3

1,000

1,250

1,000

335313 Switchgear and Switchboard Apparatus Manufacturing

87

750

840

1,500

11.6

750

47.0

3,373

1,500

0.862

1,500

12.4

750

1,250

750

335314 Relay and Industrial Control Manufacturing

41

500

267

500

5.5

500

31.1

0.805

1,250

750

750

335911 Storage Battery Manufacturing

240

1,500

1,819

1,500

65.7

3,305

1,500

0.850

1,500

25.7

500

1,250

500

335912 Primary Battery Manufacturing

134

1,250

572

1,250

88.0

837

500

0.773

750

750

1,000

335921 Fiber Optic Cable Manufacturing

65

750

294

500

64.3

569

500

0.710

500

500

1,000

335929 Other Communication and Energy Wire Manufacturing

109

1,000

398

750

36.6

0.749

500

−19.8

1,250

1,000

1,000

335931 Current-Carrying Wiring Device Manufacturing

79

750

303

500

7.5

500

20.4

0.742

500

500

500

335932 Noncurrent-Carrying Wiring Device Manufacturing

119

1,250

537

1,250

37.6

0.783

750

1,000

500

335991 Carbon and Graphite Product Manufacturing

71

750

335

500

41.2

660

500

0.782

750

750

750

335999 All Other Miscellaneous Electrical Equipment and Component Manufacturing

45

500

188

500

5.5

500

19.6

0.763

500

−18.6

750

500

500

336111 Automobile Manufacturing

376

1,500

6,539

1,500

286.4

1,500

67.6

9,705

1,500

0.945

1,500

2.2

1,000

1,500

1,000

336112 Light Truck and Utility Vehicle Manufacturing

1,285

1,500

8,271

1,500

84.3

16,270

1,500

0.857

1,500

4.7

1,000

1,500

1,000

336120 Heavy Duty Truck Manufacturing

360

1,500

2,029

1,500

65.5

4,526

1,500

0.822

1,500

14.0

1,000

1,500

1,000

336211 Motor Vehicle Body Manufacturing

66

750

411

750

7.5

500

23.6

0.787

1,000

−14.9

1,250

1,000

1,000

336212 Truck Trailer Manufacturing

78

750

688

1,500

7.8

500

42.4

2,364

1,500

0.806

1,250

−32.9

1,000

1,000

500

336213 Motor Home Manufacturing

247

1,500

1,226

1,500

52.7

1,958

1,250

0.804

1,250

1,250

1,000

336214 Travel Trailer and Camper Manufacturing

65

750

650

1,500

4.5

500

40.4

3,444

1,500

0.810

1,250

−37.4

1,000

1,000

500

336310 Motor Vehicle Gasoline Engine and Engine Parts Manufacturing

67

750

809

1,500

0.914

1,500

45.5

500

1,000

750

336320 Motor Vehicle Electrical and Electronic Equipment Manufacturing

97

1,000

707

1,500

13.0

750

0.852

1,500

11.3

750

1,000

750

336330 Motor Vehicle Steering and Suspension Components (except Spring) Manufacturing

162

1,500

641

1,500

32.7

0.771

500

1,000

750

336340 Motor Vehicle Brake System Manufacturing

167

1,500

671

1,500

42.2

1,994

1,250

0.786

1,000

1,250

750

336350 Motor Vehicle Transmission and Power Train Parts Manufacturing

172

1,500

1,572

1,500

36.7

0.892

1,500

1,500

750

336360 Motor Vehicle Seating and Interior Trim Manufacturing

170

1,500

1,367

1,500

26.7

1,000

56.9

5,459

1,500

0.860

1,500

1,500

500

336370 Motor Vehicle Metal Stamping

148

1,500

718

1,500

24.3

1,000

33.2

0.756

500

1,000

500

336390 Other Motor Vehicle Parts Manufacturing

111

1,000

542

1,250

18.8

750

0.798

1,250

3.2

750

1,000

750

336411 Aircraft Manufacturing

815

1,500

7,782

1,500

81.3

33,731

1,500

0.901

1,500

0.1

1,500

1,500

1,500

336412 Aircraft Engine and Engine Parts Manufacturing

230

1,500

1,861

1,500

73.5

1,500

74.3

10,158

1,500

0.888

1,500

−7.3

1,000

1,500

1,000

336413 Other Aircraft Parts and Auxiliary Equipment Manufacturing

146

1,500

1,768

1,500

26.1

1,000

47.3

9,325

1,500

0.884

1,500

−6.3

1,000

1,250

1,000

336414 Guided Missile and Space Vehicle Manufacturing

3,525

1,500

7,103

1,500

94.8

11,710

1,500

0.522

500

−0.8

1,000

1,250

1,000

336415 Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing

938

1,500

2,829

1,500

97.1

3,871

1,500

0.682

500

0.5

1,000

1,250

1,000

336419 Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

158

1,500

602

1,250

66.5

1,250

500

0.718

500

−19.7

1,250

1,000

1,000

336510 Railroad Rolling Stock Manufacturing

164

1,500

935

1,500

53.0

1,500

49.4

2,757

1,500

0.814

1,500

1,500

1,000

336611 Ship Building and Repairing

162

1,500

4,868

1,500

16.5

750

60.5

14,610

1,500

0.899

1,500

−17.1

1,250

1,250

1,000

336612 Boat Building

51

500

1,271

1,500

6.2

500

35.0

0.857

1,500

22.3

500

1,000

500

336991 Motorcycle, Bicycle, and Parts Manufacturing

30

500

1,380

1,500

6.9

500

72.0

1,705

1,000

0.879

1,500

1,000

500

336992 Military Armored Vehicle, Tank, and Tank Component Manufacturing

264

1,500

1,538

1,500

81.8

2,674

1,500

0.857

1,500

−5.5

1,000

1,500

1,000

336999 All Other Transportation Equipment Manufacturing

39

500

730

1,500

7.7

500

57.2

1,657

1,000

0.904

1,500

51.2

500

1,000

500

337110 Wood Kitchen Cabinet and Countertop Manufacturing

15

500

899

1,500

0.8

500

30.4

0.752

500

750

500

337121 Upholstered Household Furniture Manufacturing

52

500

1,121

1,500

2.7

500

34.0

0.856

1,500

1,000

500

337122 Nonupholstered Wood Household Furniture Manufacturing

18

500

420

750

1.1

500

30.1

0.783

750

14.2

500

750

500

337124 Metal Household Furniture Manufacturing

37

500

349

500

44.4

1,047

500

0.812

1,500

750

500

337125 Household Furniture (except Wood and Metal) Manufacturing

21

500

439

750

2.6

500

67.0

455

500

0.867

1,500

750

500

337127 Institutional Furniture Manufacturing

46

500

168

500

3.5

500

13.1

0.697

500

500

500

337211 Wood Office Furniture Manufacturing

44

500

445

750

2.8

500

39.8

0.813

1,500

1,000

