BY DANIEL M. PEREZ
Journal Staff
A sweeping proposed rule issued by the U.S. Small Business Administration could expand federal contracting and loan eligibility for businesses in Guam and the Northern Mariana Islands by significantly raising revenue thresholds and streamlining industry classifications.
Published in the Federal Register on Aug. 20, the proposed regulation represents the most comprehensive overhaul of small business size standards in more than a decade.
Under the proposed framework, the agency seeks to collapse 978 six-digit industry codes down to 338 consolidated four-digit and five-digit industry groups, a reduction of approximately 65% in line items.
The proposed overhaul aims to modernize how small businesses are defined across federal programs, according to Ryan Lambert, associate administrator of the Office of Government Contracting and Business Development at the U.S. Small Business Administration. Lambert shared that the revised methodology is designed to better reflect modern market realities, enhance competitiveness, and eliminate artificial barriers that prevent growing companies from competing for set-aside opportunities.
The agency is accepting public input on the proposed changes through Sept. 21. In addition to consolidating industry classifications, the rule eliminates all 18 existing subindustry exceptions and combines previously separate revenue-based and employee-based standards into a unified regulatory structure. Where discretion exists, the agency will default to employee-based thresholds rather than annual receipts to reduce classification volatility for expanding firms.
Furthermore, monetary thresholds will incorporate an adjustment for overall economic productivity growth in addition to standard inflation adjustments. Nationally, the agency estimates that the revised criteria will allow approximately 114,541 additional firms to qualify as small businesses.
Among those newly eligible enterprises are roughly 37,000 existing federal contractors that generated an estimated $71 billion in contract activity during fiscal 2025. In region-specific impacts across Guam and the NMI, local companies in commercial construction, engineering, custom computer programming, and management consulting stand to gain expanded access to federal small-business set-asides and specialized lending programs.
According to Boris Hertslet, program manager at the Guam APEX Accelerator, the proposal will directly affect all small businesses in Guam that are active federal contractors or seeking federal contracts. Hertslet explained that the practical outcome for local vendors depends heavily on their industry position. For instance, under current regulations, the small business size standard ceiling for commercial construction is $45 million in average annual revenue over a five-year period.
The proposed rule would transition construction to an employee-based cap of 550 workers. "For a construction company that was doing $1 million to $10 million in annual revenue, this really doesn't change a lot," Hertslet said, noting that smaller contractors rarely compete directly against $30 million to $40 million firms.
However, Hertslet cautioned that contractors operating near the current $45 million limit could face heightened competition from larger off-island entities generating between $100 million and $200 million while still maintaining under 550 employees. "There are really a lot of nuances to this proposal," Hertslet said.
Meanwhile, local small businesses and entrepreneurs in Guam can also leverage export opportunities through the Guam State Trade Expansion Program, implemented by the Guam Economic Development Authority. Funded in part by an SBA grant, the program provides eligible enterprises with comprehensive export training, financial assistance for market expansion, and access to international buyers, including financial awards for website translation, marketing design, and e-commerce integration.
Despite the broader national adjustments under review, local export assistance programs remain unchanged in the near term. Mary Camacho, marketing and communications officer at the Guam Economic Development Authority, emphasized that the size standards update remains in the proposed rule stage. "At this time, the U.S. Small Business Administration’s size standards update is only a proposed rule, so there are no immediate changes," Camacho said. "We are continuing to monitor any published final rule that comes out of the process, but we do not anticipate that this will impact the Guam STEP program."
Crucially, the agency emphasized that no size standards will be reduced under the proposed rule. In 45 industry groups where the updated calculation formula indicated a lower threshold, size caps will remain locked at current levels.
Small business owners and local stakeholders across the Mariana Islands have until the close of the 30-day public comment window to submit formal feedback on Docket No. SBA-2026-0199 before final regulations are drafted. For more information on the new U.S. Small Business Size Standards, see Small Business Size Standards, A Proposed Rule by the Small Business Administration. mbj
Journal Staff
A sweeping proposed rule issued by the U.S. Small Business Administration could expand federal contracting and loan eligibility for businesses in Guam and the Northern Mariana Islands by significantly raising revenue thresholds and streamlining industry classifications.
