Small Business Size Standards:
A Historical Analysis of Contemporary Issues
Updated April 2, 2021
Congressional Research Service
https://crsreports.congress.gov
R40860

Small Business Size Standards: A Historical Analysis of Contemporary Issues

Summary
Small business size standards are of congressional interest because they have a pivotal role in
determining eligibility for Small Business Administration (SBA) assistance as well as federal
contracting and, in some instances, tax preferences. Although there is bipartisan agreement that
the nation’s small businesses play an important role in the American economy, there are
differences of opinion concerning how to define them. The Small Business Act of 1953 (P.L. 83-
163, as amended) authorized the SBA to establish size standards to ensure that only small
businesses receive SBA assistance. The SBA currently uses two types of size standards to
determine SBA program eligibility: industry-specific size standards and alternative size standards
based on the applicant’s maximum tangible net worth and average net income after federal taxes.
The SBA’s industry-specific size standards determine program eligibility for firms in 1,037
industrial classifications described in the 2017 North American Industry Classification System
(NAICS). The size standards are based on one of four measures: (1) number of employees, (2)
average annual receipts, (3) average asset size as reported in the firm’s four quarterly financial
statements for the preceding year, or (4) a combination of number of employees and barrel per
day refining capacity. Overall, about 97% of all employer firms qualify as small under the SBA’s
size standards. These firms represent about 30% of industry receipts.
The SBA analyzes various economic factors, such as each industry’s overall competitiveness and
the competitiveness of firms within each industry, to determine its size standards. However, in the
absence of precise statutory guidance and consensus on how to define small, the SBA’s size
standards have often been challenged, typically by industry representatives seeking to increase
the number of firms eligible for assistance and by Members concerned that the size standards may
not adequately target assistance to firms that they consider to be truly small.
This report provides a historical examination of the SBA’s size standards and assesses competing
views concerning how to define a small business. It also discusses the following legislation:
 P.L. 111-240, the Small Business Jobs Act of 2010, which authorized the SBA to
establish an alternative size standard using maximum tangible net worth and
average net income after federal taxes for both the 7(a) and 504/CDC loan
guaranty programs; established, until the SBA acted, an interim alternative size
standard for the 7(a) and 504/CDC programs of not more than $15 million in
tangible net worth and not more than $5 million in average net income after
federal taxes (excluding any carry-over losses) for the two full fiscal years before
the date of the application; and required the SBA to conduct a detailed review of
not less than one-third of the SBA’s industry size standards every 18 months
beginning on the new law’s date of enactment (September 27, 2010) and ensure
that each size standard is reviewed at least once every five years.
 P.L. 112-239, the National Defense Authorization Act for Fiscal Year 2013,
which directed the SBA to end its practice of limiting the number of size
standards as a means to reduce the complexity of its size standards and, instead,
assign the appropriate size standard to each NAICS industrial classification.
 P.L. 114-328, the National Defense Authorization Act for Fiscal Year 2017,
which authorizes the SBA to establish different size standards for agricultural
enterprises using existing methods and appeal processes. Previously, the small
business size standard for agricultural enterprises was set in statute as having
annual receipts not in excess of $750,000.
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Small Business Size Standards: A Historical Analysis of Contemporary Issues

 P.L. 115-324, the Small Business Runway Extension Act of 2018, which directs
federal agencies proposing a size standard (and, based on report language
accompanying the act, presumably the SBA as well) to use the average annual
gross receipts from at least the previous five years, instead of the previous three
years, when seeking SBA approval to establish a size standard based on annual
gross receipts.
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Small Business Size Standards: A Historical Analysis of Contemporary Issues

What Is a Small Business?
The Small Business Act of 1953 (P.L. 83-163, as amended) authorized the U.S. Small Business
Administration (SBA) and justified the agency’s existence on the grounds that small businesses
are essential to the maintenance of the free enterprise system.1 In economic terms, the
congressional intent was to assist small businesses as a means to deter monopoly and oligarchy
formation within all industries and the market failures caused by the elimination or reduction of
competition in the marketplace. Congress decided to allow the SBA to establish size standards to
ensure that only small businesses were provided SBA assistance.
Specifically, the Small Business Act of 1953 defines a small business as one that
 is organized for profit;
 has a place of business in the United States;
 operates primarily within the United States or makes a significant contribution to
the U.S. economy through payment of taxes or use of American products,
materials, or labor;
 is independently owned and operated; and
 is not dominant in its field on a national basis.2
The business may be a sole proprietorship, partnership, corporation, or any other legal form.
The SBA conducts an analysis of various economic factors, such as each industry’s overall
competitiveness and the competitiveness of firms within each industry, to determine its size
standards. The analysis is designed to ensure that only small businesses receive SBA assistance
and that these small businesses are not dominant in their field on a national basis.
The SBA currently uses two types of size standards to determine SBA program eligibility: (1)
industry-specific size standards and (2) alternative size standards based on the applicant’s
maximum tangible net worth and average net income after federal taxes. The SBA’s industry-
specific size standards are also used to determine eligibility for federal small business contracting
purposes.
The SBA’s industry-specific size standards determine program eligibility for firms in 1,037
industrial classifications (hereinafter industries) in 23 sub-industry activities described in the
2017 North American Industry Classification System (NAICS). Given its mandate to promote
competition in the marketplace, the SBA includes an economic analysis of each industry’s overall
competitiveness and the competitiveness of firms within the industry in its size standards
methodology.3 The size standards are based on four measures: (1) number of employees (505

1 P.L. 83-163, the Small Business Act of 1953, §202.
2 15 U.S.C. §632(a) and 13 C.F.R. §121.105. Affiliations between businesses, or relationships allowing one party
control or the power of control over another, generally count in size determinations. Businesses can thus be determined
to be other than small because of their involvement in joint ventures, subcontracting arrangements, or franchise or
license agreements, among other things, provided that their employment or income, plus those of their affiliate(s),
exceed the pertinent size threshold. 13 C.F.R. §121.103.
3 U.S. Small Business Administration (SBA), Office of Government Contracting and Business Development, “Size
Standards Methodology White Paper,” April 11, 2019, at https://www.sba.gov/document/support—size-standards-
methodology-white-paper.
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Small Business Size Standards: A Historical Analysis of Contemporary Issues

industries),4 (2) average annual receipts (527 industries),5 (3) average asset size as reported in the
firm’s four quarterly financial statements for the preceding year (5 industries), or (4) a
combination of number of employees and barrel per day refining capacity (1 industry). Overall,
about 97% of all employer firms qualify as small.6 These firms represent about 30% of industry
receipts.7
The SBA also assesses the impact of inflation on its monetary-based size standards at least once
every five years. If the SBA does not make an inflation adjustment after the assessment, it
continues to monitor inflation on an annual basis until an adjustment is made. The most recent
adjustment for inflation took place on August 19, 2019.8
In the absence of precise statutory guidance and consensus on how to define small, the SBA’s
size standards have often been challenged, typically by industry representatives seeking to
increase the number of firms eligible for assistance. The size standards have also been challenged
by Members of Congress concerned that the size standards may not adequately target federal
assistance to firms that they consider to be truly small.

4 The SBA “counts all individuals employed on a full-time, part-time, or other basis” including employees “obtained
from a temporary employee agency, professional employee organization or leasing concern.” The employee size
standard uses the average number of employees for each pay period for the preceding completed 12 calendar months. If
the business “has not been in business for 12 months, the average number of employees is used for each of the pay
periods during which it has been in business.” See 13 C.F.R §121.106.
5 The SBA defines receipts as “all revenue in whatever form received or accrued from whatever source, including from
the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and
allowances. Generally, receipts are considered “total income” (or in the case of a sole proprietorship “gross income”)
plus “cost of goods sold” as these terms are defined and reported on Internal Revenue Service (IRS) tax return forms.”
See 13 C.F.R §121.104.
6 SBA, “SBA’s Size Standards Analysis: An Overview on Methodology and Comprehensive Size Standards Review,”
power point presentation, Khem R. Sharma, SBA Office of Size Standards, July 13, 2011, p. 4, at
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=
2ahUKEwjVqOSyvezjAhXxYd8KHUh7CJgQFjAAegQIABAC&url=
http%3A%2F%2Fwww.gtscoalition.com%2Fwp-content%2Fuploads%2F2011%2F07%2FSize-Stds-Presentation_Dr.-
Sharma-SBA.pdf&usg=AOvVaw2rawMGp_M2Uv4zOb-gin3G.
7 SBA, “Small Business Size Standards: Adjustment of Monetary-Based Size Standards for Inflation,” 84 Federal
Register 34266, July 18, 2019.
8 The SBA adjusted its monetary based size standards for inflation in 1975, 1984, 1994, 2002, 2005, 2008, 2014, and
2019. The SBA added the five-year assessment of inflation’s impact on the SBA’s monetary based size standards to its
regulations in 2002 (interim final rule). See SBA, “Small Business Size Standards Regulation,” 40 Federal Register
32824-32826, August 5, 1975; SBA, “Small Business Size Standards; Revision,” 49 Federal Register 5024-5048,
February 9, 1984; SBA, “Small Business Size Standards; Inflation Adjustment to Size Standards,” 59 Federal Register
16513-16537, April 7, 1994; SBA, “Interim Final Rule: Small Business Size Standards, Inflation Adjustment to Size
Standards,” 67 Federal Register 3041-3057, January 23, 2002 (see pages 3041 and 3045 for the addition of the five-
year assessment of inflation); SBA, “Small Business Size Standards: Inflation Adjustment to Size Standards,” 67
Federal Register 65285-65290, October 24, 2002; SBA, “Interim Final Rule: Small Business Size Standards, Inflation
Adjustment to Size Standards; Business Loan Program; Disaster Assistance Loan Program,” 70 Federal Register
72577-72595, December 6, 2005; SBA, “Small Business Size Standards: Inflation Adjustment to Size Standards,
Business Loan Program, and Disaster Assistance Loan Program,” 73 Federal Register 41237-41254, July 18, 2008;
SBA, “Interim Final Rule: Small Business Size Standards: Inflation Adjustment to Monetary Based Size Standards,” 79
Federal Register 33647-33669, June 12, 2014; SBA, “Small Business Size Standards: Inflation Adjustment to
Monetary Based Size Standards,” 81 Federal Register 3949-3956, January 25, 2016 (this final rule finalized the
changes made by the 2014 interim final rule without any further changes); and SBA, “Small Business Size Standards:
Adjustment of Monetary-Based Size Standards for Inflation,” 84 Federal Register 34261-34281, July 18, 2019
(effective August 19, 2019).
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Small Business Size Standards: A Historical Analysis of Contemporary Issues

This report provides a historical examination of the SBA’s size standards and assesses competing
views concerning how to define a small business. It also discusses the following legislation:
 P.L. 111-240, the Small Business Jobs Act of 2010, which authorized the SBA to
establish an alternative size standard using maximum tangible net worth and
average net income after federal taxes for both the 7(a) and 504/CDC loan
guaranty programs; established, until the SBA acted, an interim alternative size
standard for the 7(a) and 504/CDC programs of not more than $15 million in
tangible net worth and not more than $5 million in average net income after
federal taxes (excluding any carry-over losses) for the two full fiscal years before
the date of the application;9 and required the SBA to conduct a detailed review of
not less than one-third of the SBA’s industry size standards every 18 months
beginning on the new law’s date of enactment (September 27, 2010) and ensure
that each size standard is reviewed at least once every five years.10
 P.L. 112-239, the National Defense Authorization Act for Fiscal Year 2013,
which directs the SBA not to limit the number of size standards and to assign the
appropriate size standard to each NAICS industrial classification. This provision
addressed the SBA’s practice of limiting the number of size standards it used and
combining size standards within industrial groups as a means to reduce the
complexity of its size standards and to provide greater consistency for industrial
classifications that have similar economic characteristics.11
 P.L. 114-328, the National Defense Authorization Act for Fiscal Year 2017,
which authorizes the SBA to establish different size standards for agricultural
enterprises using existing methods and appeal processes. Previously, the small
business size standard for agricultural enterprises was set in statute as having
annual receipts not in excess of $750,000.
 P.L. 115-324, the Small Business Runway Extension Act of 2018, which directs
federal agencies proposing a size standard (and, based on report language
accompanying the act, presumably the SBA as well) to use the average annual
gross receipts from at least the previous five years, instead of the previous three

9 On December 20, 2010, the SBA announced that it planned to issue a notice of proposed rulemaking concerning the
new alternative size standard in February 2011. It did not do so. On January 8, 2013, the SBA announced that it would
issue an interim final rule, to be effective when published, establishing an alternative size standard for the 7(a) and
504/CDC programs by October 2013. See SBA, “Small Business Jobs Act: Small Business Size Standards; Alternative
Size Standard for 7(a) and 504 Business Loan Programs,” 75 Federal Register 79868, December 20, 2010, and SBA,
“Small Business Jobs Act: Small Business Size Standards; Alternative Size Standard for 7(a) and 504 Business Loan
Programs,” 78 Federal Register 1638, January 8, 2013. The SBA also indicated in its notice of proposed rulemaking on
January 8, 2013, that “the amendments will increase the current alternative standard for applicants for 504 loans.” On
December 15, 2015, the SBA announced that it would issue a notice of proposed rulemaking concerning the new
alternative size standard by November 2016. See SBA, “Small Business Size Standards; Alternative Size Standard for
7(a), 504, and Disaster Loan Programs,” 80 Federal Register 78045, December 15, 2015.
10 For congressional intent concerning the need for updated size standards, see S. 2989, the Small Business Contracting
Revitalization Act of 2010; and U.S. Congress, Senate Committee on Small Business and Entrepreneurship, Small
Business Contracting Revitalization Act of 2010, report to accompany S. 2989, 111th Cong., 2nd sess., September 29,
2010, S.Rept. 111-343 (Washington: GPO, 2010), p. 9 (“…The Committee has heard testimony that the current size
standards are in dire need of a comprehensive update”).
11 SBA, “Small Business Size Standards: Professional, Scientific and Technical Services,” 76 Federal Register 14327,
March 16, 2011.
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years, when seeking SBA approval to establish a size standard based on annual
gross receipts.12
 Legislation has also been introduced during recent Congresses to authorize the
SBA’s Office of Chief Counsel for Advocacy to approve or disapprove a size
standard requested by a federal agency for purposes other than the Small
Business Act or the Small Business Investment Act of 1958. The SBA’s
Administrator currently has that authority.13
How Big Is Small?
As Table 1 indicates, there were 5,722,144 nonfarm employer firms in the United States
employing 128,196,407 people and providing total payroll of over $6.85 trillion in 2018. Also, in
2017 (the most recent available data), there were over 25.3 million nonemployer (self-employed)
firms.14
Most nonfarm employer firms (61.5%) had 4 or fewer employees, 78.1% had fewer than 10
employees, 88.8% had fewer than 20 employees, 98.0% had fewer than 100 employees, and
99.6% had fewer than 500 employees in 2018. The table also provides data concerning other
economic factors that might be used to define a small business: an employer firm’s number of
employees as a share (cumulative percentage) of the total number of employer firms, as a share of
employer firm total employment, and as a share of employer firm total annual payroll.
As will be discussed, the SBA has traditionally applied economic factors to specific industries,
not to cumulative statistics for all employer firms, to determine which firms are small businesses.
Nonetheless, the data in Table 1 illustrate how the selection of economic factors used to define

