The U.S. Small Business Administration (SBA) published interim final rules that increase the revenue-based small business size standards for general contractors and specialty trade contractors to account for inflation since 2008. This rule change will result in a significant increase in the number of businesses that are eligible for small business set-aside contracts and can be counted as small business concerns in Small Business Subcontracting Plans under FAR 52.219-9. The SBA’s interim rules can be viewed here.
The size standard for Commercial and Institutional Building Construction (NAICS Code 236220), as well as many of the NAICS Subsector 237 (Heavy and Civil Engineering Construction) size standards, will increase from $33.5 million to $36.5 million. The size standard for Specialty Trade Contractors under NAICS Subsector 238 will increase from $14 million to $15 million.
The proposed changes will also affect other small businesses operating across a broad range of industries. To see if your small business is affected, you can check the rule (again, here) or contact me if you have any questions.
The SBA estimates that the proposed rules will result in more than 8,000 firms gaining eligibility to compete for small business contracts. Importantly, the SBA specifically contemplates that firms that grew out of the old size standards will receive new small-business-life based on these proposed changes, noting that “[s]ome businesses that are above the current size standards may gain small business status under the higher, inflation-adjusted size standards, thereby enabling them to participate in Federal small business assistance programs.” The rule will also allow firms hovering near the current standards some flexibility to continue to grow their businesses.
The SBA’s proposed changes are set to take effect on July 14, 2014. We will continue to provide updates on the status of the proposed rules as they are available.