Small Business Size Regulations; Size Standards and the North American Industry Classification System

AGENCY:

Small Business Administration.

ACTION:

Final rule.

SUMMARY:

The Small Business Administration (SBA) is amending its size regulations by establishing a new table of small business size standards for industries as the North American Industry Classification System (NAICS) defines them. These new size standards are effective beginning with Fiscal Year 2001, which starts on October 1, 2000. Small business size standards currently exist for most industries under the Standard Industrial Classification (SIC) system. SBA has determined that NAICS is a better description of industries in the U.S. economy than the SIC system for purposes of establishing size standards.

DATES:

This rule is effective October 1, 2000.

FOR FURTHER INFORMATION CONTACT:

Carl Jordan, Office of Size Standards, at (202) 205-6618.

SUPPLEMENTARY INFORMATION:

Introduction

Under section 3(a)(2) of the Small Business Act, SBA establishes small business definitions, or size standards, by industry category and varies size standards as necessary to reflect industry differences to determine small business eligibility for Federal programs. The current table of size standards uses SIC industry descriptions as the basis for the size standards. Because NAICS replaced the SIC system for use by Federal agencies in collecting economic data, we reviewed NAICS to determine whether we should also use the NAICS industry descriptions to establish small business size standards. Based on that review, we proposed in the October 22, 1999, Federal Register (64 FR 57187-57286) to adopt a new table of small business size standards for industries as they are described in NAICS, effective October 1, 2000.

The new table would replace the existing table of size standards for industries as they are described in the SIC system. We invited comments from interested parties on our proposal to adopt NAICS-based size standards. Specifically, we requested comments on at least the following: (1) Is FY 2001 an appropriate effective date? (2) Are the guidelines that we used in proposing the new size standards appropriate? (3) Will there be a significant impact on firms in an industry where some firms will lose size eligibility or formerly large firms will now become small? (4) If the answer to (3) is yes, how can we eliminate or minimize that potential impact?

NAICS was designed, as was the SIC system, solely for statistical purposes. The Office of Management and Budget (OMB) published a “Notice of final decision” in the Federal Register on April 9, 1997 (62 FR 17288-17478), announcing its decision to adopt NAICS. OMB's notice stated that “NAICS shall not be used in any administrative, regulatory, or tax program unless the head of the agency administering that program has first determined that the use of such industry definitions is appropriate for implementation of the program's objectives.” As the Administrator of SBA I have determined that NAICS industry descriptions are more appropriate than SIC industry descriptions to use in SBA programs and to accomplish our Agency's mission. Further, all Federal Agencies, in accordance with section 3(a)(2) of the Small Business Act, must use SBA's established size standards to categorize a business as a small business concern, unless the agencies: (1) Are authorized by statute to do otherwise; or (2) have obtained the SBA Administrator's approval for an alternative. NAICS is an improvement over the SIC system in identifying and describing industries in the U.S. economy, and size standards established for NAICS industries will better define small business. This final rule adopts the proposed size standards and specifies an effective date of October 1, 2000.

Summary of Comments

We received three comments to the proposed rule, each of which supported it. Two comments were from industry associations, and the third is from an SBA office. Besides supporting the proposed rule, the comments included some other observations and suggestions. We will summarize and address their comments here.

1. An association representing moving and storage companies supports our proposal to issue the new table of size standards based on NAICS using our proposed methodology, and also supports October 1, 2000, as the implementation date if an earlier one is not practicable. We stated in the October 22, 1999, proposed rule why we believe October 1, 2000, is the appropriate date. Our three reasons concerned consistency in government recordkeeping and statistics, development of historical data for comparison purposes, and the need for time to convert and update data bases and tracking systems (see 64 FR 57190). The association also commented on its understanding of certain specific NAICS codes and how those NAICS codes will apply to future Federal government and military contracts. The association indicates that it “does not believe that any firms in the moving and storage industry will be affected by this change, as the same $18.5 million size standard will apply as is currently in place.” We believe this supports our conclusions that because we applied the guidelines consistently, the size standards we proposed are appropriate and that this change will cause little loss of small business eligibility, if any, to businesses currently eligible to participate in Federal small business programs.