Published in the Federal Register on Aug. 20, the proposed regulation represents the most comprehensive overhaul of small business size standards in more than a decade.
Under the proposed framework, the agency seeks to collapse 978 six-digit industry codes down to 338 consolidated four-digit and five-digit industry groups, a reduction of approximately 65% in line items.
The proposed overhaul aims to modernize how small businesses are defined across federal programs, according to Ryan Lambert, associate administrator of the Office of Government Contracting and Business Development at the U.S. Small Business Administration. Lambert shared that the revised methodology is designed to better reflect modern market realities, enhance competitiveness, and eliminate artificial barriers that prevent growing companies from competing for set-aside opportunities.
The agency is accepting public input on the proposed changes through Sept. 21. In addition to consolidating industry classifications, the rule eliminates all 18 existing subindustry exceptions and combines previously separate revenue-based and employee-based standards into a unified regulatory structure. Where discretion exists, the agency will default to employee-based thresholds rather than annual receipts to reduce classification volatility for expanding firms.
Furthermore, monetary thresholds will incorporate an adjustment for overall economic productivity growth in addition to standard inflation adjustments. Nationally, the agency estimates that the revised criteria will allow approximately 114,541 additional firms to qualify as small businesses.
Among those newly eligible enterprises are roughly 37,000 existing federal contractors that generated an estimated $71 billion in contract activity during fiscal 2025. In region-specific impacts across Guam and the NMI, local companies in commercial construction, engineering, custom computer programming, and management consulting stand to gain expanded access to federal small-business set-asides and specialized lending programs.
According to Boris Hertslet, program manager at the Guam APEX Accelerator, the proposal will directly affect all small businesses in Guam that are active federal contractors or seeking federal contracts. Hertslet explained that the practical outcome for local vendors depends heavily on their industry position. For instance, under current regulations, the small business size standard ceiling for commercial construction is $45 million in average annual revenue over a five-year period.
The proposed rule would transition construction to an employee-based cap of 550 workers. "For a construction company that was doing $1 million to $10 million in annual revenue, this really doesn't change a lot," Hertslet said, noting that smaller contractors rarely compete directly against $30 million to $40 million firms.
However, Hertslet cautioned that contractors operating near the current $45 million limit could face heightened competition from larger off-island entities generating between $100 million and $200 million while still maintaining under 550 employees. "There are really a lot of nuances to this proposal," Hertslet said.
Meanwhile, local small businesses and entrepreneurs in Guam can also leverage export opportunities through the Guam State Trade Expansion Program, implemented by the Guam Economic Development Authority. Funded in part by an SBA grant, the program provides eligible enterprises with comprehensive export training, financial assistance for market expansion, and access to international buyers, including financial awards for website translation, marketing design, and e-commerce integration.
Despite the broader national adjustments under review, local export assistance programs remain unchanged in the near term. Mary Camacho, marketing and communications officer at the Guam Economic Development Authority, emphasized that the size standards update remains in the proposed rule stage. "At this time, the U.S. Small Business Administration’s size standards update is only a proposed rule, so there are no immediate changes," Camacho said. "We are continuing to monitor any published final rule that comes out of the process, but we do not anticipate that this will impact the Guam STEP program."
Crucially, the agency emphasized that no size standards will be reduced under the proposed rule. In 45 industry groups where the updated calculation formula indicated a lower threshold, size caps will remain locked at current levels.
Small business owners and local stakeholders across the Mariana Islands have until the close of the 30-day public comment window to submit formal feedback on Docket No. SBA-2026-0199 before final regulations are drafted. For more information on the new U.S. Small Business Size Standards, see Small Business Size Standards, A Proposed Rule by the Small Business Administration. mbj
