SBA Publishes Interim Rule Adjusting Monetary-Based Industry Size Standards for Inflation

by | Nov 26, 2019 | Blog

sba inflation adjustment

Taking into account inflation that has occurred since 2014, on July 18, 2019, the Small Business Administration (SBA) published an interim rule adjusting the monetary – based industry size standards, as part of an ongoing second five-year review of size standards mandated by the Small Business Jobs Act of 2010.  As part of its oversight responsibilities, the SBA reviews small business size standards for necessary adjustments for two reasons:

  1. Changes in industry structure and federal market conditions, and
  2. Inflation

The new adjustments include receipts-based size standards for 518 industries and nine sub-industries (ie, “exceptions” in the SBA Table Size Standards) and assets-based size standards for five industries.

In addition to these adjustments, SBA has adjusted two program-specific receipts-based size standards:

  1. Sales or leases of government property, and
  2. Stockpile purchases.

For receipts-based size standards, SBA has raised the amounts ranging from $0.75 million to $38.5 million; and for one assests-based size standards of $550 million.  This was completed by increasing dollar amounts for inflation over the last five years by 8.37%.

Note that the inflation adjustment under this interim rule are separate from revisions to size standards made during five-year rolling reviews of size standards required under the Small Business Jobs Act.  Under rolling review, SBA reviews size standards on a sector-by-sector basis over a period of time whereby the objective is to review all size standards and made necessary adjustments to reflect current industry structure and federal market conditions as opposed handling various inflation conditions at different periods.

The interim rule recognizes that a number of businesses may have lost small business eligibility for federal assistance under SBA’s monetary-based industry size standards due to inflation-led revenue growth since SBA’s last adjustment in 2014.  The interim rule aims to reinstate such firms. This rule went into effect on August 19, 2019; comments on the interim rule are due by September 16, 2019.

Reference:  Contract Management magazine pg. 62 /September 2019 edition

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