July 9 2004 Copyright 2004 Business Research Services Inc. 202-364-6473 All rights reserved.
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What If? Winners, Losers Under Dead Size Standards The proposed size standards, now withdrawn by SBA, would have inflated the federal government’s spending with small businesses by about 5% “simply by reclassifying large companies that currently exceed revenue-based size standards, with no new small business spending by federal agencies,” according to an study by Eagle Eye Publishers of Fairfax, VA. “Our analysis concludes that on average the proposed size standards revisions will harm the truly small and emerging businesses by re-classifying a group of larger contractors that exceed [current] revenue standards but not the proposed new labor standards,” said Eagle Eye President Paul Murphy. Under the proposed standards, the government could have moved closer to achieving its small business procurement goals without spending any more money with small firms, the study found. Using federal procurement statistics and Census Bureau business figures, Eagle Eye found “dramatic” impact in several industries. In NAICS 561210, Facilities Support Services, it said estimated small business spending would have fallen 46% under the proposed standards. In NAICS 541513, Computer Facilities Management Services, it forecast a drop of 88% in small business procurement. The study found potentially harmful impact on small businesses in NAICS 541519, Other Computer-Related Services, and NAICS 541990, All Other Professional, Scientific and Technical Services. In both categories, Eagle Eye estimated that the employment-based standards would have made larger firms eligible for small business status, “putting significant pressure on smaller firms in these markets.”
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