SBA Seeks Comments on Revised Size Standards Methodology

A Small Business Administration notice advises the public that the agency has revised its white paper, entitled “SBA’s Size Standards Methodology,” which describes the SBA’s methodology for establishing, reviewing and adjusting its small business size standards pursuant to the Small Business Act (PL 85-536) and related legislative guidelines. Under the Act, as amended, the SBA’s Administrator has authority to establish small business size standards for federal government programs. The white paper provides a detailed description of the size standards methodology.

Measures of business size. To determine eligibility for federal small business assistance programs, SBA establishes small business definitions (commonly referred to as size standards) for private sector industries in the United States. SBA’s existing size standards use two primary measures of business size: average annual receipts and number of employees. Financial assets and refining capacity are used as size measures for a few specialized industries. In addition, the SBA’s Small Business Investment Company, 7(a), and Certified Development Company Programs determine small business eligibility using either the industry based size standards or net worth and net income based alternative size standards. Presently, there are 28 different industry based size standards, covering 1,031 North American Industry Classification System industries and 14 “exceptions.” Of these, 531 are based on average annual receipts, 509 on number of employees (one of which also includes barrels per day total refining capacity), and 5 on average assets.

Comments welcome. SBA seeks comments and feedback on the revised methodology, which SBA intends to apply to the forthcoming five-year comprehensive review of size standards required by section 1344(a)(2) of the Small Business Jobs Act of 2010 (PL 111-240). The revised methodology is available for review and comment on the SBA’s website at https://www.sba.gov/size-standards-methodology, as well as at https://www.regulations.gov.

About George Gullo

George Gullo is an attorney editor in the Government Contracts group at Wolters Kluwer Law and Business. George serves as the principal editor of Cost Accounting Standards Guide and supports all of the group’s print and electronic publications, as well as legal research tools, including the Government Contracts Reporter, Board of Contract Appeals Decisions, and the FAR and DFARS Matrix Smart Charts. With more than 20 years experience in the legal publishing industry, including over 10 years in the government contracts area, George also has a background in legal and business transactions. He is a graduate of DePaul University College of Law and a licensed Illinois attorney.
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