How to be a GovCon Strategist by Understanding NAICS Codes
Most contractors think about NAICS codes as something they check off during their SAM registration. In reality, they're one of the most important strategic tools in government contracting.
The NAICS codes you pursue influence the opportunities you find, how agencies view your business, and the direction your company grows over time. Contractors who think strategically about their NAICS codes often position themselves for far more opportunities than those who simply add every code they can think of.
Here are some of the most common questions I get about NAICS codes and how to use them to your advantage.
Why is choosing your primary NAICS code so important?
Your primary NAICS code represents your business's primary line of work. Think carefully before choosing it because it should reflect the direction you want your company to grow, not just the contract you're pursuing today.
Many contractors make the mistake of selecting a primary NAICS code based on a single opportunity instead of their long term strategy. Instead, choose the industry that best represents your core business and then build related services around it.
Your primary NAICS code helps define your business. It should support where you want your company to be years from now, not just your next bid.
What are NAICS codes used for in government contracting?
NAICS codes are used to classify government contract opportunities into specific industries.
Agencies use them to determine the type of work being purchased, establish small business size standards, conduct market research, and identify businesses that operate within a particular industry.
For contractors, NAICS codes make it easier to search for opportunities and understand what types of work an agency is buying. They also help you evaluate whether a solicitation fits your business before investing time into preparing a proposal.
Understanding the NAICS code assigned to a solicitation gives you another piece of information that can help you make better bidding decisions.
Can you change your NAICS codes?
Yes, you can update the NAICS codes associated with your business as your capabilities grow and change. As you add new services or expand into related industries, it's a good idea to keep your SAM profile current.
Your primary NAICS code is different. It represents your primary business activity, so it isn't something you should plan on changing regularly. That's why it's important to choose it strategically from the beginning.
Rather than constantly changing your profile, focus on building a group of supporting NAICS codes that align with your long term business strategy.
How do you know which NAICS codes to select?
Start by identifying the services your business can actually perform.
Then look at the types of contracts you want to pursue and the industries where those opportunities exist.
Don't build your business around NAICS codes. Build your NAICS codes around your business.
One strategy I teach is building an umbrella of related services. Instead of trying to be everything to everyone, choose services that naturally fit together and solve similar problems for the same government customer.
This creates a stronger business strategy and often opens the door to more contracting opportunities over time.
Can you bid on a contract if the NAICS code isn't in your SAM profile?
Yes.
One of the biggest misconceptions in government contracting is that your business can only bid on contracts that match the NAICS codes listed in your SAM registration.
That's simply not true.
What's more important is whether your business can perform the work and meets the requirements of the solicitation.
If you decide to pursue that type of work as part of your long term strategy, you can always add the appropriate NAICS code to your SAM registration later. Your profile should evolve as your business grows.
Can you give an example of a good NAICS code strategy?
Absolutely.
Let's say your company wants to become known for facility support services.
Instead of chasing every opportunity you find on SAM, build an umbrella of related services. You might pursue janitorial services, landscaping, pressure washing, floor care, window cleaning, and minor facility maintenance.
Those services naturally complement one another and often serve the same government customers. As you build experience in one area, it becomes easier to expand into the others because they all support the same overall business strategy.
Now compare that to a contractor who bids on janitorial one week, office supplies the next, cybersecurity after that, and construction the following month.
Which business appears more focused?
The contractors who grow the fastest usually build depth within a market instead of chasing every opportunity they come across.
Final Thoughts
NAICS codes are much more than an administrative requirement in SAM. They're part of your business strategy.
When you choose them intentionally, they help shape the contracts you pursue, strengthen your positioning, and create a more focused government contracting business.
Think beyond your next bid. Build a strategy that supports the business you want to have years from now.
About Derek James
Derek James is the founder of GovKidMethod. By age 30, he had won 32 federal contracts worth more than $15 million. Since then, he's helped small businesses win more than $75 million in government contracts by teaching practical proposal writing, positioning, and bidding strategies that contractors can actually apply.
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