NAICS codes describe what kind of business you are, and federal buyers use them to define each contract and its size standard. Commodity codes describe what you sell, and many state and local portals use them to send bid notices. Pick codes that match work you actually perform and can prove, start narrow, then add close neighbors buyers use for the same work.
What a NAICS code is
NAICS stands for the North American Industry Classification System. It is a six-digit code that groups businesses by the kind of work they do. Federal agencies assign one NAICS code to each solicitation, and that code sets the size standard used to decide whether a business counts as small for that contract.
You list your NAICS codes in your SAM.gov registration, the federal system where companies register to do business with the government. You can list several codes and mark one as primary. The primary code should describe the work that brings in the largest share of your revenue.
What commodity codes are
Commodity codes describe products and services rather than businesses. State, county, city and school buyers often use their own code list or a shared code set such as the NIGP code or UNSPSC. Federal buyers also use Product Service Codes, which describe what is being bought on a given contract.
When you register on a state or local portal, you pick commodity codes from that portal's list. The portal then notifies you when a buyer posts a bid tagged with one of your codes. If your codes are wrong, you either miss notices or get buried in ones that do not fit.
How to pick the right codes
Work from evidence, not hope. The best codes are the ones that match the jobs you have already done and could describe in a reference.
- List the products and services you have actually delivered in the last few years, in plain words.
- Search the code list with those words and with the words buyers use, which are often different from your own.
- Look up recent bids you would have wanted and note which codes the buyer used.
- Read each code definition in full, including what it excludes, before you add it.
- Choose a primary code that matches your main line of work and your past performance.
- Add a small set of neighboring codes for related work you can truly perform.
Common mistakes
Code selection goes wrong in a few predictable ways.
- Selecting dozens of loosely related codes, which floods your inbox and makes your profile look unfocused.
- Picking a code only because its size standard makes you small, when the work does not match.
- Forgetting to update codes when you add or drop a line of business.
- Assuming every portal uses the same code list. Each one may need its own choices.
- Relying on codes alone. Buyers sometimes tag bids loosely, so keyword searches still matter.
Keep your codes working for you
Review your codes a couple of times a year. Compare the notices you received against the bids you actually wanted, and trim codes that only bring noise. When you find a good bid that never reached you, check which code it carried and consider adding it.
Keep the same codes consistent across your capability statement, your federal registration and your state and local profiles, so buyers see one clear picture of your business. Search tools such as BotBid read the bid text and judge fit, not only the code, which helps when a buyer tags a bid loosely. Your registered codes still drive the notices buyers send, so keep them accurate.
Rules vary by agency and state; check the solicitation and your own advisers.
Common questions
Can I have more than one NAICS code?
Yes. You can list several NAICS codes in your federal registration and mark one as primary. Each solicitation still uses only one code to set its size standard.
Does my NAICS code decide whether I am a small business?
Your size is measured against the size standard tied to the NAICS code on each solicitation. You can be small for one contract and not small for another.
Do state and local buyers use NAICS codes?
Some do, but many rely on commodity codes instead. Check each portal to see which list it uses.
How many commodity codes should I choose?
Choose enough to cover the work you truly perform and no more. A focused set brings relevant notices without burying them in noise.