SBA Outlines Plans for Size Standards Review SBA officials are debating how dramatically they should change size standards in their current review. Gary Jackson, chief of the Office of Size Standards, said even if the agency’s economic analysis shows that standards should be tripled or quadrupled in some industries, there is an internal debate over just how big a change should be made. Any sudden large increase could make many more companies eligible for small business set-asides, but would also bring increased competition that could damage smaller firms. Several studies have shown that mid-size companies are losing market share, and the struggles of companies to compete in the federal market after they outgrow small business status are well documented. “That is one of the most significant challenges that we have,” Jackson said at a June 3 public meeting on the size standards. “Our charter is to help small businesses. How much do we factor that in to help the mid-tier? That’s a challenge for us.” SBA plans to review all size standards over the next two years, and propose changes in two or three industry sectors at a time. Jackson said the first changes will likely be proposed by the end of the year, and will affect NAICS sector 44-45, retail trade; NAICS sector 72, accommodations and food services, including hotels and restaurants; and NAICS sector 81, other services. This broad category covers most types of repair services, including computer and communications equipment; personal care, such as barber and beauty shops and weight-loss centers; and dry cleaners and other personal services. (SAA, 2/8) NAICS sector 54, professional, scientific and technical services, will be in the second round of review, scheduled to be completed next year. (The full list was published in the May 30 issue of Set-Aside Alert.) This is the first comprehensive review since the early 1980s, and Jackson called it “long overdue.” He emphasized that the review will rely primarily on an analysis of each industry’s structure. Factors to be considered include the average size of a company in the industry and what share of the market is controlled by the largest companies and what share by the smallest. “We have no predetermined results that we are trying to achieve with this review,” he said. “…What people expect us to do with size standards is have something that makes sense, that’s supportable.” There are currently 44 different size standards covering 1,141 industries. Jackson said he hopes to reduce the number of standards, but conceded, “There is no magic number.” The Bush administration has ordered agencies to propose no new rules until the end of the president’s term in January. But SBA officials said they believe exceptions will be permitted. The size standards review “is an agency priority,” said Fay Ott, associate administrator for government contracting and business development. Any new size standards would likely not take effect until after the next president is inaugurated.