July 5 -- The U.S. Small Business Administration (“SBA” or “Agency”) proposes to amend its small business size regulations to incorporate the U.S. Office of Management and Budget's (OMB) North American Industry Classification System (NAICS) revision for 2022, identified as NAICS 2022, into its table of small business size standards.
The NAICS 2022 revision created 111 new industries by reclassifying, combining, or splitting 156 NAICS 2017 industries or their parts. SBA's proposed size standards for these 111 new industries under NAICS 2022 have resulted in an increase to the size standards for 21 industries and 27 parts of three industries under NAICS 2017, a decrease to size standards for seven industries and 41 parts of one industry, a change in the size standard measure from average annual receipts to number of employees for one industry, a change in the size standard measure from number of employees to average annual receipts for a part of one industry, and no change in size standards for 118 industries and 33 parts of eight industries.
SBA proposes to adopt the updated table of size standards, effective October 1, 2022. SBA must receive comments to this proposed rule on or before August 4, 2022.
As with the previous NAICS revisions, SBA proposes to adopt the latest NAICS revision, identified as NAICS 2022, effective October 1, 2022 (i.e., the beginning of the new fiscal year following the effective date of the OMB's release of the NAICS 2022 revision), for several reasons: (1) Federal Government contracting data and related statistics will be more consistent and comparable with past data for analyzing future small business activity if implementation of the revised table of size standards occurs at the beginning of a new fiscal year; (2) Users of size standards, for instance, Federal prime contractors, who may use the size standards for developing their subcontracting plans, can have more consistent data to examine the past and future Federal contracting trends; and (3) Small business size standards apply to most Federal agencies and their programs involving small businesses; with a time lag between the OMB's effective date and SBA's update of its size standards, agencies will have sufficient time to implement the changes and develop training tools, if necessary.