[Federal Register Volume 64, Number 199 (Friday, October 15, 1999)]
[Proposed Rules]
[Pages 55873-55878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26783]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 121


Small Business Size Standards; Help Supply Services

AGENCY: Small Business Administration.

ACTION: Proposed rule.

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SUMMARY: The Small Business Administration (SBA) proposes a size 
standard of $10 million in average annual receipts for Help Supply 
Services--Standard Industrial Classification (SIC) 7363. The current 
size standard for this industry is $5 million. SBA proposes this 
revision to better define the size of business in this industry that 
SBA believes should be eligible for Federal small business assistance 
programs. SBA also proposes clarifying language in the small business 
size regulations about affiliation when a Professional Employer 
Organization (PEO) is co-employer of a firm's employees.

DATES: Submit comments on or before December 14, 1999.

ADDRESSES: Send comments to Gary M. Jackson, Assistant Administrator 
for Size Standards, 409 3rd Street, S.W., Mail Code 6880, Washington 
D.C. 20416. SBA will make all public comments available to any person 
or entity upon request.

FOR FURTHER INFORMATION CONTACT: Patricia B. Holden, Office of Size 
Standards, (202) 205-6618 or (202) 205-6385.

SUPPLEMENTARY INFORMATION: SBA received requests from the public to 
review the size standard for the Help Supply Services industry (SIC 
7363). These requests express concern that the size standard has not 
kept pace with the rapid growth in the industry due in part to the 
trends of outsourcing and downsizing. The industry has changed in two 
ways; help supply firms are larger and they are providing a wider range 
of personnel to businesses. One request also urged SBA to allow help 
supply firms to exclude funds collected for and remitted to 
unaffiliated third parties from gross receipts, as is currently done 
for travel agents, real estate agents, and others, since 60 percent to 
85 percent of revenues on many Federal contracts are ``passed through'' 
to a firm's employees or associates.
    The current size standard for this industry, $5 million, is based 
on gross billings including funds paid to employees (sometimes referred 
to as ``associates''). Based on a review of industry data, SBA proposes 
increasing the size standard for the Help Supply Services industry to 
$10 million in average annual receipts. SBA does not propose a change 
to the way average annual receipts are calculated for firms in the Help 
Supply Services Industry (SIC code 7363). Under SBA's size regulations 
(13 CFR 121.104), the size of a firm for a receipts-based size standard 
is based on information reported on a firm's Federal tax returns. 
Generally, receipts reported to the Internal Revenue Service (IRS) 
include a firm's gross receipts or sales from provision of goods or 
services. As explained below, SBA evaluated this issue and disagrees 
that these types of receipts should be excluded from the calculation of 
size for firms in this industry. Accordingly, the following discussion 
explains the reasons for the proposed revision.

[[Page 55874]]

Calculation of Average Annual Receipts

    Although SBA reviews requests to exclude receipts of certain 
business activities on a case-by-case basis, the structure of the 
reviews is consistent with past proposed rules on this issue (see, 
e.g., advertising agencies, 57 FR 38452, and conference management 
planners, 60 FR 57982). The reviews identify and evaluate five industry 
characteristics under which it might be appropriate to exclude certain 
funds received and later transmitted to an unaffiliated third party:
    1. Does a broker or agent-like relationship exist between a firm 
and a third party provider and is that relationship a dominant or 
crucial activity of firms in the industry?
    2. Are the pass-through funds associated with the broker or agent-
like relationship a significant portion of the firm's total receipts?
    3. Consistent with the normal business practice of firms in the 
industry, after the pass-through funds are remitted to a third party, 
is the firm's remaining income typically derived from a standard 
commission or fee?
    4. Do firms in this industry usually consider billings that are 
reimbursed to other firms as their own income, or do they prefer to 
count only receipts that are retained for their own use?
    5. Do Federal Government agencies, which engage in the collection 
of statistics, and other industry analysts typically report receipts of 
the industry firms on an adjusted receipts basis?
    SBA's review of information obtained on the Help Supply Services 
industry finds that these characteristics do not exist in the industry. 
Therefore, an assessment of these characteristics does not support the 
proposal to exclude funds received in trust for unaffiliated third 
parties from the calculation of a Help Supply Services firm's receipts-
size. The following discussion summarizes these findings.

