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Proposed Size Standard Increases for Real Estate and Educational Services Industries Reflect Marketplace Changes

The proposed adjustments to size standards in 20 industries and one sub-industry in Sector 53 of the North American Industry Classification System (NAICS), “Real Estate and Rental and Leasing,” and in nine industries in Sector 61, “Educational Services,” reflect changes in marketplace conditions in those sectors.  

In both sectors, the proposed changes are based on annual gross revenues.  The standards delineate how large a business can be and still qualify as small for federal government programs. The dollar limits refer to annual revenues averaged over three years.

As part of the ongoing comprehensive review of all size standards as required under the Small Business Jobs Act of 2010, the SBA is evaluating all industries in these sectors that have revenue-based size standards to determine whether the existing size standards should be adjusted.  The last overall review of size standards occurred more than 25 years ago.

The proposed changes take into account the structural characteristics within individual industries, including average firm size, degree of competition, and federal government contracting trends.  This ensures that size definitions reflect current economic conditions within those industries.  An SBA White Paper entitled “Size Standards Methodology” (Oct. 21, 2009) explains how SBA establishes, reviews and modifies its receipts-based and employee-based small business size standards.  It is available for viewing at http://www.sba.gov/size.

The upward revisions would allow some small businesses that are close to exceeding their current size standards to retain small business eligibility under the proposed higher size standards, and give federal agencies a larger selection of small businesses to choose from for small business procurement opportunities.  They also would allow more small businesses to qualify for SBA financial assistance.  SBA estimates that up to 13,000 more firms in Sector 53 and 1,500 more companies in Sector 61 will qualify for SBA assistance and other federal programs if the proposed revisions are adopted.

Interested parties can submit comments on these proposed rules on or before January 17, 2012.  The SBA recommends that comments be submitted online at www.regulations.gov or mailed to Khem R. Sharma, Chief, Size Standards Division, 409 3rd St., SW, Mail Code 6530, Washington, D.C.  20416.  The SBA will post all comments to www.regulations.gov for public review.  The SBA does not accept comments submitted by email.  

For more information about SBA’s revisions to its small business size standards, click on “What’s New with Size Standards” on SBA’s website at http://www.sba.gov/size.

The proposed rule would affect the following industries in NAICS Sector 53:

 
 
 
NAICS
codes
NAICS Industry titles
Current size standard ($ million)
Proposed size standard ($ million)
531110
Lessors of Residential Buildings and Dwellings
$7.0
$25.5
531120
Lessors of Nonresidential Buildings (except Miniwarehouses)
$7.0
$25.5
531190
Lessors of Other Real Estate Property
$7.0
$25.5
Except,
Leasing of Building Space to Federal Government by Owners
$20.5
$35.5
531210
Offices of Real Estate Agents and Brokers
$2.0
$7.0
531311
Residential Property Managers
$2.0
$7.0
531312
Nonresidential Property Managers
$2.0
$7.0
531320
Offices of Real Estate Appraisers
$2.0
$7.0
531390
Other Activities Related to Real Estate
$2.0
$7.0
532111
Passenger Car Rental
$25.5
$35.5
532112
Passenger Car Leasing
$25.5
$35.5
532120
Truck, Utility Trailer, and RV (Recreational Vehicle) Rental and Leasing
$25.5
$35.5
532210
Consumer Electronics and Appliances Rental
$7.0
$35.5
532220
Formal Wear and Costume Rental
$7.0
$19.0
532230
Video Tape and Disc Rental
$7.0
$25.5
532291
Home Health Equipment and Rental
$7.0
$30.0
532411
Commercial, Air, Rail, and Water, Transportation Equipment and Rental
$7.0
$30.0
532412
Construction, Mining and Forestry Machinery and Equipment Rental and Leasing
$12.5
$30.0
 
532420
Office Machinery and Equipment Rental and Leasing
$25.5
$30.0
532490
Other Commercial, and Industrial Machinery and Equipment Rental and Leasing
$7.0
$30.0
533110
Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)
$7.0
$35.5
 
The proposed rule would affect the following industries in NAICS Sector 61:
 
 
 
NAICS code
 
 
NAICS industry title
Current size standard ($ million)
Proposed size standard ($ million)
611110
 
Elementary and Secondary Schools
 
$7.0
$10.0
611210
 
Junior Colleges
 
$7.0
$19.0
611310
 
Colleges, Universities and Professional Schools
 
$7.0
$25.5
611420
 
Computer Training
 
$7.0
$10.0
611430
 
Professional and Management Development Training
 
$7.0
$10.0
611519
 
Other Technical and Trade Schools
 
$7.0
$14.0
611630
 
Language Schools
 
$7.0
$10.0
611699
 
All Other Miscellaneous Schools and Instruction
 
$7.0
$10.0
611710
 
Educational Support Services
 
$7.0
$14.0
 

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