SBA Size Standards Under the Microscope

SBA’s size standards are one of the agency’s most important metrics. The size standards draw a bright line between small and large businesses for each industry by NAICS code. A firm that is below the size standard for its industry is eligible to pursue federal contracts and programs reserved for small businesses. And small businesses are also exempt from other rules that would otherwise apply to federal contractors. So how and where SBA draws the size line for each industry has significant implications for contractors and the competitive landscape for small businesses in each industry.

In the past, the size standards have remained fairly static, with infrequent updates other than the occasional minor adjustment for inflation. However, the relative stasis ended in 2010 when Congress passed the Jobs Act and directed SBA to overhaul the size standards. Starting in 2011, SBA systematically reviewed all of the size standards. As a result, numerous size standards increased – and many did so significantly. Then, in July 2014, the size standards underwent another (modest) increase based on an across-the-board inflationary adjustment.

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