The North American Industry Classification System (NAICS) is a six-digit code system for classifying businesses by what they do. In federal contracting, NAICS codes do three jobs at once: they help you find opportunities, they help contracting officers find you, and they decide whether you count as a small business for a given contract.
How NAICS codes are structured
Codes get more specific as digits are added. The first two digits are the sector, the third the subsector, the fourth the industry group, the fifth the industry, and the sixth the national industry. For example:
- 23 — Construction
- 238 — Specialty Trade Contractors
- 2382 — Building Equipment Contractors
- 238220 — Plumbing, Heating, and Air-Conditioning Contractors
Federal solicitations and SBA size standards use the six-digit code. The U.S. Census Bureau publishes the official list and periodically revises it (the current edition at the time of writing is 2022).
Why the code matters so much
Size
SBA assigns a size standard to each six-digit code, based on either average annual receipts or number of employees. Your company might be small under one code and other-than-small under another. When you list codes in SAM.gov, the system shows whether you are small for each one.
Set-aside eligibility
Each solicitation names one NAICS code. To compete for a small business set-aside, you must be small under that code's size standard. For the WOSB and EDWOSB programs, the solicitation's NAICS code must also be one SBA has designated as eligible.
Search and market research
Contract opportunity searches, agency forecasts and spending databases can all be filtered by NAICS. Contracting officers also search SAM.gov and SBA's small business search by NAICS when doing market research.
How to find your codes
1. Start with what you actually do
Write a one-sentence description of each line of work that produces revenue. "We install and service commercial HVAC systems" is better than "facilities solutions."
2. Search the Census NAICS tool
Use the Census NAICS search with plain keywords. Read the full definition of each candidate code, including cross-references that say which activities belong elsewhere.
3. Look at what the government buys under that code
Check how much agencies spend in a code and on what. PinPeek's NAICS pages summarize federal contract obligations, top buying agencies and recent awards for each code using public USAspending.gov data. You can also search USAspending.gov directly.
4. Check the size standard
Look up each code in the SBA table of size standards and compare it with your receipts or employee count, calculated the way SBA's rules require.
5. Look at real solicitations
Search Contract Opportunities on SAM.gov for the kind of work you do and note which NAICS codes agencies assign. Agencies sometimes use a different code than you would expect.
Primary versus additional codes
In SAM.gov you choose one primary NAICS code — generally the one representing most of your business — and can list additional codes. List codes for work you can genuinely perform. Listing dozens of unrelated codes does not help and can confuse market researchers reviewing your profile.
NAICS and PSC: two different codes
Federal contracts are also classified by Product and Service Codes (PSC), which describe what is being bought rather than the industry of the seller. Many opportunity searches let you filter by both. It is worth knowing the PSCs for your main services too.
If you disagree with a solicitation's NAICS code
The contracting officer chooses the code that best describes the principal purpose of the acquisition. If you believe the wrong code was assigned — for example, one with a size standard that excludes you — SBA's rules allow a NAICS code appeal to SBA's Office of Hearings and Appeals within a short deadline after the solicitation is issued (see 13 CFR 121.1103). Act quickly; the deadline is short.
Common mistakes
- Choosing by size standard alone. Picking a code only because its size standard keeps you small, when it does not describe your work, invites problems if your size or the code is challenged.
- Forgetting affiliates. SBA size rules generally count the receipts or employees of affiliated businesses. If you share ownership or management with other companies, check SBA's affiliation rules before assuming you are small.
- Using an outdated edition. NAICS is revised periodically, and codes are sometimes merged or split. Confirm your codes against the current edition and the current SBA size standards table.
- Never revisiting the list. As your business grows or changes, review your codes and size status at least once a year — a natural time is your annual SAM.gov renewal.
Frequently asked questions
How many NAICS codes should I list?
As many as truthfully describe work you can perform, and no more. Most small firms list a handful of closely related codes.
Can I bid on a contract with a NAICS code I have not listed in SAM?
Generally, what matters is whether you are small under the solicitation's NAICS code and can do the work. Adding the code to your SAM profile keeps your representations consistent and helps market researchers find you.
Where can I see the size standard for my code?
In SBA's table of size standards on sba.gov. SAM.gov also displays whether you are small for each code you list.
What is the difference between NAICS and SIC codes?
SIC is the older Standard Industrial Classification system. Federal contracting and SBA size standards use NAICS.
This guide is general information, not legal advice. Rules change — always check the solicitation and the official sources linked here.