Counsel Commentary: OHA Sees Spike in NAICS Code Appeals

In his Counsel Commentary article for Contract Management’s March 2024 issue, shareholder Stephen Bacon spotlights a little-known federal contract bid appeal option for small business set-aside procurements that saw a 60% increase in filings and a 62.5% effectiveness rate in 2023: the North American Industry Classification System (NAICS) code appeal. 

In his column, Bacon explains that the U.S. government uses NAICS codes to limit the size of contractors allowed to bid on specific federal projects. Coding mistakes can prevent contractors from competing for a project if they do not qualify as a small business under that project’s NAICS code.

Bacon discusses how and when these project coding mistakes can necessitate federal bid protests. He also walks readers through the different steps in the appeals process, as well as an example case, Consolidated Safety Services, Inc. v. United States, where a contractor prevailed on its NAICS code appeal.

“Although NAICS code appeals are relatively infrequent, they are an essential tool that every small business must understand,” Bacon writes. “If a solicitation identifies the wrong NAICS code, contractors must be prepared to promptly file a challenge to preserve their ability to compete. In some situations, a contractor’s eligibility for award may depend on filing a successful NAICS code appeal.”

Read Bacon’s article to learn more about the NAICS code appeal process.