FAR 19.102—Small business size standards and North American Industry Classification System codes.
Plain-English Summary
FAR 19.102 explains how federal buyers and offerors identify the correct small business size standard and NAICS code for a procurement, and when those determinations are made. It covers where to find SBA size standards and NAICS codes, how NAICS updates work, when SBA measures a concern’s size status, how to assign the proper NAICS code to a solicitation, how to handle multiple-award contracts and orders under them, how to treat solicitations issued before and after October 1, 2028, how to assign codes when a multiple-award contract has one code versus multiple codes, how final NAICS designations may be appealed, and which size standard applies to a solicitation when standards change. In practice, this section is the foundation for small business eligibility because the wrong NAICS code or size standard can change whether a firm qualifies as small, affect set-aside decisions, and create protest or appeal risk. It also gives contracting officers a structured method for classifying acquisitions based on the principal purpose of the supplies or services being bought. For contractors, it is critical because size status is measured at a specific point in time and includes affiliates, so a firm must know exactly when and how its small business representation will be tested. For agencies, it ensures consistency across solicitations and orders and helps align acquisition planning with SBA’s industry-based size framework.
Key Rules
SBA sets size standards
Small business size standards are established by SBA on an industry-by-industry basis and are tied to NAICS codes. The controlling source is 13 CFR 121.201, with SBA’s published table serving as the practical reference for matching a size standard to the correct industry.
NAICS codes update periodically
NAICS codes are updated by OMB through the Economic Classification Policy Committee every five years. New NAICS codes cannot be used in Federal contracting until SBA publishes corresponding size standards, so contracting officers must use only codes that are ready for procurement use.
Size status is measured at offer
SBA determines a concern’s size status, including affiliates, as of the date the concern represents that it is small to the contracting officer as part of its initial offer, including price. This makes the initial offer date the key eligibility snapshot for most procurements.
Special rule for no-price multiple-award offers
For multiple-award solicitations that do not require price in the offer, size is determined as of the date of the initial offer for the multiple-award contract, whether or not price is included or evaluated. This prevents the absence of price from changing the timing of the size determination.
Assign one NAICS code by principal purpose
As a general rule, contracting officers must assign one NAICS code and corresponding size standard to each solicitation, contract, task order, and delivery order. The code must reflect the industry that best describes the principal purpose of the acquisition, using the NAICS Manual, the solicitation’s product or service descriptions, the relative value and importance of components, and the function of the goods or services.
Value drives mixed acquisitions
A procurement is usually classified according to the component that accounts for the greatest percentage of contract value. This is especially important for mixed or bundled requirements where the dominant supply or service component should control the classification.
Multiple-award rules change after 2028
For solicitations issued on or before October 1, 2028, that will result in multiple-award contracts, the contracting officer assigns a NAICS code under the general principal-purpose rule. For solicitations issued after that date, the contracting officer must either assign one NAICS code that best describes both the acquisition and each subsequent order, or divide the acquisition into distinct portions or categories and assign each portion its own NAICS code and size standard.
Orders follow the contract’s code
When placing orders under a multiple-award contract with a single NAICS code, the order must use the same NAICS code and size standard as the contract. If the contract has multiple NAICS codes, the order must use the code assigned to the distinct portion or category against which the order is placed, and if an order spans multiple portions, the code for the portion that best represents the order’s principal purpose controls.
NAICS designation can be appealed
The contracting officer’s NAICS designation is final unless appealed under FAR 19.103. This means offerors who believe the code or size standard is wrong must use the formal appeal process rather than treating the designation as advisory.
Use the solicitation-date size standard
The contracting officer must apply the size standard in effect on the date the solicitation is issued. If SBA later amends the size standard and the change becomes effective before the due date for initial offers, the contracting officer may amend the solicitation and use the new standard.
Responsibilities
Contracting Officer
Identify and assign the correct NAICS code and corresponding size standard for each solicitation, contract, task order, and delivery order; base the code on the acquisition’s principal purpose; use the solicitation-date size standard; update the solicitation if a new SBA size standard becomes effective before initial offers are due; and follow the special multiple-award rules, including the post-October 1, 2028 requirements for single-code or multi-portion classifications.
SBA
Establish industry-based small business size standards, publish the size standards table, determine size status including affiliates, and publish corresponding size standards before new NAICS codes may be used in Federal contracting.
