[Federal Register Volume 68, Number 248 (Monday, December 29, 2003)]
[Rules and Regulations]
[Pages 74842-74847]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-31794]
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245-AE78
Small Business Size Standards; Testing Laboratories
AGENCY: U.S. Small Business Administration (SBA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Small Business Administration (SBA) is adopting the
proposed increase to the size standard for the Testing Laboratories
industry (North American Industry Classification System (NAICS) code
541380) from $6 million to $10 million in average annual receipts. This
action will better define the size of businesses in this industry that
the SBA believes should be eligible for Federal small business
assistance programs.
DATES: This rule is effective January 28, 2004.
FOR FURTHER INFORMATION CONTACT: Robert N. Ray, Office of Size
Standards, at (202) 205-6618 or [email protected].
SUPPLEMENTARY INFORMATION: On April 9, 2002, the SBA issued a proposed
rule in the Federal Register (67 FR 17020) to increase the size
standard for the Testing Laboratories industry (NAICS 541380) from $6
million to $10 million in average annual receipts (available at http://www.sba.gov/size/indexwhatsnew.html). The SBA proposed this size
standard after receiving requests from testing laboratories to review
the $6 million size standard for that industry in light of upgraded
capacities and skills that Federal agencies have recently required
among contractors that specialize in environmental and radiochemical
testing. The requesting testing laboratories claimed that these minimum
requirements have raised the costs of doing business in this industry,
and reduced the pool of eligible small testing laboratories capable of
satisfying these requirements. If this trend persists, they maintain,
Federal agencies could be hampered in using Government preference
programs designed to assist small testing laboratories.
Based on these concerns, the SBA conducted a review of this
industry's size standard. In addition to reviewing patterns of Federal
procurement in this industry, the SBA evaluated data on the industry
structure. This review involved comparisons of average firm size, the
size distribution of firms, measures of start-up costs and the degree
of concentration of activity among very large firms in the industry.
Based on its review of each evaluation factor, and the amount of
participation of small testing laboratories in Federal Government
procurement, the SBA concluded that the data supported a size standard
in this industry of $10 million in average annual receipts. (For more
detailed information on the reasons for proposing a $10 million size
standard see the April 9, 2002, (67 FR 17020) proposed rule.) After
careful consideration of the comments received on the proposed rule,
the SBA has decided to adopt the proposed size standard of $10 million.
Discussion of Comments on the Proposed Rule
The SBA received 35 comments on the proposed rule after extending
the comment period through September 30, 2002 (67 FR 56966, September
6, 2002). Of the 35 commentators, 21 supported the proposed increase,
while 14 opposed it. Below is a summary of the major issues raised by
the comments and the SBA's response.
[[Page 74843]]
Comments Supporting the Proposed Increase to $10 Million
The 21 comments in favor of the proposed rule raised a number of
issues in support of a higher size standard. The most important issue
discussed was the requirements contained in Federal contracts. Six
commentators cited a pattern of increased Government requirements in
recent years as leading to the result in which testing laboratories
under the present size standard of $6 million often cannot adequately
perform on a Federal contract. These Federal Government requirements
for laboratory operations include: reporting requirements, quality
assurance plans, emergency contingency plans, analytical requirements,
electronic data deliverable requirements, audit requirements,
management costs, health and safety requirements, regulatory
requirements and insurance and liability requirements. In addition,
radioactive and non-radioactive hazards often required testing by
environmental radiochemistry laboratories that have the licenses,
procedures, insurance protection, and approvals for both types of
hazardous samples. Therefore, the general belief among these
commentators is that large capital and labor expenses are required for
a testing laboratory to be active as a successful Federal contractor.
These commentators believed that the size standard should be raised so
that more Federal contracts will be set aside for small businesses, and
there will be a larger pool of small testing laboratories to compete
for those contracts.
Three commentators cited a recent pattern of increasing
consolidation in the industry as one or more very large testing
laboratories have acquired a number of smaller testing laboratories,
while competing testing laboratories have gone out of business. They
claimed that this trend has resulted in greater concentration in the
industry, and less ability for small testing laboratories to compete
for Federal contracts.
