To correct incorrect NAICS or PSC codes in SAM.gov, contractors must access their entity registration section and select “Update Entity” to modify these classifications. Accurate codes are essential for visibility to contracting officers and eligibility for set-aside programs. After updating, allow 24 hours for changes to process throughout the system. Regular code maintenance prevents missed opportunities and compliance issues. The following guidance provides detailed steps for maintaining proper code classifications in your federal contractor profile.

Understanding NAICS and PSC Codes: Their Critical Role in SAM.gov

When traversing the federal procurement landscape, businesses must understand two critical classification systems that determine their eligibility and visibility for government contracts.

NAICS definitions establish a six-digit code that categorizes businesses by their economic activity, allowing the government to set size standards and collect statistical data. Set-aside programs help federal agencies diversify their supplier base and meet mandated procurement goals. Meanwhile, PSC classifications use four-character codes to identify specific products and services purchased by federal agencies.

Understanding the government’s coding languages unlocks contract opportunities: NAICS shows who you are, PSCs reveal what you sell.

These complementary systems serve different purposes: NAICS codes identify “who” the business is within an industry sector, while PSC classifications specify “what” is being purchased. Contracting officers regularly use these codes for market research when identifying potential contractor sources. Incorrect code selection is among the common mistakes that significantly limit a contractor’s opportunity pipeline.

Both are mandatory for SAM.gov registration and directly impact a company’s ability to find and qualify for relevant contract opportunities in the federal marketplace.

Step-by-Step Guide to Updating Incorrect Codes in Your SAM Profile

After registering with accurate classification codes, businesses may discover the need to update their NAICS or PSC entries in SAM.gov.

Implementing effective code selection strategies requires logging into SAM.gov and moving to the entity registration section where codes can be modified.

For NAICS updates, companies should select one primary code that best represents their core business, followed by additional relevant codes.

PSC code modifications require more specificity, detailing exact products or services offered.

Profile update frequency should align with business changes, ideally reviewing codes quarterly.

After submitting changes, verification is essential—allow at least 24 hours for minor updates to process.

Ensuring codes are current before bid submissions prevents disqualification from government opportunities that match the company’s capabilities.

Economic research and market analysis benefit from properly maintained NAICS classifications across all registered businesses.

Experts recommend maintaining between 5 to 15 relevant NAICS codes to accurately represent your business offerings without overextending.

Keeping codes updated is particularly important for small businesses seeking set-aside contracts as eligibility is determined by the NAICS code size standards specified in 13 CFR 121.

Common Mistakes and Their Impact on Government Contract Eligibility

Maneuvering the complex world of government procurement requires meticulous attention to classification details. Code misclassification impacts can be severe, often resulting in missed opportunities and disqualification from set-aside contracts.

When businesses select incorrect NAICS or PSC codes, they become invisible to procurement officers searching for specific capabilities. NAICS codes beginning with 42, 44, or 45 are prohibited codes that require immediate correction to maintain GSA MAS contract compliance. Understanding primary business activity is essential when selecting appropriate classifications rather than focusing solely on products offered.

• Selecting overly broad codes dilutes visibility in targeted searches, reducing the chance of being matched with relevant opportunities.
• Misalignment between business activities and assigned codes creates eligibility criteria confusion during bid evaluations.
• Using outdated codes prevents agencies from identifying qualified vendors, potentially triggering compliance flags.

The consequences extend beyond missed opportunities to potential compliance issues. The six-digit primary NAICS code is particularly crucial for determining small business size standards and program eligibility. Contractors must regularly review their code selections to guarantee accurate representation of services and products, maintaining ideal visibility in government procurement systems.

Frequently Asked Questions

How Long Do NAICS Code Updates Take to Reflect in Government Systems?

NAICS code updates typically take several years to fully reflect in government systems after their official release.

Government processing times vary by agency, with most Census Bureau programs implementing new codes by the end of the calendar year following release.

The implementation follows a structured timeline, allowing for proper testing and integration.

This gradual approach helps maintain data consistency while government databases, forms, and reporting systems are updated to accommodate the revised classification structure.

Can I Use NAICS Codes From My Competitors’ Profiles?

Businesses can legally review competitors’ NAICS codes as part of competitor analysis to gain market insights.

However, when registering in SAM.gov, companies should select codes that accurately represent their own capabilities and offerings, not simply copy competitors.

Code accuracy is essential for proper representation in the federal marketplace.

Companies should guarantee selected NAICS codes align with their actual business operations, as misrepresentation could lead to compliance issues or missed contracting opportunities.

What Happens if My NAICS Codes Don’t Match My Proposals?

Misaligned NAICS codes in proposals can notably impact the evaluation process.

During proposal evaluation, contracting officers may reject submissions with incorrect codes as non-responsive. This mismatch often triggers compliance issues, potentially disqualifying otherwise qualified vendors.

If the selected NAICS code doesn’t reflect the primary work described, businesses risk exclusion from competition, especially in set-aside contracts. Companies should verify that their capabilities align with both the solicitation’s NAICS code and the described scope of work.

Are There Penalties for Intentionally Selecting Incorrect NAICS Codes?

Intentional misclassification of NAICS codes carries severe consequences.

Businesses may face substantial financial penalties, ranging from thousands to millions of dollars, depending on violation severity.

Legal ramifications of incorrect coding include potential criminal charges for fraud, suspension from government contracting, and contract termination.

Federal authorities can pursue debarment, preventing future contract eligibility.

The government may also initiate investigations and audits, disrupting business operations and damaging contractor reputation.

Can Multiple Businesses Share Identical NAICS and PSC Code Combinations?

Multiple businesses can share identical NAICS and PSC code combinations without restrictions.

This business classification overlap is common and expected, as many companies operate in the same industries and provide similar products or services.

Code duplication occurs naturally when businesses perform comparable functions in the marketplace.

Each organization selects codes that accurately reflect their primary activities, and many legitimate companies may fall under the same classification categories.

This sharing has no impact on a company’s eligibility for government contracts.