ACEC Calls for Changes to Proposed Small Business Standards

ACEC News / Advocacy

January 14, 2021

ACEC Calls for Changes to Proposed Small Business Standards

In comments submitted to the Small Business Administration (SBA) regarding the proposed increase in size standards, ACEC recommended that size standards for the engineering sector involved with physical infrastructure projects for governments and public works entities should be separate from those for manufacturing and management firms, many of which are very large. This can be done by using alternate data, weighing the SBA factors developed size standards to avoid skewing before averaging, or making reasonable adjustments.

The SBA defines a small business as having gross annual receipts of $16.5 million for NAICS Code 541330. The new standard would expand the qualifications up to $22.5 million.

In ACEC’s comments, the Council emphasized that to successfully achieve parity and equity in this process, it is critical to understand the many differences between board-licensed engineering professionals working on physical infrastructure projects and engineers working in the design, development, and utilization of machines, materials, instruments, processes, and systems.

Although both are now part of NAICS Code 541330, they have significant differences in several key areas:

• Responsibility for the health and safety of the public and property;
• Organization and structure due to firm ownership and individual and firm licensing requirements;
• Breadth of professional discipline focus and geographic limits;
• Uniqueness of each project and ability to prototype or beta test;
• Cost and schedule impacts for needed corrective actions;
• Liability for errors; and
• Required procurement processes.

As our comments make clear, unfortunately, the census data used by the SBA does not distinguish between real property engineering services and other engineering services. Federal procurement data is also impacted by the lumping of all engineering services together, most notably, companies such as Raytheon, General Dynamics, Northrup Grumman, SAIC, and others.

Recognizing this, SBA needs to consider how to accommodate the different firm compositions and sizes within NAICS Code 541330 and the procurement and operational differences impacting licensed professional engineers and firms.    

ACEC’s comments were prepared by the Council’s Size Standard Working Group, which includes nearly 50 industry stakeholders.

Read our full comments here.

All comments to blog posts will be moderated by ACEC staff.