- Over 66,000 comments have been submitted via the Federal Register
- Many comments are critical, saying small businesses would have to compete against mid-sized firms
- Hear directly from Bill Brigs, SBA deputy administrator, during his keynote at the 2026 FedCiv Summit!
The Small Business Administration has received an enormous level of response to its proposed overhaul of small business size standards, which has a goal of broadening which companies qualify as “small” and, thus, qualify for contracting, lending and counseling support.
Over 66,000 comments have been submitted via the Federal Register as of publication. The comment period remains open through Sept. 21. Business executives can submit comments on the proposed rule change here.
Join the conversation about SBA’s proposed new small business size standards at the Potomac Officers Club’s 2026 FedCiv Summit on Oct. 29. Get your pressing questions answered by Bill Briggs, SBA deputy administrator, following his keynote. Dive into small business capital access. Secure your seat today!
Why Is the SBA Proposing New Small Business Size Standards?
The SBA said it is proposing new small business size standards to better reflect the nature of the markets in which small businesses compete. The agency is proposing new size standards for 338 industry groups and sectors.
If finalized, the proposed rule change would grow the small business pool by an estimated 114,541 companies. About 37,000 of those companies already held more than 105,000 federal contracts worth roughly $71 billion in fiscal year 2025, according to the Coley law firm.
What Are Industry’s Concerns About SBA’s Proposed New Small Business Size Standards?
Many businesses are critical of SBA’s proposed new small business size standards. In some of the most widely used federal contracting North American Industry Classification System, or NAICS, codes, such as 541511 for computer programming services, SBA’s new size standard would grow from $34 million to $531 million and would add 1,343 new firms, Federal News Network reported.
A handful of responses reviewed by ExecutiveGov criticize SBA’s proposed revamp. One comment, from JAG Consulting LLC, opposes the proposed size standard increase for 541511.
JAG Consulting LLC said the incentive for prime contractors to bring on genuinely small subcontractors would disappear with the proposed standard increase in 541511, as a significant portion of those primes would themselves become small businesses and be exempt from subcontracting plan requirements entirely.
“The primes that remain large could satisfy identical goals by subcontracting to companies with hundreds of millions in annual receipts,” JAG Consulting LLC said. “In either case, the incentive to bring on a genuinely small subcontractor disappears.”
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Another comment, from Tangent Technologies, generally opposed the proposed rule change as it believes the rule risks redefining “small business” into what is, effectively, a mid-size business category.
That outcome, Tangent Technologies said, would be unfair to truly small businesses that rely on SBA programs, set-aside contracts and small business contracting goals to compete against firms with far greater staffing, capital, past performance, infrastructure and administrative capacity.
“Allowing those firms to compete directly for the same small business opportunities dilutes the purpose of SBA programs and reduces the ability of truly small firms to gain traction, build past performance and grow,” Tangent Technologies said.
An anonymous commenter supported the proposed changes to the small business size standards, saying that the proposal will allow for more capable small businesses to compete for work. This is because it will provide a stable of more highly qualified firms and increase competition within the small business pools. The commenter said it will also increase the opportunities for small business-to-small business teaming and joint venturing.
SBA says the proposed changes are designed to simplify size standards and reflect industry and market trends, aiding both contractors and agencies, according to Crowell & Moring. SBA also suggests it will reduce confusion that could have blocked participation.
For example, SBA pointed to how an entity may have been unsure as to whether it qualified under shipbuilding, for 1,300 employees, or boat building, for 1,000 employees. Additionally, SBA suggested that not only will more companies qualify for the large benefits afforded to companies in the small business subcontracting and lending programs. The competition will also produce better value for the agencies as more companies compete for the opportunities.
