Small Business Government Contractors Must Meet the Size Requirement

The Small Business Act was passed to help give small businesses a chance in the competitive market, and the Small Business Administration established standards and guidelines in identifying small businesses. Size indeed matters, and your business must meet the size standards established by the SBA to be eligible for government programs intended to assist small businesses, and satisfy the definition of a small business concern.

What is a size standard for small businesses?

But before that, let us define a small business concern. A small business concern is a small business that is not the dominant company or business in the field in which he is bidding for a government contract.

Size standards represent the largest size that a business can be, while still being qualified as a small business concern. The size standards apply to many government financial assistance programs such as loans, and to Federal government procurement programs that benefit small businesses.

A size standard is usually in terms of the number of employees or average annual receipts. How “small” is defined depends on the industry or field of operation of the business.

The US Small Business Administration has a table of small business size standards to which you can refer. The size standards are expressed in either millions of dollars or number of employees. Two standard sizes were established by the SBA, which are generally used – 500 employees and $7.5 million in average annual receipts. However, there are industries in which these size standards are not applicable.

What are the size standards for the construction sector?

If you own a construction company and you want to bid for government contracts, you would want to check if your can qualify as a small business, and if you are qualified for small business assistance programs. For a construction company to be considered as a small business, it must meet the size standards indicated below:

• General Building and Heavy Construction – $36.5 million in average annual receipts
• Special Trade Contractors – $15 million in average annual receipts
• Land Subdivision – $27.5 million in average annual receipts
• Dredging and Surface Cleanup Activities – $27.5 million in average annual receipts

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