SBA Size Standards Overhaul Closes for Comment Sept 21
The SBA size standards overhaul would cut 995 thresholds to 338 and raise many sharply. Comments close September 21. Here is the founder read.
There is a federal comment window closing on Monday that will reshape who you bid against. Two proposed rules published August 20 would rewrite the SBA size standards that decide which companies count as small for federal contracting, and comments close September 21, 2026.
If you sell to the government, or plan to, this is the most consequential change to that definition in decades. The thresholds are not moving a little. In some industries they multiply.
What the rules would change
The table today runs to about 995 standards, mapped onto 978 NAICS codes at the six-digit level, with 18 extra carve-outs bolted on for unusual pockets of work. All of it would compress down to 338, pitched at the broader four- and five-digit tiers.
Each of the 18 carve-outs disappears. The best known of them covers Information Technology Value Added Resellers, a bracket capped today at 150 employees that plenty of firms built their entire model around.
A universal minimum arrives too, either 500 employees or $30.6 million in revenue, depending which measure applies. The old maximums vanish. Nothing gets revised downward either, including across the 45 industries whose own agency modeling argues for a smaller number.
How far the thresholds move
Two examples show the scale.
| Industry | Current standard | Proposed |
|---|---|---|
| Engineering services (541330) | $25.5 million | $252 million |
| Computer systems design (5415) | $34 million | $531 million |
| IT Value Added Reseller | 150 employees | $531 million |
Wherever the agency can choose, the yardstick becomes headcount rather than sales. The rationale is practical. Revenue moves with inflation and with any one big award, which flips companies in and out of eligibility for reasons that have nothing to do with how big they really are.
Revenue thresholds would also track productivity gains rather than inflation alone. That indexing is new.
Who wins and who loses
By the agency’s own count, 114,541 companies would pick up small status they do not hold today. Around 37,002 already do federal work. Their contracts number 105,655 and carry a combined value north of $71 billion.
The risk here is not to your own classification. Sit well below the current limits and you remain small either way. The field around you changes instead. A shop used to chasing set-asides against outfits its own size could suddenly face rivals several times larger, carrying longer track records and dedicated bid teams.
Whoever currently sits at the top of the small business bracket absorbs the worst of it. Pricing gets squeezed and hit rates drop once bigger players are let in. Oversight is not loosening either, as the recent SBA government contracts audit made clear.
The upside nobody is talking about
The shift from receipts to headcount fixes a genuine trap.
Land a major award today and it lifts your trailing five-year sales average. Cross the threshold and you forfeit the very status that put the award within reach. Count people instead, and growth on a steady team stops pushing you out. Companies that aged out on revenue while holding staffing flat could land back inside.
Raised limits also buy joint ventures breathing room before affiliation rules start to bind, and they make it possible for one small firm to buy another without both losing standing. For founders exploring business succession planning through acquisition, that is a meaningful expansion of what is possible.
How to file a comment that counts
Anything substantive gets an answer from the agency. Raw volume earns nothing.
A note saying you approve or object will not move anything. Weight comes from your own arithmetic tied to one NAICS code, showing how the new number lands on a company shaped like yours in the market you actually bid in. If the four-digit rollup buries your niche inside an unrelated industry, bring the distribution figures rather than the complaint.
Current thresholds are published on the SBA size standards page, so you can check exactly where your codes sit before writing. Founders new to this market should also review the basics of landing government contracts before deciding how hard to fight.
What to do before Monday
Pull your NAICS codes and compare each one against the proposed table. That takes an afternoon, and it tells you whether the shift works for you or against you.
Then decide whether to back it or push against it, and file accordingly. If it helps, say so with numbers. Agencies hear from opponents far more often than supporters, and silence reads as indifference.
Whatever the outcome, plan for a more crowded field in 2027. Past performance and specific agency relationships matter more when the size filter stops doing the sorting for you.
Common questions about the proposal
When would the new standards take effect? Not immediately. The agency must review comments and publish final rules, which typically takes months after the window closes.
Could my business lose small status? Very unlikely. Projections put the number losing eligibility below 200 nationwide, because no threshold is being cut.
Where do I submit a comment? Through the federal rulemaking portal, referencing the specific proposed rule. Comments are due by September 21, 2026.
Originally published by under30ceo.com. Syndicated material does not necessarily reflect the views of Glamour Canada.