500

337212 Custom Architectural Woodwork and Millwork Manufacturing

22

500

61

500

1.1

500

5.1

0.575

500

500

500

337214 Office Furniture (except Wood) Manufacturing

111

1,000

1,302

1,500

14.1

750

64.7

3,581

1,500

0.898

1,500

8.5

500

1,000

500

337215 Showcase, Partition, Shelving, and Locker Manufacturing

34

500

183

500

2.6

500

15.7

0.756

500

20.8

500

500

500

337910 Mattress Manufacturing

50

500

636

1,500

5.7

500

51.3

2,026

1,250

0.847

1,500

1,000

500

337920 Blind and Shade Manufacturing

43

500

666

1,500

2.2

500

38.5

0.815

1,500

1,000

500

339112 Surgical and Medical Instrument Manufacturing

92

1,000

787

1,500

15.7

750

24.7

0.867

1,500

14.8

500

1,000

500

339113 Surgical Appliance and Supplies Manufacturing

58

500

529

1,000

8.7

500

30.3

0.877

1,500

14.6

500

750

500

339114 Dental Equipment and Supplies Manufacturing

22

500

341

500

3.3

500

34.6

0.853

1,500

750

500

339115 Ophthalmic Goods Manufacturing

46

500

594

1,250

6.0

500

42.5

1,595

750

0.882

1,500

1,000

500

339116 Dental Laboratories

8

500

160

500

0.2

500

18.0

0.553

500

500

500

339910 Jewelry and Silverware Manufacturing

15

500

185

500

1.9

500

0.784

750

500

500

339920 Sporting and Athletic Goods Manufacturing

27

500

305

500

3.8

500

27.0

0.838

1,500

27.0

500

750

500

339930 Doll, Toy, and Game Manufacturing

17

500

266

500

2.1

500

0.778

750

500

500

339940 Office Supplies (except Paper) Manufacturing

25

500

176

500

0.828

1,500

37.7

500

750

500

339950 Sign Manufacturing

14

500

105

500

0.9

500

6.7

0.693

500

500

500

339991 Gasket, Packing, and Sealing Device Manufacturing

61

500

335

500

6.3

500

26.9

0.774

750

500

500

339992 Musical Instrument Manufacturing

23

500

424

750

1.9

500

32.2

0.819

1,500

1,000

500

339993 Fastener, Button, Needle, and Pin Manufacturing

31

500

526

1,000

49.1

533

500

0.783

750

750

500

339994 Broom, Brush, and Mop Manufacturing

53

500

223

500

5.4

500

29.3

0.765

500

500

500

339995 Burial Casket Manufacturing

36

500

873

1,500

73.5

673

500

0.896

1,500

1,000

500

339999 All Other Miscellaneous Manufacturing

13

500

135

500

1.4

500

26.2

0.764

500

−20.8

750

500

500

Special Considerations: NAICS Code 324110 (Petroleum Refiners)

Footnote 4 of SBA's table of size standards (13 CFR 121.201) states that to qualify as a small business concern for purposes of Government procurement, the petroleum refiner must be a concern that has no more than 1,500 employees and no more than 125,000 barrels per calendar day total Operable Atmospheric Crude Oil Distillation capacity. In addition, the total product to be delivered under the small business contract must be at least 90 percent

refined by the successful bidder from either crude oil or bona fide feedstocks.

To determine if the current Petroleum Refiners size standard is appropriate, SBA analyzed current data on both total and aviation fuel capacity, as well as the number of employees of all refiners operating in the U.S. SBA also examined industry trends, and the Federal government's petroleum procurement needs. Based on this analysis, SBA proposes to increase the refining capacity component of the Petroleum Refiners (NAICS 324110) size standard from 125,000 barrels per calendar day (BPCD) total Operable Atmospheric Crude Oil Distillation capacity to 200,000 BPCD, and maintain the employee component at the current 1,500-employee level. Under the proposed size standard, for proposes of Federal procurement, a petroleum refiner can qualify as small under the 1,500-employee size standard or under the 200,000 BPCD capacity size standard. To qualify under the capacity size standard, the firm, together with its affiliates, must be primarily engaged in refining crude petroleum into refined petroleum products. The proposed increase to the capacity size standard would expand the pool of small refiners that produce aviation fuel.

Since the current regulation (limitations on subcontracting) already requires that a concern must perform at least 50 percent of the cost of contracts for the supplies or products (not including the costs of materials) (see 13 CFR 125.6), SBA is also proposing to remove the requirement that total product to be delivered under the small business contract must be at least 90 percent refined by the successful bidder from either crude oil or bona fide feedstocks. SBA has found this 90 percent requirement to be overly restrictive for small refiners to compete for government contracts. The removal of this requirement will make the limitations on subcontracting consistent across all contracts for manufactured products or supplies.

Given these changes, SBA also proposes to revise Footnote 4 of the SBA's table of size standards to read as follows:

“To qualify as small for purposes of Government procurement, the petroleum refiner, including its affiliates, must be a concern that has no more than 1,500 employees OR no more than 200,000 barrels per calendar day total Operable Atmospheric Crude Oil Distillation capacity. Capacity includes all domestic and foreign affiliates, owned or leased facilities, and facilities under a processing agreement or an arrangement such as an exchange agreement or a throughput. To qualify under the capacity size standard, the firm, together with its affiliates, must be primarily engaged in refining crude petroleum into refined petroleum products. A firm's “primary industry” is determined in accordance with 13 CFR 121.107.”

