SBA extends comment period

Proposed rule to restructure small business size standards

The Small Business Administration will take comments on proposed changes to the small business classification system until July 2.

The comment period had been scheduled to be closer to May 18, but the agency is receiving many comments and some organizations had asked for more time, said Gary Jackson, SBA's assistant administrator for size standards.

Jackson is heading the effort to reduce the number of different size classes, and to do away with many of the standards based on receipts. Instead, most companies will be evaluated based on the number of employees they have under the new rule.

About 1,300 comments have come in so far, and some trade associations had asked for more time to formulate comments, he said.

"Because of the scope of the rule, they felt they needed additional time to get a good grasp of the rule," he said. Associations also need time to consult with member companies, he added.

The comments are raising good issues, including whether the changes will push too many companies out of the small business classification before they're ready, Jackson said.

"Even though we estimated a net gain of small business becoming eligible, you have gainers and losers," he said.

Comments also concern the specific thresholds that SBA plans to set for some industries, and how part-time and contract employees should be counted, he said.

Jackson said the agency will publish a notice in the Federal Register early next week to announce the extension.

Angela Styles, the former administrator of the Office of Federal Procurement Policy, told Federal Computer Week that she believes the proposed rule would force many businesses out of the small-business nest too quickly.

"I think a lot of small businesses stand to suddenly be large, out of government work and out of business," Styles, now an attorney in Washington, D.C., said in an e-mail. "I am concerned that SBA does not know the number of small businesses that will be hurt by the proposed rule."

The rule states that 34,000 small companies will move out of small status, but Styles said that represents the net change -- losses offset by gains.

"There could be a lot more losers that just 34,000," she said. "'Streamlining the size standards'" is certainly not going to be sufficient justification for that small business that is prosperous and doing good work for the government to be suddenly large and likely out of work.