The Small Business Act tells the federal government why small business contracting exists: to preserve free competitive enterprise, ensure small businesses receive a fair proportion of federal contracts, and strengthen the nation’s economy.
asserted
businesses → tell → economy
If firms with $500 million in revenue are allowed to position themselves as “small” to access set-aside contracts, it would undermine the core congressional intent of the Small Business Act.
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it → allow → Act
The goal isn’t simply to broaden who qualifies as “small”; it’s to preserve a competitive space where small businesses compete exclusively with other small businesses.
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businesses → broaden → businesses
The proposed shift in size standards will dilute opportunities for truly innovative small and emerging firms.
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shift → propose → firms
The companies that traditionally fuel our nation’s industrial base and national security with new technologies, agile solutions, and disruptive capabilities.
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that → fuel → technologies
If the competitive landscape becomes more crowded with large firms, small and early‑stage firms will struggle to gain traction, secure past performance, and scale into meaningful contributors within federal acquisition pipelines.
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firms → become → pipelines
Those of us who have led the U.S. Small Business Administration’s Office of Government Contracting and Business Development — the office responsible for overseeing more than $180 billion in small‑business contracts — understand that size standards are the gateway to small‑business participation.
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standards → lead → participation
Size standards determine eligibility for set‑asides, 8(a), HUBZone, women-owned small business, and service-disabled veteran-owned small business programs, shape mentor‑protege joint‑venture opportunities, and anchor the broader ecosystem of small‑business subcontracting across the federal marketplace.
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standards → determine → marketplace
This unprecedented magnitude is not
We agree that size standards must rise.
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standards → agree → ?
What concerns us is the magnitude of the proposed changes and the process being used to implement them.
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concerns → concern → them
On Aug. 20, SBA simultaneously proposed a rewritten size-standards methodology and new standards covering receipts-based and employee-based industries in federal contracting and loan programs.
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SBA → propose → programs
Nearly 1,000 six-digit standards would be consolidated into 338 broader industry groupings, exceptions would disappear, and many thresholds would increase substantially.
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thresholds → consolidate → groupings
In computer systems design and related services, for example, the proposed standard would rise from roughly $34 million to $531 million.
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standard → propose → million
Engineering services would move from $25.5 million to $252 million.
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services → move → million
SBA estimates that more than 110,000 large firms would immediately qualify as small.
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firms → estimate → ?
A $40 million company and a $450 million company do not necessarily compete on equal footing.
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company → compete → footing
They may have dramatically different balance sheets, past performance, capture resources, and ability to withstand protests or procurement delays.
uncertain
They → have → protests
Expanding eligibility, therefore, does not automatically expand meaningful opportunity.
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Expanding → expand → opportunity
Mergers, acquisitions, private equity rollups, and strategic consolidations have steadily reduced the number of independent competitors for federal work, with corresponding price, performance, and innovation risks for federal agencies.
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Mergers → reduce → agencies
SBA’s proposal could accelerate M&A activity among federal contractors, further increasing price, performance, innovation, technical, and supply-chain risks.
uncertain
proposal → accelerate → risks
If set-aside competitions suddenly include firms many times larger than the businesses these programs were designed to develop, emerging companies could face significantly different competitive conditions.
uncertain
companies → set → conditions
New entrants in federal contracting face consistent headwinds that stretch across 15 years.
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that → face → years
Forcing new entrants to compete alongside firms with revenues exceeding $500 million will further exacerbate the situation, and all but eliminate opportunities for true start-ups.
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entrants → force → ups
The process matters just as much as the numbers
Historically, SBA’s review process gave stakeholders time to evaluate methodology and then examine its effect on individual industries.
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time → matter → industries
That sequencing allowed agencies, contractors, trade associations, and the industrial base community to analyze bidder pools, small-business goals, mentor-protege strategies, affiliations, and supply chain risks.
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agencies → allow → pools
This time, SBA released the revised methodology and proposed standards together with a 30-day comment period.
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SBA → release → period
Stakeholders cannot meaningfully evaluate hundreds of proposed standards without understanding and stress-testing the methodology that produced them.
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that → evaluate → them
SBA’s concern that standards set too low can force successful businesses out of small business programs prematurely is valid.
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standards → set → programs
But the answer should not be to move the line so dramatically that the distinction between small and mid-market is eliminated.
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distinction → move → small
Size policy requires balance: standards should be high enough to allow successful firms to grow, but low enough to preserve meaningful opportunities for genuinely small and emerging businesses.
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firms → require → businesses
We are asking SBA to take three steps
First, restore a sequential review process: finalize the methodology after adequate time for public comments, then evaluate receipts-based and employee-based standards with adequate opportunity for analysis and response.
Second, ensure that decisions regarding increases or reductions are supported and explained industry by industry.
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decisions → ask → industry
Finally, raise standards where the data support it.
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data → raise → it
Those of us signing this statement served in senior SBA leadership roles under different administrations.
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Those → sign → administrations
We did not always agree on every program detail.
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We → agree → detail
But we agree that size standards are too important to small businesses, competition, the industrial base, and the government’s buying power to be rewritten
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standards → agree → businesses
The consequences of these changes will impact federal procurement for years to come.
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consequences → impact → years
Thirty days is not sufficient to identify, mitigate, and plan for appropriate size standards, whether they be too high or too low.
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they → identify → standards
A. John Shoraka, Joe Jordan, Jackie Robinson-Burnette, and Frank Spampinato each led the Small Business Administration’s Office of Government Contracting and Business Development, the office that oversees more than $180 billion in small business contracts a year.
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that → lead → contracts
The Aporia