NAICS 326211, Tire Manufacturing (Except Retreading)

Footnote 5 to SBA size standards table currently includes Census Bureau's Product Classifications codes based on Standard Industry Classification (SIC) system: Namely 30111 (Passenger car pneumatic tires) and 30112 (Truck/bus tires, including off highway, pneumatic tires). To make them consistent with industry size standards that are based on NAICS, in this proposed rule, SBA amends Footnote 5 by replacing them with the Census Bureau's corresponding NAICS Product Classification codes 3262111 and 3262113, respectively. The amended Footnote 5 will read as follows:

5.

NAICS code 326211

—For Government procurement, a firm is small for bidding on a contract for pneumatic tires within Census NAICS Product Classification codes 3262111 and 3262113, provided that:

(a) The value of tires within Census NAICS Product Classification codes 3262113 which it manufactured in the United States during the previous calendar year is more than 50 percent of the value of its total worldwide manufacture,

(b) The value of pneumatic tires within Census NAICS Product Classification codes 3262113 comprising its total worldwide manufacture during the preceding calendar year was less than 5 percent of the value of all such tires manufactured in the United States during that period, and

(c) The value of the principal product which it manufactured or otherwise produced, or sold worldwide during the preceding calendar year is less than 10 percent of the total value of such products manufactured or otherwise produced or sold in the United States during that period.

Proposed Changes to Size Standards

As can be seen from Table 3, Size Standards Supported by Each Factor for Each Industry (No. of employees), the results might support increases in size standards for 209 industries, decreases for 19 industries and no changes for 136 industries.

However, SBA believes that lowering small business size standards is not in the best interest of small businesses in the current economic environment. The U.S. economy was in recession from December 2007 to June 2009, the longest and deepest of any recessions since before World War II. The economy lost more than eight million non-farm jobs during 2008-2009. In response, Congress passed and the President signed into law the American Recovery and Reinvestment Act of 2009 (Recovery Act) to promote economic recovery and to preserve and create jobs. Although the recession officially ended in June 2009, the unemployment rate is still high at 6.2 percent in July 2014 (

www.bls.gov

) and is forecast to remain around this level at least through the end of 2014 (

http://www.federalreserve.gov/monetarypolicy/mpr_20140211_part3.htm

).

In 2010, Congress passed and the President signed the Jobs Act to promote small business job creation. The Jobs Act puts more capital into the hands of entrepreneurs and small business owners; strengthens small businesses' ability to compete for contracts; includes recommendations from the President's Task Force on Federal Contracting Opportunities for Small Business; creates a better playing field for small businesses; promotes small business exporting, building on the President's National Export Initiative; expands training and counseling; and provides $12 billion in tax relief to help small businesses invest in their firms and create jobs. A proposal to reduce size standards will have an immediate impact on jobs, and it would be contrary to the expressed will of the President and the Congress.

Lowering size standards would decrease the number of firms that participate in Federal financial and procurement assistance programs for small businesses. It would also affect small businesses that are now exempt or receive some form of relief from other Federal regulations that use SBA's size standards. That impact could take the form of increased fees, paperwork, or other compliance requirements for small businesses. Furthermore, size standards based solely on analytical results without any other considerations can cut off currently eligible small firms from those programs and benefits. In the 19 industries for which analytical results might have supported lowering their size standards, about 60 businesses would lose their small business eligibility if their size standards were lowered. That would run counter to what SBA and the Federal government are doing to help small businesses and create jobs. Reducing size eligibility for Federal procurement opportunities, especially under current economic

conditions, would not preserve or create more jobs; rather, it would have the opposite effect. Therefore, in this proposed rule, SBA does not intend to reduce size standards for any industries. Accordingly, for industries where analyses might seem to support lowering size standards, SBA proposes to retain the current size standards.

Furthermore, as stated previously, the Small Business Act requires the SBA's Administrator to “. . . consider other factors deemed to be relevant . . .” to establishing small business size standards. The current economic conditions and the impact on job creation are quite relevant factors when establishing small business size standards. SBA nevertheless invites comments and suggestions on whether it should lower size standards as suggested by analyses of industry and program data or retain the current standards for those industries in view of current economic conditions.

As discussed above, lowering small business size standards is inconsistent with what the Federal government is doing to stimulate the economy and would discourage job growth for which Congress established the Recovery Act and Jobs Act. In addition, it would be inconsistent with the Small Business Act requiring the Administrator to establish size standards based on industry analysis and other relevant factors such as current economic conditions. Thus, of the 364 manufacturing industries reviewed in this rule, SBA proposes to increase size standards for 209 industries and retain the current size standards for 155 industries, including 19 for which the results might support lowering their size standards. The proposed size standards are in Table 4, Summary of Proposed Size Standards Revisions, below.

Table 4—Summary of Proposed Size Standards Revisions

NAICS code

NAICS U.S. industry title

Current size standard (number of employees)

Proposed size standard (number of employees)

