What Is a NAICS Code and How to Choose the Right One for Federal Contracting
NAICS codes determine which federal contracts you can win. Learn how to select the right NAICS codes to qualify for set-asides and appear in federal buyer searches.
Your NAICS code selection is one of the most consequential decisions you make as a federal contractor. It determines whether you appear in federal buyer searches, whether you qualify as a small business for specific set-asides, and which opportunities your matches.
Get it wrong and you will miss opportunities. Get it right and you open doors to contracts your competitors may have overlooked.
What Is a NAICS Code?
NAICS stands for North American Industry Classification System. It is a six-digit code used by US federal agencies, Canada, and Mexico to classify businesses by the type of economic activity they perform.
The US Census Bureau maintains NAICS codes and revises them every five years (most recently in 2022). There are approximately 1,000 NAICS codes covering every industry from agriculture to aerospace.
In federal contracting, NAICS codes serve three critical functions:
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Size standard determination — The SBA assigns a size standard (revenue cap or employee cap) to each NAICS code. Whether you qualify as a "small business" depends on which NAICS code the contracting officer assigns to the solicitation.
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Set-aside eligibility — Small business set-asides, 8(a) competitions, HUBZone awards, and WOSB set-asides are all triggered by size status under the applicable NAICS code.
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Market research — Contracting officers and procurement analysts search contractor databases by NAICS code to find potential vendors. If you are not listed under the relevant code, you are invisible to that search.
How NAICS Codes Are Structured
NAICS codes use a hierarchical six-digit structure:
The more specific the code (more digits), the more precisely it describes your service. In federal contracting, you always use the full six-digit code.
How NAICS Codes Affect Small Business Size Standards
The SBA publishes size standards for every NAICS code in 13 CFR Part 121. These standards are either:
- Annual revenue (most service industries): e.g., $8 million, $25 million, $41.5 million
- Employee count (manufacturing and some others): e.g., 500 employees, 1,000 employees, 1,500 employees
The size standard in play for any given contract is determined by the NAICS code the contracting officer assigns to that solicitation — not by what you have on your SAM.gov profile.
Example: Why This Matters
Suppose you are an IT consulting firm. If a solicitation is coded 541512 (Computer Systems Design Services, $34 million revenue cap), you may qualify as a small business. If the same work were coded 541330 (Engineering Services, $19 million revenue cap), you might not.
Choosing which NAICS codes to list on your SAM.gov profile does not change how a specific solicitation is coded — but it affects your visibility in vendor databases and your ability to substantiate your capabilities.
How to Choose Your Primary NAICS Code
Your primary NAICS code should reflect the activity that generates the greatest portion of your annual revenue. The SBA uses this code to adjudicate your overall small business status in certain program contexts (such as 8(a) certification).
Step 1: Identify Your Core Revenue Activity
What do you primarily do? Services, products, or a mix? Examples:
- Cybersecurity consulting → 541519 (Other Computer Related Services) or 541512
- Construction → 236220 (Commercial and Institutional Building Construction) or a specialty trade code
- Staffing → 561320 (Temporary Help Services)
- Training → 611430 (Professional and Management Development Training)
Step 2: Look Up the SBA Size Standard
Go to the SBA's Table of Small Business Size Standards (available at sba.gov) and find the revenue or employee cap for your candidate codes. Confirm you are below that threshold.
Step 3: Check What Agencies Actually Award Under That Code
The best signal for a correct NAICS code is what contracts are actually awarded under it. Search or the SAM.gov Award Data Archive for recent awards in your target agency under your candidate NAICS codes. If agencies consistently award the type of work you do under a code, that is a strong signal to include it.
does this automatically — it cross-references your capabilities against historical award data to surface the NAICS codes where you have the highest win probability.
Secondary NAICS Codes: How Many Should You Add?
