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OASIS NAICS Code- Additional Information for Industry Partners – Nov 29, 2012

The NAICS code that OASIS will be using has generated significant interest and recommendations from Industry. In response to the many comments and suggestions on this subject, the OASIS team engaged in additional extensive research.

The Federal Acquisition Regulation (FAR) Part 19.102 states:

(c) For size standard purposes, a product or service shall be classified in only one industry, whose definition best describes the principal nature of the product or service being acquired even though for other purposes it could be classified in more than one.

(d) When acquiring a product or service that could be classified in two or more industries with different size standards, contracting officers shall apply the size standard for the industry accounting for the greatest percentage of the contract price.

So, with that in mind, what accounts for the greatest percentage of the expected OASIS contract price?

Using 2011 and 2012 federal spending information, here are the top 4 NAICS codes within the 54xxx series of NAICS codes:

 

NAICS Code:

2011

2012

 Grand Total 

541330: ENGINEERING SERVICES

 $ 18,352,370,078.00

 $ 11,921,440,990.00

 $ 30,273,811,068.00

541611: ADMINISTRATIVE MANAGEMENT AND GENERAL MANAGEMENT CONSULTING SERVICES

 $   8,794,403,367.00

 $   7,387,440,582.00

 $ 16,181,843,948.00

541990: ALL OTHER PROFESSIONAL, SCIENTIFIC, AND TECHNICAL SERVICES

 $   4,194,766,917.00

 $   3,347,028,629.00

 $   7,541,795,546.00

541710: RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES

 $   2,885,656,514.00

 $   1,558,328,726.00

 $   4,443,985,240.00

 

As you can see, NAICS Code 541330 (Engineering Services) is by far the number one NAICS code in terms of dollars spent government-wide and is a core discipline of OASIS.  Now, this NAICS code has a size standard of $14M, but also has an exception of $35.5M for Engineering Services for Military and Aerospace Equipment and Military Weapons.  Further research reveals that within NAICS code 541330, engineering services for the military represents the overwhelming majority (86% in 2011) of work performed.                                                                    

 2011                                 2012                      TOTAL

541330: ENGINEERING SERVICES

 $ 18,352,370,078.05

 $ 11,921,440,989.93

 $ 30,273,811,067.98

9700: DEPT OF DEFENSE

 $ 15,864,413,481.02

 $   9,761,602,375.55

 $ 25,626,015,856.57

8000: NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

 $      925,214,543.71

 $      804,973,668.97

 $   1,730,188,212.68

6900: TRANSPORTATION, DEPARTMENT OF

 $      590,100,211.00

 $      440,927,485.92

 $   1,031,027,696.92

4700: GENERAL SERVICES ADMINISTRATION

 $      269,889,530.58

 $      272,225,652.21

 $      542,115,182.79

 

An examination of the top R code spending categories for the Dept of Defense reveals the following:

                                                             2011                                2012                         TOTAL

9700: DEPT OF DEFENSE

 $ 15,864,413,481.02

 $   9,761,602,375.55

 $ 25,626,015,856.57

R425: ENGINEERING AND TECHNICAL SERVICES

 $   9,081,170,528.74

 $          1,986,826.53

 $   9,083,157,355.27

R425: SUPPORT-

PROFESSIONAL:

ENGINEERING/TECHNICAL

 $   6,021,106,750.00

 $   6,021,106,750.00

R414: SYSTEMS ENGINEERING SERVICES

 $   2,016,604,350.97

 $      532,350,249.12

 $   2,548,954,600.09

R706: LOGISTICS SUPPORT SERVICES

 $   1,665,256,816.04

 $               49,946.83

 $   1,665,306,762.87

R408: PROGRAM MANAGEMENT/

SUPPORT SERVICES

 $   1,240,604,222.13

 

 $   1,240,604,222.13

R499: OTHER PROFESSIONAL SERVICES

 $   1,152,985,454.52

 $             224,391.04

 $   1,153,209,845.56

R706: SUPPORT-

MANAGEMENT:

LOGISTICS SUPPORT

 $      995,155,587.67

 $      995,155,587.67

R499: SUPPORT- PROFESSIONAL: OTHER

 

 $      883,768,663.42

 $      883,768,663.42

R408: SUPPORT-

PROFESSIONAL: PROGRAM

MANAGEMENT/SUPPORT

 $      860,211,166.16

 $      860,211,166.16

R799: OTHER MANAGEMENT SUPPORT SERVICES

 $      310,475,261.40

 

 $      310,475,261.40

R799: SUPPORT- MANAGEMENT: OTHER

 

 $      189,817,001.37

 $      189,817,001.37

 

 

The summary of this analysis is that Military Engineering Services is clearly where largest amount of money is spent within NAICS code 54xxx series government-wide.  We anticipate that the spending habits on OASIS will reflect these government-wide spending habits.  

