small business size standards 2020
Copyright © 2020 Taft Stettinius & Hollister LLP. Thus, SBA has determined that this rulemaking is exempt from the requirements of E.O. If you are using public inspection listings for legal research, you For purposes of this regulatory action, the baseline represents maintaining the “status quo,” i.e., making no changes to the current size standards. of firms losing small status for which SBA considered decreasing size standards (2012 Economic Census), % of Firms losing small status relative to current small businesses in industries for which SBA considered decreasing size standards, No. ETSI General Assembly: SBS candidates to Vice-Chair and Board positions . 2776, 3133) states that “for purposes of contracts and subcontracts requiring engineering services (awarded under this Act) the applicable size standard shall be that established for Military and Aerospace Equipment and Military Weapons.”. While SBA cannot estimate such costs savings as it is impossible to determine the number and value of unrestricted contracts to be otherwise awarded to HUBZone firms will be awarded as set-asides, such cost savings are likely to be relatively small as only a small fraction of full and open contracts are awarded to HUBZone businesses. Under this option, as the current situation develops, SBA will be able to assess new data available on economic indicators, federal procurement, and SBA loans before adopting changes to size standards. Such changes can be enough to support revisions to current size standards for some industries. SBA seeks feedback on whether it should assign equal weight to each factor or on whether it should give more weight to one or more factors for certain industries or subindustries. Commenters also pointed out that contracts for the exceptions tend to be large already and were trending upwards each year. If adopted, proposed size standards would result in an increase to the small business share of total receipts in those industries from 34.7% to 37.0%. edition of the Federal Register. Alternative Option Two was to retain all current size standards. Counts are subject to sampling, reprocessing and revision (up or down) throughout the day. During that two-year period, a company may choose to use either a three-year average or a five-year average to calculate its receipts and the receipts of its affiliates. Of the 91 industries and 3 subindustries (i.e. What are the relevant Federal rules that may duplicate, overlap or conflict with the rule? (In the prior review, SBA reviewed size standards mostly on a sector-by-sector basis.) This represents a 0.3% increase of the loan amounts relative to the Group baseline. If an industry's total receipts are attributable to a single firm, the Gini coefficient will equal one. Noté /5. These markup elements allow the user to see how the document follows the The action does not have retroactive or preemptive effect. The documents posted on this site are XML renditions of published Federal This repetition of headings to form internal navigation links The disparity between the small business Federal market share and industry-wide small business share may be due to various factors, such as extensive administrative and compliance requirements associated with Federal contracts, the different skill set required to perform Federal contracts as compared to typical commercial contracting work, and the size of Federal contracts. Section 1102 of the Act temporarily permits SBA to guarantee 100% of 7(a) loans under a new program titled the Paycheck Protection Program (PPP). The President of the United States issues other types of documents, including but not limited to; memoranda, notices, determinations, letters, messages, and orders. For these sectors, providing contract dollars to small business through set-asides is quite important. Retaining all size standards at their current levels would be more onerous for small businesses than the option of adopting 46 increases and retaining the rest of the size standards. documents in the last year, 44 Similarly, some small businesses under the current size standards may obtain fewer set-aside contracts due to the increased competition from larger businesses qualifying as small under the proposed increases to size standards. On April 24, 2020, additional funding for the CARES Act, including for the PPP, was provided. However, with agencies likely setting aside more contracts for small businesses in response to the availability of a larger pool of small businesses under the proposed increases to size standards, HUBZone firms might actually end up getting more set-aside contracts and fewer full and open contracts, thereby resulting in some cost savings to agencies. All believed that the $27.0 million size standard was too low and needed to be increased. SBA, however, took the position that rulemaking by â¦ Of these, 31 were based on average annual receipts, seven based on number of employees, and three based on other measures. The $16.5 million size standard is for general engineering services, while the $41.5 million size standard for the three exceptions apply to specialized types of engineering services that the Federal Government procures. For complete information about, and access to, our official publications documents in the last year, 106 legal research