SBA size standards inflation-adjusted (revenue-based standards raised by ~13.65%)
Citation: 13 CFR Part 121; 87 Fed. Reg. 69118 (Nov 17, 2022) Primary source ↗
Full explanation
The SBA's size standards (codified at 13 CFR Part 121) define what counts as a 'small business' for each NAICS code — and therefore which firms qualify for federal small-business set-asides, the SBA's loan programs, and other SBA-administered programs.
Size standards come in two flavors:
- **Employee-based** (e.g., 500 employees for most manufacturing NAICS, 100 employees for most wholesale trade NAICS). Used for industries where employee count is the most meaningful measure of firm size.
- **Revenue-based** (e.g., $41.5M for most construction NAICS, $30M for many professional services NAICS). Used for industries where revenue better captures relative firm size.
Revenue-based size standards must be periodically adjusted for inflation under the Small Business Jobs Act of 2010, which mandates that SBA review and adjust at least every 5 years. The November 2022 final rule (87 Fed. Reg. 69118) raised all revenue-based size standards by **13.65%** — the cumulative inflation since the prior adjustment.
**Examples of changes:**
- General building construction (NAICS 236220): $39.5M → $45M
- Engineering services (NAICS 541330): $19.5M → $25.5M
- Computer systems design (NAICS 541512): $30M → $34M
- Janitorial services (NAICS 561720): $19.5M → $22M
**Employee-based standards were not affected** by this rule. They follow a separate 5-year review cycle.
**The change made thousands of firms newly eligible.** Firms that were just over the prior revenue threshold became eligible to compete in small-business set-asides under their NAICS code. Firms also became eligible for SBA loan programs, the 8(a) program (where applicable), and HUBZone (where applicable).
What this means for diverse contractors
**For firms previously over the size standard:** Re-check your eligibility. If your annual revenue (averaged over the most recent 5 years per SBA's averaging rules) is now under the new threshold for your primary NAICS, you may be newly eligible for federal small-business set-asides — and for SBA's other programs including 8(a) Business Development.
**For 8(a) and HUBZone firms approaching graduation due to size:** The size threshold increase may extend your runway in the program. Both programs require continued small-business status under your primary NAICS; firms that were close to the prior cap have material additional time before mandatory exit.
**For NAICS strategy:** Size standards differ significantly by NAICS within the same industry sector. A firm with multiple NAICS may want to reassess which is its primary NAICS based on the new thresholds — picking the NAICS that gives the most runway can extend small-business status by years.
**For new federal contracting strategies:** A prior 'too big for set-asides' barrier may have lifted. Revisit federal contracting opportunities that previously seemed out of reach, particularly in NAICS where the new threshold materially exceeds your firm's revenue.
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