311111

Dog and Cat Food Manufacturing

500

1,000

311211

Flour Milling

500

1,000

311221

Wet Corn Milling

750

1,250

311314

Cane Sugar Manufacturing

750

1,000

311340

Nonchocolate Confectionery Manufacturing

500

1,000

311351

Chocolate and Confectionery Manufacturing from Cacao Beans

500

1,250

311352

Confectionery Manufacturing from Purchased Chocolate

500

1,000

311411

Frozen Fruit, Juice, and Vegetable Manufacturing

500

1,000

311412

Frozen Specialty Food Manufacturing

500

1,250

311421

Fruit and Vegetable Canning

500

1,000

311422

Specialty Canning

1,000

1,250

311423

Dried and Dehydrated Food Manufacturing

500

750

311511

Fluid Milk Manufacturing

500

1,000

311512

Creamery Butter Manufacturing

500

750

311513

Cheese Manufacturing

500

1,250

311514

Dry, Condensed, and Evaporated Dairy Product Manufacturing

500

750

311520

Ice Cream and Frozen Dessert Manufacturing

500

1,000

311611

Animal (except Poultry) Slaughtering

500

1,000

311612

Meat Processed from Carcasses

500

1,000

311613

Rendering and Meat Byproduct Processing

500

750

311615

Poultry Processing

500

1,250

311710

Seafood Product Preparation and Packaging

500

750

311812

Commercial Bakeries

500

1,000

311813

Frozen Cakes, Pies, and Other Pastries Manufacturing

500

750

311821

Cookie and Cracker Manufacturing

750

1,250

311824

Dry Pasta, Dough, and Flour Mixes Manufacturing from Purchased Flour

500

750

311830

Tortilla Manufacturing

500

1,250

311911

Roasted Nuts and Peanut Butter Manufacturing

500

750

311919

Other Snack Food Manufacturing

500

1,250

311920

Coffee and Tea Manufacturing

500

750

311930

Flavoring Syrup and Concentrate Manufacturing

500

1,000

311941

Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing

500

750

312111

Soft Drink Manufacturing

500

1,250

312112

Bottled Water Manufacturing

500

1,000

312113

Ice Manufacturing

500

750

312120

Breweries

500

1,250

312130

Wineries

500

1,000

312140

Distilleries

750

1,000

312230

Tobacco Manufacturing

1,000

1,500

313110

Fiber, Yarn, and Thread Mills

500

1,250

313230

Nonwoven Fabric Mills

500

750

314110

Carpet and Rug Mills

500

1,500

314120

Curtain and Linen Mills

500

750

315110

Hosiery and Sock Mills

500

750

315190

Other Apparel Knitting Mills

500

750

315210

Cut and Sew Apparel Contractors

500

750

315220

Men's and Boys' Cut and Sew Apparel Manufacturing

500

750

315240

Women's, Girls', and Infants' Cut and Sew Apparel Manufacturing

500

750

315280

Other Cut and Sew Apparel Manufacturing

500

750

316992

Women's Handbag and Purse Manufacturing

500

750

321212

Softwood Veneer and Plywood Manufacturing

500

1,250

321213

Engineered Wood Member (except Truss) Manufacturing

500

750

321219

Reconstituted Wood Product Manufacturing

500

750

321911

Wood Window and Door Manufacturing

500

1,000

321991

Manufactured Home (Mobile Home) Manufacturing

500

1,250

322121

Paper (except Newsprint) Mills

750

1,250

322130

Paperboard Mills

750

1,250

322211

Corrugated and Solid Fiber Box Manufacturing

500

1,250

322219

Other Paperboard Container Manufacturing

750

1,000

322220

Paper Bag and Coated and Treated Paper Manufacturing

500

750

322230

Stationery Product Manufacturing

500

750

322291

Sanitary Paper Product Manufacturing

500

1,500

323117

Books Printing

500

1,250

324191

Petroleum Lubricating Oil and Grease Manufacturing

500

750

325194

Cyclic Crude, Intermediate, and Gum and Wood Chemical Manufacturing

750

1,250

325199

All Other Basic Organic Chemical Manufacturing

1,000

1,250

325211

Plastics Material and Resin Manufacturing

750

1,250

325312

Phosphatic Fertilizer Manufacturing

500

750

325320

Pesticide and Other Agricultural Chemical Manufacturing

500

1,000

325411

Medicinal and Botanical Manufacturing

750

1,000

325412

Pharmaceutical Preparation Manufacturing

750

1,250

325413

In-Vitro Diagnostic Substance Manufacturing

500

1,250

325414

Biological Product (except Diagnostic) Manufacturing

500

1,250

325510

Paint and Coating Manufacturing

500

1,000

325611

Soap and Other Detergent Manufacturing

750

1,000

325612

Polish and Other Sanitation Good Manufacturing

500

750

325613

Surface Active Agent Manufacturing

500

750

325620

Toilet Preparation Manufacturing

500

1,250

325992

Photographic Film, Paper, Plate, and Chemical Manufacturing

500

1,500

326111

Plastics Bag and Pouch Manufacturing

500

750

326112

Plastics Packaging Film and Sheet (including Laminated) Manufacturing

500

1,000

326113

Unlaminated Plastics Film and Sheet (except Packaging) Manufacturing

500

750

326122

Plastics Pipe and Pipe Fitting Manufacturing

500

750

326140

Polystyrene Foam Product Manufacturing

500

1,000

326150

Urethane and Other Foam Product (except Polystyrene) Manufacturing

500

750

326160

Plastics Bottle Manufacturing

500

1,250

326191

Plastics Plumbing Fixture Manufacturing

500

750

326211

Tire Manufacturing (except Retreading)

1,000

1,500

326220

Rubber and Plastics Hoses and Belting Manufacturing

500

750

326291

Rubber Product Manufacturing for Mechanical Use

500

750

327110

Pottery, Ceramics, and Plumbing Fixture Manufacturing

750

1,000

327212

Other Pressed and Blown Glass and Glassware Manufacturing

750

1,250

327213

Glass Container Manufacturing

750

1,250

327215

Glass Product Manufacturing Made of Purchased Glass

500

1,000

327310

Cement Manufacturing

750

1,000

327332

Concrete Pipe Manufacturing

500

750

327410

Lime Manufacturing

500

750

327420

Gypsum Product Manufacturing

1,000

1,500

327910

Abrasive Product Manufacturing

500

750

327993

Mineral Wool Manufacturing

750

1,500

331110

Iron and Steel Mills and Ferroalloy Manufacturing

1,000

1,500

331315

Aluminum Sheet, Plate, and Foil Manufacturing

750

1,250

331511

Iron Foundries

500

1,000

331512

Steel Investment Foundries

500

1,000

332111

Iron and Steel Forging

500

750

332112

Nonferrous Forging

500

750

332215

Metal Kitchen Cookware, Utensil, Cutlery, and Flatware (except Precious) Manufacturing

