- NAICS Codes are a classification system Federal agencies use to collect and analyze statistical data about the U.S. economy
- NAICS Codes help Federal Buyers locate the right Businesses to meet their needs
- Determining the complete and correct list of NAICS Codes for your business is foundational to Winning Government Contracts.
- NAICS Codes are entered into your SAM Record, for which allows you to do business with federal buyers.
Introduction to NAICS Codes
The North American Industry Classification System (NAICS) is the go-to classification system for Federal agencies when collecting and analyzing statistical data about the U.S. economy. This numerical coding system is used for various administrative, regulatory, contracting, and tax-related purposes.
To determine the NAICS code that corresponds to your business, check out the NAICS tools provided below (ANCHOR). The system, which was adopted in 1997 to replace the Standard Industrial Classification (SIC) system, was developed under the Office of Management and Budget (OMB).
Key Points:
NAICS Codes and the Federal Market
By understanding and utilizing the NAICS classification system, you can better position your business to meet the needs of the federal marketplace. At GSA Focus, we can help you navigate the complexities of the NAICS and GSA Schedule to maximize your chances of securing government contracts.
The North American Industry Classification System (NAICS) is the standard used by the Federal statistical agencies to categorize business establishments for collecting, analyzing, and publishing statistical data related to the U.S. business economy. It was created by the Office of Management and Budget (OMB) and adopted in 1997 to replace the Standard Industrial Classification (SIC) system. The U.S. Economic Classification Policy Committee (ECPC), along with Statistics Canada and Mexico’s Instituto Nacional de Estadistica y Geografia, developed NAICS to allow for comparable business statistics among the North American countries.
The official government website offers the latest updates on NAICS revisions and access to various NAICS reference files and tools. Additional information on the background and development of NAICS can be found in the website’s history section.
Where Can I Get a Current List of NAICS Codes?
The best site we have found to search for your NAICS Codes is:
2022 NAICS Code Large Categories
The following table provides detailed information on the structure of NAICS.
This table lists NAICS sectors with their definition. Selecting sector number will display all related associated results for the selected sector.
How are NAICS Structured into a coding system?
The North American Industry Classification System (NAICS) uses a 6-digit code to classify industries, whereas the Standard Industrial Classification (SIC) uses a 4-digit code. The longer NAICS code offers greater detail and more flexibility in categorizing subsectors. The first five digits of the NAICS code are standardized among the three North American countries, but the sixth digit, where used, can vary to meet the specific needs of each country. This allows for greater precision in identifying industries in the respective countries, while still maintaining a standardized system at the 5-digit level.
I How Can I Determine the Correct NAICS Code for My Business?
To ensure you have the correct NAICS code for your business, follow these simple steps. First, identify the primary business activity, and then use the NAICS sectors provided above. Next, you have two options to find the appropriate code:
Utilize the NAICS United States Structure, where you can navigate through the 2-digit, 4-digit, and 6-digit levels to locate the relevant code.
Consult the Alphabetic Index, which lists primary business activities in alphabetical order with their corresponding codes.
Finally, read the complete industry description, including the narrative, cross-references, and illustrative examples, to confirm that it matches the primary business activity of your establishment.
By accurately identifying your NAICS code, you can better position your business to meet the needs of the federal marketplace. This ultimately enables you to take full advantage of opportunities within the GSA Schedule program.
How are NIACS Codes are used to get Government Contracts?
NAICS codes play a critical role in government contracting. Here are some key reasons why businesses must accurately identify their NAICS codes:
- Determine eligibility for specific contracts: The NAICS code assigned to your business determines which industries and types of goods or services your business is eligible to provide to the government. Accurately identifying your NAICS code can help you identify and pursue contracts that align with your business’s strengths and capabilities.
- Help the government identify potential contractors: Government agencies use NAICS codes to identify businesses that are capable of providing the goods or services they need. Accurately identifying your NAICS code can help ensure that your business is visible to government buyers and considered for relevant contracts.
- Assist in identifying small business set-asides: NAICS codes can be used to identify which contracts are set aside specifically for small businesses, based on the size standards defined by the North American Industry Classification System. This can help small businesses identify and pursue opportunities that are reserved for businesses of a similar size.
- Provide the government with data on industry trends: By tracking the use of NAICS codes, the government can gather valuable data on industry trends. This information can help shape their procurement strategies and identify areas where they need to make changes to better align with the needs of the federal marketplace.
How NIACS Codes are registered in the SAM Database?
The North American Industry Classification System (NAICS) codes are a critical component of the government procurement process. For businesses seeking government contracts, accurate registration of their NAICS codes in the System for Award Management (SAM) database is essential.
The SAM database is a centralized repository of information about businesses that want to do business with the federal government. It’s used by all federal agencies to verify a business’s eligibility for government contracts. During registration, businesses must provide information about their company, including their NAICS code. This code is used by the government to identify the types of goods or services the business provides, ensuring they are eligible for contracts in their area of expertise.
Businesses must also ensure their NAICS codes are up-to-date and accurate to maximize their opportunities for success. Inaccurate codes can cause a business to miss out on opportunities that are a good fit for their capabilities, potentially costing them valuable contracts.
Ultimately, NAICS codes are a crucial tool for businesses seeking government contracts. Registering accurate codes in the SAM database increases the chances of a business being selected for contracts that match their expertise, leading to potential growth and success in the federal marketplace. At GSA Focus, we understand the importance of NAICS codes and can help guide businesses through the registration process to maximize their chances of securing government contracts.
History of the NAICS Code
- 1930’s: The Standard Industrial Classification (SIC) system is developed to classify businesses by the type of activity they are primarily engaged in and to promote comparability of business data.
- 1987: The Office of Management and Budget (OMB) updates the SIC system.
- 1991: International Conference on the Classification of Economic Activities is held to explore criticisms of the SIC system.
- 1992: OMB establishes the Economic Classification Policy Committee (ECPC) to conduct a review of economic classifications.
- 1993: OMB announces plans to revise the SIC system for 1997 and the process for revising the SIC is established
- ECPC and Statistics Canada review the existing SIC structure and determine the need for a new industry classification system.
- 1997: The North American Industry Classification System (NAICS) replaces the SIC system.
