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July 26, 2013
In Reply Refer To:
1510 (855) P         
Information Bulletin No. 2013-089
To:                  All Washington Office and Field Office Officials
                       Attn: Contracting Officers, Procurement Analysts, Contract Specialists, and Purchasing Agents
From:              Assistant Director, Business and Fiscal Resources
Subject:           Small Business Administration (SBA) North American Industry Classification System (NAICS) Codes
This Information Bulletin (IB) requires all BLM acquisition officials to utilize proper NAICS codes when issuing a Solicitation. 

The NAICS classifies business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. economy. The NAICS industry codes define establishments based on the activities in which they are primarily engaged. The NAICS codes are also used for administrative, contracting, and tax purposes. The NAICS is production oriented (not product-oriented) and categorizes businesses with others that have similar methods of production. The SBA uses NAICS as a basis for its size standards. Size standards using NAICS as their basis apply to all Federal government programs, including procurement. When the Federal government intends to acquire goods or services, it identifies the NAICS code that describes the principal purpose of that procurement.

In accordance with Federal Acquisition Regulation (FAR) Subpart 19.303, the procuring agency contracting officer designates the proper NAICS code and size standard in a solicitation by selecting the NAICS code which best describes the principal purpose of the product or service being acquired. Primary consideration is given to the industry descriptions in the NAICS United States Manual at http://www.census.gov/eos/www/naics/, 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. One product commonly purchased that may be misclassified is the category “hay, alfalfa, clover, and/or mixed hay”.

The 13 CFR 121.402(b) states, “Acquisitions for supplies must be classified under the appropriate manufacturing NAICS code, not under the Wholesale Trade or Retail Trade NAICS code.” Acquisitions for supplies must be classified under the appropriate manufacturing NAICS code, not under a Wholesale Trade or Retail Trade NAICS code. A vender that submits an offer or quote for a contract where the NAICS code assigned to the contract is for supplies but they furnish a product they did not manufacture or produce themselves should be categorized as a non-manufacturer and deemed small if it meets the requirements set forth in 13 CFR 121.406(b).

The NAICS assigns codes to all economic activity within twenty broad sectors. Businesses may have myriad capabilities, and the NAICS code for a given procurement opportunity may not be the same as their primary NAICS code. The improper use of NAICS codes may result in the cancelation of the solicitation, protest of the award, and/or an appeal petition to the SBA. 

For further assistance, please contact Eric Pagal, Bureau Procurement Chief, at (202) 912-7073, or Dottie Williams, Business Utilization and Development Specialist, at (202) 912-7476.
Signed by:
Janine Velasco
Assistant Director
Business and Fiscal Resources
Authenticated by:
Robert M. Williams
Division of IRM Governance, WO-560

Last updated: 07-30-2013