1. No Agent-Like Relationship

    The Standard Industrial Classification Manual (1987) states that 
this industry encompasses ``establishments primarily engaged in 
supplying temporary or continuing help on a contract or fee basis. The 
help supplied is always on the payroll of the supplying establishments, 
but is under the direct or general supervision of the business to whom 
the help is furnished.'' (See SIC 7363, page 364.) Types of 
establishments include employee leasing service, fashion show model 
supply services, help supply services, modeling services, and temporary 
help services. These firms do not act as agents, but as employers. Some 
firms even provide health and 401K plans. Their employees are not 
unaffiliated third parties. Therefore, the dominant activity in this 
industry is not carried out in a broker or agent-like relationship.

2. Pass-Through Funds Are Not a Significant Portion of Total Receipts

    It is common practice in the industry for the Help Supply Services 
firm to include sufficient funds in a contract to pay the salaries of 
the workers provided. These funds are then, indeed, passed through to 
the workers just as any firm providing any other product charges enough 
to cover the cost of labor. But these funds are not held ``in trust;'' 
instead, they are the firm's own funds. How the supplying firm acquires 
and pays for labor is a business decision. Size standards should not be 
constructed to favor one labor arrangement over another. This issue 
often arises when part of a contract is subcontracted. The contractor 
has the option of employing enough workers to do the task and chooses 
not to do so. Funds which are temporarily held in trust by a firm for 
remittance to a airline, government agency, or home seller are 
different in several respects, including the fact that the firm does 
not have the option/business decision of whether or not the home 
seller, airline, or government agency will be an employee or a 
subcontractor. It is true (and not unusual) that the funds which are 
reported to be ``passed through'' to the associates constitute the 
majority of the contract revenue. Labor costs in most industries are 
the largest cost. The size of the labor costs relative to the total 
billing is not a reason to exclude them from calculation of gross 
revenues.

3. Remaining Income Is Not Derived From Standard Commission or Fee

    Real estate agents, travel agents, advertising agencies, and 
conference planners derive their gross income from commissions and 
fees, whereas most firms derive their gross income from pricing their 
products. Both types of industries must then pay labor costs. SBA is 
not aware of any commissions or fees that are standard in the Help 
Supply Services industry. Contracts with and bills to the help supply 
firms usually reflect charges for labor and overhead. Overhead, like 
wages, varies for many reasons, including the types of benefits firms 
provide their employees and efficiency of operation. Without such an 
industry standard or practice, it would be impossible to implement a 
size standard based on a firm's adjusted gross revenue from fees or 
commissions. By contrast, in the travel industry, if the bookings are 
$1 million, then it can be inferred that the adjusted gross income to 
the firm is $100,000 because the industry commission and fee structure 
is standard and well-known.

4. Firms in This Industry Usually Consider Billings as Gross Income

    Firms in the Help Supply Services industry consider funds collected 
as their own funds even though they face substantial labor costs. The 
help supply firm is the one who hires and fires the employee, 
negotiating their wages and benefits in the process. Their labor costs 
are reflected in their bids to supply labor. The funds the help supply 
firm receives to cover labor costs are fundamentally different from 
funds received by a real estate agent which must be put into an escrow 
account, and are never considered the real estate firm's funds. In 
fact, the real estate firm would face substantial penalties if the 
funds are co-mingled with its own funds. Not only is the payment 
structure different, the relationship is different in the two 
industries. In principal-agent relationships, the agent must, by law, 
act in a fiduciary capacity for the principal. SBA is not aware of any 
practice or requirement that help supply firms must act as fiduciary 
for the firm to which it supplies labor.

5. Federal Agencies and Industry Analysts Typically Do Not Represent 
Receipts of These Firms on an Adjusted Receipts Basis

    Finally, data from the U.S. Bureau of the Census (Census Bureau) on 
this industry, upon which that SBA evaluates size standards, shows firm 
receipts based on gross revenue, not commission or fee. The survey form 
used by the Census Bureau (SV 7306) when surveying Help Supply Services 
firms does not specifically instruct them to report only agency or 
brokerage commissions or fees as it does on Form UT 4700, page 2, items 
1 & 2 (used to survey firms that arrange transportation of freight and 
cargo and ``Freight Forwarding (net)'').
    Thus, the Census Bureau recognizes that the normal arrangement in 
this industry is to treat all revenue as gross income irrespective of 
labor costs. Similarly, the credit reporting firm of Dun and Bradstreet 
also reports receipts for firms in this industry by gross billings less 
any discounts or refunds.
    None of the five factors support treating the Help Supply Services 
industry like the industries that operate as agents, such as a travel 
or real estate agency. In fact, evaluation of the factors

[[Page 55875]]

strongly supports using gross revenue as the basis for the size 
standard. Based on the findings discussed above, SBA believes it is 
appropriate to continue to include all amounts collected on Help Supply 
Services contracts when calculating receipts.

