Gavin Howe
The Small Business Administration (SBA) was created in 1953 by President Dwight Eisenhower, who signed the Small Business Act into law. The SBA is an independent agency of the federal government that helps Americans start, grow, and build resilient businesses. The SBA reviews Congressional legislation and advocates on behalf of small businesses. It also provides specialized outreach and support to women, minorities, and armed forces veterans. To be eligible for government contracts, small businesses must meet specific size requirements set by the SBA and register in the federal government's System for Award Management (SAM). The SBA has also established programs such as the Small Business Investment Company (SBIC) Program to support small businesses.
| Characteristics | Values |
|---|---|
| Year of creation | 1953 |
| Created by | President Dwight Eisenhower |
| Type of agency | Independent agency of the federal government |
| Purpose | Aid, counsel, assist and protect the interests of small business concerns; preserve free competitive enterprise; maintain and strengthen the overall economy of the nation |
| Other services | Help with management, financial and federal contract procurement, specialized outreach to women, minorities, and armed forces veterans, loans for victims of natural disasters, business training, etc. |
| Registration requirements | Business registration in the federal government's System for Award Management (SAM), Unique Entity Identifier (UEI) |
| Size requirements | Set by SBA; most manufacturing companies with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million |
| Applicable laws | Federal Acquisition Regulation (FAR), Equal Employment Opportunity Commission (EEOC), Small Business Size Regulations (13 CFR Part 121) |
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What You'll Learn
Small Business Act
The Small Business Act was signed into law by President Dwight Eisenhower in 1953, establishing the Small Business Administration (SBA) as a new agency. The SBA is tasked with overseeing the small business program and ensuring that small businesses receive a "fair proportion" of government contracts and sales of surplus property. The SBA also provides loans, business training, and management assistance to small businesses.
To be eligible for government contracts reserved for small businesses, companies must meet specific size requirements set by the SBA. These size standards define the maximum size a business and its affiliates can be to qualify as a small business for a particular contract. Most manufacturing companies with 500 employees or fewer and most non-manufacturing businesses with average annual receipts under $7.5 million will qualify as small businesses. However, there are exceptions by industry.
To participate in government contracting, businesses must register in the System for Award Management (SAM), a database that government agencies use to find contractors. Businesses must also obtain a Unique Entity Identifier (UEI), a 12-character alphanumeric value, by registering with SAM. This identifier is used by entities doing business with the federal government.
The SBA offers specialized outreach and support to women-owned businesses, minority-owned businesses, and businesses owned by armed forces veterans. It also provides assistance to businesses impacted by natural disasters, including loans to help with recovery. The SBA reviews Congressional legislation and testifies on behalf of small businesses, ensuring their interests are represented.
The SBA has expanded its programs over the years to include help with international trade, management, and federal contract procurement. The Investment Company Act of 1958 established the Small Business Investment Company (SBIC) Program, further supporting small businesses. Public Law 95-507 amended the Small Business Act to include subcontracting with small businesses and set annual goals for contracting opportunities with small businesses.
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Federal Acquisition Regulation
The Federal Acquisition Regulation (FAR) is a set of rules that govern the federal government's purchasing process. The FAR applies to all agencies in the Executive Branch, while the Legislative and Judicial branches are not required to comply with it but often follow it in spirit and content. FAR contains policies and procedures for acquisition by all federal agencies. Its purpose is to ensure that purchasing procedures are standard and consistent and conducted in a fair and impartial manner.
FAR is issued and maintained jointly under the statutory authorities granted to the Secretary of Defense, the Administrator of General Services, and the Administrator of the National Aeronautics and Space Administration. The statutory authorities to issue and revise the FAR have been delegated to the Procurement Executives in the Department of Defense, the General Services Administration, and NASA.
FAR is codified at 48 CFR Chapter 1 and amended as needed. Subchapter D of the FAR includes the details of the application of certain labor, OSHA, environmental, and other socioeconomic regulations that apply to government contracts. The government has exact specifications for most products and services it purchases. As a contractor, you must deliver the product or service as described in these specifications. If you don't, the government may terminate your contract.
To participate in government contracting, you must register your business in the federal government's System for Award Management (SAM). SAM is a database that government agencies use to find contractors. Using SAM, businesses can certify their eligibility for contracts reserved for small businesses or under an SBA contracting program.
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Equal Employment Opportunity Commission
The U.S. Equal Employment Opportunity Commission (EEOC) is a federal agency that was established via the Civil Rights Act of 1964 to enforce civil rights laws against workplace discrimination. The EEOC enforces federal laws that make it illegal to discriminate against a job applicant or employee based on their race, colour, religion, sex (including sexual orientation, pregnancy, childbirth, gender identity, and related conditions), national origin, age, disability, or genetic information. The EEOC investigates discrimination complaints and has the authority to file civil discrimination suits against employers on behalf of victims.
