[Federal Register Volume 87, Number 188 (Thursday, September 29, 2022)]
[Rules and Regulations]
[Pages 59240-59292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-20513]



[[Page 59239]]

Vol. 87

Thursday,

No. 188

September 29, 2022

Part IV





Small Business Administration





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





13 CFR Part 121





Small Business Size Standards: Adoption of 2022 North American Industry 
Classification System for Size Standards; Final Rule

  Federal Register / Vol. 87, No. 188 / Thursday, September 29, 2022 / 
Rules and Regulations  

[[Page 59240]]


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

SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

RIN 3245-AH89


Small Business Size Standards: Adoption of 2022 North American 
Industry Classification System for Size Standards

AGENCY: U.S. Small Business Administration.

ACTION: Final rule.

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

SUMMARY: The U.S. Small Business Administration (``SBA'' or ``Agency'') 
amends its small business size regulations to incorporate the U.S. 
Office of Management and Budget's (OMB) North American Industry 
Classification System (NAICS) revision for 2022, identified as NAICS 
2022, into its table of small business size standards. The NAICS 2022 
revision created 111 new industries by reclassifying, combining, or 
splitting 156 NAICS 2017 industries or their parts. SBA's size 
standards for these 111 new industries under NAICS 2022 have resulted 
in an increase to the size standards for 22 industries and 29 parts of 
two industries under NAICS 2017, a decrease to size standards for seven 
industries and 53 parts of two industries, a change in the size 
standard measure from average annual receipts to number of employees 
for one industry, a change in the size standard measure from number of 
employees to average annual receipts for a part of one industry, and no 
change in size standards for 117 industries and 19 parts of seven 
industries.

DATES: This rule is effective October 1, 2022.

FOR FURTHER INFORMATION CONTACT: Dr. Khem R. Sharma, Chief, Office of 
Size Standards, (202) 205-6618 or [email protected]. This phone 
number can also be reached by individuals who are deaf or hard of 
hearing, or who have speech disabilities, through the Federal 
Communications Commission's TTY-Based Telecommunications Relay Service 
teletype service at 711.

SUPPLEMENTARY INFORMATION: Effective October 1, 2000, the U.S. Small 
Business Administration (SBA) adopted North American Industry 
Classification System (NAICS) 1997 industry definitions as a basis for 
defining industries for its table of small business size standards, 
replacing the 1987 Standard Industrial Classification (SIC) (65 FR 
30836 (May 15, 2000)). Since then, the Office of Management and Budget 
(OMB) has issued five revisions to NAICS. SBA's table of size standards 
adopted the OMB's first revision, NAICS 2002, effective October 1, 2002 
(67 FR 52597 (August 13, 2002)); the second revision, NAICS 2007, 
effective October 1, 2007 (72 FR 49639 (August 29, 2007)); the third 
revision, NAICS 2012, effective October 1, 2012 (77 FR 49991 (August 
20, 2012)); and fourth revision, NAICS 2017, effective October 1, 2017 
(82 FR 44886 (September 27, 2017)).
    On December 21, 2021, OMB published its fifth and latest revision 
to NAICS ``Notice of NAICS 2022 Final Decisions; Update of Statistical 
Policy Directive No. 8, North American Industry Classification System: 
Classification of Establishments; and Elimination of Statistical Policy 
Directive No. 9, Standard Industrial Classification of Enterprises'' 
(86 FR 72277). In the December 21, 2021, Federal Register notice, OMB 
accepted the Economic Classification Policy Committee's (ECPC) 
recommendations, as outlined in the July 2, 2021, Federal Register 
notice (86 FR 35350), for the 2022 revisions to NAICS, as well as the 
recommendations to update OMB Statistical Policy Directive No. 8, North 
American Industry Classification System: Classification of 
Establishments and to eliminate OMB Statistical Policy Directive No. 9, 
Standard Industrial Classification of Enterprises.
    The OMB's notice stated that Federal statistical establishment data 
published for reference years beginning on or after January 1, 2022, 
should be published using NAICS 2022. Although SBA is not a statistical 
agency, it is adopting NAICS 2022 for its table of size standards, 
effective October 1, 2022.
    As with the previous NAICS revisions, SBA is adopting the latest 
NAICS revision, identified as NAICS 2022, effective October 1, 2022 
(i.e., the beginning of the new fiscal year following the effective 
date of the OMB's release of the NAICS 2022 revision), for several 
reasons: (1) Federal Government contracting data and related statistics 
will be more consistent and comparable with past data for analyzing 
future small business activity if implementation of the revised table 
of size standards occurs at the beginning of a new fiscal year; (2) 
users of size standards, for instance, Federal prime contractors, who 
may use the size standards for developing their subcontracting plans, 
can have more consistent data to examine the past and future Federal 
contracting trends; and (3) small business size standards apply to most 
Federal agencies and their programs involving small businesses; with a 
time lag between the OMB's effective date and SBA's update of its size 
standards, agencies will have sufficient time to implement the changes 
and develop training tools, if necessary.

Changes in NAICS 2022

    The NAICS 2022 revision created 111 new NAICS industries by 
splitting, merging, or modifying 6-digit codes or industry titles/
definitions of 156 exiting industries under NAICS 2017 structure, of 
which nine industries were split to two or more NAICS 2022 industries. 
On July 5, 2022, SBA published proposed size standards for the new 
industries under NAICS 2022 (87 FR 40034). These changes are broken 
down by NAICS sector in Table 1, ``Modified Industries under NAICS 2017 
and New Industries under NAICS 2022 by NAICS Sector.'' As can be seen 
in Table 1, Sector 44-45 (Retail Trade) accounts for the largest 
proportions of NAICS 2017 industries that have changed or been amended 
and of the new industries that have been created under NAICS 2022, 
followed by Sector 31-33 (Manufacturing), and Sector 51 (Information).
BILLING CODE 8026-09-P

[[Page 59241]]

[GRAPHIC] [TIFF OMITTED] TR29SE22.002

    Of the 111 new industries under NAICS 2022, 79 (71% of the new 
industries) were created by merging two or more NAICS 2017 industries 
in their entirety, one or more of NAICS 2017 industries and part(s) of 
one or more NAICS 2017 industries, or parts of two or more NAICS 2017 
industries. Altogether, 125 NAICS 2017 industries or their parts were 
involved in the creation of the 79 new industries. Of the remaining 32 
new industries, OMB changed the 6-digit codes for 11 (10%) NAICS 2017 
industries without changing their titles, amended the industry titles 
of 14 (13%) NAICS 2017 industries without changing their 6-digit codes, 
and created seven (6%) new industries by modifying the title, 6-digit 
code, or definition (or any combination thereof) of a single NAICS 2017 
industry or part. These results are summarized in Table 2, ``Summary of 
NAICS 2022 Changes.''
[GRAPHIC] [TIFF OMITTED] TR29SE22.003

    Complete information on the relationship between NAICS 2017 and 
NAICS 2022 is available on the U.S. Bureau of the Census (Census 
Bureau) website at https://www.census.gov/naics/. The Census Bureau's 
website also provides detailed documentation on Federal notices 
involving the replacement of SIC with NAICS, and all subsequent NAICS 
updates and revisions, including both the July 2, 2021 and December 21, 
2021, Federal Register notices regarding the NAICS 2022 revision.

[[Page 59242]]

    Of the 79 new NAICS 2022 industries formed by merging existing 
NAICS 2017 industries or their parts, 33 or 42% were formed by merging 
one NAICS 2017 industry with parts of two other NAICS 2017 
industries.\1\ Likewise, 20 or 25% of new industries were formed by 
merging two NAICS 2017 industries, and 12 or 15% were formed by merging 
one NAICS 2017 industry with part of another industry. These results 
and the formation of the remaining 14 or 18% of new industries are 
summarized in Table 3, ``Formation of New Industries in NAICS 2022.''
---------------------------------------------------------------------------

    \1\ These 33 industries were in Sector 44-45 (Retail Trade). 
Specifically, NAICS 2017 industry 454110 (Electronic Shopping and 
Mail-Order Houses) was split to and distributed across 42 different 
retail trade industries, and similarly NAICS 454390 (Other Direct 
Selling Establishments) was split to and distributed across 39 
different retail trade industries, which were in turn merged with 33 
different Retail Trade industries.
[GRAPHIC] [TIFF OMITTED] TR29SE22.004

    Table 4, ``NAICS 2017 Industries or Their Parts Matched to NAICS 
2022 Industries,'' below, shows the detailed changes from NAICS 2017 to 
NAICS 2022.

[[Page 59243]]

[GRAPHIC] [TIFF OMITTED] TR29SE22.005


[[Page 59244]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.006


[[Page 59245]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.007


[[Page 59246]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.008


[[Page 59247]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.009


[[Page 59248]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.010


[[Page 59249]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.011


[[Page 59250]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.012


[[Page 59251]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.013


[[Page 59252]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.014


[[Page 59253]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.015


[[Page 59254]]



Size Standards for New Industries in NAICS 2022

    On October 22, 1999, SBA proposed to replace SIC with NAICS 1997 as 
the basis of industry definitions for its table of small business size 
standards (64 FR 57188). The proposed rule included a set of guidelines 
or rules that SBA applied to convert the size standards for industries 
under SIC to industries under NAICS. The guidelines primarily aimed to 
minimize the impact of applying a new industry classification system on 
SBA's size standards and on small businesses that qualified as small 
under the SIC-based size standards. SBA received no negative comments 
against the proposed guidelines. Thus, SBA published its final rule on 
May 15, 2000 (65 FR 30386), corrected on September 5, 2000 (65 FR 
53533), adopting the resulting table of size standards based on NAICS 
1997 structure, as proposed. To be consistent, SBA generally applied 
the same guidelines when it updated its table of size standards to 
adopt NAICS 2002, NAICS 2007, NAICS 2012, and NAICS 2017 revisions. In 
those updates as well, SBA received no adverse comments against using 
those guidelines, or against the resulting changes to the size 
standards. These guidelines to adopt NAICS revisions for size standards 
were also included in the SBA's ``Size Standards Methodology'' white 
paper and SBA received no adverse comments when the revised methodology 
was open for public comments. Accordingly, for the July 5, 2022, 
proposed rule to adopt NAICS 2022 structure for its size standards 
table as well, SBA generally followed the same guidelines, as shown 
below in Table 5, ``General Guidelines to Establish Size Standards for 
New Industries under NAICS 2022.''

