“SBA has issued a final rule changing all employee size standards to a 24-month calculation. This rule is scheduled to be published in the Federal Register on June 6, 2022, and and will take effect 30 days from the date it is officially published. Let’s take a closer look.”
“This final rule actually implements two updates to SBA’s rules that, once effective, will change the way SBA calculates a company’s size to determine whether it qualifies as small for SBA’s various assistance programs. The first one (the primary focus of this article) is that the SBA will adopt a 24-month average to calculate a company’s number of employees for eligibility purposes in all of SBA’s small business and socioeconomic programs. This change to SBA’s size rules will implement section 863 of the 2021 National Defense Authorization Act (NDAA), which amended section 3(a)(2)(C)(ii)(I) of the Small Business Act, to change SBA’s employee-based size standards from a 12-month averaging period to a 24-month averaging period.”
“Once this change takes effect, as SBA explains: ‘[F]or certifications following the effective date, the size of a business concern under an employee-based size standard will be calculated by averaging the concern’s number of employees for each pay period in the preceding completed 24 calendar months. In determining a concern’s number of employees, SBA counts all individuals employed on a full-time, part-time, or other basis. Part-time and temporary employees count as full-time employees, and the concern aggregates the employees of its domestic and foreign affiliates. If the concern has not been in business for 24 months, it would average its number of employees for each pay period during which it has been in business.'”
“The change will apply to all industries subject to SBA’s employee-based size standards, which predominantly apply to manufacturers (but also to certain mining, utilities, transportation, publishing, telecommunications, insurance, research and development, and environmental remediation firms). But SBA also noted that nonmanufacturers too qualify for their small business status for government supplies contracts using employee-based size standards…” Read the full article here.
Source: Upcoming SBA Rule Will Switch to 24-Month Calculation for Employee Size Standards – By Nicole Pottroff, June 3, 2022. SmallGovCon.
