Comment on the 2027 NAICS revision — held to OMB's own standard

FILED 2026-08-07 · DOCKET USBC-2026-0133 · PUBLIC COMMENT

On 13 July 2026 the Office of Management and Budget proposed the 2027 revision of the North American Industry Classification System — the six-digit codes by which every federal contract action is recorded, every size standard is set, and every industry statistic is published. Among the changes: consolidating forty-six industries into eighteen broader codes. The American Small Business Chamber of Commerce™ filed a ten-page comment on 7 August, five days ahead of the deadline, on a docket ASBCC had read in full — all 91 comments — that same morning.

The comment holds the proposal to the standard OMB set for itself: changes limited to those that "significantly improve the relevance and efficiency of the classification system."

The same output at a permanent loss of input

Tested against the Census Bureau's official 2022 NAICS structure, eleven of the eighteen proposed consolidations exactly duplicate a five-digit code the classification already publishes. Everything the merged code would report, the Census Bureau can report today — without destroying the six-digit detail beneath it. The remaining seven correspond to no existing publication level at all: defined industries replaced by aggregates the classification has never published.

Some of the merged activities are genuinely unrelated. Custom architectural woodwork — a construction trade performed on buildings — merged into office furniture manufacturing. Rice milling merged with malt manufacturing. Tire manufacturing, a capital-intensive heavy industry, merged with tire retreading, a local service business.

A record that never counts what it breaks

The problem the Committee's own record identifies is subnational: data suppressed in some states to protect business confidentiality. The remedy eliminates each industry everywhere — including the national statistics, where no problem was ever claimed. The record discusses no narrower alternative.

The Committee's fifty pages of reasoning contain no establishment counts, no employment figures, no receipts, and no measure of the suppression said to require the change — for any of the twenty-eight industries being eliminated. A threshold governing industry existence is invoked once and never stated. And the rationale the public was given in the Federal Register — "long-term declines in the size of existing industries" — is not the rationale the Committee's own supporting document records.

What the government's own data shows

Because federal agencies code every contract action to a six-digit NAICS industry, the qualitative characterizations — small, concentrated, declining — can be tested. ASBCC ran the test across all forty-six affected codes, FY2022–FY2025:

• Federal contract obligations in the affected codes grew 41.5%, against 14.2% growth in all federal contract obligations over the identical period. Ordnance manufacturing alone more than doubled, from $5.61 billion to $12.21 billion.
• The affected codes carried $28.98 billion in federal obligations in FY2025 — 3.66% of all federal contract obligations.
• 10,926 distinct firms held federal contracts in these codes in FY2025; 8,022 of them — 73.4% — were small businesses.

In the federal market, these are not declining industries. They are industries the government is buying from at nearly three times the market rate, whose detailed statistical series the government proposes to stop keeping.

What this does to a small business

NAICS is how federal size standards are administered: SBA assigns a size ceiling to each six-digit code, and when codes merge, SBA's published guideline sets the merged code's standard at the highest among the predecessors. Applying that rule to SBA's current table: twenty-four of the forty-six industries get a higher ceiling, thirteen rise fifty percent or more, and five at least double.

The concrete case is tire retreading — a local service business with a 500-employee ceiling, where 80% of federal dollars go to small firms. The proposal merges it with tire manufacturing: heavy industry, a 1,500-employee ceiling, where 4% of federal dollars go to small firms. On the merger's effective date, every manufacturer already small under the 1,500-employee standard becomes eligible for set-aside competitions in the retreading market, whose incumbent small firms average fourteen employees. A retreader with fourteen employees and a manufacturer with fourteen hundred can be the same "small business" competing for the same reserved award. No new policy choice is required — only the guideline SBA has already published.

The merged statistics will describe nothing that exists, either: inside one proposed code, the member industries' small-business shares diverge by eighty points — 94% and 14% — so the published figure will characterize neither.

What we asked for

Seven requested actions, each framed so it can be granted or denied. Among them: publish the data underlying each combination and the numeric threshold applied — or state on the record that none exists; explain why the subnational problem cannot be solved by narrower means the government already uses; reconcile the notice's stated rationale with the record's; forward the size-standard consequences of each combination to SBA before finalizing, through the referral channel the Committee's own record shows it already uses; and preserve six-digit detail, or commit to publishing at resolution sufficient for the reporting Congress requires by statute.

The record

Filed 7 August 2026 to the Economic Classification Policy Committee, Docket USBC-2026-0133, signed by Charmagne Giardina, President. Posted 10 August 2026 as comment USBC-2026-0133-0124 · tracking msj-i4ni-h1qs.

Download the filed comment (PDF, 10pp)

The analysis behind every figure is published and reproducible: Federal Marketplace Index™ v0.2 — methodology · archived release — with the NAICS-specific tables archived as a dedicated data deposit.