SAM.gov has no hard limit on additional NAICS codes. You can list as many as legitimately apply to your business. However, there is a real risk in over-listing:
The risk of code stuffing: If you list 40 NAICS codes for a small business that only has five employees, contracting officers and program managers will question your credibility during source selection. A tight, credible list is better than a sprawling one.
Best practice: List every code under which you have genuine experience and want to pursue contracts. If you have no past performance in a category, listing it may not hurt your registration but it is unlikely to generate wins.
High-Value NAICS Codes for Small Business Federal Contractors
Based on federal award volume, these NAICS codes generate the highest total small business contract dollars annually:
Professional Services
- 541511 — Custom Computer Programming Services
- 541512 — Computer Systems Design Services
- 541519 — Other Computer Related Services
- 541330 — Engineering Services
- 541611 — Administrative Management and General Management Consulting Services
- 541690 — Other Scientific and Technical Consulting Services
IT and Cybersecurity
- 541512 — Computer Systems Design Services
- 518210 — Data Processing, Hosting, and Related Services
- 541519 — Other Computer Related Services
Professional Support / Staffing
- 561320 — Temporary Help Services
- 561110 — Office Administrative Services
- 541612 — Human Resources Consulting Services
Construction and Facilities
- 236220 — Commercial and Institutional Building Construction
- 237310 — Highway, Street, and Bridge Construction
- 561720 — Janitorial Services
- 561210 — Facilities Support Services
Logistics and Transportation
- 484121 — General Freight Trucking, Long-Distance, Truckload
- 561910 — Packaging and Labeling Services
NAICS Codes vs. PSC Codes: Understanding the Difference
Federal solicitations contain both a NAICS code and one or more Product and Service Codes (PSC codes).
You should know both the NAICS and PSC codes relevant to your work. SAM.gov lets you register PSC codes on your profile in addition to NAICS codes.
How to Update Your NAICS Codes in SAM.gov
You can update your NAICS codes at any time during your annual SAM.gov renewal — or via a mid-year update. There is no limit on how often you can update your profile.
To add or change NAICS codes:
- Log into SAM.gov with your Login.gov credentials
- Navigate to your entity registration
- Select "Edit"
- Go to the "Assertions" section
- Add or remove NAICS codes
- Submit (the change takes effect immediately for the public profile after processing)
NAICS Code Changes in 2022: What Changed
The Census Bureau released an updated NAICS manual in 2022 with several codes relevant to federal contractors:
- New sector 92 split: Government administration codes were restructured.
- New tech codes: Some AI and data science activities now have cleaner classifications under 54151x subsectors.
- Renewable energy: New codes emerged under the utilities and construction sectors.
Always verify you are using 2022 NAICS codes. Outdated codes from the 2017 manual may be accepted by SAM.gov but could differ from what agencies use in solicitations.
Frequently Asked Questions
Can I have more than one NAICS code on SAM.gov? Yes. SAM.gov allows you to select one primary NAICS code and unlimited additional NAICS codes. Adding relevant codes expands which federal solicitations your profile matches.
What is the difference between a NAICS code and a PSC code? NAICS codes classify the type of business (industry classification). PSC codes classify the specific product or service being purchased. Both appear in solicitations.
How do NAICS codes affect small business size standards? SBA size standards are defined per NAICS code — the standard is either a revenue cap (in millions) or an employee cap. Your size status is determined for each contract based on the NAICS code assigned to that solicitation.
Where do I find the NAICS code for a specific federal solicitation? Every solicitation posted on SAM.gov includes a NAICS code field. It appears near the top of the notice and in the solicitation document itself.
Key Takeaways
- NAICS codes are six-digit industry classification codes that determine your size standard, set-aside eligibility, and visibility to federal buyers.
- Your primary NAICS code should reflect the activity generating your largest revenue share.
- Size standards vary by code — the same company can be "small" under one code and "other than small" under another.
- List all legitimate codes where you have experience and intent to bid — but avoid code stuffing.
- PSC codes and NAICS codes are different — both appear in solicitations and both matter.
- Review your codes annually when you renew your SAM.gov registration.
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