What is a NAICS code?

NAICS — North American Industry Classification System — is the standard taxonomy the US, Canadian, and Mexican governments use to classify businesses by what they do. The system uses up to 6 digits with a hierarchical structure:

- **2 digits** = sector (e.g., 23 = Construction)
- **3 digits** = subsector (e.g., 236 = Construction of Buildings)
- **4 digits** = industry group (e.g., 2362 = Nonresidential Building Construction)
- **5-6 digits** = specific industry (e.g., 236220 = Commercial and Institutional Building Construction)

**Why NAICS matters for supplier diversity:** federal contracting set-asides are organized by NAICS code. The SBA publishes a small-business size standard for every NAICS — some by employee count (e.g., 500 employees for most manufacturing), others by revenue (e.g., $41.5M for most construction). To qualify as a small business in a given NAICS, you must be under that code's size standard.

**Goal-attainment data is also organized by NAICS.** USASpending.gov publishes contract obligations by NAICS code, set-aside category, and recipient. If you want to know how much federal money is being spent in your industry on small-business set-asides — or specifically on 8(a), HUBZone, WOSB, or SDVOSB set-asides — NAICS code is the lookup key.

**You can have multiple NAICS codes.** Most businesses register a primary NAICS (the one that produces the majority of revenue) plus several secondary NAICS codes covering related work. SAM.gov, the federal contractor registry, lets you list multiple NAICS in your profile so federal procurement officers searching by NAICS find you.

**How to pick yours:** start with the work that produces the most revenue. Browse the NAICS hierarchy from your sector down to the most specific code that matches what you do. The SBA publishes a NAICS-to-SIC crosswalk if you've used the older SIC system before. Your primary NAICS determines which size standard applies and which federal set-aside opportunities you can compete for.

**NAICS codes change.** The federal government revises NAICS roughly every 5 years (most recently in 2022). When NAICS codes are merged or split, your registered codes auto-migrate in SAM.gov but it's worth verifying after each revision.