12 The act amended Section 3(a)(2)(C) of the Small Business Act, which references requirements for federal agencies
proposing a small business size standard. The SBA subsequently indicated that it had “long-interpreted” that section of
the Small Business Act as not applying to the SBA. However, “to promote consistency government-wide,” the SBA’s
receipts based size standards (other than for the SBA’s business and disaster loan programs, which will be subject to
separate SBA rulemaking) and other federal agency’s proposed receipts based size standards will be based, effective on
January 6, 2020, on average annual receipts over five years, instead of over three years. Firms will have the option,
through January 6, 2022, to choose between using three-year averaging or five-year averaging. See SBA, “Small
Business Size Standards: Calculation of Annual Average Receipts,” 84 Federal Register 29399-29400, June 24, 2019;
and SBA, “Small Business Size Standards: Calculation of Annual Average Receipts,” 84 Federal Register 66561,
December 5, 2019.
13 The bills include H.R. 585, the Small Business Size Standard Flexibility Act of 2011 (112th Congress), H.R. 2542,
the Regulatory Flexibility Improvements Act of 2013, which was included in H.R. 4, the Jobs for America Act (113th
Congress), H.R. 527, the Small Business Regulatory Flexibility Improvements Act of 2015, and its Senate companion
bill, S. 1536 (114th Congress), H.R. 33, the Small Business Regulatory Flexibility Improvements Act of 2017, and its
Senate companion bill, S. 584, which was included in H.R. 5, the Regulatory Accountability Act of 2017 (115th
Congress).
14 U.S. Census Bureau, “Annual Business Survey: Business Characteristics of Respondent Employer Firms by Sector,
Sex, Ethnicity, Race, and Veteran Status for the U.S., States and Metro Areas: 2018,” at
https://data.census.gov/cedsci/table?tid=ABSCB2018.AB1800CSCB01&hidePreview=true; and U.S. Census Bureau,
“NES-D Tables, Table 1 - Statistics for Nonemployer Firms by Industry, Sex, Ethnicity, Race, and Veteran Status for
the U.S., States, and Metro Areas: 2017,” at https://www2.census.gov/programs-
surveys/abs/data/2017/nesd_estimates_2017_Table1.xlsx.
Nonemployer firms have no paid employees, annual business receipts of $1,000 or more ($1 or more in the
construction industries), and are subject to federal income tax. Most nonemployers are self-employed individuals
operating very small unincorporated businesses, which may or may not be the owner’s principal source of income.
Nonemployer firms account for less than 4% of business annual sales or receipts and are usually excluded from most
business statistics. See U.S. Census Bureau, “Nonemployer Statistics (NES),” at https://www.census.gov/programs-
surveys/nonemployer-statistics/technical-documentation/methodology.html.
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small business affects the definition’s outcome. For example, for illustrative purposes only, if the
midpoint (50%) for these three economic factors was used to define what is a small business,
small businesses would be required to have no more than 4 employees to be defined as small if
the definition for small used the midpoint (50%) share of the total number of nonfarm employer
firms (nonfarm employer firms with no more than four employees accounted for 61.5% of the
total number of nonfarm employer firms in 2018). Alternatively, the small business size standard
would be at least no more than 500 employees if the definition for small used the midpoint (50%)
share of nonfarm employer total employment or total annual payroll.
Other economic factors that might be used to define a small business include the value of the
employer firm’s assets or its market share, expressed as a firm’s sales revenue from that market
divided by the total sales revenue available in that market or as a firm’s unit sales volume in that
market divided by the total volume of units sold in that market.
Table 1. Number of Nonfarm Employer Firms, Nonfarm Employer Firm
Employment, and Nonfarm Employer Firm Annual Payroll, by Employment Size,
2018
Cumulative
Cumulative
Percentage
Cumulative
Percentage
Number
of Total
Percentage
of Nonfarm
of
Number of
of Nonfarm
Employer
Employer
Number
Nonfarm
Nonfarm
Employer
Firm Annual
Firm Total
of
Employer
Employer
Firm Total
Payroll
Annual
Employees
Firms
Firms
Employment Employment
($1,000)
Payroll
0-4a
3,521,526
61.5%
5,612,254
4.3%
$235,439,486
3.4%
5-9
948,936
78.1%
6,265,576
9.3%
$249,456,413
7.1%
10-19
611,926
88.8%
8,242,749
15.7%
$335,750,963
12.0%
20-99
527,038
98.0%
20,694,904
31.8%
$932,941,262
25.6%
100-499
92,569
99.6%
18,149,248
46.0%
$948,901,808
39.4%
500+
20149
100.0%
69,231,676
100.0%
$4,149,750,376
100.0%
Total
5,722,144

128,196,407

$6,852,240,308

Sources: U.S. Census Bureau, “Annual Business Survey: Employment Size of Firm for Business Characteristics of
Respondent Employer Firms by Sex, Ethnicity, Race, and Veteran Status for the U.S.: 2018,” at
https://data.census.gov/cedsci/table?tid=ABSCB2018.AB1800CSCB04&hidePreview=true.
a. Employment is measured in March, thus some employer firms (start-ups after March, closures before
March, and seasonal firms) wil have zero employment and some annual payrol .
Who Makes the Call?
The Small Business Act of 1953 (P.L. 83-163, as amended) authorized the SBA to establish size
standards for determining eligibility for SBA assistance. More than 60 years have passed since
the SBA established its initial small business size standards on January 1, 1957.15 Yet, decisions
made then concerning the rationale and criteria used to define small businesses established
precedents that continue to shape current policy. Moreover, as mentioned, the SBA relies on an
analysis of various economic factors, such as each industry’s overall competitiveness and the
competitiveness of firms within each industry, in its size standards methodology to ensure that
businesses receiving SBA assistance are not dominant in their field on a national basis. However,

15 SBA, “Part 103 - Small Business Size Standards,” 21 Federal Register 9709-9714, December 7, 1956.
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in the absence of precise statutory guidance and consensus on how to define small, the SBA’s
size standards have often been challenged, typically by industry representatives seeking to
increase the number of firms eligible for assistance and by Members of Congress concerned that
the size standards do not adequately target the SBA’s assistance to firms that they consider to be
truly small.
Over the years, the SBA typically reviewed its size standards piecemeal, reviewing specific
industries when the SBA determined that an industry’s market conditions had changed or the SBA
was asked to undertake a review by an industry claiming that its market conditions had changed.
On five occasions, in 1980, 1982, 1992, 2004, and 2008, the SBA proposed a comprehensive
revision of its size standards. The SBA did not fully implement any of these proposals, but the
arguments presented, both for and against the proposals, provide a context for understanding the
SBA’s current size standards, and the rationale and criteria that have been presented to retain and
replace them.
As mentioned, P.L. 111-240 requires the SBA to conduct a detailed review of not less than one-
third of the SBA’s industry size standards during the 18-month period beginning on the date of
enactment (September 27, 2010) and during every 18-month period thereafter.16 The act also
requires the SBA to review each size standard at least once every five years. The SBA completed
its first five-year review of all SBA industry size standards in 2016.17 As a result of its five-year
review, the SBA estimates that more than 72,000 small businesses gained SBA eligibility.18
Early Definitions of Small Business Vary in
Approach and Criteria
There is no uniform or accepted definition for a small business. Instead, several criteria are used
to determine eligibility for small business spending and tax programs.19 This was also the case
when Congress considered establishing the SBA during the early 1950s. For example, in 1952,
the House Select Committee on Small Business reviewed federal statutes, executive branch
directives, and the academic literature to serve as a guide for determining how to define small
businesses.
The select committee began its review by asserting that the need to define the concept of small
business was based on a general consensus that assisting small business was necessary to enhance
economic competition, combat monopoly formation, inhibit the concentration of economic
power, and maintain “the integrity of independent enterprise.”20 It noted that the definition of

16 P.L. 111-240, the Small Business Act of 2010, §1344. Updated Size Standards.
17 SBA, “A Report on the First Five-Year Comprehensive Review of Small Business Size Standards Under The Small
Business Jobs Act of 2010,” April 2017, at https://www.sba.gov/sites/default/files/articles/
Size_Standards_Review_Report_to_Congress_Final_With_Cover_Letters.pdf (hereinafter SBA, “A Report on the First
Five-Year Comprehensive Review of Small Business Size Standards Under The Small Business Jobs Act of 2010”).
18 SBA, “A Report on the First Five-Year Comprehensive Review of Small Business Size Standards Under The Small
Business Jobs Act of 2010,” p. 34.
19 According to one source, the Internal Revenue Code contains at least 24 different definitions of a small business. See
Douglas K. Barney, Chris Bjornson, and Steve Wells, “Just How Small Is Your Business?,” The National Public
Accountant, August 2003, pp. 4-6, cited in CRS Report RL32254, Small Business Tax Benefits: Current Law and
Arguments For and Against Them, by Gary Guenther.
20 U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress, final report
pursuant to H.Res. 33, A Resolution Creating a Select Committee to Conduct a Study and Investigation of the Problems
of Small Business, 82nd Cong., 2nd sess., December 31, 1952 (Washington: GPO, 1952), pp. 5, 13, 14, 78, and 136
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small businesses in federal statutes reflected this consensus by taking into consideration the
firm’s size relative to other firms in its field and “matters of independence and nondominance.”21
For example, the War Mobilization and Reconversion Act of 1944 defined a small business as
either “employing 250 wage earners or less” or having “sales volumes, quantities of materials
consumed, capital investments, or any other criteria which are reasonably attributable to small
plants rather than medium- or large-sized plants.”22 The Selective Service Act of 1948 classified a
business as small for military procurement purposes if “(1) its position in the trade or industry of
which it is a part is not dominant, (2) the number of its employees does not exceed 500, and (3) it
is independently owned and operated.”23
The select committee also found that, for data-gathering purposes, the executive branch defined
small businesses in relative, as opposed to absolute, terms within specific industries. For example,
the Bureau of Labor Statistics “defined small business in terms of an average for each industry
based on the volume of employment or sales. All firms which fall below this average are deemed
to be small.”24 The U.S. Census Bureau also used different criteria for different industries. For
example, manufacturing firms were classified as small if they had fewer than 100 employees,
wholesalers were considered small if they had annual sales below $200,000, and retailers were
considered small if they had annual sales below $50,000. According the Census Bureau, in 1952,
small businesses accounted for “roughly 92 percent of all business establishments, 45 percent of
all employees, and 34 percent of all dollar value of all sales.”25
The select committee also noted that in 1951, the National Production Authority’s Office of Small
Business proposed defining all manufacturing firms with fewer than 50 employees as small and
any with more than 2,500 employees as large. Manufacturers employing between these numbers
of employees would be considered large or small depending on the general structure of the
industry to which they belonged. The larger the percentage of total output produced by large
firms, the larger the number of employees a firm could have to be considered small. Using this
definition, most manufacturing firms with fewer than 50 employees would be classified as small,
but others, such as an aircraft manufacturer, could have as many as 2,500 employees and still be
considered small.26
For procurement purposes, the select committee found that executive branch agencies defined
small businesses in absolute, as opposed to relative, terms, using 500 employees as the dividing
line between large and small firms. Federal agencies defended the so-called 500 employee rule on
the grounds that it “had the advantage of easy administration” across federal agencies.27
In reviewing the academic literature, the select committee reported that Abraham Kaplan’s Small
Business: Its Place and Problems defined small businesses as those with no more than $1 million

(hereinafter U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress).
21 U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress, p. 3.
22 U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress, p. 2.
23 U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress, p. 2; and U.S.
Congress, Conference Committee, Selective Service Act of 1948, conference report no. 2438, 80th Cong., 2nd sess., June
19, 1948 (Washington: GPO, 1948), p. 24.
24 U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress, p. 3.
25 U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress, p. 3.
26 U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress, p. 4.
27 U.S. Congress, House Select Committee on Small Business, Subcommittee No. 2, Definition of “Small Business”
Within Meaning of the Small Business Act of 1953, as Amended, hearing on H.Res. 114, 84th Cong., 2nd sess., July 5,
1956 (Washington: GPO, 1956), p. 19.
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in annual sales, $100,000 in total assets, and no more than 250 employees. Applying this
definition would have classified about 95% of all business concerns as small, and would have
accounted for about half of all nonagricultural employees.28
Based on its review of federal statutes, executive branch directives, and the academic literature,
the select committee decided that it would not attempt “to formulate a rigid definition of small
business” because “the concept of small business must remain flexible and adaptable to the
peculiar needs of each instance in which a definition may be required.”29 However, it concluded
that the definition of small should be a relative one, as opposed to an absolute one, that took into
consideration variations among economic sectors:
This committee is also convinced that whatever limits may be established to the category
of small business, they must vary from industry to industry according to the general
industrial pattern of each. Public policy may demand similar treatment for a firm of 2,500
employees in one industry as it does for a firm of 50 employees in another industry. Each
may be faced with the same basic problems of economic survival.30
The Small Business Act of 1953’s Definition of
Small Provides Room for Interpretation
Reflecting the view that formulating a rigid definition of small business was impractical, the
Small Business Act of 1953 provided leeway in defining small businesses. It defined a small firm
as “one that is independently owned and operated and which is not dominant in its field of
operation.”31 The SBA was authorized to establish and subsequently alter size standards for
determining eligibility for federal programs to assist small business, some of which are
administered by the SBA.32 The act specifies that the size standards “may utilize number of
employees, dollar volume of business, net worth, net income, a combination thereof, or other
appropriate factors.”33 It also notes that the concept of small is to be defined in a relative sense,
varying from industry to industry to the extent necessary to reflect “differing characteristics”
among industries.34
The House Committee on Banking and Currency’s report accompanying H.R. 5141, the Small
Business Act of 1953, issued on May 28, 1953, provided the committee’s rationale for not
providing a detailed definition of small:

28 U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress, p. 4. See
Abraham David Hannath Kaplan, Small Business: Its Place and Problems (NY: McGraw-Hill Book Co., 1948), pp. 21,
22.
29 U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress, p. 4.
30 U.S. Congress, House Select Committee on Small Business, Review of Small Business: 82nd Congress, p. 5.
31 15 U.S.C. §632(a)(1).
32 Initially, the SBA size standards applied only to its own programs. Other federal agencies used the SBA size
standards for procurement purposes on a voluntary basis. The Regulatory Flexibility Act of 1980 directed federal
agencies to use SBA size standards or establish their own definitions after conferring directly with the SBA’s Bureau
(now Office) for Advocacy. U.S. Congress, Senate Committee on Small Business, Small Business Administration’s
Size Standards, hearing, 97th Cong., 1st sess., May 5, 1981 (Washington: GPO, 1981), p. 18. Also, see 5 U.S.C.
§601(3).
33 15 U.S.C. §632(a)(2).
34 15 U.S.C. §632(a)(3).
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It would be impractical to include in the act a detailed definition of small business because
of the variation between business groups. It is for this reason that the act authorizes the
Administration to determine within any industry the concerns which are to be designated
small-business concerns for the purposes of the act.35
The report did not provide specific guidance concerning what the committee might consider to be
small, but it did indicate that data on industry employment, as of March 31, 1948, “reveals that on
the basis of employment, small business truly is small in size. Of the approximately 4 million
business concerns, 87.4% had fewer than 8 employees and 95.2% of the total number of
concerns, employed fewer than 20 people.”36
Industry Challenges the SBA’s Initial Size
Standards, Claiming They Are Too Restrictive
Initially, the SBA created two sets of size standards, one for federal procurement preferences and
another for the SBA’s loan and management training services. At the request of federal agencies,
the SBA adopted the then-prevailing small business size standard used by federal agencies for
procurement, which was no more than 500 employees. The SBA retained the right to make
exceptions to the no more than 500 employee procurement size standard if the SBA determined
that a firm having more than 500 employees was not dominant in its industry.
For the SBA’s loan and management training services, the SBA’s staff reviewed economic data
provided by the Census Bureau to arrive at what Wendell Barnes, SBA’s Administrator, described
at a congressional hearing in 1956 as “a fairly accurate conclusion as to what comprises small
business in each industry.”37 Jules Abels, SBA’s economic advisor to the administrator, explained
at that congressional hearing how the SBA’s staff determined what constituted a small business:
There are various techniques for the demarcation lines, but in a study of almost any
industry, you will find a large cluster of small concerns around a certain figure.... On the
other hand, above a certain dividing line you will find relatively few and as you map out a
picture of an industry it appears that a dividing line at a certain point is fair.38
On January 5, 1956, the SBA published a notice of proposed rulemaking in the Federal Register
announcing its first proposed small business size standards.39 During the public comment period,
representatives of several industries argued that the proposed standards were too restrictive and
excluded too many firms. In response, Mr. Abels testified that the SBA decided to adjust its
figures to make them “a little bit more liberal because there was some feeling on the part of
certain industries that they were too tight and that they excluded too many firms.”40 The SBA

