Q. What are small business size standards?
A. The term "size standard" describes the numerical definition of a small business. In other words, a business is considered "small" if it meets or is below an established "size standard."

Q. Who keeps the lists of eligible small businesses or issue certificates for firms to qualify as small businesses?
A. For Federal procurements, the firm self-certifies its small business status in Online Representations and Certifications Application when it submits its best and final offer, based on the size standard specified in the solicitation.

Q. My firm desires to team with another firm to bid on a Government contract. We both are below the size standard individually, but not when combined. Are we eligible to bid as a small business?
A. Only for certain procurements could this joint venture qualify as a small business. In a joint venture, both firms share, in some proportion, the responsibility and the profits or loss on a contract. They are considered affiliated for the purpose of that contract. Normally, the revenues or the employees of both firms are added together to determine the size of a joint venture. However, on certain large Federal procurements, a joint venture comprised of only small businesses would qualify as a small business joint venture. This is limited to procurements that exceed $10 million in value that are classified with an NAICS industry having an employee-based size standard, or that exceeds one-half of the size standard for procurements classified with an NAICS industry having a revenue-based size standard. Also, certain 8(a) firms may joint venture with other firms without being considered affiliates.

Q. How can I restructure my firm or firms so I still maintain ownership, but become eligible as a small business? I am not now a small business.
A. Restructuring your firm for the primary purpose of becoming small under a size standard would not change your size status.

Q. A Federal agency wishes to grant regulatory relief for small business entities. Must it use SBA's size standards to define small business?
A. Generally, federal agencies use the SBA's size standards, which are defined in the Regulatory Flexibility Act. However, if another small business definition is more appropriate to its needs, that agency may consult with SBA's Office of Size Standards to determine if it should request a more suitable small business definition from the SBA Administrator.

Q. How do Federal Agencies use the SBA size standards?
A. With few exceptions, all Federal Agencies use the size standards established by SBA. In addition, many other political entities, such as state and local governments, adopt SBA size standards. Most Federal Agencies reserve all or some of their programs for small businesses. For instance, the SBA has a number of loan programs for qualified small businesses. Most Agencies set aside a share of their procurement activity exclusively for small businesses.

Q. Can a Federal agency making a small business set-aside procurement use, at its discretion, a size standard other than what SBA has designated?
A. No. Under law, an agency must use the SBA's size standards on small business set-aside procurements. An agency has no authority to establish size standards different from the SBA's size standards on set-aside procurements.

Q. My business operates under a franchise. Am I affiliated with the franchiser or with similar franchisees?
A. A franchisee operating under its own ownership, own management, and for its own profit (or loss) would generally not be affiliated with the franchiser or other franchisees through the franchise arrangements, except under unusual circumstance.

Q. I am a member of an agricultural cooperative. Does that mean that I am affiliated with the cooperative? Am I still a small business?
A. You are not considered an affiliate of the agricultural cooperative by virtue of your membership in the cooperative. If you meet the small business size standard for your agricultural enterprise, you are a small business.

Q. What about the cooperative? Can it qualify as a small business?
A. So long as the agricultural cooperative meets the size standard for the agricultural industry involved, it can qualify as a small business. Businesses that do not meet the size standard for their industries cannot be members of the agricultural cooperative if it intends to be considered a small agricultural cooperative. That is, each individual member of the agricultural cooperative must be a small business concern.

Q. How do I find the size standard for my NAICS code?
A. Go to the table of Size Standards matched to the NAICS codes (internal link to size standards table) on SBA's website, and select one of the tables in the format you prefer to find your NAICS code with its matching size standard.

References:
• Small Business Administration

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