SBA Proposed Rule to Size Standards extends calculations from average of three year of receipts to five years.

The U.S. Small Business Administration (SBA) posted a proposed rule to modify its method for calculating annual average receipts used to determine size standards for small businesses. SBA has proposed to change its regulations on the calculation of annual average receipts from a three-year averaging period to a five-year averaging period. The rule will not affect employee count under manufacturing NAICS.

The intention is to create size-standard consistency throughout the federal government and benefit small business in a strong economy. A five-year average will generally be lower than a three-year average, allowing:

  1. Mid-sized businesses who have just exceeded size standards to regain their small business status, and
  2. Advanced small businesses close to exceeding the size standard to retain their small business status for a longer period. It

The opposite would tend to be true in an economic downturn.

SBA Seeking Public Comments

SBA is allowing for public comments and feedback until August 23, 2019. The National Veterans Small Business Council and Coley GCS are in favor of this rule and have provided some sample language for those in favor of the extension:

“COMMENT REF: RIN 3245–AH16 – IN FAVOR.  This proposed rule change on the calculation of annual average revenues from a three-year averaging period to a five-year averaging period will be very helpful to small businesses of every size, especially those that have successfully grown to revenues above the three-year average for their respective NAICS code.  This rule change supports the small business, providing them additional time to prepare to successfully compete in the full & open marketplace, and also benefits Government by ensuring continued access to these successful small businesses. I am a small business owner (or employee) and support this rule change by SBA. “

SBA has also discussed changing HUBZone and WOSB certification requirements.

If you have questions of concerns about the SBA proposed rule, contact Coley GCS by phone at 210-402-6766 or by email at [email protected]

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