[Federal Register Volume 71, Number 126 (Friday, June 30, 2006)]
[Rules and Regulations]
[Pages 37490-37492]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5894]
=======================================================================
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245-AF28
Small Business Size Standards; Security Guards and Patrol
Services Industry
AGENCY: Small Business Administration (SBA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Small Business Administration (SBA) is increasing the
small business size standard for Security Guards and Patrol Services
(North American Industry Classification System (NAICS) 561612), from
$11.5 million in average annual receipts to $17.0 million. This revised
size standard better defines the size of a small business in this
industry based on a review of the latest available data on industry
characteristics and other relevant information.
DATES: This rule is effective July 31, 2006.
FOR FURTHER INFORMATION CONTACT: Carl J. Jordan, Office of Size
Standards, (202) 205-6618, or [email protected].
SUPPLEMENTARY INFORMATION: On November 10, 2005, SBA proposed in the
Federal Register (70 FR 68368) a 47.6 percent increase to the small
business size standard for Security Guards and Patrol Services, NAICS
561612, from $10.5 million in average annual receipts to $15.5 million.
SBA later issued an interim final rule on December 6, 2005 (70 FR
72577), increasing all receipts-based small business size standards to
account for inflation that had occurred since its last increase for
inflation on February 22, 2002. That interim final rule, which became
effective on December 6, 2005, including an inflationary adjustment
increase in the Security Guards and Patrol Services size standard from
$10.5 million to $11.5 million.
In this final rule, SBA is adopting the same 47.6 percent increase
in the Security Guards and Patrol Services size standard that it
proposed on November 10, 2005. As applied to the current inflation-
adjusted size standard of $11.5 million, the new size standard under
this final rule is $17 million ($11,500,000 x 1.476 = $16,978,000,
rounded to the nearest $500,000 increment, or $17,000,000). Based on
SBA's evaluation of the one public comment it received in response to
its November 10, 2005 proposed rule (see discussion below) and on SBA's
analysis described in the proposed rule, SBA believes that this 47.6
percent increase is appropriate under the methodology SBA uses in
evaluating size standards. As described in the proposed rule, SBA
evaluates an industry's size standard by comparing that industry's
characteristics to the characteristics and size standards established
for other industries. Applying the proposed 47.6 percent increase to
the current inflation-adjusted size standard maintains the relative
relationship between the Security Guards and Patrol Services Industry
size standard and the size standards of other industries as supported
by the proposed rule's analysis.
Evaluation of Comments
In response to its November 10, 2005, proposed rule, SBA received
one comment from a business concern in the Security Guards and Patrol
Services Industry. The commenter recommended a size standard double
that of SBA's proposal. In support of that recommendation, the
commenter pointed out that there are increased security needs on
various facilities, especially those of the Federal Government. SBA
considered that issue as part of its decision to propose a 47.6 percent
increase to the standard. SBA also examined newly available data on
Federal contracting for Security Guards and Patrol Services. While some
Federal contracts may be expanding in scope in response to heightened
security concerns, the data do not show that the apparent increase in
the size of Security Guards and Patrol Services contracts has
necessarily diminished small business opportunities, so as to require
an increase in the size standard beyond the amount SBA is implementing
in this final rule. Accordingly, SBA declines to adopt the comment.
Compliance With Executive Orders 12866, 12988, and 13132, the
Regulatory Flexibility Act (5 U.S.C. 601-612) and the Paperwork
Reduction Act (44 U.S.C. Ch. 35)
The Office of Management and Budget has determined that this rule
is not a significant regulatory action for purposes of Executive Order
12866. This final rule meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice
Reform, to minimize litigation, eliminate ambiguities and reduce burden
to the extent practicable. The final rule does not have a retroactive
or preemptive effect. This final rule will not have a substantial
direct affect on the States or the distribution of power and
responsibilities among various levels of government. Therefore, for
purposes of Executive Order 13132, SBA has determined that this final
rule does not have any Federalism implications warranting the
preparation of a federalism assessment. For the purposes of the
Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA has determined that this
rule does not impose new reporting or recordkeeping requirements.
Final Regulatory Flexibility Analysis
Under the Regulatory Flexibility Act, this rule may have a
significant impact on a substantial number of small entities
[[Page 37491]]
engaged in the Security Guards and Patrol Services Industry. SBA
described in the proposed rule the possible effects on business
concerns seeking SBA 7(a) and 504 Guaranteed Loan Programs, and SBA's
Economic Injury Disaster Loans. In addition, it affects those concerns
that participate in Federal procurement programs for small businesses.
The amended size standard may also affect small businesses
participating in programs of other agencies that use SBA size
standards. As a practical matter, SBA cannot estimate the impact of a
revised size standard on every Federal program that uses its size
standards. Nevertheless, SBA did not receive any comments raising
concerns about the use of the proposed size standard on other Federal
programs or regulations.
