E8-11763. Small Business Size Standards: Public Meetings on a Comprehensive Review of Small Business Size Standards

AGENCY:

U.S. Small Business Administration.

ACTION:

Notice of public meetings.

SUMMARY:

The U.S. Small Business Administration (SBA) will hold two public meetings to inform the public about one of the Agency's top priorities—a comprehensive review of all of its small business size standards. Of fundamental importance in assisting the nation's small businesses is appropriately defining which business entities qualify as small businesses. SBA is responsible to the public for ensuring that size standards levels are sound and rational. Therefore, SBA is undertaking a 2-year across-the-board examination of its size standards. This notice discusses SBA's reasons for and its approach to the comprehensive review and provides information about registering to attend a public meeting.

DATES:

The size standards meetings will be held on June 3, 2008, at 10 a.m. Eastern Time and 2 p.m. Eastern Time in Washington, DC. Attendees must pre-register by May 30, 2008.

ADDRESSES:

1. The size standards meeting address is U.S. Small Business Administration, Eisenhower Conference Room, 409 Third Street, SW., Washington, DC 20416.

2. Send pre-registration requests to attend to SBA's Office of Size Standards at [e-mail] or call [phone].

FOR FURTHER INFORMATION CONTACT:

Fay E. Ott, Associate Administrator for Government Contracting and Business Development, at [phone], [e-mail].

SUPPLEMENTARY INFORMATION:

I. Background

To carry out its mission of assisting small businesses, SBA must identify which businesses are small and, therefore, eligible for Federal assistance programs intended for small businesses. Congress granted SBA broad discretion in establishing detailed small business definitions, or size standards (15 U.S.C. 632(a)(2)). The Small Business Act generally defines a small business as one that is independently owned and operated, not dominant in its field of operation, and meets a numerical size standard established by the SBA Administrator. SBA's size standards are promulgated in 13 CFR Part 121, “Small Business Size Regulations,” and may be found at http://www.sba.gov/​size.

Over the years, SBA has reviewed size standards on an ad hoc basis. That is, SBA has reviewed specific industries that it believed warranted modification either in response to requests from the public or a Federal agency or through its own independent analysis. In addition, SBA has periodically increased the monetary-based size standards to keep them in line with inflation between individual adjustments. The last increase for inflation was on December 6, 2005 (70 FR 72577).

SBA has undertaken a few broad reviews of size standards in the past. With the inception of the Agency in 1953, SBA examined the initial configuration of size standards and established the basic framework for today's size standards. The last comprehensive review of size standards was in the early 1980s. That review resulted in several important changes. The two most important of those were (1) replacing two sets of size standards, one for procurement programs and one for financial programs, with a single set for all programs and (2) formalizing the methodology for evaluating size standards. In 2004, SBA proposed to restructure and simplify size standards by determining the size of a small business based only on number of employees and reducing the number of different size standards levels (69 FR 13130, March 19, 2004). That effort received mixed support from the public and was subsequently withdrawn (69 FR 39874, July 1, 2004).

SBA is concerned that since the last comprehensive size standards review, not all of its size standards may now adequately define small businesses in the U.S. economy, which has seen industry consolidations, technological advances, emerging new industries, shifting societal preferences, and other significant industrial changes. SBA's approach to scrutinizing the limited number of specific industries during a year, while worthwhile, leaves unexamined many deserving industries for updating and may create over time a set of illogical size standards. Accordingly, SBA has initiated this across-the-board review of all size standards, and will proceed over the next two years with this examination to ensure that the established levels reflect today's small business segment of the various industries.

Beginning later this year, SBA will start publishing a series of proposed rules to update specific size standards; in two years this review will culminate in the complete evaluation of all size standards. SBA will organize this review by examining a group of industries within the Sectors of the North American Industry Classification System (NAICS). A Sector is a group of related industries, such as retail trade, manufacturing, construction, etc. Upon completion of an analysis of the industries within a Sector, SBA will publish a proposed rule for those industries where its assessment supports changing the current size standards.

