You know what they say: if the shoe fits, wear it. When it comes to North American Industry Classification System (NAICS) codes, finding the right fit can be just as important. Have you ever thought to yourself that a designated NAICS code didn’t really match up with the solicitation, or that something just seemed off? The NAICS Code appeal is the means of getting that addressed. A recent OHA decision is a good reminder of this, involving a debate of the NAICS code and requiring OHA to evaluate whether the primary purpose of the work was to perform ambulatory health care services or office administrative services. We explore that decision here.
As a brief reminder, a NAICS code is a six-digit code that is assigned to various industries under the North American Industry Classification System by the U.S. Census Bureau. For our purposes, this is relevant because the SBA assigns a different size standard to each NAICS code based on receipt size or number of employees. If a contractor believes that an incorrect NAICS code has been designated for a federal solicitation, they can appeal that designation to OHA. 13 C.F.R. § 121.1103(a). Generally, a contractor has 10 days after the issuance of the solicitation or amendment affecting the NAICS code to file an appeal. 13 C.F.R. § 121.1103(b)(1).
In NAICS Appeal of: Federal Staffing Resources, LLC, SBA No. NAICS-6392 (June 24, 2026), Federal Staffing Resources, LLC (Federal Staffing) submitted a NAICS appeal on the basis that the NAICS code assigned to the procurement was inappropriate given the services to be performed by the contractor. The Contracting Officer originally assigned the procurement NAICS code 621999, “All Other Miscellaneous Ambulatory Health Care Services,” which, at the time the solicitation was issued, had a $20.5 million size standard.
Federal Staffing challenged this designation, arguing that the appropriate NAICS code was 561110, “Office Administrative Services,” which carries a $12.5 million size standard. It further argued that NAICS code 621999 did not appropriately describe the principal purpose of the procurement based on the work to be performed. As provided in 13 C.F.R. § 121.402(b), the contracting officer is supposed to select “the single NAICS code which best describes the principal purpose of the product or service being acquired.” Generally, “primary consideration is given to the industry descriptions in the U.S. NAICS Manual, the product or service description in the solicitation and any attachments to it, the relative value and importance of the components of the procurement making up the end item being procured, and the function of the goods or services being purchased.” 13 C.F.R. 121.402(b)(1).
For NAICS code 621999, “All Other Miscellaneous Ambulatory Health Care Services,” the NAICS manual notes that this industry comprises of:
[E]stablishments primarily engaged in providing ambulatory health care services (except offices of physicians, dentists, and other health practitioners; outpatient care centers; medical and diagnostic laboratories; home health care providers; ambulances; and blood and organ banks).
For NAICS code 561110, “Office Administrative Services,” the NAICS manual notes that this industry comprises of:
[E]stablishments primarily engaged in providing a range of day-to-day office administrative services, such as financial planning; billing and recordkeeping; personnel; and physical distribution and logistics, for others on a contract or fee basis. These establishments do not provide operating staff to carry out the complete operations of a business.
In the procurement in question, the Performance Work Statement (PWS) stated that “the contractor will operate a call center that manages inbound and outbound calls from beneficiaries, validates beneficiary eligibility, schedules, cancels, and reschedules patient appointments in order to provide timely access to quality health care.” OHA took note of the language from the PWS and concluded that, based on that language, “it cannot be said that the contractor’s primary function will be providing ambulatory health care services.” Specifically, OHA described the work to be performed as “administrative in nature” and acknowledged that while the work was “to be performed in support of healthcare services,” it does not constitute “the performance of these healthcare services in and of themselves.” As such, NAICS Code 621999 was inappropriate for the procurement.
So, what happens when the shoe doesn’t fit? 13 C.F.R. § 121.402(e) provides that “when a NAICS code designation or size standard in a solicitation is unclear, incomplete, missing, or prohibited, SBA may clarify, complete, or supply a NAICS code designation or size standard, as appropriate, in connection with a formal size determination or size appeal.” Ultimately, “if OHA grants the appeal (changes the NAICS code), the contracting officer must amend the solicitation to reflect the new NAICS code.” 13 C.F.R. § 134.318(b).
Here, OHA ordered the Contracting Officer to amend the Request for Proposals and change the NAICS code designation from 621999 to 561110. In this case, OHA agreed with and utilized the NAICS code proposed by the appellant, but it is important to note that OHA “considers, but is not limited to, the NAICS codes recommended by the parties.” Thus, winning the appeal does not necessarily mean that OHA will require the Contracting Officer to amend the solicitation to reflect the NAICS code that the appellant proposed. Additionally, as we have noted before, the agency’s assignment of a NAICS code does not have to be perfect, so the assigned NAICS code would need to be merely reasonable. In this case, the appellant got what it wanted, but such is not a sure thing even in victory.
To learn more about why you might want to consider filing a NAICS code appeal, check out our NAICS Code Appeal entry in our Why File series, or simply sort our posts by NAICS Code Appeals. If you feel that a designated NAICS code really doesn’t fit the procurement or seems unreasonable given the work to be performed, feel free to reach out to us.
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