Federal Register - November 2, 2021
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Source: Federal Register
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Federal Register / Vol. 86, No. 209 / Tuesday, November 2, 2021 / Proposed Rules
TABLE 16NET IMPACT FROM CHANGING THE AVERAGING PERIOD FOR EMPLOYEES FROM 12 MONTHS TO 24 MONTHS
Continued Total expansive impact
Impact of proposed change Number of disaster loans impacted
Disaster loan amount impacted $ million
Disaster loan amount impacted as % of total disaster loan amount in the baseline
2. Net Impact of Changing the Averaging Period for Receipts From 3 Years to 5
Years Under the SBAs proposal allowing businesses to elect to choose either a 3year receipts average or a 5-year receipts average to establish small business eligibility for its Business Loan, Disaster Loan, and SBIC Programs, none of the currently eligible small businesses will experience a contractive impact from the proposed change. In other words, the proposed change will not cause any currently small businesses to lose or shorten their small business status. The proposed change will enable some midsize businesses above the size standard gain or regain small business status and some advanced small businesses close to the size standard to lengthen their small status. In the absence of contractive impacts, the expansive impacts shown in Table 14 above will also represent as net impacts of the proposed change.
G. Transfer Impacts
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1. Transfer Impacts of Changing the Averaging Period for Employees From 12 Months to 24 Months The proposed change may result in some redistribution of Federal contracts between businesses gaining or extending small status and large businesses, and between businesses gaining or extending small status and other existing small businesses.
However, it would have no impact on the overall economic activity since the total Federal contract dollars available for businesses to compete for will not change. While SBA cannot quantify with certainty the actual outcome of the gains and losses from the redistribution of contracts among different groups of businesses, it can identify several probable impacts in qualitative terms.
With the availability of a larger pool of small businesses under the proposed change, some unrestricted Federal contracts may be set aside for small businesses. As a result, large businesses may lose access to some Federal contracts. Similarly, some currently small businesses may obtain fewer setaside contracts due to the increased
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competition from some large businesses qualifying as small and advanced small businesses remaining small for a longer period. This impact may be offset by a greater number of procurements being set aside for all small businesses. With large businesses qualifying as small and advanced larger small businesses remaining small for a longer period under the proposed rule, smaller small businesses could face some disadvantages in competing for set-aside contracts against their larger counterparts. However, SBA cannot quantify these impacts.
2. Transfer Impacts of Changing the Averaging Period for Receipts From 3
Years to 5 Years The change from a 3-year averaging period to a 5-year averaging period may result in some redistribution of Federal contracts between businesses gaining or extending small business status and large businesses, and between businesses gaining or extending small business status and other existing small businesses. However, since the change in calculation of receipts in this proposed rule does not apply to Federal contracting, these distributional impacts are not relevant for changing the averaging period for receipts from 3
years to 5 years.
Executive Order 12988
This action meets applicable standards set forth in sections 3a and 3b2 of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. This action does not have retroactive or preemptive effect.
Executive Order 13132
For purposes of Executive Order 13132, SBA has determined that this proposed rule will not have substantial, direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, SBA
has determined that this final rule has no federalism implications warranting preparation of a federalism assessment.
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Total contractive impact
0
$0.0
0.0
0
$0.0
0.0
Net impact 0
$0.0
0.0
Executive Order 13563
Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. A description of the need for this regulatory action and benefits and costs associated with this action, including possible distributional impacts that relate to Executive Order 13563, is included above in the BenefitCost Analysis under Executive Order 12866. Additionally, Executive Order 13563, Section 6, calls for retrospective analyses of existing rules.
Following the enactment of Public Law 115324, SBA issued a public notice advising business and contracting communities that SBA must go through a rulemaking process to implement the new law and that businesses still must report their receipts based on a 3-year average until SBA changes its regulations. SBA updated the Small Business Procurement Advisory Council SBPAC at its March 26, 2019, April 23, 2019, and August 26, 2019, meetings about SBAs rulemaking process to implement Public Law 115324. On April 18, 2019, SBA also presented an update on the implementation of Public Law 115324 at the 2019 Annual Government Procurement Conference.
Through phone calls and emails, SBA
also advised business and contracting communities and other interested parties about the SBAs process to implement the new law.
Regulatory Flexibility Act Initial Regulatory Flexibility Analysis Under the Regulatory Flexibility Act RFA, this proposed rule may have a significant economic impact on a substantial number of small businesses in industries subject to both employeebased and receipts-based size standards.
As described above, this rule may affect small businesses in those industries seeking assistance under Federal small business programs. Specifically, the change in the averaging period for calculating the number employees for size standards from 12 months to 24
months may have a significant impact on a substantial number of businesses in industries subject to employee based
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