Immediately below, SBA sets forth its Final Regulatory Flexibility
Analysis for this rule on the Security Guards and Patrol Services
Industry addressing the following: (1) The need for and objective of
the rule; (2) significant issues the public raised in its comments; (3)
SBA's description and estimate of the number of small entities to which
the rule will apply; (4) the projected reporting, recordkeeping, and
other compliance requirements of the rule, and SBA's estimate of the
classes of small entities that will be subject to the requirements;
and, (5) steps SBA took to minimize the significant economic impact on
small entities.
1. Need for and Objective of the Rule
The revised size standard for the Security Guards and Patrol
Services Industry better defines the size of a small business in this
industry that should be eligible for Federal small business assistance
programs. Before SBA proposed increasing the size standard for this
industry, it reviewed the structure of this industry using five factors
that were compared with averages for two groups of comparable
industries. A review of the latest available industry and program data
supports the adopted increase to the current size standard.
2. Significant Issues the Public Raised in Its Comments
SBA received one comment from a business concern in the Security
Guards and Patrol Services Industry. The commenter supported a size
standard double that of SBA's proposal, because of increased security
needs on various facilities, especially those of the Federal
Government. SBA considered this issue in its analysis supporting the
proposed size standard and in its review of Federal contracting data
that became available after the publication of the proposed rule. SBA's
analyses of that data do not provide a basis for increasing the size
standard beyond the 47.6 percent that SBA originally proposed.
Therefore, SBA is not making any change in the amount of proposed
increase, other than applying it to the current inflation-adjusted size
standard of $11.5 million, resulting in a new size standard of $17
million. SBA received no comments regarding its Initial Regulatory
Flexibility Analysis.
3. SBA's Description and Estimate of the Number of Small Entities To
Which the Rule Will Apply
SBA estimates that 55 additional firms out of 4,853 firms in this
industry [i.e., 2.1 percent of total firms] would be considered small
as a result of this final rule. These firms will be eligible to seek
available SBA assistance if they meet other program requirements. The
estimated number of firms becoming eligible for SBA assistance because
of this rule cumulatively generate $950 million in this industry out of
a total of $13.6 billion in annual receipts. The small business
coverage in this industry will increase by 7.0 percent of total
receipts. In addition, SBA estimates that approximately 65 small
businesses that are within 20 percent of the existing size standard
could grow and retain their small business status under the $17 million
size standard.
4. Projected Reporting, Recordkeeping, and Other Compliance
Requirements of the Rule, and SBA's Estimate of the Classes of Small
Entities That Will Be Subject to the Requirements
A new size standard does not impose any additional reporting,
recordkeeping or compliance requirements on small entities. Increasing
size standards expands access to SBA programs that assist small
businesses, and does not impose a regulatory burden because it neither
regulates nor controls business behavior.
5. Steps SBA Took To Minimize the Significant Economic Impact on Small
Entities
SBA considered an alternative size standard based on average number
of employees instead of average annual receipts. It also considered a
range of size standards as part of the assessment of each evaluation
factor. Because of the large proportion of part-time employees in this
industry, an employee size standard could unintentionally influence
decisions of some firms to alter the use of part-time employees and
subcontractors to remain as small businesses. SBA believes that a
moderate increase to the size standard will assist businesses that
should be included as small businesses and small businesses that are
growing. In adopting a $17 million size standard, currently defined
small businesses will not be competitively disadvantaged as compared to
a much higher size standard. SBA did not receive any comments raising
concerns about an adverse impact on currently defined small businesses
of a higher size standard.
List of Subjects in 13 CFR Part 121
Government procurement, Government property, Loan programs
``business, Small businesses.''
0
For the reasons stated in the preamble, the Small Business
Administration amends 13 CFR part 121 as follows.
PART 121--SMALL BUSINESS SIZE REGULATIONS
0
The authority citation for part 121 continues to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 637, and 662(5);
and Public Law 105-135, sec 401, et. seq, 111 Stat. 2592.
0
In Sec. 121.201, in the table ``Small Business Size Standards by NAICS
Industry,'' under the heading Subsector 561--Administrative and Support
Services, revise the entry for 561612 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
----------------------------------------------------------------------------------------------------------------
NAICS U.S. industry Size standards in millions Size standards in number of
NAICS codes title of dollars employees
----------------------------------------------------------------------------------------------------------------
* * * * * * *
Subsector 561 Administrative and Support Services
[[Page 37492]]
* * * * * * *
561612........................ Security Guards and $17.0......................
Patrol Services.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
* * * * *
Dated: June 23, 2006.
Hector V. Barreto,
Administrator.
[FR Doc. 06-5894 Filed 6-29-06; 8:45 am]
BILLING CODE 8025-01-P