The U.S. Small Business Administration (SBA) finalized an interim final rule that adjusted monetary based small business size standards (i.e., receipts, assets, net worth and income) for inflation.  The final rule was published in the Federal Register on January 25th and will be effective immediately.

As a result of these changes, small businesses should review the changes and re-certify their entity’s small business status within their entity’s System for Award Management (SAM) registration at www.sam.gov.  Remember, there is no charge to register in, or to update, the SAM database.

On June 12, 2014, SBA published an interim final rule increasing all industry specific monetary based size standards (except for size standards for most agricultural enterprises that are set by statute) by 8.73 percent to reflect the inflation that occurred since the last adjustment for inflation in 2008.  The changes became effective July 14, 2014.  These changes were in addition to the recent revisions as a result of the SBA’s comprehensive size standards review mandated by the Small Business Jobs Act of 2010 (Jobs Act).

The final rule, as well as the June 12, 2014 interim final rule, can be viewed/downloaded at www.regulations.gov, identified by the following RIN number: RIN 3245-AG60.

SBA also adjusted its program specific monetary size standards with the exception of the new alternative size standard based on tangible net worth and net income that applies to SBA’s 7(a) and 504 loan programs.  The new alternative standard was established under the Jobs Act and will remain in effect until the SBA establishes a permanent alternative size standard for these programs.

The rule also clarified that the size standard exception for “Leasing of Building Space to Federal Government by Owners” under footnote 9 in SBA’s table of size standards applies to all industries in North American Industry Classification System (NAICS) Industry Group 5311, Lessors of Real Estate.

The rule also deleted references to Surety Bond Guarantee size standards for contracts awarded in the Presidentially declared disaster areas following Hurricanes Katrina, Rita and Wilma in 2005.  It also deleted the determination date for eligibility under the agency’s Economic Injury Disaster Loan (EIDL) Program in connection with Hurricanes Katrina, Rita and Wilma.

SBA estimates that more than 8,400 additional businesses will gain small business status under the adjusted size standards and become eligible for SBA’s financial and federal government procurement programs.  These changes can possibly lead to $150 million to $200 million in additional federal contracts and 80 additional loans, totaling about $30 million, to small businesses.

The size status of small businesses participating in federal procurement programs as either a prime contractor or subcontractor may have changed for some industries as a result of size standards changes published in the July 12, 2014 interim final rule.  To reflect the status under the revised size standards, small businesses should review the changes and re-certify their entity’s small business status within their entity’s System for Award Management (SAM) registration at www.sam.gov.

A White Paper entitled, “Size Standards Methodology,” which explains how SBA establishes, reviews, or modifies its receipts based and employee based small business size standards, is available at http://www.sba.gov/size.

For more information about SBA’s revisions to its small business size standards, refer to “What’s New with Size Standards” on SBA’s Web site at http://www.sba.gov/size.

Also see article at: http://www.govexec.com/contracting/2016/01/sba-finalizes-new-business-size-standards/125557