The world of government contracting is full of acronyms and abbreviations--there's UEIs, SINs, CAGE Codes, and the topic at hand, NAICS Codes. It’s like learning a new language full of capitalized letters. As both a government contractor and consultant, we know North American Industry Classification System (NAICS) Codes are an important identifier for your business, but what exactly is a NAICS Code and why is it relevant to GSA Schedule contractors? Let’s dive into 5 FAQs about NAICS Codes.
1. What is a NAICS Code?
A NAICS Code, which stands for North American Industry Classification System, is a standard used by federal statistical agencies to classify business establishments for the collection, tabulation, presentation, and analysis of statistical data associated with the U.S. economy. NAICS Codes are created and distributed by the Executive Branch’s Office of Management and Budget (OMB).
So, what does that really mean? To put it simply, NAICS Codes are reference numbers used to classify the types of services and products businesses provide. Each industry has a unique title and description and agencies use these categories to fulfill their procurement needs, so it’s important your business falls into the right sector. Some examples of industry titles are Educational Services, Health Care and Social Assistance, Mining, and Construction.
2. Why Are NAICS Codes Relevant to GSA Contractors?
More importantly to GSA Schedule contractors, NAICS Codes group establishments into industries according to similarity in the processes used to produce goods or services. This means agencies will categorize opportunities based off the primary NAICS Code required to complete a project.
As a contractor, you can use NAICS Codes to your advantage—use them to discover opportunities in SAM.gov, or conduct a search on the historical spending of government contractors in the Schedule Sales Query Plus.
Additionally, NAICS Codes can help determine if your company qualifies as a small business through the Small Business Act. If your company is considered a small business by the Small Business Administration (SBA), you may be eligible for small business set-asides. These are contracting opportunities specifically reserved for small businesses, or even further categorized by socio-economic status such as Women-Owned or Service-Disabled Veteran-Owned small businesses.
3. How Are NAICS Codes Assigned?
As mentioned earlier, NAICS Codes are grouped together into industries based on similarities in processes used to produce goods and services. But who determines what business is slotted under which NAICS Code?
NAICS codes are self-assigned. This means a firm can select the NAICS Codes that best apply to the core of their business in the System for Award Management (SAM) ahead of submitting a GSA proposal or responding to other contract vehicles. If you don't believe your NAICS Code best represents your business, or circumstances have changed, companies may be able to request a NAICS Code change as long as it’s relevant to the scope of their business and falls within the same category.
The only instance in which a NAICS Code cannot be self-assigned is when it is dealt through OSHA (Occupational Safety and Health Administration), the EPA (Environmental Protection Agency), or the DEP (Department of Environmental Protection).
Each business establishment only has one primary NAICS Code, but you can select more than one code over all. That being said, you should only select codes that are relevant to the services and products you provide.
NAICS Codes are updated by the federal government every 5 years to address the changes made in the economy. The most recent version of NAICS is from 2022, and can be found on the Census.gov website.
4. How Do I Find Out What My NAICS Code is?
If you are already a GSA Schedule holder, your current primary NAICS Code can be found under “Contract Information” on your GSA eLibrary page.
While a large number of companies have multiple NAICS codes, a primary NAICS Code is a number that is used to indicate a company’s primary line of business. Your full list of NAICS Codes can also be found on your SAM page. GSA Schedule holders are required to have a SAM registration, but many businesses who are not directly affiliated with GSA hold a SAM registration as well.
To view your NAICS through SAM, simply search for your business name under the “Search Records” by listing either your legal entity name, your Unique Entity Identifier (UEI), or your CAGE (Commercial and Government Entity) Code. Select “View Details” next to your company name, then select “Entity Registration” under the Entity Dashboard tab on the left side of the page. Your current NAICS Codes will be listed under the “Good and Services” section of your Entity Registration in your SAM page.
5. How are NAICS Codes Different From Special Item Numbers (SINs)?
Among the various acronyms and abbreviations you have to learn as a GSA Schedule contractor is Special Item Numbers or SINs. Many of our clients come to us confused, asking what the difference is between NAICS Codes and SINs since a lot of them seem to be almost identical.
The main difference is SINs are specific to GSA. NAICS Codes are used by the Census Bureau and across the government and business world, but SINs are only used in the GSA Multiple Award Schedule (MAS) program. Additionally, SINs are used to describe a specific product or service you offer through your GSA Schedule, and do not categorize your primary industry as a whole. For example, if you offer several types of professional services, and one of them is IT, you would need a SIN for IT and each service you intend to offer on your contract. Contractors often have several SINs but they only have one primary NAICS Code.
The reason both codes may look so similar is because GSA cross-walked NAICS and SINs a few years ago so they match more closely and are easier to identify. One thing that's important to note, however, is that having a certain NAICS Code does not mean you are automatically eligible to add that SIN to your contract. You must ensure the SIN is appropriate to your offerings and you complete any specialized requirements before adding to your contract whether through a modification or through the initial proposal process.
Use Your NAICS Code to Your Advantage
It’s important for GSA Schedule contractors to understand the purpose of NAICS codes and have a general idea of how they function. This is especially true since NAICS codes are now practically one and the same with the SIN Numbers they are associated with, and therefore go a long way in representing the essence of each contract.
Don’t let your NAICS code be just another number you have to memorize—use it to identify business opportunities, to see if you qualify as a small business, and to conduct research on government contractors to learn more about their spending habits.
For more information about NAICS codes, we encourage you to read NAICS Codes—What Do they Mean for my Business and Identify Your Best Opportunities with NAICS Codes. Do you have more questions about NAICS codes and the GSA Schedule? Contact us today!