SBA believes that a size standard review spread over time is a more manageable and expeditious process than attempting to update all size standards at one time. First, SBA is able to begin the review much sooner rather than wait until it completes an analysis of more than 1,100 industries. Second, the public can focus on and limit their comments to a limited number of related size standard revisions in SBA's proposal. Similarly, evaluating fewer and closely related comments enables SBA to understand and better consider the issues and concerns raised by the public.

The table below lists order of the size standards comprehensive review by NAICS Sector:

NAICS sector	Title	Number of industries
44-45	Retail Trade	75
72	Accommodations and Food Services	15
81	Other Services	49
54	Professional, Scientific and Technical Services	48
51	Information	32
61	Education	17
53	Real Estate and Rental and Leasing	24
71	Arts, Entertainment and Recreation	25
62	Health Care and Social Assistance	62
42	Wholesale Trade	71
56	Administrative Support and Waste Management	44
23	Construction	31
52	Finance and Investment	41
11	Agriculture	64
49	Transportation and Warehousing	57
55	Management of Companies	3
22	Utilities	10
21	Mining	29
31-33	Manufacturing	472

SBA considered several criteria in deciding the order of the NAICS Sectors. Priority was given to Sectors that have had fewer size standard revisions over the past 20 years, less variation of size standards within the Sector, a lower share of Federal contracts awarded to small businesses, and a higher quality of industry data. SBA decided to conduct the review for the Manufacturing Sector last because of the time needed to evaluate the large number of industries.

SBA encourages the public's participation in the process of updating its size standards. As discussed above, a proposed rule will be developed for each NAICS Sector over the next two years. Each proposed rule will explain how SBA analyzes an industry size standard, the latest data on an industry, and the basis for its decision to either retain or revise the current size standard. The public will have an opportunity to comment on SBA's analysis. SBA will carefully consider the public's comments on its proposals before making a final decision. The outcome of this comprehensive review will produce a more consistent, supportable, and equitable set of size standards designed to achieve SBA's mission of assisting the small business community.

II. Public Meetings

SBA will discuss in greater detail its approach to a comprehensive review of size standards at two public meetings and provide the attendees time to ask questions or provide advice on the size standards review. The public meetings will be held at 10 a.m. and 2 p.m. Eastern Time on June 3, 2008.

Location	Address	Registration closing date
Washington, DC	U.S. Small Business Administration, 409 Third Street, SW., 2nd Floor Eisenhower Conference Room, Washington, DC 20416	May 30, 2008.

To help focus the discussions on common areas of interest for the attendees, it is requested that registrants sign-up for the public meetings according the type of size standard of most interest to them, as follows:

10 a.m.—Industries with receipts-based size standards (generally, the construction, information, retail trade, and services industries).

2 p.m.—Industries with employee-based size standards (generally, the manufacturing, mining, and wholesale trade industries).

III. Registration and Attendance

SBA respectfully requests that anyone interested in attending one of the public meetings pre-register in advance with SBA. In addition, because SBA only has space for up to 150 attendees per meeting, we request that each organization register only one or two representatives. Registration requests should be received by May 30, 2008. Please contact the Office of Size Standards at [e-mail] or by calling [phone]. Please provide the following information: Name, Title, Organization Affiliation, Address, Telephone Number, E-mail Address, and Fax Number. SBA will attempt to accommodate all interested parties who wish to be heard. Based on the number of registrants it may be necessary to impose time limits to ensure that everyone who wishes to be heard has an opportunity to do so.

Please plan to arrive early. Upon arrival at SBA Headquarters, you must sign-in and pick-up a building pass at the Information Center located in the lobby. Afterwards, you may proceed through the security check and to the conference room on the 2nd floor.

Authority: 15 U.S.C. 634.

Fay E. Ott,

Associate Administrator for Government Contracting and Business Development.