What’s New with Small Business Size Standards?

This week, I want to remind everyone that as a result of legislation passed last fall, the SBA reviewed the size standards for Government contractors to account for inflation since 2008 and issued an interim final rule that increases the standards in many NAICS categories. There are literally thousands of additional companies who will now qualify and compete for opportunities as a small business. Additionally, there will be many others who are expected to be ineligible after they close this fiscal year, but will get at least one more year of eligibility based on these changes.

This interim final rule became effective on the 14th of July so it is important for your team to check if you are affected and update your certifications posted in the System for Award Management (http://www.sam.gov). Government procurement officials check the SAM to validate company size for both prime and proposed subcontractors during proposal evaluations. If your certification in SAM does not match what you propose, then it is automatically assessed as a weakness or uncertainty during the evaluation process. While this is often corrected during discussions, we recommend you remain viligilant and proactively keep your SAM.gov record updated before you submit a proposal. Please check out this link for a good overview of SAM.gov from the General Services Administration.

Rather than interpret the SBA’s message, we have included the overview below directly from the www.sba.gov:

Important:  If you participate in federal government procurement programs, either as a prime contractor or as a subcontractor, your size status may change on July 14, 2014 as a result of this interim final rule.  You must visit the System for Award Management (SAM) and verify that your profile and certifications are up to date based on these revised size standards.

The U.S. Small Business Administration (SBA or Agency) has issued an interim final rule that does the following:

  • Adjusts monetary based industry size standards (i.e., receipts, assets, net worth, and net income) for inflation that has occurred since the last adjustment in 2008.  These adjustments are in addition to the recent revisions that were part of the comprehensive size standards review, as mandated by the Small Business Jobs Act of 2010 (Jobs Act).
  • Adjusts program based size standards, with the exception of the new alternative size standard for SBA’s 7(a) and 504 loan programs that was established under the Jobs Act.  The new alternative size standard will remain in effect until SBA establishes a permanent alternative size standard for the 7(a) and 504 loan programs.
  • Deletes references to Surety Bond Guarantee size standards for contracts awarded in the presidentially declared disaster areas following Hurricanes Katrina, Rita, and Wilma in 2005.
  • Deletes the determination date for eligibility under the Agency’s Economic Injury Disaster Loan (EIDL) Program in connection with Hurricanes Katrina, Rita, and Wilma.
  • Clarifies that footnote 9 to its table of size standards is not limited to NAICS 531190, but rather applies to all industries in Industry Group 5311, Lessors of Real Estate.

Let us know how we can help you succeed in this or any other business effort!

-Michael Devine