The Small Business Administration (SBA) is currently socializing a new set of rules that seeks to modify the small business size standards, which are based on the number of employees, for nine sectors of the North American Industry Classification System (NAICS).

Public comments on these proposed SBA changes, which would expand these manufacturing businesses' eligibility for federal contracting and loan programs, are due June 27.

What benefits do these changes bring?

The proposed changes seek to impact sectors such as manufacturing and transportation, facilitating access to more medium-sized companies so that they can regain the status of small businesses and thus allowing current small companies to retain their status for longer, allowing them to benefit of SBA buyout and loan programs.

“These proposed revisions come on the heels of an SBA announcement earlier this month in which the agency issued four final rules to modify revenues-based small business size standards in 16 (NAICS) sectors to help increase small business eligibility for SBA's federal contracting and loan programs,” the SBA pointed out.

The SBA's proposed change is part of the second five-year review of size standards, as required by the Small Business Jobs Act of 2010.

Specifically, the SBA seeks to increase at least 150 employee-based size standards in nine sectors. A table presented by the agency summarizes the number of revised size standards and the number of increases by sector:

​​​What do the size standards take into account?

“The SBA also proposes to retain the current 500-employee size standard for Federal procurement of supplies set aside for small business under the nonmanufacturer rule, which requires that small businesses qualifying as nonmanufacturers must have an average of 500 or fewer employees over the past 12 months and be primarily engaged in the wholesale or retail trade activities and supply the product of a U.S. small manufacturer,” it is highlighted by the agency.

The SBA also underlines:

In response to the pandemic, SBA is retaining current size standards where otherwise data suggests that size standards should be lowered.

Seeking that small businesses reflect the current economic conditions of the industries to which they belong, the SBA takes into account the following structural characteristics of individual industries:

• Average company size
• Degree of competition
• Federal Government hiring trends

Until June 27, 2022 you can send your comments on this proposal by clicking here.

You may also send comments by mail to Khem R. Sharma, Chief, Office of Size Standards, 409 3rd Street SW, Mail Code 6530, Washington, D.C., 20416.