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Image Credit: U.S. Government Accountability Office

SBA wants to revise SME size standard to allow more to apply for Federal contracts and loans

The United States Small Business Administration (SBA) is considering revising employee-based small business size standards for businesses in nine North American Industrial Classification System (NAICS) sectors. 


The proposed changes in nine industries, including manufacturing and transportation, will allow more MSMEs and current small businesses to maintain small business status for a longer period of time, allowing them to benefit from the SBA’s procurement and loan programmes. 

These proposed changes follow an SBA announcement earlier this month in which the agency issued four final rules to modify revenue-based small business size standards in 16 (NAICS) sectors in order to increase small business eligibility for SBA’s federal contracting and loan programmes.

SME Size Standard Revision

The proposed rule change is part of the Small Business Jobs Act of 2010’s second five-year review of size standards. The SBA proposes raising 150 employee-based size standards across nine industries. 

The SBA also proposes to keep the current 500-employee size standard for Federal procurement of supplies set aside for small businesses under the nonmanufacturer rule, which requires small businesses qualifying as nonmanufacturers to have an average of 500 or fewer employees over the previous 12 months, be primarily engaged in wholesale or retail trade activities, and supply the product of a US small manufacturer. 

The proposed rule’s size standards revisions reflect the SBA’s considerations of relevant data and the effects of the ongoing COVID-19 pandemic on small businesses and the overall economy, as well as the government’s response.

In response to the pandemic, the SBA is maintaining current size standards where data suggests that they should be lowered.

Note: Comments may be submitted on this proposed rule on or before June 27, 2022, at www.regulations.gov, using the following RIN number: RIN 3245-AH09.

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Yajush Gupta

Yajush Gupta

Yajush is a journalist at Dynamic Business. He previously worked with Reuters as a business correspondent and holds a postgrad degree in print journalism.

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