Federal Rule Could Redefine Small Business Across Hundreds of Industries; Members Encouraged to Comment Before September 21

The U.S. Small Business Administration (SBA) is seeking public feedback on a significant proposal that could reshape how the federal government defines a small business across hundreds of industries. The proposed rule would revise small business size standards for 338 industry groups and industries and update the methodology SBA uses to determine eligibility for federal small business programs.

According to SBA, the proposal represents the most significant overhaul of its size standards in years. The agency would simplify how businesses are classified by consolidating many industry-specific standards, revise eligibility thresholds using an updated methodology, and in some cases increase the size limits that determine whether a company qualifies as a small business. SBA says these changes are intended to better reflect current market conditions and allow growing firms to maintain access to small-business programs and federal contracting opportunities for longer. The agency estimates the changes could result in more than 110,000 additional firms nationwide qualifying as small businesses.

Because these changes affect industries differently, the impact on individual businesses may vary considerably. For some growing companies, the proposal could preserve access to small-business programs and contracting opportunities for a longer period of time. For others, particularly businesses that currently compete for federal small-business set-aside contracts, expanded eligibility could result in increased competition. These potential impacts have been discussed within SBAM policy councils as the organization evaluates how the proposal may affect Michigan’s small-business community.

The SBA is accepting public comments on both the proposed size standards and the revised methodology used to develop them. The public comment period remains open through September 21, 2026.

SBAM encourages members, especially those who participate in federal contracting, utilize SBA programs, or may be affected by changes to industry size thresholds, to review the proposal and consider submitting comments.

To review the full proposed rule and submit feedback, visit this link. If the comment page does not open automatically, click the green “Submit Public Comment” button located at the top of the page.

Federal agencies frequently rely on stakeholder input during the rulemaking process, and member feedback can help ensure the real-world impact on small businesses is considered before any final changes are adopted. If you have any questions, please contact Parker Havard, Advocacy Coordinator and Policy Advisor, at Parker.Havard@sbam.org or (517) 492-1232.