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Federal Register / Vol. 86, No. 209 / Tuesday, November 2, 2021 / Proposed Rules receipts-based size standard, thereby depriving them of access to small business assistance, including SBAs lending. To mitigate such impacts, SBA
is allowing businesses to elect either the 3-year average annual receipts or the 5year average annual receipts for the Business Loan, Disaster Loan, and SBIC
programs. SBA seeks comment on implementation of Public Law 115324
for the Business Loan, Disaster Loan, and SBIC programs.
C. The Baseline 1. Baseline for Changing the Averaging Period for Employees From 12 Months to 24 Months In this rulemaking, SBA establishes an appropriate baseline to evaluate benefits, costs, or transfer impacts of this action and alternative approaches considered, if any. A baseline should represent the agencys best assessment of what the world would look like absent the regulatory action. For a new regulatory action modifying an existing regulation such as changing the calculation of the average number of employees from 12 months to 24
months, a baseline assuming no change to the regulation i.e., maintaining the status quo generally provides an appropriate benchmark for evaluating benefits, costs, or transfer impacts of
proposed regulatory changes and their alternatives.
Based on the 2012 Economic Census special tabulations the latest available, 2012 County Business Patterns Reports for industries not covered by the Economic Census, and 2012
Agricultural Census tabulations for agricultural industries, of a total of about 7.2 million firms in all industries with employee-based size standards, about 96 percent were considered small and 4 percent other than small under the 12-month employee average.
Similarly, of 334,990 businesses that were subject to at least one employeebased size standard and eligible for Federal contracting, 87.3 percent were small in at least one NAICS code and 12.7 percent other than small in all NAICS codes with an employee-based size standard.
Based on the data from the Federal Procurement Data SystemNext Generation FPDSNG for fiscal year 2019, on average, about 39,714 unique firms in industries subject to employeebased size standards received at least one Federal contract during 2019, of which 85.3 percent were small.
Businesses subject to employee-based size standards received $232.6 billion in annual average Federal contract dollars in 2019, of which nearly $47 billion or about 20.2 percent went to small
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businesses. Of total dollars awarded to small businesses subject to employeebased size standards, $23.8 billion or 50.6 percent was awarded through various small business set-aside programs and 49.4 percent was awarded through non-set aside contracts.
Based on SBAs internal data on its loan programs, small businesses subject to employee-based size standards received, on an annual basis, a total of 7,672 7a and 504 loans for fiscal years 20182020, totaling $4.9 billion, of which 75 percent was issued through the 7a program and 25 percent was issued through the CDC/504 program.
During fiscal years 20162018, small businesses in those industries also received about 400 loans through the SBAs disaster loan program, totaling about $0.04 billion on an annual basis.
Table 11, Baseline Analysis of Employee-Based Size Standards, below, provides these baseline results.
Besides set-aside contracting and financial assistance discussed above, small businesses also benefit through reduced fees, less paperwork, and fewer compliance requirements that are available to small businesses through Federal agencies that use SBAs size standards. However, SBA has no data to estimate the number of small businesses receiving such benefits.

TABLE 11BASELINE ANALYSIS OF EMPLOYEE-BASED SIZE STANDARDS
Measure
Value
jspears on DSK121TN23PROD with PROPOSALS1

Total industries subject to employee-based size standards
Total firms subject to at least one employee-based size standard million2012 Economic Census
Total small firms subject to at least one employee-based size standard million2012 Economic Census
Total small firms subject to at least one employee-based size standard as % of total firms2012 Economic Census
Total business concerns in SAM 1 as of September 1, 2019
Total business concerns subject to a employee-based size standard in at least one NAICS code 2 2019 SAM
Total businesses that are small in at least one NAICS code subject to an employee-based size standard
Small business concerns as % of total business concerns subject to employee-based standards 2019 SAM
Average total number of unique Eligible vendors getting Federal contracts 1FPDSNG 2019
Average total number of unique firms with employee-based size standards getting Federal contracts 2 FPDSNG 2019
Average total contract dollars awarded to business concerns, subject to employee-based standards $ billionFPDSNG
2019
Average total small business contract dollars awarded to businesses subject to employee-based standards $ billionFPDS
NG 2019
Small business dollars as % of total dollars awarded to firms subject to employee-based standards
Annual average number of 7a and 504 loans to businesses subject to employee-based standards 20182020
Annual average amount of 7a and 504 loans $ billion 20182020
Number of disaster loans to businesses subject to employee-based size standards 20162018
Amount of disaster loans $ billion 20162018

500
680,266
657,942
96.7
403,116
152,450
133,958
87.9
106,230
39,714
$232.6
$47.1
20.2
7,672
$4.9
399
$0.04

1 Entities in SAM and FPDSNG presented above only include business concerns that can be eligible to qualify as small for Federal contracting. That is, entities that can never qualify as small e.g., foreign, not-for-profit and government entities are excluded as they are not impacted by this rule.
2 A business concern could appear in multiple NAICS industries involving both employee-based and size standards and those based on other measures such as employees. Similarly, a business could be small in some industries and other than small in others.

As mentioned previously, businesses that would regain or lose small business status can be identified by comparing their 24-month employee average with the employee-based size standard. That
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is, if the 24-month employee average of a firm currently above the size standard is lower than the applicable employeebased size standard, that firm will gain or regain small business status.

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Similarly, if the 24-month employee average of a currently small business is higher than the size standard, that business will lose its small business status. However, to estimate the number
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