[[Page 59255]]

[GRAPHIC] [TIFF OMITTED] TR29SE22.016

    SBA generally applied the guidelines in Table 5 to convert the size 
standards from NAICS 2017 industries to NAICS 2022 industries. In 
addition to following the above general guidelines in Table 5, in cases 
where a new industry is formed by merging multiple industries or parts 
of multiple industries with substantially different levels or measures 
of size

[[Page 59256]]

standards, as detailed in the July 5, 2022, proposed rule, SBA also 
examined the relevant latest industry and Federal procurement data to 
determine an appropriate size standard for the new industry. Developed 
based on the above guidelines and analyses of the relevant data, where 
necessary, SBA's size standards for the new industries under NAICS 2022 
are shown in Table 6, Size Standards for New Industries in NAICS 
2022.'' Also shown in Table 6 are the current size standards for the 
affected NAICS 2017 industries and their parts.
    Following the publication of the July 5, 2022, proposed rule to 
incorporate NAICS 2022 into the SBA's table of size standards, as part 
of the second five-year review of size standards under the Small 
Business Jobs Act of 2010 (Jobs Act) (Pub. L. 111-240 (September 27, 
2010)), SBA adopted revisions to size standards for industries under 
NAICS Sectors 42 (Wholesale Trade) and 44-45 (Retail Trade), effective 
July 14, 2014 (87 FR 35869 (June 14, 2022)). Accordingly, in this final 
rule, SBA is adjusting proposed size standards for the new industries 
under NAICS 2022 to reflect new size standards for Sectors 42 and 44-45 
the Agency adopted in the June 14, 2022, final rule. Table 6 shows the 
adjusted size standards.

[[Page 59257]]

[GRAPHIC] [TIFF OMITTED] TR29SE22.017


[[Page 59258]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.018


[[Page 59259]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.019


[[Page 59260]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.020


[[Page 59261]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.021


[[Page 59262]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.022


[[Page 59263]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.023


[[Page 59264]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.024


[[Page 59265]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.025


[[Page 59266]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.026


[[Page 59267]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.027


[[Page 59268]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.028


[[Page 59269]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.029


[[Page 59270]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.030


[[Page 59271]]



Summary of Size Standards for NAICS 2022 Industries

    The NAICS 2022 revision created 111 new industries by 
reclassifying, combining, or splitting 156 NAICS 2017 industries or 
their parts. SBA's size standards for these 111 new industries under 
NAICS 2022, as shown in Table 3 (above) have resulted in an increase to 
the size standards for 22 industries and 29 parts of two industries 
under NAICS 2017, a decrease to size standards for seven industries and 
53 parts of two industries, a change in the size standard measure from 
average annual receipts to number of employees for one industry, a 
change in the size standard measure from number of employees to average 
annual receipts for part of one industry, and no change in size 
standards for 117 industries and 19 parts of seven industries. These 
figures are slightly different from those published in the proposed 
rule because of the adoption of the latest size standards for 
industries in Sectors 42 and 44-45 that became effective on July 14, 
2022 (87 FR 35869).\2\
---------------------------------------------------------------------------

    \2\ In the proposed rule, SBA's proposed size standards for the 
111 new industries under NAICS 2022 resulted in an increase to the 
size standards for 21 industries and 27 parts of three industries 
under NAICS 2017, a decrease to size standards for seven industries 
and 41 parts of one industry, a change in the size standard measure 
from average annual receipts to number of employees for one 
industry, a change in the size standard measure from number of 
employees to average annual receipts for a part of one industry, and 
no change in size standards for 118 industries and 33 parts of eight 
industries.
---------------------------------------------------------------------------

    In accordance with 13 CFR 121.102(e), SBA advises eligible parties 
of the option to file a petition for reconsideration of a revised, 
modified, or established size standard at SBA's Office of Hearings and 
Appeals (OHA) within 30 calendar days after publication of this final 
rule in accordance with 15 U.S.C. 632(a)(9) and 13 CFR 134 Subpart I. 
OHA can be reached using the following contact information: by mail at 
U.S. Small Business Administration, Office of Hearings and Appeals, 409 
Third St. SW, Eighth Floor, Washington, DC 20416, by email at 
[email protected] by phone: 202-401-8200 TTY/TRS: 711, or by fax at 
(202) 205-7059.

Discussion of Comments

    For the July 5, 2022, proposed rule, SBA provided a 30-day comment 
period for the public to comment on proposed changes to size standards 
from the adoption of the NAICS 2022, which ended on August 4, 2022. SBA 
sought comment on whether its proposed size standards for new 
industries under NAICS 2022 were appropriate and suggestions on 
alternative size standards, along with supporting data and analysis, if 
proposed size standards were not appropriate. SBA also sought comments 
on its methodology for converting size standards from NAICS 2017 to 
NAICS 2022 and data sources and analyses it used in developing proposed 
size standards for new industries. SBA received three comments, which 
are summarized and discussed below.

Comments on Correct Size Standards

    SBA received one comment contending that the Agency did not propose 
the latest size standards it updated on July 14, 2022 for three NAICS 
codes, namely NAICS 425120 (Wholesale Trade Agents and Brokers), NAICS 
445291 (Baked Goods Stores), and NAICS 445292 (Confectionery and Nut 
Stores). The commenter urged the SBA to use the most recent size 
standards for these NAICS codes.

SBA Response

    Following the publication of the July 5, 2022, proposed rule to 
adopt NAICS 2022 for size standards, as part of the second five-year 
review of size standards under the Jobs Act, SBA adopted size standards 
revisions for industries under NAICS Sectors 42 and 44-45, effective 
July 14, 2022. At the time when SBA published the NAICS 2022 proposed 
rule, the old size standards were in effect. Thus, SBA applied the old 
size standards in the proposed rule. In this final rule, however, SBA 
is adopting the July 14, 2022, version of the size standards as shown 
in Table 6 (above) and Table 7, Adopted Size Standards for NAICS 
425120, 445291 and 445292, below, which are the latest size standards 
in effect.
[GRAPHIC] [TIFF OMITTED] TR29SE22.031


[[Page 59272]]



Comments on Missing NAICS Codes

    SBA received a comment stating that the proposed rule did not 
mention three NAICS codes added for the 2022 NAICS revision, namely 
NAICS 521110 (Monetary Authorities-Central Bank), NAICS 541120 (Offices 
of Notaries), and NAICS, 551114 (Corporate, Subsidiary, and Regional 
Managing Offices). These are found on the Economic Census NAICS website 
(https://www.census.gov/naics), the commenter added.

SBA Response

    SBA disagrees with the commenter that NAICS codes 521110, 541120, 
and 551114 were newly added to NAICS 2022. These NAICS codes existed 
since the initial, 1997 edition of NAICS, which replaced the Standard 
Industry Classification (SIC) system as the basis of industry 
definitions for size standards. Table 8, NAICS-SIC Concordance for 
NAICS 521110, 541120, and 551114, shows the relationship between NAICS 
and SIC with respect to these three NAICS codes. When SBA first 
switched from SIC to NAICS as the basis of industry definitions for 
size standards, it did not establish small business size standards for 
these NAICS codes for the following reasons.
[GRAPHIC] [TIFF OMITTED] TR29SE22.032

BILLING CODE 8026-09-C
NAICS 521110--Monetary Authorities-Central Bank
    In the United States, the functions of the Monetary Authorities-
Central Bank are performed by the Federal Reserve System. According to 
the NAICS manual, found at www.census.gov/naics, establishments of the 
Board of Governors of the Federal Reserve System are classified in 
NAICS Industry 921130, Public Finance Activities. As stated in Footnote 
17 to the SBA's table of size standards, small business size standards 
are not established for industries within NAICS Sector 92, Public 
Administration.
NAICS 541120--Offices of Notaries
    As shown in Table 8 (above), NAICS Industry 541120 (Offices of 
Notaries) is not a valid industry in the United States and accordingly 
SBA does not establish the small business size standard for that NAICS 
code. According to the NAICS manual, available at www.census.gov/naics, 
establishments of notaries public engaged in activities, such as 
administering oaths and taking affidavits and depositions, witnessing 
and certifying signatures on documents, but not empowered to draw and 
approve legal documents and contracts, are classified in U.S. NAICS 
Industry 541199, All Other Legal Services. Moreover, NAICS 541120 is 
not covered by both the Economic Census and County Business Patterns 
Reports.
NAICS 551114--Corporate, Subsidiary, and Regional Managing Offices
    As shown in Table 8 (above), NAICS Industry 551114 did not 
correspond to any specific industry under SIC. As a result, when SBA 
first established size standards for NAICS industries, the Agency did 
not establish a small business size standard for NAICS 551114. The 
adoptions of the subsequent NAICS revisions also did not assign the 
size standard for NAICS 551114. Like NAICS 541120, NAICS 55114 is also 
not covered by both the Economic Census and County Business Patterns 
Reports.

Comments on Inflation Adjustment of Revenue-Based Size Standards

    SBA received a comment urging SBA to adjust all revenue-based size 
standards for inflation. The commenter maintained that current 
inflation is running at 9.1% and that inflation adjustment of size 
standards by that amount is appropriate in the current economic 
environment.

SBA Response

    SBA is required to assess the impact of inflation on its monetary-
based size standards at least once every five years (67 FR 3041 
(January 23, 2002)) and 13 CFR 121.102(c)) and make necessary 
adjustments to restore their values in real terms. As stated in the 
SBA's Semiannual Regulatory Agenda for Spring 2022, SBA is currently 
pursuing a separate rulemaking (RIN 3245-AH93) to assess the impact of 
the current general price increases on size standards. SBA agrees with 
the comment that current inflation trends warrant adjustment of 
monetary-based size standards for inflation. SBA expects to issue that 
rulemaking in the near future.

Conclusion

    In absence of adverse comments against the proposed size standards 
for the new industries under NAICS 2022, SBA is adopting the size 
standards for the new industries, as proposed.

