SBA Announces New Size-Standard Review

June 11, 2008

The U.S. Small Business Administration (SBA) announced June 3 that as part of its ongoing effort to update its small-business size standards it would review the size standards of more than 20 North American industries.

Since initiating this review process last year, the SBA has completed analyses of the Retail Trade, Accommodations and Food Services, and Other Services sectors and expects to propose a revised set of size standards for these sectors later this year.

An SBA representative said that three factors were used to determine which industry would be reviewed: (1) Had the industries been reviewed in the past 15 to 25 years?; (2) Is there much variation among the industries in the North American Industry Classification (NAIC) sectors?; and (3) Had the quality and availability of the data been considered?

In its review, the SBA will use federal procurement data as well as data from the 2002 Economic Census and other governmental, association, private sector, and statistical databases. It also may utilize special surveys.

According to the SBA, the following factors are using in determining or reviewing its size standards:

• industry structure analysis,

• degree of competition,

• average firm size,

• startup cost,

• entry barriers,

• distribution of sales and employment by firm size,

• impact of different size standard levels on the objectives of SBA programs, and

• comments from the public on notices of proposed rulemaking.

The SBA currently has 44 size standard levels—a number that could be drop. SBA’s last major review of its size standards was in the early 1980s.