DATE: January 26, 2000

FROM: Barry McVay, CPCM

SUBJECT: Small Business Administration; Small Business Size Standards for Compliance With Programs of Other Agencies

SOURCE: Federal Register, January 26, 2000, Vol. 65, No. 17, page 4176

AGENCIES: Small Business Administration (SBA)

ACTION: Proposed Rule

SYNOPSIS: The SBA proposes to amend its small business size regulations to require an agency to consult with the SBA before proposing small business size standards for use in its programs, if those size standards are different than those established by the SBA. Currently, the SBA's regulations require that the agency obtain the SBA Administrator's approval prior to proposing the contemplated size standards.

DATES: Submit comments on or before March 27, 2000.

ADDRESS: Send comments to Gary M. Jackson, Assistant Administrator for Size Standards, Office of Size Standards, 409 3rd Street, SW, Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT: Carl Jordan, Office of Size Standards, 202-205-6618.

SUPPLEMENTAL INFORMATION: The Small Business Act provides for the establishment of small business size standards, and authorizes the SBA administrator to "specify detailed definitions or standards by which a business concern may be determined to be a small business concern for the purposes of this Act or any other Act." Therefore, unless a statute specifically provides size standards for an agency's program or gives an agency authority to establish different size standards, the agency must use the applicable size standards established by SBA. However, the act allows an agency to "prescribe a size standard for categorizing a business concern as a small business concern" if the contemplated size standard meets certain criteria and the agency first obtains approval of the SBA administrator (see Section 3 of 15 U.S.C. 632).

Title 13 of the Code of Federal Regulations, Section 121.902, What size standards are applicable to programs of other agencies?, contains the procedures for agencies to follow before they prescribe size standards for their own use. These regulations require that the agency obtain the SBA Administrator's approval before it proposes them for comment as part of its rulemaking process. The agency must propose the specific size standards, explain why it believes they are appropriate for their intended purposes, why SBA's are not appropriate, and seek public comment on them.

This proposed rule would modify the procedure so that an agency would be required to consult with SBA's Office of Size Standards at least 14 calendar days before proposing to use an alternative size standard, and the agency would be required to obtain the SBA administrator's approval of the alternative size standard before it publishes its final rule.

This proposed change would streamline the rulemaking process by requiring SBA input before an alternative size standard is proposed, and by allowing the agency to consider comments on the proposed alternative size standard before seeking SBA approval of the final alternative size standard. Currently, the SBA administrator must approve the proposed alternative size standard, but there is no requirement that the SBA administrator approve the final alternative size standard.

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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