[Federal Register Volume 67, Number 226 (Friday, November 22, 2002)]
[Proposed Rules]
[Pages 70330-70339]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-29647]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 67, No. 226 / Friday, November 22, 2002 / 
Proposed Rules  

[[Page 70330]]



SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

RIN 3245-AF02


Small Business Size Standards; Job Corps Centers

AGENCY: U.S. Small Business Administration (SBA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Small Business Administration (SBA) proposes to 
establish a $30 million size standard in average annual receipts for 
Job Corps Centers activities classified within the ``Other Technical 
and Trade Schools'' industry (North American Industry Classification 
System code 611519). The current size standard for all activities 
within this industry is $6 million in average annual receipts.

DATES: Comments must be received on or before December 23, 2002.

ADDRESSES: Send comments to Gary M. Jackson, Assistant Administrator 
for Size Standards, 409 Third Street, SW., Mail Code 6530, Washington, 
DC 20416; via email to [email protected], or via facsimile at (202) 
205-6930. Upon request, SBA will make all public comments available.

FOR FURTHER INFORMATION CONTACT: Diane Heal, Office of Size Standards, 
(202) 205-6618.

SUPPLEMENTARY INFORMATION: SBA has received requests from the U.S. 
Department of Labor (DOL) and three other organizations to review the 
size standard used for Federal Job Corps Center contracts. DOL operates 
most Job Corps Centers though private sector companies. DOL had 
classified its Job Corps Centers contracts under the Facilities Support 
Services industry, NAICS code 561210, and applied the previous Base 
Maintenance size standard of $20 million in average annual receipts (as 
defined in 13 CFR 121.401). A potential offeror on a recent 
solicitation appealed this NAICS designation to SBA's Office of 
Hearings and Appeals (OHA). OHA rendered a decision that the Job Corps 
Center contract was not properly classified under the Base Maintenance 
sub-category of Facilities Support Services. (See NAICS Appeal of 
Global Solutions Network, Inc., SBA No. NAICS-4478, dated March 5, 
2002.) For the appealed requirement, OHA determined that the proper 
classification for an activity that trains individuals in life skills 
and readies them for the job market through academic studies and/or 
technical training is Other Technical and Trade Schools, NAICS code 
611519. The effect of this decision was to change the size standard for 
Job Corps Center contracts from $20 million to $5 million. (On February 
22, 2002, an inflation adjustment increased the $5 million size 
standard for NAICS 611519 to $6 million and the $20 million size 
standard for Base Maintenance to $23 million. See 67 FR 3041, dated 
January 23, 2002.)
    According to DOL, Job Corps Center contracts account for more than 
$900 million annually in contracting and represent about 60 percent of 
DOL's procurement expenditures. SBA agreed to review the size standard 
for Job Corps Centers because of the large amount of contracting in one 
specific activity and the significant change in the size standard 
resulting from the OHA decision. Based on our review, this rule 
proposes to establish a $30 million size standard specifically for DOL 
Job Corp Center contracts. The discussion below describes SBA's general 
methodology for reviewing size standards, the basis for creating an 
industry sub-category of Job Corps Centers, the data obtained on Job 
Corp Center contracts and on the bidders to these contracts, the 
analysis leading to the decision to propose $30 million, and the 
alternative size standards considered by SBA.
    Size Standards Methodology: Congress granted SBA discretion to 
establish detailed size standards (15 U.S.C. 632(a)(2)). SBA's Standard 
Operating Procedure (SOP) 90 01 3, ``Size Determination Program'' 
(available on SBA's Web site at http:/www.sba.gov/library/soproom.html) 
sets out 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, including 
the impact on other agencies' programs, may come to the attention of 
SBA during the public comment period or from SBA's own research on the 
industry. No formula or weighting has been adopted so that the factors 
may be evaluated in the 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 under review.
    Industry Analysis: Section 3(a)(2) of the Small Business Act (15 
U.S.C. 632 (a)(2)), requires that size standards vary by industry to 
the extent necessary to reflect differing industry characteristic. SBA 
has two ``base'' or ``anchor'' size standards that apply to most 
industries--500 employees for manufacturing industries and $6 million 
in average annual receipts for nonmanufacturing industries. SBA 
established 500 employees as the anchor size standard for the 
manufacturing industries at SBA's inception in 1953 and shortly 
thereafter established a $1 million average annual receipts size 
standard for the nonmanufacturing industries. The receipts-based anchor 
size standard for the nonmanufacturing industries was adjusted 
periodically for inflation so that, currently, the anchor size standard 
$6 million. Anchor size standards are presumed to be appropriate for an 
industry unless its characteristics indicate that larger firms have a 
much greater significance within that industry than the ``typical 
industry.''
    When evaluating a size standard, the characteristics of the 
specific industry under review are compared to the characteristics of a 
group of industries, referred to as a comparison group. A comparison 
group is a large number of industries grouped together to represent the 
typical industry. It can be comprised of all industries, all 
manufacturing industries, all industries with receipt-based size 
standards, or some other logical grouping.
    If the characteristics of a specific industry are similar to the 
average characteristics of the comparison group, then the anchor size 
standard is

[[Page 70331]]