500

750

332216

Saw Blade and Handtool Manufacturing

500

750

332311

Prefabricated Metal Building and Component Manufacturing

500

750

332313

Plate Work Manufacturing

500

750

332321

Metal Window and Door Manufacturing

500

750

332410

Power Boiler and Heat Exchanger Manufacturing

500

750

332420

Metal Tank (Heavy Gauge) Manufacturing

500

750

332431

Metal Can Manufacturing

1,000

1,500

332510

Hardware Manufacturing

500

750

332911

Industrial Valve Manufacturing

500

750

332912

Fluid Power Valve and Hose Fitting Manufacturing

500

1,000

332913

Plumbing Fixture Fitting and Trim Manufacturing

500

1,000

332919

Other Metal Valve and Pipe Fitting Manufacturing

500

750

332991

Ball and Roller Bearing Manufacturing

750

1,250

332992

Small Arms Ammunition Manufacturing

1,000

1,250

333111

Farm Machinery and Equipment Manufacturing

500

1,250

333112

Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing

500

1,500

333120

Construction Machinery Manufacturing

750

1,250

333132

Oil and Gas Field Machinery and Equipment Manufacturing

500

1,250

333242

Semiconductor Machinery Manufacturing

500

1,500

333244

Printing Machinery and Equipment Manufacturing

500

750

333415

Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing

750

1,250

333611

Turbine and Turbine Generator Set Units Manufacturing

1,000

1,500

333612

Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing

500

750

333613

Mechanical Power Transmission Equipment Manufacturing

500

750

333618

Other Engine Equipment Manufacturing

1,000

1,500

333911

Pump and Pumping Equipment Manufacturing

500

750

333912

Air and Gas Compressor Manufacturing

500

1,000

333913

Measuring and Dispensing Pump Manufacturing

500

750

333921

Elevator and Moving Stairway Manufacturing

500

1,000

333923

Overhead Traveling Crane, Hoist, and Monorail System Manufacturing

500

1,250

333992

Welding and Soldering Equipment Manufacturing

500

1,250

333995

Fluid Power Cylinder and Actuator Manufacturing

500

750

333996

Fluid Power Pump and Motor Manufacturing

500

1,250

334111

Electronic Computer Manufacturing

1,000

1,250

334112

Computer Storage Device Manufacturing

1,000

1,250

334210

Telephone Apparatus Manufacturing

1,000

1,250

334220

Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

750

1,250

334412

Bare Printed Circuit Board Manufacturing

500

750

334413

Semiconductor and Related Device Manufacturing

500

1,250

334417

Electronic Connector Manufacturing

500

1,000

334418

Printed Circuit Assembly (Electronic Assembly) Manufacturing

500

750

334510

Electromedical and Electrotherapeutic Apparatus Manufacturing

500

1,250

334511

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

750

1,250

334513

Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables

500

750

334514

Totalizing Fluid Meter and Counting Device Manufacturing

500

750

334515

Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

500

750

334516

Analytical Laboratory Instrument Manufacturing

500

1,000

334517

Irradiation Apparatus Manufacturing

500

1,000

334614

Software and Other Prerecorded Compact Disc, Tape, and Record Reproducing

750

1,250

335110

Electric Lamp Bulb and Part Manufacturing

1,000

1,250

335121

Residential Electric Lighting Fixture Manufacturing

500

750

335210

Small Electrical Appliance Manufacturing

750

1,500

335221

Household Cooking Appliance Manufacturing

750

1,500

335222

Household Refrigerator and Home Freezer Manufacturing

1,000

1,250

335224

Household Laundry Equipment Manufacturing

1,000

1,250

335228

Other Major Household Appliance Manufacturing

500

1,000

335312

Motor and Generator Manufacturing

1,000

1,250

335313

Switchgear and Switchboard Apparatus Manufacturing

750

1,250

335911

Storage Battery Manufacturing

500

1,250

335932

Noncurrent-Carrying Wiring Device Manufacturing

500

1,000

336111

Automobile Manufacturing

1,000

1,500

336112

Light Truck and Utility Vehicle Manufacturing

1,000

1,500

336120

Heavy Duty Truck Manufacturing

1,000

1,500

336212

Truck Trailer Manufacturing

500

1,000

336213

Motor Home Manufacturing

1,000

1,250

336214

Travel Trailer and Camper Manufacturing

500

1,000

336310

Motor Vehicle Gasoline Engine and Engine Parts Manufacturing

750

1,000

336320

Motor Vehicle Electrical and Electronic Equipment Manufacturing

750

1,000

336330

Motor Vehicle Steering and Suspension Components (except Spring) Manufacturing

750

1,000

336340

Motor Vehicle Brake System Manufacturing

750

1,250

336350

Motor Vehicle Transmission and Power Train Parts Manufacturing

750

1,500

336360

Motor Vehicle Seating and Interior Trim Manufacturing

500

1,500

336370

Motor Vehicle Metal Stamping

500

1,000

336390

Other Motor Vehicle Parts Manufacturing

750

1,000

336412

Aircraft Engine and Engine Parts Manufacturing

1,000

1,500

336413

Other Aircraft Parts and Auxiliary Equipment Manufacturing

1,000

1,250

336414

Guided Missile and Space Vehicle Manufacturing

1,000

1,250

336415

Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing

1,000

1,250

336510

Railroad Rolling Stock Manufacturing

1,000

1,500

336611

Ship Building and Repairing

1,000

1,250

336612

Boat Building

500

1,000

336991

Motorcycle, Bicycle, and Parts Manufacturing

500

1,000

336992

Military Armored Vehicle, Tank, and Tank Component Manufacturing

1,000

1,500

336999

All Other Transportation Equipment Manufacturing

500

1,000

337110

Wood Kitchen Cabinet and Countertop Manufacturing

500

750

337121

Upholstered Household Furniture Manufacturing

500

1,000

337122

Nonupholstered Wood Household Furniture Manufacturing

500

750

337124

Metal Household Furniture Manufacturing

500

750

337125

Household Furniture (except Wood and Metal) Manufacturing

500

750

337211

Wood Office Furniture Manufacturing

500

1,000

337214

Office Furniture (except Wood) Manufacturing

500

1,000

337910

Mattress Manufacturing

500

1,000

337920

Blind and Shade Manufacturing

500

1,000

339112

Surgical and Medical Instrument Manufacturing

500

1,000

339113

Surgical Appliance and Supplies Manufacturing

500

750

339114

Dental Equipment and Supplies Manufacturing

500

750

339115

Ophthalmic Goods Manufacturing

500

1,000

339920

Sporting and Athletic Goods Manufacturing

500

750

339940

Office Supplies (except Paper) Manufacturing

500

750

339992

Musical Instrument Manufacturing

500

1,000

339993

