NAMC and Minority Business Enterprise Legal Defense and Education Fund (MBELDEF) are considering filing a complaint against the SBA in response to the proposed changes to its size standards announced on August 20.
One of the major proposed changes is to shift to higher revenue-- $100 million firms with 1,000 employees wil be allowed in SBA size standards in many industries. For example, all the construction management & consulting services-related NAICS codes have revenue-based size standards ranging from $25 million to a maximum of $295 million, a more than 1,100% increase.
SBA is now proposing to change all of the construction industries to employee-based size standards of over 1,000 workers, with the new size standards ranging up to 1,500 employees, depending on the industry. For example, a firm currently operating in the other heavy and civil engineering construction industry, NAICS code 237990, qualifies as small if its average annual revenue over the past five completed fiscal years is less than $45 million. But under SBA’s new proposal, firms would qualify under the broader Construction NAICS Sector 23713 if their average number of employees per pay period over the last 24 months is less than 1,500 employees.
This means significantly larger and more firms would now qualify as small for construction. We need only to remember the last time we saw something like this was the PPP Loan, which took the money from Main Street to Wall Street. Gross revenue did not matter at all under the new guidance, only the number of employees. Then, the cap was 500; this time, the cap is triple that: 1,500.
In addition, SBA is proposing to change the NAICS level at which size standards are calculated, which will reduce the number of individual size standards. Along these lines, this will also result in SBA removing all size standard exceptions.
Currently, many NAICS codes have certain exceptions to size standards for various subindustries. One of these is the exception for NAICS code 541519, Information Technology Value Added Resellers (ITVAR), which currently has a size standard of 150 employees. ITVAR is not addressed directly in the proposed rule, but with the proposed shift to 4- or 5-digit NAICS levels to determine size standards, it appears that the size standard could be changing to $531 million. It is unclear how this will comport with the performance of work requirements for ITVARs performing on set-aside contracts.
Another major proposed change is the dramatic increase in most (but not all) of the current revenue-based size standards. To provide a few examples, the table below compares the current and proposed new size standards for several professional services industries. The magnitude of the proposed changes is readily apparent from the percentage increase, the lowest of which reflects an increase of more than 200%.
SBA explains that its proposals will increase industrial base resilience, participation in SBA loan programs, and satisfaction of small business goals by dramatically increasing the number of small businesses in federal contracting. While true, it is not clear if SBA considered the other side of that equation – namely, firms that currently qualify as small businesses would now have to compete for small business set-aside contracts against much larger and more sophisticated firms.
Please contact the NAMC national office with questions or comments.
Respectfully,
Wendell R. Stemley, PM / CM
NAMC National President
August 25, 2026
On August 20th, SBA published stunning proposed changes to its size standards, replacing the August 2025 proposed rule, discussed here, as well as revised size standards methodology. From time to time, SBA reviews and proposes changes to its size standards and those changes are typically incremental and to adjust for inflation. Tomorrow’s proposed changes are massive and will dramatically reshape how small businesses are determined for federal contracting if finalized.
One of the major proposed changes is to shift from revenue to employee-based size standards in many industries. For example, all the construction-related NAICS codes in NAICS Sectors 236 and 237 currently have revenue-based size standards ranging between $19 and $45 million. SBA is now proposing to change all of the construction industries to employee-based size standards, with the new size standards ranging between 550 and 2,000 employees depending on the industry. For example, a firm currently operating in the other heavy and civil engineering construction industry, NAICS code 237990, qualifies as small if its average annual revenue over the past five completed fiscal years is less than $45 million. But under SBA’s new proposal, firms would qualify under the broader Construction NAICS Sector 23713 if their average employees per pay period over the last 24 months is less than 1,500 employees. This means significantly larger and more firms would now qualify as small for construction.
In addition, SBA is proposing to change the NAICS level at which size standards are calculated, which will reduce the number of individual size standards. Along these lines, this will also result in SBA removing all size standard exceptions. Currently, many NAICS codes have certain exceptions to size standards for various subindustries. One of these is the exception for NAICS code 541519, Information Technology Value Added Resellers (ITVAR), which currently has a size standard of 150 employees. ITVAR is not addressed directly in the proposed rule, but with the proposed shift to 4- or 5-digit NAICS levels to determine size standards, it appears that the size standard could be changing to $531 million. It is unclear how this will comport with the performance of work requirements for ITVARs performing on set-aside contracts.
Another major proposed change is the dramatic increase in most (but not all) of the current revenue-based size standards. To provide a few examples, the table below compares the current and proposed new size standards for several professional services industries. The magnitude of the proposed changes is readily apparent from the percentage increase, the lowest of which reflects an increase of more than 200%.
SBA explains that its proposals will increase industrial base resilience, participation in SBA loan programs, and satisfaction of small business goals by dramatically increasing the number of small businesses in federal contracting. While true, it is not clear if SBA considered the other side of that equation – namely, firms that currently qualify as small businesses would now have to compete for small business set-aside contracts against much larger and more sophisticated firms.
Please contact the NAMC national office with questions or comments.
Respectfully,
Wendell R. Stemley, PM / CM
NAMC National President
August 6, 2026
The Business Community, Corporate Professionals, and Contractors Should Be Alarmed
At NAMC, we stand on advocacy and the right to participate in the U.S. economy. This includes the equitable use of our taxpayer dollars.
Minority women-owned businesses face heightened exclusion driven by a rollback of corporate diversity programs, severely restricted access to venture capital, and systemic lending biases. Despite launching businesses at record rates out of economic necessity, founders confront compounding financial and institutional hurdles.
Financial and Funding Barriers
Capital deficits: Venture capital funding for Black women-founded startups has dropped to minimal fractional shares, making traditional scaling nearly impossible without heavy self-funding or high-interest debt.
Loan rejections: Loan rejection rates for Black female entrepreneurs historically run significantly higher than average, paired with stricter terms and higher interest rates. This is causing wider wealth gaps, as lower median household wealth and fewer personal assets restrict the collateral required by commercial banks.
New Corporate and Network Exclusion
DEI rollbacks: Corporations have retreated from supplier diversity and inclusion (DEI) programs, reducing lucrative business-to-business contract opportunities for minority women-owned enterprises and corporate employment opportunities.
Network Isolation - The Buyers Are Gone
Mass corporate layoffs and workplace rollbacks are pushing many minority women into entrepreneurship, not by choice, but as a survival strategy following systemic displacement. Minority women are being forced out of the labor force. We are now seeing a reversal in opportunities—the business climate is shrinking and the unemployment rate is rising. With minority women currently experiencing unemployment of over 7%, when will the alarm sound—at 10%?
Government Programs Realignment
City of Houston lawsuit. Programs and corporations are openly stating that they have a WBE program that does not emphasize minority women. Black women entrepreneurs have been hit exceptionally hard as U.S. companies are axing diversity programs. U.S. corporations' retreat from supplier diversity initiatives is affecting minority women the most. Even minority women as employees are systematically excluded from many occupations. Even with higher education, this new movement is showing us that minority women are at risk. We cannot remain quiet.
Please contact the NAMC national office with questions or comments.
Respectfully,
Wendell R. Stemley, PM / CM
NAMC National President
