Independent · not SAM.gov

SBA's proposed new size standards: what they would mean for your small business status

Updated September 2026

Whether you count as a small business depends on one number: the size standard SBA sets for the NAICS code on a solicitation. SBA now wants to rewrite almost every one of those numbers at once, with a new method and a new floor. For a firm that is small today, the proposal does not take that status away. What it changes is who you would be competing against for set-asides, and that is the part worth reading closely before the new deadline.

What SBA published, and what changed on September 24

SBA published two documents in the Federal Register on August 20, 2026. The first is the proposed rule itself, "Small Business Size Standards," 91 FR 53741 (FR Doc. 2026-17042, RIN 3245-AI67, docket SBA-2026-0199). It would replace the table in 13 CFR 121.201. The second is a notice of availability for SBA's Revised Size Standards Methodology, 91 FR 54096 (FR Doc. 2026-17039, docket SBA-2026-0265), the white paper that explains how the new numbers were calculated.

Both originally allowed only 30 days for comments, closing September 21. On September 24, SBA published an extension notice at 91 FR 60524 (FR Doc. 2026-19546). It adds 60 days from September 21, so both comment periods now close on November 20, 2026. SBA's reasons were requests for more time and what it called its "clarification of the impacts" of the proposal. SBA's Office of Advocacy posted the same deadline in a regulatory alert the same day.

The response so far has been large. By the original deadline, trade reporting put the number of comments above 60,000, many of them critical: Washington Technology reported nearly 70,000 and SmallGovCon more than 60,000. Washington Technology also reported that it took regulations.gov three days to reopen both dockets after the extension.

What is a size standard, and where does yours come from?

A size standard is the ceiling SBA sets for each industry. Stay under it, counting your affiliates, and you are small for work in that industry. Each NAICS code has one. The standard is either average annual receipts or average number of employees:

• Receipts are your total receipts over your last five completed fiscal years, divided by five, under 13 CFR 121.104.
• Employees are your average headcount across every pay period in the preceding 24 completed months, with part-time and temporary staff counted the same as full-time, under 13 CFR 121.106.

The contracting officer picks one NAICS code for each solicitation, and that code's standard is the one that counts for that bid. Your size is fixed as of the day you self-certify with your initial offer that includes price, and you generally keep that status for the life of the contract. That is why the codes you list in SAM.gov matter so much. If you have not settled yours, start with our guide to finding your NAICS code.

What would change under the proposal

The proposed rule lists five major changes to the method. In plain terms:

• Fewer, broader standards. Size standards would be set at the 4-digit or 5-digit NAICS level instead of the 6-digit level. That turns 978 standards, plus 18 special "exceptions," into 338: 276 at the 4-digit level and 62 at the 5-digit level. All 18 exceptions would go.
• More employee-based standards. Where SBA has a choice of measure, it would now default to employees rather than receipts. The count would go from 496 receipts-based and 478 employee-based standards to 129 and 208.
• A new formula. The 2024 method averaged seven factors, including two measures of how small businesses were doing in federal contracting. The new method uses three: the national size of the industry, the number of distinct geographic markets it competes in, and an adjustment for imports and exports. SBA combines them into an "average market size" and says this tracks the Small Business Act's test that a small firm is "not dominant in its field of operations."
• No maximum. Today receipts standards top out at $47 million and employee standards at 1,500. The new formula has no ceiling, but it keeps a floor. The methodology sets the minimum receipts standard at $30.6 million.
• Productivity, not just inflation. SBA last raised receipts standards for inflation in November 2022. The proposal adjusts receipts-based standards for both inflation and general productivity growth, which SBA has never done before.

One policy choice sits on top of all that. The analysis pointed to lower standards in 45 industries, including sugar, cement, bakery products and waste collection. SBA proposes not to lower any standard that keeps the same measure, so those 45 keep their current numbers.

How much higher would the numbers be for common federal contracting codes?

The comparison table in the proposed rule is printed as images, so it does not show up in a text search of the Federal Register. These are the rows for codes that small federal contractors use most, read from the published table. Confirm your own code in the official PDF.

The jumps are largest in professional and IT services. Every code in the 5415 group, computer systems design and related services, would share one standard of $531 million. The management, scientific and technical consulting codes from 541611 to 541690 would share $295 million. Some codes barely move by comparison: solid waste collection (562111) stays at $47 million.

Because exceptions disappear, the special carve-outs go too. Engineering's current exception for military and aerospace equipment is $47 million today; under the proposal every engineering buy would use the single $252 million figure. SBA says that for all but one exception, the new industry standard is larger than the exception it replaces.

Why would construction switch from receipts to employees?

This is the change that most alters how a firm checks its own size. Today, general building and heavy construction contractors are small up to $45 million in average receipts and most specialty trade contractors up to $19 million. Under the proposal, those codes would be measured by headcount: 550 employees for residential builders and for electrical, plumbing and HVAC, and site preparation contractors; 600 for commercial and institutional building; 650 for foundation, framing, roofing and similar trades; and 700 for highway and water and sewer work.

SBA's reason is stability. A receipts standard erodes with inflation, so between adjustments some firms lose small status without growing in real terms, then regain it when SBA catches up. SBA points to its 2022 inflation rule, which it expected to return small status to 17,713 firms that had lost it through inflation alone. Headcount moves more slowly.

