In the world of government contracting, size standards set by the Small Business Administration (SBA) determine whether your company is considered a small business or “other than small” business. Your size status is important because it impacts your ability to qualify for set-asides and contracting assistance programs. It also impacts whether or not your company is required to establish a small business subcontracting plan.
Is Your Company Considered a Small Business?
Size standards vary based on your type of entity and your applicable North American Industry Classification System (NAICS) Code(s). If you are not familiar with NAICS Codes, you can learn more here.
If your company is a for-profit entity with offices in the U.S. or a U.S. territory, your business size status is determined by your NAICS Code. SBA sets a threshold for each NAICS Code by either the:
- Average number of employees over the last 24 months; or
- Average annual receipts over a company’s latest five fiscal years
There are some types of entities that cannot be classified as small, regardless of their NAICS code, number of employees, or annual receipts. Non-profit organizations and companies outside of the U.S. or U.S. territories are not eligible to receive a small business classification.
Details regarding how average number of employees and average annual receipts are to be calculated can be found within the Code of Federal Regulations (CFR) Part 121 – 121.104 (annual receipts) and 121.106 (number of employees) specifically.
Search your NAICS code in the chart below to review the current size standard as of March 17, 2023. Please note, SBA is the official source for business size standards. For more information, visit SBA’s website here.
SBA Size Standards Footnotes
How Do You Update Your Business Size?
Depending upon the size standard for your NAICS code, your business size status can be impacted by a change in your number of employees or annual receipts. Your business size can also change when SBA updates their size standards. You can follow notifications regarding size status changes on SBA’s website here.
To change your business size status, you must update your entity registration record on the System for Award Management (SAM.gov). You may need to take additional steps if you would like the size change reflected within federal contracts you hold. For example, if your company holds a GSA Multiple Award Schedule (MAS) Contract and now qualifies as a small business under revised size standards, you can submit a “Re-Representation of Business Size” modification in order to be considered a small business under the GSA MAS Contract.