Tuesday Insight – November 24th, 2020

Nov 30, 2020

SBA Proposes Increasing Size Standards in Professional, Management, and Administrative Industries

SBA’s recent proposed rule will increase size standards for a number of industries. The rule also said that SBA was thinking about lowering size standards. While most often, size standards increase over time, SBA can also lower them. However, SBA decided against lowering them. Read on for what standards will change.

SBA’s size standards determine whether a company can bid on procurements restricted to small businesses. They determine whether a company is “small” for a particular procurement. So, when SBA proposes to change those size standards, it can have a big impact on which companies are eligible for procurements going forward.

SBA adjusts its size standards periodically based on

[T]he structural characteristics of an industry as a basis to assess industry differences and the overall degree of competitiveness of an industry and of firms within the industry. Industry structure is typically examined by analyzing four primary factors: Average firm size, degree of competition within an industry, start-up costs and entry barriers, and distribution of firms by size.

SBA also looks at small business federal contracting as a share of total federal contracting. For perspective, there are 27 different size standards levels covering 1,023 NAICS industries.

In this rule, SBA proposes to increase size standards for 46 industries including 27 industries in NAICS Sector 54 (Professional, Scientific and Technical Services), 2 industries in Sector 55 (Management of Companies and Enterprises), and 17 industries in Sector 56 (Administrative and Support and Waste Management and Remediation Services).

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