Hope is not a plan: Get ready for SBA's new size standards now

As of Aug. 20^, when the Small Business Administration sprung their new size standards on industry, we’ve been inundated with articles and LinkedIn posts decrying the increases.

I’ve read hundreds of posts that suggest all parties should submit comments through the Federal Register in the hope that SBA might withdraw or adjust their proposal. And so far, that pretty much captures the sophistication of the available advice.

To be clear, you should submit comments. We could indeed see a change of heart from SBA or perhaps a viable legal challenge. That is possible.

However, I’d like to suggest that it’s pretty clear that SBA has the statutory authority to adjust size standards. And negative comments aren’t likely to deter the SBA. More than likely, something along the lines of what SBA proposed will take effect in 2027.

It’s been more than 30 days since SBA shocked us with the news. Don’t you think it’s time that industry starts sharing ideas on how to prepare? I talk to a lot of companies, of all sizes, and I can tell you that others are already developing their strategies. To share a few concepts I’m hearing from industry:

• Due to the rule of two, the higher size standards are likely to drive work, currently held by the true large businesses, from unrestricted to small business set-aside (SBSA). Smart players are doing the research today, to understand which unrestricted contracts are likely to flip SBSA. And in the meantime, are already gathering the companies they need, to include those who are current subcontractors to the unrestricted firms and are forming strong teams to pursue those contracts. They aren’t putting their head in the sand for months waiting to see what final size standards get implemented.
• Perform some competitive analysis. Identify the currently mid-size firms that will become small that have a footprint or strong relationships in your market. Think about who is likely to compete with you. Hold a black hat and know your competitors better, now. What are their weaknesses? Who are the teaming partners they need to try and capture your work? What moves will they make? Get ahead of them, while you can.
• The number of bidders for each opportunity is likely to increase. Figure out how you can further differentiate yourself. What does your customer value most? Work hard now to meet with and influence your customers and better shape the opportunities that you must secure for success. Invest the time to improve your relationships with the government decision makers associated with your work.  Make the investments, sharpen your pencil, and focus yourself to be the best competitor you can now, before others start engaging with your customers.
• Evaluate the true smalls that live in your market and who compete for your work. Assess the capabilities, strengths, and customer relationships of those firms and pick a few to approach and engage with. A number of true smalls should be more willing to join your teams as they also reflect on the new competitive environment and explore ways they can stay relevant. You might find some of those smaller firms have relevant relationships and give your team a distinct advantage.

I’ve always appreciated the saying that “Hope is not a Plan.” Hoping the new size standards go away isn’t a plan. Submit your comments. But start appraising your markets and competitors and get moving. While most parties have enjoyed the dialogue on social media the best players are already working to shape their environment.