How to Choose NAICS Codes for Government Contracts & SBA Size Standards | Intandem

Step 1: Understand How Contracting Officers Assign NAICS Codes to RFPs (FAR 19.102(b) / 13 CFR 121.402)

Every federal solicitation can have only ONE official NAICS code—and that single code determines the SBA size ceiling for the entire contract.

Under FAR 19.102(b), a Contracting Officer must designate a single 6-digit NAICS code in every solicitation that best describes the "principal purpose" of the product or service being acquired. Even if an RFP includes software development, cloud hosting, cybersecurity training, and helpdesk staffing, the Contracting Officer picks just one primary code (for example, `541512` Computer Systems Design Services).

Because human Contracting Officers across 100+ agencies interpret scopes differently, two identical RFPs at the Department of Veterans Affairs and the Department of Defense are routinely posted under completely different NAICS codes. If you only monitor a single code, you will miss more than half of the contracts you are qualified to win.

Step 1 Checklist

• Understand the 6-digit hierarchy: the first 2 digits represent the Sector (e.g., `54` Professional/Technical, `23` Construction, `56` Administrative/Support), and all 6 digits define the exact federal industry.
• Never filter your opportunity pipeline by a single NAICS code alone.
• Know that you can update your NAICS codes in SAM.gov at any time for free.

Step 2: Build a Cluster of 1 Primary + 6 to 10 Secondary NAICS Codes (13 CFR 121.107)

Group your NAICS codes into a logical "Primary + Adjacent Cluster" based on real federal spending volume.

Your **Primary NAICS Code** in SAM.gov should reflect the activity that generates the largest share of your revenue (or, for a new startup, your flagship offering) and has a high SBA size standard ceiling. Your **Secondary NAICS Codes** should cover every related classification where Contracting Officers commonly place your type of work.

For example, an IT & Cybersecurity firm shouldn’t just list `541512` ($34M size standard). It should also list `541511` (Custom Computer Programming), `541513` (Computer Facilities Management), `541519` (Other Computer Related Services—which also unlocks the 150-employee Value-Added Reseller exception!), `541611` (Management Consulting), and `518210` (Data Processing & Hosting).

Step 2 Checklist

• Check annual federal and SLED spend for each candidate code in Intandem’s NAICS Directory before selecting it.
• Look up what NAICS codes your top 5 successful small business competitors list in their SAM.gov / USASpending profiles.
• Ensure every NAICS code you plan to bid on is listed in your SAM.gov Assertions tab prior to submitting an offer (FAR 52.219-1).

Research Spend, SBA Size Standards & Live Bids Across 351 NAICS Codes: Use Intandem’s free NAICS Code Directory to view live federal and SLED spending, SBA size standards, top buying agencies, and active solicitations for 351 government contracting codes—plus semantic AI matching that catches misclassified RFPs automatically. Browse the 351 NAICS Directory | Try Semantic AI Contract Search

Step 3: Calculate Your SBA Size Standard (Receipts vs. Employees) (13 CFR 121.104 & 121.106)

Understand how the SBA calculates your 5-year average annual receipts or 24-month average employee count—and how affiliation rules work.

Every NAICS code has either a **Receipts-Based** size standard (most service and construction codes, ranging from $9.0M to $47.0M) or an **Employee-Based** size standard (most manufacturing, wholesale, and R&D codes, ranging from 100 to 1,500 employees).

For receipts-based codes, the SBA takes your "Total Income" plus "Cost of Goods Sold" from your federal tax returns over your **last 5 completed fiscal years** and divides by 5 (if your business has been operating for less than 5 years, you average the years you have been in business). You can be a "small business" under one NAICS code (e.g., `236220` with a $45M ceiling) while exceeding the size standard under a smaller code (e.g., `238210` with a $19M ceiling).

Step 3 Checklist

• Calculate your trailing 5-year average annual gross receipts (including any affiliated companies under common ownership/control per 13 CFR 121.103).
• Verify which of your selected NAICS codes are WOSB or EDWOSB eligible if you are women-owned (FAR 19.15 only applies to designated underrepresented NAICS codes).
• Know that for WOSB/EDWOSB, certain NAICS codes allow restricted competition while others do not.

Step 4: Map Your NAICS Codes to Federal PSCs & State NIGP Codes (DFARS PGI 204.6 & State eProcurement Rules)

State, county, and city procurement portals rarely use NAICS codes—they use NIGP or UNSPSC commodity codes.

While NAICS describes *your industry*, federal **Product Service Codes (PSCs)** (4-character codes like `D302` IT Systems Development or `R408` Program Management) describe *exact what the government is buying* on that specific line item. Adding PSCs to your SAM.gov profile improves your visibility in agency market research.

Even more importantly, when you bid on state, county, municipal, and school district (SLED) portals, over 80% of them categorize bids using **NIGP (National Institute of Governmental Purchasing)** 3-digit class / 2-digit item codes or **UNSPSC** codes instead of NAICS. Make sure your vendor profiles and search tools bridge all three code systems.

Step 4 Checklist

• Add 5–10 matching 4-character Product Service Codes (PSCs) to your SAM.gov Goods & Services assertions.
• Map your core services to 3-digit NIGP classes when registering on state portals like Texas ESBD, Virginia eVA, or North Carolina eVP.
• Use AI semantic matching (rather than rigid code filters alone) so you catch solicitations posted under unexpected codes.