The Small Business Administration, which is a U.S. government agency that supports small businesses and entrepreneurs, requires that participants in its programs meet the size standard SBA has adopted for the business’s primary industry. Those size standards are based on North American Industry Classification System codes, specifically the version of the NAICS codes adopted in 2017. Depending on the specific NAICS code, the size standard is measured using either yearly revenue or number of employees, as stated in the SBA’s Table of Small Business Size Standards.
On December 21, 2022, a new version of NAICS codes was adopted by the Office of Management and Budget. This new set of NAICS codes created new NAICS codes that were not in the 2017 NAICS and revised, deleted, and consolidated other 2017 NAICS codes. The U.S. Census has published a spreadsheet that identifies the NAICS codes that were changed.
The SBA has issued a statement noting that “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 a formal rulemaking process. Accordingly, SBA is recommending that procurement officials and participants in the SBA’s small business programs continue to use 2017 NAICS codes when preparing solicitations, proposals, and awarding contracts.
SBA anticipates updating its Table of Small Business Size Standards to conform to the 2022 NAICS by October 1, 2022.
This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.
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