Federal Contracting Glossary
NAICS Code & Size Standard
The industry classification code assigned to a solicitation and its associated SBA size standard, which together determine small-business eligibility.
Definition
The North American Industry Classification System (NAICS) code is the six-digit industry code the contracting officer assigns to a solicitation to describe the principal purpose of the requirement. Each NAICS code carries an SBA size standard — either a maximum number of employees or a maximum average annual receipts figure — that defines how large a firm can be and still qualify as "small" for that acquisition.
The assigned NAICS code therefore drives small-business eligibility, set-aside decisions, and which firms can compete on a set-aside or claim socioeconomic status. Offerors self-certify their size against the solicitation's NAICS code in SAM.gov; a size representation can be challenged, and getting it wrong — or applying the wrong NAICS — can disqualify an offer. Many requirements also carry a Product Service Code (PSC) describing what is being bought.
How this affects your proposal
Check the NAICS code on the solicitation and confirm you qualify as small under its size standard before you rely on a set-aside. If the assigned NAICS looks wrong for the work, you can challenge it early — but only within the deadline the rules allow.
Common questions about naics code & size standard
How is small-business size measured?
By the SBA size standard tied to the solicitation's NAICS code — an employee count for some industries, average annual receipts (typically over a multi-year period) for others. You self-certify in SAM.gov.
What is the difference between a NAICS code and a PSC?
NAICS classifies the industry and sets the size standard; the Product Service Code (PSC) classifies the specific product or service being purchased. A solicitation can reference both.
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