2. A coalition of environmental contractors supported SBA's methodology and the FY 2001 implementation date as well. They raised, however, questions about two NAICS codes for which we established a $5.0 million size standard. Specifically, the coalition questioned whether $5 million is appropriate for NAICS codes 514199, “All Other Information Services,” and 541620, “Environmental Consulting Services.” NAICS codes 514199 and 541620 are two activities related to SIC 8999, “Services, NEC” (specifically, Miscellaneous Information Providers and Environmental Consultants), both of which are new NAICS industries. The current size standard for SIC 8999 is $5 million.

Concerning NAICS 514199, it is one of five industries within Subsector 514, “Information Services and Data Processing Services.” Four of those NAICS industries are related to and the same as four SIC industries. Two of them, namely NAICS 514191 (On-Line Information Services) and NAICS 514210 (Data Processing Services) are Computer Services. All industry activities described within SIC codes 7371 through 7379 have the same $18.0 million size standard. We applied the first proposed guideline, and therefore, $18.0 million is the correct size standard for NAICS 514191 and NAICS 514210. The other two NAICS codes, namely NAICS 514110 (News Syndicates) and NAICS 514120 (Libraries and Archives) are related to and the same as SIC 7383 (News Syndicates) and SIC 8231 (Libraries) respectively. The size standards for SIC 7383 and 8231 are $5.0 million. We applied the first proposed guideline, and therefore, $5.0 million is the correct size standard for NAICS 514110 and NAICS 514120. While all of these industries are parts of Subsector 514 (Information Services and Data Processing Services), NAICS 514199 specifically excludes news syndicates, libraries, archives and on-line information access. Further, NAICS 514199 is only related to part of SIC 8999, “Services, NEC,” and it is limited to “miscellaneous information providers.” Therefore, consistent with the first guideline, and the other industries in this Subsector, $5.0 million is the correct size standard for NAICS 514199.

Concerning NAICS 541620, “Environmental Consulting Services,” the coalition further suggested that the size standard should be 500 employees, the same as we established for “Environmental Remediation Services,” a segment of SIC 8744, “Facilities Support Management Services.” Consistent with the fourth proposed guideline, we retained this activity and its corresponding size standard of 500 employees as a segment within NAICS 562910 “Remediation Services.” NAICS 562910 is an industry related to part of SIC 1799, “Special Trade Contractors, NEC.” Because the size standard for SIC 1799 is $7 million, we are retaining $7 million as the size standard for NAICS 562910. This is consistent with the first proposed guideline.

The distinction between “Remediation Services” and “Environmental Remediation Services” lies in the extent and complexity of work to be performed on a specific Federal government contract. “Environmental Consulting Services” is one activity, and, as the coalition notes, often conducted in conjunction with an environmental remediation contract. However, “Environmental Remediation Services” requires that (1) the purpose of the procurement be the restoration of a contaminated environment, i.e., environmental remediation, and (2) the procurement be composed of activities in three or more separate industries, none of which constitutes 50% or more of the contract value, and each of which would, if it were a separate contract, be a different NAICS (formerly SIC) code. Footnote 14 more fully details when 500 employees is the appropriate size standard for an Environmental Remediation Services contract.

Therefore, the size standards for NAICS 541620 and NAICS 562910 will be $5 million and $7 million respectively. The contracting officer will assign the NAICS code together with its small business size standard that best describes the principal purpose of the contract to be performed. If Environmental Consulting Services is the principal purpose of a Federal government procurement, the appropriate NAICS code is 541620 and the size standard is $5 million. If the principal purpose of the Federal government procurement is Environmental Remediation Services and it meets the conditions stated in Footnote 14, the contracting officer will assign NAICS 562910 with the 500 employee size standard. We recognize that these three industries are closely related. As industry data become available for these industries, we will reconsider their size standard(s).

Lastly, the coalition suggests we review the $5 million “anchor” size standard for industries generally classified as Services. In 1994 we increased nearly all receipts based size standards because inflation had reduced the number of small businesses eligible to participate in Federal programs reserved for small business. We are reviewing all receipts based small business size standards to determine the extent of inflation since the 1994 increase, and whether we should adjust the size standards to reflect inflation's effects since then. Once we determine the need for an increase, we will publish a proposed rule in the Federal Register concerning the change.

While we are open to requests to change one or more size standards, this rule is limited to replacing the existing table of small business size standards with a new one based on more current and accurate industry definitions. This rule does not reevaluate existing small business size standards nor does it intend to change any. We modify size standards occasionally, but only after we have separately evaluated individual industries and their size standards. Such modifications are separate SBA actions. Following the requirements set forth in the Administrative Procedure Act, we fully explain our methodology and reasons for a contemplated change, and do not make changes without having provided an opportunity for public comment.

