“NSBA supports raising small-business standards where the evidence supports it, and we've supported such increases before."
Last week, after urging the Administration to reconsider the short time frame of its announcement, the National Small Business Association (NSBA) submitted formal comments to the U.S. Small Business Administration (SBA), once again urging the agency to reconsider its proposed changes to federal small business size standards.
NSBA supports regularly updating size standards when the evidence supports doing so, including increases that allow growing small businesses to remain eligible for federal programs. However, NSBA has raised significant concerns with the scope and methodology of SBA’s current proposal.
Under the proposed rule, SBA estimates that 114,541 additional firms would be classified as small businesses, including 37,002 firms that currently hold federal contracts worth more than $71 billion. That would significantly expand the pool of businesses eligible to compete for small-business contracting opportunities without increasing the statutory 23 percent small-business contracting goal.
NSBA also raised concerns about the proposal’s decision to eliminate existing maximum size standards. The current baseline maximums are $47 million in average annual receipts and 1,500 employees, while the proposed framework would establish no maximum. Under the proposal, some size standards would reach $531 million in annual receipts, $1.011 billion in receipts, or $5.031 billion in assets, depending on the industry.
Another major concern is SBA’s proposal to consolidate the current size-standard table from roughly 996 standards to 338 and eliminate all 18 existing federal contracting exceptions. NSBA argues that this consolidation could cause smaller, specialized businesses to be measured against significantly larger industries, producing dramatic increases in applicable size standards without corresponding changes in the businesses themselves. For example, ahead of comment submission, NSBA’s analysis found proposed increases from $9 million to $651 million for Independent Artists, Writers, and Performers; from $9 million to $503 million for Bed-and-Breakfast Inns; and from $34 million to $531 million for Custom Computer Programming Services.
NSBA is also urging SBA to reconsider its proposed conversion of 173 industries and six subindustry exceptions from revenue-based standards to employee-based standards. Small business relying exclusively on headcount could disadvantage labor-intensive businesses, particularly in construction, where companies with identical revenue could receive different treatment depending on how much work they perform with their own employees versus subcontractors.
The comments further identify what NSBA describes as data discrepancies, gaps in the public record and procedural concerns, including inconsistencies in SBA's firm counts, the use of older underlying data, and the lack of machine-readable versions of the proposed tables. NSBA also requested clarification regarding SBA’s departure from its 2024 methodology and the status of a separate proposed rule issued in August 2025.
“NSBA supports raising standards where the evidence supports it, and has supported such increases before,” NSBA's comments read. “NSBA cannot support a rule that removes every ceiling, discards the revenue test in 173 industries and 6 subindustry exceptions, collapses two thirds of the table on a justification the statute does not contemplate, and rests on a record that does not reconcile with itself.”
In summary, NSBA's comments request for SBA to:
* Reconsider the rule in its current form and extend the comment period by at least 60 days.
* Reinstate a ceiling on size standards.
* Subject any productivity adjustment to public notice and comment.
* Apply its methodology consistently when determining both increases and decreases.
* Provide industry-specific justification for consolidated size standards.
* Retain revenue-based standards where converting to employee-based standards could disadvantage labor-intensive businesses.
* Reconcile discrepancies in the data and provide corrected figures for public review.
* Explain its departure from the 2024 methodology.
* Clarify the status of the August 2025 proposed rule.
* Consider protections for the smallest businesses within newly enlarged size-standard groupings.
NSBA will continue advocating for size standards that preserve meaningful access to federal contracting opportunities for small businesses while allowing growing firms to compete and succeed.
Read the full comments here.
Submit your own comments by Sept. 21, 2026 here.