PETALUMA, Calif., Nov. 12, 2014/PRNewswire-USNewswire/ -- The Small Business Administration's (SBA's) newproposed policy that could bankrupt thousands of small businesses that provide ITproducts to the federal government has received a resounding opposition from across America.

The American Small Business League (ASBL) mounted a nationalcampaign to oppose the new SBA policy they described as "anti-small business". 

The SBA was proposing to remove the 150-employee small business size standard forInformation Technology Value Added Resellers (ITVARs) that operate under NorthAmerican Industry Classification System (NAICS) code 541519.

Several opposing comments pointed out the strongest piece ofevidence that negates the rule, which came directly from the SBA in their 2004 Final Rule on 541519. In the SBA's Final Rule theystated, "An employee size standard is considered a better measure of thesize of ITVARs operation than receipts since a substantial proportion of theirreceipts merely reflect the dollar value of equipment and software sold."

Over 98% of the comments were vehemently opposed to the proposedchange. One of the most noteworthy opposing comments came from Professor Charles Tiefer, one of the nation's leadingexperts on federal contracting law. Professor Tiefer had been retained by theASBL to review the proposed SBA policy and determine if the SBA had theauthority to adopt such a rule, and if the proposed rule was consistent withthe Congressional intent of passing The Small Business Jobs Act of 2010 thatauthorized the SBA to change small business size standards.

"The SBA made a compelling case for the sub-industry ofIT-VAR in 2002-2003.  As for the SBA's 2014 proposal to eliminate thesub-industry, the kind of administrative concerns and data questions that theSBA puts forth simply do not have any traction for questioning or changing the2003 establishment of the category… It should continue, not eliminate,IT-VAR," Professor Tiefer stated in his opposition.

An opposing comment from Carly Goldsteinpointed out that "The SBA notice also indicated that it was using 2007Economic Census data… That 2007 Economic Census data has no relevance to thecontractual landscape of 2014. It is apparent that the SBA has not attempted toobtain current data regarding the cost incurred by an ITVAR contractor withless than 150 employees to perform."

ASBL President Lloyd Chapman'srefers to a hidden agenda the SBA may have in proposing this new rulewhen he stated in his comment, "I believe this latest round of changes insmall business size standards is the latest attempt to prepare to close the SBAby combing it with the Department of Commerce in early 2015… I am stronglyopposed to the removal of the 150-employee small business size standard for InformationTechnology Value Added Resellers."

It will now be several weeks before the SBA issues their finalrule on the proposed policy.

"If the SBA tries to adopt this new policy that willunquestionably push thousands of legitimate small businesses out of the federalmarketplace, I will work with our legal team to file and injunction to preventthem from making any change to NAICS code 541519," Chapman stated.

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