Size Standard for the Help Supply Services

    Based on requests received from the public, SBA believes it is 
appropriate to re-evaluate the size standard to see what, if any, 
changes in the industry have occurred since the size standard of $5 
million was established. Based on that evaluation, SBA proposes a $10 
million size standard for this industry. The following discussion 
describes SBA's size standards methodology and the evaluation of data 
on the Help Supply Services industry supporting a revision to the 
current size standard.

Size Standards Methodology

    Congress granted SBA discretion to establish detailed size 
standards. SBA generally considers four categories for establishing and 
evaluating size standards:
    1. The structure of the industry and its various economic 
characteristics;
    2. SBA program objectives and the impact of different size 
standards on these programs;
    3. Whether a size standard successfully excludes those businesses 
which are dominant in the industry; and
    4. Other factors if applicable.
    Other factors may come to SBA's attention during the public comment 
period or from SBA's own research on the industry. The reason SBA has 
not adopted a general formula or uniform weighting system is to ensure 
that the factors will be evaluated in context of a specific industry. 
Below is a discussion of SBA's analysis of the economic characteristics 
of an industry, the impact of a size standard on SBA programs, and the 
evaluation of whether a firm at or below a size standard could be 
considered dominant in the industry.

Industry Analysis

    Paragraphs (a) and (b) of 13 CFR 121.102 list evaluation factors 
which are the primary factors describing the structural characteristics 
of an industry--average firm size, distribution of firms by size, 
start-up costs and entry barriers, and degree of industry competition. 
While these evaluation factors are generally considered the most 
important indicators of industry structure, SBA will consider and 
evaluate all relevant information that is helpful in assessing an 
industry's size standard. Below is a brief description of the industry 
structure evaluation characteristics.
    1. Average firm size is simply total industry revenues (or number 
of employees) divided by the total number of firms. If an industry has 
an average firm size significantly higher than the average firm size of 
a group of comparative industries (in this case, industries with the 
anchor size standard of $5 million in receipts), this fact may support 
establishing a higher size standard than the one in effect for the 
group of related industries. Conversely, data showing an industry with 
a significantly lower average firm size relative to the related group 
of industries tends to support a lower size standard.
    2. The distribution of firms by size examines the proportion of 
industry sales, employment, or other economic activity accounted for by 
firms of different sizes within an industry. If the majority of an 
industry's output comes from large firms, this would tend to support a 
higher size standard than the anchor. The opposite is true for an 
industry in which the distribution of firms by size indicates that 
output is concentrated among the smaller firms in an industry.
    3. Start-up costs affect a firm's initial size because entrants 
into an industry must have sufficient capital to start a viable 
business. To the extent that firms in an industry have greater start-up 
capital requirements than firms in other industries, SBA is justified 
in considering a higher size standard. As a proxy measure for start-up 
costs, SBA examines the average level of assets for firms in an 
industry. An industry with a relatively high level of average assets 
per firm as compared with the average assets per firm of the group of 
comparative industries with a $5 million size standard is likely to be 
a capital intensive industry in which start-up costs tend to be higher 
for firms entering the industry. For those types of industries, that 
circumstance may support the need for a relatively higher size standard 
than the anchor size standard.
    4. SBA assesses the degree of industry competition by measuring the 
proportion or share of industry sales obtained by firms above a 
relatively large firm size. In this proposed rule, SBA analyzes the 
proportion of industry sales generated by the four largest firms in an 
industry--generally referred to as the ``four-firm concentration 
ratio.'' If a significant proportion of revenue from sales within an 
industry is concentrated among a few relatively large producers, SBA 
tends to set a higher size standard to assist a broader range of firms 
to compete with firms that are clearly dominant in the industry. If 
this factor shows the industry to be highly competitive, SBA tends to 
apply the anchor.
    5. Competition for Federal procurements and SBA financial 
assistance. SBA also evaluates the impact of a size standard on its 
programs and other applications of size standards to determine whether 
small businesses defined under the existing size standard are receiving 
a reasonable level of assistance. This assessment mainly focuses on the 
proportion or share of Federal contract dollars awarded to small 
businesses. In general, the lower the share of Federal contract dollars 
awarded to small businesses in an industry which receives significant 
Federal procurement revenues, the greater the justification for a size 
standard higher than the existing one.
    Another factor SBA considers when evaluating the impact of a 
proposed size standard on SBA programs is the volume of guaranteed 
loans within an industry and the size of firms in that industry 
obtaining loans in SBA's financial assistance programs. SBA considers 
this factor when determining whether or not the current size standard 
may inappropriately restrict the level of financial assistance to firms 
in that industry. If small businesses receive ample assistance through 
these programs, a change to the size standard (especially if it is 
already above the anchor size) may not be appropriate.
    SBA established a size standard of 500 employees for the 
manufacturing and mining industries at SBA's inception in 1953. Shortly 
thereafter, SBA established a $1 million size standard for the 
nonmanufacturing industries. These two size standards are generally 
referred to as ``a base or anchor size standards.'' The revenue-based 
size standards were adjusted for inflation so that, currently, the 
anchor size for the nonmanufacturing industries is $5 million.
    If the structural characteristics of an industry are significantly 
different from the average characteristics of industries with the 
anchor size standard, a size standard higher or, in rare cases, lower 
than the anchor size standard may be supportable. Only when all or most 
of the industry data are significantly smaller than the average 
characteristics of the anchor group industries, or other industry 
considerations suggest the anchor standard is an unreasonably high size 
standard, will SBA adopt a size standard below the anchor size 
standard.
    Excluding agriculture and subsistence categories, which generally 
have size