For example, we have proposed increasing size standards for the Help Supply Services (SIC 7363), 11 of the 19 Health Services (Major Group 80), the General and Special Construction Industries (Major Groups 15, 16 and 17), Garbage and Refuse Collection (part of SIC 4212) and Refuse Systems (SIC 4953). The comment period is closed on those proposed rules, and we will publish our decision on them as Final Rules in the Federal Register in the near future. However, those size standards, once published as final, will apply to industries in the current table of size standards based on the SIC system, until October 1, 2000. From that date forward they will apply to the related industries as they are described in NAICS. The table that is the subject of this rule is based only on existing size standards.

3. The SBA comment noted that in Table IV of the proposed rule we did not affix Footnote 10 to NAICS codes 531311, 531312, 531390 and 561920, but had listed those NAICS codes in the text of Footnote 10 as if the footnote applied to those codes. Footnote 10 allows firms in those industries to exclude certain amounts when calculating average annual receipts under 13 CFR 121.104(a)(1). Footnote 10 to this table is the same as Footnote 6 to the table based on SIC industry descriptions.

Footnote 10 does not apply to firms in NAICS codes 531311 (Residential Property Managers), 531312 (Nonresidential Property Managers) and 531390 (Other Activities Related to Real Estate), since they do not work on commission. Including them in the list of NAICS codes to which Footnote 10 applied was inadvertent on our part. Therefore, we modify Footnote 10 to apply only to NAICS 531210 (Offices of Real Estate Agents and Brokers), NAICS 541810 (Advertising Agencies), NAICS 561510 (Travel Agencies) and NAICS 561920 (Convention and Trade Show Organizers).

The SBA comment also noted that the proposed rule did not reflect the change of the acronym SIC to NAICS in §§ 121.103(f)(3)(i), 121.103(f)(3)(i)(A), and 121.103(f)(3)(iii). We overlooked those changes in the proposed rule, but have included them in this final rule. The changes are not substantive. Rather, “NAICS” replaces “SIC” there as it does in the other sections of this part. They are the logical outgrowth of this overall change. There were no other comments in this regard.

Reasons for This Change

We explained in our October 22, 1999, proposed rule why we believed a new table of size standards based on NAICS should replace the existing table based on SIC. NAICS is a significant improvement over the SIC system and provides a better structure on which to establish size standards by industry category. NAICS was developed to describe the structure of today's economy. We have determined that the new table of small business size standards reflecting NAICS industries is in the interests of small business. We stated in our October 22, 1999, proposed rule why we believe we should use NAICS for small business size standards, namely because (1) the SIC system has not kept up with the economy; (2) NAICS recognizes the growth and expansion of the services and technological industries; (3) the Census Bureau will no longer organize and make data available for SIC industries after the 1997 Economic Census; and (4) we believe that all other Federal agencies will switch to NAICS for their program and administrative purposes. Having a single industry classification system within the Federal government will avoid confusion and inconsistency that would likely result if we delay issuing a new table of size standards based on NAICS.

Implementation Date of NAICS Size Standards

NAICS-based size standards are effective for all Federal small business programs beginning with FY 2001, which starts October 1, 2000. We have selected this date to implement NAICS-based size standards because (1) Federal government recordkeeping and statistics will be more consistent and comparable with past data and for analyzing future small business activity if implementation of the new table of size standards is at the beginning of a fiscal year; (2) we and other users of size standards will need to collect data on small business programs on the NAICS format to be able to compare those data with the future Federal statistics; and (3) small business size standards apply to most Federal agencies and their programs involving small businesses, and they will need time to determine how to implement the new size standards and to develop training tools necessary to do so.

Present Status of NAICS

OMB adopted NAICS to replace the 1987 SIC system. NAICS is based on concepts developed by the U.S. Economic Classification Policy Committee (ECPC), an interagency committee established by OMB, with Statistics Canada and Mexico's Instituto Nacional de Estadistica Geografia e Informatica. We did not in our proposed rule, nor do we here, include the entire texts of OMB's or ECPC's documents. We suggest that interested parties review the April 9, 1997, Federal Register (62 FR 17288-17478) notice, together with earlier Federal Register notices, proposed rules and other papers and documents that preceded and followed that final notice. We believe that this will help interested parties understand NAICS better and increase their awareness of the changes that may affect them and their industry. Copies of all Federal Register notices, including SBA's October 22, 1999, proposed rule, are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, or by calling 1 (202) 512-1800. Those with access to the Internet can obtain all Federal Register notices for 1995 and forward via GPO Access at http://www.access.gpo.gov/su_docs. In addition, the U.S. Department of Commerce, Bureau of Census (Census Bureau) at http://www.census.gov/epcd/www/naics.html has the April 9, 1997, Federal Register notice and other NAICS related documents.

