DATE: August 13, 2002

SUBJECT: Small Business Administration; Small Business Size Standards by 2002 North American Industry Classification System (NAICS)

SOURCE: Federal Register, August 13, 2002, Vol. 67, No. 156, pages 52597 and 52633

AGENCIES: Small Business Administration (SBA)

ACTION: Direct Final Rule and Proposed Rule

SYNOPSIS: The SBA is amending its small business size standards regulations by incorporating the Office of Management and Budget's (OMB) 2002 modifications of the North American Industry Classification System (NAICS) into its table of small business size standards.

EDITOR'S NOTE: The SBA's regulations are in Title 13 of the Code of Federal Regulations (CFR). The SBA small business size regulations are in Chapter 1, Small Business Administration; Part 121, Small Business Size Regulations; Subpart A, Size Eligibility Provisions and Standards; Section 121.201, What size standards has SBA identified by North American Industry Classification System codes?

The NAICS was adopted in 1997 by OMB to replace the Standard Industrial Classification (SIC), which was originally developed in the 1930's, to better reflect the economy's changing industry composition and organization.

For more on OMB's 2002 modifications of NAICS, see the January 16, 2001, FEDERAL CONTRACTS DISPATCH "Office of Management and Budget; North American Industry Classification System -- Revision for 2002."

For complete information on the relationship between NAICS 1997 and NAICS 2002, see the U.S. Bureau of the Census web site at http://www.census.gov/epcd/naics02/.

SBA is modifying its small business size standards through use of a "direct final rule," which SBA reserves for rules it believes are noncontroversial. Normally, if SBA receives any adverse comments on a direct final rule, it withdraws the rule, considers the comments, then decides whether to publish a proposed rule for comments. However, to shorten the process should adverse comments are submitted, SBA is publishing concurrently a proposed rule that is an exact duplicate of the direct final rule. Those who submit adverse comments on the direct final rule are invited to submit those comments under the proposed rule. SBA will withdraw the direct final rule, consider the comments submitted under the proposed rule, and decide on the contents of a final rule.

DATES: This rule is effective October 1, 2002, without further action, unless adverse comment is received by September 12, 2002. Comments on the proposed rule must be received by September 12, 2002.

ADDRESSES: Send comments concerning this rule to Gary M. Jackson, Assistant Administrator for Size Standards, Office of Size Standards, 409 Third Street, SW, Washington, DC 20416, or by e-mail to sizestandards@sba.gov, or by fax to 202-205-6390. Those submitting comments should address whether they think SBA should adopt NAICS 2002 and what they believe the impact on small businesses will be.

FOR FURTHER INFORMATION CONTACT: Carl Jordan, Office of Size Standards, at 202-205-6618 or e-mail: sizestandards@sba.gov.

SUPPLEMENTAL INFORMATION: SBA adopted NAICS industry definitions as a basis for its small business size standards effective October 1, 2000 (see the May 15, 2000, FEDERAL CONTRACTS DISPATCH "Small Business Administration -- North American Industry Classification System (NAICS) Small Business Size Standards"). OMB restructured and modified parts of NAICS on January 16, 2001, effective January 1, 2002. This direct final rule incorporates OMB's restructuring and modifications into SBA's small business size standards.

NAICS 2002 is the same as NAICS 1997 for 16 of the 20 industry sectors. Two sectors, Construction and Wholesale Trade, are substantially changed. Also, OMB modified a number of classifications in the Retail Trades sector, and reorganized the Information sector.

The small business size standards for 12 NAICS 1997 industries and economic activities have been changed. The 12 activities with a size standard change moved to seven NAICS 2002 industries. The following is a list of the NAICS 1997 industries and corresponding size standards and the revised NAICS 2002 industries and corresponding size standards:

NAICS 1997NAICS 2002
CodeSize Standard
($ Millions)
ActivityCodeSize Standard
($ Millions,
except as indicated)
213112$6.0Construction of Field Gathering Lines (support of oil and gas operations)237120$28.5Oil and Gas Pipeline and Related Structures Construction
213112$6.0Site Preparation and Related Construction Activities (support of oil and gas operations)238910$12.0Site Preparation Contractors
213113$6.0Site Preparation and Related Construction Activities (support of coal mining industry)238910$12.0Site Preparation Contractors
213114$6.0Site Preparation and Related Construction Activities (support of metal mining industry)238910$12.0Site Preparation ContractorS
213115$6.0Site Preparation and Related Construction Activities (support of nonmetallic minerals industry)238910$12.0Site Preparation Contractors
234990$28.5Right-of-Way Clearing and Line Slashing, Blasting, Trenching, and Equipment Rental238910$12.0Site Preparation Contractors
234990$28.5Rental of Cranes with Operator238990$12.0All Other Specialty Trade Contractors
235810$12.0Water Well Drilling Contractors237110$28.5Water and Sewer Line and Related Structures Construction
235990$12.0Indoor Swimming Pools236220$28.5Commercial and Institutional Building Construction
235990$12.0Anchored Earth Retention Contractors237990$28.5Other Heavy and Civil Engineering Construction
514199$6.0Internet Broadcasting516110500 employeesInternet Publishing and Broadcasting
561720$14.0Cleaning Buildings During and Immediately After Construction238990$12.0All Other Specialty Trade Contractors

EDITOR'S NOTE: To be on the safe side, small businesses ought to check SBA's small business size standards to make sure their size standards have not changed, possibly making them ineligible for small business set-aside awards, awards under the 8(a) program, and other SBA assistance.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2002 by Panoptic Enterprises. All Rights Reserved.

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