$71B Reclassified, No New Work: The SBA Size Standards Proposal

SBA can grow its small business numbers by $71 billion without awarding a single new contract.

That is The Reclassification Illusion. The scoreboard changes, the work doesn't, and the firms the program was built for are the ones who pay for it.

SBA's own analysis says $71 billion in existing contracts would count as small under its size standards proposal, and none of those awards is new.

Ben Shotzberger, Founder and Chief Backstop of In Foul Territory and a 10-year homeland security fed, joins Chelsea Roberts to unpack what that means for your set-aside pipeline.

That is The Reclassification Illusion. Roughly 37,000 contractors become small on paper, the agency's numbers climb, and the $10 million shop that built its capture plan on today's NAICS standards now competes with a $530 million company carrying the same label.

Ben has worked on both sides of the table, as a COTR inside Homeland Security and in industry at small businesses, mid-tiers, and large primes. He now leads the proposed Small Posse, a coalition of firms asking SBA to open its methodology and talk with industry before the rule moves forward.

Ben and Chelsea cover why reclassification adds no new small business work, what agencies lose when small firms drop out of the market, and why the people opposing this proposal are not opposing modernization. They also get into the small business cliff, the case for a separate mid-tier or emerging category instead of stretching IT services from under $50 million to $531 million, and what a win looks like, whether that is dialogue with SBA or a challenge in court. If your next recompete sits in a set-aside, this is the conversation to hear before the November 20, 2026 comment deadline.

Timestamps:

00:02:38 Why did small business advocates form a single coalition when WOSB, SDVOSB, and other groups were already commenting on the SBA size standards proposal?

00:04:43 Does reclassifying $71 billion in existing contracts as small create any new small business work?

00:05:34 Could a household-name tech company qualify as small under the proposed size standards?

00:07:19 How many viable small business prime contractors could the federal market support under the new size standards?

00:08:04 Can a $10 million small business compete with a $530 million firm that also counts as small?

00:08:43 What do agencies lose when small business contractors drop out of the market?

00:10:09 Would newly small large firms even pursue simplified acquisition and purchase card work?

00:10:41 Why does the extended SBA comment period worry small business advocates?

00:11:40 Are opponents of the SBA size standards proposal against modernizing size standards?

00:12:16 What does a win look like for small businesses fighting the size standards proposal?

00:13:30 Should mid-tier contractors get their own size category instead of a $531 million small business standard?

00:14:23 How did past SBA size standard increases affect small firms approaching their limit?

00:16:53 Does the size standards proposal solve the small business cliff or push it down the road?

00:17:58 Why does incubating small contractors matter for the next generation of large primes?

00:23:04 Why are some contractors afraid to publicly oppose the SBA size standards proposal?

00:24:55 How is the Small Posse governed, and does a two-person firm get the same vote as a large association?

00:26:38 How can contractors join the Small Posse or contact the coalition?

Resources:

• Follow Chelsea Roberts
• Follow Ben Shotzberger

Other Resources:

• Small Posse Website
• Small Posse email: RideWithUs@SmallPosse.org

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