OMB / Economic Classification Policy Committee
Update NAICS codes every five years and issue the revised classification structure that agencies and SBA rely on for procurement coding.
Offeror / Contractor
Represent small business status accurately as of the required date, understand that affiliates are included in the size determination, and challenge an incorrect NAICS code or size standard through the appeal process if necessary.
Agency
Support contracting officers in using current SBA size standards and valid NAICS codes, ensure solicitations reflect the proper classification framework, and manage multiple-award acquisition structures consistent with the applicable FAR timing rules.
Practical Implications
The NAICS code is not just a label; it can determine whether a firm is eligible for a set-aside or small business credit, so getting the principal-purpose analysis right is essential.
Size status is measured at a specific point in time, so contractors should monitor affiliate relationships and business changes before submitting the initial offer.
For mixed acquisitions, the biggest-value component often drives the code, but contracting officers should document why that component best reflects the principal purpose to reduce protest risk.
Multiple-award contracting will become more complex after October 1, 2028, because agencies may need to split acquisitions into distinct portions or categories instead of relying on one broad code.
If a solicitation’s size standard changes before initial offers are due, the contracting officer has discretion to amend the solicitation, so offerors should watch amendments closely and not assume the original standard will remain in place.
Official Regulatory Text
(a) Locating size standards and North American Industry Classification System codes. (1) SBA establishes small business size standards on an industry-by-industry basis. Small business size standards and corresponding North American Industry Classification System (NAICS) codes are provided at 13 CFR 121.201 . They are also available at https://www.sba.gov/document/support--table-size-standards . (2) NAICS codes are updated by the Office of Management and Budget through its Economic Classification Policy Committee every five years. New NAICS codes are not available for use in Federal contracting until SBA publishes corresponding size standards. NAICS codes are available from the U.S. Census Bureau at https://www.census.gov/naics/ . (3) SBA determines the size status of a concern, including its affiliates, as of the date the concern represents that it is small to the contracting officer as part of its initial offer, which includes price. (4) When an agency uses a solicitation for a multiple-award contract that does not require offers for the contract to include price, SBA determines size as of the date of initial offer for the multiple-award contract, whether or not the offer includes price or the price is evaluated. (See 13 CFR 121.404(a)(1)(iv) ). (b) Determining the appropriate NAICS codes for the solicitation. (1) Unless required to do otherwise by paragraph (b)(2)(ii)(B) of this section, contracting officers shall assign one NAICS code and corresponding size standard to all solicitations, contracts, and task and delivery orders. The contracting officer shall determine the appropriate NAICS code by classifying the product or service being acquired in the one industry that best describes the principal purpose of the supply or service being acquired. Primary consideration is given to the industry descriptions in the U.S. NAICS Manual, the product or service descriptions in the solicitation, the relative value and importance of the components of the requirement making up the end item being procured, and the function of the goods or services being purchased. A procurement is usually classified according to the component that accounts for the greatest percentage of contract value. (2) (i) For solicitations issued on or before October 1, 2028, that will result in multiple-award contracts, the contracting officer shall assign a NAICS code in accordance with paragraph (b)(1) of this section. (ii) For solicitations issued after October 1, 2028, that will result in multiple-award contracts, the contracting officer shall– (A) Assign a single NAICS code (and corresponding size standard) that best describes the principal purpose of both the acquisition and each subsequent order; or (B) Divide the acquisition into distinct portions or categories ( e.g. , line item numbers, Special Item Numbers, sectors, functional areas, or equivalent) and assign each portion or category a single NAICS code and size standard that best describes the principal purpose of the supplies or services to be acquired under that distinct portion or category. (3) (i) When placing orders under multiple-award contracts with a single NAICS code, the contracting officer shall assign the order the same NAICS code and corresponding size standard designated in the contract. (ii) When placing orders under multiple-award contracts with more than one NAICS code, the contracting officer shall assign the order the NAICS code and corresponding size standard designated in the contract for the distinct portion or category against which the order is placed. If an order covers multiple portions or categories, select the NAICS code and corresponding size standard designated in the contract for the distinct portion or category that best represents the principal purpose of the order. (4) The contracting officer's designation is final unless appealed in accordance with the procedures in 19.103 . (c) Application of small business size standards to solicitations. (1) The contracting officer shall apply the size standard in effect on the date the solicitation is issued. (2) The contracting officer may amend the solicitation and use the new size standard if SBA amends the size standard and it becomes effective before the due date for receipt of initial offers.