When we enter a new year, it’s common to spend time reflecting on the past year and set goals for the next 365 days. While our calendar year isn’t over just yet (don’t worry we aren’t glossing over Halloween), the federal government Fiscal year (FY) just ended on September 30th, and we are taking the time to glance back at 2024 and report our findings.
One way to measure the government contracting landscape for the past year is to look at the top North American Industry Classification System (NAICS) Codes. NAICS Codes were created to collect data on the U.S. business economy--each one represents an industry businesses are selling products and services under. With the presidential election coming up, we could see a shift in spending priority, so it's important to document what we are seeing now. Let’s take a closer look at the top NAICS Codes for FY2024 the GSA Multiple Award Schedule Program (MAS).
Top NAICS Codes in FY2024
As mentioned above, NAICS Codes are used to represent industries so we can collect and analyze data on our economy. By looking at the top NAICS you can see where the government spent a lot of their money in 2024 and have a better idea of where your solutions fit into the picture.
One thing to note is since FY2024 ended a few weeks ago, some of the numbers may still need to be reported, so this is the spending information we have so far. We used GSA’s Schedule Sales Query Plus (SSQ+) to create these tables.
Comparing to our FY2023 NAICS Codes numbers, we can see that the codes didn’t change at all, but the order (money spent through these NAICS) did. Last year, NAICS 511210 Software Publishers was listed 4th, but in 2024 it rose to the top, replacing NAICS 541519 Other Computer Related Services. There was about a $270 million drop in spending for Other Computer Related Services this year, while Software Publishers grew about $1.6 billion. The other NAICS Codes grew a little bit year over year.
Contractors Selling Under the Top NAICS of FY2024
If you’re currently selling under one of the top NAICS Codes or plan to, it’s important to understand your market. We put together a table showing the number of contractors under each NAICS for Fiscal Years 2022-2024. While there isn’t any obvious trends we can pull from the increase or decrease of contractors over the year, you can look at each induvial NAICS and see if it’s growing steadily, staying consistent, or even shrinking.
You can also compare the number of contractors to the dollars awarded last year. If the NAICS Code has a smaller number of contractors but large amounts of money awarded, it could be a more competitive market but leaves room for opportunity. If there’s a large number of contractors and a lot of money awarded, it could be a lucrative market, but may be a bit oversaturated.
Top Industries in FY2024
The top 10 NAICS Codes above largely represent 2 industries: IT and Professional Services. This is no surprise as these are consistently the top Large Categories through the GSA MAS program every year. But if you don’t see your NAICS listed above, this doesn’t mean you won’t be successful in your contracting. The federal government buys all kinds of products and services and will always have a need for a wide range of solutions. Here’s a list of the top industries overall and the 2024 spending (as reported so far).
Taking Advantage of Your NAICS Codes
NAICS Codes aren’t only used to measure spending through certain industries. As a government contractor, they also help you determine your business size and find relevant contracting opportunities for your business. It’s important you know your primary NAICS Code so you can see if your company qualifies for small business set-asides and also identify any contracting opportunities that apply to your offerings.
If you have any questions about your NAICS Codes, or your GSA Schedule, feel free to reach out to one of our consultants. We would be happy to help you determine which NAICS Codes best represent your business.