How We Converted the Size Standards From SIC-Based to NAICS-Based

The October 22, 1999, proposed rule contains a full description of our methodology in determining the correct size standards to use for the NAICS industry descriptions. We included a table (Table III in the proposed rule) that summarized guidelines for the conversions. Comments supported our methodology and this rule is the result of our applying them consistently. Therefore, we have made no changes to the size standards we proposed in that notice. We repeat those guidelines below in Table I, which is the same as Table III in the proposed rule.

Following these guidelines we produced a table of small business size standards that accomplished our objectives. There are approximately 1,175 NAICS industries, and small business size standards for virtually all economic activities within the SIC codes remain the same in NAICS. Most of the NAICS small business size standards resulted from applying the first two guidelines. There were no comments suggesting that SBA should consider modifying the guidelines.

Besides the guidelines, SBA included in the October 22, 1999, proposed rule a complete table that showed each NAICS industry with the SIC industry or industries that are related to it. That table (Table IV in the proposed rule) provided the existing size standard(s) for the associated SIC code(s) and the proposed size standard for each NAICS code, as they result from applying the guidelines. Because we applied these guidelines consistently, and the only comments on them that we received were favorable, we are not repeating that table in this rule. Interested parties may refer to the October 22, 1999, proposed rule (64 FR 57187-57286), as cited above, or visit SBA's Web site on size standards site at http://www.sba.gov/size/,, and select “What's New.”

Compliance With Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), the Paperwork Reduction Act (44 U.S.C. 3501 Ch. 35), and Executive Orders and 12988 and 13132

SBA has determined that this rule is not a significant rule within the meaning of Executive Order 12866. For purposes of the Regulatory Flexibility Act, SBA certifies that the rule will affect a significant number of small businesses, but that the impact of the rule on each business will not be substantial.

This rule applies to all small entities and Federal programs reserved for small entities, except those specifically excluded by Federal legislation or elsewhere under 13 CFR part 121. SBA estimates that relatively few firms will gain or lose small business status because of this rule. Though SBA is establishing a new table of size standards, firms that are now eligible for Federal small business programs will remain eligible to the maximum extent practicable.

There are three significant benefits to this rule. (a) Size standards are based on the most current industry descriptions. (b) Since SBA uses Census data to establish, review, change and/or otherwise modify small business size standards, data SBA obtains from the Census Bureau will be the most recent and accurate economic data available. (c) Collecting and analyzing statistical data on small business participation in the Federal procurement process will be more accurate, particularly in the technological and services industries.

SBA believes that this rule will impose no additional costs on the public. Further, the new NAICS-based table of small business size standards does not add any significant costs to Federal Government programs reserved for small businesses. Federal agencies and other users bear the administrative costs associated with converting from the SIC system to NAICS.

For the purpose of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., SBA has determined that this rule does not impose new reporting or record keeping requirements. For purposes of Executive Order 12988, SBA certifies that this rule is drafted, to the extent possible under standards in section 3 of the order. For purposes of Executive Order 13132, SBA has determined that this rule does not have any federalism implications warranting the preparation of a Federalism Assessment.

List of Subjects in 13 CFR Part 121

Government procurement, Government property, Grant programs-business, Loan programs-business, Small business.

For the reasons stated in the preamble, SBA is amending 13 CFR PART 121 as follows:

PART 121—SMALL BUSINESS SIZE REGULATIONS

1. The authority citation of part 121 continues to read as follows:

Authority: Pub. L. 105-135 sec. 601 et seq., 111 Stat. 2592; 15 U.S.C. 632(a), 634(b)(6), 637(a), and 644(c); and Pub. L. 102-486, 106 Stat. 2776, 3133.

2. Revise § 121.101 to read as follows:

3. Amend § 121.103 as follows:

a. In paragraph (f)(3)(i) introductory text, replace the acronym “SIC” with the acronym “NAICS.”

b. In paragraph (f)(3)(i)(B)(1) replace the acronym “SIC” with the acronym “NAICS.”

c. In paragraph (f)(3)(iii) replace the acronym “SIC” with the acronym “NAICS.”

