In a testimony today before the U.S. House of Representatives Committee on Small Business, Subcommittee on Contracting and Workforce, Ronald M. Reim, AIA, executive vice president and a founding principal of St. Louis–based Oculus, argued on behalf of the AIA that the passage of H.R. 1429, the Stronger Voice for Small Business Act, could help small firms in the design and construction sector more effectively compete for federal projects. The legislation, introduced in March by Reps. Mike Bost (R-Ill.) and Gerry Connolly (D-Va.), would allow small firms to challenge size-standards decisions in the Small Business Administration (SBA)’s Office of Hearings and Appeals, rather than through a lengthy and expensive legal process.
In 2011, the SBA proposed imposing a single size standard to architecture and engineering firms alike, under the definition of "small business" for firms generating $19 million or less in average annual receipts. The standard would have included all but about 2 percent of architecture firms in the designation. Reim, whose own practice is classified as a small business under the current definition of $7.5 million or less in average annual receipts, argued that the rule would have significantly increased competition among firms for a shrinking pool of available work, and "essentially double down on one of the most pernicious aspects of the financial downtown," he said in the testimony.
In 2012, Congress passed the Small Business Protection Act, which limited the SBA’s ability to consolidate disparate industries into one size standard. With AIA’s backing, the SBA modified its original proposal, but it can still change its size standards without a timely review process. Reim urged the SBA to follow the intent of 2012 law as it conducts a five-year review process of the standards, ensuring that any adjustments are made to reflect current market conditions. “Even moderate changes to SBA definitions could have dire consequences for thousands of firms if an influx of disproportionately larger businesses were suddenly introduced into the marketplace,” he said.