NAICS Code
The North American Industry Classification System code — a 6-digit number that classifies a business by the type of economic activity it performs, used to determine small business size standards.
How It Works
Every federal solicitation includes a NAICS code identifying the industry of the work being performed. The SBA assigns size standards to each NAICS code — a company is "small" if it falls below the threshold (e.g., under $41.5 million in revenue for IT services, or under 1,250 employees for aircraft manufacturing). Contractors register their NAICS codes in SAM.gov. The codes are also used to categorize spending data on USASpending.gov. NAICS codes are updated every 5 years to reflect changes in the economy.
Related Terms
- Small Business Set-Aside — A federal contracting provision that reserves certain contracts exclusively for small businesses — part of the government's goal of awarding 23% of contract dollars to small firms.
- SAM.gov (System for Award Management) — The federal government's central registration database for entities doing business with the government — required for receiving contracts, grants, or other awards.
- Product Service Code (PSC) — A 4-character code that describes what the government is buying — from "R&D in weapons systems" to "janitorial services" — used to categorize contract spending.
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About This Definition
This definition is part of the TaxDollarData Federal Spending Glossary — 31 terms explaining how the U.S. government spends taxpayer money. All definitions are written in plain language for taxpayers, journalists, contractors, and researchers.