Fastener, Button, Needle, and Pin Manufacturing

500

750

339995

Burial Casket Manufacturing

500

1,000

Maintaining current size standards when the analytical results suggested lowering them is consistent with SBA's recent final rules on NAICS Sector 44-45, Retail Trade (75 FR 61597 (October 6, 2010)); NAICS Sector 72, Accommodation and Food Services (75 FR 61604 (October 6, 2010)); NAICS Sector 81, Other Services (75 FR 61591 (October 6, 2010)); NAICS Sector 54, Professional, Scientific and Technical Services (77 FR 7490 (February 10, 2012)); NAICS Sector 48 49, Transportation and Warehousing (77 FR 10943 (February 24, 2012)); NAICS Sector 51, Information (77 FR 72702 (December 6, 2012)); NAICS Sector 53, Real Estate and Rental and Leasing (77 FR 88747 (September 24, 2012)); NAICS Sector 56, Administrative and Support, Waste Management and Remediation Services (77 FR 72691 (December 6, 2012)); NAICS Sector 61, Educational Services (77 FR 58739 (September 24, 2012)); and NAICS Sector 62, Health Care and Social Assistance (77 FR 58755 (September 24, 2012)); NAICS Sector 11, Agriculture, Forestry, Fishing and Hunting (78 FR 37398 (June 20, 2013)); NAICS Subsector 213, Support Activities for Mining (78 FR 37404 (June 20, 2013)); NAICS Sector 52, Finance and Insurance and Sector 55, Management of Companies and Enterprises (78 FR 37409 (June 20, 2013)); NAICS Sector 71, Arts, Entertainment and Recreation (78 FR 37417 (June 20, 2013)); and NAICS Sector 23, Construction (78 FR 77334 (December 23, 2013)). In each of those final rules, SBA retained the existing size standards for those that it could have reduced.

Evaluation of Dominance in Field of Operation

SBA has determined that for the industries for which it has proposed to increase size standards in this proposed rule, no individual firm at or below the proposed size standard will be large enough to dominate its field of operation. At the proposed size standards, if adopted, the small business share of total industry receipts among those industries for which SBA has proposed to increase their size standards is, on average, 1.7 percent, varying from a minimum of 0.02 percent to a maximum of 18.9 percent. These market shares effectively preclude a firm at or below the proposed size standards from exerting control on any of the industries.

Request for Comments

SBA invites public comments on this proposed rule, especially on the following issues:

1. SBA proposes five levels of employee based size standards for industries in Manufacturing and industries in other Sectors except for Wholesale Trade and Retail Trade that have employee based size standards: 500 employees, 750 employees, 1,000 employees, 1,250 employees, and 1,500 employees. SBA invites comments on whether these proposed size levels are appropriate and suggestions on alternative levels, if they would be more appropriate.

2. To be consistent with its policy of not lowering any size standards in all recent proposed and final rules on receipts based size standards in view of current economic conditions, SBA is retaining the current 500-employee minimum and 1,500-employee maximum size standards for all industries in the Manufacturing Sector and other industries not in the Wholesale and Retail Trade Sectors that have employee based size standards. In its “Size Standards Methodology,” available at

www.sba.gov/size,

SBA had proposed setting the minimum size standard for these industries at 250 employees and the maximum size standard at 1,000 employees. This would have resulted in lowering the existing employee based size standards for some industries. SBA invites comments on whether it should maintain the 500-employee minimum and the 1,500-employee maximum size standards or it lower them to 250 employees and 1,000 employees, respectively, as the Agency proposed in its “Size Standards Methodology.” SBA requests suggestions on alternative minimum and maximum levels, if they would be more appropriate.

3. SBA seeks feedback on whether it should adjust employee based size standards for labor productivity growth. SBA periodically increases receipts

based size standards for inflation. Should SBA take labor productivity growth and technological change into consideration when it reviews employee based standards? If so, what data are available to assist SBA in evaluating such factors? What if such an evaluation leads to lower size standards for some industries? How should SBA apply the results to its size standards decision?

4. SBA seeks feedback on whether its proposal to increase size standards for 209 industries and retain current size standards for 155 industries is appropriate, given the economic characteristics of each industry reviewed in this proposed rule. SBA also seeks feedback and suggestions on alternative size standards, if they would be more appropriate.

5. SBA has proposed to retain the current size standards for 19 industries for which the analytical results would support lowering them. SBA seeks comments on whether SBA should lower them solely based on its analysis or retain them at their current levels in view of current economic conditions.

6. SBA invites comments on its proposal to increase the capacity component of the Petroleum Refiners (NAICS 324110) size standard from 125,000 barrels per calendar day (BPCD) total Operable Atmospheric Crude Oil Distillation capacity to 200,000 BPCD and retain the employee component at the current 1,500-employee level. SBA also welcomes comments on its proposal to allow business concerns to qualify either under the 1,500-employee size standard or under the 200,000 BPCD capacity size standard, if they, together with affiliates, are primarily engaged in petroleum refining. Finally, SBA also seeks feedback on its proposal to eliminate the requirement that “[t]he total product to be delivered under the contract must be at least 90 percent refined by the successful bidder from either crude oil or bona fide feedstocks.”

7. SBA's proposed size standards are based on five primary factors—average firm size, average assets size (as a proxy of startup costs and entry barriers), four-firm concentration ratio, distribution of firms by size and, the level and small business share of Federal contracting dollars of the evaluated industries and sub-industries. SBA welcomes comments on these factors and/or suggestions on other factors that it should consider when evaluating or revising employee based size standards. SBA also seeks information on relevant data sources, other than what it uses, if available.