35 U.S. Congress, House Committee on Banking and Currency, Small Business Act of 1953, report to accompany H.R.
5141, 83rd Cong., 1st sess., May 28, 1953, H.Rept. 83-494 (Washington: GPO, 1953), p. 3 (hereinafter U.S. Congress,
House Committee on Banking and Currency, Small Business Act of 1953).
36 U.S. Congress, House Committee on Banking and Currency, Small Business Act of 1953, p. 4.
37 U.S. Congress, House Select Committee on Small Business, Subcommittee No. 2, Definition of “Small Business”
Within Meaning of the Small Business Act of 1953, as Amended, hearing on H. Res. 114, 84th Cong., 2nd sess., July 5,
1956 (Washington: GPO, 1956), p. 24 (hereinafter U.S. Congress, House Select Committee on Small Business,
Subcommittee No. 2, Definition of “Small Business” Within Meaning of the Small Business Act of 1953, as Amended).
38 U.S. Congress, House Select Committee on Small Business, Subcommittee No. 2, Definition of “Small Business”
Within Meaning of the Small Business Act of 1953, as Amended, p. 39.
39 SBA, “Small Business Size Standards,” 21 Federal Register 79-80, January 5, 1956.
40 U.S. Congress, House Select Committee on Small Business, Subcommittee No. 2, Definition of “Small Business”
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published its final rule concerning its small business size standards on December 7, 1956, and
they became effective on January 1, 1957.41
The SBA decided to use number of employees as the sole criterion for determining if
manufacturing firms were small and annual sales or annual receipts as the sole criterion for all
other industries. Mr. Abels explained at the congressional hearing the SBA’s rationale for using
number of employees for classifying manufacturing firms as small and annual sales or annual
receipts for all other firms:
in the absence of automation which would give one firm in an industry a great advantage
over another, roughly speaking if the firms were mechanized to the same extent, a firm
with 400 employees would have an output which would be twice as large as the output of
a firm with 200 employees.... However when you depart from the manufacturing field and
go into, say, a distributive field or trade, it then becomes necessary to discard the number
of employees, because it is a matter of judicial notice, that one man for example in the
distributive trades can sell as much as 100 men can sell. One small construction firm
possibly can do a lot more business than one with a lot more employees. A service trade
again has its volume geared to something other than the number of employees. So I think
that one can say with reasonable certainty that it is only within the manufacturing field that
the employee standard is the uniform yardstick, but that other than manufacturing the dollar
volume is the appropriate yardstick.42
The SBA’s initial size standards defined most manufacturing firms employing no more than 250
employees as small. In addition, the SBA considered manufacturing firms in some industries
(e.g., metalworking and small arms) as small if they employed no more than 500 employees, and
in some others (e.g., sugar refining and tractors) as small if they employed no more than 1,000
employees. To be considered small, wholesalers were required to have annual sales volume of $5
million or less; construction firms had to have average annual receipts of $5 million or less over
the preceding three years; trucking and warehousing firms had to have annual receipts of $2
million or less; taxicab companies and most firms in the service trades had to have annual receipts
of $1 million or less; and most retail firms had to have annual sales of $1 million or less.43
Mr. Abels testified that the SBA experienced “continual” protests of its size standards by firms
denied financial or support assistance because they were not considered small. He also testified
that in each case, the SBA denied the protest and determined, in his words, that the standard was
“valid and accurate.”44

Within Meaning of the Small Business Act of 1953, as Amended, p. 40.
41 SBA, “Part 103 - Small Business Size Standards,” 21 Federal Register 9709-9714, December 7, 1956.
42 U.S. Congress, House Select Committee on Small Business, Subcommittee No. 2, Definition of “Small Business”
Within Meaning of the Small Business Act of 1953, as Amended, p. 41.
43 U.S. Congress, House Select Committee on Small Business, Subcommittee No. 2, Definition of “Small Business”
Within Meaning of the Small Business Act of 1953, as Amended, p. 3. In the retail sector, department and variety stores,
grocery stores with fresh meats, and new and used automobile stores were considered small if they had annual sales
volume of $2 million or less. In the service trades sector, hotels and power industry firms were considered small if they
had annual receipts of $2 million or less.
44 U.S. Congress, House Select Committee on Small Business, Subcommittee No. 2, Definition of “Small Business”
Within Meaning of the Small Business Act of 1953, as Amended, p. 40.
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GAO and Several Members of Congress Challenge
the SBA’s Size Standards, Claiming They Are
Too Broad
In 1977, the U.S. General Accounting Office (GAO, now the U.S. Government Accountability
Office) was asked by the Senate Select Committee on Small Business to review the SBA’s size
standards. At that time, most of the SBA’s size standards remained at their original 1957 levels,
other than a one-time upward adjustment for inflation in 1975 for industries using annual sales
and receipts to restore eligibility to firms that may have lost small-business status due solely to
the effect of inflation.45
GAO’s report, issued in 1978, found that the SBA’s size standards “are often high and often are
not justified by economic rationale.”46 Specifically, GAO reported that
many size standards may not direct assistance to the target group described in SBA
regulations as businesses “struggling to become or remain competitive” because the loan
and procurement size standards for most industries were established 15 or more years ago
and have not been periodically reviewed; SBA records do not indicate how most standards
were developed; and the standards often define as small a very high percentage of the firms
in the industries to which they apply.47
GAO recommended that the SBA reexamine its size standards “by collecting data on the size of
bidders on set-aside and unrestricted contracts, determining the size of businesses which need set-
aside protection because they cannot otherwise obtain Federal contracts” and then consider
reducing its size standards or “establishing a two-tiered system for set-aside contracts, under
which certain procurements would be available for bidding only to the smaller firms and others
would be opened for bidding to all businesses considered small under present standards.”48
Citing the GAO report, several Members objected to the SBA’s size standards at a House
Committee on Small Business oversight hearing conducted on July 10, 1979. Representative John
J. LaFalce, chair of the House Committee on Small Business Subcommittee on General Oversight
and Minority Enterprise, stated that “what we have faced from 1953 to the present is virtually
nothing other than acquiescence to the demands of the special interest groups. That is how the
size standards have been set.”49 Representative Tim Lee Carter, the subcommittee’s ranking

45 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise,
Size Standards for Small Business, hearing, 96th Cong., 1st sess., July 10, 1979 (Washington: GPO, 1979), p. 3
(hereinafter U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority
Enterprise, Size Standards for Small Business).
GAO reported that adjustments to the size standards had been made to “only 81 of the 534 industries covered by the
special standards” from January 1, 1968, through April 25, 1978. The upward inflation adjustments for industries using
annual sales or receipts ranged from 10.3% to 92.9% depending on the date when the standards were adopted. See
SBA, “Small Business Size Standards,” 40 Federal Register 24210-24215, June 5, 1975, and SBA, “Small Business
Size Standards Regulation,” 40 Federal Register 32824-32826, August 5, 1975.
46 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise,
Size Standards for Small Business, p. 3. Also, see GAO, What Is a Small Business? The Small Business Administration
Needs to Reexamine Its Answer, CED-78-149, August 9, 1978, at http://www.gao.gov/assets/130/123644.pdf
(hereinafter GAO, What Is A Small Business?).
47 GAO, What Is A Small Business?, p. 3.
48 GAO, What Is A Small Business?, p. 4.
49 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise,
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minority member, stated that “it seems to me that we may be fast growing into just a regular bank
forum not just to small business but to all business.”50 At that time, approximately 99% of all
firms with employees were classified by the SBA as a small business.51
Roger Rosenberger, SBA’s associate administrator for policy, planning and budgeting, testified at
the hearing that the SBA would undertake a comprehensive economic analysis of industry data to
determine if its size standards should be changed. However, he also defended the validity of the
SBA’s size standards, arguing that the task of setting size standards was a complicated and
difficult one because of “how market structure and size distribution of firms vary from industry to
industry.”52 He testified that some industries are dominated by a few large firms, some are
comprised almost entirely of small businesses, and others “can be referred to as a mixed
industry.”53 He argued that each market structure presents unique challenges for defining small
businesses within that industry group. For example, he argued that it was debatable whether the
SBA should provide any assistance to any of the businesses within industries where “smaller
firms are flourishing.”54
SBA Proposes More Restrictive Size Standards
Based on Industry Competitiveness
On March 10, 1980, the SBA issued a notice of proposed rulemaking designed to “reduce
administrative complexity” by replacing its two sets of size standards, one for procurement
preferences and another for its loan and consultative support services, with a single set of size
standards for both purposes.55 The SBA also proposed to use a single factor, the firm’s number of
employees, for definitional purposes for nearly all industries instead of using the firm’s number
of employees for some industries, the firm’s assets for others, and the firm’s annual gross receipts
for still others. The SBA argued that
when size standards are denominated in dollars, i.e., annual revenues, its ability to help the
small business sector is undermined by inflation. Using employment, as opposed to dollar
sales, will provide greater stability for SBA and its clients; will remove inter-industry
distortions generated by differential inflation rates; and reduce the need for SBA to make
frequent revisions in the size standards merely to reflect price increases.56

Size Standards for Small Business, p. 9.
50 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise,
Size Standards for Small Business, p. 6.
51 U.S. Congress, Senate Committee on Small Business, Small Business Administration’s Size Standards, hearing, 97th
Cong., 1st sess., May 5, 1981 (Washington: GPO, 1981), p. 14.
52 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise,
Size Standards for Small Business, p. 17.
53 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise,
Size Standards for Small Business, p. 17.
54 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise,
Size Standards for Small Business, p. 28.
55 U.S. Congress, House Committee on Small Business, Small Business Size Standards, hearing, 96th Cong., 2nd sess.,
March 13, 1980 (Washington: GPO, 1980), p. III (hereinafter U.S. Congress, House Committee on Small Business,
Small Business Size Standards).
56 U.S. Congress, House Committee on Small Business, Small Business Size Standards, p. 50.
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In setting its proposed new size standards for each industry (ranging from no more than 15 to no
more than 2,500 employees), the SBA first placed each industry into one of three groups:
concentrated (characterized by a highly unequal distribution of sales among the firms in the
industry), competitive (characterized by a more equal distribution of sales in the industry), or
mixed (industries that do not meet the criteria of competitive or concentrated industries).57
The SBA determined that there were 160 concentrated industries, 317 competitive industries, and
249 mixed industries.58 The SBA argued that establishing a size standard for the 160 concentrated
industries was a “straight-forward task—simply identify and exclude those few firms which
account for a disproportionately large share of the industry’s sales.”59 For competitive industries,
the SBA argued that the size standard should be set “relatively low, so as to support entry and
moderate growth.”60 The SBA argued that mixed industries require “relatively high size standards
... to reinforce competition and offset the pressures to increase the degree of concentration in
these industries.”61
The proposed new SBA size standards would have had the net effect of reducing the number of
firms classified as small by about 225,000.62 In percentage terms, the number of firms classified
as small would have been reduced from about 99% of all employer firms to 96%.63
Over 86% of the more than 1,500 public comments received by the SBA concerning its proposed
new size standards criticized it. Most of the criticism was from firms that would no longer be
considered small under the new size standards.64 In addition, several federal agencies indicated
that the proposed size standards in the services and construction industries were set too low,
reducing the number of small firms eligible to compete for procurement contracts below levels
they deemed necessary to ensure adequate competition to prevent agency costs from rising.
On October 21, 1980, Congress required the SBA to take additional time to consider the
consequences of the proposed changes to the size standards by adopting the Small Business
Export Expansion Act of 1980 (P.L. 96-481). It prohibited “the SBA from promulgating any final
rule or regulation relating to small business size standards until March 31, 1981.”65 In the
meantime, the Reagan Administration entered office, and, as is customary when there is a change
in Administration, replaced the SBA’s senior leadership.
The SBA’s new Administrator, Michael Cardenas, was sympathetic to the concerns of federal
agencies that the proposed size standards in the services and construction industries were set too
low to meet those agencies’ procurement needs. As a result, he indicated that the SBA would
modify its size standards proposal by (1) increasing the proposed size standards for 51 industries,
mostly in the services and construction industries; (2) lowering the proposed size standards in 157
manufacturing industries (typically from no more than 2,500 employees to no more than 500

57 U.S. Congress, House Committee on Small Business, Small Business Size Standards, p. 48.
58 U.S. Congress, House Committee on Small Business, Small Business Size Standards, p. 48.
59 U.S. Congress, House Committee on Small Business, Small Business Size Standards, p. 49.
60 U.S. Congress, House Committee on Small Business, Small Business Size Standards, p. 49.
61 U.S. Congress, House Committee on Small Business, Small Business Size Standards, p. 49.
62 U.S. Congress, Senate Committee on Small Business, Small Business Administration’s Size Standards, hearing, 97th
Cong., 1st sess., May 5, 1981 (Washington: GPO, 1981), p. 11 (hereinafter U.S. Congress, Senate Committee on Small
Business, Small Business Administration’s Size Standards).
63 U.S. Congress, Senate Committee on Small Business, Small Business Administration’s Size Standards, p. 25.
64 U.S. Congress, Senate Committee on Small Business, Small Business Administration’s Size Standards, pp. 4, 10, 16.
65 U.S. Congress, Senate Committee on Small Business, Small Business Administration’s Size Standards, p. 5; and P.L.
96-481, the Small Business Export Expansion Act of 1980.
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employees) to prevent one or more of the largest producers in those industries from being
classified as small; and (3) increasing the SBA’s proposed lowest size standard from no more
than 15 employees to no more than 25 employees (affecting 93 service and trade industries).66
The net effect of these changes would have restored eligibility for approximately 60,000 of the
225,000 firms expected to lose eligibility under the previous Administration’s proposal.67
The SBA subsequently met with various trade organizations and federal agency procurement
officials to discuss the proposal. As these consultations took place, the SBA experienced another
turnover in its senior leadership.
The SBA, headed by the new appointee, James C. Sanders, issued a notice of proposed
rulemaking concerning its size standards on May 3, 1982.68 The proposal differed from its March
10, 1980, predecessor in three ways:
First, the range of size standards was narrowed to a range of 25 employees to 500
employees. This reflected a widespread view that 15 employees was too low a cutoff while
2,500 employees was too high. Second, SBA proposed a 500-employee ceiling, focusing
on smaller firms. Third, SBA responded to sentiments within many procurement-sensitive
industries that the proposed size standards in some cases were too low to accommodate the
average procurement currently being performed by small business. Therefore, SBA
proposed higher size standards in a number of procurement-sensitive industries, while
maintaining the 500-employee cap.69
The SBA received over 500 comments on the proposed rule, with about 72% of those comments
opposing the rule.70
Taking those comments into consideration, the SBA reexamined its size standards once again,
and, after a year of further consultation with various trade organizations and federal agency
procurement officials, issued another notice of proposed rulemaking on May 6, 1983.71 The 1983
proposal (1) replaced the use of two sets of size standards, one for procurement and another for
the SBA’s loan and consultative support services, with a single set for all programs; (2) retained
most of the size standards that were expressed in terms of average annual sales or receipts; (3)
adjusted those size standards for inflation (an upward adjustment of 81%); (4) retained most of
the size standards for manufacturing; and (5) made relatively minor changes to the size standards
in other industries, with a continued emphasis on a 500-employee ceiling for most industries. The
SBA received 630 comments on the proposed rule, with almost 70% supporting it.72

