19.102
Small business size standards and North American Industry Classification System codes
Correct assignment and application of NAICS codes and small business size standards are essential for determining small business eligibility in federal contracting.
Overview
FAR 19.102 outlines how small business size standards and North American Industry Classification System (NAICS) codes are determined and applied in federal contracting. It details the process for locating size standards, assigning NAICS codes to solicitations and contracts, and applying the correct size standard to each procurement. The section also addresses how size status is determined and the procedures for multiple-award contracts, including changes effective after October 1, 2028.
Key Rules
- Locating Size Standards and NAICS Codes
- SBA establishes size standards by industry, published at 13 CFR 121.201 and on the SBA website. NAICS codes are updated every five years and must have corresponding SBA size standards before use in contracting.
- Determining Size Status
- SBA determines a business’s size status as of the date it represents itself as small in its initial offer, including price, or as of the initial offer for multiple-award contracts not requiring price.
- Assigning NAICS Codes
- Contracting officers must assign one NAICS code and size standard per solicitation, contract, or order, based on the principal purpose of the procurement. For multiple-award contracts after October 1, 2028, officers may assign codes by distinct portions or categories.
- Application of Size Standards
- The size standard in effect on the solicitation date applies, but may be updated if SBA changes the standard before initial offers are due.
Responsibilities
- Contracting Officers: Assign appropriate NAICS codes and size standards, ensure compliance with assignment procedures, and apply current size standards.
- Contractors: Accurately represent size status and understand applicable NAICS codes and standards.
- Agencies: Oversee compliance and respond to appeals per 19.103.
Practical Implications
- Ensures fair competition by clearly defining small business eligibility.
- Impacts how contractors qualify for set-asides and small business programs.
- Misclassification or failure to update codes/standards can lead to disputes or loss of eligibility.