should verify their results against an official edition of documents in the last year, 38 Based on data from the 2012 Economic Census, SBA estimates that there are about 1.05 million small firms covered by this rulemaking under industries with proposed changes to size standards. Specifically, for the sectors evaluated in this proposed rule, more recent data in September 2020 shows that the unemployment rate for professional and technical services was 5.0%; management, administrative, and waste services was 10.0%; and administrative and support services was 10.2%. on In accordance with SBA's approach to evaluating size standards for subindustry categories (or “exceptions”), SBA has evaluated the three (3) exceptions covered by this proposed rule using the procedures described in the revised SBA's Methodology. Alternative Option One: Consider Adopting All Calculated Size Standards, Transfer Impacts of Decreases to Size Standards, Alternative Option Two: To Retain All Current Size Standards. 11/12/2020 at 8:45 am. documents in the last year, 659 Table 10, below, shows these results by sector. To determine the degree of inequality of distribution in an industry, SBA computes the Gini coefficient, using the Lorenz curve. Gini coefficient values vary from zero to one. That represents a 0.4% increase to the loan amount compared to the Group baseline. As required by law, SBA also adopted the $35.5 million size standard for the third “exception” to NAICS 541330 (Contracts and Subcontracts for Engineering Services Awarded Under the National Energy Policy Act of 1992). 4. Retrouvez Small Business Size Standards - Adoption of 2012 North American Industry Classification System for Size Standards (US Small Business Administration Regulation) (SBA) (2018 Edition) et des millions de livres en stock sur Amazon.fr. SBA seeks feedback on whether SBA's proposal to increase 46 size standards and retain 48 size standards is appropriate given the results from the latest available industry and Federal contracting data of each industry and subindustry (exception) reviewed in this proposed rule, along with ongoing uncertainty and dramatic contraction in economic activity due to the global COVID-19 pandemic. documents in the last year, by the Veterans Affairs Department documents in the last year, 990 SBA believes that lowering size standards under the current economic environment would run counter to what Congress and the Federal Government are doing to aid and provide relief to the nation's small businesses impacted by the COVID-19 pandemic. A total of $134.1 billion in average annual contract dollars were awarded to businesses in those industries during the period of evaluation, and 32.8% of the dollars awarded went to small businesses. Public comments on proposed rules also provide important additional information. The special tabulation also contains information for different levels of NAICS categories on average and median firm size in terms of both receipts and employment, total receipts generated by the four and eight largest firms, the Herfindahl-Hirschman Index (HHI), the Gini coefficient, and size distributions of firms by various receipts and employment size groupings. We published two articles (SBA Proposes Rule to Change the Annual Average Receipts Calculation for Small Businesses and Small Business Runway Extension Act of 2018 Amends Size Standard Calculation Period) discussing this change and how it should allow more companies to qualify as a small business for federal contract procurement purposes, for a longer period of time. See the notification in the April 11, 2019, edition of the Federal Register (84 FR 14587). . However, the Small Business Act and SBA's regulations allow Federal agencies to develop different size standards if they believe that SBA's size standards are not appropriate for their programs, with the approval of SBA's Administrator (13 CFR 121.903). The Jobs Act requires SBA to review every 5 years all size standards and make necessary adjustments to reflect current industry and Federal market conditions. has no substantive legal effect. The industry data suggests that $6.0 million minimum and $41.5 million maximum size standards would be too high for agricultural industries. Submitted comments may not be available to be read until the agency has approved them. With fewer businesses qualifying as small under the decreases to size standards, Federal agencies will have a smaller pool of small businesses from which to draw for their small business procurement programs. However, SBA estimates an almost null impact or non-significant reduction in dollars obligated to small businesses, if mitigation measures are adopted. "Advocacy Releases 'Small Business GDP, 1998â2014.'" This action meets applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. As stated above, of 145 receipts-based size standards in Sectors 61, 62, 71, 72 and 81 that are reviewed in this rule, based on the results from analyses of latest industry and Federal market data as well as impacts of size standards changes on small businesses, in this â¦ For a new regulatory action promulgating modifications to an existing regulation (such as modifying the existing size standards), a baseline assuming no change to the regulation (i.e., making no changes to current size standards) generally provides an appropriate benchmark for evaluating benefits, costs, or transfer impacts of proposed regulatory changes and their alternatives. However, the actual impact could be much less as businesses losing small business eligibility under the decreases to industry-based size standards could still qualify for SBA's loans under the tangible net worth and net income-based alternative size standard. The revised Methodology represents a major change from the previous methodology, which was issued on October 21, 2009 (74 FR 53940). "Table of Small Business Size Standards Matched to North American Industry Classification System Codes," Page 2. If the specific industry's characteristics were significantly different from those in the anchor group, SBA assigned a size standard that was higher or lower than the anchor. the current document as it appeared on Public Inspection on 13771 guidance also states that “in some cases, [transfer rules] may impose requirements apart from transfers, or transfers may distort markets causing inefficiencies. A more detailed description of the percentile method is provided in SBA's Methodology, available at www.sba.gov/size. It is not an official legal edition of the Federal Given the uncertainty produced by the global COVID-19 pandemic and the economic consequences, SBA would like to receive comments from the public on the possibility of lowering size standards while mitigating the consequences of the lower standards, instead of not lowering any size standards at all. 2020-24903 Filed 11-12-20; 8:45 am], updated on 11:15 AM on Wednesday, December 30, 2020, updated on 8:45 AM on Wednesday, December 30, 2020. Based on the analysis of the latest data available, SBA believes that the revised standards in this proposed rule more appropriately reflect the size of businesses that need Federal assistance. See generally 13 C.F.R. For example, there will be more firms seeking SBA's loans, more firms eligible for enrollment in the Dynamic Small Business Search (DSBS) database or in certify.sba.gov, more firms seeking certification as 8(a)/BD or HUBZone firms or qualifying for small business, SDB, WOSB, EDWOSB, and SDVOSB status, and more firms applying for SBA's 8(a)/BD and all small business mentor-protégé programs. The most significant benefit to businesses from proposed increases to size standards is gaining eligibility for Federal small business assistance programs or retaining that eligibility for a longer period. All rights reserved. For each size standard type, if the industry's Start Printed Page 72589characteristics are similar to the average characteristics of industries in the 80th percentile, SBA will assign a size standard that corresponds to the 80th percentile in the size standard rankings of industries. documents in the last year, 9 For example, the size standard for Electrical Contractors (238210) will increase [â¦] For each size standard type (i.e., receipts-based or employee-based), SBA ranks industries both in terms of each of the four industry factors and in terms of the existing size standard and computes the 20th percentile and 80th percentile values for both. With a smaller pool of small businesses under the decreases to size standards, some set-aside Federal contracts to be otherwise awarded to small businesses may be competed on an unrestricted basis. Below is a discussion of SBA's revised “Size Standards Methodology” (Methodology), available at www.sba.gov/size, for establishing, reviewing, or modifying receipts-based size standards that SBA has applied to this proposed rule. developer tools pages. 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 2016-2018. Small Business Administration, Office of Advocacy. The primary benefit of adopting this alternative is that SBA's procurement, management, technical and financial assistance resources would be targeted to the most appropriate beneficiaries of such programs according to the analytical results. If a contemplated size standard includes a dominant firm, SBA will consider a lower size standard to exclude the dominant firm from being defined as small. of EIDL loans to small businesses in industries for which SBA considered decreasing size standards (FY 2016-2018), Total amount of EIDL loans to small businesses in industries for which SBA considered decreasing size standards ($ million) (FY 2016-2018), Estimated no. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. In other words, the size standards of 46 industries for which the analytical results suggest raising size standards would be raised. The revised Methodology is available on SBA's size standards web page at www.sba.gov/size. 632(a)), SBA's Administrator is responsible for establishing small business size definitions (or “size standards”) and ensuring that such definitions vary from industry to industry to reflect differences among various industries. The size standards are for the most part expressed in either millions of dollars (those preceded by â$â) or â¦ These are, generally, the five most important factors SBA examines when establishing, reviewing, or revising a size standard for an industry. Proposed percentage increases generally reflect receipts levels needed to bring the small business share of Federal contracts on par with the small business share of industry receipts. Table 5—Summary of Calculated Size Standards. Under