Changes in Size Standards Are Coming SBA is reviewing all size standards and may increase many of them before the Bush administration leaves office in January, 2009. “We are conducting a comprehensive study…to re-evaluate the size standards for all industries,” said Paul Hsu, SBA associate administrator for government contracting and business development. Spokeswoman Tiffani Shea Clements told Set-Aside Alert SBA will review two or three NAICS sectors every quarter and propose “appropriate changes” as those reviews are completed. Since there are 19 sectors (the sector is the first two digits of a NAICS code), the project will take 18 months to two years. The first increases may affect sector 54, covering most professional, scientific and technical services. SBA officials said in February that they had finished a review of those industries and would propose “significant changes.” (SAA, 2/9) The current standard for IT services is $23 million in annual revenue; most other services in the sector are capped at $6.5 million. The Information Technology Association of America has proposed increasing the IT standard to $50 million in revenue. This is the second about-face in SBA’s halting attempt to grapple with size standards. In 2004 the agency proposed a complete overhaul of the standards, but scrapped it because of opposition from industry and key Congress members. Last February Administrator Steven Preston said no comprehensive revision of the standards was planned. The new across-the-board review began after discussions with the Office of Federal Procurement Policy, which must approve any changes, according to Anthony Martoccia, who preceded Hsu as SBA associate administrator. The Defense Department, the largest government buyer, has been pushing for an increase in many standards because the growing size and complexity of its contracts puts them out of reach for most small businesses. Martoccia, who now heads the DOD small business office, said the department believes the standards for engineering, professional services and IT services are “unrealistically low.” Martoccia and Hsu testified before the Senate Small Business Committee on July 18. Committee Chairman John Kerry, D-MA, said, “There has been no serious update in size standards in years. So we need to update size standards.” Some contractor organizations have urged creation of separate standards for procurement, larger than those governing SBA loan programs. SBA’s latest statements did not mention any plan to convert dollar-based size standards to standards based on employment. That was the most controversial feature of the 2004 proposal, which was withdrawn.