SBA’s Size Standards Are About to Shift , Here’s What Small GovCon Firms Need to Do Now
The Small Business Administration is gearing up to raise the revenue-based size standards that determine whether your business qualifies as “small” under federal rules. If you rely on 8a contracts services, women owned small business certification, or are pursuing disabled veteran government contracts, this could be one of the most important regulatory changes of the year.
The SBA’s proposed rule, open for public comment until October 21, would increase the size thresholds for 263 industries, letting more companies qualify for small business status (or stay qualified longer). If you're close to the line on your NAICS code threshold, now is the time to check your numbers and get your voice heard.
Here’s what’s happening (and why it matters)
Under the proposed rule (RIN 3245-AI12), SBA plans to raise monetary-based size standards in hundreds of industries based on updated economic data, inflation, and federal contracting trends. These changes would mostly impact services and construction sectors where thresholds are defined by average annual revenue, not number of employees.
Key examples:
NAICS 541330 (Engineering Services): from $25.5M to ~$29M
NAICS 541519 (Other Computer Services): from $34M to ~$40M
NAICS 238220 (Plumbing/HVAC): from $19M to ~$21–22M
NAICS 518210 (Data Processing): from $40M to ~$47M
This proposal uses SBA’s “Revised Methodology,” which blends Census data, industry concentration, firm-size distributions, and disparities in federal awards to determine where size caps should be set.
For contractors on the edge of eligibility, especially those growing quickly, this rule could be the difference between qualifying for an 8a certification assistance program or aging out of women business certification criteria.
Why you should care, even if you're “safe” now
For businesses in government procurement, staying “small” means staying eligible for the most competitive federal contracting certifications. These include:
SBA 8a certification
Women owned small business certification
Disabled veteran small business certification
HUBZone and SBIR Grant Assistance programs
If your average receipts are creeping up, especially after a few strong years, this new proposal could offer breathing room. Conversely, if your competitors suddenly regain small-business status thanks to a raised threshold, you may face stiffer competition in set-asides you used to dominate.
It also affects:
Mentor-protégé programs
Joint ventures
Recertification triggers for contract options or novations
Strategy for selecting the best NAICS code for government contractors
And don’t forget: many agencies filter government contracting opportunities based on the NAICS code you’ve registered in SAM.gov. A size standard change can shift how you show up in their market research.
What small businesses should do right now
Here’s a quick checklist to get ahead of the change and make your voice count:
Register for the SBA virtual forums
Happening September 17 and 18 from 1:00–3:00 p.m. EDT. You can indicate if you want to testify when you register.Model your receipts
Pull your last 5 years of revenue (gross income + COGS) and calculate the 5-year average per 13 CFR 121.104. If your business is under 5 years old, follow SBA’s prorating rule.Include affiliates
Got shared ownership, franchise ties, or board overlap? SBA may count affiliated firms’ receipts. Be sure to include them or risk a miscalculation.Compare against new thresholds
Use the NAICS code for your primary contracts and check both the current and proposed size standards.Plan your testimony or comment
Even if you don’t speak at the forum, you can still submit written comments by October 21, 2025. SBA is required by law to review and respond to substantive comments, especially those with data and clear recommendations.Craft your “ask”
Here are three examples to consider:Suggest an alternate threshold based on data (e.g., $42M instead of $34M)
Request a transition period before new standards take effect
Ask for clarification on affiliate rules or treatment of forgiven PPP loans
Bigger picture: This is your shot to shape the rules
These changes don’t happen often, and when they do, they ripple across the federal contracting ecosystem. The last time SBA adjusted size standards due to inflation (in 2022), more than 8,500 firms regained small-business status.
The same could happen here. That means more players in the field, but also more chances to partner, mentor, and compete.
So don’t just wait to see what happens. Weigh in, document your numbers, and claim your spot in the conversation. Whether you’re applying for federal contracting certifications or helping others navigate the government contracting certification process, this is a moment to lead.
Want to dig deeper into NAICS selection and how it could help you capture a SLED contract?
Check out our recent post: The Best NAICS Codes for Small Businesses Going After SLED Contracts in 2025.
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