considered appropriate for the industry. If the specific industry's 
characteristics are significantly different from the characteristics of 
the comparison group, a size standard higher or, in rare cases, lower 
than the anchor size standard may be considered appropriate. The larger 
the differences between the specific industry's characteristics and the 
comparison group's characteristics, the larger the difference between 
the appropriate industry size standard and the anchor size standard. 
SBA will consider adopting a size standard below the anchor size 
standard only when (1) all or most of the industry characteristics are 
significantly smaller than the average characteristics of the 
comparison group, or (2) other industry considerations strongly suggest 
that the anchor size standard would be an unreasonably high size 
standard for the industry under review.
    The primary evaluation factors that SBA considers in analyzing the 
structural characteristics of an industry are listed in 13 CFR 121.102 
(a) and (b). Those factors include average firm size, distribution of 
firms by size, start-up costs, and industry competition. The analysis 
also examines the possible impact of a size standard revision on SBA's 
programs as an evaluation factor. SBA generally considers these five 
factors to be the most important evaluation factors in establishing or 
revising a size standard for an industry. However, it will also 
consider and evaluate other information that it believes relevant to 
the decision on a size standard for a particular industry. Public 
comments submitted on proposed size standards are also an important 
source of additional information that SBA closely reviews before making 
a final decision on a size standard. Below is a brief description of 
each of the five evaluation factors.
    1. Average firm size is simply total industry receipts (or number 
of employees) divided by the number of firms in the industry. If the 
average firm size of an industry is significantly higher than the 
average firm size of a comparison industry group, this fact would be 
viewed as supporting 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 comparison industry group, it 
would be a basis to adopt the anchor size standard or, in rare cases a 
lower size standard.
    2. The distribution of firms by size examines the proportion of 
industry receipts, employment, or other economic activity accounted for 
by firms of different sizes in an industry. If the preponderance of an 
industry's economic activity is by smaller firms, this tends to support 
adopting the anchor size standard. A size standard higher than the 
anchor size standard is supportable for an industry in which the 
distribution of firms indicates that economic activity is concentrated 
among the largest firms in an industry. In this rule, SBA is comparing 
the size of firms within an industry to the size of firms in the 
comparison group at which predetermined percentages of receipts are 
generated by firms smaller than a particular size firm. For example, 
assume for the industry under review that 50 percent of total industry 
receipts are generated by firms of $28.5 million in receipts and less. 
This contrasts with the comparison group (composed of industries with 
the nonmanufacturing anchor size standard of $6 million) in which firms 
of $5.8 million and less in receipts generated 50 percent of total 
industry receipts. Viewed in isolation, the higher figure for the 
industry under review suggests that a size standard higher than the 
nonmanufacturing anchor size standard may be warranted. Other size 
distribution comparisons in the industry analysis include 40 percent, 
60 percent, and 70 percent, as well as the 50 percent comparison 
discussed above. Usually, SBA uses information based on the most recent 
economic census conducted by the Department of Commerce's Bureau of the 
Census. However, Job Corps Centers are germane to the Federal 
government and involve approximately 35 organizations and firms from 
various industries. Information specific to Job Corps Centers under 
NAICS code 611519 is not reflected in the latest census data. 
Therefore, SBA gathered pertinent data on the various firms in this 
industry, which it will use along with the Census data.
    3. Start-up costs affect a firm's initial size because entrants 
into an industry must have sufficient capital to start and maintain a 
viable business. To the extent that firms entering into one industry 
have greater financial requirements than firms do in other industries, 
SBA is justified in considering a higher size standard. In lieu of 
direct data on start-up costs, SBA uses a proxy measure to assess the 
financial burden for entry-level firms. For this analysis, SBA has 
calculated nonpayroll costs per establishment for each industry. This 
is derived by first calculating the percent of receipts in an industry 
that are either retained or expended on costs other than payroll costs. 
(The figure comprising the numerator of this percentage is mostly 
composed of capitalization costs, overhead costs, materials costs, and 
the costs of goods sold or inventoried.) This percentage is then 
applied to average establishment receipts to arrive at nonpayroll costs 
per establishment (an establishment is a business entity operating at a 
single location). An industry with a significantly higher level of 
nonpayroll costs per establishment than that of the comparison group is 
likely to have higher start-up costs, which would tend to support a 
size standard higher than the anchor size standard. Conversely, if the 
industry showed a significantly lower nonpayroll costs per 
establishment when compared to the comparison group, the anchor size 
standard would be considered the appropriate size standard.
    4. Industry competition is assessed by measuring the proportion or 
share of industry receipts obtained by firms that are among the largest 
firms in an industry. In this proposed rule, SBA compares the 
proportion of industry receipts generated by the four largest firms in 
the industry'generally referred to as the ``four-firm concentration 
ratio''with the average four-firm concentration ratio for industries in 
the comparison groups. If a significant proportion of economic activity 
within the industry is concentrated among a few relatively large 
producers, SBA tends to set a size standard relatively higher than the 
anchor size standard in order to assist firms in a broader size range 
to compete with firms that are larger and more dominant in the 
industry. In general, however, SBA does not consider this to be an 
important factor in assessing a size standard if the four-firm 
concentration ratio falls below 40 percent for an industry under 
review, while its comparison groups also average less than 40 percent.
    5. ``Impact of size standard revisions on SBA programs'' refers to 
the possible impact a size standard change may have on the level of 
small business assistance. This assessment most often focuses on the 
proportion or share of Federal contract dollars awarded to small 
businesses in the industry in question. 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 is 
the justification for a size standard higher than the existing one.
    Another factor to evaluate the impact of a proposed size standard 
on SBA programs is the volume of guaranteed loans within an industry 
and the size of firms obtaining those loans. This factor is sometimes 
examined to assess whether the current size standard may

[[Page 70332]]

be restricting the level of financial assistance to firms in that 
industry. If small businesses receive significant amounts of assistance 
through these programs, or if the financial assistance is provided 
mainly to small businesses much lower than the size standard, a change 
to the size standard (especially if it is already above the anchor size 
standard) may not be necessary.

Establishing a Job Corps Centers Sub-Industry Category

    The Other Technical and Trade Schools industry which OHA designated 
for Job Corps Center contracts comprises establishments primarily 
engaged in offering job or career vocational or technical courses that 
are not specifically designated under NAICS as industries in their own 
right. The curriculums offered by these schools are highly structured 
and specialized and lead to job-specific certification. Examples of 
these schools include truck driving schools, bartending schools, and 
graphic arts schools. These schools tend to offer trade specific 
training and certification, and are usually small. More than 95 percent 
of these firms have revenues at or below $6 million.
    The DOL's Job Corps Centers, on the other hand, go beyond trade 
certification programs. Job Corps is a residential education and 
training program that helps students between the ages of 16 and 24 gain 
the experience they need to get a better job and take control of their 
lives. The mission is to prepare economically disadvantaged youth to 
obtain and hold gainful employment, pursue further education or 
training, or satisfy entrance requirements for careers in the Armed 
Forces. The centers provide comprehensive life skills training, 
comprehensive career preparation and development services which include 
academic, vocational, social and independent living skills, and career-
readiness training and support services. The centers offer college 
preparatory training, military entrance training, career transition 
activities, and training and certification in a trade. Basic life-
skills training include basic reading and math skills, English as a 
second language, dietary, dental, basic health, personal hygiene, as 
well as job life skills. The centers provide academic training that 
will lead to a high school diploma or equivalent and conduct training 
in computer skills, resume development, interview skills, and career 
development. Besides providing teachers for these requirements, several 
centers have agreements with local high schools as well as local 
community colleges. Centers also prepare interested participants for 
military service exams, and train students in various trades, including 
plumbing, carpentry, culinary arts, auto-mechanic, electrician, 
facilities maintenance, landscaping, brick masonry, etc. The Job Corps 
contractors are required to provide outreach activities and also to 
maintain the facility, purchase any equipment needed in the teaching of 
a trade (outfitting kitchens for culinary studies, purchasing heavy 
machinery for mechanical and automotive trades, etc.), provide medical 
and dental facilities, and perform admission physicals which include 
drug and alcohol abuse screening.
    The significantly broader scope of activities performed by Job 
Corps Center contractors as compared with the activities of all other 
trade schools within its industry supports a separate assessment of an 
appropriate size standard. Job Corps Centers are larger than the 
typical trade school, with an average yearly funding of $8.8 million 
for one center (yearly funding for each center ranges from $5 million 
to over $44 million). The average size trade school in NAICS 611519 is 
less than one million dollars.
    Because the performance of Job Corps Center contracts is a segment 
of the Other Technical and Trade Schools industry, SBA's proposal 
includes a footnote to the table of size standards defining the 
activities covered. It explains that contracts for Job Corps Centers 
require the complete maintenance and operation of the centers. The 
activities involved include admissions activities, life skills 
training, educational activities, comprehensive career preparation 
activities, career development activities, career transition 
activities, as well as the management and support functions and 
services needed to operate and maintain the facility. SBA invites 
comment on this definition so that it is accurately depicts the scope 
of activities currently performed by Job Corps Center contractors.