4. Revise § 121.201 to read as follows:

Footnotes

[As noted at the head of the table in the Supplementary Information above, the following footnotes relate only to SBA's proposed size standards. Footnotes to existing size standards follow the table of size standards in the Supplementary Information above.]

1. NAICS codes 221111, 221112, 221113, 221119, 221121, 221122—A firm is small if, including its affiliates, it is primarily engaged in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours.

2. NAICS code 234990—Dredging: To be considered small for purposes of Government procurement, a firm must perform at least 40 percent of the volume dredged with its own equipment or equipment owned by another small dredging concern.

3. NAICS code 311421—For purposes of Government procurement for food canning and preserving, the standard of 500 employees excludes agricultural labor as defined in 3306(k) of the Internal Revenue Code, 26 U.S.C. § 3306(k).

4. NAICS code 324110—For purposes of Government procurement, the firm may not have more than 1,500 employees nor more than 75,000 barrels per day capacity of petroleum-based inputs, including crude oil or bona fide feedstocks. Capacity includes owned or leased facilities as well as facilities under a processing agreement or an arrangement such as an exchange agreement or a throughput. The total product to be delivered under the contract must be at least 90 percent refined by the successful bidder from either crude oil or bona fide feedstocks.

5. NAICS code 326211—For Government procurement, a firm is small for bidding on a contract for pneumatic tires within Census Classification codes 30111 and 30112, provided that:

(a) The value of tires within Census Classification codes 30111 and 30112 which it manufactured in the United States during the previous calendar year is more than 50 percent of the value of its total worldwide manufacture,

(b) the value of pneumatic tires within Census Classification codes 30111 and 30112 comprising its total worldwide manufacture during the preceding calendar year was less than 5 percent of the value of all such tires manufactured in the United States during that period, and

(c) the value of the principal product which it manufactured or otherwise produced, or sold worldwide during the preceding calendar year is less than 10 percent of the total value of such products manufactured or otherwise produced or sold in the United States during that period.

6. NAICS Subsectors 333, 334, 335 and 336—For rebuilding machinery or equipment on a factory basis, or equivalent, use the NAICS code for a newly manufactured product. Concerns performing major rebuilding or overhaul activities do not necessarily have to meet the criteria for being a “manufacturer” although the activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are not considered rebuilding.

7. NAICS code 336413—Contracts for the rebuilding or overhaul of aircraft ground support equipment on a contract basis are classified under NAICS code 336413.

8. NAICS Codes 522110, 522120, 522130, 522190, 522210 and 522930—A financial institution's assets are determined by averaging the assets reported on its four quarterly financial statements for the preceding year. “Assets” for the purposes of this size standard means the assets defined according to the Federal Financial Institutions Examination Council 034 call report form.

9. NAICS code 531190—Leasing of building space to the Federal Government by Owners: For Government procurement, a size standard of $15.0 million in gross receipts applies to the owners of building space leased to the Federal Government. The standard does not apply to an agent.

10. NAICS codes 531210, 541810, 561510 and 561920—As measured by total revenues, but excluding funds received in trust for an unaffiliated third party, such as bookings or sales subject to commissions. The commissions received are included as revenue.

11. NAICS code 541710—For research and development contracts requiring the delivery of a manufactured product, the appropriate size standard is that of the manufacturing industry.

(a) “Research and Development” means laboratory or other physical research and development. It does not include economic, educational, engineering, operations, systems, or other nonphysical research; or computer programming, data processing, commercial and/or medical laboratory testing.

(b) For purposes of the Small Business Innovation Research (SBIR) program only, a different definition has been established by law. See § 121.701 of these regulations.

(c) “Research and Development” for guided missiles and space vehicles includes evaluations and simulation, and other services requiring thorough knowledge of complete missiles and spacecraft.

12. NAICS code 561210—Facilities Management, a component of NAICS 561210, includes establishments, not classified elsewhere, which provide overall management and personnel to perform a variety of related support services in operating a complete facility in or around a specific building, or within another business or Government establishment. Facilities management means furnishing three or more personnel supply services which may include, but are not limited to secretarial services, typists, word processing, maintaining files and/or libraries, telephone answering, switchboard operation, reproduction or mimeograph service, mailing service, writers, bookkeeping, financial or business management, public relations, conference planning, minor office equipment maintenance and repair, use of information systems (not programming), word processing, travel arrangements, maintaining files and/or libraries.

