Small Business Size Regulations; Size Standards and the North American Industry Classification System; Correction

AGENCY:

Small Business Administration.

ACTION:

Final rule; correction.

SUMMARY:

This is a technical correction to the final rule that the Small Business Administration (SBA) published in the Federal Register (65 FR 30836-30863) on May 15, 2000. In that rule the Small Business Administration adopted a new table of small business size standards for industries as they are defined in the North American Industry Classification System (NAICS). SBA is providing below a complete replacement table for the one that was contained in that final rule. The table that was published on May 15, 2000, contained errors that occurred during the printing process. The errors are significant in nature and number, and SBA believes that they would be misleading if not corrected. SBA is including, as well, minor editorial changes, although if they were not made, they would not mislead or otherwise affect the correct use of the size standards. This table also includes updated size standards based on two other final rules that SBA subsequently published in the Federal Register. Effective October 1, 2000, all users of small business size standards must use the table of small business size standards below, in place of the table included in the May 15, 2000, Federal Register.

DATES:

Effective on October 1, 2000.

FOR FURTHER INFORMATION CONTACT:

Carl Jordan, Office of Size Standards, at (202) 205-6618.

SUPPLEMENTARY INFORMATION:

SBA is publishing below a new complete table of small business size standards based on industries as they are defined in NAICS. This table corrects, updates and replaces the table included in the final rule SBA published in the Federal Register on May 15, 2000. The originally published table included a number of errors that occurred during the printing process. Because the errors are significant in nature and number, SBA believes that merely listing the corrections is not sufficient. Therefore, this new full table replaces the table found in the final rule published on May 15, 2000.

List of Corrected Errors

Page 30841—NAICS 211112—deleted under Subsector 115, where it is duplicated. It appears correctly in Subsector 211.

Page 30843—NAICS 311421—footnote “14” is corrected to read footnote “3.”

Page 30850—NAICS 336413—added footnote “7,” which had been omitted.

Page 30853—NAICS 448130—corrected size standard to “$5.0” million.

Page 30853—NAICS 448150—corrected size standard to “$5.0” million.

Page 30853—NAICS 452990—deleted redundant dollar sign.

Page 30853—NAICS 454110—corrected size standard to “$18.5” million.

Page 30854—NAICS 454311—deleted redundant dollar sign.

Page 30854—NAICS 481111—deleted dollar sign.

Page 30854—NAICS 481112—deleted dollar sign.

Page 30854—NAICS 481211—deleted dollar sign.

Page 30854—NAICS 481212 and NAICS 481219 corrected to read as follows:

Page 30854—NAICS 482111 through NAICS 483212—deleted dollar signs.

Page 30854—NAICS 511210—moved “$18.0” from the description column to the size standard column.

Page 30856—NAICS 522120 through NAICS 522210—added footnote “8.”

Page 30856—NAICS 522293—added footnote “8.”

Page 30857—added NAICS 531320 and NAICS 531390, which had been omitted, as follow:

Page 30857—change NAICS 53212 to NAICS 532120.

Updated Size Standards:

Since May 15, 2000, SBA has published two final rules that modify existing size standards as they are described in the Standard Industrial Classification (SIC) system. SBA originally intended to issue Federal Register notices before October 1, 2000, to update the table of small business size standards based on NAICS that result from those changes. However, SBA is using this opportunity to include those changes here. The updates, based on final rules issued since May 15, 2000, are the following:

1. NAICS code 561320, Temporary Help Services, and NAICS code 561330, Employment Leasing Services—On June 6, 2000, SBA published a final rule establishing a size standard of $10 million in average annual receipts for Help Supply Services, SIC code 7363 (65 FR 35810-35813). The activities described by SIC 7363 are related to NAICS 561320 and NAICS 561330. Therefore, size standards NAICS 561320 and NAICS 561330 are being updated to conform the table of size standards based on NAICS to the June 6, 2000, Federal Register notice.