8. SBA gives equal weight to each of the five primary factors in all industries. SBA seeks feedback on whether it should continue giving equal weight to each factor or whether it should give more weight to one or more factors for certain industries. Recommendations to weigh some factors more than others should include suggested weights for each factor along with supporting information.

9. For analytical simplicity and efficiency, in this proposed rule, SBA has refined its size standard methodology to obtain a single value as a proposed size standard instead of a range of values, as in its past size regulations. SBA welcomes any comments on this procedure and suggestions on alternative methods.

Public comments on the above issues are very valuable to SBA for validating its size standard methodology and its proposed size standards revisions in this proposed rule. This will help SBA to ensure that size standards reflect industry structure and Federal market conditions. Commenters addressing SBA's proposed size standard revisions for a specific industry or a group of industries should include relevant data and/or other information supporting their comments. If comments relate to using size standards for Federal procurement programs, SBA suggests that commenters provide information on the size of contracts in their industries, the size of businesses that can undertake the contracts, startup costs, equipment and other asset requirements, the amount of subcontracting, other direct and indirect costs associated with the contracts, the use of mandatory sources of supply for products and services, and the degree to which contractors can mark up those costs.

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

Executive Order 12866

The Office of Management and Budget (OMB) has determined that this proposed rule is a significant regulatory action for purposes of Executive Order 12866. Accordingly, in the next section SBA provides a Regulatory Impact Analysis of this proposed rule. However, this rule is not a “major rule” under the Congressional Review Act, 5 U.S.C. 800.

Regulatory Impact Analysis

1. Is there a need for the regulatory action?

SBA believes that the proposed size standards revisions in this proposed rule will better reflect the economic characteristics of small businesses and the Federal government marketplace in the affected industries and. SBA's mission is to aid and assist small businesses through a variety of financial, procurement, business development, and advocacy programs. To determine the intended beneficiaries of these programs, SBA establishes distinct definitions of which businesses are deemed small businesses. The Small Business Act (15 U.S.C. 632(a)) delegates to SBA's Administrator the responsibility for establishing small business definitions. The Act also requires that small business definitions vary to reflect industry differences. The Jobs Act also requires SBA to review all size standards and make necessary adjustments to reflect market conditions. The supplementary information section of this proposed rule explains SBA's methodology for analyzing a size standard for a particular industry.

2. What are the potential benefits and costs of this regulatory action?

The most significant benefit to businesses obtaining small business status because of this proposed rule is gaining or retaining eligibility for Federal small business assistance programs. These include SBA's financial assistance programs, economic injury disaster loans, and Federal procurement programs intended for small businesses. Federal procurement programs provide targeted opportunities for small businesses under SBA's business development programs, such as 8(a), Small Disadvantaged Businesses (SDB), small businesses located in Historically Underutilized Business Zones (HUBZone), women-owned small businesses (WOSB), economically disadvantaged women-owned small businesses (EDWOSB), and service-disabled veteran-owned small businesses (SDVOSB). Federal agencies may also use SBA's size standards for a variety of other regulatory and program purposes. These programs assist small businesses to become more knowledgeable, stable, and competitive. SBA estimates that in 209 industries for which it has proposed to increase size standards about 1,250 firms, not small under the existing size standards, will become small under the proposed size standards and therefore become eligible for these programs. That is about 0.4 percent of all firms classified as small under the current size standards in all industries reviewed in this proposed rule. If adopted as proposed, this will increase the small business share of total receipts in those industries from 26 percent to 29 percent.

Three groups will benefit from the proposed size standards revisions in this rule, if they are adopted as proposed: (1) Some businesses that are above the current size standards may gain small business status under the higher size standards, thereby enabling them to participate in Federal small business assistance programs; (2) growing small businesses that are close to exceeding the current size standards will be able to retain their small business status under the higher size standards, thereby enabling them to continue their participation in the programs; and (3) Federal agencies will have a larger pool of small businesses from which to draw for their small business procurement programs.

SBA estimates that firms gaining small business status under the proposed size standards could receive Federal contracts totaling $170 million to $175 million annually under SBA's small business, 8(a), SDB, HUBZone, WOSB, EDWOSB, and SDVOSB Programs, and other unrestricted procurements. The added competition for many of these procurements can also result in lower prices to the Government for procurements reserved for small businesses, but SBA cannot quantify this benefit.

Under SBA's 7(a) and 504 Loan Programs, based on the fiscal years 2010-2012 data, SBA estimates up to about 25 SBA loans totaling about $12.0 million could be made to these newly defined small businesses under the proposed size standards. Increasing the size standards will likely result in more small business guaranteed loans to businesses in these industries, but it is be impractical to try to estimate exactly the number and total amount of loans. There are two reasons for this: (1) Under the Jobs Act, SBA can now guarantee substantially larger loans than in the past; and (2) as described above, the Jobs Act established a higher alternative size standard ($15 million in tangible net worth and $5 million in net income after income taxes) for business concerns that do not meet the size standards for their industry. Therefore, SBA finds it difficult to quantify the actual impact of these proposed size standards on its 7(a) and 504 Loan Programs.

Newly defined small businesses will also benefit from SBA's Economic Injury Disaster Loan (EIDL) Program. Since this program is contingent on the occurrence and severity of a disaster in the future, SBA cannot make a meaningful estimate of this impact.

In addition, newly defined small businesses will also benefit through reduced fees, less paperwork, and fewer compliance requirements that are available to small businesses through Federal government.

To the extent that those 1,250 newly defined additional small firms could become active in Federal procurement programs, the proposed changes to size standards, if adopted, may entail some additional administrative costs to the government as a result of more businesses being eligible for Federal small business programs. For example, there will be more firms seeking SBA's guaranteed loans, more firms eligible for enrollment in the System of Award Management (SAM) database, and more firms seeking certification as 8(a) or HUBZone firms or qualifying for small business, WOSB, EDWOSB, SDVOSB, and SDB status. Among those newly defined small businesses seeking SBA's assistance, there could be some additional costs associated with compliance and verification of small business status and protests of small business status. However, SBA believes that these added administrative costs will be minimal because mechanisms are already in place to handle these requirements.

