AAFA Comments Opposing SBA Size Standard Increases

The American Apparel & Footwear Association (AAFA) submitted comments to the U.S. Small Business Administration (SBA) opposing its proposed rule to revise small business size standards for 338 industries (RIN 3245-AI67; Docket No. SBA-2026-0199). The proposal would sharply raise employee-based thresholds across the textile, apparel, and footwear manufacturing sector. The largest increases include cut-and-sew apparel (750 to 2,650 employees), apparel knitting mills (850 to 1,950), other leather products (500 to 1,250), footwear (1,000 to 1,550), and commercial printing, which includes apparel labels (650 to 1,250).

AAFA argues that raising size standards does not create new competition. Instead, it spreads a fixed pool of set-aside dollars across larger, better-resourced firms, leaving the smallest domestic manufacturers, many with well under 200 employees, at a disadvantage. The comments note that SBA rejected comparable increases for cut-and-sew apparel in 2023 and for footwear in 2016. They also explain how the change would affect 8(a), HUBZone, WOSB, and SDVOSB eligibility, SBA 7(a) and 504 loans, subcontracting credit, and agency small business scorecards.

AAFA connects its position to the defense industrial base. It points to Section 865 of the FY2026 NDAA, which directs the Defense Logistics Agency to strengthen domestic textile and footwear capacity. AAFA also highlights the effect of Federal Prison Industries (UNICOR) competing for small business set-asides in military textile and apparel procurement. AAFA asks SBA to:

• Retain current size standards for the sector.
• Conduct a targeted impact analysis before making any change.
• Prioritize more predictable, multiyear federal contracting as the more effective way to stabilize the industrial base.

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