Evaluation of Dominance in Field of Operation

    Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) defines a 
small business concern as one that: (1) Is independently owned and 
operated; (2) Is not dominant in its field of operation; and (3) Meets 
a specific small business definition or size standard established by 
SBA's Administrator. SBA considers, as part of its evaluation, whether 
a business concern at a proposed or revised size standard would be 
dominant in its field of operation. For this, SBA generally examines 
the industry's market share of firms at the proposed or revised 
standard. SBA also examines distribution of firms by size to

[[Page 59273]]

ensure that a contemplated size standard excludes the largest and 
potentially dominant firms within an industry. The results of the 
market share analysis and size distribution of firms may indicate 
whether a firm, at the proposed or revised size standard, can exercise 
a control on a national basis. SBA has determined that for the 
industries for which size standards have been changed in this proposed 
rule, no individual firm at or below the proposed size standard will be 
large enough to dominate its field of operation. The share of a firm in 
total industry receipts at the proposed size standard, among those 
industries for which size standards have been changed is, on average, 
1.8%, ranging from 0.005% to 31.2%. SBA determines that these levels of 
market shares effectively preclude a firm at or below the proposed size 
standards from exerting control on any of the industries.

Alternatives To Adopting NAICS 2022 for Size Standards

    As an alternative to adopting new size standards for NAICS 2022 
industries, in this final rule, SBA considered retaining NAICS 2017 as 
the basis of industry definitions for its small business size 
standards. That would, however, lead to inconsistency between SBA's 
size standards and establishment data published by Federal agencies 
that will adopt NAICS 2022 for their statistical and other data 
collection programs. OMB stated in its December 21, 2021, notice that 
``Federal statistical establishment data published for reference years 
beginning on or after January 1, 2022, should be published using the 
2022 NAICS United States codes.'' SBA is not a statistical agency, but 
the Agency uses for its size standards analyses establishment data 
collected by other Federal agencies, such as the Economic Census data 
and County Business Patterns from the U.S. Census Bureau. If SBA 
continues using NAICS 2017 for its size standards, it will not be able 
to analyze and evaluate industry structure adequately and accurately 
and adjust small business size standards appropriately because the 
forthcoming Economic Census and County Business Patterns data based on 
NAICS 2022 will not be compatible with NAICS 2017. That would run 
counter to the mandate of the Jobs Act, which requires SBA to review 
all size standards and adjust them appropriately to reflect the current 
industry and market data every five years.
    To establish, review, or revise, where necessary, small business 
size standards, SBA uses special tabulations of industry data that it 
obtains from the U.S. Census Bureau based on its Economic Census of 
U.S. industries and businesses, and establishment data from its County 
Business Patterns. Because the 2022 Economic Census will be based on 
NAICS 2022 industry definitions, it is imperative that SBA use NAICS 
2022 as the basis of industry definitions for its table of small 
business size standards.

Justification for the October 1, 2022, Effective Date

    The Administrative Procedure Act (APA) requires that ``publication 
or service of a substantive rule shall be made not less than 30 days 
before its effective date, except * * * as otherwise provided by the 
agency for good cause found and published with the rule.'' 5 U.S.C. 
553(d)(3). The purpose of the APA provision delaying the effective date 
of a rule for 30 days after publication is to provide interested and 
affected members of the public sufficient time to adjust their behavior 
before the rule takes effect. For the reasons set forth below, SBA 
finds that good cause exists to make this final rule become effective 
on October 1, 2022, less than 30 days after it is published in the 
Federal Register.
    SBA's small business size standards, matched to NAICS 2022, to be 
adopted in a forthcoming final rule, will be effective on October 1, 
2022, for the following reasons:
    1. OMB stated in its December 21, 2021, notice that Federal 
statistical establishment data published for reference years beginning 
on or after January 1, 2022, should be published using NAICS 2022. SBA 
is not a statistical agency, but it uses the establishment data 
collected from other Federal agencies, such as the Economic Census and 
County Business Patterns data from the Census Bureau for its size 
standards analysis. Similarly, Federal procurement databases and 
systems, such as FPDS-NG and the System for Award Management (SAM), use 
NAICS codes from SBA's table of size standards. If SBA does not adopt 
NAICS 2022 for its table of size standards in a timely manner, it will 
result in inconsistency between SBA's size standards and other Federal 
procurement databases.
    Small business size standards apply to most Federal agencies and 
their programs involving small businesses; the time lag between the 
OMB's effective date and SBA's update to its size standards has already 
given them time to implement the changes and develop training tools, if 
necessary; so further additional time to prepare to comply is 
unnecessary.
    2. October 1, 2022, is the start of the new Federal Government 
fiscal year following OMB's adoption of NAICS 2022 effective January 1, 
2022, and is consistent with SBA's adoption of previous NAICS revisions 
for its size standards effective at the beginning of the new fiscal 
year after the OMB's effective date. Like the adoption of the previous 
NAICS revisions, the adoption of NAICS 2022 is ``not significant'' and 
noncontroversial, as SBA is merely implementing the revised NAICS codes 
promulgated by OMB through a comment and notice process.
    3. With the adoption of the updated size standards at the start of 
the new fiscal year (October 1, 2022), instead of the OMB January 1, 
2022, effective date, Federal agencies that use NAICS industry 
definitions and SBA's size standards can collect comparable and 
consistent data on Federal statistics for program and industry 
analyses.
    4. With the October 1, 2022, effective date, Federal agencies that 
use SBA's small business size standards for their programs will have 
sufficient time to plan and implement the updated size standards and 
assess the impact of size standards changes on their programs.

Compliance With Executive Orders 12866, the Congressional Review Act (5 
U.S.C. 801-808), the Regulatory Flexibility Act (5 U.S.C. 601-612), 
Executive Orders 13563, 12988, and 13132, and the Paperwork Reduction 
Act (44 U.S.C. Ch. 35)

Executive Order 12866

    OMB has determined that this final rule is not a ``significant 
regulatory action'' for purposes of Executive Order 12866. This rule 
incorporates the OMB's 2022 revisions of NAICS, which SBA uses as a 
basis of industry definitions for purposes of establishing small 
business size standards. As discussed above in the Supplementary 
Information section, the size standards of some industries or their 
parts would change because of the adoption of the NAICS 2022 revisions 
for SBA's Table of Size Standards. However, SBA has determined that a 
vast majority of businesses defined as small under the current NAICS 
2017 based size standards will continue to remain small under the NAICS 
2022 based size standards. The final rule will also affect other 
Federal Government programs that use SBA's size standards and provide 
various benefits for small businesses. In order to help explain the 
need and objective of this proposed rule and its potential benefits and 
costs, SBA is providing, below, a Cost Benefit Analysis of this final 
rule, including (1)

[[Page 59274]]

A statement of the need for the regulatory action, (2) An examination 
of alternative approaches, and (3) An evaluation of the benefits and 
costs--both quantitative and qualitative--of the regulatory action and 
the alternatives considered.

Cost Benefit Analysis

    1. What is the need for the regulatory action?
    SBA believes that revising its small business size standards based 
on NAICS 2022 is in the best interests of small businesses. SBA's 
mission is to aid and assist small businesses through a variety of 
financial, procurement, business development and counselling, and 
advocacy programs. To ensure that these programs are best directed to 
their intended beneficiaries, SBA establishes numerical small business 
definitions (usually referred to as ``size standards'') to determine 
which businesses are deemed eligible for Federal small business 
assistance. NAICS 2022 provides the latest industry definitions 
reflecting the latest changes in industry structure in the United 
States.
    Under the Small Business Act (Act) (15 U.S.C. 632(a)), the SBA 
Administrator is responsible for establishing small business size 
definitions and for ensuring that such definitions vary from industry 
to industry to reflect differences among various industries. By 
analyzing and reviewing size standards based on the NAICS 2022 industry 
definitions, SBA can more accurately and appropriately fulfill its 
mandate. If SBA does not use the latest industry definitions under 
NAICS 2022, size standards would not accurately reflect differences 
among industries. In addition, the Jobs Act requires SBA to review, at 
least every five years, all size standards and make necessary 
adjustments to reflect current industry and market conditions. To 
better serve this mandate, SBA needs to evaluate the industry data 
based on the latest NAICS industry definitions available.
    In this final rule, SBA is generally following the same guidelines 
that it followed for adopting prior NAICS revisions for size standards, 
as spelled out under the Supplemental Information section. SBA also 
analyzed the relevant industry and program data to determine the size 
standards for certain NAICS 2022 industries involving NAICS 2017 
industries or their parts with substantially different size standards. 
Size standards based on NAICS 2022 industry definitions and 
corresponding data will serve SBA's mission more effectively.

2. What are the potential benefits and costs of this regulatory action?

    As stated previously, the NAICS 2022 revision created 111 new 
industries by reclassifying, combining, or splitting 156 NAICS 2017 
industries or their parts. Changes from NAICS 2017 to NAICS 2022 
consist of mergers of 125 NAICS 2017 industries or their parts to form 
the 79 new industries in NAICS 2022 with impacts on size standards on a 
number of NAICS 2017 industries. The NAICS 2022 revision also includes 
32 changes in 6-digit codes, industry titles, or descriptions without 
changing the size standards. SBA's size standards for these 111 new 
industries under NAICS 2022 have resulted in an increase to the size 
standards for 22 industries and 29 parts of two industries, a decrease 
to size standards for seven industries and 53 parts of two industries, 
a change in the size standard measure from average annual receipts to 
number of employees for one industry, a change in the size standard 
measure from number of employees to average annual receipts for part of 
one industry, and no change in size standards for 117 industries and 19 
parts of seven industries. The benefits, costs, and transfer impacts of 
these changes are discussed below.
    OMB directs agencies to establish an appropriate baseline to 
evaluate any benefits, costs, or transfer impacts of new regulatory 
actions and alternative approaches considered. The baseline should 
represent the agency's best assessment of what the world would look 
like absent the regulatory action. For a regulatory action promulgating 
modifications to an existing regulation (such as modifying the existing 
size standards), a baseline assuming no change to the regulation (i.e., 
making no changes to current size standards) would generally provide an 
appropriate benchmark for evaluating benefits, costs, or transfer 
impacts of proposed or final regulatory changes and their alternatives.

