Small businesses competing for government contracts are often assured by agencies that the agency has a goal of awarding 23 percent of contracts to small-business. What they fail to mention is that in many cases, the "small businesses" they are competing against for that 23 percent are not all that small. Companies with over 26,000 employees are often deemed "small" by the federal government when it comes to awarding contracts, while over 98 percent of America's 23 million small businesses have fewer than 100 employees.

The Small Business Administration uses the 500 employee standard to determine a small business, but not always when it comes to contracts. The nemerical definition for each industry changes each year through unnoticed revisions. Recently, a recommendation to reduce the basic size-standard to 100 was halted by the SBA in July 2004, despite comments overwhelmingly supporting the reduction.

The Small Business Administration issued the proposed rule on March 19, 2004, stating its intention to reduce and simplify the number of size standards. The proposed rule would have helped millions of truly small businesses compete for government contracts. However, the proposal was withdrawn because it would have reclassified as large businesses more than 34,000 firms currently recognized as small businesses.

The National Association of Government Contractors is committed to revising the size standards to a level that is representative of the size of America's small businesses. NAGC also supports the enforcement of size standards and the prosecution of fraud in the procurement process.