What's New with Size Standards

SBA Issues a Report on the First 5-Year Comprehensive Review of Size Standards

In 2007, SBA launched a comprehensive review of size standards.  Subsequently, in 2010, U.S. Congress enacted the Small Business Jobs Act (Jobs Act).  Public Law 111-240, 124 Stat. 2504, Sept. 27, 2010.  Section 1344 of Jobs Act requires SBA to conduct a detailed review of all size standards and to make appropriate adjustments to reflect market conditions.  Specifically, the Jobs Act required SBA to review at least one-third of all size standards during every 18-month period from the date of its enactment and to review all size standards not less frequently than once every five years, thereafter.  SBA has completed the first five-year review of all size standards.  The SBA’s previous comprehensive size standards review was in the late 1970s and early 1980s.

In accordance with the Jobs Act, SBA has also submitted to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the factors SBA evaluated for reviewing size standards and the criteria it used for adjusting or not adjusting each size standard.  Specifically, the report (see below) provides an overview of SBA’s “Size Standards Methodology,” including industry and Federal contracting factors and data sources the Agency evaluated when reviewing size standards.  Also included in the report is information on the order in which SBA reviewed size standards in various North American Industry Classification System (NAICS) sectors, number of size standards that were reviewed and revised in each sector, size standards of high public interest and concerns, and impacts of size standard revisions.

SBA is in the process of launching the second 5-year review of size standards.  As part of that effort, the Agency will first publish its revised “Size Standards Methodology” white paper for public comments.  Once the revised methodology is finalized, SBA will start reviewing the size standards and issuing proposed rules for comments.  For more details, interested parties are advised to contact SBA’s Office of Size Standards at sizestandards@sba.gov or 202-205-6618.

A Report on the First 5-Year Comprehensive Review of Size Standards 

 

SBA Issues a Proposed Rule to Adopt NAICS 2017 for Small Business Size Standards

The U.S. Small Business Administration (SBA) proposes to amend its small business size regulations to incorporate the U.S. Office of Management and Budget’s (OMB) North American Industry Classification System (NAICS) revision for 2017, identified as NAICS 2017, into its table of small business size standards.  NAICS 2017 created 21 new industries by reclassifying, combining, or splitting 29 existing industries under changes made to NAICS in 2012 (NAICS 2012).  SBA’s proposed size standards for these 21 new industries have resulted in an increase to size standards for six NAICS 2012 industries and part of one industry, a decrease to size standards for two, a change in the size standards measure from average annual receipts to number of employees for one, and no change in size standards for twenty industries and part of one industry.  SBA proposes to adopt the updated table of size standards, effective October 1, 2017.

If you would like to submit comments on SBA’s proposed rule, identify them by RIN 3245–AG84.  The proposed rule explains how to submit your comments to SBA. We recommend that you comment through the Federal eRulemaking Portal: http://www.regulations.gov/.  Follow the instructions there for submitting your comments.  SBA will not accept comments submitted by email to this proposed rule.  The period for comments ends on June 19, 2017.

You may also review the proposed rule together with comments from other interested parties by going to www.regulations.gov.

 

SBA increases small business size standards for NAICS Sector 31-33, Manufacturing

The United States Small Business Administration (SBA) has issued a final rule to do the following:

  • Increase small business size standards for 209 industries in NAICS Sector 31-33, Manufacturing. 
  • Modify the size standard for NAICS 324110, Petroleum Refiners, by
    • increasing the refining capacity component of the size standard to 200,000 barrels per calendar day for businesses that are primarily engaged in petroleum refining; and by
    • eliminating the requirement that 90 percent of the output to be delivered be refined by the successful bidder from either crude oil or bona fide feedstocks.
  • Update footnote 5 to NAICS 326211 to reflect current Census Product Classification Codes 3262111 and 3262113.

SBA estimates that about 1,250 additional firms will become small because of revised size standards for the 209 industries in NAICS Sector 31-33.

You may read/download SBA’s final rule at Regulations.gov (search on “RIN 3245‑AG50” [without quotes]).  You may also review the originally proposed rule together with all of the comments submitted by going to Regulations.gov.  The proposed rule and the comments are included in the same docket.

The revised size standards are effective February 26, 2016.
 

SBA increases employee based size standards for industries in NAICS Sector 42, Wholesale Trade, and NAICS Sector 44 45, Retail Trade 

The United States Small Business Administration (SBA) has issued a final rule that

  • Increases employee based size standards for 46 industries in North American Industry Classification System (NAICS) Sector 42, Wholesale Trade;
  • Increases the employee based size standard for one industry in NAICS Sector 44‑45, Retail Trade;
  • Retains the current size standards in the remaining industries in those sectors;
  • Retains the current 500‑employee size standard for Federal procurement of supplies under the nonmanufacturer rule (13 CFR 121.406)

SBA reviewed all 71 industries in NAICS Sector 42 and two industries in NAICS Sector 44‑45 that have employee based size standards as part of its ongoing comprehensive size standards review as required by the Small Business Jobs Act of 2010. 