Industry Data on Job Corp Centers

    The U.S. Bureau of the Census does not published specific data on 
firms engaged in the operation and management of Job Corps Centers. 
Also, companies that perform and compete for these Job Corp Center 
contracts operate primarily in industries outside of the Other 
Technical and Trade Schools industry. To assess a size standard for the 
operation and maintenance of Job Corps Centers, SBA collected contract 
and company data from DOL and Dun and Bradstreet (D&B). Tables 1-3 
summarize these data.
    SBA collected fiscal years 2000-01 data from the DOL on 
organizations who have contracts or who have submitted proposals on Job 
Corps Center requirements, and used information provided on D&B 
Information Reports on these organizations. A review of those 
organizations shows the following information. There are approximately 
35 organizations in this activity. The organizations include for-profit 
businesses, the YWCA, businesses owned by Native American tribes and 
nations, and several non-profit establishments. There are 21 
organizations currently under contract with DOL to operate Job Corps 
Centers. According to D&B reports, these organizations are in the 
following industries: Management of youth facilities, vocational 
rehabilitation, facilities maintenance, home health care services, 
human resource counseling, management consulting, and information 
retrieval. Seven organizations were awarded contracts under Small 
Business Set-Aside procedures with the contracting officer using the 
appealed NAICS code of 561210 and the previous Base Maintenance size 
standard of $20 million. Five of the organizations in this activity 
have receipts below $6 million, but only one of these currently has a 
Job Corps Center contract. In addition, D&B information shows that four 
of the five organizations have receipts below $1 million. These firms 
are in the following industries: temporary help services, construction, 
investigation services, and engineering and technical services.
    Twenty six of the 35 organizations are listed with D&B. Two non-
profit organizations do not have receipts and employees listed on their 
D&B reports, therefore, SBA has relevant information on 24 
organizations. D&B reports on eight organizations show the number of 
employees but lacked information on those firms' receipts. For these 
eight organizations, SBA estimated their receipts based organizations 
in similar industries with similar employee counts.
    SBA calculated the average characteristics of the 24 Job Corp 
Center organizations that provided D&B with receipt and employee 
information. Table 1 shows the mean and median values of these 
organizations. Because of the small number of organizations competing 
for Job Corps Center contracts, the mean values are inordinately 
influenced by a few very large firms. The median values are considered 
more reflective of the average characteristics of Job Corps

[[Page 70333]]

Center firms and are used in the analysis of industry structure 
discussed later in this rule.

                       Table 1.--Industry Characteristics of the Job Corps Center Activity
----------------------------------------------------------------------------------------------------------------
                                                            Mean                             Median
                                             -------------------------------------------------------------------
                  Category                        Receipts                          Receipts
                                                 (millions)        Employees       (millions)       Employees
----------------------------------------------------------------------------------------------------------------
Job Corps Center............................           $75.3            1,820            $30.0              400
----------------------------------------------------------------------------------------------------------------

    Tables 2 and 3 examine the distribution of firms in relation to 
receipts and number of employees. In addition, Table 2 contains 
information on the percentage distribution of Job Corps Center contract 
dollars by receipts size of the firm.

 Table 2.--Receipts Distribution and Percentage of Contract Dollars for
                        Job Corps Center Activity
------------------------------------------------------------------------
                                                            Percent of
                                             Number of       total job
         Receipts  (in millions)              firms/       corps center
                                           organizations     contract
                                                              dollars
------------------------------------------------------------------------
$100 and over...........................               3              52
$50-$99,999.............................               7              28
$30-$49,999.............................               2               7
$20-$29,999.............................               2               2
$10-$19,999.............................               4               5
$6-$9,999...............................               1               1
Below $6................................               5               1
Undetermined............................           \1\ 3              4
------------------------------------------------------------------------
\1\ Two organizations with Job Corps Center contracts are listed with
  D&B, but provided no receipt and employee information. One non-profit
  organization with a Job Corps Center contract is not listed with Dun
  and Bradstreet.


      Table 3.--Employee Distribution for Job Corps Center Activity
------------------------------------------------------------------------
                                                             Number of
                        Employees                            firms and
                                                           organizations
------------------------------------------------------------------------
Over 2,500..............................................               1
1,000-2,499.............................................               5
500-999.................................................               5
250-499.................................................               5
150-249.................................................               4
0-149...................................................               4
Undetermined............................................          \1\ 3
------------------------------------------------------------------------
\1\ Two organizations with contracts are listed with D&B, but provided
  no receipt and employee information. One non-profit organization with
  a Job Corps Center contract is not listed with Dun and Bradstreet.

