NAICS Codes: How to Find, Choose, and Use Them for Government Contracts

Every government contract opportunity is assigned a NAICS code that determines which industry the work falls into, what size standard applies, and which businesses qualify as small for that particular procurement. Choosing the right NAICS codes for your business affects everything from your SAM.gov registration to your certification eligibility, your contract search filters, and whether you qualify as a small business on specific opportunities.

Despite their importance, NAICS codes confuse many contractors. The system includes over 1,000 six-digit codes across 20 industry sectors, and the differences between similar codes can mean millions of dollars in size standard variations. A company that picks the wrong primary NAICS code might inadvertently disqualify itself from small business set-asides or miss relevant contract opportunities entirely.

This guide explains what NAICS codes are, how to find the right codes for your business, how size standards work, and how to use NAICS codes strategically in your government contracting efforts.

What Is a NAICS Code?

A NAICS code (North American Industry Classification System) is a standardized six-digit number used to classify businesses by their primary economic activity. Developed jointly by the United States, Canada, and Mexico, the NAICS system replaced the older Standard Industrial Classification (SIC) system in 1997.

In government contracting, NAICS codes serve three critical functions:

1. Industry classification. Every federal contract opportunity is assigned a NAICS code that defines the industry sector of the work.
2. Size standard determination. Each NAICS code has an associated SBA size standard that defines the maximum size a business can be and still qualify as "small" for contracts in that industry.
3. Procurement tracking. The government uses NAICS codes to track spending patterns, set small business goals, and analyze procurement data by industry.

NAICS Code Structure

NAICS codes follow a hierarchical structure:

The more digits, the more specific the classification. Government solicitations use the full six-digit code.

How to Find the Right NAICS Codes

Selecting the right NAICS codes requires matching your actual business activities to the code descriptions in the NAICS manual. Here are the most effective approaches:

Method 1: SamSearch AI NAICS Code Lookup

SamSearch's NAICS Code Lookup uses AI to match your business description to the most relevant NAICS codes. Simply describe your products or services in plain language, and the tool recommends appropriate codes with explanations of why each code fits.

This is the fastest way to identify NAICS codes, especially if you offer services that could fall under multiple classifications.

Method 2: Census Bureau NAICS Search

The U.S. Census Bureau maintains the official NAICS database at census.gov/naics. You can search by keyword or browse the hierarchical structure.

Method 3: Analyze Similar Contracts

Search SamSearch or SAM.gov for contracts similar to the work you perform. Note which NAICS codes are assigned to those contracts. This approach tells you which codes contracting officers actually use for work like yours, which may differ from what the NAICS manual suggests.

Method 4: Competitor Research

Use USAspending.gov to look up competitors' contract awards. The NAICS codes on their contracts indicate which codes are relevant for businesses like yours.

Best Practices for NAICS Selection

• Be accurate. Select codes that genuinely describe your business activities. Do not select codes just because they have higher size standards.
• Be thorough. List all codes that apply to your various business lines. Most businesses legitimately fall under 3 to 10 NAICS codes.
• Choose your primary code carefully. Your primary NAICS code should reflect your dominant revenue-generating activity. It determines your default size standard.
• Consider future work. If you plan to pursue work in a new area, include the relevant NAICS code even if you have not performed that work yet (provided you have the capability).

SBA Size Standards Explained

Every NAICS code has an associated SBA size standard that defines the maximum business size for small business qualification. Size standards vary significantly across industries.

Types of Size Standards

Revenue-based: Most service and construction NAICS codes use annual revenue as the size standard. Revenue is calculated as average annual receipts over the most recent five completed fiscal years.

Examples:

• NAICS 541512 (Computer Systems Design Services): $34 million
• NAICS 541611 (Administrative Management Consulting): $19 million
• NAICS 236220 (Commercial Building Construction): $45 million

Employee-based: Manufacturing and some other NAICS codes use number of employees as the size standard. Employee count is based on the average number of employees over the most recent 24 calendar months.

Examples:

• NAICS 336411 (Aircraft Manufacturing): 1,500 employees
• NAICS 311812 (Commercial Bakeries): 1,000 employees
• NAICS 332710 (Machine Shops): 500 employees

Why Size Standards Matter

Your small business status is determined on a contract-by-contract basis using the NAICS code assigned to each specific solicitation. This means:

• You might be small under one NAICS code (with a $47 million threshold) but large under another (with a $12 million threshold).
• A single company can qualify for small business set-asides under some contracts but not others.
• Your primary NAICS code's size standard applies for general small business designations (like SBA certifications), but the solicitation-specific NAICS code applies for individual contract eligibility.

Affiliation Rules

When calculating your size, the SBA considers not just your company but also affiliates. Companies that are connected through ownership, management, or other controlling interests may have their revenues or employee counts combined. Common affiliation scenarios:

• Parent-subsidiary relationships
• Joint ventures and partnerships
• Shared management or board members
• Economic dependence on another firm

How Agencies Use NAICS Codes in Solicitations

When a contracting officer creates a solicitation, they assign a NAICS code based on the principal purpose of the contract. This assignment has significant implications:

Determining Small Business Status

The assigned NAICS code determines which companies qualify as small for that specific procurement. This affects whether the contract can be set aside for small businesses and which businesses can compete.

Set-Aside Decisions

Contracting officers consider the number of capable small businesses available under the assigned NAICS code when deciding whether to set aside the procurement. If they can identify at least two capable small businesses (the Rule of Two), the contract should be set aside.

