Small business owners can improve their ability to get federal contracts if they understand the nature and use of the North American Industry Classification System (NAICS) and Product and Service Codes.  The purposes of these codes are to collect, analyze and publish statistical data on economic activity in the United States, Mexico and Canada. The Federal Procurement Data System (FPDS) uses these codes to track federal procurement history

NAICS is a two through six-digit hierarchical classification code system offering five levels of detail. The first two digits designate the economic sector, the third digit designates the subsector, the fourth digit designates the industry group, the fifth digit designates the NAICS industry, and the sixth digit designates the national industry. The Product and Service Codes (PSC) are a four digit code system to further describe products, services and research and development purchases by the USG

The report below describes the FY 2012 USG Procurement by NAICS_PSC at the economic sector level. Further breakdown of procurement by NAICS and PSC is available from the FPDS data set located at data.gov.  Four hundred and forty (440) Agency Contracting Offices completed 588,946 transactions with 69,014 vendors in the amount of $49 billion. These transactions were classified using 922 NAICS and 9,733 PSC.

Small business can use these classifications to determine how much the USG buys and which agency contracting offices make the purchase. The FPDS is a good data set to build a federal marketing plan. 

http://fedcontractintel.com/how-important-are-naics-and-psc-to-wining-federal-contracts/