    Evaluation of Size Standard for the Job Corps Center Sub-industry: 
Tables 4 and 5 below show the characteristics of the Job Corp Centers 
sub-industry and for two comparison groups. The first comparison group 
is comprised of all industries with a $6 million receipts-based size 
standard, referred to as the nonmanufacturing anchor group. Since SBA 
assumes that the $6 million anchor size standard is appropriate for a 
nonmanufacturing industry, this is the most logical set of industries 
to group together for the industry analysis to assess whether a size 
standard at the anchor size standard or higher is appropriate. The 
second comparison group consists of nonmanufacturing industries which 
have the highest levels of receipt-based size standards established by 
SBA, referred to as the nonmanufacturing higher-level size standard 
group. Size standards for these industries range from $21 million to 
$29 million. If an industry's characteristics are significantly larger 
than those of the nonmanufacturing anchor group, SBA will compare them 
to characteristics of the higher-level size standards group. By doing 
so, SBA can assess if a size standard among its highest receipts-based 
size standards is appropriate or an intermediate size standard between 
the anchor size standard and the range of higher size standards.
    SBA examined economic data on the comparison group industries taken 
from a special tabulation of the 1997 Economic Census prepared under 
contract by the U.S. Bureau of the Census (Census). Data on Job Corps 
Centers contracts, contractors, and bidders were obtained from DOL and 
D&B, as described earlier. Industry Structure Consideration: Table 4 
below examines the size distribution of firms. For this factor, SBA is 
evaluating the cumulative size of firm that account for predetermined 
percentages of total industry receipts (40 percent, 50 percent, 60 
percent, and 70 percent). The table shows firms up to a specific size 
that, along with all other smaller firms, account for a specific 
percentage of total industry receipts. For the Job Corps Center 
bidders, the percentages reflect the value of awarded Job Corps Center 
contracts.

[[Page 70334]]



  Table 4.--Size Distribution of Firms in the Job Corps Center Sub-Industry, Nonmanufacturing Anchor Group and
                                        Higher-level Size Standard Group
                                          [Data in millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                   Size of firm    Size of firm    Size of firm    Size of firm
                    Category                          at 40%          at 50%          at 60%          at 70%
----------------------------------------------------------------------------------------------------------------
Job Corps Centers Bidders.......................           $54.5           $68.6          $900.0          $900.0
Nonmanufacturing Anchor Group...................            $3.2            $5.8           $11.8           $28.0
Higher-level Size Standards Group...............           $24.2           $50.4          $135.6          $423.6
----------------------------------------------------------------------------------------------------------------

    These data support a size standard significantly higher than $6 
million for the Job Corps Centers industry. At a given coverage level 
the size of firms in the Job Corps Centers industry is substantially 
larger than in the two comparison groups. In relation to the 
nonmanufacturing anchor group, the Job Corp Center firms are 18 to 32 
times larger, and almost double that of the higher-level size standard. 
Because the size distribution of Job Corps Centers firms is 
significantly higher than that of the nonmanufacturing anchor group, 
the analysis of this factor supports a size standard significantly 
above the $6 million nonmanufacturing anchor size standard and at or 
beyond the size standards of the higher-level size standard group.
    Table 5 lists the two other evaluation factors of average firm size 
and the four-firm concentration ratio for the Job Corps Centers sub-
industry and the comparison groups.

 Table 5.--Industry Characteristics of the Job Corps Center Industry, Nonmanufacturing Anchor Group, and Higher-
                                           Level Size Standards Group
----------------------------------------------------------------------------------------------------------------
                                                                         Average firm size           Four firm
                                                                 --------------------------------  concentration
                            Category                                 Receipts                          ratio
                                                                    (millions)       Employees       (percent)
----------------------------------------------------------------------------------------------------------------
Job Corp Center Bidders.........................................           $30.0             400            50.0
Nonmanufacturing Anchor Group...................................           $0.95            10.6            14.4
Higher-level Size Standards Group...............................            $4.6            21.4            26.7
----------------------------------------------------------------------------------------------------------------

    For Job Corps Centers, its average firm size in receipts is over 30 
times larger than the average firm size in the nonmanufacturing anchor 
group and approximately six and one half times that of the higher-level 
size standards group. Moreover, its average firm size in employees is 
19 to 37 times the average sizes of these two comparison groups. This 
factor is substantially higher than the comparison groups and supports 
a size standard far above $6 million. Because the size distribution of 
Job Corps Centers firms is significantly higher than that higher-level 
size standard group, this factor supports a size standard at or beyond 
the range of $21 million to $29 million.
    The four-firm concentration ratio for Job Corps Center firms is 
about double that of the higher-level size standards group. This factor 
supports a size standard at least within the range of the higher-level 
size standards group.
    The start-up costs evaluation factor is not analyzed since no data 
are not available for Job Corp Centers. However, the following 
discussion of program considerations addresses the issue of size of 
contract which indirectly relates to the start-up costs associated with 
Job Corps Centers.
    SBA Program Considerations: SBA is proposing this rule to establish 
a size standard specifically for DOL's Job Corps Centers contracts. 
SBA's loan programs will be minimally affected as organizations 
participating in the Job Corps Centers primarily operate in other 
industries, namely facility support services, general construction, and 
home health care services.
    SBA extensively reviewed the scope of Job Corp Centers and the 
organizations bidding on and winning these contracts. Since the 
beginning of the Job Corps Centers program, the Federal Government has 
relied on the private sector for the operation of most of these centers 
or parts of the centers. Since the inception of the Job Corps Centers 
program, DOL has contracted out the entire operation and maintenance of 
a facility. A Job Corps Center contract requires an organization to 
provide teachers, counselors, administrators and support personnel, 
outreach activities, medical and dental facilities; and perform 
admissions physicals, maintain the facility, and purchase any equipment 
needed in the teaching of a trade. Over the years the Job Corps program 
has developed many public-private partnerships with various trade 
unions, corporations, and organizations. Many trade unions provide 
teachers and provide opportunities for the participants to apprentice 
with master tradesmen. Because the mission of these centers prepares 
students for the job market, many of the functions of the centers are 
integrated as a teaching tool for the students. As an example, students 
interested in culinary arts studies will work in the cafeteria 
alongside chefs, or a student interested in learning the plumbing trade 
will work with the maintenance crews, gaining ``hands-on'' experience. 
This approach has been extremely successful in achieving the mission 
and goals of the Job Corps Center program.
    DOL operates 118 Job Corps Centers, of which 88 centers are run by 
the private sector. All but two of these centers are residential where 
students are housed. Several centers operate as advanced centers. For 
example, the San Francisco center runs an advanced culinary institute 
that prepares participants with skills beyond the high school level. 
The yearly funding in fiscal year 2001 for these centers ranged from $5 
million to more than $44 million for their residential centers, with an 
average yearly funding amounting to $8.8 million per year per center. 
Non-residential center contracts range from $4 million to more than $6 
million.