66 U.S. Congress, Senate Committee on Small Business, Small Business Administration’s Size Standards, p. 12.
67 U.S. Congress, Senate Committee on Small Business, Small Business Administration’s Size Standards, p. 11.
68 SBA, “Small Business Size Standards; Size Standards Revisions,” 47 Federal Register 18992-19011, May 3, 1982.
69 U.S. Congress, House Committee on Small Business, Subcommittee on SBA and SBIC Authority, Minority
Enterprise and General Small Business Problems, Size Standards, hearing, 98th Cong., 1st sess., October 20, 1983
(Washington: GPO, 1983), p. 17 (hereinafter U.S. Congress, House Committee on Small Business, Subcommittee on
SBA and SBIC Authority, Minority Enterprise and General Small Business Problems, Size Standards). Congress
created the Small Business Investment Company (SBIC) program in 1958 to provide small businesses enhanced access
to equity capital, long-term loans, and consultative management assistance.
70 U.S. Congress, House Committee on Small Business, Subcommittee on SBA and SBIC Authority, Minority
Enterprise and General Small Business Problems, H.R. 1178: Small Business Size Standards, hearing, 99th Cong., 1st
sess., July 30, 1985 (Washington: GPO, 1985), p. 198.
71 SBA, “Small Business Size Standards; Revision,” 48 Federal Register 20560-20590, May 6, 1983.
72 U.S. Congress, House Committee on Small Business, Subcommittee on SBA and SBIC Authority, Minority
Enterprise and General Small Business Problems, Size Standards, p. 18.
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SBA Administrator Sanders characterized the SBA’s revised size standard proposal as “a fine-
tuning of current standards which has the basic support of both the private sector and the Federal
agencies that use the basic size standards to achieve their set-aside procurement goals.”73 He also
added that “since almost no size standard is proposed to decrease, and most will in fact increase,
very few firms will lose their small business status. We estimate that about 39,000 firms will gain
small business status.”74 He testified that in percentage terms, in 1983, 97.9% of the nation’s 5.2
million firms with employees were classified by the SBA as small. Under the SBA’s proposal,
98.6% of all firms with employees would be classified as small.75 The final rule was published in
the Federal Register on February 9, 1984.76
Representative Parren J. Mitchell, chair of the House Committee on Small Business, expressed
disappointment in the SBA’s final rule, stating at a congressional oversight hearing on July 30,
1985, that “the government and the business community are still victimized by that same ad hoc,
sporadic system that the SBA promised to fix some six years ago.”77 He introduced legislation
(H.R. 1178, a bill to amend the Small Business Act) that would have required the SBA to adjust
its size standard for an industrial classification downward by at least 20% if small business’ share
of that market equaled or exceeded 60%, and at least 40% of the market share was achieved
through the receipt of federal procurement contracts. The bill also mandated a minimum 10%
increase in the SBA’s size standard for an industrial classification if small business’ share of that
market was less than 20% and less than 10% of the market share was achieved through the receipt
of federal procurement contracts.78 The bill was opposed by various trade associations, the SBA,
and federal agency procurement officials, and was not reported out of committee.79
SBA Proposes to Streamline Its Size Standards
On December 31, 1992, the SBA issued a notice of proposed rulemaking “to streamline its size
standards” by reducing the number of fixed size standard levels from 30 to 9.80 The nine proposed
size standards were no more than 100, 500, 750, 1,000, or 1,500 employees; and no more than $5
million, $10 million, $18 million, or $24 million in annual receipts. The annual receipts levels
reflected an upward adjustment of 43% for inflation. The SBA argued that the proposed changes
would make the size standards more user-friendly for small business owners and restore

73 U.S. Congress, House Committee on Small Business, Subcommittee on SBA and SBIC Authority, Minority
Enterprise and General Small Business Problems, Size Standards, p. 18.
74 U.S. Congress, House Committee on Small Business, Subcommittee on SBA and SBIC Authority, Minority
Enterprise and General Small Business Problems, Size Standards, p. 18.
75 U.S. Congress, House Committee on Small Business, Subcommittee on SBA and SBIC Authority, Minority
Enterprise and General Small Business Problems, Size Standards, p. 18.
76 SBA, “Small Business Size Standards; Revision,” 49 Federal Register 5024-5048, February 9, 1984.
77 U.S. Congress, House Committee on Small Business, Subcommittee on SBA and SBIC Authority, Minority
Enterprise and General Small Business Problems, H.R. 1178: Small Business Size Standards, hearing, 99th Cong., 1st
sess., July 30, 1985 (Washington: GPO, 1985), p. 4 (hereinafter U.S. Congress, House Committee on Small Business,
Subcommittee on SBA and SBIC Authority, Minority Enterprise and General Small Business Problems, H.R. 1178:
Small Business Size Standards).
78 U.S. Congress, House Committee on Small Business, Subcommittee on SBA and SBIC Authority, Minority
Enterprise and General Small Business Problems, H.R. 1178: Small Business Size Standards, pp. 237-250.
79 U.S. Congress, House Committee on Small Business, Subcommittee on SBA and SBIC Authority, Minority
Enterprise and General Small Business Problems, H.R. 1178: Small Business Size Standards, pp. 6, 8, 53, 153, 181,
244, 245, 261.
80 SBA, “Small Business Size Standards: Fixed Size Standard Levels,” 57 Federal Register 62515, December 31, 1992.
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eligibility to nearly 20,000 firms that were no longer considered small solely because of the
effects of inflation. The proposed rule was later withdrawn as a courtesy to allow the incoming
Clinton Administration time to review it.81 The SBA ultimately decided not to pursue this
approach because it felt that converting “receipts based size standards in effect at that time to one
of four proposed receipts levels created a number of unacceptable anomalies.”82
Over the subsequent decade, the SBA reviewed the size standards for some industries on a
piecemeal basis and, in 1994, adjusted for inflation its size standards based on firm’s annual sales
or receipts (an upward adjustment of 48.2%). The SBA estimated that the adjustment would
restore eligibility to approximately 20,000 firms that lost small-business status due solely to the
effects of inflation.83
In 2002, the SBA adjusted for inflation its annual sales and receipts based size standards for the
fourth time (an upward adjustment of 15.8%). The SBA estimated that the adjustment would
restore eligibility to approximately 8,760 firms that lost small-business status due solely to the
effects of inflation. The rule also included a provision that the SBA would assess the impact of
inflation on its annual sales and receipts based size standards at least once every five years.84
Then, on March 19, 2004, the SBA, once again, issued a notice of proposed rulemaking to
streamline its size standards.85
The proposed rule would have established size standards based on the firm’s number of
employees for all industries, avoiding the need to adjust for inflation size standards based on sales
or receipts.86 At that time, the SBA size standards consisted of 37 different size levels: 30 based
on annual sales or receipts, 5 on the number of employees (both full- and part-time), 1 on
financial assets, and 1 on generating capacity. Under the proposed rule, the SBA would use 10
size standards, 5 new employee size standards (adding no more than 50, 150, 200, 300, and 400
employees), and the existing 5 employee size standards (no more than 100, 500, 750, 1,000, and
1,500 employees).87
The proposed rule would not have changed any existing size standards based on number of
employees. The SBA argued that the use of a single size standard would “help to simplify size
standards” and “tends to be a more stable measure of business size” than other measures.88 It
added that the proposed rule would change 514 size standards and that, after the proposed
conversion to the use of number of employees, of the “approximately 4.4 million businesses in

81 U.S. Congress, House Committee on Small Business, Subcommittee on Minority Enterprise, Finance, and Urban
Development, SBA’s Efforts to Streamline Size Standards, hearing, 103rd Cong., 1st sess., May 25, 1993 (Washington:
GPO, 1993), pp. 5, 6.
82 SBA, “Small Business Size Standards: Restructuring of Size Standards,” 69 Federal Register 13130, March 19,
2004.
83 SBA, “Small Business Size Standards: Inflation Adjusted Size Standards,” 59 Federal Register 16513-16538, April
7, 1994.
84 SBA, “Small Business Size Standards: Inflation Adjustment to Size Standards,” 67 Federal Register 65285-65290,
October 24, 2002.
85 SBA, “Small Business Size Standards: Restructuring of Size Standards,” 69 Federal Register 13129-13164, March
19, 2004.
86 SBA, “Small Business Size Standards: Restructuring of Size Standards,” 69 Federal Register 13129-13164, March
19, 2004.
87 SBA, “Small Business Size Standards: Restructuring of Size Standards,” 69 Federal Register 13130, March 19,
2004.
88 SBA, “Small Business Size Standards: Restructuring of Size Standards,” 69 Federal Register 13131-13132, March
19, 2004.
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the industries with revised size standards, 35,200 businesses could gain and 34,100 could lose
small business eligibility, with the net effect of 1,100 additional businesses defined as small.”89
A majority (51%) of the more than 4,500 comments on the proposed rule supported it, but with “a
large number of comments opposing various aspects of SBA’s approach to simplifying size
standards.”90 In addition, the chairs of the House Committee on Small Business and Senate
Committee on Small Business and Entrepreneurship opposed the proposed rule, largely because
they were concerned about potential job losses resulting from more than 34,000 small businesses
losing program eligibility.91 The SBA withdrew the proposed rule on July 1, 2004.
In 2005, the SBA adjusted for inflation size standards based on firms’ annual sales or receipts (an
upward adjustment of 8.7%). The SBA estimated that the adjustment restored eligibility to
approximately 12,000 firms that lost small-business status due solely to inflation. In 2008, the
SBA made another adjustment for inflation to its annual sales and receipts based standards
(another upward adjustment of 8.7%). The SBA estimated that the adjustment restored eligibility
for approximately 10,400 firms that lost small-business status due solely to inflation.92
SBA Adopts a Targeted Approach and Reduces the
Number of Receipt Based Size Standards
In June 2008, the SBA announced that it would undertake a comprehensive, two-year review of
its size standards, proceeding one industrial sector at a time, starting with Retail Trade (NAICS
Sector 44-45), Accommodations and Food Services (NAICS Sector 72), and Other Services
(NAICS Sector 81).93 The SBA argued that it was concerned that “not all of its size standards may
now adequately define small businesses in the U.S. economy, which has seen industry
consolidations, technological advances, emerging new industries, shifting societal preferences,
and other significant industrial changes.”94 It added that its reliance on an ad hoc approach
“scrutinizing the limited number of specific industries during a year, while worthwhile, leaves

89 SBA, “Small Business Size Standards: Restructuring of Size Standards,” 69 Federal Register 13138, March 19,
2004.
90 SBA, “Small Business Size Standards: Selected Size Standards Issues,” 69 Federal Register 70197, December 3,
2004; and SBA, “Small Business Size Standards: Selected Size Standards Issues,” 70 Federal Register 2976, January
19, 2005.
91 Rep. Donald A. Manzullo and Rep. Nydia M. Velázquez, “Small Business Size Standards; Restructuring of Size
Standards,” 69 Federal Register 13,130 (March 19, 2004); Letter to Gary M. Jackson, SBA Assistant Administrator for
Size Standards, July 8, 2004; and U.S. Newswire, “Snowe Hails SBA’s Withdrawal of New Size Standards Proposal;
Decision Spares Small Firms Costly Disruptions,” July 1, 2004, p. 1, at http://proquest.umi.com/pqdweb?did=
657675071&sid=1&Fmt=3&clientId=45714&RQT=309&VName=PQD.
92 SBA, “Small Business Size Standards, Inflation Adjustment to Size Standards; Business Loan Program; Disaster
Assistance Loan Program,” 70 Federal Register 72577, December 6, 2005; and SBA, “Small Business Size Standards:
Inflation Adjustment to Size Standards; Business Loan Program, and Disaster Assistance Loan Program,” 73 Federal
Register 41237-41254, July 18, 2008.
93 SBA, “Small Business Size Standards: Public Meetings on a Comprehensive Review of Small Business Size
Standards,” 73 Federal Register 30440-30442, May 27, 2008. Other Services (NAICS Sector 81) include repair and
maintenance, personal and laundry services, and religious, grantmaking, civic, professional, and similar organizations.
94 SBA, “Small Business Size Standards: Public Meetings on a Comprehensive Review of Small Business Size
Standards,” 73 Federal Register 30441, May 27, 2008.
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unexamined many deserving industries for updating and may create over time a set of illogical
size standards.”95
The SBA announced that it would begin its analysis of its size standards by assuming that “$6.5
million [later increased to $7.5 million] is an appropriate size standard for those industries with
receipts size standards and 500 employees for those industries with employee size standards.”96 It
would then analyze the following industry characteristics: “average firm size; average asset size
(a proxy for startup costs); competition, as measured by the market share of the four largest firms
in the industry; and, the distribution of market share by firm size—that is, are firms in the
industry generally very small firms, or dominated by very large firms.”97 Then, before making its
final determination on the size standard, it would “examine the participation of small businesses
in federal contracting and SBA’s guaranteed loan program at the current size standard level.
Depending on the level of small business participation, additional consideration may be given to
the level of the current size standard and the analysis of industry factors.”98
In April 2009, the SBA announced that was simplifying the administration and use of its size
standards by reducing the number of receipts based size standards from 31 to 8 when establishing
a new size standard or reviewing an existing size standard:
For many years, SBA has been concerned about the complexity of determining small
business status caused by a large number of varying receipts based size standards (see 69
FR 13130 (March 4, 2004) and 57 FR 62515 (December 31, 1992)). At the start of current
comprehensive size standards review, there were 31 different levels of receipts based size
standards. They ranged from $0.75 million to $35.5 million, and many of them applied to
one or only a few industries. The SBA believes that to have so many different size standards
with small variations among them is unnecessary and difficult to justify analytically. To
simplify managing and using size standards, SBA proposes that there be fewer size
standard levels. This will produce more common size standards for businesses operating in
related industries. This will also result in greater consistency among the size standards for
industries that have similar economic characteristics.
Under the current comprehensive size standards review, SBA is proposing to establish
eight “fixed-level” receipts based size standards: $5.0 million, $7.0 million, $10.0 million,
$14.0 million, $19.0 million, $25.5 million, $30.0 million, and $35.5 million. These levels
are established by taking into consideration the minimum, maximum and the most
commonly used current receipts based size standards.99
These eight receipts based size standards were increased to $5.5 million, $7.5 million, $11.0
million, $15.0 million, $20.5 million, $27.5 million, $32.5 million, and $38.5 million in 2014 to
account for inflation.100
The SBA also announced that it would

