Understanding NAICS Codes: The Key to Government Contracting Success

What Are NAICS Codes?

NAICS (North American Industry Classification System) codes are 6-digit numbers that classify every business in the US, Canada, and Mexico by industry. The federal government uses NAICS codes to categorize contract opportunities and determine which businesses are eligible to bid.

When an agency posts a contract on SAM.gov, they assign one or more NAICS codes. Your SAM.gov registration lists your business's NAICS codes. The match between these codes is the single most important factor in finding relevant opportunities.

How NAICS Codes Are Structured

NAICS codes follow a hierarchical structure:

• 2-digit: Sector (e.g., 54 = Professional, Scientific, Technical Services)
• 3-digit: Subsector (e.g., 541 = Professional, Scientific, Technical Services)
• 4-digit: Industry Group (e.g., 5415 = Computer Systems Design)
• 5-digit: Industry (e.g., 54151 = Computer Systems Design and Related)
• 6-digit: National Industry (e.g., 541511 = Custom Computer Programming)

Common NAICS Codes for Government Contractors

IT Services

• 541511 — Custom Computer Programming Services
• 541512 — Computer Systems Design Services
• 541513 — Computer Facilities Management Services
• 541519 — Other Computer Related Services
• 518210 — Computing Infrastructure Providers

Consulting

• 541611 — Administrative Management Consulting
• 541612 — Human Resources Consulting
• 541618 — Other Management Consulting
• 541690 — Other Scientific and Technical Consulting

Construction

• 236220 — Commercial and Institutional Building Construction
• 237310 — Highway, Street, and Bridge Construction
• 238210 — Electrical Contractors
• 238220 — Plumbing, Heating, and Air-Conditioning Contractors

Small Business Size Standards

Each NAICS code has a Small Business Administration (SBA) size standard — either a revenue cap or employee count cap. For example:

• 541511 (Programming): $34 million annual revenue
• 541512 (Systems Design): $34 million annual revenue
• 236220 (Construction): $45 million annual revenue

If your business is under the size standard for a given NAICS code, you qualify as a small business for contracts under that code.

Choosing Your NAICS Codes

1. Start with your primary service — what do you actually do?
2. Add adjacent codes — related services you can perform
3. Check size standards — make sure you qualify as small business
4. Research competitors — what codes are similar contractors using?
5. Don't over-select — focus on codes where you have real capability

How GovRadar Uses NAICS Codes

GovRadar's AI matching engine scores every new opportunity against your NAICS codes. An exact 6-digit match scores highest (40 points), while a 4-digit partial match (same industry group) still earns points. Combined with keyword matching, set-aside alignment, and geographic preferences, this gives you a 0-100 relevance score for every opportunity.