References on this page to the System for Award Management (SAM) will go into effect on July 29, 2012 until then please continue to use the Central Contractor Registration (CCR), and the Online Representations and Certifications Application (ORCA), to register your business with the government. SAM will replace CCR & ORCA on July 29, 2012. For more information on SAM visit www.sam.gov. If you or your customers require any assistance (troubleshooting, data concerns, general information, etc.) with SAM contact the Federal Service Desk at fsd.gov or by telephone at 1-866-606-8220.
What is NAICS?
The North American Industry Classification System (NAICS) is an industry classification system that groups establishments into industries based on the activities in which they are primarily engaged. SBA uses NAICS as a basis for its size standards. NAICS is used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.” It is also used for many other things, such as administrative, contracting, and tax purposes. NAICS is production – not product – oriented, and businesses are classified with others that have similar methods of production. Your NAICS code classifies the economic sector and industry, according to your economic activity.
An NAICS code has six digits. The first two indicate the economic Sector, the third the Subsector, the fourth the Industry Group, the fifth the Industry, and the sixth the U.S. Industry.
Why do I need it?
Some federal and state agencies use NAICS codes for administrative, contracting, and tax purposes. As an example, the U.S. Department of Transportation provides a reduced HAZMat registration fee for small businesses; but those businesses must identify their NAICS code when they apply for the reduced fee. Some state governments offer tax incentives to businesses from specific NAICS industries.
The United States Census Bureau uses NAICS codes for its economic statistical data and reports.
If you intend to contract with the Federal government, start by identifying your NAICS code(s).
Do I qualify for Federal government set-aside contracting?
The Federal government sets aside procurement opportunities for small business concerns. To qualify for a “small business set-aside” you must at least be a for-profit business concern and meet the small business size standard for the NAICS code that the contracting officer assigns to the procurement. That may or may not be the same as your principal business activity. However, that does not stop you from bidding, if you meet the size standard.
For more about qualifying as a small business see What is a Small Business?
For more about SBA’s contracting programs see SBA’s Contracting page.
Be sure you register your business and complete the online representations and certifications in the System for Award Management (SAM). Registration is not required for subcontracting with other companies, but SBA recommends that you consider doing so. Large government contractors have small business goals; they search for and track small businesses with whom they do businesses. Registering in SAM is one way you can let them know you are out there. Once you complete your SAM registration, it will tell you if you are a small business for one or more of the NAICS codes you put into your SAM profile. Yes, you can enter all the NAICS codes that describe what you do, can do, or would like to do as a prime or a subcontractor.
What’s my NAICS code?
Visit the United States Census Bureau website for more information on identifying your NAICS code(s). We recommend using a single word for a search term. You can truncate your search term to get even more results.
Other resources that may be helpful if you read this article
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Summary of Size Standards by Industry