95 SBA, “Small Business Size Standards: Public Meetings on a Comprehensive Review of Small Business Size
Standards,” 73 Federal Register 30441, May 27, 2008.
96 SBA, “Size Standards Comprehensive Review,” June 3, 2008 (no longer available).
97 SBA, “Size Standards Comprehensive Review,” June 3, 2008.
98 SBA, “Size Standards Comprehensive Review,” June 3, 2008.
99 SBA, “Small Business Size Standards Methodology,” April 2009, pp. 21, 22, at http://www.sba.gov/sites/default/
files/size_standards_methodology.pdf.
100 SBA, “Small Business Size Standards: Inflation Adjustment to Monetary Size Standards,” 79 Federal Register
33647-33669, June 12, 2014; and SBA, “Small Business Size Standards: Inflation Adjustment to Monetary Based Size
Standards,” 81 Federal Register 3949-3956, January 25, 2016.
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 use eight employee based size standards when establishing a new size standard or
reviewing an existing size standard (no more than 50, 100, 150, 200, 250, 500,
750, and 1,000 employees) instead of seven (no more than 50, 100, 150, 500,
750, 1,000, and 1,500 employees);101 and
 continue to use one asset based size standard, one megawatt hours size standard
(based on electrical output over the preceding fiscal year), and one size standard
based on a combination of the number of employees and barrel per day refining
capacity.
The SBA also announced that “to simplify size standards further” it “may propose a common size
standard for closely related industries.”102 The SBA argued
although the size standard analysis may support a separate size standard for each industry,
SBA believes that establishing different size standards for closely related industries may
not always be appropriate. For example, in cases where many of the same businesses
operate in the same multiple industries, a common size standard for those industries might
better reflect the Federal marketplace. This might also make size standards among related
industries more consistent than separate size standards for each of those industries.103
Because SBA size standards remain in force until after they are reviewed, the number of size
standards did not immediately drop from 41 to 19 in 2009. Instead, the number of size standards
began to decline gradually as new size standard final rules were issued. In addition, from 2010
through 2016, the SBA decided, in most instances, not to lower size standards (which would have
made it more difficult for businesses to qualify) even if the data supported lowering them because
unemployment at that time was relatively high and doing so would “run counter to numerous
Congressional and Administration’s initiatives and programs to create jobs and boost economic
growth.”104 As a result of this policy decision, several size standards that would have otherwise
been eliminated remained in place. Also, in 2016, the SBA added a new employee based size
standard (no more than 1,250 employees) and reinstated the use of another (no more than 1,500
employees) when establishing a new, or revising an existing, size standard.105

101 SBA, “Small Business Size Standards Methodology,” April 2009, p. 23, at http://www.sba.gov/sites/default/files/
size_standards_methodology.pdf (hereinafter SBA, “Small Business Size Standards Methodology,” April 2009). The
SBA stopped using the no more than 1,500 employee size standard when establishing a new or reviewing an existing
size standard, noting that only three manufacturing industries had a no more than 1,500 employee size standard at that
time.
102 SBA, “Small Business Size Standards Methodology,” April 2009, pp. 22, 23.
103 SBA, “Small Business Size Standards Methodology,” April 2009, p. 23.
104 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2018, p. 27, at https://www.sba.gov/sites/default/files/2019-04/
SBA%27s%20Size%20Standards%20Methodology%20White%20Paper%20%28April%202018%29.pdf (hereinafter
SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2018); SBA, “Small Business Size Standards: Retail Trade,” 75 Federal Register 61598, October 6, 2010; SBA, “Small
Business Size Standards: Accommodations and Food Service Industries,” 75 Federal Register 61605, October 6, 2010;
and SBA, “Small Business Size Standards: Other Services,” 75 Federal Register 61592, October 6, 2010.
The SBA’s only exception to this practice was if lowering the size standard was necessary to exclude dominant firms
from becoming eligible for SBA assistance.
105 SBA, “Small Business Size Standards for Manufacturing,” 79 Federal Register 54150, September 10, 2014; SBA,
“Small Business Size Standards for Manufacturing,” 80 Federal Register 78044, December 15, 2015; and SBA, “Small
Business Size Standards for Manufacturing,” 81 Federal Register 4469-4492, January 26, 2016. On September 10,
2014, the SBA announced its intention to eliminate its no more than 150 employee based size standard in its proposed
rule for industries with employee based size standards not part of the manufacturing, wholesale trade, and retail trade
industries. However, the SBA decided to retain the no more than 150 employee-size standard in the size standard final
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The SBA’s decisions in 2009 to reduce the number of receipts based size standards and to
propose a common size standard for closely related industries were opposed by some industry
groups. They argued that these policies could lead to the SBA to classify an industry “for the sake
of convenience” into a size standard that the agency’s own economic analysis indicates should be
in a different (easier to qualify) size standard.106 Congress adopted legislation in 2013 (P.L. 112-
239, National Defense Authorization Act for Fiscal Year 2013) that included provisions directing
the SBA not to limit the number of size standards and to assign the appropriate size standard to
each NAICS industrial classification.107
The SBA currently has 27 SBA industry size standards in effect (16 receipts based size standards,
9 employee based sized standards, 1 asset based size standard, and 1 size standard based on a
combination of the number of employees and barrel per day refining capacity).108 That number is
expected to increase given the SBA’s directive not to limit the number of size standards.
Congress Requires Periodic Size Standard Reviews
As mentioned, P.L. 111-240 requires the SBA to conduct a detailed review of not less than one-
third of the SBA’s industry size standards during the 18-month period beginning on the date of
enactment (September 27, 2010) and during every 18-month period thereafter.109
The act directs the SBA to “make appropriate adjustments to the size standards” to reflect market
conditions, and to report to the House Committee on Small Business and the Senate Committee
on Small Business and Entrepreneurship and make publicly available “not later than 30 days”
after the completion of each review information regarding the factors evaluated as part of each
review, the criteria used for any revised size standard, and why the SBA did, or did not, adjust
each size standard that was reviewed. The act also requires the SBA to ensure that each industry
size standard is reviewed at least once every five years.110
On July 7, 2011, the SBA announced that its “comprehensive review of all small business size
standards” would begin with the following six industries:

rule for those industries, which was issued on January 26, 2016. See SBA, “Small Business Size Standards: Industries
With Employee Based Size Standards Not Part of Manufacturing, Wholesale Trade, or Retail Trade,” 79 Federal
Register 53647, September 10, 2014; and SBA, “Small Business Size Standards: Industries With Employee Based Size
Standards Not Part of Manufacturing, Wholesale Trade, or Retail Trade,” 81 Federal Register 4436-4469, January 26,
2016.
106 U.S. Congress, House Committee on Small Business, Small Business Protection Act of 2012, report to accompany
H.R. 3987, 112th Cong., 2nd sess., December 21, 2012, H.Rept. 112-724 (Washington: GPO, 2012), p. 4.
107 The SBA subsequently decided not to implement this provision until the first five-year review cycle mandated by
P.L. 111-240, the Small Business Jobs Act of 2010, was completed.
108 Since August 19, 2019, the SBA’s receipts based size standards have been no more than $1.0 million, $6.0 million,
$8.0 million, $12.0 million, $16.5 million, $19.5 million, $20.5 million, $22.0 million, $27.0 million, $30.0 million,
$32.0 million, $34.5 million, $35.0 million, $39.5 million, $40.5 million, and $41.5 million in average annual receipts
over the most recently completed three (soon to be five) fiscal years or average annual receipts on a pro rata basis if the
firm has been in business for less than three (soon to be five) years. The employee based size standards are no more
than 100 employees, 150 employees, 200 employees, 250 employees, 500 employees, 750 employees, 1,000
employees, 1,250 employees, and 1,500 employees. The assets based size standard is $600 million as reported by the
institution’s four quarterly financial statements for the preceding year. The combined size standard is no more than
1,500 employees or no more than 200,000 barrels per calendar day total Operable Atmospheric Crude Oil Distillation
capacity.
109 P.L. 111-240, the Small Business Act of 2010, §1344. Updated Size Standards.
110 P.L. 111-240, the Small Business Act of 2010, §1344. Updated Size Standards.
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 Educational Services (final rule was issued on September 24, 2012);
 Health Care and Social Assistance Services (final rule was issued on September
24, 2012);
 Real Estate Rental and Leasing (final rule was issued on September 24, 2012);
 Administrative and Support, Waste Management and Remediation Services (final
rule was issued on December 6, 2012);
 Information (final rule was issued on December 6, 2012); and
 Utilities (final rule was issued on December 23, 2013).111
The SBA subsequently completed size standard reviews for all industries in January 2016 (listed
by when the final rule was issued):
 Professional, Scientific and Technical Services (final rule was issued on February
24, 2012);
 Transportation and Warehousing (final rule was issued on February 24, 2012);
 Agriculture, Forestry, Fishing and Hunting (final rule was issued on June 20,
2013);
 Arts, Entertainment, and Recreation (final rule was issued on June 20, 2013);
 Finance and Insurance (final rule was issued on June 20, 2013);
 Management of Companies (final rule was issued on June 20, 2013);
 Support Activities for Mining (final rule was issued on June 20, 2013);
 Construction (final rule was issued on December 23, 2013);
 Wholesale Trade (final rule was issued on January 25, 2016);
 Industries with Employee Based Size Standards not Part of Manufacturing,
Wholesale Trade, or Retail Trade (final rule was issued on January 26, 2016); and
 Manufacturing (final rule was issued on January 26, 2016).
A summary of the final rules issued for each industry is provided in Table A-1.
During the first five-year review cycle, the SBA increased 621 size standards, decreased 3 (to
exclude potentially dominant firms from being considered small), and retained 388 at their pre-
existing levels.112 Of the 388 retained size standards, 214 were retained based on the results of the
SBA’s economic analysis and 174 were retained based on the SBA’s policy of generally not

111 SBA, “Semiannual Regulatory Agenda,” 76 Federal Register 40140-40142, July 7, 2011.
112 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2018, p. 9.
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lowering any size standard, even though the results of the economic analysis supported lowering
them, due to national economic conditions.113
The SBA has started its second five-year review of its NAICS Sector size standards and has
announced the following anticipated dates for the issuance of final rules for each Sector:
 May 2021—Sector 42 (wholesale trade), Sectors 44-45 (retail trade), and Sectors
31-33 (manufacturing);114
 July 2021—Sector 54 (professional, scientific, and technical services), Sector 55
(management of companies and enterprises), and Sector 56 (administrative and
support, waste management and remediation services);115
 September 2021—Sector 11 (agriculture, forestry, fishing and hunting); Sector 21
(mining, quarrying, and oil and gas extraction), Sector 22 (utilities), Sector 23
(construction), Sectors 48-49 (transportation and warehousing), Sector 51
(information), Sector 52 (finance and insurance) and Sector 53 (real estate and
rental and leasing);116 and
 October 2021—Sector 61 (education services), Sector 62 (health care and social
assistance), Sector 71 (arts, entertainment and recreation), Sector 72
(accommodation and food services) and Sector 81 (other services).117
The SBA will use new size standard methodology proposed in April 2018 and finalized in April
2019 (discussed in the next section) during its second five-year review cycle.118 The SBA also
announced in April 2018 (and again in April 2019) that its policy of generally not lowering size
standards when the analysis indicates that a lower standard is justified would no longer be in
force, at least initially, during the second five-year review cycle:
the decision to raise, lower, or retain a size standard will primarily be driven by analytical
results, with due considerations of public comments, impacts of changes on the affected
businesses, and other factors SBA considers important. All of these decisions will be
detailed in individual rulemakings. It will take several years to complete the five-year
review of all size standards … during which the state of the economy may change. It is,
therefore, not possible to state now … what impact, if any, the future economic
environment would have on the SBA’s policy decision regarding size standards.119

113 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2018, p. 9.
114 SBA, “Semiannual Regulatory Agenda,” 86 Federal Register 16974, March 31, 2021.
115 SBA, “Semiannual Regulatory Agenda,” 86 Federal Register 16973-16974, March 31, 2021.
116 SBA, “Semiannual Regulatory Agenda,” 86 Federal Register 16973, March 31, 2021.
117 SBA, “Semiannual Regulatory Agenda,” 86 Federal Register 16974, March 31, 2021.
118 In addition, effective October 1, 2017, the SBA amended its small business size standards to incorporate the U.S.
Office of Management and Budget’s (OMB’s) 2017 NAICS designations. NAICS 2017 created 21 new industries by
reclassifying, combining, or splitting 29 existing industries designated under NAICS 2012. The SBA’s size standards
for the industries affected by OMB’s revisions increased size standards for six NAICS 2012 industries and part of
another, decreased size standards for two others, changed the size standards measure from average annual receipts to
number of employees for another, and resulted in no change for 20 industries and parts of another. See SBA, “Small
Business Size Standards; Adoption of 2017 North American Industry Classification System for Size Standards,” 82
Federal Register 18253, April 18, 2017; and SBA, “Small Business Size Standards; Adoption of 2017 North American
Industry Classification System for Size Standards,” 82 Federal Register 44886-44895, September 27, 2017.
119 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2018, p. 27. Also, see SBA, Office of Government Contracting and Business Development, “SBA Size Standards
Methodology,” April 11, 2019, pp. 26, 27, at https://www.sba.gov/document/support—size-standards-methodology-
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SBA’s Definitions for Small Business
As mentioned, the SBA, relying on statutory language, defines a small business as a concern that
is organized for profit; has a place of business in the United States; operates primarily within the
United States or makes a significant contribution to the economy through payment of taxes or use
of American products, materials, or labor; is independently owned and operated; and is not
dominant in its field on a national basis. The business may be a sole proprietorship, partnership,
corporation, or any other legal form.120
The SBA uses two measures to determine if a business is small: industry specific size standards or
a combination of the business’s net worth and net income. For example, the SBA’s Small
Business Investment Company (SBIC) program allows businesses to qualify as small if they meet
the SBA’s size standard for the industry in which the applicant is primarily engaged, or an
alternative net worth and net income based size standard which has been established for the SBIC
program. The SBIC’s alternative size standard is currently set as a maximum net worth of not
more than $19.5 million and average after-tax net income for the preceding two years of not more
than $6.5 million.121 All of the company’s subsidiaries, parent companies, and affiliates are
considered in determining if it meets the size standard. The SBA decided to apply the net worth
and net income measures to the SBIC program “because investment companies evaluate
businesses using these measures to decide whether or not to make an investment in them.”122
Businesses participating in the SBA’s 504/Certified Development Company (504/CDC) loan
guaranty program are to be deemed small if they did not have a tangible net worth in excess of
$8.5 million and did not have an average net income in excess of $3 million after taxes for the
preceding two years.123 As discussed below, P.L. 111-240 increased these threshold amounts on an
interim basis to not more than $15 million in tangible net worth and not more than $5 million in
average net income after federal taxes for the two full fiscal years before the date of the
application. All of the company’s subsidiaries, parent companies, and affiliates are considered in
determining if it meets the size standard. Also, before May 5, 2009, businesses participating in the
SBA’s 7(a) loan guaranty program, including its express programs, were deemed small if they
met the SBA’s size standards for firms in the industries described in NAICS.124