Two commentators, both large firms, supported the higher size
standard because they have found it difficult to find competent small
testing laboratories to meet their Federal subcontracting goals under
the present size standard. A higher size standard would immediately
qualify more testing laboratories as small, while permitting additional
small testing laboratories to expand in size and still be qualified as
small.
Finally, two commentators believed that a higher size standard
would allow them to expand. These commentators contended that the
present size standard tends to frustrate growth and reduce competition.
Comments Opposing the Proposed Increase
The strongest criticism of the proposed increase focused on the
claim that testing laboratories in the $6 million to $10 million size
range are relatively successful and well capitalized compared to
testing laboratories with less than $6 million in sales. Eight of the
14 commentators opposing the proposed change asserted that testing
laboratories in this size range are too successful to be considered
small. They indicated that these larger testing laboratories have lower
costs than smaller testing laboratories due to higher volume. They also
view larger laboratories as better able to target Federal contracts. A
common observation is that testing laboratories in the $6 million to
$10 million size range have larger facilities than smaller testing
laboratories, and that Federal contracts are often awarded on the basis
of individual facility qualifications. Four commentators believed that
a higher size standard would give significant advantages to the large,
single-site testing laboratories when competing for Federal contracts.
Commentators opposing the proposed change also generally believed
that there is a stagnant market for Federal contracts and that
increasing the size standard in such an environment would increase
competition for Federal contracts. This additional competition would
have a negative impact on testing laboratories that are presently under
the $6 million size standard.
The comments opposing the proposed size standard also raised an
issue regarding the performance of small testing laboratories on
subcontracts awarded by large businesses in fulfillment of
subcontracting goals on Federal contracts. They contended that small
testing laboratories are very successful and competitive in obtaining
subcontracts, and thus, a higher size standard was not needed. One
comment provided data on such subcontracts awarded by several large
businesses. These data indicated that small testing laboratories were
able to achieve a higher proportion of subcontracts than Federal
contracts.
Other commentators opposing the proposed change cited information
in two key areas identified in the proposed rule as reasons supporting
an increase in the size standard. First, three commentators noted that
the trend toward consolidation in the industry was associated with one
or more very large companies buying out smaller, less successful,
testing laboratories. These commentators recognized that there has been
a shakeup in the industry, with smaller testing laboratories often
unsuccessfully competing with very large testing laboratories for
Federal Government contracts. Second, three commentators also contended
that recent Federal Government requirements have tended to reduce the
pool of small testing laboratories that can effectively bid on Federal
contracts. They viewed these developments as reasons for retaining the
current size standard rather than supporting an increase.
Response to Significant Issues Raised by Comments
The SBA believes that the trends in the Testing Laboratories
industry and the level of small business participation in Federal
contracting support a size standard higher than $6 million and the
adoption of the proposed $10 million size standard. Since the time of
the proposed rule, Federal contracting data have become available for
fiscal years (FY) 2001-02. These data show small testing laboratories
have increased their level of participation in Federal contracting over
previous years. Small testing laboratories obtained 23.1% of testing
contract dollars in FY 2002, and 29.7% in FY 2001. However, these
levels remain significantly below the small business share of 44% of
total industry revenues. The SBA found in a detailed review of fiscal
years 2001-02 Federal testing contracts that small testing laboratories
are successful in obtaining contracts of varying sizes. However, the
consistent discrepancy between the Federal and industry share does lend
credence to the arguments advanced by the comments supporting the
proposed size standard that Federal contract requirements have become
more restrictive in recent years, and that this pattern favors larger,
more heavily capitalized firms. The SBA also agrees with the view that
the industry has become more concentrated over time with a much greater
presence of very large testing laboratories. In 1997, $3.1 billion out
of $6.4 billion in sales were generated by testing laboratories with
more than $10 million in sales. This share, almost 50%, has probably
increased significantly with the recent consolidation in the industry
and the departure of small testing laboratories. The SBA believes that
these patterns of more stringent contracting requirements and greater
industry concentration support a higher size standard.
