You can create more small businesses without helping a single one. That paradox sits at the center of the SBA proposed size standards, and it is why a group of federal contracting practitioners spent an hour pulling the rule apart.
On the surface, the proposal reads like relief. According to SBA’s proposed rule, size standards would be set across 338 industry groups instead of nearly a thousand, calculated at 4 and 5-digit NAICS levels rather than 6-digit codes. The ceiling on how large a small business can be would come off entirely, and a net 114,541 firms would be reclassified as small. Roughly 37,002 of those firms already hold federal contracts, accounting for more than $71 billion in fiscal 2025 work.
Our Founder, Chelsea Roberts, joined Guy Timberlake‘s GettingFED panel with the American Small Business Coalition, alongside Shauna Weatherly, Jaime Gracia, Steven Koprince, and Nick Wakeman, to answer the question every owner is now asking: what does this do to me?
Chelsea’s read cuts straight to it. Relabeling companies as small is not the same as lowering the barriers that pushed real small businesses out in the first place. When a five-person firm and a $300 million firm land in the same set-aside pool, size stops being the thing that separates them. What replaces it is past performance. CPARS, corporate experience, and a history with the specific buyer become the differentiator, and that shift favors the companies that already carry scale.
The on-ramps narrow, too. As the panel noted, the largest of the newly-small firms would be exempt from subcontracting plan requirements, quietly eroding the subcontracting path that new entrants have long used to break in.
So what does a small business actually do about it? Chelsea’s answer is the one C2 builds its work around. Capture matters more now than it ever has. If you do not know your customer, a set-aside is not protection. You have to be in that customer’s ear early, understanding the requirement and helping to shape it long before a solicitation posts. Treating the RFI as the start of the opportunity cycle is already too late.
The proposed rule is open for public comment through September 21, 2026, under docket SBA-2026-0199 at regulations.gov. Whether or not it passes, the preparation is identical: build a capture process that puts you next to your customer now.
Watch the full panel discussion here: [https://theasbc.org/2026/08/26/sba-size-standards-increase/]