What is NAICS?

By Chris Wiedemann, consultant

Over the course of this series, we’ve covered a lot of the ins and outs of government contracting in the IT and COTS space.

Of course, the government buys products and services across the full range of the American economy, in addition to its role in monitoring, reporting on and regulating American industry. That led to the need for a classification system to bucket American companies based on the service or product they provide – the North American Industrial Classification System (NAICS).

NAICS codes, as they are known, are six-digit codes that categorize companies and are used by the government in different ways. For example, every solicitation that an agency releases must indicate a primary NAICS that the solicitation pertains to (and, in some cases, additional NAICS codes that might apply).

For the sales community, NAICS codes are primarily of interest because they determine set-aside thresholds. As we’ve discussed before, set-aside codes are the means that the government uses to ensure that small, or otherwise disadvantaged, businesses are represented in competition.

Of course, the obvious question is, what defines a “small business?” – and the answer lies in NAICS codes. Specifically, different NAICS categories have different size thresholds for small business, defined either by employee count or annual revenue. That means that you’ll want to familiarize yourself with the NAICS code that applies to your industry as well as the relevant size standards – you want to know if you qualify as a small business, or whether you need to partner with a company that does, for each bid you submit.

Of course, knowing NAICS codes will only get you so far. For a more in-depth look at key partners, upcoming opportunities or anything else of interest in your territory, learn more about how immixGroup’s Market Intelligence organization can help.

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