[[Page 55876]]

standards established by statute, only seven industries in the revenue-
based size standards are below the $5 million anchor. None in the 
manufacturing or mining industries is below the 500 employee-based size 
standards.
    For the Help Supply Services industry under review in this proposed 
rule, SBA begins by comparing the characteristics of the five 
evaluation factors for this industry to the average characteristics of 
the nonmanufacturing industries which have the anchor size standard of 
$5 million (hereafter referred to as the nonmanufacturing anchor 
group). If the characteristics of the industry are similar to the 
average characteristics of the nonmanufacturing anchor group, then the 
anchor size standard of $5 million is considered an appropriate size 
standard for that industry. If, however, the industry characteristics 
significantly differ from the average characteristics of the 
nonmanufacturing anchor group, then a size standard above or below $5 
million may be appropriate.

Evaluation of Industry Size Standard

    SBA analyzed the size standard for the Help Supply Services 
industry by comparing the industry's characteristics with the average 
characteristics of the nonmanufacturing anchor group discussed above. 
SBA examined economic data on the industry using:
     A special tabulation of the 1992 Economic Census prepared 
on contract by the U.S. Bureau of the Census;
     Asset data from Dun and Bradstreet's 1998 Industry Norms 
and Key Business Ratios;
     Federal contract award data for fiscal years 1997 and 1998 
from the U.S. General Services Administration's Federal Procurement 
Data Center; and
     7(a) Business Loans from SBA's database.
    The table below shows the characteristics for the Help Supply 
Services industry compared to the average characteristics for the 
nonmanufacturing anchor group. A review of these factors leads to a 
proposed size standard of $10 million for this industry.

                                   Industry Characteristics of SIC 7363 Compared to the Nonmanufacturing Anchor Group
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Percent of industry sales by firms                                Percent of
                                                                                            of                     Average                      gov't
                                                                  Average  ------------------------------------  assets per     Four-firm    procurement
                           Category                              firm size                                         firm ($    concentration   dollars to
                                                                 ($ mil.)     <$5Mil.    <$10Mil.    <$25Mil.       mil.)         ratio         small
                                                                                                                                               business
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nonmanufacturing Anchor Group.................................       $0.85        51.0        61.0        67.0         $0.5           15.0          21.0
Help Supply Services Industry.................................        2.98        26.3        37.2        52.0          0.56          11.1          10.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The average firm size in the Help Supply Services industry is more 
than three times larger than the average firm size of the 
nonmanufacturing anchor group. This shows that firms in the Help Supply 
Services industry tend to be much larger in size than firms in other 
non-manufacturing anchor group and supports a size standard at least 
$10 million.
    The distribution of sales by firm size also supports a size 
standard for this industry at least $10 million. Under this factor, the 
proportion of industry sales obtained by firms of $5 million and less 
in sales, $10 million and less in sales, and $25 million and less in 
sales is much smaller than that of firms of the same size class found 
for the anchor nonmanufacturing group.
    The average assets per firm show that the industry is capital 
intensive, similar to the industries in the anchor group, and thus, 
would support a size standard at the anchor of $5 million. However, the 
average assets per firm is not substantially different from the anchor 
group and so would not by itself support a standard higher than the 
present $5 million standard.
    The four-firm concentration ratio likewise is similar to, but 
slightly less than, the anchor group characteristic size standard--no 
higher than $5 million. The four-firm concentration ratio shows that 
the four largest firms in the Help Supply Services industry account for 
only 11 percent of the industry revenues, while the four largest-firms 
in the nonmanufacturing anchor group account for 15 percent. This 
factor shows the industry is already highly competitive.
    If a few large firms were controlling a large portion of the 
industry revenues, then raising the size standard above the anchor size 
standard might help smaller firms compete. However, when the industry 
is already competitive, as this one is, nothing would be gained in 
competitiveness by lowering the size standard. Therefore, we conclude 
that the four-firm concentration ratio does not support a standard 
either higher or lower than the anchor.

