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decision except when the original small business size standard for supported by the proposed rule’s
decision requires that the grade or pay Security Guards and Patrol Services analysis.
of the position be reduced and the (North American Industry Classification
Evaluation of Comments
employee is not entitled to grade or pay System (NAICS) 561612), from $11.5
retention. million in average annual receipts to In response to its November 10, 2005,
(c) When the original decision $17.0 million. This revised size proposed rule, SBA received one
requires that the grade or pay of the standard better defines the size of a comment from a business concern in the
position be reduced and the employee is small business in this industry based on Security Guards and Patrol Services
not entitled to grade or pay retention, a review of the latest available data on Industry. The commenter recommended
the reviewing authority, if sustaining industry characteristics and other a size standard double that of SBA’s
the original decision, shall issue a new relevant information. proposal. In support of that
certificate and the effective date of the DATES: This rule is effective July 31, recommendation, the commenter
new certificate shall be not earlier than 2006. pointed out that there are increased
the date of the new decision and not security needs on various facilities,
FOR FURTHER INFORMATION CONTACT: Carl especially those of the Federal
later than the beginning of the fourth
J. Jordan, Office of Size Standards, (202) Government. SBA considered that issue
pay period following the date of the new
205–6618, or sizestandards@sba.gov. as part of its decision to propose a 47.6
decision, unless a subsequent date is
specifically stated in the new decision. SUPPLEMENTARY INFORMATION: On percent increase to the standard. SBA
November 10, 2005, SBA proposed in also examined newly available data on
PART 532—PREVAILING RATE the Federal Register (70 FR 68368) a Federal contracting for Security Guards
SYSTEMS 47.6 percent increase to the small and Patrol Services. While some Federal
business size standard for Security contracts may be expanding in scope in
■ 6. The authority citation for part 532 Guards and Patrol Services, NAICS response to heightened security
continues to read as follows: 561612, from $10.5 million in average concerns, the data do not show that the
Authority: 5 U.S.C. 5343, 5346; § 532.707 annual receipts to $15.5 million. SBA apparent increase in the size of Security
also issued under 5 U.S.C. 552. later issued an interim final rule on Guards and Patrol Services contracts has
December 6, 2005 (70 FR 72577), necessarily diminished small business
■ 7. Revise paragraph (f) of § 532.705 to increasing all receipts-based small
read as follows: opportunities, so as to require an
business size standards to account for increase in the size standard beyond the
§ 532.705 Appeal to the Office of inflation that had occurred since its last amount SBA is implementing in this
Personnel Management. increase for inflation on February 22, final rule. Accordingly, SBA declines to
* * * * * 2002. That interim final rule, which adopt the comment.
(f) The Office of Personnel became effective on December 6, 2005,
Management may, at its discretion, including an inflationary adjustment Compliance With Executive Orders
reopen and reconsider any job-grading increase in the Security Guards and 12866, 12988, and 13132, the
decision made by the Office when Patrol Services size standard from $10.5 Regulatory Flexibility Act (5 U.S.C.
requested by an employee or an agency. million to $11.5 million. 601–612) and the Paperwork Reduction
This authority may be used under In this final rule, SBA is adopting the Act (44 U.S.C. Ch. 35)
circumstances such as the following: same 47.6 percent increase in the The Office of Management and Budget
(1) An employee or an agency Security Guards and Patrol Services size has determined that this rule is not a
presents material facts not previously standard that it proposed on November significant regulatory action for
considered by the Office; 10, 2005. As applied to the current purposes of Executive Order 12866.
(2) There is room for reasonable doubt inflation-adjusted size standard of $11.5 This final rule meets the applicable
as to the appropriateness of the million, the new size standard under standards set forth in sections 3(a) and
decision; or this final rule is $17 million 3(b)(2) of Executive Order 12988, Civil
(3) The potential impact of a decision ($11,500,000 x 1.476 = $16,978,000, Justice Reform, to minimize litigation,
on similar jobs is sufficiently significant rounded to the nearest $500,000 eliminate ambiguities and reduce
to make further review of the decision increment, or $17,000,000). Based on burden to the extent practicable. The
desirable. SBA’s evaluation of the one public final rule does not have a retroactive or
* * * * * comment it received in response to its preemptive effect. This final rule will
November 10, 2005 proposed rule (see not have a substantial direct affect on
[FR Doc. 06–5891 Filed 6–29–06; 8:45 am]
discussion below) and on SBA’s the States or the distribution of power
BILLING CODE 6325–39–P
analysis described in the proposed rule, and responsibilities among various
SBA believes that this 47.6 percent levels of government. Therefore, for
increase is appropriate under the purposes of Executive Order 13132,
SMALL BUSINESS ADMINISTRATION methodology SBA uses in evaluating SBA has determined that this final rule
size standards. As described in the does not have any Federalism
13 CFR Part 121
proposed rule, SBA evaluates an implications warranting the preparation
RIN 3245–AF28 industry’s size standard by comparing of a federalism assessment. For the
that industry’s characteristics to the purposes of the Paperwork Reduction
Small Business Size Standards; characteristics and size standards Act, 44 U.S.C. Ch. 35, SBA has
Security Guards and Patrol Services established for other industries. determined that this rule does not
Industry Applying the proposed 47.6 percent impose new reporting or recordkeeping
increase to the current inflation- requirements.