The SBA is aware that firms that are larger in size will often
possess greater
[[Page 74844]]
capabilities than smaller firms. This pattern occurs in most
industries. Regardless of where a size standard is established, there
will be a variation in firm size and capabilities within the pool of
eligible small businesses and this variation will generally favor
larger firms in the distribution. However, Federal contract
requirements vary from procurement to procurement, and there is no
certainty that firms with less than $6 million in sales will be unable
to compete with firms in the $6 million to $10 million range for most
contracts. The SBA is concerned that small testing laboratories under
the current $6 million size standard need to be able to grow to a
larger size to capably handle Federal testing requirements and to
develop a stronger competitive base before they grow beyond the size
standard.
The SBA does not agree that subcontract awards to small testing
laboratories should be used as a basis to retain the current size
standard. Subcontract awards by industry activity on Federal contracts
are not reported by large businesses. Without a systematic collection
of testing subcontract data, the SBA is unable to adequately assess the
implications of Federal subcontracting on the size standard. In
addition, the SBA received comments from two large businesses
supporting the proposed size standard because they were experiencing
difficulty in finding capable small testing laboratories to satisfy
their testing requirements. The SBA believes that the industry data
offer an alternative to considering Federal subcontracting trends.
These data reflect the amount of revenues obtained by testing
laboratories from all sources. As discussed in this rule and the
proposed rule, the SBA has concluded that data on the characteristics
of testing laboratories support the proposed size standard.
Explanation of Revised and Updated Federal Contracting Data
Comments expressed a concern about the accuracy of the Federal
procurement data discussed in the proposed rule. In table 3 of the
proposed rule, a formatting error occurred that showed the Federal
testing contract data in thousands of dollars instead of millions of
dollars. The table below shows the correct data as well as the recently
available contract data for fiscal years 2001-02.
Small Business Prime Contract Awards, Fiscal Years 1998-2002
[Data in millions of dollars]
----------------------------------------------------------------------------------------------------------------
Category FY 1998 FY 1999 FY 2000 FY 2001 FY 2002
----------------------------------------------------------------------------------------------------------------
Testing laboratories awards.............................. $861.6 $628.0 $84.7 $176.7 $233.7
Small testing laboratories awards........................ $44.1 $45.3 $42.1 $52.5 $54.0
Percent to small testing laboratories.................... 5.1% 7.2% 49.7% 29.7% 23.1%
----------------------------------------------------------------------------------------------------------------
Source: Federal Procurement Data Center, U.S. General Services Administration.
Note: Data for FY 2000 for Testing Laboratories are not representative of most years due to deobligations of
$135 million from procurements initiated in previous years.
The concerns regarding the Federal contracting data also questioned
the overall quality of the testing contracts reported. While a certain
degree of error exists with all large databases, the SBA believes the
data collected by the Federal Procurement Data System (FPDS), the
official database on Federal contract award information, satisfactorily
reports the overall level of Federal testing contracts and the amount
of contracting to various organizational categories. FPDS collects
detailed information on all Federal contracts with a value of $25,000
or more. The table above shows data on Federal contracts for testing
services as evidenced by the assignment of an industry code for the
testing laboratories industry (NAICS 541380 and SIC 8734). For these
contracts, testing comprises the predominate activity of the contract.
The dollar amounts reported show that amount of funds obligated to a
contract within a fiscal year. That is, for a contract that is more
than 1 year in duration, the amount of funds spent in a fiscal year are
reported rather than the entire anticipated dollar value of the
contract in the year awarded. For indefinite delivery/indefinite
quantity contracts, only amounts actually awarded through a task order
are reported, not potential amounts. The SBA recognizes that testing
may be included within other Federal contracts; however, no method
exists to accurately identify those contracts. Further, testing would
tend to comprise only a minor part of those contracts. The SBA does not
believe that those contracts have a bearing on the size standard for
testing laboratories.