The Baseline

    For purposes of this regulatory action, the baseline represents 
maintaining the ``status quo,'' i.e., making no changes to the current 
size standards. Using the number of small businesses and levels of 
small business benefits (such as set-aside contracts, SBA's loans, 
disaster assistance, etc.) they receive under the current size 
standards as a baseline, one can examine the potential benefits, costs, 
and transfer impacts of changes to size standards on small businesses 
and on the overall economy.
    Based on the 2017 Economic Census data, of a total of about 880,245 
firms in the 156 impacted industries under NAICS 2017, 97.9% are 
considered small under the current size standards under NAICS 2017.
    Similarly, based on the data from FPDS-NG for fiscal years 2018-
2020, about 15,400 unique firms in those 156 NAICS 2017 industries 
received at least one Federal contract during that period, of which 
76.2% were found to be small under the current size standards.\3\ Of 
about $18.6 billion in total average annual contract dollars awarded to 
businesses in the impacted industries during that period, 25.6% went to 
small businesses. Of about $4.8 billion in total small business 
contract dollars awarded in those industries during that period, 87.1% 
were awarded through various set-aside programs and 12.9% were awarded 
through non-set aside contracts. Table 9, Baseline of Impacted 
Industries Under NAICS 2017, provides these baseline results.
---------------------------------------------------------------------------

    \3\ Of the 156 NAICS 2017 industries impacted in the NAICS 2022 
revision, 66 industries were part of Sector 42 (Wholesale Trade) or 
Sector 44-45 (Retail Trade) that does not apply for Federal 
contracting. In the remaining 90 industries that belong to other 
sectors, about 15,400 unique firms got at least one Federal contract 
during fiscal years 2018-2020.
---------------------------------------------------------------------------

BILLING CODE 8026-09-P

[[Page 59275]]

[GRAPHIC] [TIFF OMITTED] TR29SE22.033

    Based on the SBA's internal data on its loan programs for fiscal 
years 2018-2020, small businesses in those 156 industries received, on 
an average annual basis, a total of 8,316 7(a) loans and CDC/504 loans 
in that period. That corresponded to about $4.8 billion in total loan 
amount, of which 85.8% was issued through the 7(a) loan guarantee 
program and 14.2% was issued through the CDC/504 program. During fiscal 
years 2018-2020, small businesses in those industries also received 589 
loans through the SBA's EIDL program, totaling about $52.6 million on 
an annual basis.\4\
---------------------------------------------------------------------------

    \4\ The analysis of the disaster loan data excludes physical 
disaster loans that are available to anyone regardless of size, 
disaster loans issued to nonprofit entities, and EIDLs issued under 
the COVID-19 relief program. Effective January 1, 2022, SBA stopped 
accepting applications for new COVID EIDL loans or advances. Thus, 
the disaster loan analysis presented here pertains to the regular 
EIDL loans only. SBA estimates impacts of size standards changes on 
EIDL loans by calculating the ratio of businesses getting EIDL loans 
to total small businesses (based on the 2017 Economic Census data) 
and multiplying it by the number of impacted small firms. Due to 
data limitations, for FY 2019-20, some loans with both physical and 
EIDL loan components could not be broken into the physical and EIDL 
loan amounts. In such cases, SBA applied the ratio of EIDL amount to 
total (physical loan + EIDL) amount using FY 2016-18 data to the FY 
2019-20 data to obtain the amount attributable to the EIDL loans.
---------------------------------------------------------------------------

Increases to Size Standards

    As stated above, SBA's size standards for the 111 new industries 
under NAICS 2022 have resulted in an increase to the size standards for 
22 industries and 29 parts of two industries under NAICS 2017. Below 
are descriptions of the benefits, costs, and transfer impacts of 
increases to size standards.

Benefits of Increases to Size Standards

    The benefits of adopting NAICS 2022 and the resulting increases to 
size standards will accrue to three groups in the following ways: (1) 
Some businesses that are currently above their current size standards 
may gain small business status, thereby becoming eligible to 
participate in Federal small business assistance programs, including 
SBA's 7(a) loan program, CDC/504 loan program, EIDL program, Surety 
Bond Guarantee Program, and Federal procurement and business 
development programs intended for small businesses; (2) Growing small 
businesses that are close to exceeding the current size standards for 
their NAICS 2017 industries may retain their small business status for 
a longer period under the new size standards under NAICS 2022, and can 
continue participating in the above programs; and (3) Federal 
Government agencies will have a larger pool of small businesses from 
which to draw to fulfill their small business procurement requirements 
because they

[[Page 59276]]

will be able to define more accurately the principal purposes of their 
procurements under NAICS 2022 industry definitions.
    The most significant benefit to businesses from increases to size 
standards is gaining or extending eligibility for Federal small 
business assistance programs. These include SBA's 7(a) loan program, 
CDC/504 loan program, EIDL program, Surety Bond Guarantee Program, and 
Federal procurement programs intended for small businesses. Federal 
procurement programs provide targeted, set-aside opportunities for 
small businesses. These include the 8(a) Business Development (BD) 
program, the Historically Underutilized Business Zones (HUBZone) 
program, the Women-Owned Small Businesses (WOSB) program, the 
Economically Disadvantaged Women-Owned Small Businesses (EDWOSB) 
program, and the Service-Disabled Veteran-Owned Small Businesses 
(SDVOSB) program.
    For the affected NAICS 2017 industries or their parts for which 
size standards have increased, based on the 2017 Economic Census data, 
SBA estimates that approximately 450 additional businesses would gain 
small business status under the proposed size standards for 2022 NAICS 
industries. That represents about 0.6% of the total number of small 
businesses in the affected industries. SBA's size standards for new 
industries under NAICS 2022 would result in an increase to the small 
business share of total receipts in those 24 industries (i.e., those 
with increases in size standards) from 40.7% to 45.7%. Table 10, 
Impacts of Increases to Size Standards for NAICS 2022 Industries, 
provides impacts of increasing size standards for 22 industries and 29 
parts of two industries from NAICS 2017.

[[Page 59277]]

[GRAPHIC] [TIFF OMITTED] TR29SE22.034

BILLING CODE 8026-09-C

[[Page 59278]]

    As shown in Table 10, based on the FPDS-NG data for fiscal years 
2018-2020, SBA estimates that about 42 firms that are currently active 
in Federal contracting in those industries would gain small business 
status under the size standards for new industries under NAICS 2022. 
Based on the same data, SBA estimates that those newly-qualified small 
businesses under the size standards under NAICS 2022 could receive 
Federal small business contracts totaling about $60.4 million annually. 
That represents a 12.3% increase to Federal small business dollars from 
the baseline.
    The added competition from more businesses qualifying as small can 
result in lower prices to certain Federal Government procurements set 
aside or reserved for small businesses, but SBA cannot quantify this 
impact precisely. Costs could also be higher when full and open 
contracts are awarded to HUBZone businesses that receive price 
evaluation preferences. However, with agencies likely setting aside 
more contracts for small businesses in response to the availability of 
a larger pool of small businesses under the new size standards, HUBZone 
firms might receive more set-aside contracts and fewer full and open 
contracts, thereby resulting in some cost savings to agencies. SBA 
cannot estimate such costs savings as it is impossible to determine the 
number and value of unrestricted contracts to be otherwise awarded to 
HUBZone firms will be awarded as set-aside contracts for small 
businesses. However, such cost savings are likely to be relatively 
small as only a small fraction of full and open contracts are awarded 
to HUBZone businesses.
    Under SBA's 7(a) and CDC/504 loan programs, with more businesses 
qualifying as small under the new size standards under NAICS 2022, SBA 
will be able to guarantee more loans to small businesses. However, SBA 
expects the impact on loans to be minimal since applicants to SBA's 
financial assistance programs are typically much smaller than the 
industry size standard and most businesses that currently participate 
in the program would remain eligible for assistance even after this 
rule is adopted. Moreover, SBA does not anticipate that the increases 
to size standards will have a significant impact on the distribution of 
firms receiving loans by size of firm. Since SBA's size standards 
changes primarily impact firms at the higher margin of size standards, 
SBA estimates the impact to its financial assistance programs by 
estimating the number of loans and the amount of loans to firms greater 
than 10% below their size thresholds. SBA believes that expanding 
access to SBA's financial assistance programs will help all small 
businesses to adapt to changes in business environment, recover from 
disasters more quickly, and grow successfully, while having no impact 
on the ability of smaller small firms to access financial services from 
SBA.
    Based on its internal data for fiscal years 2018-2020, SBA 
estimates that about one additional 7(a) and CDC/504 loans, totaling 
approximately $.01 million, could be made to the newly-defined small 
businesses under the proposed size standards under NAICS 2022. That 
represents a 0.003% increase to the loan amount compared to the 
baseline (see Table 10). The actual impact might be even smaller as the 
newly-qualified firms under the new size standards could have qualified 
anyway under the tangible net worth and net income based alternative 
size standard.
    Newly-defined small businesses will also benefit from SBA's EIDL 
program, which, like SBA's 7(a) and CDC/504 loan program, typically 
provides loans to businesses that are much smaller than the industry 
size standard. Since this program is contingent on the occurrence and 
severity of a disaster, SBA cannot make a precise estimate of the 
future EIDL benefit. However, based on its internal disaster loan 
program data for fiscal years 2018-2020 and the amount of loans to 
firms greater than 10% below their size thresholds, SBA estimates that, 
on an annual basis, the newly-defined small businesses under the new 
size standards for NAICS 2022 would not be impacted.
    Additionally, the newly-defined small businesses under proposed 
size standards under NAICS 2022 would also benefit through reduced 
fees, less paperwork, and fewer compliance requirements that are 
available to small businesses through the Federal Government programs, 
but SBA has no data to quantify this impact.

