North American Industry Classification System (NAICS)

Definition

The North American Industry Classification System (NAICS) is a 6-digit code system jointly maintained by the U.S., Canada, and Mexico. The Census Bureau manages U.S. NAICS. On federal contracts, the contracting officer designates a single NAICS code per solicitation that best represents the work. NAICS drives the applicable small-business size standard (either revenue- or employee-based), and therefore who qualifies as a small business for set-aside eligibility. The SBA's size-standards table maps NAICS codes to dollar or headcount thresholds.

Why It Matters

NAICS is how the government decides whether your firm is 'small' for each specific procurement. A firm that is small under NAICS 541519 ($34M) may not be small under NAICS 541512 ($34M) if it exceeds the threshold, or may be considered 'other than small' even if small in its primary NAICS. Choosing the right primary NAICS in SAM.gov affects your set-aside eligibility, your bidding strategy, and your size recertification obligations on long-term vehicles.

Example

A firm with $22M in revenue bids on a solicitation under NAICS 541519 ($34M standard) and qualifies as small. A week later, it bids under NAICS 541330 ($25.5M standard) and still qualifies. Two months later, with revenue at $28M, it no longer qualifies under NAICS 541330 but remains small under 541519.

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