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SBA Retreats on Big Hike in Design Firms’ Revenue Caps

February 17, 2012

By Tom Ichniowski
This article originally appeared in Engineering News-Record

In a victory for architectural firms, the Small Business Administration has backed away from a proposed major boost in the revenue a firm can have and still be rated “small.” That ceiling governs eligibility for small-business programs, such as contracts set aside for such firms.

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Last year SBA proposed hiking the “size standard” for both architectural and landscape architectural firms to $19 million in average annual receipts, from $4.5 million for architects and $7 million for landscape architects. Under the higher caps, small firms would compete against much bigger ones for small-business set-asides. After architects flooded SBA with criticisms about the $19-million plan, SBA retreated. In a final rule printed on Feb. 10, SBA raised architects’ ceiling to $7 million and kept landscape architects’ cap at $7 million.

SBA lifted the engineering services limit to $14 million, from $4.5 million. It had proposed $19 million. The American Council of Engineering Cos. “raised numerous concerns” about the proposal, says Steve Hall, vice president for government affairs. “Some of those concerns apparently struck a chord.” The new caps take effect on March 12.

“I think we’re very excited that we got them away from that $19 million,” says Jessica Salmoiraghi, American Institute of Architects director of federal relations and counsel. The $7-million cap covers 95.5 percent of AIA members, up from 91.7 percent at the old mark. The American Society of Landscape Architects was “extremely pleased” that SBA agreed with its recommendation to keep the $7-million cap, says Roxanne Blackwell, ASLA federal government affairs manager. “It keeps more landscape architecture firms active and viable in the SBA procurement arena,” she adds.

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