Costs of Increases to Size Standards

    Aside from taking time to register in the System for Award 
Management (SAM) to be eligible to participate in Federal contracting 
and update the SAM profile annually, small businesses incur no direct 
costs to gain or retain their small business status under new size 
standards for NAICS 2022. All businesses willing to do business with 
the Federal Government must register in SAM and update their SAM 
profiles annually, regardless of their size status. SBA believes that a 
vast majority of businesses that are willing to participate in Federal 
contracting are already registered in SAM and update their SAM profiles 
annually. It is important to point out that most business entities that 
are already registered in SAM will not be required to update their SAM 
profiles. However, it will be incumbent on registrants to review, and 
update as necessary, their profiles to ensure that they have the 
correct NAICS codes. SAM requires that registered companies review and 
update their profiles annually, and therefore, businesses will need to 
pay particular attention to the changes to determine if they might 
affect them. They will also have to verify, and update, if necessary, 
their Representations and Certifications in SAM. More importantly, this 
final rule does not establish the new size standards for the very first 
time; rather it intends to modify the existing size standards to 
conform to new industry definitions under NAICS 2022.
    To the extent that the newly-defined small firms under NAICS 2022 
could become active in Federal procurement programs, this may entail 
some additional administrative costs to the Federal Government because 
of more businesses qualifying for Federal small business programs. For 
example, there will be more firms seeking SBA's loans, more firms 
eligible for enrollment in the SBA's Dynamic Small Business Search 
(DSBS) database or in certify.sba.gov, more firms seeking 
certifications as 8(a) BD or HUBZone firms, or qualifying for WOSB, 
EDWOSB, and SDVOSB status, and more firms applying for SBA's 8(a) BD 
mentor-prot[eacute]g[eacute] program.
    Among those newly-defined small businesses seeking SBA's loans, 
there could be some additional costs associated with verification of 
their small business status. However, small business lenders have an 
option of using the tangible net worth and net income-based alternative 
size standard instead of using the industry-based size standards to 
establish eligibility for SBA's loans. For these reasons, SBA believes 
that these added administrative costs will be minor because necessary 
mechanisms are already in place to handle these added requirements.
    Additionally, some Federal contracts may possibly have higher 
costs. With a greater number of businesses defined as small due to new 
size standards under NAICS 2022, Federal agencies may choose to set 
aside more contracts for competition among small businesses only 
instead of using a full and open competition. The movement of contracts 
from unrestricted competition to small business set-aside contracts 
might result in competition among fewer total bidders, although there 
will be more small businesses eligible to submit

[[Page 59279]]

offers under the new size standards. However, any additional costs 
associated with fewer bidders are expected to be minor since, by law, 
procurements may be set aside for small businesses under the 8(a)/BD, 
SDB, HUBZone, WOSB, EDWOSB, or SDVOSB programs only if awards are 
expected to be made at fair and reasonable prices.
    Costs may also be higher when full and open contracts are awarded 
to HUBZone businesses that receive price evaluation preferences. 
However, with agencies likely setting aside more contracts for small 
businesses in response to the availability of a larger pool of small 
businesses under the adopted increases to size standards, HUBZone firms 
might receive fewer full and open contracts, thereby resulting in some 
cost savings to agencies. However, such cost savings are likely to be 
minimal as only a small fraction of unrestricted contracts are awarded 
to HUBZone businesses.

Transfer Impacts of Increases to Size Standards

    The new size standards for the NAICS 2022 industries may result in 
some redistribution of Federal contracts between the newly-qualified 
small businesses and large businesses and between the newly-qualified 
small businesses and small businesses under the current size standards. 
However, it would have no impact on the overall economic activity since 
total Federal contract dollars available for businesses to compete for 
will not change with changes to size standards. While SBA cannot 
quantify with certainty the actual outcome of the gains and losses from 
the redistribution of contracts among different groups of businesses, 
it can identify several probable impacts in qualitative terms. With the 
availability of a larger pool of small businesses under the increases 
to size standards for 22 NAICS 2017 industries and 29 parts of two 
industries, some unrestricted Federal contracts that would otherwise be 
awarded to large businesses may be set aside for small businesses. As a 
result, large businesses may lose some Federal contracting 
opportunities. Similarly, some small businesses under the current size 
standards may obtain fewer set-aside contracts due to the increased 
competition from larger businesses qualifying as small under the new 
size standards for NAICS 2022 industries. This impact may be offset by 
a greater number of procurements being set aside for small businesses 
because of more businesses qualifying as small under the new size 
standards. With larger businesses qualifying as small under the higher 
size standards, smaller small businesses could face some disadvantage 
in competing for set-aside contracts against their larger counterparts. 
However, SBA cannot quantify these impacts.

Decreases to Size Standards

    As stated above, SBA's size standards for the 111 new industries 
under NAICS 2022 have resulted in a decrease to the size standards for 
seven industries and 53 parts of two industries from NAICS 2017. Below 
are descriptions of the benefits, costs, and transfer impacts of these 
decreases to size standards.

Benefits of Decreases to Size Standards

    The most significant benefit from decreases to size standards based 
on analytical results is to ensure that size standards are more 
reflective of latest industry structure and Federal market trends and 
that Federal small business assistance is more effectively targeted to 
its intended beneficiaries. These include SBA's 7(a) loan program, CDC/
504 loan program, EIDL program, Surety Bond Guarantee Program, and 
Federal procurement programs. As stated previously, Federal procurement 
programs provide targeted, set-aside opportunities for small businesses 
under SBA's contracting and business development programs, such as 
small business, 8(a) BD, HUBZone, WOSB, EDWOSB, and SDVOSB programs. 
The adoption of size standards based on relevant data diminishes the 
risk of awarding Federal Government contracts or granting financial 
assistance to firms that are not small anymore. Lowering size standards 
would also reduce the risk of allowing the largest and potentially 
dominant firms to qualify as small and become eligible for Federal 
assistance intended for small businesses. This may provide a better 
chance for smaller small firms to grow and benefit from the 
opportunities available on the Federal marketplace and strengthen the 
small business industrial base for the Federal Government.

Costs of Decreases to Size Standards

    Table 11, Impacts of Decreases to Size Standards, shows the various 
impacts of proposing to lower size standards in seven industries and 53 
parts of two industries under NAICS 2017. Based on the 2017 Economic 
Census, about 849 (1.9%) firms would lose their small business status 
under the decreases to size standards.\5\ However, many of these 
businesses were not found to have participated in Federal small 
businesses programs, including SBA's financial assistance and 
procurement programs, which suggests that impacts of above decreases to 
size standards would be fairly minimal. Similarly, based on the FPDS-NG 
data for fiscal years 2018-2020, SBA estimates that no small businesses 
participating in Federal contracting would lose their small status and 
become ineligible to compete for set-aside contracts. Thus, SBA 
believes these impacts are minimal.
---------------------------------------------------------------------------

    \5\ Of the 849 firms losing small business status under the size 
standards for new industries under NAICS 2022 structure, 808 (or 
95.1%) belong to NAICS 2017 industry 454110 (Electronic Shopping and 
Mail-Order Houses). NAICS 454110, with a $41.5 million size 
standard, was split and distributed among 42 other Retail Trade 
industries, resulting in a decrease to the size standard for 40 
parts and no change to the size standard for one part. This would 
have very minimal impact on firms seeking SBA's financial assistance 
as firms receiving such assistance are typically much smaller than 
the size standard. Moreover, businesses not qualifying as small for 
financial assistance under the industry size standard, could still 
qualify under the tangible net worth and net income based 
alternative size standard. The reduction in size standard for NAICS 
454110 would have no impact on small businesses seeking Federal 
contracts as that NAICS code does not apply to Federal contracting.
---------------------------------------------------------------------------

BILLING CODE 8026-09-P

[[Page 59280]]

[GRAPHIC] [TIFF OMITTED] TR29SE22.035


[[Page 59281]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.036

Transfer Impacts of Decreases to Size Standards

    If the size standards are decreased, it may result in a 
redistribution of Federal contracts between small businesses losing 
their small business status and large businesses; and between small 
businesses losing their small business status and small businesses 
remaining small under the reduced size standards. However, as under the 
increases to size standards, this would have no impact on the overall 
economic activity since the total Federal contract dollars available 
for businesses to compete for will stay the same. While SBA cannot 
estimate with certainty the actual outcome of the gains and losses 
among different groups of businesses from contract redistribution 
resulting from decreases to size standards, it can identify several 
probable impacts. With a smaller pool of small businesses under the 
decreases to size standards, some set-aside Federal contracts to be 
otherwise awarded to small businesses may be competed on an 
unrestricted

[[Page 59282]]

basis. As a result, large businesses may have more Federal contracting 
opportunities. However, because agencies are still required by law to 
award 23% of Federal dollars to small businesses, SBA expects the 
movement of set-aside contracts to unrestricted competition to be 
limited. For the same reason, small businesses under the reduced size 
standards are likely to obtain more set-aside contracts due to the 
reduced competition from fewer businesses qualifying as small under the 
decreases to size standards. With some larger small businesses losing 
small business status under the decreases to size standards, smaller 
small businesses would likely become more competitive in obtaining set-
aside contracts. However, SBA cannot quantify these impacts.

Net Impacts of Size Standards Changes

    The impacts of the increases of size standards for 22 industries 
and 29 parts of two industries were shown in Table 10 (above). 
Similarly, the impacts of decreases of size standards for seven 
industries and 53 parts of two industries were presented in Table 11 
(above). Table 12, Net Impacts of Size Standards Changes, below, 
presents the net impacts of changes to size standards for 29 industries 
and 82 parts of four industries.
    Based on the 2017 Economic Census, SBA estimates that when moving 
from NAICS 2017 to NAICS 2022, 29 industries and 82 parts of four 
industries resulted in size standard changes. About 403 firms (almost 
all in NAICS 2017 industry 454110) would not qualify as small under the 
new size standards for NAICS 2022 industries. That represents about 
0.3% of all firms classified as small in those industries and industry 
parts under the current size standards.
[GRAPHIC] [TIFF OMITTED] TR29SE22.037


[[Page 59283]]


[GRAPHIC] [TIFF OMITTED] TR29SE22.038

BILLING CODE 8026-09-C
    Based on the FPDS-NG data for fiscal years 2018-2020, SBA estimates 
that about 42 unique active firms in Federal contracting in those 
industries would gain their small business status under the changes to 
size standards, most of them in Sector 31-33 (Manufacturing). This 
represents an increase of about 2.8% of the total number of small 
businesses participating in Federal contracting under the current size 
standards. Based on the same data, SBA estimates that about $60.4 
million of Federal procurement dollars would become available to all 
small firms,

