NAICS and PSC codes are your keys to unlocking government contracts. NAICS codes classify what your company is (your industry), while PSC codes categorize what you sell to the government.
The Key Difference
NAICS codes classify your company’s primary business model - think broad categories like manufacturer, software company, or R&D firm. Every business has one primary NAICS code that determines your small business size standard (employee count or revenue threshold). A defense startup might be 541715 (R&D in Physical Sciences), 541512 (Computer Systems Design), or 336411 (Aircraft Manufacturing) - fundamentally different business types.
PSC codes classify what you’re selling in a specific contract - the actual product or service being procured. These are much more granular. The same company can bid under dozens of different PSC codes. That R&D firm might win contracts for drones (1550), software development (D302), or technical services (R408).
Why Startups Need to Know Theirs
Your NAICS code determines eligibility for small business set-asides and contracts reserved for specific industries. Your PSC codes help you find relevant solicitations and track competitors. Without the right codes, you’re invisible to government buyers searching for vendors.
How to Use Them
Registration: You will have to choose your primary NAICS code when registering in System for Award Management (SAM) - it determines your small business size standards and which set-asides you qualify for. Self-assignment means It’s up to you (the founder or business owner) to correctly categorize the business based on its principal source of income. You can list multiple NAICS codes, but your primary code is what counts for eligibility.
Finding opportunities: Search contract databases like USAspending.gov and beta.SAM.gov using relevant PSC codes to find solicitations matching what you offer. A UAV startup might search PSC 1550 (Drones) or 1510 (Aircraft, Fixed Wing) to discover active opportunities, for example.
Market intelligence: Use these codes to track which competitors are winning contracts in your space, monitor government spending trends in your technology area, and identify which agencies are most likely to buy your solution.
Which Matters More?
Both are essential but used differently. NAICS is critical for registration and eligibility - get this wrong and you might not qualify for small business set-asides. PSC codes are critical for finding opportunities - these are how you search for relevant contracts and track competitors. For defense tech, NAICS tends to be broad (manufacturing vs. services), while PSC codes get specific (fixed-wing aircraft vs. rotary-wing vs. drones). Use your NAICS to prove you’re a small business; use PSC codes to hunt for contracts.
PSC and NAICS codes lookup:
Product and Service Code Manual 2025
North American Industry Classification System (NAICS) Codes 2025