How Is the Right NAICS Code Chosen for Federal Contracting?

How is a NAICS code chosen for a federal solicitation?

According to FAR Subpart 19.1, the contracting officer assigns one NAICS code and corresponding size standard to solicitations, contracts, and task and delivery orders, unless a specific multiple-award rule applies. The code must reflect the one industry that best describes the principal purpose of the supply or service being acquired. The officer gives primary consideration to the U.S. NAICS Manual, the solicitation’s product or service descriptions, the relative value and importance of the requirement’s components, and the function of the goods or services being purchased; the procurement is usually classified by the component that accounts for the greatest percentage of contract value. SBA states that NAICS codes have corresponding receipts-based or employee-based size standards, and the applicable size standard is the one in effect when the solicitation is issued. If SBA amends the size standard before initial offers are due, the contracting officer may amend the solicitation and apply the new standard. NAICS codes are updated by OMB every five years, and new codes are not available for federal contracting until SBA publishes matching size standards.