13. NAICS code 235990 (All Other Special Trade Contractors) and NAICS code 561210 (Facilities Support Services)— Base Maintenance:

(a) If one of the activities of base maintenance, as defined in paragraph (b) (below in this endnote) can be identified with a separate industry and that activity (or industry) accounts for 50 percent or more of the value of an entire contract, then the proper size standard is that of the particular industry, and not the base maintenance size standard.

(b) “Base Maintenance” requires the performance of three or more separate activities in the areas of service or special trade construction industries. If services are performed, these activities must each be in a separate NAICS code including, but not limited to, Janitorial and Custodial Service, Fire Prevention Service, Messenger Service, Commissary Service, Protective Guard Service, and Grounds Maintenance and Landscaping Service. If the contract requires the use of special trade contractors (plumbing, painting, plastering, carpentry, etc.), all such special trade construction activities are considered a single activity and classified as Base Housing Maintenance. Since Base Housing Maintenance is only one activity, two additional activities are required for a contract to be classified as “Base Maintenance.”

14. NAICS 562910—Environmental Remediation Services:

(a) For SBA assistance as a small business concern in the industry of Environmental Remediation Services, other than for Government procurement, a concern must be engaged primarily in furnishing a range of services for the remediation of a contaminated environment to an acceptable condition including, but not limited to, preliminary assessment, site inspection, testing, remedial investigation, feasibility studies, remedial design, containment, remedial action, removal of contaminated materials, storage of contaminated materials and security and site closeouts. If one of such activities accounts for 50 percent or more of a concern's total revenues, employees, or other related factors, the concern's primary industry is that of the particular industry and not the Environmental Remediation Services Industry.

(b) For purposes of classifying a Government procurement as Environmental Remediation Services, the general purpose of the procurement must be to restore a contaminated environment and also the procurement must be composed of activities in three or more separate industries with separate NAICS codes or, in some instances (e.g., engineering), smaller sub-components of NAICS codes with separate, distinct size standards. These activities may include, but are not limited to, separate activities in industries such as: Heavy Construction; Special Trade Construction; Engineering Services; Architectural Services; Management Services; Refuse Systems; Sanitary Services, Not Elsewhere Classified; Local Trucking Without Storage; Testing Laboratories; and Commercial, Physical and Biological Research. If any activity in the procurement can be identified with a separate NAICS code, or component of a code with a separate distinct size standard, and that industry accounts for 50 percent or more of the value of the entire procurement, then the proper size standard is the one for that particular industry, and not the Environmental Remediation Service size standard.

5. Amend § 121.402 as follows:

a. In paragraph (a) and (d) replace the acronym “SIC” with the acronym “NAICS.”

b. In paragraph (b) replace all “SIC” acronyms with “NAICS” and in the second sentence, add “United States” after the first NAICS acronym.

c. In paragraph (c) replace all “SIC” acronyms with the acronym “NAICS” and replace the word “a” before the second NAICS acronym with the word “an.”

d. In paragraph (e) replace the words “a SIC” with “an NAICS.”

6. In § 121.403, replace the acronym “SIC” in the heading and the first sentence with the acronym “NAICS.”

7. In paragraph (c)(1) of § 121.406, replace the acronym “SIC” with the acronym “NAICS.”

8. In § 121.409, replace the acronym “SIC” with the acronym “NAICS.”

9. In the last sentence of paragraph (a) of § 121.410, remove the phrase “SIC code 8711” and replace it with “NAICS code 541330.”

10. In paragraph (a) of § 121.603, replace the acronym “SIC” with the acronym “NAICS.”

11. In § 121.1102, replace the acronym “SIC” in the heading and the text with the acronym “NAICS.”

12. Amend § 121.1103 as follows:

a. In the heading and the first sentence of paragraph (a), replace the phrase “a SIC” with “an NAICS.”

b. In paragraph (b), replace the acronym “SIC” with the acronym “NAICS.”

13. In paragraph (d) of § 121.1202, replace the phrase “a four-digit” with “an NAICS” and replace the acronym “SIC” with “NAICS.”

14. In paragraphs (a)(3) and (b)(1)(ii) of § 121.1204, replace the acronym “SIC” with the acronym “NAICS.”