Is your company a ‘small business’ under new SBA rules?

Baltimore Business Journal
Date: Monday, October 22, 2012, 12:00pm EDT

Whether a company fits the definition of “small business,” as determined by the U.S. Small Business Administration, can make all the difference between enjoying special access to tens of billions of U.S. Government contracting dollars and being excluded from competing for such contracts.


Because roughly 23 percent of all federal contracting dollars are intended to go to “small” businesses, and it is the SBA that sets the size standard for what qualifies as “small” on an industry-by-industry basis.

Recently, the SBA raised the size standards for 58 industries. The increased size standards, effective on Oct. 24, are in three North American Industry Classification System codes sectors: Real estate, rental and leasing; educational services; and health care and social assistance.

So, for example, the “small” business threshold, measured in average annual revenue over the last three years, will increase from $7 million to $25.5 million for companies that lease buildings or land to the federal government, and the size standard for medical laboratories will grow from $13.5 million to $30 million.

Significantly, the size standards for hundreds of other industries will likely be increased in the next few months, but they will take effect at different times.

Given that federal solicitations are required to state both the applicable NAICS code and size standard so that offerors can correctly represent themselves as “small” business concerns (or as large businesses), it is critical for potential bidders to know whether they in fact qualify as “small” for their principal industries. Thus, companies should check the Census Bureau website to identify the appropriate NAICS codes, and then check the SBA website to find the size standards that are applicable to their core lines of business.