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Federal Register / Vol. 86, No. 138 / Thursday, July 22, 2021 / Proposed Rules
Ta bl e 1: SummaryofAffiecte dE mp1oyees, I
R e2uIt a ory C os t s, an dTrans tiers Average Annualized Future Years Value Year 1
3%Real 7%Real Year2
Year 10
Rate Rate
B. Number of Affected Firms and Employees
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1. Overview and Data This section explains the Departments methodology to estimate the number of affected firms and employees. The number of firms is estimated primarily from the General Services Administrations GSA System for Award Management SAM. This is supplemented with a variety of other data sources. There are no government data on the number of employees working on Federal contracts; therefore, to estimate the number of Federal contract employees, the Department employed the approach used in two previous Executive order rulemakings, the 2016 rule implementing Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors, which was an updated version of the methodology used in the 2014
rulemaking implementing Executive Order 13658.16 This approach uses data from USASpending.gov, a database of Government contracts from the Federal Procurement Data SystemNext Generation FPDSNG. Although more recent data is available, the Department generally used data from 2019 to avoid any shifts in the data associated with the COVID19 pandemic in 2020. Any long-run impacts of COVID19 are speculative because this is an unprecedented situation, so using data from 2019 is the best approximation the Department has for future impacts. The pandemic could cause structural changes to the economy, resulting in shifts in industry employment and wages. The transfers to employees associated with this rule could be an underestimate or an overestimate, depending on how employment and 16 See 81 FR 9591, 963640 analysis of workers affected by Executive Order 13706 and 79 FR
60634, 6069395 analysis of workers affected by Executive Order 13658.

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wages have changed in the industries affected by this rule.
After approximating the total number of Federal contract employees, the Department estimated the share who would receive an increase in earnings i.e., affected employees. Specifically, the Department used 2019 data from the Current Population Survey CPS to identify the share of workers, by industry, who earned between the 2019
minimum wage for Federal contract employees, $7.40 per hour for tipped employees and $10.60 per hour for nontipped employees, and $15 per hour.17
This ratio was then applied to the population of Federal contract employees.
2. Number of Affected Firms The main data source used to estimate the number of affected firms is SAM. All entities bidding on Federal procurement contracts or grants must register in SAM. Using May 2021 SAM data, the Department estimated there are 428,300
registered firms.18 The Department excluded firms with expired registrations, firms only applying for grants,19 government entities such as city or county governments, foreign organizations, and companies that only sell products and do not provide services. SAM provides the primary North American Industry Classification System NAICS for all companies.20
17 Before doing this calculation, the Department first dropped those earning less than $10.60 and tipped workers earning less than $7.40, so this estimate is the share of workers who are already earning at least $7.40 for tipped workers and $10.60
for non-tipped workers.
18 Data released in monthly files. Available at:
https www.sam.gov/SAM/pages/public/extracts/
samPublicAccessData.jsf.
19 Entities registering in SAM are asked if they wish to bid on contracts. If the firm answers yes, then they are included as All Awards in the Purpose of Registration column in the SAM data.
The Department included only firms with a value of Z2, which denotes All Awards.
20 In some instances the primary NAICS was listed as Public Administration, which is excluded from the analysis because it is not available for
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SAM includes all prime contractors and some subcontractors those who are also prime contractors or who have otherwise registered in SAM. However, the Department is unable to determine the number of subcontractors who are not in the SAM database. Therefore, the Department examined five years of USASpending data 2015 through 2019 21 and found 33,500 unique subcontractors who did not hold contracts as primes in 2019 and thus may not be included in SAM, and added these firms to the total from SAM
Table 2. Adding these 33,500 firms to the number of firms in SAM, results in 461,800 potentially affected firms that may hold Federal contracts.
In addition, some entities operating on nonprocurement contracts are covered by the E.O. Estimating the number of covered contracts involves many data sources and assumptions.22
There are seven types of contracts included in this analysis of nonprocurement contracts Table 3:
other data sources required see section B.iii..
Therefore, these companies are redistributed to other NAICS based on the current distribution.
21 The Department identified subawardees from the USASpending.gov data who did not perform work as a prime during 2019. The Department included subcontractors from five years of data to compensate for lower-tier subcontractors that may not be included in USASpending.gov. The Department believes this is a reasonable approximation of the number of subcontractors.
22 Those estimates primarily capture those covered contracts for concessions and contracts in connection with Federal property or lands and relating to services for Federal employees, their dependents, or the general public that are nonprocurement in nature, such that the contracting entities are not necessarily listed in SAM. However, the estimates will additionally capture some SCA-covered contracts because SCAcovered contracts, contracts for concessions and contracts in connection with Federal property or lands are to some degree overlapping categories of contracts e.g., at least some concessions contracts and contracts in connection with Federal property or lands are covered by the SCA, see, e.g., Cradle of Forestry in America Interpretive Association, ARB Case No. 99035, 2001 WL 328132 ARB
March 30, 2001.

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Affected employees 1,000s Direct employer costs million Regulatory familiarization Implementation Transfers millions