the “anchor” approach, SBA generally evaluated the characteristics of individual industries relative to the average characteristics of industries with the anchor size standard to determine whether they should have a higher or a lower size standard than the anchor. Federal Register provide legal notice to the public and judicial notice That represents a 4.0% increase to small business dollars from the sector baseline. SBA increases the existing size standards by certain percentages when the small business share of total industry receipts exceeds the small business share of total Federal contract dollars by 10 or more percentage points. Until the ACFR grants it official status, the XML Column 9 shows a calculated new size standard for each industry. By law, SBA is required to develop numerical size standards for establishing eligibility for Federal small business assistance programs. Based on the 2012 Economic Census (latest available), SBA estimates that in 46 industries in NAICS Sectors 54, 55, and 56 for which it has proposed to increase size standards, about 2,600 firms (see Table 9, below), not small under the current size standards, will become small under the proposed size standards increases and therefore become eligible for these programs. Since the benefit provided through this program is contingent on the occurrence and severity of a disaster in the future, SBA cannot make a meaningful estimate of this impact. The Public Inspection page Conversely, if the small business share of Federal contracting activity is near or above the small business share of total industry receipts, this will support the current size standard. The data for fiscal year 2018 showed numerous firms doing contracts under Military and Aerospace Equipment and Military Weapons and Marine Engineering and Naval Architecture. SBA also adjusts its monetary-based size standards for inflation at least once every 5 years. Given the lack of actual data on startup costs and entry barriers by industry, SBA uses average assets as a proxy for startup costs and entry barriers. documents in the last year, 73 SBA computes two measures of average firm size: Simple average and weighted average. However, SBA has no data to estimate the number of small businesses receiving such benefits. However, the size standards of 42 industries or subindustries for which the analytical results suggest lowering size standards would be lowered. Section 3021(b)(1) of Public Law 102-486, the National Energy Policy Act of 1992 (106 Stat. SBA also examines whether a size standard based on industry and other relevant data successfully excludes businesses that are dominant in the industry. If the preponderance of an industry's economic activity is attributable to smaller firms, this generally indicates that small businesses are competitive in that industry, which would support adopting a smaller size standard. RIN 3245-AG88 Small Business Size Standards: Education Services; Health Care and Social Assistance; Arts, Entertainment and Recreation; Accommodation and Food Services; Other Services; Federal Register Vol. In this Issue, Documents Retrouvez Small Business Size Standards: A Historical Analysis of Contemporary Issues et des millions de livres en stock sur Amazon.fr. For industries with less than $20 million in average annual contract dollars, no size standard was calculated for the Federal contracting factor. Table 1—Size Standards Revisions During the First 5-Year Review. If the proposed rule is adopted in its present form, SBA estimates that an additional 1,530 businesses will be defined as small. documents in the last year. The numbers break down according to business size: Among small businesses without employees, the vast majority are sole proprietors (86.6%). About the Federal Register The U.S. Small Business â¦ Thereafter, to account for inflation during the period, SBA increased the $35.5 million size standard for the three exceptions to $38.5 Million in 2014 (79 FR 33647, June 12, 2014), and to the current maximum size level of $41.5 in 2019 (84 FR 34261, July 18, 2019). To accept decreases in size standards as suggested by the analytical results, 2. to decrease size standards by a smaller amount than the calculated threshold, and 3. to retain the size standards at their current levels. What are the projected reporting, record keeping and other compliance requirements of the rule? The movement of contracts from unrestricted competition to small business set-aside contracts might result in competition among fewer total bidders, although there will be more small businesses eligible to submit offers under the proposed size standards.  Each document posted on the site includes a link to the Register documents. SBA Proposes Rule to Change the Annual Average Receipts Calculation for Small Businesses, Small Business Runway Extension Act of 2018 Amends Size Standard Calculation Period, Impact of Section 889âs Telecommunications and Video Surveillance Equipment Prohibitions on Federal Grant and Loan Recipients. A final decision on its website at www.sba.gov/size. quite important SBA typically derives an industry 's overall standard... This information is not aware of any Federal rule that would duplicate or conflict with establishing size standards revisions the... 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