[[Page 70335]]

    Procurement statistics show that in fiscal year 2001, DOL expended 
$909.5 million in Job Corps Center contracts. There are 21 
organizations currently under contract with DOL to operate Job Corps 
Centers. Seven firms were awarded their contracts under Small Business 
Set-Aside procedures. (For these set-aside contracts, DOL used the 
appealed NAICS code of 561210 and applied the previous $20 million size 
standard for Base Maintenance). These small businesses account for 6 
percent of total Job Corps Center contract dollars.
    The analysis of Job Corps Center contracts indicates that a size 
standard of $6 million inadequately identifies the smaller segment of 
organizations competing for and obtaining these types of contracts. A 
size standard of at least equal to the current Base Maintenance size 
standard of $23 million represents a more realistic and effective size 
standard. The size of winning contractors and the average size of Job 
Corps Center contracts support this assessment.
    As discussed above, there are 21 organizations performing 88 Job 
Corps Center contracts. Table 6 below summarizes the size of the 
awardees and bidders on these contracts. Only one of the successful 
organizations has receipts below $6 million. This organization's 
contract is for $5.8 million per year. With a contract that is yearly 
funded just below the current $6 million size standard, this 
organization will probably outgrow the size standard by the end of its 
next fiscal year, potentially leaving no currently defined small Job 
Corps Center contractor eligible for future small business asides. Of 
four other organizations under $6 million in receipts competing for Job 
Corps Center contracts, none have been successful offerors.

  Table 6.--Breakdown on Firms and Organizations Involved in Job Corps
                             Center Activity
------------------------------------------------------------------------
                                    Number of
                                      firms             Industries
------------------------------------------------------------------------
Firms and organizations                      35
 involved or interested in Job
 Corps Center Activity.
Firms and organizations with                 21  Industries: tribal
 Job Corps Center contracts.                      business, management
                                                  of youth facilities,
                                                  vocational
                                                  rehabilitation,
                                                  facilities
                                                  maintenance, home-heal
                                                  care services, human
                                                  resource counseling,
                                                  management consulting,
                                                  and information
                                                  retrieval.
Firms under $23 million........              11
Firms under $23 million with                  7
 Job Corps Center Contracts.
Firms under $6 million.........               5
Firms under $6 million with Job               1
 Corps Center contracts.
Firms with revenues under $1                  4  Industries: Temporary
 million (none have Job Corps                     help services,
 Center contracts).                               construction,
                                                  investigation
                                                  services, and
                                                  engineering and
                                                  technical services.
------------------------------------------------------------------------

    Table 2 above shows that 80 percent of the value of Job Corps 
Center contracts were awarded to organization with receipts of $50 
million or more. All of the awards to small business were made as set-
aside awards. Only one percent of Job Corps Center contract dollars go 
to small businesses using a $6 million size standard. In addition, 49 
percent of contract dollars were expended with firms and organizations 
that have over $100 million in receipts. This shows that a significant 
proportion of economic activity within the Job Corps Centers industry 
is concentrated among a few relatively large organizations.
    Tables 7 and 8 below illustrate that firms that have been 
successful in winning Job Corps Center contracts are concentrated in 
industries that have size standards significantly greater than $6 
million, such as general construction, facilities maintenance services, 
and home health care services. These observations provide further 
evidence that a size standard greater than $6 million is needed to 
attract the type of firms capable of performing the broad range of 
activities of Job Corp Centers.

 Table 7.--Listing of Primary Industries of Job Corps Center Contractors
------------------------------------------------------------------------
                                                                 Size
                      Primary industry                         standard
                                                              (million)
------------------------------------------------------------------------
General Construction.......................................        $28.5
Facilities Maintenance Services............................        $23.0
Home Health Care Services..................................        $11.5
Vocational Schools.........................................         $6.0
------------------------------------------------------------------------


  Table 8.--Listing of Primary Industries for Firms That Have Submitted
  Proposals Against Job Corps Center Solicitations but Have Not Won Job
                         Corps Center Contracts
------------------------------------------------------------------------
                                                                 Size
                      Primary industry                         standard
                                                              (million)
------------------------------------------------------------------------
Supply Services............................................         $6.0
Investigation Services.....................................        $10.5
Engineering and Technical Services.........................         $4.0
                                                                    $6.0
Behavioral Health Services.................................         $6.0
------------------------------------------------------------------------

    The size of Job Corps Centers contracts explains to a great extent 
the pattern of awards by size of contractor. For an organization to 
perform on the average Job Corps Center contract of $8.8 million, it 
generally must be at least several times that size. Under the current 
$6 million size standard, if an organization receives an award for just 
one center, it is close to or over the current $6 million size 
standard. Those organizations under the current size standard would 
probably go over $6 million in receipts within a year if they receive 
any other substantial business. Thus, with a $6 million size standard, 
the opportunities for small businesses in this activity are severely 
limited.
    Additionally, firms with receipts over $23 million currently handle 
from four to 22 Job Corps Centers. On average, they operate nine 
centers. Small businesses must be able to successfully compete with 
these large organizations, therefore, the size standard needs to be set 
at a threshold where these businesses can reach a competitive level. In 
discussions with DOL, an organization can achieve meaningful economies 
of scale by operating three to four centers. The total operational 
costs of three centers are $26.4 million (based on an average cost of 
$8.8 million per center), and indicates support of a size standard at 
that level as a viable alternative to the $6 million level.