Nearly 4,000 more firms in Sectors 42 and 44‑45 will become small and therefore eligible for financial assistance under the revised employee based size standards.  These revisions do not affect federal procurement programs.  Newly eligible small businesses will generally benefit from a variety of Federal regulatory and other programs that use SBA’s size standards.  Such benefits may include, but are not limited to, reduced fees, less paperwork, or exemption from compliance or other regulatory requirements.

You may read/download SBA’s final rule at Regulations.gov (search on “RIN 3245‑AG49” [without quotes]).  You may also review the originally proposed rule together with all of the comments submitted by going to Regulations.gov.  The proposed rule and the comments are included in the same docket.

The revised size standards are effective February 26, 2016.
 

SBA updates employee based small business size standards for Industries that are not part of Manufacturing (NAICS Sector 31‑33), Wholesale Trade (NAICS Sector 42), or Retail Trade (NAICS Sector 44‑45)

The United States Small Business Administration (SBA) has issued a final rule to modify employee based small business size standards for 36 industries and “exceptions” in SBA’s table of size standards that are not part of North American Industry Classification System (NAICS) Sector 31-33 (Manufacturing), Sector 42 (Wholesale Trade), or Sector 44-45 (Retail Trade).  Specifically, the rule

  • Increases 30 size standards for industries and three “exceptions.” 
  • Decreases size standards from 500 employees to 250 employees for three industries, namely
    • NAICS 212113 (Anthracite Mining),
    • NAICS 212222 (Silver Ore Mining), and
    • NAICS 212291 (Uranium-Radium-Vanadium Ore Mining). 
  • Maintains the Information Technology Value Added Resellers (ITVAR) “exception” under NAICS 541519 (Other Computer Related Services) as follows:
    • It retains the 150‑employee size standard, and
    • It amends footnote 18 to SBA’s table of size standards by adding the requirement that the supply component of small business set-aside ITVAR contracts (i.e., computer hardware and software) must comply with the nonmanufacturing performance requirements or nonmanufacturer rule.
  • Eliminates the Offshore Marine Air Transportation Services “exception” under NAICS 481211 (Nonscheduled Chartered Passenger Air Transportation), and NAICS 481212 (Nonscheduled Chartered Freight Air Transportation).
  • Eliminates the Offshore Marine Services “exception” for industries in NAICS Subsector 483 (Water Transportation), and their $30.5 million receipts based size standards.
  • Removes footnote 15 (the “exception” to Subsector 483) from the table of size standards.

SBA estimates that about 375 additional firms may become small because of increased size standards for the 30 industries and three “exceptions” covered by this rule.

You may read/download SBA’s final rule at Regulations.gov (search on “RIN 3245‑AG51” [without quotes]).  You may also review the originally proposed rule together with all of the comments submitted by going to Regulations.gov.  The proposed rule and the comments are included in the same docket.

The revised size standards are effective February 26, 2016.

 

SBA issues a final rule on increases to monetary size standards for inflation

The U.S. Small Business Administration (SBA) has finalized, without change, its June 12, 2014 interim final rule that adjusted monetary small business size standards for inflation.  Specifically, the rule

  • Increased by 8.73 percent all monetary based industry size standards (i.e., receipts, assets, net worth, and net income) for inflation that has occurred since the last adjustment in 2008.  These adjustments were in addition to revisions that were part of the comprehensive size standards review, as mandated by the Small Business Jobs Act of 2010 (Jobs Act).
  • Increased by the same amount the program based size standards, with the exception of the new alternative size standard for SBA’s 7(a) and 504 loan programs that was established under the Jobs Act.  The new alternative size standard will remain in effect until SBA establishes a permanent alternative size standard for those programs.
  • Deleted references to Surety Bond Guarantee size standards for contracts awarded in the Presidentially declared disaster areas following Hurricanes Katrina, Rita, and Wilma in 2005.
  • Deleted the determination date for eligibility under the Agency’s Economic Injury Disaster Loan (EIDL) Program in connection with Hurricanes Katrina, Rita, and Wilma.
  • Clarified that Footnote 9 to its table of size standards is not limited to NAICS 531190, Lessors of Other Real Estate Property, but rather applies to all industries in Industry Group 5311, Lessors of Real Estate. 

You may read/download the rule at Regulations.gov (search on “RIN 3245‑AG60” [without quotes]).  You may also review there the original interim final rule together with all of the comments submitted at Regulations.gov.  The proposed rule and the comments are included in the same docket.

The changes published in the interim final rule were effective July 14, 2014.

Important:  If you participate in Federal Government procurement programs, either as a prime contractor or as a subcontractor, your size status may have changed on July 14, 2014 as a result of the interim final rule, which this rule finalizes without change.  You must visit the System for Award Management (SAM) and verify that your profile and certifications are up to date based on these revised size standards.

 

SBA issues White Paper on its Size Standards Methodology

The U.S. Small Business Administration (SBA) has prepared a White Paper, explaining how it establishes, reviews and modifies (when appropriate) small business size standards. The document, entitled "SBA Size Standards Methodology," is available on SBA's website where any interested party can review and/or download it. SBA is using "Size Standards Methodology" for ongoing comprehensive review of size standards and will apply it to future regulatory actions that relate to establishing, reviewing and modifying size standards. The Agency welcomes comments on "Size Standards Methodology." Please submit your comments to Regulations.gov. To comment on the document, search SBA under the advanced search and search document 2009‑0008.

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