Small Business Size Standards Set to Increase

June 16, 2014Alerts Federal Government Contracts & Procurement Alert

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 rule 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 SBA estimates that the proposed rule will result in more than 8,000 firms gaining eligibility to compete for small business contracts. Notably, 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 would 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 rule as they are available.

If there are any questions regarding this Alert, please contact Reginald M. Jones at 202.461.3111 or [email protected] , or any member of the firm’s Federal Government Contracts & Procurement Practice.