white-paper.
120 13 C.F.R. §121.105. Affiliations between businesses, or relationships allowing one party control or the power of
control over another, generally count in size determinations. Businesses can thus be determined to be other than small
because of their involvement in joint ventures, subcontracting arrangements, or franchise or license agreements, among
other things, provided that their personnel numbers or income, plus those of their affiliate(s), are over the pertinent size
threshold. 13 C.F.R. §121.103. For further analysis, see CRS Report R44844, SBA’s “8(a) Program”: Overview,
History, and Current Issues, by Robert Jay Dilger.
121 13 C.F.R. §107.700; 13 C.F.R. §107.710; 13 C.F.R. §301(c)(2); and 13 C.F.R. §301(c)(1).
122 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2009, p. 8, at http://www.sba.gov/sites/default/files/size_standards_methodology.pdf.
123 SBA, “SOP 50 10 5(C): Lender and Development Company Loan Programs,” (effective October 1, 2010), p. 266, at
http://www.sba.gov/sites/default/files/serv_sops_50105c_loan_0.pdf; and SBA, “SOP 50 10 5(E): Lender and
Development Company Loan Programs,” (effective June 1, 2012), p. 92, at http://www.sba.gov/sites/default/files/
SOP%2050%2010%205(E)%20(6-27-2013)%20change%20of%20ownership%20eff%20date%207-1-13%20clean.pdf.
124 13 C.F.R. §121.201.
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Alternative Size Standards
Using authority provided under P.L. 111-5, the American Recovery and Reinvestment Act of
2009, the SBA temporarily applied the 504/CDC program’s size standards as an alternative for
7(a) loans approved from May 5, 2009, through September 30, 2010.125 Firms applying for a 7(a)
loan during that time period qualified as small using either the SBA’s industry size standards or
the 504/CDC program’s size standard. The provision’s intent was to enhance the ability of small
businesses to access the capital necessary to create and retain jobs during the economic recovery.
P.L. 111-240 made the use of alternative size standards for the 7(a) program permanent. The act
directs the SBA to establish an alternative size standard for both the 7(a) and 504/CDC programs
that uses maximum tangible net worth and average net income as an alternative to the use of
industry standards. The act also establishes, until the date on which the alternative size standard is
established, an interim alternative size standard for the 7(a) and 504/CDC programs of not more
than $15 million in tangible net worth and not more than $5 million in average net income after
federal taxes (excluding any carry-over losses) for the two full fiscal years before the date of the
application.126
The SBA has announced that it is working on a new alternative size standard for the 7(a) and
504/CDC programs and anticipates issuing a notice of proposed rulemaking for the new
alternative size standard in May 2021.127
Industry Size Standards
The SBA Administrator has the authority to establish and modify size standards for particular
industries. As mentioned, about 97% of all employer firms qualify as small under the SBA’s size
standards, and these firms account for about 30% of industry receipts.128
The SBA generally “prefers to use average annual receipts as a size measure because it measures
the value of output of a business and can be easily verified by business tax returns and financial

125 SBA, “Small Business Size Standards; Temporary Alternative Size Standards for 7(a) Business Loan Program,” 74
Federal Register 20577, May 5, 2009.
126 P.L. 111-240, the Small Business Act of 2010, §1116. Alternative Size Standards. S. 3103, the Small Business Job
Creation Act of 2010, introduced by then-Senator Olympia Snowe on March 10, 2010, and referred to the Senate
Committee on Finance, and S. 2869, the Small Business Job Creation and Access to Capital Act of 2009, introduced by
Senator Mary Landrieu on December 10, 2009, and reported favorably by the Senate Committee on Small Business and
Entrepreneurship, would have authorized the SBA to establish an alternative size standard for the SBA’s 7(a) and
504/CDC loan programs. Both bills would have used maximum tangible net worth of not more than $15 million and
average net income after federal taxes of not more than $5 million for the two full fiscal years before the date of the
application as an alternative to the use of the SBA’s industry size standards. Senator Snowe stated on the Senate floor,
on December 10, 2009, that the proposed alternative size standard in S. 2869 would “help more small businesses meet
the SBA’s requirements to access SBA-backed loans.” Senator Olympia Snowe, “Statements on Introduced Bills and
Joint Resolutions,” remarks in the Senate, Congressional Record, daily edition, vol. 155, no. 185 (December 10, 2009),
p. S12913.
127 SBA, “Semiannual Regulatory Agenda,” 86 Federal Register 16973, March 31, 2021. The SBA had previously
indicated that it anticipated issuing a notice of proposed rulemaking for the new alternative size standard in December
2020. See SBA, “Semiannual Regulatory Agenda,” 85 Federal Register 52785, August 26, 2020.
128 SBA, “SBA’s Size Standards Analysis: An Overview on Methodology and Comprehensive Size Standards Review,”
power point presentation, Khem R. Sharma, SBA Office of Size Standards, July 13, 2011, p. 4, at
http://www.actgov.org/sigcom/SIGs/SIGs/SBSIG/Documents/2011%20-%20Documents%20and%20Presentations/
Size%20Stds%20Presentation_SIG%20Meeting.pdf; and SBA, “Small Business Size Standards: Adjustment of
Monetary-Based Size Standards for Inflation,” 84 Federal Register 34266, July 18, 2019.
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records.”129 However, historically, the SBA has used the number of employees to determine if
manufacturing and mining companies are small.
Before a proposed change to the size standards can take effect, the SBA’s Office of Size
Standards (OSS) undertakes an analysis of the change’s likely impact on the affected industry,
focusing on the industry’s overall degree of competition and the competitiveness of the firms
within the industry. The analysis includes an assessment of the following four economic factors:
“average firm size, average assets size as a proxy of start-up costs and entry barriers, the 4-firm
concentration ratio as a measure of industry competition, and size distribution of firms.”130 The
SBA also considers the ability of small businesses to compete for federal contracting
opportunities and, when necessary, several secondary factors “as they are relevant to the
industries and the interests of small businesses, including technological change, competition
among industries, industry growth trends, and impacts of size standard revisions on small
businesses.”131
The specifics of SBA’s size standards methodology have evolved over the years with the
availability of new industry and federal procurement data and staff research. For example, the
SBA previously presumed less than $7.0 million (increased to less than $7.5 million in 2014 to
account for inflation) as an appropriate “anchor” size standard for the services, retail trade,
construction, and other industries with receipts based size standards; 500 or fewer employees as
an appropriate anchor size standard for the manufacturing, mining and other industries with
employee based size standards; and 100 or fewer employees as an appropriate anchor size
standard for the wholesale trade industries. These three anchor size standards were used as
benchmarks or starting points for the SBA’s economic analysis. To the extent an industry
displayed “differing industry characteristics,” a size standard higher, or in some cases lower, than
an anchor size standard was used.132
In April 2018, the SBA indicated that it was replacing the “anchor” approach with a “percentile”
approach, primarily because the anchors were no longer representative of the size standards being
used (just 24% of industries with receipt-based size standards and 22% of those with employee
based size standards had the anchor size standards) and the anchor approach entails “grouping
industries from different NAICS sectors thereby making it inconsistent with section 3(a)(7) of the
[Small Business] Act,” which limits the SBA’s ability to create common size standards by
grouping industries below the 4-digit NAICS level.133 The SBA finalized this change in April
2019.134
Specifically, when assessing the appropriateness of the current size standards, the SBA now

129 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2009, p. 8, at http://www.sba.gov/sites/default/files/size_standards_methodology.pdf.
130 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2018, pp. 29, 30.
131 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2009, p. 1, at http://www.sba.gov/sites/default/files/size_standards_methodology.pdf.
132 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2018, p. 1. The SBA established 500 employees as its anchor size standard for manufacturing industries at the SBA’s
inception in 1953. Shortly thereafter, the SBA established a receipt-based anchor size standard of $1 million in average
annual receipts for nonmanufacturing industries. The receipt-based anchor size standard has been adjusted periodically
for inflation.
133 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2018, pp. 13, 14.
134 SBA, Office of Government Contracting and Business Development, “Size Standards Methodology White Paper,”
April 11, 2019, at https://www.sba.gov/document/support—size-standards-methodology-white-paper.
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evaluates the structure of each industry in terms of four economic characteristics or factors,
namely average firm size, average assets size as a proxy of start-up costs and entry barriers,
the 4-firm concentration ratio as a measure of industry competition, and size distribution
of firms using the Gini coefficient. For each size standard type ... SBA ranks industries
both in terms each of the four industry factors and in terms of the existing size standard
and computes the 20th percentile and 80th percentile values for both. SBA then evaluates
each industry by comparing its value for each industry factor to the 20th percentile and 80th
percentile values for the corresponding factor for industries under a particular type of size
standard.
If the characteristics of an industry under review within a particular size standard type are
similar to the average characteristics of industries within the same size standard type in the
20th percentile, SBA will consider adopting as an appropriate size standard for that industry
the 20th percentile value of size standards for those industries. For each size standard type,
if the industry’s characteristics are similar to the average characteristics of industries in the
80th percentile, SBA will assign a size standard that corresponds to the 80th percentile in
the size standard rankings of industries. A separate size standard is established for each
factor based on the amount of differences between the factor value for an industry under a
particular size standard type and 20th percentile and 80th percentile values for the
corresponding factor for all industries in the same type. Specifically, the actual level of the
new size standard for each industry factor is derived by a linear interpolation using the 20th
percentile and 80th percentile values of that factor and corresponding percentiles of size
standards. Each calculated size standard will be bounded between the minimum and
maximum size standards levels [see Table 2] ... the calculated value for a receipts based
size standard for each industry factor is rounded to the nearest $500,000 and the calculated
value for an employee based size standard is rounded to the nearest 50 employees for
Manufacturing and industries in other sectors (except Wholesale and Retail Trade) and to
the nearest 25 employees for employee based size standards for Wholesale Trade and Retail
Trade.135
The SBA anticipates that its shift from using the anchor approach to the percentile approach will
have minimal impact, both in terms of the direction and magnitude of changes, to its industry size
standards.136
Table 2. Minimum and Maximum Receipts and Employee Based Size Standards,
Since 2019
Type of Size Standards
Minimum
Maximum
Receipts based size standards
$5 mil ion
$41.5 mil iona
(excluding agricultural industries in
NAICS subsectors 111 and 112)
Receipts based size standards for
$1 mil ion
$5 mil ion
agricultural industries in NAICS
subsectors 111 and 112
Employee based size standards for
250 employees
1,500 employees
Manufacturing and other industries
(excluding Wholesale and Retail
Trade)

135 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2018, pp. 29, 30.
136 SBA, Office of Government Contracting and Business Development, “SBA Size Standards Methodology,” April
2018, p. 2.
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Type of Size Standards
Minimum
Maximum
Employee based size standards for
50 employees
250 employees
Wholesale and Retail Trade
Source: U.S. Small Business Administration, Office of Government Contracting and Business Development,
“Size Standards Methodology White Paper,” April 11, 2019, p. 28, at https://www.sba.gov/document/support—
size-standards-methodology-white-paper.
a. The Size Standards Methodology White Paper indicates that the maximum receipts-based size standard
(excluding agricultural industries in NAICS subsectors 111 and 112) is $40.0 mil ion. That figure was
increased to $41.5 mil ion on August 19, 2019, to account for inflation. See U.S. Small Business
Administration, “Small Business Size Standards: Adjustment of Monetary-Based Size Standards for Inflation,”
84 Federal Register 34261-34281, July 18, 2019 (effective August 19, 2019).
Any changes to size standards must follow the rulemaking procedures of the Administrative
Procedure Act. A proposed rule changing a size standard is first published in the Federal Register,
allowing for public comment. It must include documentation establishing that a significant
problem exists that requires a revision of the size standard, plus an economic analysis of the
change. Comments from the public, plus any other new information, are reviewed and evaluated
before a final rule is promulgated establishing a new size standard.
The SBA currently uses employment size to determine eligibility for 505 of 1,037 industries
(48.7%), including all 360 manufacturing industries, 24 mining industries, and 71 wholesale trade
industries. Since October 1, 2017,
 98 manufacturing industries have an upper limit of 500 employees (27.2%); 91
have an upper limit of 750 employees (25.2%); 89 have an upper limit of 1,000
employees (24.7%); 56 have an upper limit of 1,250 employees (15.6%); and 26
have an upper limit of 1,500 employees (7.2%).137
 3 of the 24 mining industries have an upper limit of 250 employees (12.5%), 7
have an upper limit of 500 employees (29.2%), 7 have an upper limit of 750
employees (29.2%), 2 have an upper limit of 1,000 employees (8.3%), 3 have an
upper limit of 1,250 employees (12.5%), and 2 have an upper limit of 1,500
employees (8.3%).138
 25 of the 71 wholesale trades industries have an upper limit of 100 employees
(35.2%), 16 have an upper limit of 150 employees (22.5%), 21 have an upper
limit of 200 employees (29.6%), and 9 have an upper limit of 250 employees
(12.7%).139
The SBA currently has nine employee based industry size standards in effect (no more than 100,
150, 200, 250, 500, 750, 1,000, 1,250, and 1,500 employees).

137 SBA, “Small Business Size Standards for Manufacturing,” 81 Federal Register 4469-4492, January 26, 2016.
138 SBA, “Table of Small Business Size Standards,” at http://www.sba.gov/content/table-small-business-size-standards.
139 SBA, “Small Business Size Standards: Employee Based Size Standards in Wholesale Trade and Retail Trade,” 81
Federal Register 3941-3949, January 25, 2016. Until February 26, 2016 (and since 1986), all industries in the
Wholesale Trade Sector had an upper limit of 100 employees. See SBA, “Table of Small Business Size Standards,”
July 14, 2014, at http://www.sba.gov/content/table-small-business-size-standards. Also, for procurement purposes, the
SBA’s size standard is no more than 500 employees for all industries in both the Retail Trade and Wholesale Trade
Sectors.
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The SBA uses average annual receipts to determine program eligibility for most other industries
(527 of 1,037 industries, or 50.8%).140
Pursuant to P.L. 115-324, the Small Business Runway Extension Act of 2018, and SBA regulatory
action (effective January 6, 2020), SBA’s receipts based size standards (other than for the SBA’s
business and disaster loan programs, which will be subject to separate SBA rulemaking
anticipated to be issued in November 2021) and other federal agency’s proposed receipts based
size standards will be based on average annual receipts over five years, instead of over three
years.141 Firms will have the option, through January 6, 2022, to choose between using three-year
averaging or five-year averaging.142
This change is expected to allow about 7,800 businesses to be deemed small that otherwise would
not qualify as small and about 63,000 small businesses about to outgrow their status as a small
business to retain that status.143 According to the SBA, the final rule follows the intent of P.L.
115-324 by providing “small businesses more time to grow and develop competitiveness and
infrastructure so that they are better prepared to succeed under full and open competition [for
federal contracts] once they outgrow the size threshold.”144
The SBA also uses average asset size as reported in the firm’s four quarterly financial statements
for the preceding year to determine eligibility for five finance industries, and a combination of
number of employees and barrel per day refining capacity for petroleum refineries.145
The SBA currently has 16 receipts based industry size standards in effect (no more than $1.0
million, $6.0 million, $8.0 million, $12.0 million, $16.5 million, $19.5 million, $20.5 million,
$22.0 million, $27.0 million, $30.0 million, $32.0 million, $34.5 million, $35.0 million, $39.5
million, $40.5 million, and $41.5 million).146 In some instances, there is considerable variation in
the size standards used within each industrial sector. For example, the SBA uses 11 different size
standards to determine eligibility for 66 industries in the retail trade sector. In general,
 most administrative and support service industries have an upper limit of either
$16.5 million or $22.0 million in average annual sales or receipts;

