Small Business Size Standards: Adoption of 2022 North American Industry Classification System for Size Standards 87 Fed. i.e., on As with the previous NAICS revisions, SBA is adopting the latest NAICS revision, identified as NAICS 2022, effective October 1, 2022 ( High Risk NAICS Code Cookie Policy Privacy Policy 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. 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. A central premise of Public Law 116-283 is that a 24-month employee average (as opposed to a 12-month employee average) would enable some mid-size businesses who have recently exceeded the size standard to regain small business status and some advanced small businesses close to exceeding the size standard to retain their small business status . Remove the entries for 334613, 334614, 335110, 335121, 335122, and 335129. ee. sizestandards@sba.gov. Costs could also be higher when full and open contracts are awarded to HUBZone businesses that receive price evaluation preferences. 8, North American Industry Classification System: Classification of Establishments; and Elimination of Statistical Policy Directive No. 2. Size standards are mostly based on the average annual receipts or the average number of employees. 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. The Public Inspection page standards, which increases all size standards by 13.65 percent Start Printed Page 59285 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. www.census.gov/naics, Add entries for 335131, 335132, 335139, and 335910 in numerical order; ff. SBA Published Final Rule: Effective May 2, Small Business Size Add Subsectors 455, 456, 457, 458, and 459 in numerical order; ddd. 1. For complete information about, and access to, our official publications 15 U.S.C. 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. The authority citation for part 121 is revised to read as follows: Authority: The size standard changes due to the adoption of NAICS 2022 impose no additional reporting or record keeping requirements on small businesses. Open for Comment, Prevailing Wage and Apprenticeship Initial Guidance, Economic Sanctions & Foreign Assets Control, Commercial Space Transportation Advisory Committee, Inclusive Competition and Market Integrity Under the Packers and Stockyards Act, Taking Additional Steps To Address the National Emergency With Respect to the Situation in Nicaragua, Lowering Prescription Drug Costs for Americans, Size Standards for New Industries in NAICS 2022, Summary of Size Standards for NAICS 2022 Industries, NAICS 521110Monetary Authorities-Central Bank, NAICS 551114Corporate, Subsidiary, and Regional Managing Offices, Comments on Inflation Adjustment of Revenue-Based Size Standards, Evaluation of Dominance in Field of Operation, Alternatives To Adopting NAICS 2022 for Size Standards, Justification for the October 1, 2022, Effective Date, Compliance With Executive Orders 12866, the Congressional Review Act (. Federal Register. 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. Reg. There are minimal costs associated with SAM registration and annual recertification, but this final rule does not impose any new costs in this area. 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. on NARA's archives.gov. 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 NAICS 2022 revision created 111 new industries by reclassifying, combining, or splitting 156 NAICS 2017 industries or their parts. 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. the current document as it appeared on Public Inspection on the Federal Register. Remove the entries for 522190, 522293, 522294, and 522298; kkk. documents in the last year, 1378 Analyses of Small Business Size Standards: Adoption of 2022 North Use this Document Find the SBA Size Standards based on Total Employees or Dollars for any given NAICS Code. *2022 NAICS CODES ARE NOW IN USE. 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. 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. documents in the last year, 520 In those updates as well, SBA received no adverse comments against using those guidelines, or against the resulting changes to the size standards. 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. 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. U. S. Small Business Administration . Sign Up for our free News Alerts - All the latest articles on your chosen topics condensed into a free bi-weekly email. on Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. 1. 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. We need this to enable us to match you with other users from the same organisation. Federal Register :: Small Business Size Standards: Adoption of 2022 or by The final rule will also affect other Federal Government programs that use SBA's size standards and provide various benefits for small businesses. fax at (202) 205-7059. regulatory information on FederalRegister.gov with the objective of 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. (See 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 ( 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) Add entries for 444230 and 444240 in numerical order; yy. 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. 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. would also increase the dollar limit for combined total 8(a) 09/28/2022 at 8:45 am. 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. 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. continuing eligibility (net worth, aggregate gross income and total However, such cost savings are likely to be minimal as only a small fraction of unrestricted contracts are awarded to HUBZone businesses. totaling more than $207.5 million. Start Printed Page 59273 SBA Issues Final Rule on 2022 NAICS Code Update assets) have also been adjusted for inflation. Below are descriptions of the benefits, costs, and transfer impacts of these decreases to size standards. 804(2). Add an entry for 333998 in numerical order; cc. As you may recall, the $22.5 million threshold was what the agency originally . 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. What is the need for the regulatory action? On March 31, 2022, the Small Business Administration issued several Final Rules, as part of the ongoing effort to update the Small Business Size Standards for many . All Rights Reserved. Revise entry 424940 and the heading for Subsector 425; nn. Add an entry for 522180 in numerical order; jjj. Revise entries for 524292, 541380, 541850, 561611, and 624410; qqq. Document page views are updated periodically throughout the day and are cumulative counts for this document. 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 also includes 32 changes in 6-digit codes, industry titles, or descriptions without changing the size standards. After January 6, 2022, average annual gross receipts over the firm's previous 5 fiscal years. The interim rule documents in the last year, 815 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. 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. Although SBA is not a statistical agency, it is adopting NAICS 2022 for its table of size standards, effective October 1, 2022. These are cookies that have yet to be defined in our system. 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. Add an entry for 424350 in numerical order; ll. Moreover, NAICS 541120 is not covered by both the Economic Census and County Business Patterns Reports. Explore More information Go to resource Small Business Size Standards . Add Subsector 449 in numerical order; zz. Thus, SBA believes these impacts are minimal. Friday, April 8, 2022. 2. These 33 industries were in Sector 44-45 (Retail Trade). including those gaining small status. This month's Bid Protest Roundup focuses on one recent Court of Federal Claims decision and two Government Accountability Office (GAO) decisions. For this document 424940 and the heading for Subsector 425 ; nn descriptions without the! 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