[[Page 59284]]

including those gaining small status. This represents an increase of 
12.2% from the baseline. SBA estimates that the dollars obligated to 
small businesses will increase despite a reduction in the total number 
of small firms because the contract dollars to newly-qualified small 
businesses in sectors with increases to size standards is higher than 
the contract dollars to small businesses losing small business status 
in sectors with decreases to size standards.
    Based on the SBA's loan data for fiscal years 2018-2020, the total 
number of 7(a) and CDC/504 loans will not be impacted, and the loan 
amount may increase slightly since the average loan value to firms with 
increases to size standards is higher than the average loan value to 
firms with decreases to size standards.
    Firms' participation under the SBA's EIDL program will be affected 
as well. Since the benefit provided through this program is contingent 
on the occurrence and severity of a disaster in the future, SBA cannot 
make a meaningful estimate of this impact. However, based on the 
disaster loan program data for fiscal years 2018-2020, SBA estimates 
that the total number of EIDL loans and the loan amount will not be 
impacted.
    3. What alternatives have been considered?
    As stated previously, as an alternative to adopting new size 
standards for NAICS 2022 industries, SBA considered retaining NAICS 
2017 as the basis of industry definitions for its small business size 
standards. That would, however, lead to inconsistencies between SBA's 
size standards and establishment data published by Federal agencies 
that will adopt NAICS 2022 for their statistical and other data 
collection programs. OMB stated in its December 21, 2021, notice that 
``Federal statistical establishment data published for reference years 
beginning on or after January 1, 2022, should be published using the 
2022 NAICS United States codes.'' SBA is not a statistical agency, but 
it uses for its size standards analyses establishment data collected by 
other Federal agencies, such as the Economic Census data and County 
Business Patterns from the U.S. Census Bureau. If SBA continues using 
NAICS 2017 for its size standards, it will not be able to analyze and 
evaluate industry structure adequately and accurately and adjust small 
business size standards appropriately because the forthcoming Economic 
Census and County Business Patterns data based on NAICS 2022 will not 
be compatible with NAICS 2017 industry definitions. That would run 
counter to the Jobs Act mandate that requires SBA to review all size 
standards and adjust them appropriately to reflect the current industry 
structure and market conditions every five years.
    To establish, review, or revise, where necessary, small business 
size standards, SBA uses special tabulations of industry data that it 
obtains from the U.S. Census Bureau based on its Economic Census of 
U.S. industries and businesses, and establishment data from its County 
Business Patterns (CBP). Because the 2022 Economic Census and CBP data 
will be based on NAICS 2022 industry definitions, it is imperative that 
SBA also use NAICS 2022 as the basis of industry definitions for its 
table of small business size standards.

Congressional Review Act

    Subtitle E of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (codified at 5 U.S.C. 801-808), also known as the 
Congressional Review Act or CRA, generally provides that before a rule 
may take effect, the agency promulgating the rule must submit a rule 
report, which includes a copy of the rule, to each House of the 
Congress and to the Comptroller General of the United States. SBA will 
submit a report containing this rule and other required information to 
the U.S. Senate, the U.S. House of Representatives, and the Comptroller 
General of the United States. A major rule under the CRA cannot take 
effect until 60 days after it is published in the Federal Register. 
OMB's Office of Information and Regulatory Affairs has determined that 
this rule is not a ``major rule'' as defined by 5 U.S.C. 804(2).

Final Regulatory Flexibility Analysis

    Under the Regulatory Flexibility Act (RFA), this final rule may 
have a significant impact on a substantial number of small businesses 
in some industries whose size standards have been changed as a result 
of adopting NAICS 2022 for size standards. As described above, this 
rule may affect small businesses applying for Federal Government 
contracts, loans under SBA's 7(a), 504, and EIDL Programs, and 
assistance under other Federal small business programs.
    Immediately below, SBA sets forth a final regulatory flexibility 
analysis (FRFA) of this final rule addressing the following questions: 
(1) What are the need for and objectives of the rule?; (2) What are 
SBA's description and estimate of the number of small businesses to 
which the rule will apply?; (3) What are the projected reporting, 
record keeping, and other compliance requirements of the rule?;
    (4) What are the relevant Federal rules that may duplicate, 
overlap, or conflict with the rule?; and (5) What alternatives will 
allow the Agency to accomplish its regulatory objectives while 
minimizing the impact on small businesses?
    1. What are the need for and objective of the rule?
    The Small Business Act requires that small business size standards 
vary from industry to industry reflecting the differing characteristics 
of the various industries. SBA uses the latest NAICS as a basis of 
industries definitions for its table of size standards. As part of its 
five-year review of and revisions to NAICS industry definitions, OMB 
published its latest NAICS revision, NAICS 2022, on December 21, 2021. 
According to the OMB's notice, Federal establishment and industry data 
for reference years beginning on or after January 1, 2022, should be 
published using NAICS 2022. This rule amends SBA's small business size 
regulations to incorporate NAICS 2022 into its table of size standards. 
This not only makes SBA's size standards more reflective of the latest 
industry differences but also makes them more consistent with latest 
industry data the Agency uses to establish, review or adjust size 
standards. Updating size standards to the latest industry definitions 
also serves the SBA's mandate to review all size standards and make 
appropriate adjustments to reflect market conditions under the Jobs 
Act.
    2. What are SBA's description and estimate of the number of small 
businesses to which the rule will apply?
    With the update of size standards to the latest industry 
definitions under NAICS 2022, Federal small business assistance is more 
effectively targeted to its intended beneficiaries. The NAICS 2022 
revision created 111 new industries by reclassifying, combining, or 
splitting 156 NAICS 2017 industries or their parts. SBA's size 
standards for these 111 new industries under NAICS 2022 will result in 
an increase to the size standards for 22 industries and 29 parts of two 
industries under NAICS 2017, a decrease to size standards for seven 
industries and 53 parts of two industries, a change in the size 
standard measure from average annual receipts to number of employees 
for one industry, a change in the size standard measure from number of 
employees to average annual receipts for a part of one industry, and no 
change in size standards for 117 industries and 19 parts of seven 
industries. In 22 industries and 29 parts of two industries whose size 
standards would increase due to the adoption of NAICS 2022, nearly 450 
firms above the current size standards would qualify as small under the 
updated size standards, thereby

[[Page 59285]]

making them eligible for Federal small business assistance programs. 
Based on the data for fiscal years 2018-2020, SBA estimates that 
approximately $60.0 million in Federal contracts and about $100,000 in 
SBA 7(a) and 504 loans could be awarded to the newly defined small 
businesses under the updated size standards. The updated size standards 
would enable advanced small businesses to maintain their small business 
size status for a longer period and some mid-size businesses (i.e., 
businesses that have just exceeded the size thresholds) regain their 
small business status. In the seven NAICS 2017 industries and 53 parts 
of two industries for which size standards will decrease as a result of 
adoption of NAICS 2022, 849 firms below the current size standards 
would lose their small business size status under the proposed size 
standards. However, the program data suggests that this would cause no 
impact on them in terms of access to Federal contracting and SBA's 
loans programs. Currently, they are not participating in any small 
business programs.
    3. What are the projected reporting, record keeping and other 
compliance requirements of the rule?
    The size standard changes due to the adoption of NAICS 2022 impose 
no additional reporting or record keeping requirements on small 
businesses. However, qualifying for Federal small business contracting 
and other programs may require businesses to register in SAM and 
recertify in SAM that they are small at least once annually. Therefore, 
the newly qualified small businesses opting to participate in those 
programs must comply with SAM requirements. There are minimal costs 
associated with SAM registration and annual recertification, but this 
final rule does not impose any new costs in this area. Changing size 
standards alters the access to SBA's financial and other Federal 
programs that assist small businesses but does not impose a regulatory 
burden because they neither regulate nor control business behavior.
    4. What are the relevant Federal rules, which may duplicate, 
overlap, or conflict with the rule?
    Under section 3(a)(2)(C) of the Small Business Act, 15 U.S.C. 
632(a)(2)(c), Federal agencies must generally use SBA's size standards 
to define a small business, unless specifically authorized by statute 
to do otherwise. 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 (November 24, 1995)). An agency 
may establish for its programs a size standard that is different from 
those established by SBA if approved by SBA's Administrator in 
accordance with 13 CFR 121.903. SBA is not aware of any Federal rule 
that would duplicate or conflict with establishing or updating size 
standards.
    However, the Small Business Act and SBA's regulations allow Federal 
agencies to develop different size standards if they believe that SBA's 
size standards are not appropriate for their programs, with the 
approval of SBA's Administrator (13 CFR 121.903). The RFA authorizes a 
Federal agency to establish an alternative small business definition, 
after consultation with the Office of Advocacy of the U.S. Small 
Business Administration (5 U.S.C. 601(3)).
    5. What alternatives will allow the Agency to accomplish its 
regulatory objectives while minimizing the impact on small entities?
    By law, SBA is required to develop numerical size standards for 
establishing eligibility for Federal small business assistance 
programs. Other than varying levels of size standards by industry and 
changing the size measures, no practical alternative exists to the 
systems of numerical size standards. As stated previously, SBA 
considered continuing to use NAICS 2017 as a basis of industry 
definitions for its table of size standards. However, that would render 
SBA's table of size standards incompatible with Federal industry and 
establishment statistics and other databases when evaluating industry 
characteristics to ensure size standards are reflective of current 
industry structure and market conditions.

Executive Order 13563

    A description of the need for this proposed regulatory action and 
benefits and costs associated with this action including possible 
distribution impacts that relate to Executive Order 13563 are included 
above in the Cost Benefit Analysis.
    To engage interested parties in this action, SBA reached out to all 
Federal agencies advising them that the Agency plans to update its 
table of size standards to NAICS 2022, effective October 1, 2022, and 
that agencies must continue using the current size standards until that 
date. Adopting the updated size standards on October 1, 2022, is 
consistent with SBA's adoptions of previous NAICS revisions at the 
beginning of the new fiscal year following the OMB's January 1 
effective date of NAICS revisions for Federal statistical agencies.
    Unlike the most previous NAICS revisions which SBA adopted for its 
size standards either through a direct final rule or through an interim 
final rule, for the adoption of NAICS 2022 revision, SBA issued this 
proposed rule and sought comments to better engage the public in the 
process. SBA received two comments during the comment period which SBA 
has summarized and discussed above in the Discussion of Comments 
section. SBA also updated the size standards web page at www.sba.gov/size, asking interested parties to comment on the rule. SBA thoroughly 
considered all public comments when developing this final rule.

Executive Order 12988

    This action meets applicable standards set forth in sections 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. The action does not 
have retroactive or preemptive effect.

Executive Order 13132

    For purposes of Executive Order 13132, SBA has determined that this 
final rule will not have substantial, direct effects on the States, on 
the relationship between the Federal Government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. Therefore, SBA has determined that this final rule has 
no federalism implications warranting preparation of a federalism 
assessment.

Paperwork Reduction Act

    For the purpose of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, 
SBA has determined that this final rule would not impose any new 
reporting or record keeping requirements.

