A contractor objected to the NAICS code assigned to a small business set-aside. The contractor argued the solicitation sought medical support staff, but the assigned code related to hospitals. The agency argued the hospital code should apply because it had been used in predecessor contracts. OHA rejected the agency’s argument. An NAICS appeal stands alone. The fact that the government may have used the same code in previous contracts is irrelevant. OHA sustained the appeal. The agency had clearly assigned the wrong code to the procurement.
NAICS Appeal of Prime Physicians, SBA No. NAICS-6185
Background
The Defense Health Agency (DHA) posted an RFP seeking professional medical services. DHA set the procurement aside for small businesses. DHS assigned the procurement NAICS code 622110, General Medical and Surgical Hospitals, with a size standard of $47 million in annual receipts.
Prime Physicians filed an appeal with SBA’s Office of Hearings and Appeal, challenging the NAICS code. Prime argued that code 622110 applies when the government contracts with a hospital. Here, the RFP did not seek to contract with a hospital. Rather, it sought contractors who will furnish medical personnel to perform services for the government. This is typically the type of work performed by staffing agencies, not hospitals. Prime suggested an alternative NAICIS: 62111 Offices of Physicians, which covers medical staffing.
Analysis
OHA agreed with Prime. The RFP clearly sought medical staffing services. The RFP required the contractor to recruit, qualify, and manage physicians, nurses, and dentists. There was no indication DHA had intended to contract with entire hospitals for these services. The NAICS code for hospitals was inappropriate.
DHA argued the hospital code, 622110, should be used because it had been used on predecessor contracts. OHA reasoned that NAICS codes used in other, similar procurements carry little weight in an appeal. This case stands alone. The fact that DHA may have assigned this code to other contracts was irrelevant.
The court agreed with Prime that NAICS code 621111 better described the principal purpose of the acquisition.
Prime is represented by its CEO, Dr. Chakri Pureti. The government is represented by Raul J. Garcia of the Defense Health Agency.
–Case summary by Craig LaChance, Senior Editor
