What are NAICS Codes, the North American Industry Classification System codes? Episode 3

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What are NAICS Codes, the North American Industry Classification System codes?  

Welcome to our podcast FedBiz 5, where you get informed, get connected and get results.  In our last episode we discussed, “What is SAM?” – The System for Award Management.   Now we will learn more about NAICS Codes and their importance in your SAM registration.

NAICS Codes are the six-digit identification standard used by federal statistical agencies in classifying businesses for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.  For federal contracting, these are the codes the government researches to find goods and services for award opportunities.

An important part of the SAM registration process is ensuring a business has properly categorized its industry codes in their SAM registration. 

The six-digit NAICS Code can be broken down into specific levels by each digit of the code.  The NAICS code has 20 primary two-digit Sectors. The NAICS hierarchy includes 99 three-digit Subcategories, 311 four-digit Industry Groups, and 709 five-digit NAICS Industry Designations.  There are 1,057 six-digit NAICS Codes.

NAICS Code Structure by Sector:

SECTOR                DESCRIPTION

 | 11 | Agriculture, Forestry, Fishing and Hunting
| 21 | Mining, Quarrying, and Oil and Gas Extraction
| 22 | Utilities
| 23 | Construction
| 31-33 | Manufacturing
| 42 | Wholesale Trade
| 44-45 | Retail Trade
| 48-49 | Transportation and Warehousing
| 51 | Information
| 52 | Finance and Insurance
| 53 | Real Estate and Rental and Leasing
| 54 | Professional, Scientific, and Technical Services
| 55 | Management of Companies and Enterprises
| 56 | Administrative and Support and Waste Management and Remediation Services
| 61 | Educational Services
| 62 | Health Care and Social Assistance
| 71 | Arts, Entertainment, and Recreation
| 72 | Accommodation and Food Services
| 81 | Other Services (except Public Administration)
| 92 | Public Administration

NAICS Codes describe in general “HOW” purchased products and/or services are produced.  For example, NAICS Code 541611 is defined as ‘Administrative Management and General Management Consulting Services.’  NAICS Codes do not describe who a business sells to.  NAICS Codes are based on a production-oriented concept, meaning that it groups businesses into industries according to similarity in the processes used to produce goods and/or services.

In SAM, NAICS Codes should be focused on core business.  Too much disparity or too many NAICS Codes can give the impression the business is not focused.  What do you want to sell to the government? Less is more in this instance, and that focus is very important.

FedBiz Access’ fulfillment team takes the time to understand their client’s business and asks questions to pull information from the client to ensure their registration is complete, optimized and verified.

This podcast is sponsored by FedBiz Access - https://fedbizaccess.com.  For government contracting made simple, call [phone].

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