Choosing the Right NAICS Codes for Government Contracts

A NAICS code is the six-digit industry classification the federal government uses to decide what your business does — and it drives whether you count as a "small business" and which set-asides you can win. The SBA attaches a size standard to almost every code, so the code you're measured under is an eligibility test, not a formality. You self-select your codes in SAM.gov, but on any individual solicitation the contracting officer assigns the single code that governs that award.

Pick the wrong NAICS code and you can lose a set-aside you actually qualified for — or count as "small" in one industry and "other than small" in another. Here is how NAICS codes work, why a single number can decide your eligibility, and how to choose the codes that match how the government buys.

What a NAICS code actually is

NAICS — the North American Industry Classification System — is the standard the federal government uses to classify businesses by what they do. Every code is six digits, moving from broad sector to specific industry: the first two digits name the sector, and each additional digit narrows the activity down to a national industry.

The system is maintained by the U.S. Census Bureau, under the Office of Management and Budget's Economic Classification Policy Committee, and it is reviewed and revised every five years, in years ending in 2 and 7. The 2022 revision is the current version, and a 2027 update is already in progress — the Census Bureau began soliciting proposed changes for the next cycle in 2026. For contracting purposes, that five-year rhythm matters: when NAICS changes, the size standards attached to those codes get remapped, which is why the SBA issued a final rule adopting NAICS 2022 for its size-standard table.

One clarification up front: NAICS codes are not the same as Product Service Codes (PSCs). NAICS describes what kind of business you are; PSCs describe the specific product or service being bought on a given solicitation. Both appear in federal opportunities, but only the NAICS code is tied to your small-business size status.

Why one code decides whether you're "small"

This is the part that trips up new contractors. "Small business" is not a single, company-wide status — it is measured per NAICS code.

The SBA assigns a size standard to nearly every NAICS code, and publishes them all in its Table of Small Business Size Standards. A size standard is the largest a firm can be and still count as small in that industry. Most standards are one of two types:

• Receipts-based — a cap on your average annual revenue (for example, many professional-services industries).
• Employee-based — a cap on your headcount (most manufacturing and wholesale industries).

Because the caps differ by industry, the same company can be small under one code and "other than small" under another. A firm that comfortably clears the size standard for a consulting NAICS might blow past a lower-revenue cap in a different code — so the code you're measured under isn't a formality, it's the eligibility test.

How the SBA calculates your size is worth knowing precisely:

• Receipts are now averaged over your most recently completed five fiscal years, divided by five. That five-year window replaced the old three-year average under the Small Business Runway Extension Act of 2018, codified at 13 CFR 121.104. The longer window helps growing firms stay small a little longer as they scale.
• Employees are the average number of people employed per pay period over your latest 12 calendar months, counting everyone — full-time, part-time, and temporary.

The SBA reviews its size standards on a rolling five-year cycle, so the exact dollar and headcount figures shift over time. Always confirm the current number in the official table rather than relying on a figure you saw a few years ago.

How to find the codes that fit your business

Choosing codes is less about finding the "perfect" one and more about accurately describing your primary line of work and the related work you can credibly perform.

Start at the source. The Census Bureau's NAICS search tool lets you type in a keyword — "janitorial," "software," "catering" — and see the matching six-digit codes with their official definitions. Read the full definition, not just the title: NAICS descriptions include "illustrative examples" and cross-references that tell you exactly what does and doesn't belong in a code.

Then reason backward from how the government buys what you sell. Look at recent awards and open solicitations in your field and note which NAICS codes agencies actually attach to that work. If buyers consistently use one code for the services you provide, that's a strong signal it should be among your codes — regardless of how you'd describe yourself in plain English. A quick scan of open opportunities on a tool like the WedgeBid RFP search shows you the codes real buyers are using in your space.

Pick a primary code that best reflects your core revenue, then add secondary codes for genuine adjacent capabilities. Resist the urge to claim codes you can't actually perform — misaligned codes invite size-status challenges and waste your time on opportunities you can't win.

Primary vs. multiple codes in SAM.gov

When you register in SAM.gov, you self-select your NAICS codes, and you're not limited to one. A business that sells multiple products or services will generally have a primary NAICS code plus additional codes covering its other lines of work.

Two practical points:

• You self-certify your size for each code. SAM.gov reflects, per NAICS code, whether you're small under that code's size standard. Because the caps differ, your profile can show "small" for some codes and not others — and that's normal, not an error.
• Your primary code carries weight beyond bidding. It's the code most associated with your firm in federal systems and is used for some reporting and benchmarking, so choose it to reflect where your real revenue comes from, not your most aspirational offering.

Listing extra codes doesn't hurt you and can surface you in more buyer searches — but only list codes you can actually perform. Padding your profile with unrelated codes makes you harder to take seriously and exposes you to size-status disputes.

The code the government actually uses on a solicitation

Here's the twist that catches people off guard: on any specific opportunity, the government — not you — decides which NAICS code applies.

Under FAR 19.102, the contracting officer must designate the single NAICS code that "best describes the principal purpose" of what's being acquired, and — except for multiple-award contracts — every solicitation contains only one NAICS code and its one corresponding size standard. That single designation governs the whole competition: it sets the size standard bidders are measured against and determines who counts as small for that award.

This is exactly why your own code choices matter but don't control the outcome. You might classify your firm one way, but if the contracting officer attaches a code with a lower size standard, a firm you thought was a competitor might now qualify as small — or you might not.

When the assigned code looks wrong, you have a remedy — but a tight one. Under FAR 19.103, an appeal of the contracting officer's NAICS code designation must be filed with the SBA's Office of Hearings and Appeals within 10 calendar days after the solicitation is issued (or amended in a way that changes the code or size standard). Miss that window and OHA will dismiss the appeal as untimely, and the designation becomes final. If a miscoded solicitation is shutting eligible small firms out — or letting large firms in — the 10-day clock is the thing to watch.

A practical checklist for choosing your codes

Pulling it together, here's how to choose NAICS codes you won't regret:

• Identify the primary code that matches the largest share of your revenue, and read its full Census Bureau definition — not just the title.
• Confirm the size standard for that code in the SBA table, and check that you clear it using the five-year receipts average or 12-month employee average.
• Add secondary codes only for work you can genuinely deliver, guided by the codes buyers actually use in your field.
• Set your primary NAICS in SAM.gov deliberately, and verify your small-business status shows correctly for each code.
• On each solicitation, read the assigned NAICS code and size standard first — and if it's clearly wrong, weigh a NAICS appeal inside the 10-day window.

Where to start this week

If you're setting up or cleaning up your federal profile, the highest-leverage move is getting your codes and size status right before you chase opportunities. Start by pressure-testing your eligibility with the free WedgeBid eligibility checker, make sure your SAM.gov registration lists an accurate primary and secondary set of NAICS codes, and align the capability statement you'll hand to buyers so it speaks to the same codes they search under. Want a second set of eyes on whether your classification and size status will hold up? Request a WedgeBid readiness audit — getting the foundation right first is what keeps a coding mistake from quietly costing you contracts.

Not legal advice — see our disclosures for full disclaimers.