The EEOC's work includes providing leadership and guidance to federal agencies on equal employment opportunity programs, ensuring compliance with EEOC regulations, and offering technical assistance and training to federal agencies on EEO complaint adjudication. The EEOC also works to prevent discrimination through outreach, education, and technical assistance programs.
The EEOC first began operating in 1965, and its early work included addressing complaints from female flight attendants. Over time, the EEOC has expanded its scope, including recognising "sex-stereotyping" of lesbian, gay, and bisexual individuals as a form of sex discrimination under Title VII of the Civil Rights Act of 1964. The EEOC has also faced criticism for its handling of certain cases, including a lawsuit against Sears, Roebuck & Co. in 1980, where it was accused of using heavy-handed tactics.
In recent years, the EEOC has continued to address discrimination complaints and adapt to changing societal needs. In 2025, the EEOC, together with the Department of Justice, released new DEI guidelines after the Trump administration sought to end DEI programs at federal agencies. The EEOC's acting chair, Andrea R. Lucas, has been in the role since 2025 and has actively pursued investigations into DEI policies at law firms.
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Investment Company Act
The Investment Company Act of 1958 established the Small Business Investment Company (SBIC) Program. The Act declares it to be the policy of Congress and the purpose of the Act to improve and stimulate the national economy in general and the small-business segment thereof.
The SBIC Program is designed to help small businesses by providing them with access to capital and financial management. The program is regulated by the SBA, which is responsible for licensing and overseeing SBICs. To be eligible for an SBIC license, an entity must have a net worth of at least $1 million and be one of the following: a state or national bank, trust company, savings bank, or savings and loan association.
The SBA has proposed changes to the SBIC program to reduce barriers to participation for new fund managers and funds investing in underserved communities, capital-intensive investments, and technologies critical to national security and economic development. The SBA is also seeking to clarify its intent relative to specific sections of the Act, noting that Reinvestor SBIC Licensees may provide Equity Capital Investments to disadvantaged businesses, including Community Development Financial Institutions (CDFIs) and Minority Deposit Institutions (MDIs).
Additionally, the SBA has proposed rule changes to encourage the SBIC program to focus on technology and tech-driven companies that address critical national priorities, such as climate change, strengthening supply chains, improving health outcomes, and bolstering national security. The SBA is also working to implement Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, by reducing financial and administrative barriers to participation in the SBIC program and modernizing its license offerings.
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Small Business Size Regulations
The Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to "aid, counsel, assist and protect the interests of small business concerns; preserve free competitive enterprise; and maintain and strengthen the overall economy of our nation." SBA reviews Congressional legislation and testifies on behalf of small businesses. It also assesses the impact of regulatory burden on small businesses.
Small businesses must meet some basic requirements before they can compete for government contracts. They must register their business in the federal government's System for Award Management (SAM). SAM is a database that government agencies use to find contractors. Using SAM, businesses can certify that they are eligible for contracts reserved for small businesses, such as SBA loan programs and contracting opportunities.
Size standards are established by the SBA's Administrator, who makes recommendations for establishing or revising size standards according to changes in industries and the economy. These size standards define the maximum size that a business and its affiliates can be to qualify as a small business for a particular contract. Most manufacturing companies with 500 employees or fewer and most non-manufacturing businesses with average annual receipts under $7.5 million will qualify as a small business. However, there are exceptions by industry.
The SBA's table of small business size standards helps small businesses assess their business size. The definition of "small" varies by industry and is mostly based on average annual receipts or the average number of employees. Size standards are reviewed every five years, and when SBA considers revising them, it issues a notice of proposed rules. The SBA takes comments from the public into consideration before finalizing proposed rules on size standards.
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Frequently asked questions
The U.S. Small Business Administration (SBA) is an independent federal government agency that was created in 1953 to help Americans start, grow, and build resilient businesses.
The SBA doesn't create laws, but it was established by the Small Business Act, which was signed into law by President Eisenhower in 1953. The SBA oversees the small business program and reviews Congressional legislation, testifying on behalf of small businesses.
The SBA provides counselling, capital, and contracting expertise to small businesses. It also offers loans to small businesses and victims of natural disasters. The SBA helps small businesses understand and meet the requirements for government contracts, including registering their business in the System for Award Management (SAM) database.
The SBA defines a small business as one with 500 employees or fewer in the manufacturing industry or non-manufacturing businesses with average annual receipts under $7.5 million. However, there are exceptions by industry.
