What is a NAICS code?

NAICS, the North American Industry Classification System, is the standard federal statistical agencies use to classify business establishments. It was built so the three North American countries could compare business statistics on the same basis.

The structure. Per the Census Bureau, a 2-digit code is a sector, 3 digits a subsector, 4 digits an industry group, 5 digits a NAICS industry and 6 digits a national industry. Three sectors use a range of 2-digit codes: manufacturing (31-33), retail trade (44-45) and transportation and warehousing (48-49). A construction example: 23 is construction, 236 is construction of buildings, and 236220 is commercial and institutional building construction.

Why it matters in federal contracting. SBA assigns a size standard to every 6-digit code in 13 CFR 121.201, measured either in average annual receipts or in employees. A few current figures: 236220 commercial and institutional building construction, $45.0 million; 238210 electrical contractors, $19.0 million; 541330 engineering services, $25.5 million; 541511 custom computer programming, $34.0 million; 332710 machine shops, 500 employees; 336411 aircraft manufacturing, 1,500 employees. The same firm can be small under one code and large under another.

NAICS also controls program access. SBA's list of industries eligible for WOSB set-asides has 733 codes, 626 open to all certified WOSBs and 107 limited to EDWOSBs, so a WOSB certification only opens set-asides in those codes. For WOSB, VOSB and SDVOSB certification, SBA's rules test size under the standard for any NAICS code listed in the firm's SAM profile.

You can list several codes. SAM.gov lets you register a primary code and additional codes. Contracting officers and corporate buyers search by code, so list each code that describes work you actually perform and can show past performance in.

How to pick your primary code. Start with the activity that produces the largest share of your revenue, then work down the hierarchy from the sector to the most specific 6-digit code that describes it. Check that code's size standard in 13 CFR 121.201 before you register, because it decides whether you are small for most of the work you will bid.

Codes change. NAICS is revised periodically; SBA's current size table and WOSB list use 2022 NAICS codes. After a revision, compare the codes in your SAM.gov profile with the new edition and update any code that was split, merged or renumbered.