Government Contracts Monitor

Short Take: Contract Award Moots NAICS Code Appeals

May 23, 2016

By: Eric Whytsell

Timing is everything, particularly when filing North American Industry Classification System (NAICS) code appeals at the Small Business Administration (SBA) Office of Hearings and Appeals (OHA). This point was driven home in the recent case of KAES Enterprises, LLC, SBA No. NAICS-5731.

The matter involved a sole source award to McCann Contracting, Inc. by the Veterans Administration (VA) under a solicitation that had been designated under NAICS code 541330, with a corresponding $15 million annual receipts size standard. Shortly after the award another company, Kaes Enterprises, LLC, filed an appeal with OHA, asserting that the appropriate NACIS code for the solicitation was actually 811310, which instead has a $7.5 size standard.

Four days later, Judge Holleman of the OHA ordered Kaes to show cause why its appeal should not be dismissed as moot and for failure to comply with the applicable filing requirements. As Judge Holleman explained when Kaes failed to respond to the Show Cause Order, OHA precedent provides that, once a procurement has been awarded, any additional dispute over the NAICS code is moot and OHA must dismiss the case. When the contract had already been awarded, OHA lacks authority to compel the contracting officer to rescind the award.

If you want to challenge a NAICS code, make sure to file before the contract is awarded. If you wait until after award, you’ll be wasting your time.

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