Compliance With Executive Orders 12866, 12988, and 13132, the Paperwork
Reduction Act (44 U.S.C. Ch. 35) and the Regulatory Flexibility Act (5
U.S.C. 601-612)
The Office of Management and Budget (OMB) has determined that this
final rule is a significant regulatory action for purposes of Executive
Order 12866. Size standards determine which businesses are eligible for
Federal small business programs. This is not a major rule, however,
under the Congressional Review Act, 5 U.S.C. 800. For the purpose of
the Paperwork Reduction Act, 44 U.S.C. Ch. 35, the SBA has determined
that this rule would not impose new reporting or record keeping
requirements. For purposes of Executive Order 13132, the SBA has
determined that this rule does not have any federalism implications
warranting the preparation of a Federalism Assessment. For purposes of
Executive Order 12988, the SBA has determined that this rule is
drafted, to the extent practicable, in accordance with the standards
set forth in that order. Our Regulatory Impact Analysis follows.
Regulatory Impact Analysis
1. Is there a need for the regulatory action?
The SBA is chartered to aid and assist small businesses through a
variety of financial, procurement, business development, and advocacy
programs. To effectively assist intended beneficiaries of these
programs, the SBA must establish distinct definitions of which
businesses are deemed small businesses. The Small Business Act (15
U.S.C. 632(a)) delegates to the SBA Administrator the responsibility
for establishing small business definitions. It also requires that
small business definitions vary to reflect industry differences (the
Small Business Act is available at http://www.sba.gov/library/lawroon.html). The preamble of the proposed rule explained the approach
the SBA follows when analyzing a size standard for a particular
industry. Based on that analysis, and comments received on the proposed
rule, the SBA believes
[[Page 74845]]
that a revision to the current size standard for testing laboratories
is needed to better define small businesses in this industry.
2. What are the potential benefits and costs of this regulatory action?
The most significant benefit to businesses obtaining small business
status as a result of this rule is eligibility for Federal small
business assistance programs. Under this rule, 120 additional firms
generating 9.9% of sales in this industry would obtain small business
status and could be eligible for these programs. These programs include
the SBA's financial assistance programs, economic injury disaster loans
and Federal procurement preference programs for small businesses, 8(a)
firms, small disadvantaged businesses (SDB), and small businesses
located in Historically Underutilized Business Zones (HUBZones).
Through the assistance of these programs, small businesses may benefit
by becoming more knowledgeable, stable, and competitive businesses.
Other Federal agencies also use the SBA's size standards for their
programs for a variety of regulatory and program purposes. The SBA does
not have information on each of these uses sufficient to evaluate the
impact of the size standard change. If an agency believes that a
different size standard is appropriate for its programs, it must
contact the SBA. If an agency is seeking to change size standards in a
general rulemaking context, then the agency should contact the SBA's
Office of Size Standards. (See 13 CFR 121.901-904. The SBA's
regulations are available at http://www.sba.gov/library/lawroon.html.)
If the agency is seeking to change size standards for the purposes of a
Regulatory Flexibility Act (RFA) analysis then the SBA's Office of
Advocacy should be contacted pursuant to the RFA (5 U.S.C. 603(a)),
available at http://www.sba.gov/advo/laws/regflex.html). Section 601(3)
of the RFA requires the agency to consult with the Office of Advocacy
and provide an opportunity for public comment when using a different
size standard for the RFA analysis.
The benefits of a size standard increase to a more appropriate
level would affect three groups: (1) Businesses that benefit by gaining
small business status from the proposed size standard and use small
business assistance programs; (2) growing small businesses that may
exceed the current size standard in the near future and who will retain
small business status from the higher size standard; and (3) Federal
agencies that award contracts under procurement programs that require
small business status.
Newly defined small businesses could benefit from the SBA's 7(a)
Guaranteed Loan Program. The SBA estimates that approximately $2
million in new Federal loan guarantees would be made to these newly
defined small businesses. This represents approximately 9.9% of the
annual average of $19 million in loans that were guaranteed by the SBA
under this financial program to testing laboratories firms during
fiscal years 1998-2002. Because of the size of the loan guarantees,
most loans are made to small businesses well below the size standard.