Additionally, Federal government contracts may have higher costs. With a greater number of businesses defined as small, Federal agencies may choose to set aside more contracts for competition among small businesses only rather than using full and open competition. The movement from unrestricted to small business set-aside contracting might result in competition among fewer total bidders, although there will be more small businesses eligible to submit offers. However, the additional costs associated with fewer bidders are expected to be minor since, by law, procurements may be set aside for small businesses or reserved for the 8(a), HUBZone, WOSB, EDWOSB, or SDVOSB Programs only if awards are expected to be made at fair and reasonable prices. In addition, there may be higher costs when more full and open contracts are awarded to HUBZone businesses that receive price evaluation preferences.

The proposed size standards revisions, if adopted, may have some distributional effects among large and small businesses. Although SBA cannot estimate with certainty the actual outcome of the gains and losses among small and large businesses, it can identify several probable impacts. There may be a transfer of some Federal contracts to small businesses from large businesses. Large businesses may have fewer Federal contract opportunities as Federal agencies decide to set aside more contracts for small businesses. In addition, some Federal contracts may be awarded to HUBZone concerns instead of large businesses since these firms may be eligible for a price evaluation preference for contracts when they compete on a full and open basis.

Similarly, some businesses defined small under the current size standards may obtain fewer Federal contracts due to the increased competition from more businesses defined as small under the proposed size standards. This transfer may be offset by a greater number of Federal procurements set aside for all small businesses. The number of newly defined and expanding small businesses that are willing and able to sell to the Federal Government will limit the potential transfer of contracts from large and currently defined small businesses. SBA cannot estimate the potential distributional impacts of these transfers with any degree of precision.

The proposed revisions to the existing size standards for 210 industries in Sector 31-33 are consistent with SBA's statutory mandate to assist small business. This regulatory action promotes the Administration's objectives. One of SBA's goals in support of the Administration's objectives is to help individual small businesses succeed through fair and equitable access to capital and credit, Government contracts, and management and technical assistance. Reviewing and modifying size standards, when appropriate, ensures that intended beneficiaries have access to small business programs designed to assist them.

Executive Order 13563

Descriptions 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 are included above in the Regulatory Impact Analysis under Executive Order 12866, above.

In an effort to engage interested parties in this action, SBA has presented its size standards methodology (discussed above under Supplementary Information) to various industry associations and trade groups. SBA also met with a number of industry groups and individual businesses to get their feedback on its methodology and other size standards issues. In addition, SBA presented its size standards methodology to businesses in 13 cities in the U.S. and sought their input as part of Jobs Act tours. The presentation also included information on the latest status of the comprehensive size standards review and on how interested

parties can provide SBA with input and feedback on size standards review.

Additionally, SBA sent letters to the Directors of the Offices of Small and Disadvantaged Business Utilization (OSDBU) at several Federal agencies with considerable procurement responsibilities requesting their feedback on how the agencies use SBA's size standards and whether current size standards meet their programmatic needs (both procurement and non-procurement). SBA gave appropriate consideration to all input, suggestions, recommendations, and relevant information obtained from industry groups, individual businesses, and Federal agencies in preparing this proposed rule.

The review of size standards in industries covered in this proposed rule is consistent with Executive Order 13563, Section 6, calling for retrospective analyses of existing rules. The last comprehensive review of size standards occurred during the late 1970s and early 1980s. Since then, except for periodic adjustments for monetary based size standards, most reviews of size standards were limited to a few specific industries in response to requests from the public and Federal agencies. The majority of employee based size standards, including those in NAICS Sector 31-33, have not been reviewed since they were first established. SBA recognizes that changes in industry structure and the Federal marketplace over time have rendered existing size standards for some industries no longer supportable by current data. Accordingly, in 2007, SBA began a comprehensive review of its size standards to ensure that existing size standards have supportable bases and to revise them when necessary. In addition, the Jobs Act requires SBA to conduct a detailed review of all size standards and to make appropriate adjustments to reflect market conditions. Specifically, the Jobs Act requires SBA to conduct a detailed review of at least one-third of all size standards during every 18-month period from the date of its enactment and do a complete review of all size standards not less frequently than once every 5 years thereafter.

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

Initial Regulatory Flexibility Analysis

Under the Regulatory Flexibility Act (RFA), this proposed rule, if adopted, may have a significant impact on a substantial number of small businesses in the industries and sub-industries covered by this rule. As described above, this rule may affect small businesses seeking Federal contracts, loans under SBA's 7(a), 504 and Economic Injury Disaster Loan Programs, and assistance under other Federal small business programs.

Immediately below, SBA sets forth an initial regulatory flexibility analysis (IRFA) of this proposed rule addressing the following questions: (1) What are the need for and objective of the rule? (2) What are SBA's description and estimate of the number of small businesses to which the rule will apply? (3) What are the projected reporting, record keeping, and other compliance requirements of the rule? (4) What are the relevant Federal rules that may duplicate, overlap, or conflict with the rule? and (5) What alternatives will allow the Agency to accomplish its regulatory objectives while minimizing the impact on small businesses?

1. What are the need for and 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 reviewed in this proposed rule. Such changes can be sufficient to support revisions to current size standards for some industries. Based on the analysis of the latest data available, SBA believes that the revised standards in this proposed rule more appropriately reflect the size of businesses that need Federal assistance. The Jobs Act also requires SBA to review all size standards and make necessary adjustments to reflect market conditions.

2. What are SBA's description and estimate of the number of small businesses to which the rule will apply?

If the proposed rule is adopted in its present form, SBA estimates that about 1,250 additional firms will become small because of increased size standards 209 industries in NAICS Sector 31-33. That represents 0.4 percent of total firms that are small under current size standards in all industries in that Sector. This will result in an increase in the small business share of total industry receipts in Sector 31-33 from 26 percent under the current size standards to 29 percent under the proposed size standards. The proposed size standards, if adopted, will enable more small businesses to retain their small business status for a longer period. Many firms may have lost their eligibility and find it difficult to compete at current size standards with companies that are significantly larger than they are. SBA believes the competitive impact will be positive for existing small businesses and for those that exceed the size standards but are on the very low end of those that are not small. They might oth

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