Saturday, May 14, 2011

SBA Proposes Size Standard Changes

WASHINGTON – A proposed rule published this week for comment in The Federal Register by the U.S. Small Business Administration would adjust the size definition of small businesses in the transportation and warehousing sector to reflect changes in marketplace conditions in those sectors.

The proposed revisions would increase the revenue-based size definition businesses must meet to qualify as small businesses in 22 industries of the transportation and warehousing sector. As part of its ongoing comprehensive review of all size standards, the SBA evaluated all industries in this sector that have revenue-based size standards to determine whether the size standards should be retained or revised.

In 2007, the SBA began the process of reviewing and updating size standards based on industry-specific data. Before this, the last overall review of size standards occurred more than 25 years ago. Under provisions in the Small Business Jobs Act of 2010, SBA will continue its comprehensive review of all size standards for the next several years.

The proposed changes take into account the structural characteristics within individual industries, including average firm size, the degree of competition, and federal government contracting trends to ensure that size definitions reflect current economic conditions within those industries.

The changes would allow some small businesses that are close to exceeding their current size standards to retain small business eligibility under higher size standards, give federal agencies a larger selection of small businesses to choose from for small business procurement opportunities and allow small businesses to qualify for financial assistance from the SBA. SBA estimates as many as 1,200 additional firms will become eligible for SBA programs as a result of the proposed revisions, if they are adopted.

The SBA issued a White Paper entitled “Size Standards Methodology” on Oct. 21, 2009, which explains how the SBA establishes, reviews and modifies its receipts-based and employee-based small business size standards. It can be viewed here.

Comments can be submitted on this proposed rule on or before July 13, 2011, online at: www.regulations.gov, where they will be posted, or mailed to Khem R. Sharma, chief, Size Standards Division, 409 3rd St., SW, Mail Code 6530, Washington, DC 20416. For more information about SBA’s revisions to its small business size standards, click on “What’s New” on SBA’s Web site.

SBA also has extended for an extra 30 days the comment period for a proposed rule published March 16 increasing the size standards for 35 industries and one sub-industry in the professional, scientific and technical services and other services sectors. Comments on that rule will be accepted up until June 15.

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