SBA Increases Its Size Standards, Opening More Opportunities for Winning Government Contracts

The long-awaited increase to size standards by the Small Business Administration (SBA) has arrived. On March 31, 2022, SBA issued four final rules that increase the small business size standards for a number of industries. As a result, many businesses will gain eligibility for federal small business assistance programs or retain eligibility for a longer period. These programs include SBA’s business loan programs, Economic Injury Disaster Loan (EIDL) program, and federal procurement programs that provide targeted, set-aside opportunities for small businesses. Small businesses also may benefit through reduced fees, less paperwork, and fewer compliance requirements. Below, PilieroMazza provides a summary of the changes that could affect the ability of your business to compete for and win government contracts.

(1) Agriculture, Forestry, Fishing and Hunting; Mining, Quarrying, and Oil and Gas Extraction; Utilities; Construction 

In these sectors, SBA increased the size standards for 68 industries, including 58 industries and two subindustries in Sector 11 (Agriculture, Forestry, Fishing and Hunting; three industries in Sector 21 (Mining, Quarrying, and Oil and Gas Extraction); three industries in Sector 22 (Utilities); and one industry and one subindustry in Sector 23 (Construction).

(2) Education Services; Health Care and Social Assistance; Arts, Entertainment and Recreation; Accommodation and Food Services; Other Services

In these sectors, SBA increased the size standards for 70 industries, including 14 industries in Sector 61 (Education Services); 18 industries in Sector 62 (Health Care and Social Assistance); 11 industries in Sector 71 (Arts, Entertainment and Recreation); four industries in Sector 72 (Accommodation and Food Services); and 23 industries in Sector 81 (Other Services).

(3) Professional, Scientific and Technical Services; Management of Companies and Enterprises; Administrative and Support and Waste Management and Remediation Services

In these sectors, SBA increased the size standards for 46 industries, including 27 industries in Sector 54 (Professional, Scientific and Technical Services); two industries in Sector 55 (Management of Companies and Enterprises); and 17 industries in Sector 56 (Administrative and Support and Waste Management and Remediation Services).

(4) Transportation and Warehousing; Information; Finance and Insurance; Real Estate and Rental and Leasing

In these sectors, SBA increased the size standards for 45 industries, including 18 industries in Sector 48–49 (Transportation and Warehousing); eight industries in Sector 51 (Information); 10 industries in Sector 52 (Finance and Insurance); and nine industries in Sector 53 (Real Estate and Rental and Leasing).

In some cases, these final rules increase the applicable size standards dramatically. Many of our clients may be particularly interested in increased size standards in North American Industry Classification System (NAICS) Sector 54 (Professional, Scientific and Technical Services). For instance:

• NAICS 541214 (Payroll Services) will increase from $22 million to $34.5 million.
• NAICS 541310 (Architectural Services) will increase from $8 million to $11 million.
• NAICS 541330 (Engineering Services) will increase from $16.5 million to $22.5 million.
• NAICS 541611 (Administrative Management and General Management Consulting Services) will increase from $16.5 million to $21.5 million.
• NAICS 541612 (Human Resources Consulting Services) will increase from $16.5 million to $25.5 million.
• NAICS 541990 (All Other Professional, Scientific and Technical Services) will increase from $16.5 million to $17 million.

Each final rule takes effect on May 2, 2022.

If you have any questions regarding these recent final rules and their impact on eligibility for government contracts, please contact Peter Ford and Patrick Rothwell, the authors of this client alert, or another attorney in PilieroMazza’s Government Contracts Group