SBA Employee-Based Size Standards Review — Manufacturing and Defense NAICS (Proposed Rule)
SBA proposed adjustments to employee-based size standards for 120 NAICS codes in manufacturing, defense electronics, and shipbuilding sectors. Proposed increases of 50–250 employees per code to reflect industry consolidation and workforce growth since the 2019 review.
Change log (3)
- Data refreshRe-checked rule statuses and comment deadlines against the latest Federal Register postings.
- Structured dataCross-linked related rules and added affected-area tags to each change.
- LaunchedPublished the tracker covering major 2023–2025 SBA/VA/DoD/FAR rule changes affecting SDVOSBs.
| Agency | Small Business Administration |
| Rule Type | Proposed Rule |
| Status | Open for Comment |
| Published | 2025-04-07 |
| Comment Deadline | 2025-06-06 |
| FR Citation | 90 FR 14832 |
| Rule / Docket | RIN 3245-AH81 |
| Affected Areas | Size Standards |
Rule Details
SBA published a proposed rule initiating the 2025 review of employee-based size standards covering manufacturing and defense-related NAICS codes. Unlike the 2025 revenue-based inflation adjustment (effective March 2025), employee thresholds require a more complex analysis of industry structure and do not adjust automatically with inflation.
The proposed changes are most significant for SDVOSB-relevant defense manufacturing codes, including: 332 series (Fabricated Metal Products) — proposed increase from 500 to 600 employees for most codes, 334 series (Computer and Electronic Product Manufacturing) — proposed increase from 750 to 1,250 employees for defense electronics, 336 series (Transportation Equipment Manufacturing, including shipbuilding) — proposed increase from 1,000 to 1,250 employees, 541330 (Engineering Services, when used with defense work) — proposed increase from 1,000 to 1,250 employees.
SDVOSBs in manufacturing sectors should review whether a threshold increase would affect their competitive position. If your firm was previously above the size standard, a proposed increase may reclassify you as 'small,' enabling SDVOSB set-aside eligibility for requirements in those NAICS codes. Conversely, firms near the top of expanded thresholds should ensure accurate employee count reporting using the SBA's 12-month average calculation method.
The comment period closes June 6, 2025. SBA is specifically soliciting data on average annual employment levels, industry consolidation trends, and whether the proposed thresholds adequately reflect the competitive landscape for small defense manufacturers. SDVOSBs with data to share are encouraged to submit comments through regulations.gov under docket SBA-2025-0012.
Frequently Asked Questions
What does SBA Employee-Based Size Standards Review — Manufacturing and Defense NAICS (Proposed Rule) mean for SDVOSBs?
SBA proposed adjustments to employee-based size standards for 120 NAICS codes in manufacturing, defense electronics, and shipbuilding sectors. Proposed increases of 50–250 employees per code to reflect industry consolidation and workforce growth since the 2019 review.
When does this proposed rule take effect?
This rule is still in the proposed stage. The public comment period closes on 2025-06-06. An effective date will be determined after SBA reviews public comments and issues a final rule.
Where can I read the full text of 90 FR 14832?
The full text of this rule is published in the Federal Register under citation 90 FR 14832. You can search for it at federalregister.gov using the citation or docket number RIN 3245-AH81.