Thus, increasing the size standard will likely result in only a small
increase in small business guaranteed loans to testing laboratories,
and the $2 million estimated figure may overstate the actual impact.
The newly defined small businesses would also benefit from the
SBA's Economic Injury Disaster Loan (EIDL) program. Since this program
is contingent upon the occurrence and severity of a disaster, however,
no meaningful estimate of benefits can be projected.
The SBA estimates that firms gaining small business status could
potentially obtain Federal contracts worth an additional $42 million in
sales. This represents 9.9% of approximately $424 million that the
Federal Government awarded per year in this industry during fiscal
years 1998-2002.
Federal agencies may benefit from the higher size standards if the
newly defined and expanding small businesses compete for more set-aside
procurements. The larger base of small businesses would likely increase
competition and would lower the prices on set-aside procurements. A
larger base of small businesses may create an incentive for Federal
agencies to set aside more contracts, resulting in greater
opportunities for all small businesses. Small business opportunities
will be enhanced in full and open procurements as newly eligible firms
gain experience in Federal contracting through set aside and other
small business procurement preference programs. Large businesses with
small business subcontracting goals may also benefit from a larger pool
of small businesses by enabling them to better achieve their
subcontracting goals at lower prices. No estimate of cost savings from
these contracting decisions can be made, since data are not available
to directly measure price or competitive trends on Federal contracts.
To the extent that up to 120 additional firms could become active
in Federal Government small business programs, this may entail some
additional administrative costs to the Federal Government associated
with additional bidders for Federal procurements, additional firms
seeking assistance from the SBA's guaranteed lending programs, and
additional firms eligible for enrollment in the SBA's PRO-Net database
program. Among businesses in this group seeking the SBA's assistance,
there will be some additional costs associated with compliance,
protests, and verification of small business status. These costs are
likely to generate minimal incremental costs since mechanisms are
currently in place to handle these administrative requirements.
The costs to the Federal Government may be higher on some Federal
contracts. With a greater number of businesses defined as small,
Federal agencies may choose to set aside more contracts for competition
among small businesses rather than using full and open competition. The
movement from full and open to set-aside contracting is likely to
result in competition among fewer bidders for a contract. Also, higher
costs may result if additional full and open contracts are awarded to
HUBZone and SDB businesses as a result of a price evaluation
preference. The additional costs associated with fewer bidders and
price evaluation preferences, however, are likely to be minor since, as
a matter of policy, procurements may be set aside for small businesses
or reserved for the 8(a) and HUBZone programs, only if awards are
expected to be made at fair and reasonable prices.
The new final size standard may have distributional effects among
large and small businesses. Although the actual outcome of the gains
and losses among small and large businesses cannot be estimated with
certainty, several trends are likely to emerge. First, a transfer of
some Federal contracts from large businesses to small businesses will
probably occur. Large businesses may have fewer Federal contract
opportunities if Federal agencies decide to set aside more Federal
procurements for small businesses. Also, some Federal contracts may be
awarded to HUBZone and SDB businesses instead of large businesses,
since those two categories of small business are eligible for price
evaluation adjustment for contracts competed on a full and open basis.
Similarly, currently defined small businesses may obtain fewer Federal
contacts due to the increased competition from more businesses defined
as small. This transfer, however, may be offset by a greater number of
[[Page 74846]]
Federal procurements set-aside for all small businesses. The number of
newly defined and expanding small businesses that are willing and able
to sell to the Federal Government, however, would limit the potential
transfer of contracts away from large and currently defined small
businesses. The potential distributional impacts of these transfers may
not be estimated with any degree of precision since the data on the
size of business receiving a Federal contract are limited to
identifying whether a business is small or other-than-small, without
regard to the exact size of business.
The revision to current size standards for testing laboratories is
consistent with the SBA's statutory mandate to assist small businesses.
