Concerns about SBA size standards

IT resellers, computer facility managers want modifications

Small business government contractors in several specific industries--primarily IT resellers and computer facilities managers--told a House subcommittee that they want changes in the small business size standards for their industries.

The vendors testified at a hearing of the House Small Business Subcommittee on Contracting and the Workforce.

The contractor representatives primarily took issue with the Small Business Administration’s comprehensive update to size standards that was begun in 2009 and was completed in a final rule in February 2012, and with an SBA proposed rule from 2014.

The 2009 update was the SBA’s first in nearly 30 years. However, in 2010, Congress passed a law requiring size standard updates every five years. James Fontana, an attorney representing an ad hoc coalition of value-added information technology resellers, said the SBA’s proposed rule in 2014 would eliminate the previous 150-employee size standard for the industry, replacing it with a $27.5 million revenue-basd standard.

That would be very damaging to such resellers, who have high-volume sales but very low margins, he asserted. All coalition members would become “instantly ineligible” for set-asides if the proposed rule takes effect, Fontana said.

Others also would be affected. Resellers with fewer than 150 employees and receipts over $27.5 make up a majority of the small business resellers on large federal contracts, including DHS FSII (63%), Air Force NETCENTS-2 (64%) and NIH CIO-CS (68%), Fontana said, based on his own research.

Roger Jordan, vice president of government relations for the Professional Services Council, spoke on behalf of vendors in the NAICS 541513 (Computer Facilities Management Services) industry.

Jordan said SBA should have adopted a $35.5 million size standard instead of the current $25.5 million standard. By adopting the lower standard, “SBA has eliminatd legitimate small business from being able to qualify,” Jordan said in his testimony.

Ronald Reim, speaking on behalf of the American Institute of Architects, said the architects previously had concerns about being lumped with engineers in a 2011 proposed rule, but that was withdrawn in the SBA’s final rule. But architects worry that similar issues may surface again, Reim said.

Richard Hanna, chair of the subcommittee, accused the SBA of moving too slowly to implement changes to the size standards process dating from a Jan. 2013 law. SBA officials did not speak at the hearing and were not available for comment by press time.

More Information: Hearing testimony http://goo.gl/CTo7ji

Concerns about SBA size standards

Is the “Buy Indian Act” enough?

SBA focus on tribes

Contracts down by $14B in ‘14

Column: The “Inside Scoop” on IT Opportunities

Washington Insider: