Regarding the Small Business Administration Proposed Rule.13 CFR Part 121; RIN 3245-AG07; Small Business Size Standards: Professional, Scientific and Technical Services:
SBA’s published size standards methodology is exceedingly convoluted and it is difficult for businesses to determine the validity of the size evaluation when faced with the array of statistical based analysis and non-fact related benchmarks for industries (e.g., anchor size standards for services, manufacturing, etc.).
A common-sense approach to establishing size standards would be to look at the average size of the dominant prime contractors in a given field. Once the dominant prime average is established, the SBA would then apply a rule that any company that is significantly smaller than the dominant firm average (e.g., 80% smaller) would be considered small in that field.
Example: In the case of the Military exemption for 541330, the dominant firms average more than $25.0 billion in annual receipts. The current small business size standard of $27.0 million is ridiculously out of proportion to the leaders in the industry. By increasing the standard to reflect a reasonable percentage variance from the dominant prime contractors in the Department of Defense environment, small companies could continue to grow and mature to a level that would allow them to compete openly in that market.