[[Page 70336]]

    Overview: Based on a review of each evaluation factor, SBA is 
proposing a $30 million size standard for Job Corps Centers. All of the 
factors support a size standard comparable to those of the 
nonmanufacturing higher-level size standard group, which ranges between 
$21 million to $29 million. Most factors support even a higher size 
standard. A $30 million size standard takes into consideration that a 
Job Corps Center organization achieves economics of scales operating 
three to four centers. This suggests a size standard of $26.4 million 
or more. Since organizations involved with Job Corps Center contracts 
have other operations, SBA also needs to take that fact into account in 
establishing a size standard for Job Corps Centers. A $30 million size 
standard provides small businesses the ability to compete and grow at 
an appropriate level without losing their small business status, but 
not to a level where a few firms would be able to control a significant 
portion of Federal contracts at the expense of other small businesses.
    Dominant in Field of Operation: Section 3(a) of the Small Business 
Act defines a small concern as one that is (1) independently owned and 
operated, (2) not dominant in its field of operation and (3) within 
detailed definitions or size standards established by the SBA 
Administrator. SBA considers as part of its evaluation of a size 
standard whether a business concern at or below a proposed size 
standard would be considered dominant in its field of operation. This 
assessment generally considers the market share of firms at the 
proposed or final size standard or other factors that may show whether 
a firm can exercise a controlling influence on a national basis in 
which significant numbers of business concerns are engaged.
    SBA has determined that no organization at or below the proposed 
size standard in the Job Corps Centers activities would be of a 
sufficient size to dominate its field of operation. For Job Corps 
Centers, an organization with $30 million in receipts could obtain 
about three percent of the total dollar value of Job Corps Center 
contracts. This level of market share effectively precludes an 
organization at or below the proposed size standard to exert a 
controlling effect on Job Corps Center contracts.
    Alternative Size Standards: SBA concluded that a single size 
standard of $6 million was inadequate to define small businesses in the 
entire Other Technical and Trade Schools industry. The size standard 
would be too low for Job Corps Centers or too high for all other 
industry activities, such as job training facilities, marine navigation 
schools, and truck driving schools. Establishing two size standards for 
these industries would enable SBA to determine the most appropriate 
size standard for disparate segments of the industry.
    SBA considered restoring the $20 million size standard for Job 
Corps Centers previously applied by DOL. After reviewing the industry 
data, in particular procurement data, which show the average Job Corp 
Center contract is for $8.8 million, SBA concluded that a $20 million 
size standard would not be adequate for Job Corps Centers. The adoption 
of this size standard would allow a firm to receive only two Job Corps 
Center contracts and be at risk of outgrowing its small business status 
before reaching sufficient economies to be competitive against the 
larger incumbent Job Corps Center contractors. Therefore, SBA decided 
against a $20 million size standard for Job Corps Centers since it 
would not allow sufficient growth and business development.
    SBA welcomes public comments on its proposed size standard for Job 
Corps Centers. SBA is concerned with how the proposed size standards 
may negatively impact those qualified under the current size standard. 
Comments supporting an alternative to the proposal, including the $20 
million, or the option of retaining the size standard at $6 million 
discussed above, should explain why the alternative would be preferable 
to the proposed size standard, and how the alternative impacts current 
small businesses.

Compliance With Executive Orders 12866, 12988, and 13132, the Paperwork 
Reduction Act (44 U.S.C. Ch. 35) and the Regulatory Flexibility Act (5 
U.S.C. 601-612)

    The Office of Management and Budget (OMB) has determined that the 
proposed rule is not a ``significant'' regulatory action for purposes 
of Executive Order 12866. Size standards determine which businesses are 
eligible for Federal small business programs. For the purpose of the 
Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA has determined that this 
rule would not impose new reporting or record keeping requirements. For 
purposes of Executive Order 13132, SBA has determined that this rule 
does not have any federalism implications warranting the preparation of 
a Federalism Assessment. For purposes of Executive Order 12988, SBA has 
determined that this rule is drafted, to the extent practicable, in 
accordance with the standards set forth in that order. Our Regulatory 
Impact Analysis follows.

Regulatory Impact Analysis

i. Is There a Need for the Regulatory Action?
    SBA is chartered to aid and assist small businesses through a 
variety of financial, procurement, business development, and advocacy 
programs. To effectively assist intended beneficiaries of these 
programs, SBA must establish distinct definitions of which businesses 
are deemed small businesses. The Small Business Act (15 U.S.C. 632(a)) 
delegates to the SBA Administrator the responsibility for establishing 
small business definitions. It also requires that small business 
definitions vary to reflect industry differences. The preamble of this 
rule explains the approach SBA follows when analyzing a size standard 
for a particular industry. Based on that analysis, SBA believes that a 
size standard for Job Corps Centers is needed to better define small 
businesses engaged in these activities.
ii. What Are the Potential Benefits and Costs of This Regulatory 
Action?
    The most significant benefit to businesses obtaining small business 
status as a result of this rule is eligibility for Federal small 
business assistance programs. Under this rule, approximately 10 
additional firms will obtain small business status and become eligible 
for these programs. These include Federal procurement preference 
programs for small businesses, 8(a) firms, small disadvantaged 
businesses (SDB), and small businesses located in Historically 
Underutilized Business Zones (HUBZone), as well as those for contracts 
awarded through full and open competition after application of the 
HUBZone or SDB price evaluation preference or adjustment. They may also 
become eligible for SBA financial assistance programs. Other Federal 
agencies use SBA size standards for a variety of regulatory and program 
purposes. SBA does not have information on each of these uses 
sufficient to evaluate the impact of size standards changes. However, 
in cases where SBA size standards are not appropriate, an agency may 
establish its own size standards with the approval of the SBA 
Administrator (see 13 CFR 121.801). Through the assistance of these 
programs, small businesses may benefit by becoming more knowledgeable, 
stable, and competitive businesses.
    The benefits of a size standard increase to a more appropriate 
level

[[Page 70337]]

