A federal proposal to rewrite the Small Business Administration's size standards could change which construction companies qualify for small-business set-asides on federal work, and contractors have until Nov. 20 to tell the agency what they think. Associated Builders and Contractors is also running a member survey on the plan that closes at the end of the business day Oct. 28 (via ABC).
The SBA published the proposed rule in the Federal Register on Aug. 20. It's a big one. The agency wants to collapse 978 separate size standards, each tied to a six-digit industry code, into 338 broader groups, mostly organized around four-digit codes. It would also drop the special exceptions that some subindustries have today and fold the separate rules for revenue-based and headcount-based standards into a single approach.
Under the new method, the SBA would lean toward using employee counts instead of annual receipts wherever it has the choice. The rule doesn't lower any existing standard, according to the agency.
For general contractors, ABC flagged the change that matters most. Commercial and institutional building construction, NAICS code 236220, is now capped at $45 million in average annual receipts. Under the proposal, ABC says, that would switch to a 600-employee limit. The trade group says the overall plan would push more than 14,000 additional construction companies into the small-business category, which would make them eligible to compete for federal contracts set aside for small firms.
Across all industries, the SBA's own estimate is that about 114,000 more firms would count as small, a bump of roughly 1.8%, while fewer than 200 would lose that status.
ABC isn't on board with how the rule handles construction. The group says it led a coalition of construction trade associations that filed comments raising concerns about the SBA's approach to Sector 23, the construction sector, before the original Sept. 21 deadline. After requests from ABC, other industry groups and small businesses, the SBA pushed the deadline back 60 days. The extension notice, published Sept. 24, says the agency received requests for more time and wanted to clarify the effects of the changes. ABC says it will file a supplemental comment letter and wants member input to shape it. Members can get the survey by emailing ABC through the address on its Newsline post.
Anyone can comment directly with the SBA. Comments on the proposed rule go through regulations.gov under docket SBA-2026-0199. A separate docket, SBA-2026-0265, covers the revised methodology the agency used to calculate the new standards. Both are open until Nov. 20.
The proposed tables list the new standard for each industry group. Before you assume where your company lands, look up your own primary NAICS code in the rule rather than relying on summaries.
Why it matters for Contractors
If you don't bid federal work, this one probably won't touch your day-to-day. If you do, or you've thought about chasing set-aside jobs, it could matter a lot in both directions.
A bigger pool of firms counted as small means more competitors for the same set-aside contracts. A commercial GC that's well past $45 million a year in receipts but under 600 employees, for example, could start bidding against much smaller shops. On the flip side, if you've been bumping up against a receipts cap, a headcount-based standard might keep you eligible longer.
Small shops are often the ones that don't comment, and then live with the result. You don't need a lawyer to file. A short comment on regulations.gov that explains your size, your NAICS code and how the change would affect your bidding counts. Get it in by Nov. 20.