By: Maria Panichelli

If you participate in federal government procurement programs, either as a prime contractor or as a subcontractor, listen up!  Your small business size status may have changed on July 14, 2014 as a result of an interim rule issued by the Small Business Administration (SBA).  The rule increased revenue-based size standards for numerous industries, including general and specialty construction.  The SBA has estimated that approximately 480 additional firms will now be considered “small” under the new size standards.  Federal contractors and subcontractors should visit the System for Award Management (SAM) and verify that all profile and certification information are up to date based upon the revised size standards.  A summary of the changes to the construction NAICS codes is set forth below.

The SBA cited inflation as the reason for the change; the last time the size standards were adjusted for inflation was back in 2008.  These adjustments are in addition to the recent size standard revisions that were implemented following passage of the Small Business Jobs Act of 2010 (Jobs Act).

The rule made other changes as well, most notably:

• An adjustment to program-based size standards, with the exception of the new alternative size standard for SBA’s 7(a) and 504 loan programs that was established under the Jobs Act.  The new alternative size standard will remain in effect until SBA establishes a permanent alternative size standard for the 7(a) and 504 loan programs.
  Deletion of references to surety bond guarantee size standards for contracts awarded in presidentially declared disaster areas following Hurricanes Katrina, Rita, and Wilma in 2005.
• Deletion of the determination date for eligibility under the SBA’s Economic Injury Disaster Loan (EIDL) Program in connection with Hurricanes Katrina, Rita, and Wilma.
• The SBA encourages contractors to review the new rule and provide feedback.  The comment period closes on August 11, 2014.  Additional information about small business size standards is available on the SBA’s website.

If you need assistance in determining whether you are a “small” business under these newly established NAICS codes, or in general, please do not hesitate to contact us.  Here are the new standards for general and specialty construction:

If you have any questions about the new size standards, please contact Maria Panichelli at mpanichelli@cohenseglias.com or 215.564.1700.