would accrue to three groups: (1) Businesses that benefit by gaining 
small business status from the proposed size standards and use small 
business assistance programs, (2) growing small businesses that may 
exceed the current size standards in the near future and who will 
retain small business status from the proposed size standards, and (3) 
Federal agencies that award contracts under procurement programs that 
require small business status.
    Newly defined small businesses may benefit from SBA's financial 
programs, in particular its 7(a) Guaranteed Loan Program. Under this 
program SBA estimates that $700,000 in new Federal loan guarantees 
could be made to the newly defined small businesses. Because of the 
size of the loan guarantees, most loans are made to small businesses 
well below the size standard. Thus, increasing the size standard to 
include 10 additional businesses may result in only one or two small 
business guaranteed loans to businesses in this industry. As a 
guaranteed loan for larger firms averages $350,000 for firms in the 
Other Technical and Trade Schools industry and the Facilities Support 
Services industry, if two of the 10 business applied for a loan, SBA 
could expect to guarantee $700,000 in loans. However, most firms 
involved in Job Corps Centers are in other industries; thus their 
eligibility for SBA loan assistance would be under their primary NAICS 
industry. The newly defined small businesses would also benefit from 
SBA's economic injury disaster loan program. Since this program is 
contingent upon the occurrence and severity of a disaster, no 
meaningful estimate of benefits can be projected.
    SBA estimates that firms gaining small business status could 
potentially obtain Federal contracts worth $53 million per year under 
the small business set-aside program, the 8(a) and HUBZone Programs, or 
unrestricted contracts. Federal agencies may benefit from the higher 
size standards if the newly defined and expanding small businesses 
compete for more set-aside procurements. The larger base of small 
businesses would likely increase competition and lower the prices on 
set-aside procurements. A larger base of small businesses may create an 
incentive for Federal agencies to set aside more procurements, thus 
creating greater opportunities for all small businesses. Other than 
small businesses with small business subcontracting goals may also 
benefit from a larger pool of small businesses by enabling them to 
better achieve their subcontracting goals at lower prices. No estimate 
of cost savings from these contracting decisions can be made since data 
are not available to directly measure price or competitive trends on 
Federal contracts.
    To the extent that approximately 10 additional firms could become 
active in Government programs, this may entail some additional 
administrative costs to the Federal Government associated with 
additional bidders for Federal small business procurement programs, 
additional firms seeking SBA guaranteed lending programs, and 
additional firms eligible for enrollment in SBA's PRO-Net small 
business database. Among businesses in this group seeking SBA 
assistance, there will be some additional costs associated with 
compliance and verification of small business status and protests of 
small business status. These costs are likely to generate minimal 
incremental costs since mechanisms are currently in place to handle 
these administrative requirements.
    The costs to the Federal Government may be higher on some Federal 
contracts as a result of this rule. With greater numbers of businesses 
defined as small, Federal agencies may choose to set aside more 
contracts for competition among small businesses rather than using full 
and open competition. The movement from unrestricted to set-aside is 
likely to result in competition among fewer bidders for a contract. 
Also, higher costs may result if additional full and open contracts are 
awarded to HUBZone and SDB businesses as a result of a price evaluation 
preference. However, the additional costs associated with fewer bidders 
are likely to be minor since, as a matter of policy, procurements may 
be set aside for small businesses or under the 8(a), and HUBZone 
Programs only if awards are expected to be made at fair and reasonable 
prices. In addition, the use of small business set-asides may encourage 
more competitors since small businesses would not have to compete 
against the major businesses in the industry.
    The proposed size standard may have distributional effects among 
large and small businesses. Although the actual outcome of the gains 
and losses among small and large businesses cannot be estimated with 
certainty, several trends are likely to emerge. First, a transfer of 
some Federal contracts to small businesses from large businesses. Large 
businesses may have fewer Federal contract opportunities as Federal 
agencies decide to set aside more Federal procurements for small 
businesses. Also, some Federal contracts may be awarded to SDB or 
HUBZone businesses instead of large businesses since those two 
categories of small businesses are eligible for price evaluation 
preferences for contracts competed on a full and open basis. Similarly, 
currently defined small businesses may obtain fewer Federal contacts 
due to the increased competition from more businesses defined as small. 
As currently there is only one small business that has a contract for a 
Job Corps Center, this transfer will be offset by initiating a number 
of Federal procurements than can now be set aside for all small 
businesses. The potential transfer of contracts away from large and 
currently defined small businesses would be limited by the number of 
newly defined and expanding small businesses that were willing and able 
to sell to the Federal Government. The potential distributional impacts 
of these transfers could result in up to $53 million or 5.8 percent of 
total contract dollars of $909 million being transferred from large 
businesses to small businesses. SBA based this estimate on the per year 
funding of the firms that currently have Job Corps Center contracts, 
which would gain small business status if this proposed rule is 
adopted.
    The revision to current size standard for Job Corps Centers is 
consistent with SBA's statutory mandate to assist small businesses. 
This regulatory action is in support of the Administration's objectives 
is to help individual small businesses succeed through fair and 
equitable access to capital and credit, Government contracts, and 
management and technical assistance. Reviewing and modifying size 
standards when appropriate ensures that intended beneficiaries have 
access to small business programs designed to assist them. Size 
standards do not interfere with State, local, and tribal governments in 
the exercise of their government functions. In a few cases, State and 
local governments have voluntarily adopted SBA's size standards for 
their programs to eliminate the need to establish an administrative 
mechanism for developing their own size standards.

Initial Regulatory Flexibility Analysis

    Under the Regulatory Flexibility Act (RFA), this rule may have a 
significant impact on a substantial number of small entities engaged in 
Job Corps Center activities. As described in the above Regulatory 
Impact Analysis, this rule may impact small entities in two ways. 
First, small businesses interested in competing for Federal Job Corps 
Centers procurements reserved for small businesses, and SDB and HUBZone 
businesses eligible for price preferences, may face greater competition 
from

[[Page 70338]]

