SBA extends comment time on small-biz standards

Companies that want to comment on proposed changes to the way the government defines small businesses are getting an additional 45 days to weigh in.

The Small Business Administration has received 1,300 comments since its proposal was published March 19 in the Federal Register, according to Gary Jackson, assistant administrator for size standards. SBA said in today's Federal Register that the deadline to comment has been extended to July 2. The original deadline was May 18.

"Many small businesses have indicated they need more time to assess the rule and how it may impact them," Jackson said.

SBA proposed cutting the number of small-business size standards from 37 to 10. It also recommended basing all size standards on the number of employees. Currently, some size standards are based on annual revenue, and others are based on employee count. The changes will simplify the size standards and their application to federal programs, according to SBA.

Under the proposal, size standards will range between 50 employees and 1,500 employees, depending on the industry or SBA program. Companies that meet the small-business size standard in their industries can qualify for SBA loan programs, contracts set aside for small businesses and other federal business-development programs.

Comments received so far have identified several concerns that SBA officials need to study, Jackson said. Those concerns include a fear that the new size standards will be too low.

Many IT contractors said in their comments and in interviews with Washington Technology that the new standards will push them out of the small-business category before they are ready to compete fully with much larger companies.

Also, companies that use many part-time employees are concerned that the rule will push them out of small-business status faster than other companies, Jackson said. The proposed rule treats full- and part-time employees equally, he said.

"The IT area is where we are getting a significant amount of comments. That whole area is going to be carefully reviewed," Jackson said.

Finalization of the rule before the end of 2004 is unlikely, Jackson said.

"We are going to take the time we need to make sure we understand the issues and decide how to effectively address those issues," he said.

Comments should be sent to restructure.sizestandards@sba.gov or at www.regulations.gov. Comments should be labeled with the code 3245-AF11.