Purpose of and Impact on SBA Programs

    The percent of Federal contract dollars awarded to small firms in 
the Help Supply Services industry during fiscal years 1997 and 1998 is 
about half as large as the share of Federal contracting going to small 
firms within the non-manufacturing anchor group. This supports an 
increase to the current size standard. In fiscal years 1997 and 1998, 
of the 1,049 actions reported by the Federal Procurement Data System, 
645 (61 percent) went to small firms. While the 645 actions were 61 
percent of the total actions, they were only 10.7 percent of the total 
contract dollars awarded when the two years are combined. This industry 
is lagging behind those in the anchor group.
    Also, an increase to the size standard for this industry appears 
reasonable based on the distribution of SBA guaranteed loans under the 
7(a) program. In fiscal years 1994 through 1998, small businesses in 
the Help Supply Services industry received a total of 229 loans which 
averaged $116,800. The number of 7(a) loans to this industry has taken 
a downward trend in recent years, from 81 in FY 1995 to 25 in FY 1998. 
The total dollar value has also declined during that time, from 
$6,951,029 to $2,651,687. As in Federal procurement, the potential 
exists to increase 7(a) loans going to this industry. Both the level of 
participation in this program and the trend would support a $10 million 
size standard as one providing a reasonable level of assistance to 
small businesses in this industry.
    Considering these industry structure factors and the impact on SBA 
programs in the aggregate, SBA believes that the $10 million size 
standard is reasonable and would provide assistance to firms we believe 
should be eligible as small business for this industry. Three of the 
industry factors support a size standard higher than the non-
manufacturing anchor group and two industry factors

[[Page 55877]]

support a size standard at the anchor size standard.

Dominant in Field of Operation

    Section 3(a) of the Small Business Act defines a small concern as 
one that is independently owned and operated, not dominant in its field 
of operation, and within detailed definitions or standards established 
by the SBA Administrator. As part of its evaluation of a size standard, 
SBA considers whether a business concern at or below a recommended size 
standard would be considered dominant in its field of operation. This 
assessment generally considers the market share of firms at a proposed 
size standard as well as other factors that may reveal if a firm can 
exercise a major controlling influence on a national basis in which 
significant numbers of business concerns are engaged.
    SBA has determined that at the recommended size standard of $10 
million, no firm at or below those levels would be of a sufficient size 
to be dominant in its field of operation. Firms at the proposed size 
standard generate less than .02 percent of total industry sales. This 
level of market share effectively precludes any firm from exerting a 
controlling effect on the industry.
    SBA also proposes to add clarifying language to Sec. 121.103(b)(4). 
Paragraph (b) discusses exclusions from affiliation rules while 
paragraph (b)(4) specifically excludes business concerns that lease 
employees. We propose to insert Professional Employee Organizations 
(PEOs) in this section along with leasing companies. Their relationship 
with the firms to whom they provide employees and staffing services are 
similar, yet questions arise from time-to-time because PEOs were not 
specifically mentioned in the exclusion. SBA will not find a firm 
affiliated with a leasing company or PEO merely because it uses the 
services of a leasing company or PEO. However, SBA might find 
affiliation based on other conditions.
    Nothing in the clarification of the exclusions to the affiliation 
rule is intended to change the way a firm must count its employees when 
determining size. All employees must be counted; whether permanent, 
part-time, temporary, leased or covered by a contract with a PEO. How a 
firm obtains its staffing is a business decision, and size standards 
are not intended to influence its decision in that regard.