2. On June 16, 2000, SBA published a final rule in the Federal Register (65 FR 37689-37694) establishing a size standard of $27.5 million in average annual receipts for all industries in General Building Contractors, Standard Industrial Classification (SIC) Major Group 15, and for all industries except Dredging and Surface Cleanup Activities in Heavy Construction Other Than Building Construction, SIC Major Group 16; $17.0 million for Dredging and Surface Cleanup Activities, part of SIC 1629, Heavy Construction, Not Elsewhere Classified (NEC); $11.5 million for all industries in Special Trade Contractors, SIC Major Group 17; and $10.0 million for Garbage and Refuse Collection, Without Disposal, part of SIC 4212, Local Trucking Without Storage, and Refuse Systems, SIC 4953. As a result, the following NAICS codes, which are related to these SIC industries and activities, are revised accordingly, effective October 1, 2000. For additional information on how they are related, see SBA's proposed rule in the October 22, 1999, Federal Register (64 FR 57187-57286). Therefore, size standards for the following NAICS industries are being updated to conform the table of size standards based on NAICS to the June 16, 2000, Federal Register notice:

Other Changes:

SBA is also making other minor editorial changes at this time. They are the following:

(1) On page 30854, NAICS code 485110 is corrected to read NAICS code 485111.

(2) On page 30859, NAICS code 562111, Solid Waste Collection, is moved from its last place in Subsector 561, Administrative and Support Services, to first place in Subsector 562, Waste Management and Remediation Services.

(3) On page 30861, NAICS code 812391, Garment Pressing, and Agents for Laundries, and NAICS code 81239, All Other Laundry Services, are deleted. These activities are included in NAICS code 812320, Drycleaning and Laundry Services (except Coin-Operated) (see 63 FR 41699).

(4) The following NAICS Industry descriptive titles are changed:

(5) On page 30854 SBA is adding footnote 15 to Subsector 483, Water Transportation. This is the same footnote that was used (as footnote 8) in 13 CFR 121.601 up to and including the January 1, 1995, edition. Beginning with the March 1, 1996, edition of the 13 CFR 121, footnote 8 was omitted and “Offshore Marine Water Transportation Services” was added as a segment of SIC 4499, Water Transportation Services, N.E.C. SIC 4499 is related to a number of NAICS codes in Subsector 483. However, SBA omitted this segment from the October 22, 1999, proposed and the May 15, 2000, final rules. Rather than include numerous “exceptions,” SBA is replacing the entire text of the footnote, as it could apply to any of the NAICS codes. This does not change or alter existing size standards for any activities, and is consistent with Guideline 4 in Table III of the October 22, 1999, proposed rule (64 FR 57191).

Note:

SBA is publishing this table of small business size standards to replace the table that was part of the final rule published in the Federal Register on May 15, 2000 (65 FR 30836-30863). That rule contained a table with a large number of errors that were beyond SBA's control. This table does not change or modify any size standards. However, it has been updated to reflect changes that SBA has made to size standards since its May 15, 2000, publication. Those changes are stated in detail above.

Correction

In FR Doc. 00-11874 published on May 15, 2000 (65 FR 30840), make the following correction. On pages 30840 through 30863, correct § 121.201 by revising the table of “Small Business Size Standards by NAICS Industry” to read as follows:

Footnotes

1. NAICS codes 221111, 221112, 221113, 221119, 221121, and 221122—A firm is small if, including its affiliates, it is primarily engaged in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours.

2. NAICS code 234990—Dredging: To be considered small for purposes of Government procurement, a firm must perform at least 40 percent of the volume dredged with its own equipment or equipment owned by another small dredging concern.

3. NAICS code 311421—For purposes of Government procurement for food canning and preserving, the standard of 500 employees excludes agricultural labor as defined in 3306(k) of the Internal Revenue Code, 26 U.S.C. § 3306(k).

4. NAICS code 324110—For purposes of Government procurement, the firm may not have more than 1,500 employees nor more than 75,000 barrels per day capacity of petroleum-based inputs, including crude oil or bona fide feedstocks. Capacity includes owned or leased facilities as well as facilities under a processing agreement or an arrangement such as an exchange agreement or a throughput. The 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.

5. NAICS code 326211—For Government procurement, a firm is small for bidding on a contract for pneumatic tires within Census Classification codes 30111 and 30112, provided that:

(a) The value of tires within Census Classification codes 30111 and 30112 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 Classification codes 30111 and 30112 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.

6. NAICS Subsectors 333, 334, 335 and 336—For rebuilding machinery or equipment on a factory basis, or equivalent, use the NAICS code for a newly manufactured product. Concerns performing major rebuilding or overhaul activities do not necessarily have to meet the criteria for being a “manufacturer” although the activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are not considered rebuilding.

7. NAICS code 336413—Contracts for the rebuilding or overhaul of aircraft ground support equipment on a contract basis are classified under NAICS code 336413.

8. NAICS Codes 522110, 522120, 522130, 522190, 522210 and 522930—A financial institution's assets are determined by averaging the assets reported on its four quarterly financial statements for the preceding year. “Assets” for the purposes of this size standard means the assets defined according to the Federal Financial Institutions Examination Council 034 call report form.

