Understanding NAICS Codes for Government Contracting

What Are NAICS Codes?

NAICS (North American Industry Classification System) codes are 6-digit numbers that classify businesses by their primary economic activity. In government contracting, NAICS codes are critical because they:

1. Categorize contracts: Every government contract is assigned a NAICS code
2. Determine size standards: Your small business status depends on your NAICS code
3. Affect set-aside eligibility: Some set-asides are NAICS-specific

How NAICS Codes Work

Structure

NAICS codes follow a hierarchical structure:

• First 2 digits: Economic sector (e.g., 54 = Professional Services)
• Third digit: Subsector
• Fourth digit: Industry group
• Fifth digit: NAICS industry
• Sixth digit: National industry

Example

541512 - Computer Systems Design Services

• 54: Professional, Scientific, and Technical Services
• 541: Professional, Scientific, and Technical Services
• 5415: Computer Systems Design and Related Services
• 54151: Computer Systems Design and Related Services
• 541512: Computer Systems Design Services

Choosing Your NAICS Codes

Primary NAICS Code

Your primary NAICS code should reflect your main business activity. This is used to determine your small business size standard.

Secondary NAICS Codes

You can (and should) list multiple NAICS codes in SAM.gov if you offer multiple services.

Tips for Selection

1. Be specific: Use 6-digit codes when possible
2. Research competitors: See what codes similar businesses use
3. Check size standards: Make sure you qualify as small under your primary code
4. Consider growth: Choose codes that allow room to grow

Size Standards by NAICS Code

Size standards vary significantly by NAICS code. Here are some examples:

Note: Size standards are updated regularly. Check the SBA's size standards table for current values.

NAICS Codes and Set-Asides

Some set-aside contracts specify particular NAICS codes. For example:

• A contract might be set aside for small businesses under NAICS 541512
• Your business must qualify as small under that specific NAICS code to be eligible

Common Mistakes to Avoid

1. Too broad: Using a 4-digit code when a 6-digit code is more accurate
2. Wrong primary: Choosing a NAICS code for strategic reasons rather than accuracy
3. Missing codes: Not listing all applicable NAICS codes in your SAM.gov profile
4. Size standard confusion: Not understanding how size is calculated (revenue vs. employees)

Finding Your NAICS Code

Resources

1. Census Bureau NAICS Search: Official NAICS code lookup
2. SBA Size Standards Tool: Find size standards for any NAICS code
3. GovCon Data: Filter opportunities by NAICS code to see what's available

Conclusion

NAICS codes are fundamental to government contracting success. Take time to research and select the right codes for your business, and keep your SAM.gov profile updated as your business evolves.

Need help finding contracts that match your NAICS codes? GovCon Data automatically matches opportunities to your business profile.