mstockstill on PROD1PC61 with RULES
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Federal Register / Vol. 71, No. 126 / Friday, June 30, 2006 / Rules and Regulations 37491
engaged in the Security Guards and commenter supported a size standard 5. Steps SBA Took To Minimize the
Patrol Services Industry. SBA described double that of SBA’s proposal, because Significant Economic Impact on Small
in the proposed rule the possible effects of increased security needs on various Entities
on business concerns seeking SBA 7(a) facilities, especially those of the Federal
and 504 Guaranteed Loan Programs, and Government. SBA considered this issue SBA considered an alternative size
SBA’s Economic Injury Disaster Loans. in its analysis supporting the proposed standard based on average number of
In addition, it affects those concerns size standard and in its review of employees instead of average annual
that participate in Federal procurement Federal contracting data that became receipts. It also considered a range of
programs for small businesses. The available after the publication of the size standards as part of the assessment
amended size standard may also affect proposed rule. SBA’s analyses of that of each evaluation factor. Because of the
small businesses participating in data do not provide a basis for large proportion of part-time employees
programs of other agencies that use SBA increasing the size standard beyond the in this industry, an employee size
size standards. As a practical matter, 47.6 percent that SBA originally standard could unintentionally
SBA cannot estimate the impact of a proposed. Therefore, SBA is not making influence decisions of some firms to
revised size standard on every Federal any change in the amount of proposed alter the use of part-time employees and
program that uses its size standards. increase, other than applying it to the subcontractors to remain as small
Nevertheless, SBA did not receive any current inflation-adjusted size standard businesses. SBA believes that a
comments raising concerns about the of $11.5 million, resulting in a new size moderate increase to the size standard
use of the proposed size standard on standard of $17 million. SBA received will assist businesses that should be
other Federal programs or regulations. no comments regarding its Initial included as small businesses and small
Immediately below, SBA sets forth its Regulatory Flexibility Analysis. businesses that are growing. In adopting
Final Regulatory Flexibility Analysis for a $17 million size standard, currently
this rule on the Security Guards and 3. SBA’s Description and Estimate of the defined small businesses will not be
Patrol Services Industry addressing the Number of Small Entities To Which the competitively disadvantaged as
following: (1) The need for and objective Rule Will Apply
compared to a much higher size
of the rule; (2) significant issues the SBA estimates that 55 additional standard. SBA did not receive any
public raised in its comments; (3) SBA’s firms out of 4,853 firms in this industry comments raising concerns about an
description and estimate of the number [i.e., 2.1 percent of total firms] would be adverse impact on currently defined
of small entities to which the rule will considered small as a result of this final small businesses of a higher size
apply; (4) the projected reporting, rule. These firms will be eligible to seek standard.
recordkeeping, and other compliance available SBA assistance if they meet
requirements of the rule, and SBA’s other program requirements. The List of Subjects in 13 CFR Part 121
estimate of the classes of small entities estimated number of firms becoming
Government procurement,
that will be subject to the requirements; eligible for SBA assistance because of
Government property, Loan programs
and, (5) steps SBA took to minimize the this rule cumulatively generate $950
‘‘business, Small businesses.’’
significant economic impact on small million in this industry out of a total of
entities. $13.6 billion in annual receipts. The ■ For the reasons stated in the preamble,
small business coverage in this industry the Small Business Administration
1. Need for and Objective of the Rule will increase by 7.0 percent of total amends 13 CFR part 121 as follows.
The revised size standard for the receipts. In addition, SBA estimates that
Security Guards and Patrol Services approximately 65 small businesses that PART 121—SMALL BUSINESS SIZE
Industry better defines the size of a are within 20 percent of the existing size REGULATIONS
small business in this industry that standard could grow and retain their
should be eligible for Federal small small business status under the $17 ■ The authority citation for part 121
business assistance programs. Before million size standard. continues to read as follows:
SBA proposed increasing the size Authority: 15 U.S.C. 632, 634(b)(6), 636(b),
4. Projected Reporting, Recordkeeping,
standard for this industry, it reviewed 637, and 662(5); and Public Law 105–135, sec
and Other Compliance Requirements of
the structure of this industry using five 401, et. seq, 111 Stat. 2592.
the Rule, and SBA’s Estimate of the
factors that were compared with
Classes of Small Entities That Will Be
averages for two groups of comparable ■ In § 121.201, in the table ‘‘Small
Subject to the Requirements
industries. A review of the latest Business Size Standards by NAICS
available industry and program data A new size standard does not impose Industry,’’ under the heading Subsector
supports the adopted increase to the any additional reporting, recordkeeping 561—Administrative and Support
current size standard. or compliance requirements on small Services, revise the entry for 561612 to
entities. Increasing size standards read as follows:
2. Significant Issues the Public Raised in expands access to SBA programs that
Its Comments assist small businesses, and does not § 121.201 What size standards has SBA
SBA received one comment from a impose a regulatory burden because it identified by North American Industry
business concern in the Security Guards neither regulates nor controls business Classification System codes?
and Patrol Services Industry. The behavior. * * * * *
* * * * * * *
Subsector 561 Administrative and Support Services
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37492 Federal Register / Vol. 71, No. 126 / Friday, June 30, 2006 / Rules and Regulations
* * * * * * *
561612 ..................................... Security Guards and Patrol Services ........................................ $17.0.
* * * * * * *
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