Reading the Tea Leaves from SBA’s Regulatory Agenda

We’re back with another edition of looking for interesting tidbits from SBA’s semiannual regulatory agenda. SBA (along with other agencies) provide a guide to upcoming regulations. This schedule can help contractors determine when SBA is likely to update certain rules. Here are a few key updates.

Here are some of the key rules on SBA’s agenda, and what stage they are at. What’s interesting to note is there are not that many big rules on the horizon in the procurement space. Most of these are updates to size standards. While important, they are regularly planned updates, rather than a whole new set of rules.

That’s not to say that SBA has not been busy. Rather, the regulatory agenda only captures certain rules. For instance, the new SDVOSB rules that SBA is implementing are included in the agenda. We discuss those changes here.

Lower Tier Subcontracting

SBA is updating its rules in connection with the National Defense Authorization Act of 2020, Credit for Lower Tier Subcontracting and Other Amendments. The NDAA required SBA to update SBA the method and means of accounting for lower tier small business subcontracting. More specifically, if a subcontractor’s “subcontracting goals pertain only to a single contract with a Federal agency, the prime contractor may elect to receive credit for small business concerns performing as first tier subcontractors or subcontractors at any tier.” Conversely, for subcontracting plans that cover multiple contracts, the “prime contractor may only receive credit for first tier subcontractors that are small business concerns.” This rule is still in the planning stages and a proposed rule is expected in January 2023.

2022 NAICS Codes

SBA will be updating its Small Business Size Standards: Adoption of 2022 North American Industry Classification System for Size Standards. We wrote about this pending rule here, and noted that most of the changes mostly concern industries that rarely engage in federal contract work. Still, it’s something to keep on top of. The final rule is scheduled for October 2022.

Size Standards

SBA has updated size standards for the following industry categories and for inflation:

  • Small Business Size Standards: Manufacturing and Industries With Employee Based Size Standards in Other Sectors Except Wholesale Trade and Retail Trade. We discussed this here. The final rule is expected in December 2022.
  • Small Business Size Standards: Wholesale Trade and Retail Trade. See our post. The final rule is expected in September 2022.
  • Small Business Size Standards: Adjustment of Monetary Based Size Standards for Inflation. This proposed rule came out in 2019, and adjusted all monetary based industry size standards for inflation. However a final rule is expected in December 2022.

These rules are all in the final stage.

Other Updates

The SBA plans to update its rules in a few other areas. Because these may have less bearing on contractors, I won’t go into detail on them.

  • Small Business Development Center Program Revisions
  • Small Business Size Standards; Alternative Size Standard for 7(a), 504, and Disaster Loan Programs
  • Small Business Lending Company (SBLC) Moratorium Rescission and Change of Ownership Updates
  • Small Business Timber Set-Aside Program

If you have questions about any of these other updates, be sure to review the agenda.

Stay tuned to SmallGovCon to keep track of these updated SBA rules, as they could have an important impact on small business federal contracting.

Questions about this post? Email us.

Legal assistance needed for a federal government contracting issue? Call us at 785-200-8919

Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedInTwitter and Facebook.