Office of Acquisition and Logistics (OAL)
Acquisition Policy Flash! 22-12
Guidance on Not Using North American Industry Classification System (NAICS): Classification 2022 Until Small Business Administration (SBA) Update
Purpose: To advise all procurement professionals not to use the NAICS 2022 codes when preparing solicitations and awarding contracts until SBA updates its small business size standards to NAICS 2022, which SBA anticipates implementing on October 1, 2022.
Affected FAR Parts: N/A
Effective Date: February 1, 2022
Background: On December 21, 2021, the U.S. Office of Management and Budget (OMB) published its “Notice of NAICS 2022 Final Decisions; Update of Statistical Policy Directive No. 8, North American Industry Classification System: Classification of Establishments; and Elimination of Statistical Policy Directive No. 9, Standard Industrial Classification of Enterprises” (86 FR 72277). OMB accepts the Economic Classification Policy Committee (ECPC) recommendations, as outlined in the July 2, 2021, Federal Register notice (86 FR 35350), for the 2022 revisions to the North American Industry Classification System (NAICS), as well as the recommendations to update OMB Statistical Policy Directive No. 8, North American Industry Classification System: Classification of Establishments, and to eliminate OMB Statistical Policy Directive No. 9, Standard Industrial Classification of Enterprises.
As in previous revisions, NAICS 2022 Revision has created new NAICS codes that are not in NAICS 2017. In addition, it revised, deleted, or consolidated numerous industry definitions and codes in NAICS 2017. NAICS 2022 Revision has impacted about 170 6-digit industry definitions and codes currently in NAICS 2017.
In the December 21, 2021 notice, OMB advises that the Federal statistical establishment data published for reference years beginning on or after January 1, 2022 should be published using the 2022 NAICS United States codes. However, before NAICS 2022 can apply to Federal government programs such as procurement and SBA’s loan programs, SBA must update its ‘Table of Small Business Size Standards’ to NAICS 2022.
This requires SBA to go through the Federal rulemaking process, which can take several months to complete. Once that is accomplished, the updated NAICS 2022 based small business size standards will replace the NAICS 2017 based small business size standards in the System for Award Management (SAM) and other Federal procurement systems, including Federal Procurement Data System – Next Generation (FPDS-NG) and SBA’s Dynamic Small Business Search (DSBS). Use of the NAICS 2022 codes prior to the NAICS update will result in data errors in SAM and in FPDS-NG. Therefore, we advise that all procurement activities continue using the NAICS 2017 codes until after SBA’s small business size standards are updated to NAICS 2022.
Applicability: All solicitations issued and contracts awarded prior to the SBA NAICS 2022 update.
Action Required: Contracting officers will not use the NAICS 2022 codes when preparing solicitations and awarding contracts until SBA updates its small business size standards to NAICS 2022.
Additional Information: Should procurement professionals have any questions, please contact SBA’s Office of Size Standards staff at sizestandards@sba.gov or (202) 205-6618 or Procurement Policy and Warrant Management Service at va.procurement.policy@va.gov or via telephone at (202) 632-5288.
