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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: October 15, 2003

SUBJECT: Small Business Administration; Small Business Size Standard for Facilities Support Services (Including Base Maintenance)

SOURCE: Federal Register, October 15, 2003, Vol. 68, No. 199, page 59309

AGENCIES: Small Business Administration (SBA)

ACTION: Final Rule

SYNOPSIS: SBA is increasing the size standard for the facilities support services industry (North American Industry Classification System (NAICS) 561210) from $6 million in average annual receipts to $30 million, and the size standard for the sub-category of base maintenance from $23 million to $30 million.

EDITOR'S NOTE: For more on the proposed rule, see the February 3, 2003, FEDERAL CONTRACTS DISPATCH "Small Business Administration; Small Business Size Standard for Facilities Support Services (Including Base Maintenance)."

The SBA's regulations are in Title 13 of the Code of Federal Regulations (CFR). The SBA small business size regulations are in Chapter 1, Small Business Administration; Part 121, Small Business Size Regulations; Subpart A, Size Eligibility Provisions and Standards; Section 121.201, What size standards has SBA identified by North American Industry Classification System codes?

A complete listing of current size standards is available at SBA's Size Standards website at http://www.sba.gov/size/sizetable2002.html, or by calling 202-205-6618 and requesting a copy of the table of size standards.

EFFECTIVE DATE: November 14, 2003.

FOR FURTHER INFORMATION CONTACT: Diane Heal, Office of Size Standards, Office of Government Contracting and Business Development, 202-205-6618.

SUPPLEMENTAL INFORMATION: SBA had received requests from firms in the facilities support services industry to review its $6 million size standard for this industry and the $23 million size standard for base maintenance, a sub-category of the industry. The firms argued that a size standard increase is warranted to reflect the size of federal contracts in this area. These contracts include a broad spectrum of services involving administrative support, custodial services, facilities repair and maintenance, and technical services, which often are $10 million per year or more in value. The firms maintained that a small business can lose its small businesses status with only one or two contracts, and that costs on these types of contracts have increased greater than the general inflation rate, especially due to changes in the mandated labor rates under the Service Contract Act and increased health insurance costs. They believed that to help develop small businesses to be competitive with large businesses in this industry, the size standard should be increased to the $25 million to $30 million range.

Based on the analysis of the industry, on February 3, 2003, SBA published a proposal to increase the size standard for facilities support services to $30 million, and eliminate the base maintenance sub-category because "the activities comprising this industry and the characteristics of firms in the industry no longer require separate size standards for base maintenance and for all other facilities support activities. The NAICS 2002 industry description of facilities support services is very similar to the SBA's description of base maintenance...The SBA believes that the firms performing base maintenance services also perform, or have the capability to perform, most other facilities support activities. Given the close similarity of the descriptions of facilities support services and base maintenance, the SBA believes that a single size standard is appropriate for all activities within the facilities support services industry."

SBA received 16 comments on the proposed size standard from various business concerns -- nine commenters supported the proposed size standard and seven commenters opposed the change. SBA has decided to adopt the proposed size standard increase as final and, based on a comment from SBA's Office of Hearings and Appeals, has decided to change the title of "Base Housing Maintenance" (an exception to NAICS 238990, All Other Specialty Trade Contractors) to "Building and Property Specialty Trade Services" because "Base Housing Maintenance" is often confused with "Base Maintenance," an activity under Facilities Support Services. Therefore, this final rule revises footnote 13 to reflect this change in title.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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