Accordingly, we feel this research supports a decision to apply the NAICS code 541330 with the size standard of $35.5 million to the OASIS acquisition.

Please let me know if you have additional thoughts on this subject. We look forward to hearing from you.

 

Jim

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croot64
<p><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 11pt; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;"><font color="#000000">Dear Jim and OASIS Team.&nbsp; Although we&#39;ve worked in GSA for years and have multiple contracts with multiple agencies, we work predominantly under one NAICA code.&nbsp; Will GSA SB OASIS cosider reducing the requirement for NAICS code contract references to 1 code for pool participation?&nbsp;</font></span></p>
OASIS Blogger
<p>We will take it under consideration.&nbsp; Jim</p><p>&nbsp;</p>
croot64
<p><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 11pt; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;"><font color="#000000">For GSA SB OASIS can GSA reduce the requirement to one NAICS code contract reference for pool participation? </font></span></p>
OASIS Blogger
<p>We will take it under consideration.&nbsp; Jim</p>
bjaffefedbizsb
<p><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;">Do you know what the option recertification requirements will be, and what the task order certification requirements will be within the contract. For example, if we submit now as a Prime qualified under&nbsp;$35.5M, but then could easily have grown beyond that level by the next year or the year after. Normally we recertify in SAM (old CCR), but the critical issues of &ldquo;annual contract recertification from SAM&rdquo; vs. changing status as a small business from the&nbsp;submission size unless the company is sold/contract novated. Then the task order certification requirements also strongly affect the desirability of bringing work to a vehicle as a Prime vs. sub. - i.e. if a company grows organically beyond the size standard, but is still in the contract term (no sale or novation), will task orders require certification at submission size or &quot;SAM size&quot;.</span></p><p><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;">Happy to discuss this further, because it&rsquo;s a big difference in how the vehicle is perceived within industry as well.</span></p>
OASIS Blogger
<p><span id="internal-source-marker_0.7351466384899873" style="font-size:13px;font-family:Arial;color:#000000;background-color:#ffffff;font-weight:normal;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;">Currently, the FAR calls for recertification at the 5 year point and at any option period after that. &nbsp;Because we are planning for a five year base period and a five year option period, that would mean a recertification once and that recertification would happen 120 days prior to exercising the option period.&nbsp; Jim</span></p>
Prashant Gaur - PG
<p>Thank you for your detaled work on NAICS code.&nbsp; While the selection of Engineering Services is the right choice for size standard, it may hinder the correct perception and consequently limit&nbsp;the use of OASIS by federal agencies.&nbsp;&nbsp;Request you to consider instead&nbsp;a straight forward approach as recently adopted by OPM for its TMA contract (Solicitation OPM19-12-R-003).&nbsp; It says : &quot;The NAICS codes for this solicitation are as follows :&nbsp; 541611, 541612, 611430.&nbsp; Small businesses submitting a proposal in response to this solicitation&nbsp; and competing for an award are required to meet the size standard for only one of the applicable NAICS codes.&quot;.&nbsp; This allows consistent messaging for both size standard as well as nature of the work performed.</p><p>Thank you for your consideration</p>
OASIS Blogger
<p><span style="font-size:13px;font-family:Arial;color:#000000;background-color:#ffffff;font-weight:normal;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;">Hello and thanks for the input. &nbsp;Regulatory guidance is very clear that for size standard purposes, ONE industry and size standard shall be identified even though for other purposes, it could be classified in more than one. &nbsp;In accordance with regulation, we anticipate selecting 541330 as the NAICS code (and the $35.5M size standard) to identify a size standard for the contracts, but will also identify a number of other NAICS codes that fall within scope of the contracts. &nbsp;We hope that this will circumvent any perception problems you mention. &nbsp;Thanks again for your feedback. &nbsp;Jim</span></p>
bmarmion
<p>Jim,</p><p>Can you please provide clarification on the NAICS size standard---will the $35.5M threshold only apply to companies who meet the exceptions listed under the SBA size standards list (and those who do not meet the exceptions will still be held to $14M), or will all companies under $35.5M in annual revenues be considered as small business?</p><p>Thank you,</p><p>Brigid</p>