List of Subjects in 13 CFR Part 121

    Administrative practice and procedure, Federal Government 
procurement, Federal Government property, Grant programs--Business, 
Individuals with disabilities, Loan programs--Business, Reporting and 
recordkeeping requirements, Small businesses.

    For the reasons set forth in the preamble, SBA amends 13 CFR part 
121 as follows:

PART 121--SMALL BUSINESS SIZE REGULATIONS

0
1. The authority citation for part 121 is revised to read as follows:

    Authority:  15 U.S.C. 632, 634(b)(6), 636(a)(36), 662, 694a(9), 
and 9012.


[[Page 59286]]



0
2. In Sec.  121.201, amend the table, ``Small Business Size Standards 
by NAICS Industry'' as follows:
0
a. Remove the entries for 212111, 212112, and 212113;
0
b. Add entries for 212114, 212115, and 212220 in numerical order;
0
c. Remove the entries for 212221 and 212222;
0
d. Add an entry for 212290 in numerical order;
0
e. Remove the entries for 212291 and 212299;
0
f. Add an entry for 212323 in numerical order;
0
g. Remove the entries for 212324 and 212325;
0
h. Add an entry for 212390 in numerical order;
0
i. Remove the entries for 212391, 212392, 212393, and 212399;
0
j. Revise entry 311221;
0
k. Remove the entry for 315110;
0
l. Add an entry for 315120 in numerical order;
0
m. Remove the entries for 315190, 315220, and 315240;
0
n. Add an entry for 315250 in numerical order;
0
o. Remove the entry for 315280;
0
p. Add an entry for 316990 in numerical order;
0
q. Remove the entries for 316992, 316998, 321213, and 321214;
0
r. Add entries for 321215 and 322120 in numerical order;
0
s. Remove the entries for 322121 and 322122;
0
t. Add an entry for 325315 in numerical order;
0
u. Revise entry 325992;
0
v. Remove the entry for 333244;
0
w. Add an entry for 333248 in numerical order;
0
x. Remove the entry for 333249;
0
y. Add an entry for 333310 in numerical order;
0
z. Remove the entries for 333314, 333316, 333318, and 333997;
0
aa. Add an entry for 333998 in numerical order;
0
bb. Remove the entry for 333999;
0
cc. Add an entry for 334610 in numerical order;
0
dd. Remove the entries for 334613, 334614, 335110, 335121, 335122, and 
335129.
0
ee. Add entries for 335131, 335132, 335139, and 335910 in numerical 
order;
0
ff. Remove the entries for 335911 and 335912;
0
gg. Add an entry for 336110 in numerical order;
0
hh. Remove the entries for 336111, 336112, 337124, and 337125;
0
ii. Add an entry for 337126 in numerical order;
0
jj. Remove the entries for 424320 and 424330;
0
kk. Add an entry for 424350 in numerical order;
0
ll. Revise entry 424940 and the heading for Subsector 425;
0
mm. Remove the entry for 425110;
0
nn. Add an entry for 441227 in numerical order;
0
oo. Remove the entries for 441228, 441310, and 441320;
0
pp. Add entries for 441330 and 441340 in numerical order;
0
qq. Remove Subsectors 442 and 443;
0
rr. Revise entry 444120;
0
ss. Remove the entry for 444130;
0
tt. Add entries for 444140 and 444180 in numerical order;
0
uu. Remove the entries for 444190, 444210, and 444220;
0
vv. Add entries for 444230 and 444240 in numerical order;
0
ww. Revise Subsector 445;
0
xx. Remove Subsectors 446, 447, and 448;
0
yy. Add Subsector 449 in numerical order;
0
zz. Remove Subsectors 451, 452, 453, and 454;
0
aaa. Add Subsectors 455, 456, 457, 458, and 459 in numerical order;
0
bbb. Revise entry 485310;
0
ccc. Remove Subsector 511;
0
ddd. Add Subsector 513 in numerical order;
0
eee. Remove Subsector 515;
0
fff. Add Subsector 516 in numerical order;
0
ggg. Revise Subsectors 517, 518, and 519;
0
hhh. Remove the entry for 522120;
0
iii. Add an entry for 522180 in numerical order;
0
jjj. Remove the entries for 522190, 522293, 522294, and 522298;
0
kkk. Add an entry for 522299 in numerical order;
0
lll. Remove the entries for 523110, 523120, 523130, and 523140;
0
mmm. Add entries for 523150 and 523160 in numerical order;
0
nnn. Remove the entries for 523920 and 523930;
0
ooo. Add an entry for 523940 in numerical order;
0
ppp. Revise entries for 524292, 541380, 541850, 561611, and 624410;
0
qqq. Remove the entries for 811112 and 811113;
0
rrr. Add an entry for 811114 in numerical order;
0
sss. Remove the entry for 811118;
0
ttt. Add an entry for 811210 in numerical order;
0
uuu. Remove the entries for 811211, 811212, 811213, and 811219; and
0
vvv. Revise footnotes 8 and 15 at the end of the table.
    The additions and revisions read as follows:


Sec.  121.201   What size standards has SBA identified by North 
American U.S. Industry Classification System codes?

* * * * *

                                 Small Business Size Standards By NAICS Industry
----------------------------------------------------------------------------------------------------------------
                                                                               Size standards    Size standards
              NAICS codes                     NAICS U.S. industry title        in millions of     in number of
                                                                                   dollars          employees
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                            Sector 21--Mining, Quarrying, and Oil and Gas Extraction
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                   Subsector 212--Mining (except Oil and Gas)
----------------------------------------------------------------------------------------------------------------
212114.................................  Surface Coal Mining................  ................             1,250
212115.................................  Underground Coal Mining............  ................             1,500
 
                                                  * * * * * * *
212220.................................  Gold Ore and Silver Ore Mining.....  ................             1,500
 

[[Page 59287]]

 
                                                  * * * * * * *
212290.................................  Other Metal Ore Mining.............  ................               750
 
                                                  * * * * * * *
212323.................................  Kaolin, Clay, and Ceramic and        ................               500
                                          Refractory Minerals Mining.
212390.................................  Other Nonmetallic Mineral Mining     ................               500
                                          and Quarrying.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                          Sectors 31-33--Manufacturing
----------------------------------------------------------------------------------------------------------------
                                        Subsector 311--Food Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
311221.................................  Wet Corn Milling and Starch          ................             1,250
                                          Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                      Subsector 315--Apparel Manufacturing
----------------------------------------------------------------------------------------------------------------
315120.................................  Apparel Knitting Mills.............  ................               750
 
                                                  * * * * * * *
315250.................................  Cut and Sew Apparel Manufacturing    ................               750
                                          (except Contractors).
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                             Subsector 316--Leather and Allied Product Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
316990.................................  Other Leather and Allied Product     ................               500
                                          Manufacturing.
----------------------------------------------------------------------------------------------------------------
                                    Subsector 321--Wood Product Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
321215.................................  Engineered Wood Member               ................               500
                                          Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                       Subsector 322--Paper Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
322120.................................  Paper Mills........................  ................             1,250
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                      Subsector 325--Chemical Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
325315.................................  Compost Manufacturing..............  ................               500
 
                                                  * * * * * * *
325992.................................  Photographic Film, Paper, Plate,     ................             1,500
                                          Chemical, and Copy Toner
                                          Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                   Subsector 333--Machinery Manufacturing \6\
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
333248.................................  All Other Industrial Machinery       ................               750
                                          Manufacturing.
333310.................................  Commercial and Service Industry      ................             1,000
                                          Machinery Manufacturing.
 

[[Page 59288]]

 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
333998.................................  All Other Miscellaneous General      ................               500
                                          Purpose Machinery Manufacturing.
----------------------------------------------------------------------------------------------------------------
                        Subsector 334--Computer and Electronic Product Manufacturing \6\
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
334610.................................  Manufacturing and Reproducing        ................             1,250
                                          Magnetic and Optical Media.
----------------------------------------------------------------------------------------------------------------
                 Subsector 335--Electrical Equipment, Appliance and Component Manufacturing \6\
----------------------------------------------------------------------------------------------------------------
335131.................................  Residential Electric Lighting        ................               750
                                          Fixture Manufacturing.
335132.................................  Commercial, Industrial, and          ................               500
                                          Institutional Electric Lighting
                                          Fixture Manufacturing.
335139.................................  Electric Lamp Bulb and Other         ................             1,250
                                          Lighting Equipment Manufacturing.
 
                                                  * * * * * * *
335910.................................  Battery Manufacturing..............  ................             1,250
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                            Subsector 336--Transportation Equipment Manufacturing \6\
----------------------------------------------------------------------------------------------------------------
336110.................................  Automobile and Light Duty Motor      ................             1,500
                                          Vehicle Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                           Subsector 337--Furniture and Related Product Manufacturing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
337126.................................  Household Furniture (except Wood     ................               750
                                          and Upholstered) Manufacturing.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                           Sector 42--Wholesale Trade
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                              Subsector 424--Merchant Wholesalers, Nondurable Goods
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
424350.................................  Clothing and Clothing Accessories    ................               150
                                          Merchant Wholesalers.
 
