Because the NAICS code governs the size standard used to determine whether a company qualifies as a small business, the choice of a NAICS code can dramatically affect the competitive landscape for a set-aside acquisition.
The only legal procedure for challenging the NAICS code assigned by the contracting officer is to appeal the assignment to the SBA’s Office of Hearings and Appeals. A NAICS code appeal can be an extraordinarily powerful tool for a business to challenge whether a contracting officer assigned the correct NAICS code in setting aside a procurement.
So how often are NAICS code appeals filed, and how often do these NAICS code appeals succeed? A recent GAO report has some answers.
NAICS code appeals, while little known, can be an extraordinarily powerful tool when it comes to affecting the competitive landscape of government acquisitions.
Case in point: in a recent NAICS code appeal decision issued by the SBA Office of Hearings and Appeals, the appellant prevailed–and obtained an order requiring the contracting officer to change the solicitation’s size standard from 500 employees to $15 million.
A NAICS code appeal ordinarily must be filed within ten days of the issuance of a solicitation–and a prospective offeror’s discussions with the Contracting Officer do not extend the deadline.
In a recent NAICS code appeal decision, the SBA Office of Hearings and Appeals confirmed that the ten-day clock keeps moving even while a prospective offeror is working behind the scenes in an effort to convince the procuring agency to change the NAICS code.
NAICS code appeals are now allowed on unrestricted procurements, so long as a change in NAICS code would affect the offeror’s size status for the procurement.
In a recent size appeal decision, the SBA Office of Hearings and Appeals confirmed that recent SBA regulatory amendments have overturned prior OHA case law prohibiting most NAICS code appeals on unrestricted procurements.
A NAICS code appeal can be filed even after a SBA District Office accepts the procurement for competition in the 8(a) Business Development (BD) Program.
In a recent decision, SBA Office of Hearings and Appeals rejected the argument that acceptance of a procurement into the 8(a) Program results in the approval of the NAICS code assigned to that procurement, thus preventing subsequent NAICS code appeals. Had SBA OHA reached the opposite conclusion, the decision might have effectively excluded 8(a) contracts from the reach of traditional NAICS code appeals.
A NAICS code appeal cannot validly be filed against a NAICS code designated by the SBA Office of Hearings and Appeals.
In a recent decision, SBA OHA held that when SBA OHA determines the appropriate NAICS code as the result of a NAICS code appeal, that NAICS code cannot itself be attacked in a new NAICS code appeal. The message to prospective offerors: participate in the initial NAICS code appeal, or hold your peace.
The SBA Office of Hearings and Appeals does not have jurisdiction to review a contracting officer’s decision not to set aside a procurement for small business.
In a recent decision, SBA OHA dismissed a contractor’s contention that the procuring agency should have set aside a procurement for small business–and rejected the contractor’s underlying legal argument, as well.