SBA Adjusts Monetary-Based Size Standards for Inflation

Effective August 19, 2019, the Small Business Administration (“SBA”) has updated and increased the monetary-based size standards (i.e. receipts-based and assets-based size standards).  The SBA announced this change back in July, and explained that the standards were being changed solely to account for inflation.  Pursuant to the Small Business Jobs Act of 2010, the SBA reviews the size standards every five years and makes any necessary inflation-based adjustments.  The SBA also has the power to revise the size standards to account for changes in industry structure and federal market conditions.

Based on its calculation that inflation had increased 8.37% from June 2014, when the last inflation-based adjustments to the size standards were made, the SBA made changes to the size standards associated with 518 industries and 9 “subindustries” (which the SBA characterizes as “exceptions” in the SBA Table of Size Standards).   Included in this group are the size standards associated with the construction-based NAICS codes.  Many general construction NAICS codes increased from $36.5 million to $39.5, with specialty construction size standards increasing from $15 million $16.5 million and dredging increasing from $27.5 million to $30 million. Remember that, while Congress has legislated that these receipts-based standards be calculated on a 5-year rather than 3-year average basis, contractors must continue to use a 3-year average calculation until the SBA finalizes a rule implementing Congress’ instruction.

The SBA also, upon publication of the new size standard table, provided an important notice, instructing contractors to update their SAM registrations. Be advised that until your SAM registration is updated, the SAM profiles will continue to display the small business status under the old standards. This could impact your eligibility and cause problems with award so make sure to take a look today, and make any necessary changes.

The new table of Small Business Size Standards Matched to the NAICS Codes has been uploaded to the SBA website, and can be found here.

About the Authors

Maria L. Panichelli

Partner

Maria is a partner and the Chair of the Government Contracting department.   She focuses her practice exclusively on federal government contracting and procurement, guiding her clients throughout the entire lifecycle of their...

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Michael A. Richard

Associate

Michael is an attorney in Obermayer’s Government Contracting Department, where he excels at getting clients to the settlement table. Michael’s tenacity is truly a force to be reckoned with. Over the past...

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