                                                  * * * * * * *
424940.................................  Tobacco Product and Electronic       ................               250
                                          Cigarette Merchant Wholesalers.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                Subsector 425--Wholesale Trade Agents and Brokers
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                           Sector 44-45--Retail Trade
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                 Subsector 441--Motor Vehicles and Parts Dealers
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
441227.................................  Motorcycle, ATV, and All Other                  $35.0  ................
                                          Motor Vehicle Dealers.
441330.................................  Automotive Parts and Accessories                 25.0  ................
                                          Retailers.
441340.................................  Tire Dealers.......................              22.5  ................
----------------------------------------------------------------------------------------------------------------

[[Page 59289]]

 
                   Subsector 444--Building Material and Garden Equipment and Supplies Dealers
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
444120.................................  Paint and Wallpaper Retailers......              30.0  ................
444140.................................  Hardware Retailers.................              14.5  ................
444180.................................  Other Building Material Dealers....              22.0  ................
444230.................................  Outdoor Power Equipment Retailers..               8.5  ................
444240.................................  Nursery, Garden Center, and Farm                 19.0  ................
                                          Supply Retailers.
----------------------------------------------------------------------------------------------------------------
                                   Subsector 445--Food and Beverage Retailers
----------------------------------------------------------------------------------------------------------------
445110.................................  Supermarkets and Other Grocery                   35.0  ................
                                          Retailers (except Convenience
                                          Retailers).
445131.................................  Convenience Retailers..............              32.0  ................
445132.................................  Vending Machine Operators..........              18.5  ................
445230.................................  Fruit and Vegetable Retailers......               8.0  ................
445240.................................  Meat Retailers.....................               8.0  ................
445250.................................  Fish and Seafood Retailers.........               8.0  ................
445291.................................  Baked Goods Retailers..............              14.0  ................
445292.................................  Confectionery and Nut Retailers....              17.0  ................
445298.................................  All Other Specialty Food Retailers.               9.0  ................
445320.................................  Beer, Wine, and Liquor Retailers...               9.0  ................
----------------------------------------------------------------------------------------------------------------
                Subsector 449--Furniture, Home Furnishings, Electronics, and Appliance Retailers
----------------------------------------------------------------------------------------------------------------
449110.................................  Furniture Retailers................              22.0  ................
449121.................................  Floor Covering Retailers...........               8.0  ................
449122.................................  Window Treatment Retailers.........              10.0  ................
449129.................................  All Other Home Furnishings                       29.5  ................
                                          Retailers.
449210.................................  Electronics and Appliance Retailers              35.0  ................
----------------------------------------------------------------------------------------------------------------
                                  Subsector 455--General Merchandise Retailers
----------------------------------------------------------------------------------------------------------------
455110.................................  Department Stores..................              35.0  ................
455211.................................  Warehouse Clubs and Supercenters...              41.5  ................
455219.................................  All Other General Merchandise                    35.0  ................
                                          Retailers.
----------------------------------------------------------------------------------------------------------------
                                Subsector 456--Health and Personal Care Retailers
----------------------------------------------------------------------------------------------------------------
456110.................................  Pharmacies and Drug Retailers......              33.0  ................
456120.................................  Cosmetics, Beauty Supplies, and                  30.0  ................
                                          Perfume Retailers.
456130.................................  Optical Goods Retailers............              26.0  ................
456191.................................  Food (Health) Supplement Retailers.              20.0  ................
456199.................................  All Other Health and Personal Care                8.5  ................
                                          Retailers.
----------------------------------------------------------------------------------------------------------------
                                Subsector 457--Gasoline Stations and Fuel Dealers
----------------------------------------------------------------------------------------------------------------
457110.................................  Gasoline Stations with Convenience               32.0  ................
                                          Stores.
457120.................................  Other Gasoline Stations............              29.5  ................
457210.................................  Fuel Dealers.......................  ................               100
----------------------------------------------------------------------------------------------------------------
                   Subsector 458--Clothing, Clothing Accessories, Shoe, and Jewelry Retailers
----------------------------------------------------------------------------------------------------------------
458110.................................  Clothing and Clothing Accessories                41.5  ................
                                          Retailers.
458210.................................  Shoe Retailers.....................              30.0  ................
458310.................................  Jewelry Retailers..................              18.0  ................
458320.................................  Luggage and Leather Goods Retailers              33.5  ................
----------------------------------------------------------------------------------------------------------------
           Subsector 459--Sporting Goods, Hobby, Musical Instrument, Book, and Miscellaneous Retailers
----------------------------------------------------------------------------------------------------------------
459110.................................  Sporting Goods Retailers...........              23.5  ................
459120.................................  Hobby, Toy, and Game Retailers.....              31.0  ................
459130.................................  Sewing, Needlework, and Piece Goods              30.0  ................
                                          Retailers.
459140.................................  Musical Instrument and Supplies                  20.0  ................
                                          Retailers.
459210.................................  Book Retailers and News Dealers....              31.5  ................
459310.................................  Florists...........................               8.0  ................
459410.................................  Office Supplies and Stationery                   35.0  ................
                                          Retailers.
459420.................................  Gift, Novelty, and Souvenir                      12.0  ................
                                          Retailers.
459510.................................  Used Merchandise Retailers.........              12.5  ................
459910.................................  Pet and Pet Supplies Retailers.....              28.0  ................
459920.................................  Art Dealers........................              14.5  ................

[[Page 59290]]

 
459930.................................  Manufactured (Mobile) Home Dealers.              16.5  ................
459991.................................  Tobacco, Electronic Cigarette, and               10.0  ................
                                          Other Smoking Supplies Retailers.
459999.................................  All Other Miscellaneous Retailers..              10.0  ................
----------------------------------------------------------------------------------------------------------------
                                  Sectors 48-49--Transportation and Warehousing
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                           Subsector 485--Transit and Ground Passenger Transportation
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
485310.................................  Taxi and Ridesharing Services......              16.5  ................
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                             Sector 51--Information
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                      Subsector 513--Publishing Industries
----------------------------------------------------------------------------------------------------------------
513110.................................  Newspaper Publishers...............  ................             1,000
513120.................................  Periodical Publishers..............  ................             1,000
513130.................................  Book Publishers....................  ................             1,000
513140.................................  Directory and Mailing List           ................             1,000
                                          Publishers.
513191.................................  Greeting Card Publishers...........  ................             1,000
513199.................................  All Other Publishers...............  ................             1,000
513210.................................  Software Publishers \15\...........         \15\ 41.5  ................
----------------------------------------------------------------------------------------------------------------
                                Subsector 516--Broadcasting and Content Providers
----------------------------------------------------------------------------------------------------------------
516110.................................  Radio Broadcasting Stations........              41.5  ................
516120.................................  Television Broadcasting Stations...              41.5  ................
516210.................................  Media Streaming Distribution                     41.5  ................
                                          Services, Social Networks, and
                                          Other Media Networks and Content
                                          Providers.
----------------------------------------------------------------------------------------------------------------
                                        Subsector 517--Telecommunications
----------------------------------------------------------------------------------------------------------------
517111.................................  Wired Telecommunications Carriers..  ................             1,500
517112.................................  Wireless Telecommunications          ................             1,500
                                          Carriers (except Satellite).
517121.................................  Telecommunications Resellers.......  ................             1,500
517122.................................  Agents for Wireless                  ................             1,500
                                          Telecommunications Services.
517410.................................  Satellite Communications...........              38.5  ................
517810.................................  All Other Telecommunications.......              35.0  ................
----------------------------------------------------------------------------------------------------------------
      Subsector 518--Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
----------------------------------------------------------------------------------------------------------------
518210.................................  Computing Infrastructure Providers,              35.0  ................
                                          Data Processing, Web Hosting, and
                                          Related Services.
----------------------------------------------------------------------------------------------------------------
             Subsector 519--Web Search Portals, Libraries, Archives, and Other Information Services
----------------------------------------------------------------------------------------------------------------
519210.................................  Libraries and Archives.............              18.5  ................
519290.................................  Web Search Portals and All Other     ................             1,000
                                          Information Services.
----------------------------------------------------------------------------------------------------------------
                                        Sector 52--Finance and Insurance
----------------------------------------------------------------------------------------------------------------
                           Subsector 522--Credit Intermediation and Related Activities
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
522180.................................  Savings Institutions and Other                  750.0  ................
                                          Depository Credit Intermediation          million in
                                          \8\.                                  average assets
                                                                                           \8\
 
                                                  * * * * * * *
522299.................................  International, Secondary Market,                 41.5  ................
                                          and All Other Nondepository Credit
                                          Intermediation.
 

[[Page 59291]]

 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
     Subsector 523--Securities, Commodity Contracts, and Other Financial Investments and Related Activities
----------------------------------------------------------------------------------------------------------------
523150.................................  Investment Banking and Securities                41.5  ................
                                          Intermediation.
523160.................................  Commodity Contracts Intermediation.              41.5  ................
 
                                                  * * * * * * *
523940.................................  Portfolio Management and Investment              41.5  ................
                                          Advice.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                            Subsector 524--Insurance Carriers and Related Activities
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
524292.................................  Pharmacy Benefit Management and                  40.0  ................
                                          Other Third-Party Administration
                                          of Insurance and Pension Funds.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                           Sector 54--Professional, Scientific and Technical Services
----------------------------------------------------------------------------------------------------------------
                         Subsector 541--Professional, Scientific and Technical Services
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
541380.................................  Testing Laboratories and Services..              16.5  ................
 
                                                  * * * * * * *
541850.................................  Indoor and Outdoor Display                       30.5  ................
                                          Advertising.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
               Sector 56--Administrative and Support and Waste Management and Remediation Services
----------------------------------------------------------------------------------------------------------------
                               Subsector 561--Administrative and Support Services
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
561611.................................  Investigation and Personal                       22.0  ................
                                          Background Check Services.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                  Sector 62--Health Care and Social Assistance
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                        Subsector 624--Social Assistance
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
624410.................................  Child Care Services................               8.5  ................
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                            Sector 81--Other Services (Except Public Administration)
----------------------------------------------------------------------------------------------------------------
                                      Subsector 811--Repair and Maintenance
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
811114.................................  Specialized Automotive Repair......               8.0  ................
 
                                                  * * * * * * *
811210.................................  Electronic and Precision Equipment               30.0  ................
                                          Repair and Maintenance.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
Footnotes
 * * * * * * *

[[Page 59292]]

 
6. NAICS Subsectors 333, 334, 335 and 336--For rebuilding machinery or equipment on a factory basis, or
  equivalent, use the NAICS code for a newly manufactured product. Concerns performing major rebuilding or
  overhaul activities do not necessarily have to meet the criteria for being a ``manufacturer'' although the
  activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are
  not considered rebuilding.
 * * * * * * *
8. NAICS Codes 522110, 522130, 522180, and 522210--A financial institution's assets are determined by averaging
  the assets reported on its four quarterly financial statements for the preceding year. ``Assets'' for the
  purposes of this size standard means the assets defined according to the Federal Financial Institutions
  Examination Council 041 call report form for NAICS codes 522110, 522180, and 522210 and the National Credit
  Union Administration 5300 call report form for NAICS code 522130.
 * * * * * * *
15. NAICS code 513210--For purposes of Government procurement, the purchase of software subject to potential
  waiver of the nonmanufacturer rule pursuant to Sec.   121.1203(d) should be classified under this NAICS code.
 * * * * * * *


Isabella Casillas Guzman,
Administrator.
[FR Doc. 2022-20513 Filed 9-28-22; 8:45 am]
BILLING CODE 8026-09-P