# Small Business Size Standards for Manufacturing

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A2014-20837

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** September 10, 2014
- **Citation:** 79 FR 54146

## Text

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2014-20837. Public record. Not legal advice.