SBA Would Classify $531M-Receipt Firms as Small
Collapsing roughly 1,000 NAICS categories into 338, the proposed rule would redraw the competitive map for set-aside contracts while mid-size contractors watch as closely as small firms.
TL;DR
The SBA released a proposed rule that would collapse roughly 1,000 NAICS industry categories into 338 and replace the current size-standard methodology with one based on national industry size, geographic markets, and a net import adjustment. In computer systems design, the small-business receipt ceiling would jump from $34 million in annual government receipts to $531 million, a roughly 15-fold increase. Comments are due September 21. PSC president Stephanie Kostro told Federal News Network that mid-size and large contractors are tracking the proposal as closely as small firms are.
The SBA's proposed rule, published on a Friday with comments due September 21, makes two moves at once. It collapses roughly 1,000 NAICS industry categories into 338 groupings, restructuring how the government slices the industrial base for size-eligibility purposes. And it replaces the current size-standard methodology with a formula based on national industry size, the number of geographic markets, and a net import adjustment.
The result, in at least one category, is dramatic. Under the current standard, a computer systems design firm qualifies as small if its annual government receipts don't exceed $34 million. Under the proposed rule, that ceiling rises to $531 million. That doesn't just expand the small-business pool, it reclassifies firms that graduated out of small status years ago.
Stephanie Kostro, president of the Professional Services Council, told Federal News Network that interest isn't confined to small companies. "I've had in-depth conversations with midsize companies that used to be small or that are on the smaller side within the large framework," she said. Large contractors, she added, also "have something to say about the proposed rule."
PSC, whose members span "literal mom and pop shops all the way up to the largest of the largest defense contractors," is evaluating the rule against two criteria: whether it lets the government access more companies faster, and whether it supports the vitality of the industrial base. Kostro noted this isn't the SBA's periodic methodology revision, which wrapped in 2024. It's a structural rewrite, not a routine update.
Published ·Deep Fathom