The contracting officer will designate, as part of the solicitation, the applicable size standard for the government procurement. The size standard is based on the industry classification of the goods or services being procured. The proper NAICS industry is that which best describes the principal purpose of the procurement, giving primary consideration to the industry description in the NAICS. When more than one NAICS is involved in a contract, consideration is to be given to the function of the goods and services being purchased and the relative value and importance of each.

To bid on Federal contracts, the concern must self-certify that it is a small business under the appropriate size standard set forth in the solicitation. It does so via the Online Representations and Certifications Application (ORCA). The size of the concern at the time of self-certification prevails for that contract. A concern may grow above the size standard before or after award without loss of eligibility to perform on that contract. In the 8(a), HUBZone and SDB Programs, the concern must meet the size standard for its primary industry to be admitted to the program. Then it must meet the size standard for the NAICS industry assigned to each individual contract. If a procurement calls for two or more items with different size standards and the concern must bid on all end items, it may qualify as a small business if it meets the common size standard for those items accounting for the greatest percentage of total contract value. If the concern is not required to bid on all items, it may bid only on items for which it meets the size standard. To be awarded a Government small business set-aside or 8(a) contract, the concern must perform at least a given percentage of the contract. This provision limits the amount of subcontracting a concern may enter into with other firms when performing these types of contracts. The provisions are as follows:

• Construction. For general and heavy construction contractors, at least 15 percent of the cost of the contract, not including the cost of materials, must be performed by the prime contractor with its own employees. For special trade construction, such as plumbing, electrical or tile work, this requirement is 25 percent.
• Manufacturing. At least 50 percent of the cost of manufacturing, not including the cost of materials, must be done by the prime contractor.
• Services. At least 50 percent of the contract cost for personnel must be performed by the prime contractor's own employees.

References:
• Small Business Administration

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