SBA Revises White Paper, "SBA's Size Standards Methodology (April 2019)"

On Thursday, April 11th, the SBA published a notification that it revised its white paper, "SBA's Size Standards Methodology (April 2019)."

The white paper touches upon a variety of topics, including and most notably, SBA's revised explanation on "how it establishes, reviews, or revises small business size standards." As many small contractors know, in December 2018, the president signed the Small Business Runway Extension Act, which amended the Small Business Act to change the calculation of revenue-based size standards from an average of the previous 3 years to 5.

While the the Extension Act didn't include an effective date, it's commonplace under legal precedent that it would be effective on the date signed. See Johnson v. United States, 529 U.S. 694 (2000) (citing Gozlon–Peretz v. United States, 498 U.S. 395 (1991)).

However, SBA has taken a different approach, stating, "[t]his change to the calculation of annual average receipts requires the issuance of a proposed rule and approval by the SBA Administrator." In other words, until SBA amends its regulations, small businesses must continue to use the 3-year average, not 5.

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