Comments close: Small Business Size Standards: Revised Size Standards Methodology

The Small Business Administration (SBA) has released a revised methodology for determining small business size standards. This document details the analytical framework used to define size thresholds, which are primarily based on receipts or employee counts. The methodology incorporates economic data from various federal sources, including the Census Bureau, the Bureau of Economic Analysis, and the Energy Information Administration, to ensure standards reflect current market conditions. The SBA utilizes specific economic indicators, such as inflation and productivity growth, to adjust receipts-based standards. For the current review, the agency applied a 22.1% adjustment to receipts-based values to account for economic changes since March 2022. The methodology also addresses unique industry characteristics, such as the use of total assets for financial institutions and barrels of oil refined for petroleum refineries, though the SBA is moving toward employment-based standards for greater consistency. To ensure geographic and market accuracy, the SBA employs commuting zone algorithms and Herfindahl-Hirschman Index (HHI) analysis, consistent with 2023 Department of Justice and Federal Trade Commission merger guidelines. The document also identifies specific industries where new large businesses have been reclassified, including telecommunications, waste collection, and various manufacturing sectors, while noting that certain government-owned entities and specific agricultural sectors remain excluded from standard size calculations.