SBA Maintains Size Standards for LA Firms

The U.S. Small Business Administration has agreed to maintain a $7 million threshold for landscape architect firms to be considered ?EUR??,,????'??small firms.?EUR??,,????'?? The SBA was considering substantially raising the threshold.

The Small Business Administration (SBA) recently issued a final rule for size standards affecting the North American Industry Classification System (NAICS) Sector 54, the professional, scientific and technical services industries, including architecture, landscape architecture, engineering, planning, and a host of other professions.

The SBA as agreed to maintain the $7 million threshold to be considered a small landscape architecture firm for purposes of federal procurement opportunities, as recommended by the Society. In March 2011, the SBA issued a proposed rule that recommended increasing the threshold to $19 million to be considered a small landscape architecture firm.

The American Society of Landscape Architects argued that the $19 million threshold was significantly high and did not accurately reflect the current state of annual receipts in the landscape architecture profession. Instead, ASLA, along with many member firms, recommended that SBA maintain the current cap of $7 million dollars because it more appropriately represents annual revenue for the profession.

According to the SBA, more than 1,400 comments on the proposed changes were received from about 1,320 unique members of the public representing individuals, about 850 firms, and a dozen trade groups and professional associations.

Commenters supporting SBA's proposed increases in size standards believed that higher size standards would enable small businesses to grow and be able to compete fully and openly in the Federal market, effectively compete against largest firms in their industries for Federal contracts, retain or regain small business size eligibility for Federal assistance, and successfully perform and meet size and other requirements associated with Federal contracts.

Most commenters opposing the proposed rule believed that small businesses under the current size standards would face adverse competition with the newly defined small businesses under the proposed increases. Many contended that if the proposed increases are adopted, an exorbitant percentage of businesses, including many mid-sized and large businesses, will qualify as small, thereby increasing competition for small business opportunities in the Federal market.

Many others also felt that the proposed size standards do not reflect “what is truly small.” Many commenters in architectural and landscape architectural services pointed out that a vast majority of firms either operate as sole proprietors or have fewer than 20 employees and do not need a higher size standard.

The final rule increases 37 small business size standards for 34 industries and three sub-industries. The rule is effective March 12, 2012.