Federal Register - November 2, 2021

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Source: Federal Register

Federal Register / Vol. 86, No. 209 / Tuesday, November 2, 2021 / Proposed Rules reasons, SBA believes that these added administrative costs will be minor because necessary mechanisms are already in place to handle these added requirements.
Additionally, some Federal contracts may possibly have higher costs. With a greater number of businesses defined as small under the proposed change, Federal agencies may choose to set aside more contracts for competition among small businesses only instead of using full and open competition. The movement of contracts from unrestricted competition to small business set-aside contracts might result in competition among fewer total bidders, although there will be more small businesses eligible to submit offers under the proposed change.
However, the additional costs associated with fewer bidders are expected to be minor since, by law, procurements may be set aside for small businesses under the 8a/BD, HUBZone, WOSB, EDWOSB, or SDVOSB programs only if awards are expected to be made at fair and reasonable prices.
Costs may also be higher when full and open contracts are awarded to HUBZone businesses that receive price evaluation preferences. 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 proposed change to the averaging period for employees from 12 months to 24
months, HUBZone firms might actually end up getting fewer full and open contracts, thereby resulting in some cost savings to agencies. However, such cost savings are likely to be minimal as only a small fraction of unrestricted contracts are awarded to HUBZone businesses.
2. Contractive Effects of Changing the Averaging Period for Receipts From 3
Years to 5 Years As stated previously, the change enacted under Public Law 115324 may not always and necessarily benefit every small business concern. When
businesses annual revenues are declining or when annual revenues for the latest 3 years are lower than those for the earliest 2 years of the 5-year period, the 5-year average would be higher than the 3-year average, thereby ejecting small businesses out of their small business status sooner or rendering some small businesses other than small immediately. Similarly, small businesses that lose their small business status would have to wait longer to qualify as small again. Such small businesses would no longer be eligible for Federal small business opportunities, such as Federal small business contracts, SBA loan programs and other Federal benefits such as reduced fees and exemptions from certain paperwork and compliance requirements available to small businesses. However, the SBAs proposal to allow businesses applying for its Business Loan, Disaster Loan and SBIC Programs to elect to use either the 3-year receipts average or the 5-year receipts average will mitigate such impacts. Moreover, the change in the averaging period for receipts in this proposed rule only applies to businesses in the SBA Business Loan, Disaster Loan, and SBIC Programs. In other words, the change in the calculation of average annual receipts in this proposed rule will have no impacts on businesses participating in Federal procurement and all other non-procurement programs except SBA loan programs.
By enabling mid-size businesses to regain small business status and lengthening the small business status of advanced and successful larger small businesses, the proposed rule may disadvantage smaller small businesses in more need of Federal assistance than their larger counterparts in competing for Federal opportunities. SBA
frequently receives concerns from smaller small businesses that they lack resources, past performance qualifications and expertise to be able to compete against more resourceful,
60413

qualified and experienced larger small businesses for Federal opportunities for small businesses. SBA believes that overall benefits to small businesses from this proposed rule change outweigh the costs to small businesses.
F. Net Impact 1. Net Impact of Changing the Averaging Period for Employees From 12 Months to 24 Months As discussed elsewhere, the proposed change in averaging period for employees would result in four primary impacts, which can be categorized as either having a expansive impact or contractive impact on size status of both currently large and small businesses. Allowing some currently large firms to gain small business status and some advanced small firms to remain small for a longer period represents the expansive impact of the proposed rule. Causing some currently small firms to lose or shorten their small business is the contractive impact.
Although businesses in a majority of industries with employee-based size standards would be both positively and negatively impacted by this proposed rule, in totality the number of firms with expansive impacts was generally greater than the number of firms with contractive impacts. The proposed rule would result in a net gain of about $158
million or 0.3 percent increase from the baseline in Federal small business contract dollars. The net impact of the proposed rule on SBA loans was also positive, but very small. Specifically, SBA estimates a net gain of $0.01
million in 7a and 504 loans and no change in disaster loans to small firms as a result of changing the period for calculating the average number of employees for size standards from 12
months to 24 months. Net impacts of the proposed rule are summarized in Table 16, Net Impact from Changing the Averaging Period for Employees from 12
Months to 24 Months, below.

TABLE 16NET IMPACT FROM CHANGING THE AVERAGING PERIOD FOR EMPLOYEES FROM 12 MONTHS TO 24 MONTHS
Total expansive impact
jspears on DSK121TN23PROD with PROPOSALS1

Impact of proposed change Total number of impacted firmsSAM as of Sept 1, 2019
Impacted firms as % of total firms in the baselineSAM as of Sept 1, 2019
Number of impacted firms2012 Economic Census
Impacted firms as % of total firms in the baseline2012 Economic Census
Number of impacted firms eligible for set-aside contracts FPDSNG
Small business dollars impacted $ million
Small business dollars impacted as % total set-aside dollars in the baseline
Number of 7a and 504 loans impacted
7a and 504 loan amount impacted $ million
7a and 504 loan amount impacted as % of total 7a and 504 loan amount in the baseline

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Total contractive impact
Net impact
757
0.5
1,484
0.2
219
$423.2
0.9
2 $0.03

361
0.2
1,050
0.2
197
$265.8
0.6
2 $0.02

396
0.3
435
0.1
22
$157.8
0.3
0 $0.01

0.0

0.0

0.0

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Federal Register - November 2, 2021

TitoloFederal Register

PaeseStati Uniti

Data02/11/2021

Conteggio pagine181

Numero di edizioni7801

Prima edizione14/03/1936

Ultima edizione24/06/2026

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