This regulatory action promotes the Administrator's objectives. One of
the SBA's goals in support of the Administrator's objectives is to help
individual small businesses succeed through fair and equitable access
to capital and credit, Government contracts, and management and
technical assistance. Reviewing, and modifying size standards when
appropriate, ensures that intended beneficiaries have access to small
business programs designed to assist them. Size standards do not
interfere with State, local, and tribal governments in the exercise of
their government functions. In a few cases, State and local governments
have voluntarily adopted the SBA's size standards for their programs to
eliminate the need to establish an administrative mechanism for
developing their own size standards.
Final Regulatory Flexibility Analysis
Under the RFA, this rule may have a significant impact on a
substantial number of small entities. As described in the regulatory
impact analysis, this rule may impact small entities seeking SBA 7(a)
Guaranteed Loans or Economic Injury Disaster Loans as well as the
Federal Government's procurement preference programs.
The size standard may also affect small businesses participating in
the programs of other agencies that use the SBA size standards. As a
practical matter, however, the SBA cannot estimate the impact of a size
standard change on each and every Federal program that uses its size
standards. No comments were received that identified a program or
regulation that would be adversely affected by the proposed size
standard. In cases where an SBA size standard is not appropriate, the
Small Business Act and the SBA's regulations allow Federal agencies to
develop different size standards with the approval of the SBA
Administrator (15 U.S.C. 632(a)(2)(c) and 13 CFR 121.902). If the
agency is seeking to change size standards for the purposes of an RFA
analysis, then the SBA's Office of Advocacy should be contacted
pursuant to the RFA).
Immediately below, the SBA sets forth a final regulatory
flexibility analysis (FRFA) of this rule addressing the reasons and
objective of the rule; a description and estimate of small entities to
which the rule will apply; the projected reporting, record keeping, and
other compliance requirements of the rule; the relevant Federal rules
which may duplicate, overlap or conflict with the rule; and
alternatives to the final rule considered by the SBA that minimize the
impact on small businesses.
(1) What is the need for and objective of this rule?
The objective of this rule is to establish an appropriate size
standard for the Testing Laboratories industry. The revision to the
size standard for the Testing Laboratories industry more accurately
defines the size of businesses in this industry that the SBA believes
should be eligible for Federal small business assistance programs.
Significant changes in the industry and in the requirements of
Government clients support the need for a different size standard.
(2) What significant issues were raised by the public comments in
response to the Initial Regulatory Flexibility Act (IRFA)?
About a third of commentators believe that the SBA is permitting
testing laboratories to be eligible that are already very successful
and that do not need the additional advantage of being considered
small. The SBA, however, believes that a higher size standard is
necessary due to Federal contract requirements that require a high
degree of competence and physical investment, a tendency for very large
firms to acquire smaller testing laboratories, and the fact that small
testing laboratories have been awarded Federal procurements
significantly less than their overall share in the industry.
(3) What is the SBA's description and estimate of the number of small
entities to which the rule will apply?
Within the Testing Laboratories industry, 3,762 out of 4,126
businesses are small under the $6 million size standard that is
presently in place. The number of small businesses will increase by 120
testing laboratories to 3,882 under a $10 million size standard.
Testing laboratories becoming newly eligible for the SBA's assistance
as a result of this rule cumulatively generate $635 million in
receipts. The amount of receipts by small testing laboratories would
increase from $2.7 billion to $3.3 billion out of a total of $6.4
billion in receipts. The small business coverage in this industry would
increase by 9.9% of total receipts. This is based on the U.S. Census
Bureau's special tabulation of the 1997 Economic Census for the SBA's
Office of Size Standards, which shows industry characteristics by firm
size.
(4) Will this rule impose any additional reporting or recordkeeping
requirements or other compliance requirements on small businesses?
