Happy New Year! SBA updates Size Standards and Net Worth Thresholds

Just before Christmas, the SBA gave small business government contractors a nice gift. An SBA final rule went into effect on December 19, 2022, adjusting upwards all receipts-based size standards and measures of economic disadvantage. For size standards, this means that for any small business set-aside procurements or any SBA program where a concern must qualify as a small business, the SBA has increased the five (5) year average receipts-measured size standards for all those applicable NAICS codes. (recall, since January 6, 2022, federal contractors are required to use a five (5) year average instead of three (3) years). Note that these increases only apply to receipts-based (i.e., typically construction and services) and not employee-based (i.e., typically manufacturing and supply) NAICS codes. For measuring economic disadvantage, the SBA has increased the thresholds for personal net worth, adjusted gross income, and total asset value. These thresholds apply to the 8(a) Business Development and Economically Disadvantaged Women-Owned Small Business (EDWOSB) Programs as well as firm’s self-certifying at www.SAM.gov as a Small Disadvantaged Business.​

SBA adjusted these values to provide some relief to small businesses dealing with historic rates of inflation. Bottom line, this change will allow small businesses to maintain eligibility for set-aside and sole-source work longer and provide a bit more flexibility to business owners seeking to qualify and maintain economic disadvantage qualification for the SBA’s programs.

​Below are the revised size standard numbers for some common NAICS codes and revised economic disadvantage thresholds:

​NAICS Code	Old Size Standard (in millions)	New Size Standard (in millions)
236220 (Commercial and Industrial Building Construction)	$39.5	$45.0
​238XXX (Special Trade Construction—e.g., prefab concrete/structural steel, HVAC, electrical, masonry, roofing, siding, painting, drywall/insulation, framing, site preparation, flooring, etc.)	$16.5	$19.0
​493110 (General Warehousing and Storage)	$30.0	$34.0
541330 (Engineering Services)	$22.5	$25.5
​541330 (Engineering Services, Exceptions 1-3 for Military and Aerospace Equipment and Weapons, National Energy Policy Act contracts, and Marine Engineering and Naval Architecture)	$41.5	$47.0
​541511 (Custom Computer Programming Services)	$30.0	$34.0
541990 (All Other Professional, Scientific and Technical Services)	$17.0	$19.5

Disadvantage Measure	Old Threshold	New Threshold
Personal Net Worth	​$750,000	$850,00
Adjusted Gross Income (AGI)	​$350,000	$400,000
Total Asset Value	$6 million	$6.5 million

Please do not hesitate to reach out if you have any questions on the above or any other government contracting legal matters!

This client alert is for informational purposes only and does not constitute legal advice. For specific legal advice on any of the issues discussed above, please consider contacting
Paul Hawkins or Brad Reaves.