NAICS Codes
Near the top of every federal contract you’ll find the North American Industry Classification (“NAICS”) code assigned to the work. This code is critical not only because it describes the type of business that can do the work sought but also because it determines the size of businesses eligible to compete for the contract award. NAICS codes are six-digit codes published by the United States Census Bureau that generally describe industry sectors. Each code has a corresponding revenue or employee size threshold assigned by the Small Business Administration (“SBA”). The government frequently sets aside work for only businesses that qualify as small for that procurement.
Contracting officers have a duty to assign the NAICS code that best reflects the principal purpose of the procurement. But with dozens of codes to choose from, assigning the best NAICS code to a solicitation is often more art than science.
It is not unusual for contractors to disagree with the code selected, especially when the code selected results in a much larger size standard being applied opening the competition to ever larger “small” businesses. When that happens, contractors can appeal the code selection to the SBA’s Office of Hearings and Appeals. It has the authority to review NAICS code assignments, as well as order the application of a specific NAICS code.
Though a contractor is not required to have an attorney to file a NAICS appeal, it helps. We have successfully represented contractors in NAICS appeals and can assist by evaluating the chances of an appeal’s success, developing a legal strategy, and drafting an appeal brief supported by legal research and advocating for a specific code.