If you’re pursuing federal contracts, one of the first steps to getting noticed by government buyers is selecting the right classification for your business. That classification is your NAICS code. While it may seem like a formality, understanding how these codes work is vital for identifying the right opportunities, competing for set-aside contracts, and ensuring your business is searchable and visible within the federal marketplace.

NAICS codes define and categorize every line of business in the U.S. economy. For contractors, understanding NAICS codes is more than just choosing a category—it’s a strategic decision that can influence eligibility and success.

What Are NAICS Codes?

NAICS stands for the North American Industry Classification System. These six-digit codes are used by the U.S., Canada, and Mexico to classify businesses by their primary economic activity. For federal contractors, the correct code selection influences registration, opportunity discovery, and past performance tracking.

Each code corresponds to a specific industry. For example:

• 541330 – Engineering Services
• 541512 – Computer Systems Design Services
• 236220 – Commercial and Institutional Building Construction

Businesses can select multiple codes but must choose a primary one that best represents their core services.

Why It’s Important to Get NAICS Codes Right

For contractors working with federal agencies, understanding NAICS codes is essential because it directly impacts your ability to:

• Locate relevant opportunities on SAM.gov
• Qualify for small business set-asides
• Match with teaming partners based on similar services
• Be visible in searches conducted by agency buyers

Choosing incorrect or overly broad codes can reduce your visibility or disqualify you from opportunities you might otherwise be eligible for.

How NAICS Codes Are Assigned and Used

When you register in the System for Award Management (SAM), you self-select your NAICS codes. These selections appear on your public profile, are used in Dynamic Small Business Search (DSBS), and affect how you are matched to solicitations.

Federal contracting officers assign a single NAICS code to each opportunity. If your business doesn’t have that code included in its SAM profile, you might not receive alerts or be considered eligible.

Best Practices for Selecting NAICS Codes

To make the most of your registration and improve opportunity targeting, follow these tips:

1. Match Capabilities Accurately

Start with a close review of your service offerings. Then use the NAICS search tool to find codes that best align with your primary and secondary capabilities.

2. Check Historical Data

Look at recent awards in your sector and see which NAICS codes were used. This helps guide realistic, data-informed selections.

3. Align With Your Growth Strategy

Your primary code should reflect your core focus, but additional codes can support future expansion. Just make sure you have—or are building—the qualifications to support them.

4. Keep Codes Updated

As your offerings evolve, so should your NAICS profile. Annual updates help ensure accuracy and visibility.

NAICS Codes and Small Business Eligibility

NAICS codes are closely tied to the Small Business Administration’s (SBA) size standards. Each code has a corresponding size threshold, based on either average annual revenue or number of employees. This determines whether you qualify as a small business under a given code.

For example:

• 541330 – $25.5 million
• 541512 – $34 million
• 561210 – $47 million

Understanding NAICS codes and their size thresholds is especially important if you’re pursuing set-aside contracts or applying for programs like 8(a) or WOSB. Being misaligned can result in disqualification—even if your company would otherwise qualify.

Where NAICS Codes Show Up

You’ll encounter NAICS codes in several key areas of federal contracting:

• SAM.gov profiles
• DSBS listings
• Federal solicitations
• Proposal submissions
• Market research tools

Ensuring your NAICS selections are relevant and correctly applied boosts both compliance and competitiveness.

How to Optimize Your Profile

To ensure the best outcomes, focus on clarity and accuracy in your business profile:

• Use plain language to describe capabilities aligned with your codes
• Choose codes used by agencies that match your target market
• Review your competitors to spot any strategic gaps or additions
• Periodically update your codes to reflect current capabilities

These steps support better matchmaking, teaming opportunities, and positioning within agency market research efforts.

Resources to Support NAICS Code Selection

If you’re still working on understanding NAICS codes, there are several tools and resources to guide you:

• SAM.gov: Use NAICS filters to view opportunities in your industry
• SBA Size Standards Table: Match codes to size eligibility
• NAICS Association tools (naics.com): Browse and compare code definitions
• Historical award databases: Research competitors and trends by code

NAICS code strategy can and should evolve. As you gain new experience and qualifications, revisit your selections to stay aligned with your market goals.

If you’d like assistance refining your NAICS code strategy or strengthening your federal business development profile, contact us. Hinz Consulting helps contractors improve their visibility and alignment with agency expectations by building smarter profiles and targeting the right opportunities.