OASIS Blogger
<p><span id="internal-source-marker_0.8772703139726759" style="font-size:13px;font-family:Arial;color:#000000;background-color:#ffffff;font-weight:normal;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;">Hi Brigid and thanks for the question. &nbsp;The size standard will apply to all companies. &nbsp;So if a company&rsquo;s annual revenue is under $35.5M, they will be considered a small business. &nbsp;Thanks again for the question. &nbsp;Jim</span></p>
betsey.hutton
<p>Jim,</p><p>Thank you for providing the rationale for GSA&rsquo;s selection of NAICS code 541330 for the OASIS procurement. While fully understanding that this selection is based on the need to provide a standard that accounts for the greatest percentage of the contract price and government-wide spending trends, the use of 541330 neglects the existence of several comparable Department of Defense (DoD) contracts that will compete with OASIS as well as the intent and needs of multiple independent agencies to utilize the vehicle.</p><p>DoD agencies have access to several vehicles that correspond with the OASIS disciplines including but not limited to Navy SeaPort-e, Air Force NETCENTS II, and several Army Multiple Award Task Order Contracts (MATOC&rsquo;S). These contracts will rival OASIS for work and inevitably take away from the dollar value DoD puts through the contract. &nbsp;&nbsp;&nbsp;</p><p>OASIS requires a broad, inclusive NAICS code that is attractive and applicable across a multitude of agencies. The 541712 NAICS code is grounded in engineering (where the most money was spent in 2011 and 2012), but is more comprehensive to include research and development in life sciences; electronics, environmental, agriculture, biology, computers, food, geology, health, and medicine are just some of the areas accounted for under the 541712 NAICS code. Research and development is at the core of all business activities and will inevitably be central to the work that comes through the OASIS contract irrespective of the agency.</p><p>The SBA Small Business (SB) Size Standard for 541712 is 500 people, which minimizes the risk to GSA and its agency customers that is posed by smaller (in terms of people and revenue) and unavoidably less-developed and less-experienced companies.</p><p>Risks posed by companies below $35M in annual revenue include but are not limited to:</p><ol><li>Infrastructure Risk: Moderate-sized small companies have come up the growth curve to the point where they have a tried and true, mature infrastructure that handles expansion successfully. Businesses this size have a maturity of infrastructure that is typically unavailable to smaller companies for whom rapid growth is stressful and is accompanied by the need to also make wrenching internal changes that put agency customers at risk.</li><li>Performance Risk: A company of 500 employees is still a small company that is agile and responsive, with a short management chain back to its leadership for rapid service and flexible and innovative approaches. Companies of this size are more diverse and have the bench strength and wide base of expertise to match the broad perspective of the disciplines comprising OASIS; they have the past performance and integration experience that OASIS requires. They are big enough to bring a large portion of the capability from within their own resources &ndash; and do so quickly and responsively &ndash; and have an HR department sized and experienced in hiring numerous staff. Additionally, moderate-sized small companies are most likely to have processes in place to ensure quality performance like ISO, CMMI, EVM, etc.</li><li>Subcontracting Risk: Much smaller companies can bring only a fraction of the capability and must engage with either multiple small companies or a large company to bring the full range of resources. This introduces more subcontracting risk and diffused accountability as these companies have neither the extensive experience managing subcontractors nor the processes in place to manage multiple contractors effectively. Very small companies rarely have significant subcontractor management capability and even their accounting systems and management structure are forced to grow rapidly and may become destabilized.</li><li>Cost Risk: A 500 employee SB is better able to manage the risks involved in FFP and Cost Plus TO&rsquo;s. With a larger business base and more sophisticated cost tracking and DCAA audited accounting system, they are mature enough to manage different types of TOs and share risk with the government. Small companies are limited in their financial management experience and ability to take risk and do not have the substantial lines of credit required to manage the working capital demands of government contracting. &nbsp;&nbsp;</li></ol><p>Recognizing that GSA invested much time and resources in the analysis and selection of the OASIS NAICS code, is this issue still open for discussion? Additionally, any thoughts you have or have had on the use of 541712 would be greatly valued.</p><p>Thank you for the opportunity to provide these comments.</p><p>Betsey &nbsp;</p>