Alternative Size Standards

    SBA considered two alternative size standards for this industry. 
One alternative considered was modifying the average annual receipts 
method to allow for pass-through funds received for employees 
(sometimes referred to as ``associates''). SBA rejected this 
alternative because the industry characteristics are not similar to 
those industries which obtain gross revenues from commissions and fees. 
None of the five factors used in this evaluation supported making that 
change.
    Also, since not all the factors supported the same size standard, 
but rather indicated a range of possible size standards, a second 
alternative considered was to select one of the other sizes from the 
range, either somewhat higher or lower than the one proposed. On 
balance, and given the characteristics of the industry, SBA considers 
$10 million the best interpretation of the data and the most 
supportable standard for this industry.
    SBA welcomes comments on the proposed size standard for Help Supply 
Services. If the public can show compelling reasons why a different 
size standard for this industry should be established or that it should 
weigh one factor higher or lower, SBA will consider these reasons when 
developing the final rule. SBA would also appreciate comments on its 
position that it should measure the receipts size of a Help Supply 
Services firm on gross receipts.

Compliance With Executive Orders 12612, 12988, and 12866, the 
Regulatory Flexibility Act (5 U.S.C. 601-612), and the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.)

    SBA certifies that this rule, if adopted, would not be a 
significant rule within the meaning of Executive Order 12866 since it 
will not have an impact of $100 million or more. The total amount of 
Federal procurement and SBA guaranteed loans combined is less than $160 
million to this industry annually, and a change to the size standard is 
unlikely to significantly affect these programs.
    For purposes of the Regulatory Flexibility Act, this rule would not 
have a substantial impact on a significant number of small entities. 
Although potentially 576 additional firms could gain small business 
status as a result of this rule, only a very small percentage of firms 
in the industry compete for Federal procurements or obtain guaranteed 
loans through SBA's financial assistance programs.
    For the purpose of the Paperwork Reduction Act, 44 U.S.C. 3501 et 
seq., SBA certifies that this rule would not impose new reporting or 
recordkeeping requirements other than those already required of SBA.
    For purposes of Executive Order 12612, SBA certifies that this rule 
does not have any federalism implications warranting the preparation of 
a Federalism Assessment.
    For purposes of Executive Order 12988, SBA certifies that this rule 
is drafted, to the extent practicable, in accordance with the standards 
set forth in that order.

List of Subjects in 13 CFR Part 121

    Government procurement, Government property, Grant programs--
business, Loan programs--business, Small businesses.

    For reasons stated in the preamble, SBA proposes to amend 13 CFR 
part 121 as follows:

PART 121--SMALL BUSINESS SIZE REGULATIONS

    1. The authority citation for part 121 continues to read as 
follows:

    Authority: 15 U.S.C. 632(a), 634(b)(6), 637(a), 644(c) and 
662(5).

    2. In Sec. 121.103, revise paragraph (b)(4), to read as follows:


Sec. 121.103  What is affiliation?

* * * * *
    (b) * * *
    (4) Business concerns that lease employees from concerns primarily 
engaged in leasing employees to other businesses or that enter into a 
co-employer arrangement with a Professional Employer Organization (PEO) 
are not affiliated with the leasing company or PEO solely on the basis 
of a leasing agreement.
* * * * *
    3. In Sec. 121.201, under the DIVISION I--SERVICES heading of the 
``SIZE STANDARDS BY SIC INDUSTRY'' table, add a new entry for SIC Code 
7363 in numerical order to read as follows:


Sec. 121.201  What size standards has SBA identified by Standard 
Industrial Classification codes?

* * * * *

                     Size Standards by SIC Industry
------------------------------------------------------------------------
                                                          Size standards
                                                           in number of
                SIC code and description                   employees or
                                                            millions of
                                                              dollars
------------------------------------------------------------------------
 
                  *        *        *        *        *
DIVISION I--SERVICES....................................            $5.0
EXCEPT:
 
                  *        *        *        *        *
7363 Help Supply Services...............................           $10.0
 

[[Page 55878]]

 
                  *        *        *        *        *
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    Dated: October 7, 1999.
Aida Alvarez,
Administrator.
[FR Doc. 99-26783 Filed 10-14-99; 8:45 am]
BILLING CODE 8025-01-P