The U.S. Small Business Administration (SBA) is amending its small business size regulations to incorporate the NAICS revision for 2017. The proposed rule was issued by the SBA on April 18th and is currently open for comments until June 19th. The NAICS changes for 2017 include the creation of 21 new industries. These new NAICS codes were created from combining, reclassifying, or splitting 29 existing industries. The new NAICS codes have resulted in an increase to the size standards for six NAICS industries and a part of one industry, a decrease to size standards for two, and a change in the size standards from average annual receipts to number of employees for one.
When determining these size standards changes for NAICS codes, the SBA uses the following process:
- If the new NAICS code is comprised of a single NAICS 2012 industry, the same size standard is used.
- If a new NAICS code is a combination of two or more NAICS 2012 industries or parts of those industries and:
- The industries all have the same size standard, the new NAICS will have the same size standard.
- The industries all have the same size measure, but not the same size standard, the new NAICS will use the same size standard for the NAICS 2012 that most closely matches the economic activity or the highest size standard.
- The industries have different size measures, SBA will use the NAICS 2012 industry that most closely matches the economic activity or the highest size standard amount NAICS 2012 industries. In this situation, the SBA coverts all size standards to single measure such as receipts or employees.
A few of the industries effected by this change include crude petroleum extraction, natural gas extraction, mining, major household appliance manufacturing, department stores, electronic shopping, and others. You can find the full list located at the Federal Register.
These changes are proposed to be adopted effective 10/1/17 or at the beginning of the fiscal year.
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Colin Johnson is a Contracts Manager who focuses on business development and federal contracts management. His expertise is in preparing quotes and responses for both government and commercial entities for training and legal support services.