SBA Loan

NAICS- the North American Industry Classification System

Everybody’s heard of SIC codes. But did you know that they were obsolete? Here’s what you need to know about NAICS teh system that replaced the old SIC code system.

1. What is NAICS?

NAICS is the North American Industry Classification System. It replaced the Standard Industrial Classification (SIC) system. Federal Government agencies that collect establishment based statistics are now required to use NAICS instead of SIC.

2. Why did SBA issue a new table of size standards?

NAICS describes how industries do business in today’s economy better than SIC does. SBA has always established size standards for industries as they are described in SIC. Size standards based on NAICS industries will provide more opportunities for small businesses to participate in Federal programs that give preference to small businesses.

3. Why does SBA think that NAICS is better than SIC?

NAICS describes how industries do business in today’s economy better than SIC does. SBA has always established size standards for industries as they are described in SIC. Size standards based on NAICS industries will provide more opportunities for small businesses to participate in Federal programs that give preference to small businesses.

4. Why does SBA think that NAICS is better than SIC?

NAICS, first of all, classifies over 350 more industries than SIC does – that’s 15% more. Most of these new industries are in the Services Sectors.

NAICS identifies industries that SIC does not, industries that are more relevant to today’s economy. For example, NAICS includes industries that manufacture semiconductor machinery and fiber optic cable, reproduce software, provide satellite telecommunications, paging, cellular and other wireless telecommunications. Warehouse clubs and superstores, telemarketing bureaus, hazardous waste collection and casinos are also new in NAICS.

NAICS is more consistent than SIC. Businesses that use similar production processes are grouped together.

NAICS gives special attention to new and emerging industries, service industries in general, and industries that produce advanced technology. The SIC system, which was last revised in 1987, does not include many of these industries, or at least does not describe them well, and it will never be updated or changed.

5. Since this is a new table, do any size standards change? What about my size standard?

Some size standards that are assigned to SIC codes do change. However, their number is small. Most likely you will continue as a small business eligible for federal small business programs under NAICS size standards. You need to identify the NAICS code for your business and check its size standard.

6. How do I find out what my NAICS code is?

Go to SBA’s NAICS Lookup at https://eweb1.sba.gov/naics/dsp_naicssearch2.cfm.

Simply enter your product or service in the description area and then locate your business area.

7. How do I find the size standard for my NAICS code?

Use SBA’s NAICS Lookup at

Type in your NAICS code or business description and then locate your business area on the resulting table.

8. How will the change from SIC to NAICS affect federal contracting opportunities for small businesses?

Federal procuring agencies, starting October 1, 2000, must use the proper NAICS codes and size standards in their procurement solicitations. They will use the NAICS code, instead of the SIC code, that best describes the principal purpose of the product or service they intend to acquire.

9. What about outstanding procurements on which agencies have solicited bids or offers, but which they have not yet awarded – will the SIC code they used be changed to the NAICS code?

The contracting officer has some discretion here, if the agency has not yet awarded the contract. SBA suggests you ask the contracting officer what he intends to do.

10. Where can I find more information about size standards?

Go to SBA’s Website about Size Standards. You can also email SBA’s Office of Size standards at sizestandards@sba.gov, or call us at (202) 205-6618.

11. Where can I find more information about NAICS?

Go to the Bureau of Census Website.

12. Where can I find more information about small business size standards and NAICS together?

Go to Small Business Size Standards and the North American Industry Classification System (NAICS) on SBA’s Website.

13. When did NAICS replace SIC?

NAICS replaced SIC on January 1, 1997.

Contracting with the Federal Government

1. How does SBA define a business as

In making a detailed definition, SBA may use a number of criteria, including the number of employees, annual receipts, affiliates, or other applicable factors. These specific criteria are set forth in the SBA Small Business Size Regulations, Title 13, Part 121 of the Code of Federal Regulations. For information on specific industry classifications (manufacturing, construction, services, transportation, refined petroleum products, and research development and testing), or more information on general small business definitions, please contact the SBA’s Office of Size Standards.

2. How do I find out who in the government purchases my product or service?

This web site contains links to “Federal Acquisition and Procurement Opportunities,” and to Federal Government Acquisition sites under “Programs to Assist You.”

3. How can I get a DUNS number?

DUNS stands for “Data Universal Numbering System” and is used by the government to identify contractors and their locations. The number is also required to register with the Central Contractor Register (CCR) that is used by the government’s electronic commerce/electronic data interchange (EC/EDI) system called FACNET. If you do not have a DUNS number, you can obtain one from Dun and Bradstreet (D&B) at no cost. Contact the company at 800-333-0505.

4. What is the FedBizOpps?

FedBizOpps.gov is the single government point-of-entry (GPE) for Federal government procurement opportunities over $25,000. Government buyers are able to publicize their business opportunities by posting information directly to FedBizOpps via the Internet. Through one portal – FedBizOpps (FBO) – commercial vendors seeking Federal markets for their products and services can search, monitor and retrieve opportunities solicited by the entire Federal contracting community.

5. What is the 8(a) Program?

The 8(a) Business Development program is designed to provide business development assistance and technical assistance to help socially and economically disadvantaged American businesses gain access to the mainstream American economy. The program is named for the section of the Small Business Act that authorizes its policies and procedures.

6. What is the Certificate of Competency Program?

The Certificate of Competency (COC) program allows a small business to appeal a contracting officer’s determination that it is unable to fulfill the requirements of a specific government contract on which it is the apparent low bidder. When the small business applies for a COC, SBA industrial and financial specialists conduct a detailed review of the firm’s capabilities to perform on the contract. If the business demonstrates the ability to perform, the SBA issues a COC to the contracting officer requiring the award of that specific contract to the small business.

7. What is the 7(j) program?

Section 7(j) of the Small Business Act authorizes SBA to enter into grants, cooperative agreements or contracts, with public or private organizations that can deliver management or technical assistance to eligible individuals and enterprises. This assistance is delivered to 8(a) certified firms, small disadvantaged businesses, businesses operating in areas of high unemployment or low-income or firms owned by low-income individuals. More…