SBA Proposes Changes to Expand Small Business Eligibility in Manufacturing for Federal Contracting and Loan Programs
The U.S. Small Business Administration (SBA) is seeking public comments on a proposed rule that would revise the employee-based small business size standards for businesses in nine North American Industrial Classification System (NAICS) sectors. The proposed changes would increase small business eligibility for SBA’s federal contracting and loan programs.
The proposed changes in nine sectors, including manufacturing and transportation, will enable more mid-sized businesses to regain small business status and allow current small businesses to retain small business status for a longer period, thereby allowing them to benefit from SBA’s procurement 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 proposed rule change is part of the second five-year review of size standards, as required under the Small Business Jobs Act of 2010. SBA proposes to increase 150 employee-based size standards in nine sectors. The table below summarizes the number of size standards reviewed and the number of increases by sector.
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.
The size standards revisions in the proposed rule reflect SBA’s considerations of the relevant data and impacts of the ongoing COVID-19 pandemic on small businesses and the overall economy and Government response. In response to the pandemic, SBA is retaining current size standards where otherwise data suggests that size standards should be lowered.
As part of the review of size standards, SBA considers the structural characteristics of individual industries, including average firm size, the degree of competition, and federal government contracting trends. This ensures that small business size standards reflect current economic conditions in those industries.
Comments may be submitted on this proposed rule on or before June 27, 2022, at www.regulations.gov, using the following RIN number: RIN 3245-AH09. 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.
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About Size Standards Methodology
The SBA-issued white paper entitled, “SBA’s Size Standards Methodology,” explains how SBA establishes, reviews and modifies small business size standards, which can be viewed at http://www.sba.gov/size.
About the U.S. Small Business Administration
The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
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