NAICS code updates, occurring every five years, directly impact government contractors’ eligibility for federal contracts. Recent changes better represent technology and service sectors, affecting small business set-asides and program eligibility. Contractors must update their SAM profiles promptly, as outdated codes can eliminate businesses from contract consideration. Starting January 2025, new regulations require NAICS code validation for task orders under FAR 52.219-28. The following information will guide contractors through maintaining compliance and maximizing opportunities.
Key NAICS Code Revisions Every Government Contractor Should Know
Every government contractor must stay informed about changes to the North American Industry Classification System (NAICS) codes to maintain eligibility for federal contracts.
The NAICS system undergoes thorough reviews every five years to reflect economic shifts and emerging industries, making these updates critical for contractor compliance.
Recent NAICS classifications have been adjusted to better represent modern economic realities, particularly in technology and service sectors.
These revisions directly impact small business set-asides and contract eligibility determinations. Contractors who fail to incorporate these changes risk profile suspension in SAM or missing valuable opportunities.
Industry trends show that agencies increasingly rely on precise NAICS codes when identifying qualified contractors, making accurate code selection essential for maintaining competitive positioning in government procurement processes. Selecting the appropriate codes is crucial as they identify specific opportunities aligned with your business offerings in federal procurement.
The standardized framework provided by NAICS codes helps businesses properly categorize themselves within their respective industries for statistical analysis and federal contract eligibility.
Understanding the requirements for recertification will be particularly important for small businesses anticipating mergers and acquisitions before the SBA’s new Final Rule takes effect on January 16, 2025.
How Updated NAICS Codes Impact Your Federal Contract Eligibility
Countless federal contractors lose eligibility for lucrative opportunities each year due to outdated NAICS code designations in their SAM profiles.
Outdated NAICS codes silently eliminate contractors from the federal marketplace, costing millions in missed opportunities annually.
The NAICS code implications extend beyond simple classification, directly affecting contract eligibility across multiple federal programs.
Beginning January 2025, contractors must validate their NAICS codes for task orders on multiple-award contracts under FAR 52.219-28 requirements.
Failure to maintain accurate codes can result in immediate loss of set-aside order eligibility if socioeconomic status no longer applies at order placement.
Small businesses face additional scrutiny, as NAICS-specific requirements govern participation in 8(a), HUBZone, SDVOSB, and WOSB programs.
Even with SBA’s new rule allowing size status retention, contractors must guarantee SAM profile synchronization with current certifications to avoid automatic bid invalidation.
Properly identifying and using the correct codes is essential when registering with government contracting portals to maximize opportunities for businesses in disadvantaged groups.
Contractors should note that the new regulations require representation for specific scenarios including orders set aside for small businesses under multiple-award contracts.
The rule introduces significant changes to rerepresentation protocols with a January 17, 2025 effective date, giving contractors time to prepare their compliance procedures.
Step-By-Step Guide to Updating Your SAM Profile With New NAICS Codes
Now that the importance of accurate NAICS codes is clear, contractors need a practical approach to update their SAM profiles with current classifications.
The registration process begins by logging into SAM.gov and directing to the Entity Registration section on the dashboard. Contractors must then access the Core Data tab where NAICS codes are managed.
When adding new codes, users should first verify they have administrative permissions before proceeding. Including multiple NAICS codes significantly increases your visibility to potential government agencies seeking your specific services. Understanding the industry-specific classifications helps ensure compliance with federal requirements when bidding on contracts. The system allows manual entry of both primary and secondary codes, which should reflect the company’s actual business activities. Incorrect classifications could result in disqualified bids and missed set-aside opportunities for small businesses.
After inputting the codes, contractors should run SAM’s validation tools to check for errors. Finally, submit the changes through the official portal and await confirmation, which typically arrives within 48 hours.
Frequently Asked Questions
How Do NAICS Changes Affect Subcontractor Relationships?
NAICS changes require timely subcontractor compliance through proper code assignment based on primary work scope. Prime contractors must guarantee effective NAICS communication to validate size status and maintain limitations on subcontracting compliance throughout contract performance.
Can I Keep Both Old and New NAICS Codes Temporarily?
Businesses may maintain both old and new NAICS codes only during designated changeover periods. This temporary compliance window allows for dual coding while contracts under previous classifications remain active, preventing disruption to existing agreements.
Will Incorrect NAICS Codes Trigger an Automatic SAM.Gov Suspension?
Incorrect NAICS codes alone do not trigger automatic SAM.gov suspensions. While they may affect contract eligibility and set-aside qualifications, NAICS compliance issues typically result in procurement limitations rather than direct SAM repercussions for registered entities.
How Do International Companies Align With U.S. NAICS Changes?
International companies achieve compliance by monitoring NAICS updates, selecting appropriate classifications for U.S. operations, updating SAM registrations promptly, and maintaining coding consistency between their global operations and U.S. regulatory requirements.
Does the NAICS Transition Affect Past Performance Evaluations?
Yes, NAICS changes impact past performance evaluations as contracting officers may struggle to align historical work with current classifications. This can affect evaluation criteria when evaluating relevant experience under restructured industry categories.