newly eligible small businesses. Second, additional Federal 
procurements for the operation and management of Job Corps Centers may 
be set aside for small business as the pool of eligible small 
businesses expands. As discussed in the preamble, SBA estimates that 
firms gaining small business status could potentially obtain Federal 
contracts worth $53 million.
    As Job Corps Center activity is limited to Federal procurements 
within DOL, SBA cannot guarantee that the proposed size standard will 
affect small businesses participating in programs of other agencies 
that use SBA size standards. As a practical matter, SBA cannot estimate 
the impact of a size standard change on each and every Federal program 
that uses its size standards. For this particular proposed rule, SBA 
did consult with DOL regarding a possible increase to the Job Corps 
Centers size standard. In cases where an SBA size standard is not 
appropriate, the Small Business Act and SBA's regulations allow Federal 
agencies to develop different size standards with the approval of the 
SBA Administrator (13 CFR 121.902). For purposes of a regulatory 
flexibility analysis, agencies must consult with SBA's Office of 
Advocacy when developing different size standards for their programs 
(13 CFR 121.902(b)(4)).
    Immediately below, SBA sets forth an initial regulatory flexibility 
analysis (IRFA) of this proposed rule on the Job Corps Centers industry 
addressing the following questions: (1) what is the need for and 
objective of the rule; (2) what is SBA's description and estimate of 
the number of small entities to which the rule will apply; (3) what is 
the projected reporting, record keeping, and other compliance 
requirements of the rule; (4) what are the relevant Federal rules which 
may duplicate, overlap or conflict with the proposed rule; and (5) what 
alternatives will allow the Agency to accomplish its regulatory 
objectives while minimizing the impact on small entities?
(1) What Is the Need for and Objective of the Rule?
    A separate size standard for Job Corps Centers more appropriately 
defines the size of businesses in this industry activity that SBA 
believes should be eligible for Federal small business assistance 
programs. Currently, there are five firms in the Job Corps Centers 
activity that have revenues below $6 million size standard, however, 
only one of these firms has a contract for a Job Corps Center. This 
firm is likely to outgrow the current size standard within the next 
year as its current contract is for $5.8 million per year. This will 
leave only four firms below the size standard, all having revenues 
below $1 million. None of these firms have been successful in winning a 
Job Corps Center contract. This, along with the facts that the average 
contract funding is $8.8 million and the minimal funding for a Job 
Corps Center is $5 million for a residential center and $4 million for 
a non-residential center, indicates that the size standard for Job 
Corps Centers needs to be greater than the current $6 million.
(2) What Is SBA's Description and Estimate of the Number of Small 
Entities to Which the Rule Will Apply?
    SBA estimates that 35 organizations are engaged in the Job Corps 
Center industry, of which approximately 14 percent are small businesses 
currently at or just below the $6 million threshold. If this rule were 
adopted, 10 additional businesses would be considered small. Although 
this may not represent a substantial number of small businesses, SBA is 
preparing an IRFA to ensure that the impact on small businesses of 
higher size standards are known and being considered. These businesses 
would be eligible to seek available SBA assistance provided that they 
meet other program requirements.
    Based on the relative size of these firms and SBA's knowledge of 
contracting in this area, SBA estimates that small business coverage 
could increase by $53.1 million or 5.8 percent of total revenues in 
this activity. SBA based this estimate on the per year funding of the 
firms that currently have Job Corps Center contracts, which would gain 
small business status if this proposed rule is adopted.
(3) What Are the Projected Reporting, Record Keeping, and Other 
Compliance Requirements of the Rule and an Estimate of the Classes of 
Small Entities That Will Be Subject to the Requirements?
    A new size standard does not impose any additional reporting, 
record keeping or compliance requirements on small entities. Increasing 
size standards expands access to SBA programs that assist small 
businesses, but does not impose a regulatory burden as they neither 
regulate nor control business behavior.
(4) What Are the Relevant Federal Rules Which May Duplicate, Overlap or 
Conflict With the Proposed Rule?
    This proposed rule overlaps other Federal rules that use SBA's size 
standards to define a small business. Under section 632(a)(2)(C) of the 
Small Business Act, unless specifically authorized by statute, Federal 
agencies must use SBA's size standards to define a small business. In 
1995, SBA published in the Federal Register a list of statutory and 
regulatory size standards that identified the application of SBA's size 
standards as well as other size standards used by Federal agencies (60 
FR 57988, dated November 24, 1995). SBA is not aware of any Federal 
rule that would duplicate or conflict with establishing size standards.
(5) What Alternatives Will Allow the Agency To Accomplish Its 
Regulatory Objectives While Minimizing the Impact on Small Entities?
    As discussed in the preamble, SBA considered several alternative 
size standards and their implications on small businesses. First, SBA 
considered retaining a single size standard of $6 million for the Other 
Technical and Trade Schools industry. In researching firms engaged in 
the operation and maintenance of Job Corps Centers, SBA concluded that 
no single size standard could adequately define small business in the 
whole industry. The size standard would be either too low for Job Corps 
Centers or too high for other industry activities, such as graphics 
arts schools, real estate schools, and broadcasting schools. 
Establishing two size standards for this industry would enable SBA to 
determine the most appropriate size standard for disparate segments of 
the industry.
    SBA also considered restoring the $20 million size standard for Job 
Corps Centers. However, as discussed in the preamble, this size 
standard would not allow for sufficient growth and development of a 
small Job Corps Center contractor. A firm would be at risk of losing 
its small business status if it received two average-size contracts.
    By establishing the size standard at $30 million, SBA will create 
opportunities for the small businesses in an industry where only five 
firms are below the size standard. Of these five firms, four have 
revenues below $1 million and only one firm has a Job Corps Center 
contract. If SBA retains the current $6 million size standard, it will 
not accurately reflect the smaller segment of businesses that 
participate in operating and maintaining Job Corps Centers.
    SBA welcomes comments on other alternatives that minimize the 
impact of this rule on small businesses and achieve the objectives of 
this rule. Those comments should describe the alternative and explain 
why it is preferable to the proposed rule.

[[Page 70339]]

List of Subjects in 13 CFR Part 121

    Administrative practice and procedure, Government procurement, 
Government property, Grant programs--business. Loan programs--business. 
Small businesses.

    Accordingly, for the reasons stated in the preamble, SBA proposes 
to amend part 121 of title 13 of the Code of Federal Regulations as 
follows:

PART 121--SMALL BUSINESS SIZE REGULATIONS

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

    Authority: 15 U.S.C. 632(a), 634(b)(6), 637(a), 644(c) and 
662(5) and Sec. 304, Pub. L. 103-403, 108 Stat. 4175, 4188.

    2. Amend Sec.  121.201 as follows:
    a. In the table ``Small Business Size Standards by NAICS Industry'' 
under the heading ``Subsector 611--Educational Services,'' revise the 
entry for 611519 to read as follows; and
    b. Add footnote 17 to the end of the table to read as follows:

                                 Small Business Size Standards by NAICS Industry
----------------------------------------------------------------------------------------------------------------
                                                                                  Size standards  Size standards
                NAICS codes                       NAICS U.S. industry title        in million of   in number of
                                                                                      dollars        employees
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
--------------------------------------------
                                       Subsector 611--Educational Services
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
611519.....................................  Other Technical and Trade Corps....            $6.0  ..............
EXCEPT.....................................  Job Corps Centers..................      \16\ $30.0  ..............
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
Footnotes:
* * * * *
\16\ NAICS codes 611519--Job Corps Centers. For classifying a Federal procurement, the purpose of the
  solicitation must be for the management and operation of a U.S. Department of Labor Job Corps Center. The
  activities involved include admissions activities, lift skills training, educational activities, comprehensive
  career preparation activities, career development activities, career transition activities, as well as the
  management and support functions and services needed to operate and maintain the facility. For SBA assistance
  as a small business concern, other than for Federal government procurements, a concern must be primarily
  engaged in providing the services to operate and maintain Federal Job Corps Centers.


    Dated: November 15, 2002.
Hector V. Barreto,
Administrator.
[FR Doc. 02-29647 Filed 11-21-02; 8:45 am]
BILLING CODE 8025-01-P