140 SBA, “Table of Small Business Size Standards,” at http://www.sba.gov/content/table-small-business-size-standards.
141 See SBA, “Semiannual Regulatory Agenda,” 86 Federal Register 16975-16976, March 31, 2021.
142 SBA, “Small Business Size Standards: Calculation of Annual Average Receipts,” 84 Federal Register 66561,
December 5, 2019. Some commentators argued that requiring lenders to review an additional two years of tax returns
or financial statements to establish eligibility for SBA’s loan programs would “add costs to loan processing, increase
turn-around times, and discourage small businesses from participating in the SBA’s loan programs” and “this additional
requirement increases the burden without any underlying benefit to the small business.” As a result, SBA decided not to
include SBA’s business and disaster loan programs in the final rule establishing five-year averaging and to seek further
public comment through a proposed rule for these lending programs at a later date. See SBA, “Small Business Size
Standards: Calculation of Annual Average Receipts,” 84 Federal Register 66565-66566, December 5, 2019. Also, the
final rule “does not affect existing non-SBA size standards that specify a 3-year averaging unless the responsible
agency proposes and finalizes changes to the existing specification of a 3-year average.” See SBA, “Small Business
Size Standards: Calculation of Annual Average Receipts,” 84 Federal Register 66569, December 5, 2019.
143 SBA, “Small Business Size Standards: Calculation of Annual Average Receipts,” 84 Federal Register 66573,
December 5, 2019.
144 SBA, “Small Business Size Standards: Calculation of Annual Average Receipts,” 84 Federal Register 66571,
December 5, 2019.
145 SBA, “Table of Small Business Size Standards,” July 14, 2014, at http://www.sba.gov/content/table-small-business-
size-standards.
146 The receipts based size standards in use from April 21, 2016, to August 19, 2019, were no more than: $0.75 million,
$5.5 million, $7.5 million, $11.0 million, $15.0 million, $18.0 million, $19.0 million, $20.5 million, $25.0 million,
$27.5 million, $29.5 million, $32.0 million, $32.5 million, $36.5 million, $37.5 million, and $38.5 million.
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 most agricultural industries have an upper limit of $1.0 million in average annual
sales or receipts;147
 most construction of buildings and civil engineering construction industries have
an upper limit of $39.5 million in average annual sales or receipts, and most
construction specialty trade contractors have an upper limit of $16.5 million in
average annual sales or receipts;
 most educational services industries have an upper limit of either $8.0 million or
$12.0 million in average annual sales or receipts;
 most health care industries have an upper limit of either $8.0 million or $16.5
million in average annual sales or receipts;
 most social assistance industries have an upper limit of $12.0 million in average
annual sales or receipts;
 there is considerable variation within the professional, scientific, and technical
service industries, ranging from an upper limit of $8.0 million in average annual
sales or receipts to $41.5 million;
 there is considerable variation within the transportation and warehousing
industrial sector, ranging from an upper limit of $8.0 million in average annual
sales or receipts to $41.5 million for 43 industries and from an upper limit of 500
employees to 1,500 employees for 15 industries); and
 most finance and insurance industries have an upper limit of $41.5 million in
average annual sales or receipts.
The SBA also applies a $600 million average asset limit (as reported in the firm’s four quarterly
financial statements for the preceding year) to determine eligibility in five finance industries:
commercial banks, saving institutions, credit unions, other depository credit intermediation, and
credit card issuing.148
Other Federal Agency Size Standards
Many federal statutes provide special considerations for small businesses. For example, small
businesses are provided preferences through set-asides and sole source awards in federal
contracting and pay lower fees to apply for patents and trademarks.149 In most instances,

147 P.L. 99-272, the Consolidated Omnibus Budget Reconciliation Act of 1985 (Title XVIII, Section 18016) inserted a
requirement that notwithstanding any other provision of law, an agricultural enterprise shall be deemed to be a small
business concern if it, including its affiliates, has annual receipts not in excess of $500,000. P.L. 106-554, the
Consolidated Appropriations Act, 2001 (Title VIII, Section 806(b)), substituted “$750,000” for “$500,000.” P.L. 114-
328, the National Defense Authorization Act for Fiscal Year 2017, authorized the SBA to establish different size
standards for agricultural enterprises using existing methods and appeal processes.
148 SBA, “Table of Small Business Size Standards,” at http://www.sba.gov/content/table-small-business-size-standards;
and SBA, “Small Business Size Standards: Adjustment of Monetary-Based Size Standards for Inflation,” 84 Federal
Register 34270-34280, July 18, 2019 (effective August 19, 2019).
149 The federal government has a goal of awarding at least 23% of all small business eligible federal government
procurement contracts to small businesses, including 5% for small disadvantaged businesses, 5% for women-owned
small businesses, 3% for small businesses owned by service-disabled veterans, and 3% for small businesses located in a
HUBZone. See U.S. General Services Administration, Federal Procurement Data System – Next Generation, “Small
Business Goaling Reports,” at https://www.fpds.gov/fpdsng_cms/index.php/en/reports. For further information and
analysis concerning federal contracting preferences for small businesses, see CRS Report R41268, Small Business
Administration HUBZone Program, by Robert Jay Dilger.
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businesses are required to meet the SBA’s size standards to be considered a small business.
However, in some cases, the underlying statute defines the eligibility criteria for defining a small
business. In other cases, the statute authorizes the implementing agency to make those
determinations.
Under current law, a federal agency that decides that it would like to exercise its authority to
establish its own size standard through the federal rulemaking process is required to, among other
things, (1) undertake an initial regulatory flexibility analysis to determine the potential impact of
the proposed rule on small businesses, (2) transmit a copy of the initial regulatory flexibility
analysis to the SBA’s Chief Counsel for Advocacy for comment, and (3) publish the agency’s
response to any comments filed by the SBA’s Chief Counsel for Advocacy in response to the
proposed rule and a detailed statement of any change made to the proposed rule in the final rule
as a result of those comments.150 In addition, the federal agency must provide public notice of the
proposed rule and an opportunity for the public to comment on the proposed rule, typically
through the publication of an advanced notice of proposed rulemaking in the Federal Register
and notification of interested small businesses and related organizations.151 Also, prior to issuing
the final rule, the federal agency must have the approval of the SBA’s Administrator.152 Under
current practice, the SBA’s Administrator, through the SBA’s Office of Size Standards, consults
with the SBA’s Office of Advocacy prior to making a final decision concerning such requests.153
The Office of Advocacy is an independent office within the SBA.
During the 112th Congress, H.R. 585, the Small Business Size Standard Flexibility Act of 2011,
was reported by the House Committee on Small Business on November 16, 2011, by a vote of 13
to 8. The bill would have retained the SBA’s Administrator’s authority to approve or disapprove
size standards for programs under the Small Business Act of 1953 (as amended) and the Small
Business Investment Act of 1958 (as amended). The Office of Chief Counsel for Advocacy would
have assumed the SBA Administrator’s authority to approve or disapprove size standards for
purposes of any other act.154

150 5 U.S.C. §601; 5 U.S.C. §603; and 5 U.S.C. §604. The SBA last published a list of size standards set by agencies
other than the SBA in 1995. See SBA, “Small Business Size Standards,” 60 Federal Register 57988-57991, November
24, 1995. For a related example (establishing a size standard for Regulatory Flexibility Act compliance), see U.S.
Department of Commerce, National Oceanic and Atmospheric Administration, “Establish a Single Small Business Size
Standard for Commercial Fishing Business,” 80 Federal Register 81194-80872, December 29, 2015.
151 15 U.S.C. §632.
152 15 U.S.C. §632. The SBA reports “that there have been approximately 25 requests by other agencies under the
authority of amended §3 of the Small Business Act since the date of amendment in 1992.” See U.S. Congress, House
Committee on Small Business, Small Business Size Standard Flexibility Act of 2011, report to accompany H.R. 585,
112th Cong., 2nd sess., November 16, 2011, H.Rept. 112-288 (Washington: GPO, 2011), p. 7.
153 Rep. Sam Graves, “Full Committee Hearing, Lifting the Weight of Regulations: Growing Jobs By Reducing
Regulatory Burdens (III. H.R. 585—Small Business Size Standard Flexibility Act of 2011),” letter to House Committee
on Small Business, June 8, 2011, p. 44, at http://smbiz.house.gov/UploadedFiles/6-15_Memo.pdf; U.S. Congressional
Budget Office, “Congressional Budget Office Cost Estimate: H.R. 585—Small Business Size Standard Flexibility Act
of 2011,” p. 2, at https://www.cbo.gov/sites/default/files/112th-congress-2011-2012/costestimate/hr5851.pdf; and U.S.
Congress, House Committee on Small Business, Small Business Size Standard Flexibility Act of 2011, report to
accompany H.R. 585, 112th Cong., 2nd sess., November 16, 2011, H.Rept. 112-288 (Washington: GPO, 2011), pp. 6-8.
Also, see 13 C.F.R. §121.901-903.
154 U.S. Congressional Budget Office, “Congressional Budget Office Cost Estimate: H.R. 585—Small Business Size
Standard Flexibility Act of 2011,” p. 2, at https://www.cbo.gov/sites/default/files/112th-congress-2011-2012/
costestimate/hr5851.pdf; and H.Rept. 112-288, the Business Size Standard Flexibility Act of 2011. CBO has estimated
that the Office of Advocacy would ultimately need 10 additional staff positions to implement its new authority; and that
the bill would cost $6 million over the 2012-2016 period.
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Similar legislative provisions have been introduced during the 113th Congress (H.R. 2542, the
Regulatory Flexibility Improvements Act of 2013, and included in H.R. 4, the Jobs for America
Act), 114th Congress (H.R. 527, the Small Business Regulatory Flexibility Improvements Act of
2015, and its Senate companion bill, S. 1536), and 115th Congress (H.R. 33, the Small Business
Regulatory Flexibility Improvements Act of 2017, and its Senate companion bill, S. 584, and
included in H.R. 5, the Regulatory Accountability Act of 2017).
Advocates of splitting the SBA Administrator’s small business size standards’ authority between
the Office of Chief Counsel for Advocacy and the SBA’s Administrator have argued that
Should an agency wish to draft a regulation that adopts a size standard different from the
one already adopted by the Administrator in regulations implementing the Small Business
Act, the agency must obtain approval of the Administrator. However, that requires the
Administrator to have a complete understanding of the regulatory regime of that other act—
knowledge usually outside the expertise of the SBA. However, the Office of the Chief
Counsel for Advocacy, an independent office within the SBA, represents the interests of
small businesses in rulemaking proceedings (as part of its responsibility to monitor agency
compliance with the Regulatory Flexibility Act, 5 U.S.C. 601-12, (RFA)) does have such
expertise. Therefore, it is logical to transfer the limited function on determining size
standards of small businesses for purposes other than the Small Business Act and Small
Business Investment Act of 1958 to the Office of the Chief Counsel for Advocacy….
the Administrator is not the proper official to determine size standards for purposes of other
agencies’ regulatory activities. The Administrator is not fluent with the vast array of federal
regulatory programs, is not in constant communication with small entities that might be
affected by another federal agency’s regulatory regime, and does not have the analytical
expertise to assess the regulatory impact of a particular size standard on small entities.
Furthermore, the Administrator’s standards are: very inclusive, not developed to comport
with other agencies’ regulatory regimes, and lack sufficient granularity to examine the
impact of a proposed rule on a spectrum of small businesses.155
Opponents have argued that
When an agency is seeking to use a size standard other than those approved by the SBA,
the agency may consult with the Office of Advocacy. Such consultation is sensible, as the
Office of Advocacy has significant knowledge of the regulatory environment outside of
the canon of SBA law. However, the SBA’s Office of Size Standards, with its historical
involvement, expertise, and staff resources in this area, remains the appropriate entity to
approve such size standards….
While the legislation permits the SBA to continue to approve size standards for its enabling
statutes, it removes SBA’s authority to do so for other statutes. The result would be to
create a duplicate size standard authority in both the SBA and the Office of Advocacy.
Both the SBA and the Office of Advocacy would have personnel who would analyze and
evaluate size standards. Through the bifurcation of these responsibilities, taxpayers would
effectively be forgoing the economies of scale that are currently enjoyed by the operation
of a single Office of Size Standards in the SBA….
Having two such entities that have the same mission is not a transfer of function, but an
inefficient and duplicative reorganization.… Instead of having one central office, there will

155 U.S. Congress, House Committee on Small Business, Small Business Size Standard Flexibility Act of 2011, report to
accompany H.R. 585, 112th Cong., 2nd sess., November 16, 2011, H.Rept. 112-288 (Washington: GPO, 2011), p. 6
(hereinafter U.S. Congress, House Committee on Small Business, Small Business Size Standard Flexibility Act of
2011).
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now be two—further muddling small businesses’ relationship with the federal
government.156
Other Recent Legislation
Two bills were introduced during the 114th Congress (H.R. 3714, the Small Agriculture Producer
Size Standards Improvements Act of 2015, and H.R. 4341, the Defending America’s Small
Contractors Act of 2016) to authorize the SBA to establish size standards for agricultural
enterprises not later than 18 months after the date of enactment. The size standard for agricultural
enterprises was, at that time, set in statute as having annual receipts not in excess of $750,000.157
H.R. 4341, among other provisions, would have also limited an industry category to a greater
extent than provided under the North American Industry Classification codes for small business
procurement purposes if further segmentation of the industry category is warranted.158
H.R. 4341 was introduced on January 7, 2016, and ordered to be reported with amendment by the
House Committee on Small Business on January 13, 2016. H.R. 3714 was introduced on October
8, 2015, considered by the House under suspension of the rules on April 19, 2016, and agreed to
by voice vote.
P.L. 114-328, the National Defense Authorization Act for Fiscal Year 2017, includes a provision
which authorizes the SBA to establish different size standards for agricultural enterprises using
existing methods and appeal processes.
In addition, as mentioned, P.L. 115-324 directs federal agencies proposing a size standard (and,
based on report language accompanying the act, presumably the SBA as well) to use the average
annual gross receipts from at least the previous five years, instead of the previous three years,
when seeking SBA approval to establish a size standard based on annual gross receipts.159
The SBA asserts that P.L. 115-324’s provision mandating the use of the average annual gross
receipts from at least the previous five years, instead of the previous three years, in determining
receipts based size standards does not apply to the SBA. However, “to promote consistency
government-wide,” the SBA announced that it will use the average annual gross receipts from the
previous five years, instead of the previous three years (effective January 6, 2020), when
establishing its receipts based size standards.160 As mentioned, the SBA also adopted a transition
period through January 6, 2022, allowing firms to choose between using a three-year averaging
period and a five-year averaging period. The SBA will also retain three-year averaging for the
SBA’s business and disaster loan programs while it gathers additional public input through future
proposed rulemaking (anticipated to be issued in November 2021) concerning potential

