NAICS codes and SBA size standards, in detail.

NAICS, the North American Industry Classification System, is a six-digit industry taxonomy jointly developed by the U.S. Economic Classification Policy Committee (ECPC), Statistics Canada, and Mexico's Instituto Nacional de Estadistica y Geografia. It was adopted in 1997 to replace the Standard Industrial Classification (SIC) system. The U.S. Census Bureau hosts the official lookup at census.gov/naics, with searchable indexes for the 2022, 2017, and 2012 revisions. The 2022 revision is the current operative version.

The next planned revision is NAICS 2027. Per the Census Bureau's January 6, 2026 announcement, the second Federal Register Notice (originally planned for fall 2025) was delayed; ECPC's recommendations to OMB for the 2027 revision are now expected to publish in the Federal Register in early 2026. The governing instrument is Statistical Policy Directive No. 8. Track census.gov/naics for the actual publication.

SBA size standards sit on top of NAICS. For every NAICS code, SBA publishes a numeric ceiling that determines whether a firm qualifies as small for federal contracting purposes in that industry. The pairing is what makes "small business" a precise term in procurement rather than a vibe. A firm is small if its size falls under the ceiling for the NAICS the contracting officer assigned to the solicitation. Same firm, different NAICS, different answer.

NAICS

Six-digit industry code, 2022 revision current. Hosted by U.S. Census Bureau. Used across federal data systems including SAM, FPDS, USAspending, and PSC mappings.

SBA size standard

Numeric ceiling per NAICS. Either a dollar threshold (5-year average annual receipts) or an employee headcount, depending on the industry. Published in the SBA Size Standards Table effective March 17, 2023 at sba.gov/document/support--table-size-standards.

The pairing

NAICS classifies the work; the size standard sets the ceiling. Both are needed for a small business representation to mean anything.

The fastest path is the SBA Size Standards Tool(short URL: sba.gov/size-standards). The tool opens with the framing question: "Do you qualify as a small business for government contracting purposes?" You enter a NAICS code and the tool returns the threshold and unit for that industry.

Tool URL

sba.gov/federal-contracting/contracting-guide/size-standards/size-standards-tool

Canonical underlying document

The SBA Size Standards Table, effective March 17, 2023. The tool reads from this table; if the tool and the table ever disagree, the table controls.

What you get back

A threshold value and the unit (receipts in dollars, or employee headcount). Some NAICS have footnoted variations for sub-industries within the same code.

What you do not get

A certification. The tool returns a self-determination framework, not an SBA-issued small business certificate. See section 6.

Each NAICS-anchored size standard is denominated in either dollars or employees. The unit is fixed by the size standard itself; the contractor does not get to pick.

Receipts-based standards

Common in services, construction, and retail trade. Measured as average annual receipts over the most recent 5 completed fiscal years. Single-year revenue spikes do not move the firm above the threshold immediately, and single-year troughs do not move it below immediately.

Employee-based standards

Common in manufacturing, wholesale trade, and certain transportation NAICS. Measured by headcount, including all employees of the concern and its affiliates.

How to know which applies

Look up the specific NAICS in the SBA Size Standards Tool or Table. Each code lists exactly one unit and threshold.

Why this matters

A construction firm with 800 employees can be small (its NAICS is dollar-denominated). A 50-employee specialty manufacturer may be too large (its NAICS is employee-denominated with a 50-person ceiling). Apply the wrong unit and the small business representation is invalid.

The pairing of NAICS to size standard is operationalized in FAR 19.102. The text is unusually direct: "the contracting officer shall assign one NAICS code and corresponding size standard to all solicitations, contracts, and task and delivery orders."

Two consequences flow from that single sentence:

One NAICS, one ceiling

A solicitation cannot offer multiple NAICS for the offeror to choose from. The CO picks the NAICS that best describes the principal purpose, and the corresponding size standard is what every offeror is measured against.

Wrong NAICS = wrong size determination

If the CO assigns a NAICS that does not actually describe the work, the size standard pulled from the table is also wrong. Offerors can challenge a NAICS designation through the SBA Office of Hearings and Appeals; the appeal must be filed within a tight window after the solicitation issues.

Self-certification anchored to that one code

When an offeror represents itself as small in SAM, that representation is for the assigned NAICS only. A firm small under one NAICS may be other-than-small under another.

See our SAM.gov check guide for how the small business representation surfaces in the SAM record, and the diligence checklist for where size-standard verification fits in the broader workflow.

Most small-business size disqualifications do not come from a firm misreading the threshold. They come from forgetting to add up affiliates. The governing regulation is 13 CFR 121.103, hosted in canonical form by Cornell LII.

The rule, in SBA's own words: affiliation arises when "one controls or has the power to control the other, or a third party or parties" controls both. The crucial half-sentence that gets missed is the next one: "It does not matter whether control is exercised, so long as the power to control exists."

What SBA looks at

Ownership, management, previous relationships with or ties to another concern, and contractual relationships. Any one of these, or a combination, can establish control or the power to control.

How size is computed once affiliation is established

Per 13 CFR 121.103, SBA "counts the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates." Foreign affiliates count.

The classic trap

A 30-employee operating company that is wholly owned by a 5,000-employee parent will fail the size test for any employee-based NAICS with a ceiling under roughly 5,030. The operating company on its own looks small; with affiliate aggregation, it is not.

Power to control without exercising it

A minority investor with a board veto, a contract giving one party negative control over another, or a family relationship across two separately incorporated firms can all establish the power to control. The point of the rule is to prevent structural workarounds.

• Picking the wrong NAICS. A NAICS that does not describe the principal purpose of the work pulls the wrong size standard. The fix is at the solicitation stage, not at offer evaluation.
• Forgetting affiliate aggregation. The single most common reason a self-certified small business loses on protest. See section 5 for the rule and Cornell LII text.
• Using current-year revenue instead of the 5-year average. Receipts-based standards are computed across the most recent 5 completed fiscal years. A bad quarter does not make a firm small; a good year does not make it large.
• Applying the wrong unit. Using employees as the measure when the NAICS is receipts-based, or vice versa. The unit is fixed by the size standard for that NAICS, not chosen by the firm.
• Treating the SBA tool as a certification. The Size Standards Tool returns a self-determination framework. Most small business representations in SAM are self-certified per solicitation. Specific programs (8(a), HUBZone, WOSB, SDVOSB) require separate SBA certification, see SBA certification verification.

Honest scope: DiligenceDesk reads the NAICS and PSC codes from a vendor's SAM.gov record and overlays the sector-risk classification (weapons, aerospace, nuclear, and related categories described in the methodology page). DiligenceDesk does not compute SBA size eligibility, and it does not perform affiliate-aggregation analysis under 13 CFR 121.103.

What that means in practice:

What DD answers

Which NAICS appear on this vendor's SAM record. What sectors those NAICS imply for risk classification. Whether the vendor self-represents as small for those NAICS in SAM.

What DD does not answer

Whether the vendor actually qualifies as small under the assigned NAICS for a given solicitation. That requires a 5-year receipts review or employee-headcount review with full affiliate aggregation, which is a manual due-diligence task or an SBA size determination.

The right pairing

Use DiligenceDesk to anchor identity (UEI, CAGE, NAICS) and surface sector risk. For certified small business set-aside verification, see SBA certification verification. For the broader workflow, see the diligence checklist. For the identity anchor itself, see SAM.gov check.