The Small Business Administration is seeking public comment on a proposed revision of its methodology for defining small enterprises.
The 2023 version includes the disparity ratio approach for calibrating the representation of small businesses in awarded federal contracts, as well as the use of the next-generation Federal Procurement Data System, a.k.a. FPDS, to calculate size standards based on industry factors, SBA said in a notice posted Monday on Federal Register.
The SBA Size Standards Methodology white paper is revised every five years to align with current federal market conditions and industry structure.
In the 2023 draft, the disparity ratio approach will replace the current procedure for determining the federal contracting factor, which is the difference between a small enterprise’s share of total contract obligations and its receipts from industry. Instead of the difference, the new approach will compute the utilization ratio for the number of contract shares and availability ratio for industry receipt shares.
Another proposed change is the use of FPDS and the System for Award Management, or SAM, data to calculate the 20th and 80th percentile values of industry factors for evaluating subindustry exceptions to size standards. SBA said this change will enable comparability in the values and consistency in data reporting.
The period for public feedback ends on Feb. 9, 2024.