156 U.S. Congress, House Committee on Small Business, Small Business Size Standard Flexibility Act of 2011, p. 14.
157 P.L. 99-272, the Consolidated Omnibus Budget Reconciliation Act of 1985, established the size standard for
agricultural enterprises as annual receipts not in excess of $500,000. P.L. 106-554, the Consolidated Appropriations
Act, 2001, increased the size standard for agricultural enterprises to annual receipts not in excess of $750,000.
158 The bill would authorize the SBA Administrator to limit an industry category due to special capital equipment
needs, special labor requirements, special geographic requirements (with specified limitations), or to recognize a new
industry. See H.R. 4341, the Defending America’s Small Contractors Act of 2016, Section 101. Plain Language
Rewrite of Requirements for Small Business Procurements.
159 U.S. Congress, House Committee on Small Business, Small Business Runway Extension Act of 2018, report to
accompany H.R. 6330, 115th Cong., 2nd sess., September 12, 2018, H.Rept. 115-939 (Washington: GPO, 2018), p. 2.
160 SBA, “Small Business Size Standards: Calculation of Annual Average Receipts,” 84 Federal Register 29399-29400,
June 24, 2019; and SBA, “Small Business Size Standards: Calculation of Annual Average Receipts,” 84 Federal
Register 66561, December 5, 2019.
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administrative burdens that moving from three-year averaging to five-year averaging may have
on lenders and borrowers.161
Congressional Policy Options
Historically, the SBA has relied on economic analysis of market conditions within each industry
to define eligibility for small business assistance. On several occasions in its history, the SBA
attempted to revise its small business size standards in a comprehensive manner. However,
because (1) the Small Business Act provides leeway in how the SBA is to define small business;
(2) there is no consensus on the economic factors that should be used in defining small business;
(3) federal agencies have generally opposed size standards that might adversely affect their pool
of available small business contractors; and (4) the SBA’s initial size standards provided program
eligibility to nearly all businesses, the SBA’s efforts to undertake a comprehensive reassessment
of its size standards met with resistance. Firms that might lose eligibility objected. Federal
agencies also objected. As a result, in each instance, the SBA’s comprehensive revisions were not
fully implemented.
The SBA’s congressionally mandated requirement to conduct a detailed review of at least one-
third of the SBA’s industry size standards every 18 months was imposed by P.L. 111-240, the
Small Business Jobs Act of 2010, to prevent small business size standards from becoming
outdated.162 More frequent reviews of the size standards were expected to increase their accuracy
and, generally speaking, result in (1) increased numbers of small businesses found to be eligible
for SBA assistance and (2) an increase in the number and amount of federal contracts awarded to
small businesses (primarily by preventing large businesses from being misclassified as small and
by increasing the number of small businesses eligible to compete for federal contracts).163
As expected, the SBA’s economic analyses during the recent five-year review cycle often
supported an increase in the size standards for many industries. However, the SBA’s economic
analyses also occasionally supported a decrease in the size standards for some industries. Despite
the SBA’s decision to, in most circumstances, make no changes when their economic analyses
indicated that a decrease was warranted, it could be argued that the increased frequency of the
reviews has generally prevented the SBA’s size standards from becoming outdated. This, in turn,
has, at least to a certain extent, improved the accuracy of the size standards (as measured by the
extent to which the size standard is in alignment with the SBA’s economic analyses).
In a related matter, the SBA continues to adjust its receipts based size standards for inflation at
least once every five years, or more frequently if inflationary circumstances warrant, to prevent
firms from losing their small business eligibility solely due to the effects of inflation. As
mentioned, the most recent adjustment for inflation took place on August 19, 2019.164 The SBA

161 SBA, “Semiannual Regulatory Agenda,” 86 Federal Register 16975-16976, March 31, 2021.
162 See U.S. Congress, Senate Committee on Small Business and Entrepreneurship, Small Business Contracting
Revitalization Act of 2010, report to accompany S. 2989, 111th Cong., 2nd sess., September 29, 2010, S.Rept. 111-343
(Washington: GPO, 2010), p. 9. “The Committee has heard testimony that the current size standards are in dire need of
a comprehensive update.”
163 See Sen. Mary Landrieu, “Statements on Introduced Bills and Joint Resolutions: S. 2989 A bill to improve the Small
Business Act, and for other purposes,” remarks in the Senate, Congressional Record, vol. 156, part 17 (February 4,
2010), p. S487 “… The Committee has heard from a number of small businesses about large businesses parading as
small businesses. It is imperative that small business contracts go to small businesses. Small businesses may be losing
billions of dollars in opportunities because of size standard loopholes.”
164 SBA, “Small Business Size Standards: Adjustment of Monetary-Based Size Standards for Inflation,” 84 Federal
Register 34261-34281, July 18, 2019 (effective August 19, 2019).
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also continues to review size standards within specific industries whenever it determines that
market conditions within that industry have changed.
Congress has several options related to the SBA’s ongoing review of its size standards. For
example, as part of its oversight of the SBA, Congress can wait for the agency to issue its
proposed rule before providing input or establish a dialogue with the agency, either at the staff
level or with Members involved directly, prior to the issuance of its proposed rule. Historically,
Congress has tended to wait for the SBA to issue proposed rules concerning its size standards
before providing input, essentially deferring to the agency’s expertise in the technical and
methodological issues involved in determining where to draw the line between small and large
firms. Congress has then tended to respond to the SBA’s proposed rules concerning its size
standards after taking into consideration current economic conditions and input received from the
SBA and affected industries.
Waiting for the SBA to issue its proposed rule concerning its size standards before providing
congressional input has both advantages and disadvantages. It provides the advantage of
insulating the proposed rule from charges that it is influenced by political factors. It also has the
advantage of respecting the separation of powers and responsibilities of the executive and
legislative branches. However, it has the disadvantage of heightening the prospects for
miscommunication, false expectations, and wasted effort, as evidenced by past proposed rules
concerning the SBA’s size standards that were either rejected outright, or withdrawn, after facing
congressional opposition.
Another policy option that has not received much congressional attention in recent years, but
which Congress may choose to address, is the targeting of the SBA’s resources. When the SBA
reviews its size standards, it focuses on the competitive nature of the industry under review, with
the goal of removing eligibility of firms that are considered large, or dominant, in that industry.
There has been relatively little discussion of the costs and benefits of undertaking those reviews
with the goal of targeting SBA resources to small businesses in industries that are struggling to
remain competitive. GAO recommended this approach in 1978 and Roger Rosenberger, then
SBA’s associate administrator for policy, planning, and budgeting, testified at a congressional
hearing in 1979 that it was debatable whether the SBA should provide any assistance to any of the
businesses within industries where “smaller firms are flourishing.”165
Revising the SBA’s size standards using this more targeted approach would likely reduce the
number of firms eligible for assistance. It would also present the possibility of increasing
available benefits to eligible small firms in those industries deemed “mixed” or “concentrated” by
the SBA without necessarily increasing overall program costs. Perhaps because previous
proposals that would result in a reduction in the number of firms eligible for assistance have met
with resistance, this alternative approach to determining program eligibility has not received
serious consideration in recent years. Nonetheless, it remains an option available to Congress
should it decide to change current policy.

165 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise,
Size Standards for Small Business, hearing, 96th Cong., 1st sess., July 10, 1979 (Washington: GPO, 1979), p. 28.
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link to page 42 Small Business Size Standards: A Historical Analysis of Contemporary Issues

Appendix. SBA Size Standard Reviews, 2011-2016
Table A-1. Status of SBA Size Standard Reviews, By Issue Date, 2011-2016
Notice of
Intent to
Notice of
Review the
Proposed
Recommended
Final
Final
NAICS Sectors
Standard
Rulemaking
Change
Rule
Change
Professional,
75 Federal
76 Federal
Would increase
77 Federal Increased
Scientific and
Register 21893,
Register 14323-
size standards for Register
size
Technical Services
21894,
14341,
35 industries and
7488-
standards for
(NAICS Sector
Apr. 26, 2010
Mar. 16, 2011
1 sub-industry
7515,
34 industries
54)
Feb. 10,
and 3 sub-
2012
industriesa
(effective
Mar. 12,
2012)
Transportation
75 Federal
76 Federal
Would increase
77 Federal Increased
and Warehousing
Register 21894,
Register 27935-
size standards for Register
size
(NAICS Sector
Apr. 26, 2010
27952,
22 industries
10943-
standards for
48-49)
May 13, 2011
10950,
22 industries
Feb. 24,
2012
(effective
Mar. 26,
2012)
Educational
76 Federal
76 Federal
Would increase
77 Federal Increased
Services
Register 40140-
Register 70667-
size standards for Register
size
(NAICS Sector
40142,
70680,
nine industries
58739-
standards for
61)
July 7, 2011
Nov. 15, 2011
58747,
9 industries
Sept. 24,
2012
(effective
Oct. 24,
2012)
Health Care and
76 Federal
77 Federal
Would increase
77 Federal Increased
Social Assistance
Register 40140-
Register 11001-
size standards for Register
size
Services
40142,
11017,
28 industries
58755-
standards for
(NAICS Sector
July 7, 2011
Feb. 24, 2012
58761,
28 industries
62)
Sept. 24,
2012
(effective
Oct. 24,
2012)
Real Estate, Rental 76 Federal
76 Federal
Would increase
77 Federal Increased
and Leasing
Register 40140-
Register 70680-
size standards for Register
size
(NAICS Sector
40142,
70694,
20 industries and
58747-
standards for
53)
July 7, 2011
Nov. 15, 2011
1 sub-industry
58755,
21 industries
Sept. 24,
and 1 sub-
2012
industry
(effective
Oct. 24,
2012)
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Notice of
Intent to
Notice of
Review the
Proposed
Recommended
Final
Final
NAICS Sectors
Standard
Rulemaking
Change
Rule
Change
Administrative
76 Federal
76 Federal
Would increase
77 Federal Increased
and Support,
Register 40140-
Register 63510-
size standards for Register
size
Waste
40142,
63525,
37 industries
72691-
standards for
Management and
July 7, 2011
Oct. 12, 2011
72702,
37 industries
Remediation
Dec. 6,
Services
2012
(NAICS Sector
(effective
56)
Jan. 7,
2013)
Information
76 Federal
76 Federal
Would increase
77 Federal Increased
(NAICS Sector
Register 40140-
Register 63216-
size standards for Register
size
51)
40142,
63229,
15 industries
72702-
standards for
July 7, 2011
Oct. 12, 2011
72709,
15 industries
Dec. 6,
2012
(effective
Jan. 7,
2013)
Agriculture,
NA
77 Federal
Would increase
78 Federal Increased
Forestry, Fishing
Register 55755-
size standards for Register
size
and Hunting
55768,
11 industries
37398-
standards for
(NAICS Sector
Sept. 11, 2012
37404,
11 industries
11)
June 20,
2013
(effective
July 22,
2013)
Arts,
77 Federal
77 Federal
Would increase
78 Federal Increased
Entertainment,
Register 8024,
Register 42211-
size standards for Register
size
and Recreation
Feb. 13, 2012
42225,
17 industries
37417-
standards for
(NAICS Sector
July 18, 2012
37422,
17 industries
71)
June 20,
2013
(effective
July 22,
2013)
Finance and
NA
77 Federal
Would increase
78 Federal Increased
Insurance
Register 55737-
size standards for Register
size
(NAICS Sector
55755,
37 industries and
37409-
standards for
52)
Sept. 11, 2012
change the
37417,
36 industries,
measure of size
June 20,
and changed
from total assets
2013
the measure
to annual receipts (effective
of size from
for 1 industry
July 22,
total assets
2013)
to annual
receipts for 1
industry
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Small Business Size Standards: A Historical Analysis of Contemporary Issues

Notice of
Intent to
Notice of
Review the
Proposed
Recommended
Final
Final
NAICS Sectors
Standard
Rulemaking
Change
Rule
Change
Management of
NA
77 Federal
Would increase
78 Federal Increased
Companies
Register 55737-
size standards for Register
size
(NAICS Sector
55755,
2 industries
37409-
standards for
55)
Sept. 11, 2012
37417,
2 industries
June 20,
2013
(effective
July 22,
2013)
Support Activities
NA
77 Federal
Would increase
78 Federal Increased
for Mining
Register 72766,
size standards for Register
size
(within NAICS
Dec. 6, 2012
3 industries
37404-
standards for
Sector 21)
37408,
3 industries
June 20,
2013
(effective
July 22,
2013)
Construction
77 Federal
77 Federal
Would increase
78 Federal Increased
(NAICS Sector
Register 8024,
Register 42197-
size standards for Register
size
23)
Feb. 13, 2012
42211,
1 industry and
77334-
standards for
July 18, 2012
1 sub-industry
77343,
1 industry
Dec. 23,
and 1 sub-
2013
industry
(effective
Jan. 22,
2014)
Utilities
76 Federal
77 Federal
Would increase
78 Federal Increased
(NAICS Sector
Register 40140-
Register 42441-
size standards for Register
size
22)
40142,
42454,
3 industries and
77343-
standards for
July 7, 2011
July 19, 2012
convert 6
77351,
3 industries
industries from
Dec. 23,
and
no more than 4
2013
converted 10
mil ion megawatt
(effective
industries
hours in electric
Jan. 22,
from no
output in the
2014)
more than 4
preceding fiscal
mil ion
year to no more
megawatt
than 500
hours in
employees
electric
output in the
preceding
fiscal year to
number of
employees
(varying by
industry)
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Notice of
Intent to
Notice of
Review the
Proposed
Recommended
Final
Final
NAICS Sectors
Standard
Rulemaking
Change
Rule
Change
Wholesale Trade
78 Federal
79 Federal
Would increase
81 Federal Increased
(NAICS Sector
Register 1639,
Register 28631-
size standards for Register
size
42)
Jan. 8, 2013
28647, May 19,
46 industries in
3941-
standards for
and
2014
NAICS Sector
3949, Jan. 46 industries
42, and 1
25, 2016
in NAICS
Retail Trade (two
industry in
(effective
Sector 42,
industries with
NAICS Sector
Feb. 26,
and 1
employee based
44-45
2016)
industry in
size standards
NAICS
within NAICS
Sector 44-45
Sector 44-45)
Industries with
78 Federal
79 Federal
Would increase
81 Federal Increased
Employee Based
Register 1639,
Register 53646-
size standards for Register
size
Size Standards not Jan. 8, 2013
53666, Sept. 10,
30 industries and
4436-
standards for
Part of
2014
3 sub-industries,
4469, Jan. 30 industries
Manufacturing,
eliminate 2 sub-
26, 2016
and 3 sub-
Wholesale Trade,
industry
(effective
industries,
or Retail Trade
exceptions, and
Feb. 26,
eliminated 2
(primarily within
decrease size
2016)
sub-industry
NAICS Sectors 51
standards for 3
exceptions,
and 54)
industries “to
and
exclude dominant
decreased
firms”
size
standards for
3 industries
to exclude
dominant
firms
Manufacturing
78 Federal
79 Federal
Would increase
81 Federal Increased
(NAICS Sector
Register 1639,
Register 54146-
size standards for Register
size
31-33)
Jan. 8, 2013
54177, Sept. 10,
209 industries in
4469-
standards for
2014
NAICS Sector
4492, Jan. 209
31-33
26, 2016
industries in
Would also
(effective
NAICS
increase the
Feb. 26,
Sector 31-33,
refining capacity
2016)
and increased
component for
the refining
Petroleum
capacity
Refiners from no
component
more than
for
125,000 barrels
Petroleum
per calendar day
Refiners from
to no more than
no more than
200,000 barrels
125,000
per calendar day
barrels per
calendar day
to no more
than 200,000
barrels per
calendar day
Source: Federal Register as cited in the table.
a. Also increased one size standard (Computer and Office Machine Repair and Maintenance) in NAICS Sector
81, Other Services, which was not reviewed during the SBA’s review of that sector in 2010.
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Author Information

Robert Jay Dilger

Senior Specialist in American National Government

Disclaimer
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Congressional Research Service
R40860 · VERSION 92 · UPDATED
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