![]() ![]() Of course, businesses can be multi-faceted, so I could have my primary NAICS be 512110, but then also do other work in other related NAICS codes, making those my “secondary NAICS codes.” For example, if I decided that I was finally bored of watching my extensive movie collection, and I wanted to start a business making movies for the Government, I would likely choose for my business, NAICS code 512110, whose assigned industry is “Motion Picture and Video Production”, which has assigned to it currently a $40,000,000 size standard (don’t worry we will get to what that all means below). (A list of the NAICS Codes, as well as the industries and sizes assigned to them is published by the SBA here). Contractors must select a primary NAICS code to represent what their company does when registering their business on SAM.gov and participate in different federal contracting programs. NAICS code is short for North American Industry Classification Code System, and each NAICS code is a six digit number that directly correlates to a defined industry, and size standard. Given the last answer, some contractors’ next question may be, “what is a NAICS code?” (side-note, when saying NAICS, remember that it is pronounced “naykes” like the word “cakes”, although if you pronounce it differently, that is allowed). Specifically, the SBA expects a business claiming to be small to “ not exceed the size standard for the NAICS code specified in the solicitation.” That is what size roughly means when you are dealing with federal contracting. ![]() In the realm of federal contracting, when an agency or other business discusses the “size” of a certain business, what they are truly meaning is, are you smaller, or bigger than the size standard establishes for the applicable NAICS code? Size for federal contracting is categorized by NAICS code, either specified in the solicitation you would like to bid on, or that you chose to represent your business’s primary industry. This will lead to the inevitable thought of, “I guess I am pretty small compared to that company” or “wow I’ve got a lot of employees and revenue compared to that business that does what I do in this town, so I guess I am a large business.” While that may make for good shop talk at your next industry convention or at your local coffee shop, when it comes to federal contracting, the Small Business Administration (SBA) demands something much more concrete. Often businesses will informally gauge their business “size” by looking at other businesses in their industry and comparing themselves. ![]() ![]() What does “size” mean for federal contracting?Īs Julie Andrews so astutely sang in Sound of Music, “Let’s start at the very beginning, a very good place to start.” When talking about calculating size, the first thing to ask is, what does size even mean? While this may seem like a fairly simple question, it can have varying answers based on who you are asking, and why you are asking it. But don’t fear, in this edition of our Back to Basics series, we will discuss some of the basics around calculating the size of your business and why it all matters. So, knowing the accurate size of your business could be critical to the success or failure of your federal contacting business. Miscalculating or misrepresenting your business size could open you up to size protests, and other severe repercussions. Most contractors, when starting their journey into the world of federal contracting eventually run into the same question: What size is my business? In the world of federal contracting, the size of your business can determine whether you can bid on certain procurements, participate in certain programs, and more. ![]()
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