SBA proposes major overhaul of small business size standards

The U.S. Small Business Administration (SBA) has proposed a major overhaul of its small business size standards. The proposal aims to modernize how the federal government classifies small businesses by transitioning from complex 6-digit North American Industry Classification System (NAICS) codes to streamlined 4-digit category standards. This change could reduce the list of industry categories by approximately 65%, down to 338 broader classifications.

If finalized, the SBA estimates the new standards would expand the small business pool by over 110,000 firms. The initiative is intended to allow rapidly growing companies to maintain their small business status and increase access to capital, counseling, and federal contracting opportunities.

Separately, the General Services Administration (GSA) has submitted legislative proposals to Congress regarding the bid protest system. The GSA is seeking to implement a ‘loser pays’ rule for civilian agencies, similar to existing rules for the Department of Defense. Additionally, the GSA has requested to raise the minimum threshold for protesting civilian agency task or delivery orders at the Government Accountability Office (GAO) from $10 million to $35 million.