NAICS (North American Industry Classification System)

What is NAICS?

NAICS (the North American Industry Classification System) is the standard used by US federal statistical agencies and procurement systems to classify business establishments by their line of activity. NAICS codes are six digits, organized hierarchically from a two-digit sector down to the six-digit national industry. In federal contracting, the contracting officer assigns a primary NAICS code to each solicitation that best describes the principal purpose of the requirement.

NAICS codes matter for contracting because the Small Business Administration (SBA) ties its small-business size standards to them. Each NAICS code carries a size standard — expressed either as a maximum number of employees or maximum average annual receipts — that determines whether a business counts as small for that requirement. Because size standards vary by code, the same company can be small under one NAICS code and other-than-small under another. The NAICS code assigned to a solicitation therefore governs which size standard applies and, in turn, which firms are eligible for small-business set-asides.

For vendors, choosing accurate NAICS codes in SAM.gov determines whether you surface in contracting officers' market research and whether you qualify as small for a given opportunity. Reviewing the solicitation's assigned NAICS code — and its corresponding SBA size standard — is a basic qualification step before deciding to bid.