When an agency competes a task order under a multiple-award contract, the agency must assign the task solicitation a NAICS code set forth in the underlying MAC.

As demonstrated in a recent SBA Office of Hearings and Appeals decision, when the MAC is assigned a single NAICS code, all task orders competed under that MAC will also be assigned that NAICS code–even if a prospective offeror believes that a different NAICS code will best describe the principal purpose of the task order acquisition.

OHA’s decision in NAICS Appeal of Dellew Corporation, SBA No. NAICS-5837 (2017) involved a task order solicitation under the NAVSUP Global Business Support MAC.  The MAC solicitation was issued in 2014, and was assigned a single NAICS code: 561210 (Facilities Support Services).

On May 5, 2017, NAVSUP issued a task order RFQ under the MAC.  The task order RFQ was set aside for WOSBs, and designated with NAICS code 561210.

Dellew Corporation, a MAC holder, filed a NAICS code appeal with OHA.  Dellew argued that NAICS code 561210 did not best describe the work to be acquired under the task order RFQ.  Dellew contended that the appropriate NAICS code was 541214 (Payroll Services).

OHA wrote that, under SBA regulations at 13 C.F.R. 121.402(c), an agency issuing a solicitation for a MAC has two choices when it comes to NAICS codes.  First, the agency can assign “a single NAICS code and size standard which best describes the principal purpose of the acquisition,” but only if “the NAICS code will also best describe the principal purpose of each order to be placed” under the MAC.  Alternatively, the agency can “[d]ivide the solicitation into discrete categories,” such as CLINs, and “assign each discrete category the single NAICS code and corresponding size standard that best describes the principal purpose of the goods or services to be acquired under that category.”  Once the MAC is awarded, OHA explained, “a CO may not designate a NAICS code to a task order that was not assigned in the underlying contract.”

In this case, “because the GBS MAC was assigned only one NAICS code, any task orders issued thereunder must utilize that same NAICS code.”  Dellew “like all GBS contract holders . . . was on notice in 2014 that task orders issued under the GBS MAC would utilize NAICS code 561210.”

OHA dismissed Dellew’s NAICS code appeal.

When it comes to orders under multiple-award contracts, an agency’s choice of NAICS codes is severely constrained.  As the Dellew Corporation decision demonstrates, each solicitation for an order under a MAC must be assigned a NAICS code that was designated for the underlying MAC–even if the MAC was assigned only one NAICS code.

View the full article