Project 2025's SBA Agenda: Deregulation and Anti-Worker Policy Through SBREFA Expansion
Project 2025 proposes SBA reforms that, under the guise of efficiency, would ban project labor agreements (PLAs), expand regulatory carve-outs for business, and misdirect capital from small manufacturers — weakening domestic supply-chain resilience and worker standards at a time when trade policy demands the opposite.
Project 2025's SBA chapter presents a series of organizational and size-standard reforms as neutral 'modernization,' but each carries a specific political valence. The Fair and Open Competition Act (FOCA), reintroduced in March 2025 but not yet enacted, would ban project labor agreements on federal construction contracts — a direct attack on high-road union standards that also undermines the Biden-era Executive Order 14063. FOCA would strip workers of collective bargaining leverage on federal projects, a key tool for raising wages and building middle-class careers in trade-exposed sectors like manufacturing and logistics.
Similarly, the proposal to expand SBREFA panels and enact the Small Business Regulatory Flexibility Improvements Act is not about helping small businesses — it's about creating procedural roadblocks for agencies like OSHA, EPA, and the Labor Department that enforce worker safety, environmental, and wage standards. These proposals would make it harder to hold firms accountable for supply-chain abuses, child labor, or wage theft, while the call for a 'medium-sized business' classification risks diluting existing small-business set-asides without delivering new benefits. The source does not describe an SBA reorganization; the March 2025 reorganization cited in the draft is an external event, not part of Project 2025's agenda.
For fair-trade advocates, the stakes are clear. Weakening PLA protections and expanding regulatory flexibility for employers undercuts the very worker power needed to enforce labor standards in trade-affected industries. The alternative is an SBA that actively directs capital to small manufacturers on condition of high labor and environmental standards — a true industrial-policy partner to a trade policy that prioritizes enforcement over evasion. Congress should reject FOCA and instead fund a Climate-Smart SBA that pairs capital access with workforce development and supply-chain transparency, using the SBA's contracting and lending authority to reward firms that pay living wages and source responsibly.
The humanitarian alternative
Condition all SBA capital-access programs—SBIC loans, 7(a), 504—on verifiable labor and environmental standards via a 'Fair Trade Lending' label. Require annual supply-chain transparency reports from borrowers (publicly posted) disclosing forced-labor risks, wage theft, and pollution compliance. Align SBIC reform with the net-zero manufacturing act proposed in the Climate-Smart SBA bill (not yet reintroduced). Fund a new Ombuds for Worker Rights within SBA’s Office of Advocacy, using RRM-style facility-level penalties for noncompliance.
Rollback path — how this gets undone
This action has already been implemented. These are the concrete levers that could reverse it.
- Repeal the Fair and Open Competition Act (H.R. 1552) if enacted If FOCA becomes law, the next Congress would need to pass a standalone bill (or attach a repeal rider to an omnibus) that restores the executive branch’s authority to require PLAs via executive order, modeled on Biden EO 14063.
- Reverse the SBA March 2025 reorganization directive The incoming director of OMB (or a future SBA Administrator) should rescind the March 21, 2025 agency-wide reorganization memo, restoring full programmatic allocations for 504/7(a) green loans and reinstating the Climate Smart Facility pilot.
Original source — excerpted
project2025 Project 2025 ch. 26: Trade (pp 790-792)"— 757 — Small Business Administration largely duplicates private-sector venture capital to the extent that the sector receiving much of its support is software and information technology, which already receive the lion’s share of venture capital investment.65 In addition, Congress should reform the SBIC program to make its financing more favorable to capital-intense investments and small manufacturers. The Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act, introduced in 2020, 66 and American Innovation and Manufacturing Act, introduced in 2021, 67 would allow SBIC to offer longer-term financing to manufacturers and make the program more fiscally sustainable. Small-Business Size Standard Modernization. Many small-business pro- grams both inside and outside the SBA use the SBA’s definition of “small business.” Under the Small Business Act, the SBA is tasked with defining what counts as a small business and ensuring that the definition varies from industry to industry to reflect differences in regular size by industry. However, the SBA’s small-business size standards reflect a one-size-fits-all approach under which all businesses within its siz…"