9. NAICS code 531190—Leasing of building space to the Federal Government by Owners: For Government procurement, a size standard of $15.0 million in gross receipts applies to the owners of building space leased to the Federal Government. The standard does not apply to an agent.

10. NAICS codes 531210, 541810, 561510 and 561920—As measured by total revenues, but excluding funds received in trust for an unaffiliated third party, such as bookings or sales subject to commissions. The commissions received are included as revenue.

11. NAICS code 541710—For research and development contracts requiring the delivery of a manufactured product, the appropriate size standard is that of the manufacturing industry.

(a) “Research and Development” means laboratory or other physical research and development. It does not include economic, educational, engineering, operations, systems, or other nonphysical research; or computer programming, data processing, commercial and/or medical laboratory testing.

(b) For purposes of the Small Business Innovation Research (SBIR) program only, a different definition has been established by law. See § 121.701 of these regulations.

(c) “Research and Development” for guided missiles and space vehicles includes evaluations and simulation, and other services requiring thorough knowledge of complete missiles and spacecraft.

12. NAICS code 561210—Facilities Management, a component of NAICS 561210, includes establishments, not classified elsewhere, which provide overall management and personnel to perform a variety of related support services in operating a complete facility in or around a specific building, or within another business or Government establishment. Facilities management means furnishing three or more personnel supply services which may include, but are not limited to secretarial services, typists, word processing, maintaining files and/or libraries, telephone answering, switchboard operation, reproduction or mimeograph service, mailing service, writers, bookkeeping, financial or business management, public relations, conference planning, minor office equipment maintenance and repair, use of information systems (not programming), word processing, travel arrangements, maintaining files and/or libraries.

13. NAICS code 235990 (All Other Special Trade Contractors) and NAICS code 561210 (Facilities Support Services)—Base Maintenance:

(a) If one of the activities of base maintenance, as defined in paragraph (b) (below in this endnote) can be identified with a separate industry and that activity (or industry) accounts for 50 percent or more of the value of an entire contract, then the proper size standard is that of the particular industry, and not the base maintenance size standard.

(b) “Base Maintenance” requires the performance of three or more separate activities in the areas of service or special trade construction industries. If services are performed, these activities must each be in a separate NAICS code including, but not limited to, Janitorial and Custodial Service, Fire Prevention Service, Messenger Service, Commissary Service, Protective Guard Service, and Grounds Maintenance and Landscaping Service. If the contract requires the use of special trade contractors (plumbing, painting, plastering, carpentry, etc.), all such special trade construction activities are considered a single activity and classified as Base Housing Maintenance. Since Base Housing Maintenance is only one activity, two additional activities are required for a contract to be classified as “Base Maintenance.”

14. NAICS 562910—Environmental Remediation Services:

(a) For SBA assistance as a small business concern in the industry of Environmental Remediation Services, other than for Government procurement, a concern must be engaged primarily in furnishing a range of services for the remediation of a contaminated environment to an acceptable condition including, but not limited to, preliminary assessment, site inspection, testing, remedial investigation, feasibility studies, remedial design, containment, remedial action, removal of contaminated materials, storage of contaminated materials and security and site closeouts. If one of such activities accounts for 50 percent or more of a concern's total revenues, employees, or other related factors, the concern's primary industry is that of the particular industry and not the Environmental Remediation Services Industry.

(b) For purposes of classifying a Government procurement as Environmental Remediation Services, the general purpose of the procurement must be to restore a contaminated environment and also the procurement must be composed of activities in three or more separate industries with separate NAICS codes or, in some instances (e.g., engineering), smaller sub-components of NAICS codes with separate, distinct size standards. These activities may include, but are not limited to, separate activities in industries such as: Heavy Construction; Special Trade Construction; Engineering Services; Architectural Services; Management Services; Refuse Systems; Sanitary Services, Not Elsewhere Classified; Local Trucking Without Storage; Testing Laboratories; and Commercial, Physical and Biological Research. If any activity in the procurement can be identified with a separate NAICS code, or component of a code with a separate distinct size standard, and that industry accounts for 50 percent or more of the value of the entire procurement, then the proper size standard is the one for that particular industry, and not the Environmental Remediation Service size standard.

15. Subsector 483—Water Transportation—Offshore Marine Services: The applicable size standard shall be $20.5 million for firms furnishing specific transportation services to concerns engaged in offshore oil and/or natural gas exploration, drilling production, or marine research; such services encompass passenger and freight transportation, anchor handling, and related logistical services to and from the work site or at sea.