SBA Revising Small Business Revenue Classifications…Not Enough?

On August 18, 2008, the Small Business Administration (SBA) increased all revenue-based small business size standards. The new rule finalizes the Agency’s December 2005 interim final rule that also amended monetary-based small business size standards for inflation. These size standards will be increased 8.7 percent, which I argue is not nearly enough.

In a recent article in Washington Technology, Jerry Grossman advocates an increase in the revenue cap for small businesses – allowing companies “time to mature” and “expand their infrastructure”.

Both the government and the contractors they use have a legal, moral and ethical responsibility to safeguard taxpayers’ funds that are contracted out for services. In this regulatory environment, small contractors need to invest in systems and training to protect the government and to protect themselves. This year alone, Altron has already spent over $150,000 training our staff, updating our audit services and installing a new accounting system. While these types of expenditures may be of little significance for a large company, they are considerable for small firms like Altron. .

This is not a complaint -- Firms like mine must make these kinds of investments if we are committed to staying and growing in the government market.. However, I argue that allowing small companies a few more years of growth under the umbrella of small business programs would facilitate the necessary investments in internal controls. This would benefit companies like Altron, this market, government customers and the U.S. taxpayer.