A new size standard does not impose any additional reporting,
recordkeeping or other compliance requirements on small entities for
the SBA's programs. A change in a size standard would not create
additional costs on a business to determine whether or not it qualifies
as a small business. A business needs to only examine existing
information to determine its size, such as Federal tax returns, payroll
records, and accounting records. Size standards determine ``voluntary
access'' to the SBA's and other Federal programs that assist small
businesses, but do not impose a regulatory burden as they neither
regulate nor control business behavior. In addition, this rule does not
impose any new information collection requirements from the SBA which
require approval by the OMB under the Paperwork Reduction Act of 1980,
U.S.C. 3501-3520.
(5) What are the steps the SBA has taken to minimize the significant
economic impact on small business?
Most of the economic impact on small businesses will be positive.
The most significant benefits to businesses that will obtain small
business status as a result of this rule are eligibility for the SBA's
financial assistance programs such as 7(a) business loans, 504 business
loans, and EIDL assistance and eligibility for the Federal Government's
procurement preference programs for small business, 8(a) firms, SDBs,
and HUBZone small businesses The SBA estimates that approximately $42
million per year of additional Federal prime contracts may be awarded
to businesses becoming newly designated small businesses in the Testing
Laboratories industry and that approximately $2 million in new Federal
loan guarantees could be made annually to these newly defined small
businesses. The projected increase of three additional loans totaling
approximately $2 million in new
[[Page 74847]]
Federal loan guarantees will have virtually no impact on the overall
availability of loans for the SBA's loan programs, which have averaged
about 50,000 loans totaling more than $12 billion per year in recent
years.
(6) What alternatives were considered by the SBA to accomplish its
regulatory objectives while minimizing the impact on small entities?
In the proposed rule of April 9, 2002, the SBA considered
alternative size standards which included a more limited increase to
$7.5 million, and a larger increase to $12.5 million. The SBA decided
not to propose the more moderate increase to $7.5 million because it
believed that the very low share of Federal procurements to small
testing laboratories indicated the need for a higher size standard to
include those testing laboratories that can meet and perform on the
majority of Federal analytical testing contracts. The SBA also
considered, but rejected, the larger increase to $12.5 million based on
the fact that two of the five factors considered in determining the
appropriate size standard pointed to a size standard at, or only
slightly above, the $6 million nonmanufacturing anchor size standard.
The SBA believes that the evaluation factors should be virtually
unanimous for an increase of this magnitude.
List of Subjects in 13 CFR Part 121
Administrative practice and procedures, Government procurement,
Government property, Grant programs--business, Loan programs--business,
Small businesses.
For reasons set forth in the preamble, the SBA amends part 121 of
title 13 of the Code of Federal Regulations as follows:
PART 121--SMALL BUSINESS SIZE REGULATIONS
0
1. The authority citation of part 121 continues to read as follows:
Authority: 15 U.S.C. 632(a), 634(b)(6), 636(b), 637(a), 644(c)
and 662(5) and Sec. 304, Pub. L. 103-403, 108 Stat. 4175, 4188, Pub.
L. 106-24, 113 Stat. 39.
0
2. In Sec. 121.201, in the table ``Small Business Size Standards by
NAICS Industry'', under the heading NAICS ``Subsector 541--
Professional, Scientific and Technical Services,'' revise entry 541380
to read as follows:
Sec. 121.201 What size standards has SBA identified by North American
Industry Classification System codes?
* * * * *
Small Business Size Standards by NAICS Industry
------------------------------------------------------------------------
Size standards Size standards
NAICS codes NAICS U.S. industry in millions of in number of
title dollars employees
------------------------------------------------------------------------
* * * * * * *
------------------------------------------------------------------------
Subsector 541--Professional, Scientific and Technical Services
------------------------------------------------------------------------
* * * * * * *
------------------------------------------------------------------------
541380.......... Testing Laboratories.. $10.0
------------------------------------------------------------------------
* * * * * * *
------------------------------------------------------------------------
Dated: September 27, 2003.
Hector V. Barreto,
Administrator.
Editorial Note: This document was received in the Office of the
Federal Register on December 19, 2003.
[FR Doc. 03-31794 Filed 12-24-03; 8:45 am]
BILLING CODE 8025-01-P