In a move to expand eligibility for more industry sectors to qualify as small businesses, the Small Business Administration announced March 16 it would redefine the meaning of small in professional, scientific, technical and other service sectors.
The proposed revisions would increase the revenue-based size definition businesses need to meet to qualify as a small business in 37 industries and one sub-industry. As part of an ongoing review of all size standards, the SBA evaluated 46 industries and three sub-industries. The SBA standards vary from industry to industry to account for differences among them.
The SBA began the updating and review process in 2006, based on industry-specific data, the first time in 25 years it has reviewed its own guidelines. Under provisions in the Small Business Jobs Act of 2010, it will continue the review of all size standards for the next several years.
The proposed changes would take into account the structural characteristics within individual industries, including average firm size, degree of competition and federal government contracting trends to ensure size definitions reflect current economic conditions within those industries.
Changes would allow some small business that are close to exceeding current size standards to retain small business eligibility under higher size standards, giving federal agencies a larger pool to select from. The SBA estimated nearly 9,500 additional firms would become eligible as a result of the revisions ”“ if the revisions are adopted.
To read the SBA”™s White Paper, “Size Standards Methodology” released in October, 2009, visit sba.gov/size.
For businesses that are on the edge of being disqualified from participating in bidding on government contracts, the possibility of being reinvented as a “small business” ”“ despite a growth spurt ”“ hopes to fuel more competitiveness for companies vying for government business. Unfortunately, though spurred by the 2010 Jobs Act, there is no deadline for the SBA to redefine its current policies.