OASIS Blogger
<p><span id="internal-source-marker_0.8610535237395767" style="font-size:13px;font-family:Arial;color:#000000;background-color:#ffffff;font-weight:normal;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;">Hello Betsey, and thank you for the thoughtful input. &nbsp;Until the final solicitations are released, all issues are still open for discussion. &nbsp;We understand the logic of you saying that other contracts may take away work placed on OASIS. &nbsp;However, there are several issues we see with the approach you suggest. &nbsp;First, the same logic that suggests that other DoD contracts might take work away from OASIS in the Engineering Services areas would also apply to Research and Development, since the overwhelming majority of R&amp;D work is performed in the DoD arena and contracts exist within DoD for that type of work as well. &nbsp;Second, if you take ALL of the DoD spending out of the Engineering Services area, the remaining amount of Government spending for Engineering Services is still higher than the entire amount spent in NAICS 541712 (including DoD spending). &nbsp;Finally, if we eliminate Engineering Services from consideration, the next NAICS code with the highest spend is 541611, followed by 541990. &nbsp;Both of which have a size standard of $14M. &nbsp;These would have to be considered before the suggested 541712. &nbsp;Regulatory guidance dictates our actions on this issue. &nbsp;Accordingly, we must avoid speculation as much as possible. &nbsp;Your suggestion certainly has some valid points, but we simply don&rsquo;t have the ability to rationalize our choice of NAICS code. &nbsp;Thanks again for the stimulating feedback and please keep the ideas coming. &nbsp;Jim</span></p>
MBReslie
<p>Jim,</p><p>I must confess ignorance here.&nbsp; I get how the selection of this NAICS code will be a determining factor as to who can bid on the OASIS SB&nbsp;contract.&nbsp; However, I don&#39;t understand the impact which regard to large businesses.&nbsp; I work for a company that does $3B in annual revenue so there was never any question about which of the two contracts we can bid.&nbsp; Am I missing something?</p><p>Mike...</p>
OASIS Blogger
<p><span id="internal-source-marker_0.5547894796986536" style="font-size:13px;font-family:Arial;color:#000000;background-color:transparent;font-weight:normal;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;">Hi Mike. &nbsp;For your company, you didn&rsquo;t miss anything and the NAICS Code and size standard doesn&rsquo;t impact you at all. &nbsp;What this did do, however, was determine which companies would be considered &ldquo;small businesses&rdquo; and which companies would be considered &ldquo;other than small businesses&rdquo;. &nbsp;Had the NAICS code of 541611 that was previously discussed been used on OASIS, then companies with annual revenues over $14M would have been considered &ldquo;other than small businesses&rdquo;. &nbsp;Using the NAICS code of 541330 and the associated exception identified, those same companies, and companies with up to $35M of annual revenue, will be considered &ldquo;small businesses&rdquo;. &nbsp;Hope this clears things up. Jim</span></p>
ThomasJ
<p>Jim,</p><p>Thanks for update and feeback. &nbsp;I think that you assigned the appropriate NAICS code for these types of services.</p><p>I am somewhat new to this interactive site and haven&#39;t finished reading through all the postings. &nbsp;Can you tell me if this OASIS vehicle is going to serve as a conslidated schedule? &nbsp;For instance, if a company has a MOBIS and IT-70 schedule, will those schedules be required to be consolidated under OASIS?</p><p>---Jessica</p>
OASIS Blogger
<p><b id="internal-source-marker_0.3133282952476293" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; font-weight: normal;"><span style="font-size: 13px; font-family: Arial; vertical-align: baseline; white-space: pre-wrap;">Hi Jessica and thanks for the feedback and question. &nbsp;While OASIS is designed to be a compliment to the MAS Schedules program, the OASIS contracts themselves are not schedule contracts and are completely different and distinct from the Schedules program. &nbsp;Please read through the blogs and the questions and answers following each blog. &nbsp;There is lots of information posted here. &nbsp;Jim</span></b></p>