NAICS Code Appeals

If you believe a contracting officer assigned the wrong NAICS code to a solicitation, you can file an appeal with the SBA's Office of Hearings and Appeals (OHA) within 10 calendar days of the solicitation issuance. The OHA can change the assigned NAICS code, which may change the applicable size standard and the pool of eligible small businesses.

Common reasons for appeals:

• The code does not reflect the principal purpose of the contract.
• A more specific code exists that better describes the work.
• The assigned code has a size standard that unfairly excludes qualified small businesses.

NAICS Codes in Your SAM.gov Registration

Your SAM.gov registration includes a section where you list your NAICS codes and designate one as your primary code.

How to Set Up NAICS Codes in SAM.gov

1. Navigate to your entity registration in SAM.gov.
2. In the NAICS codes section, add all codes that describe your business activities.
3. Designate one code as your primary NAICS code. This should reflect your largest revenue-generating activity.
4. Your small business size status will be calculated based on each NAICS code's size standard.

Updating Your NAICS Codes

You can update your NAICS codes at any time through your SAM.gov registration. Add new codes as you expand into new service areas, and remove codes that no longer apply.

Impact on Certifications

Your primary NAICS code determines:

• Your default small business size standard for SBA certification purposes.
• Whether certain certification programs apply (e.g., WOSB set-asides are limited to designated NAICS codes).
• How contracting officers and agencies find your business when searching for vendors in specific industries.

Using NAICS Codes in Your Contract Search

NAICS codes are essential search filters when looking for government contract opportunities.

Searching by NAICS Code

When using SamSearch's Contract Search or SAM.gov:

• Filter opportunities by your NAICS codes to find relevant solicitations.
• Search multiple NAICS codes to capture opportunities that might be classified under different codes than you expect.
• Set up saved searches or alerts for your priority NAICS codes.

Analyzing NAICS Code Spending

Use spending data to understand which NAICS codes offer the most opportunity:

• Total spending: How much does the government spend under each of your NAICS codes?
• Set-aside percentage: What proportion of spending is set aside for small businesses?
• Top agencies: Which agencies spend the most under each code?
• Competition level: How many businesses are competing for work under each code?

This analysis helps you prioritize which NAICS codes to target most aggressively.

Common NAICS Code Mistakes

Selecting codes for size standard advantages. Some businesses choose NAICS codes with higher size standards even when the code does not accurately describe their work. This can create problems during SBA reviews and size protests.

Using too few codes. Limiting yourself to one or two NAICS codes means missing opportunities that are classified under related codes. Most businesses should register 5 to 10 codes.

Using too many irrelevant codes. Listing dozens of NAICS codes that do not reflect actual capabilities dilutes your profile and can raise credibility questions.

Ignoring the primary code designation. Your primary NAICS code affects your size standard for certifications and general small business status. Choose it deliberately based on your dominant revenue activity.

Not monitoring NAICS code updates. The system is revised every five years, and size standards can change at any time. A size standard increase could make you eligible for set-asides, while a decrease could push you out of small business status.

Not appealing wrong assignments. If a solicitation uses a NAICS code that does not fit the work and the resulting size standard disadvantages you, file an appeal. Many contractors do not know this option exists.

Frequently Asked Questions

What is a NAICS code?

A NAICS code is a six-digit number that classifies businesses by industry. The federal government uses NAICS codes to categorize contract opportunities, determine small business size standards, and track procurement spending. Every solicitation is assigned a NAICS code that determines which businesses qualify as small.

How many NAICS codes can I have?

There is no limit. You can list as many NAICS codes as accurately describe your business activities in your SAM.gov registration. Most businesses register 3 to 10 codes. You must designate one as your primary NAICS code.

How do I find the right NAICS code for my business?

Use SamSearch's AI NAICS Code Lookup to describe your business in plain language and receive recommended codes. Cross-reference by searching for similar contracts on SAM.gov and analyzing competitors' awards on USAspending.gov. Also consult the Census Bureau's official NAICS database.

What are SBA size standards?

SBA size standards define the maximum size a business can be while still qualifying as small for a specific NAICS code. Standards are expressed as either maximum annual revenue or maximum employee count, depending on the industry. Each NAICS code has its own size standard.

Can I be small under one NAICS code and large under another?

Yes. Size standards vary by NAICS code. A company with $20 million in annual revenue would be small under a NAICS code with a $34 million threshold but large under a code with a $16.5 million threshold. Status is determined by the NAICS code assigned to each specific solicitation.

Who assigns the NAICS code on a solicitation?

The contracting officer assigns the NAICS code based on the principal purpose of the contract. This determines the applicable size standard and whether the procurement can be set aside for small businesses. Contractors can appeal NAICS code assignments through the SBA.

What happens if the wrong NAICS code is assigned?

You can file a NAICS code appeal with the SBA's Office of Hearings and Appeals within 10 calendar days of the solicitation posting. The OHA reviews the appeal and can change the assigned code, which may change the size standard and the competitive field.

How often do NAICS codes change?

The NAICS system is updated every five years by the Census Bureau, with the most recent update in 2022. The SBA also adjusts size standards independently. Monitor changes that affect your codes, as size standard modifications can impact your small business eligibility.

Next Steps

Start by identifying the NAICS codes that accurately describe your business activities using SamSearch's NAICS Code Lookup. Update your SAM.gov registration with all relevant codes and designate your primary NAICS code strategically based on your dominant revenue activity and desired size standard.

Then analyze spending data for each of your NAICS codes using SamSearch's Contract Search to understand where the opportunities are and which agencies to target.

For guidance on registering in SAM.gov, see our SAM.gov Registration Guide. For an overview of starting in government contracting, see our Beginner's Guide.