SBA Rejects Major Changes in Size Standard Methodology

The SBA has rejected several recommendations for major changes in how the SBA calculates small business size status.

In commentary published in the Federal Register last week, the SBA rejected (among other things) recommendations that it use average employee count to evaluate the sizes of construction firms and that other firms’ sizes be measured by profits or net worth instead of average annual receipts.

The SBA’s commentary accompanied the publication of the SBA’s revised Size Standards Methodology White Paper, which is now available on the SBA’s website.  The White Paper explains how the SBA establishes, reviews, and modifies its small business size standards.

Way back in October 2009, the SBA solicited commentary on the White Paper in effect at the time.  The SBA also sought comments on various policy questions the SBA must consider when developing size standards, such  as “how high a small business size standard should be, should there be a single measure of business size for all industries (i.e., employee or annual receipts)” and so on.  The SBA accepted comments until the end of the 2015 fiscal year.

Now, some 8 1/2 years after the SBA first sought public comments, the SBA has published its responses to those comments.  If you’re something of a size policy nerd (I’ll admit to it!), the SBA’s Federal Register commentary is worth reading in its entirety.  But for those who may not put themselves in that category, here are some of the highlights:

The SBA’s commentary is chock-full of interesting information, and not everything is the SBA saying “no.”  The SBA does make some proposed improvements and refinements to its size standards methodology.  The SBA also seeks public commentary on a variety of important size questions, such as whether there would be a uniform maximum size standard, and whether the SBA should consider lowering any size standards.  Public comments are due by June 26, 2018.
This content originally published on SmallGovCon.

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