Shayne Sullivan
<p>Great Analysis and overview of the 541330 NAICS, fully understanding the OASIS IS NOT an IT vehicle doesn&#39;t this NAICS preclude any services other than straight engineering and R&amp;D.&nbsp; What about Business Intelligence, Process Improvement and Auditing tracks that are not clearly under this NAICS.&nbsp; Or is the intent to have OASIS be an A and E contract vehicle?</p><p>&nbsp;</p><p>Thanks Shayne</p>
OASIS Blogger
<p><b id="internal-source-marker_0.3133282952476293" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; font-weight: normal;"><span style="font-size: 13px; font-family: Arial; vertical-align: baseline; white-space: pre-wrap;">Thanks for the question, Shayne.&nbsp;The scope of OASIS spans across many NAICS codes. When a contract vehicle spans multiple NAICS codes, the regulations guide you to select a single NAICS code in order to establish a size standard. This NAICS code, however, does not in any way limit the work to be performed under the contract.&nbsp;NAICS codes are reporting mechanisms designed to classify and track work being performed. &nbsp;NAICS codes do not establish the scope of contracts. We plan to identify a number of other NAICS codes covered by the scope of OASIS in the contracts which would include business consulting, process improvement, and auditing services amongst many others. We hope this will clear up any perceptions regarding potential use of the contracts. Thanks again for the question and please keep following our progress. &nbsp;Jim</span></b></p>
dwalz
<p>Jim and OASIS Team,</p><p>Clearly this was a topic of great interest to a lot of us contractors who barely exceed the $14M size standard. The research and analysis the OASIS Team did on this is tremendous and will best help to provide the small business community with a fair and inclusive competition.</p><p>Thanks for the excellent work on this!</p><p>Damien Walz</p>
OASIS Blogger
<p><b id="internal-source-marker_0.3133282952476293" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; font-weight: normal;"><span style="font-size: 13px; font-family: Arial; background-color: transparent; vertical-align: baseline; white-space: pre-wrap;">Hi Damien. A lot of work and research goes into these decisions, so thanks for the feedback. We really appreciate it. &nbsp;Jim</span></b></p>
bobfritz
<p>Jim,</p><p>Thanks for that terrific analysis of why the 541330 NAICS Code would be the one to use for OASIS. I commend you on that kind of thoughtful work!</p><p>Bob</p>
OASIS Blogger
<p><span id="internal-source-marker_0.05574613846302734" style="font-size:13px;font-family:Arial;color:#000000;background-color:#ffffff;font-weight:normal;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;">Thank you for the feedback, Bob. &nbsp;&nbsp;We try to be as open as we can with both our decisions and the rationale behind those decisions. &nbsp;Thanks again for the input and please continue to monitor our progress. &nbsp;Jim</span></p>
MontyWhite
<p>I agree with the selection of 541330 as the appropriate NAICS code for the OASIS effort.&nbsp; However, I believe the size standard is $27M, rather than $35.5M.&nbsp; At least that is what I find on the SBA size standard table.</p>
OASIS Blogger
<p><span id="internal-source-marker_0.05574613846302734" style="font-size:13px;font-family:Arial;color:#000000;background-color:#ffffff;font-weight:normal;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;">Hello and thanks for the input. &nbsp;The size standards change from time to time. &nbsp;The most current list for 2012 indicates $35.5M is the correct standard. &nbsp;Please see the size standard table at </span><a href="http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf"><span style="font-size:13px;font-family:Arial;color:#1155cc;background-color:#ffffff;font-weight:normal;font-style:normal;font-variant:normal;text-decoration:underline;vertical-align:baseline;">http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf</span></a><br /><br /><span style="font-size:13px;font-family:Arial;color:#000000;background-color:#ffffff;font-weight:normal;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;">Thanks for the input and please continue to help watch our backs! &nbsp;Jim</span></p>
Good
<p>re: $35.5M size standard</p><p>Are you refering to applying that to the OASIS Small Business vehicle, &nbsp;the F&amp;O, or both?</p>
OASIS Blogger
<p><span style="font-size:13px;font-family:Arial;color:#000000;background-color:#ffffff;font-weight:normal;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;">Thanks for the question. &nbsp;We would be applying the NAICS and size standard to both contracts. &nbsp;Jim</span></p>
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