Senate Small Business Committee Chair Olympia Snowe is urging SBA to consider tiered size standards "to enable competition among firms of similar size."

In a statement, she pointed to a tiering proposal backed by several industry organizations that would open federal small business programs to much larger companies.

The most detailed plan, submitted to SBA by the Association of Small Businesses in Technology, is called "5-10-5." It envisions five tiers, with the top tier based on 10% of the average revenue of the five largest corporations in an industry. If the largest corporations averaged $1 billion in annual revenue, a small business would be defined as one with up to $100 million in revenue. Under current rules, the largest revenue-based standard is $28.5 million for several heavy construction categories. (SAA, 4/15)

In supporting the tiered approach, the Minority Business Summit Committee said it would allow growing businesses to continue to qualify for set-aside contracts until they are big enough to compete with large corporations.

Other advocates, including Lloyd Chapman, president of the American Small Business League, argue that larger companies would take contracts away from those firms that are currently classified as small.

Snowe (R-ME) said creation of tiered standards would "better account for industry-specific circumstances and the needs of small firms in various stages of development."

SBA has said it would need congressional authorization to use tiered standards.

SBA is winding up a month-long nationwide series of public hearings on its planned revision of size standards, with the last meetings set for June 28 and 29 in San Francisco and Los Angeles, respectively. Several of the hearings have revealed deep divisions over whether size standards should be larger or smaller and whether businesses currently classified as small should be grandfathered in under the new standards. Both the National Federation of Independent Business and the American Small Business League oppose a grandfather clause.

Following a June 7 hearing in Portland, ME, Sen. Snowe said, "Today, we heard from many small business owners that the SBA's size standards system must not leave behind small or emerging firms. Any reform of this system must be fair to businesses of every size, must help them grow to become competitive in national and global markets, and give due regard to the unique circumstances of the industries in which they compete." SBA officials have said it is likely to be several more months before they publish a proposed rule.

Last year SBA proposed basing size standards on employment, with an additional revenue cap in most service industries. The proposal was withdrawn in the face of widespread opposition, and the agency issued a new request for comments in December.