The Small Business Administration is simply redefining “small business,” a move that means that 900,000 small businesses will increase to more than 918,000 in a few days. The bad news for the existing small businesses is that they’ll face fiercer competition for the portion of $533 billion in annual federal contracts set aside for the little guys, according to a Bloomberg Government report by BGov Analyst Rich Stein. They already compete with the Goliaths of federal contracting. Agencies set some contract money aside to encourage new business formation, job growth and competition. More companies will be eligible to compete for that small-business money after Oct. 24.
The SBA’s first redefinition of small business since the 1980s will initially apply to real estate and leasing companies, educational services and health-care businesses. The agency will consider in November expanding the definition’s reach to financial services, management, and agricultural and fishing industries.
Small technology companies so far have received a reprieve. The coming changes are much more sweeping than one the SBA rejected earlier this year, when it considered and then dropped a rule that would have added 500 companies to the list of those eligible for small-business contracts.