What are NAICS and PSC Codes?

Federal contracting is full of acronyms that people unfamiliar with the industry may not know. Two common acronyms that you see every day are NAICS and PSC codes. NAICS codes, which stands for North American Industry Classification, are used to classify businesses by their economical activity.  They allow for the collection, analysis, and publishing of statistical data that can be made in correlation to the U.S. business economy. On the other hand, PSC codes, or Product Service Codes, are four-digit codes that describe a product, service, or research and development (R&D) effort that is purchased by the federal government. Both are a vital aspect to identifying and targeting various contract opportunities with the government.

NAICS Codes

Since 1997, these codes have replaced the Standard Industrial Classification System (SIC) and have promoted a more efficient way of comparing the business statistics of North American countries. In essence, NAICS codes are a system of grouping establishments into industries based on their similarities. As of 2022, there are 20 sectors, and over 1,000 industries recorded. NAICS codes typically range between four to six digits and follow a specific method that consists of subsectors, industry groups, NAICS industries, and 6-digit industries. Each category belongs to a sector division determined by the United States, Canada, and Mexico.

Ex. NAICS Codes

Sector 11--Agriculture, Forestry, Fishing and Hunting
111 Crop Production
1111 Oilseed and Grain Farming
11111 Soybean Farming
11112 Oilseed (except Soybean) Farming

PSC Codes

PSC codes focus on the "what" (type of product/service) of a purchase, while NAICS codes focus on the "who" (type of business). Unlike NAICs codes, PSC codes follow a more simplistic format in which they have a two-digit base code and a four-digit subcode section. Unlike NAICS codes, there are over 6,000 established codes to represent all products or services provided to the federal government.

Ex. Product Service Codes

18 SPACE VEHICLES
1810 SPACE VEHICLES
1820 SPACE VEHICLE COMPONENTS
1830 SPACE VEHICLE REMOTE CONTROL SYSTEMS
1840 SPACE VEHICLE LAUNCHERS
1850 SPACE VEHICLE HANDLING & SERVICE EQ
1850 SPACE VEHICLE HANDLING AND SERVICING EQUIPMENT
1860 SPACE SURVIVAL EQUIPMENT
 

Understanding the Importance

Every government contract can be traced by its affiliating NAICS or PSC code. This not only allows contractors to study the trends of federal agencies, but also helps to prepare and align themselves with the correct products or services that they can provide according to the needs of the buyer’s expectations.

Between both sets of codes, their importance rests solely in each product or service that they represent and the key to understanding them can be found in identifying the company’s core capabilities and matching them with the sectors and subsectors of each base code. With so many different classifications, it is crucial for a company to become familiar with the ones that align with their capabilities or future endeavors and be aware of any updates that are made. Each code guides a seller to their next potential opportunity and sheds light into federal government agency trends and forecasts.

Our research team at JetCo Solutions can assist you with finding opportunities that are related to your NAICS and PSC codes. Contact us today for more information.

 

About the Author

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Jeffrey Hilliard

Jeff uses his research and analytical skills to identify opportunities for clients to sell to the government. He also uses broad research to identify programs, target agencies, and competitors while using in-depth research to understand contract-level or program-level data and leads the Research Team to do the same.

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