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ASA urged the U.S. Small Business Administration (SBA) to extend the comment period on proposed changes to the federal government’s small-business size standards, citing significant concerns about the potential impact on construction subcontractors and specialty trade contractors. ASA submitted a letter to SBA requesting that the September 21, 2026, comment deadline be extended by at least 60 days, through November 20, 2026. The association believes additional time is necessary for construction contractors, subcontractors, ASA chapters, and other stakeholders to fully understand the proposal and provide meaningful, industry-specific feedback.

The SBA proposal represents more than a routine adjustment to existing size standards. It would make significant changes to the methodology used to determine whether a business qualifies as “small,” including consolidating many existing six-digit NAICS classifications into broader four- and five-digit classifications and shifting numerous industries from receipts-based standards to employee-based standards.

ASA is particularly concerned about the potential impact on small construction subcontractors.  The construction industry is highly specialized, with businesses ranging from general building contractors to electrical, plumbing, drywall, painting, flooring, tile, finish carpentry, and other specialty trades. These businesses can have very different business models, revenue levels, workforce requirements, bonding capacity, and competitive resources.

Under the proposed approach, many of these distinct specialty trades would be grouped under broader NAICS classifications.

For example, drywall, painting and wall covering, flooring, tile and terrazzo, and finish carpentry contractors would fall under the broader NAICS 2383 – Building Finishing Contractors classification, with a proposed size standard of 600 employees.

ASA believes SBA needs to carefully consider whether broader classifications accurately reflect the differences among these businesses and whether consolidation could result in substantially larger companies competing with genuinely small specialty contractors for federal small-business opportunities.

ASA also raised concerns about SBA’s proposal to move many industries from receipts-based size standards to employee-based standards.  For construction, employee count may not accurately reflect the economic size or competitive capacity of a business.  Construction revenues can vary significantly based on material costs, project size, subcontracted work, geography, and the type of work being performed. Two contractors with the same number of employees can have dramatically different annual revenues, bonding capacity, capital resources, equipment, purchasing power, and administrative capabilities. ASA believes SBA should provide additional analysis demonstrating why an employee-based standard is appropriate for construction and whether it accurately distinguishes genuinely small contractors from significantly larger businesses.

Another concern involves SBA’s proposed methodology for receipts-based size standards, which establishes a minimum standard of $30.6 million. Although many construction standards under the proposal would be expressed in terms of employees, ASA is concerned about the broader effect of expanding the number and size of companies that could qualify as “small.”

A locally owned subcontractor with 20, 30, or 50 employees may face a very different competitive environment than a company with substantially greater revenue, bonding capacity, purchasing power, workforce, administrative resources, and access to capital. If significantly larger companies qualify as small, they could compete for federal small-business set-asides and subcontracting opportunities alongside businesses that are considerably smaller in both size and resources. ASA believes this could undermine the purpose of federal small-business programs, which are designed to provide opportunities for small businesses to compete, grow, and build capacity.

The proposed changes could have a direct impact on federal construction procurement.

If more businesses qualify as small, the number of companies competing for small-business set-asides could increase significantly. The change could also affect federal subcontracting goals, where prime contractors rely on small specialty subcontractors to meet their small-business participation requirements.

ASA is concerned that expanding the definition of “small” could unintentionally make it more difficult for genuinely small subcontractors to secure these opportunities. ASA believes SBA should evaluate not only how many additional businesses would qualify as small under the proposal, but also how those businesses compete in the federal marketplace and what effect the changes could have on existing small-business participation.

ASA’s request for an extension is intended to allow the construction industry to conduct a more thorough review of the proposal and provide SBA with meaningful, real-world information. Among the issues ASA plans to further evaluate are:

  • The number of construction firms that would newly qualify as small;
  • The impact of converting receipts-based standards to employee-based standards;
  • The consolidation of six-digit construction NAICS codes;
  • The impact on small-business set-asides;
  • The effect on federal subcontracting goals;
  • The competitive differences between general contractors and specialty subcontractors; and
  • Whether separate size standards are appropriate for substantially different construction trades.

ASA supports SBA’s mission to promote opportunities for small businesses and recognizes the importance of periodically reviewing and updating size standards. However, the association believes the definition of “small” must remain meaningful. ASA will continue to engage with SBA on this issue and will encourage its chapters and members to participate in the rulemaking process. Additional input from ASA members will be important as the association develops its substantive comments on how the proposed changes could affect construction subcontractors across the country.