If proposed changes to small business size standards are finalized, most of the nation’s engineering fims will be defined as small businesses, allowing them access to set-aside contracts that should go to “truly small firms,” the American Council of Engineering Companies said this week.
The Small Business Administration (SBA) is redefining what constitutes a small business in the professional, scientific and technical services sector for the first time in more than 25 years.
SBA has said the changes aim to reflect the current realities of industry.
For example, the revenue standard defining a small engineering services firm would increase from $4.5 million to $19 million under SBA’s proposal. For computer system design services, the change is more slight — from $25 million to $25.5 million.
The SBA started reviewing its size standards after its inspector general found that several large contractors were getting small-business contracts. SBA officials said at the time the findings demonstrated a need to change the rules for situations where long-term contracts let a small company grow past revenue size limits.
Craig Rose, an employee of Wetland Studies and Solutions Inc., said in a public comment to SBA that his company, with 75 employees and $9.7 million in annual revenue, is in a “no man’s land” in the marketplace — too big to qualify as a small business but too small to compete effectively against large companies.
The increased size standard would provide more opportunities for moderate size firms like his and also allow federal agencies a larger pool of technical expertise from which to choose.
But the changes would force engineering firms with a dozen employees or fewer to compete for work against companies with hundreds of employees, ACEC President David Raymond said in a news release.
“In engineering-and in many other industries-such a size difference produces unassailable advantages for the larger firms in vying for federal contracts,” he said.
ACEC, which represents more than 5,300 engineering firms nationwide, has recommended to the SBA a size standard increase to $10 million.
The SBA is in the process of finalizing the size standards after receiving hundreds of comments both in support and opposition of the changes.