The law limits how far SBA can take this. The Small Business Act requires receipts-based standards for services firms, averaged over at least five years, so professional services, IT, facilities and consulting stay on receipts. The switch applies to industries where SBA has discretion, such as construction, utilities, real estate lessors and some rental businesses.

For a construction firm, the practical consequence is that your payroll records become the size test. Part-time and temporary workers, and people supplied by a staffing agency or professional employer organization, count the same as full-time staff, and your affiliates' employees are added in. A firm with high receipts and a lean crew could become small; a labor-heavy firm with modest receipts should run the 24-month average before assuming anything.

Who gains small status, and who faces more competition?

SBA's own estimate in the proposed rule is that the number of small firms nationwide would rise from 6,344,967 to 6,459,508, a net increase of 114,541, or about 1.8 percent. It says 37,002 firms that held federal contracts in fiscal year 2025 would become small. Together those firms had about 105,655 contracts worth more than $71 billion. The largest groups by code were engineering services (5,314 firms), other computer related services (2,247) and custom computer programming (2,171).

Only one industry would lose small firms under SBA's numbers: direct property and casualty insurance carriers (524126), which would move from 1,500 employees to $842 million in receipts, costing fewer than five firms their status.

That estimate has already moved. Both Washington Technology and SmallGovCon report that SBA's revised figure is 4,000 to 6,000 more contractors qualifying as small, far below the rule's original number. We have not found the revised analysis published by SBA itself, so treat both figures with care until it appears in the docket.

SBA is candid about who pays for the change. The rule says growing small businesses closest to today's size standard are "likely to face the greatest competition" from newly eligible firms, because they chase the same contracts. It argues the trade-off is worth it: firms could grow much further before losing small status, which SBA calls pushing out the "benefit cliff." If you are a small firm well below the current line, the question is how many larger competitors would enter your set-aside pool. That is the heart of most critical comments, and our page on set-asides and the Rule of Two explains why the size of that pool decides how often a buy is reserved at all.

Would anything change for 8(a), WOSB, HUBZone or SDVOSB firms?

Each SBA certification program requires a firm to be small under the size standard for the NAICS code on the contract, and each has its own eligibility rules on top. The proposal changes only the size part. It does not change who counts as socially or economically disadvantaged, the HUBZone residency test, or veteran or ownership requirements. SBA notes in the rule that more firms would be size-eligible, "however, each program has additional and unique eligibility requirements."

It is also a separate rulemaking from the other big changes this year. The new 8(a) social disadvantage rule is already in effect and is unaffected. The FAR overhaul rules published on September 18 do not touch size standards either; we covered them in the September 2026 FAR overhaul rules. For how certifications relate to your basic registration, see SBA certifications vs SAM.gov.

What should you do before November 20?

1. Find your codes in the table. Open the official PDF and look up every NAICS code you list in SAM.gov, not just your primary one. Note the current and proposed standard and whether the measure changes.
2. Work out your own numbers. Average your receipts over the last five completed fiscal years. If any of your codes would switch to employees, average your headcount over the last 24 months, counting part-time, temporary, leased and affiliate staff.
3. Look at who else would qualify. Think about the competitors you currently lose to in full and open competition. If they would become small in your codes, your set-aside competition changes.
4. Comment with specifics. At regulations.gov, search for docket SBA-2026-0199 for the size standards or SBA-2026-0265 for the methodology. Name your NAICS codes, your approximate size, and what the change would do to the set-asides you win. Comments are generally posted publicly, so leave out confidential figures.
5. Change nothing yet. Until a final rule takes effect, the current table in 13 CFR 121.201 governs, and so does the NAICS code in each solicitation.

Does this change anything in SAM.gov right now?

No. SAM.gov registration and your annual renewal stay free, and SBA itself says in the rule that "there are no costs associated with SAM registration or certification." When a final rule does take effect, the step that matters is making sure the NAICS codes and figures in your reps and certs are accurate, because that is where you self-certify size for every code you list. You can make that update yourself in your own record.

Expect sales pitches anyway. If someone offers to "recertify your size under the new SBA standards" for a fee, remember that nothing is final and the update is a free edit you make at sam.gov. Our page on registration scams covers the patterns.

Key facts and dates

• November 17, 2022: SBA's last inflation adjustment to receipts-based size standards.
• September 12, 2024: SBA adopts the 2024 size standards methodology that the new proposal would replace.
• August 20, 2026: proposed rule (91 FR 53741) and Revised Methodology (91 FR 54096) published; 338 new standards proposed.
• September 21, 2026: original comment deadline; SBA extends both periods by 60 days, effective on filing.
• September 24, 2026: extension notice published (91 FR 60524).
• November 20, 2026: new comment deadline for both dockets.
• Until a final rule takes effect: the current 13 CFR 121.201 table applies.

This page summarizes a proposed rule and SBA's published tables as of September 25, 2026. Final rules can differ. Confirm the standard for your NAICS code at sba.gov/size, in 13 CFR 121.201 on ecfr.gov and in each solicitation before relying on anything here.

Independent information, not legal advice. ZeroGov is not SBA, not SAM.gov and not the U.S. government.