The U.S. Small Business Administration (SBA), Washington, D.C., wants more participation from companies in construction, dredging and waste-related fields. To accomplish this, SBA changed its definition of “small,” which will enable an estimated 2,500 more businesses to compete for federal contracts reserved for small enterprises.
“This opens the doors even wider to new contracting opportunities for the firms in these industries,” said SBA Administrator Aida Alvarez.
Some 140 newly eligible companies operate in Garbage and Refuse Collection, Without Disposal (part of SIC 4212) and Refuse Systems (SIC 4953), according to SBA sources. The change will result in an increase of waste businesses eligible for small business contracts and other SBA assistance — for example, government guarantees for private bank loans.
Under the recently revised limits, which appear at 13 C.F.R. Sec. 121.201, the receipts-based table “Size Standards By SIC Industry” assistance for garbage and refuse operations (Division E) now reads $10 million.
Effective in mid-July, the increases were designed to adjust the current size standards for the effects of inflation that had occurred since 1984, which was when the ceilings were last adjusted. In the interim, many companies simply outgrew their eligibility to compete for small business federal contracts and aid.
“By adjusting the Construction and Refuse size standards to the same point in time, we [first] attempted to have receipts-based size standards adjusted to a common base year of 1994,” said SBA in announcing the change. “We [eventually] decided to increase the size standards for … the refuse industries to account for inflation through 1999 rather than through 1994 as proposed.”
In particular, the SBA noted its commitment to “more frequent inflation adjustments than has occurred in the past, and five years would seem to be sufficient time to wait for an inflationary adjustment.”
Nearly half the comments submitted to SBA addressing the refuse size standard supported the proposed increase to $9 million, while an equal number argued for an even higher ceiling.
In its formal size standard announcement increase, SBA expressed concern about certain refuse industry trends cited by 75 percent of the parties who filed comments. “Although one comment argued that small businesses were very competitive, the industry appears to have been consolidating in recent years,” said the agency. Other comments cited concerns of vertical integration, consolidation and buy-outs of smaller firms by larger firms. Still other comments expressed worry about increasingly larger federal waste collection contracts in recent years — a trend that normally favors larger companies. Not surprisingly, small businesses have been winning a diminishing share of these jobs.