The American Institute of Architects (AIA) testified on a proposal by the Small Business Administration (SBA) that would increase the number of enterprises that qualify as a small business, stating that such a move would harm the already struggling architecture profession.
In testimony today before the U.S. House of Representatives Committee on Small Business, Walter Hainsfurther, FAIA, said that architecture firms - most of whom already qualify as small businesses under the current SBA definition - would be harmed by the proposal because it would put them in the same definitional category as much larger firms with more resources at their disposal to win business.
The SBA's proposal is designed to reduce administrative oversight by limiting the number of exemptions from standards and reducing the number of levels it has for small businesses to meet these standards. To change this standard, the SBA has introduced new annual revenue levels for businesses: $5 million, $7 million, $10 million, $14 million, $19 million, $25.5 million, $30 million and $35.5 million.
"The AIA estimates that over 91 percent of architecture firms fall under the current $4.5 million standard," testified Hainsfurther, president of Kurtz Associates Architects, a seven-person architectural firm based in Des Plaines, Illinois. "If the standard is raised to $19 million, over 97 percent of firms will qualify as a small business."
"In short, the SBA is asking firms that have five employees to compete against those that have 50 employees," Hainsfurther testified. "As you can see, the SBA's goal of increasing participation in the architectural market is too broad and their proposal has over-reached."
Currently, the SBA is reviewing a third of their size standards; the architecture, engineering, mapping, interior design and landscape architecture professions have been included in the review.