The Problem With NAICS and PSC Codes

Every system has pros and cons, and we aren’t here to bash on the people who came up with NAICS and PSC.  We couldn’t have done better, in fact, we would have done a lot worse.  But, it’s important to understand the limitations of each system.

They’re out of date:
Both systems were devised decades ago and reflect the economy then.  So there are hundreds of agriculture and manufacturing codes, but there is no code for cybersecurity. So if there is no code for the thing you provide you’ll have to guess which existing code your thing has been put into.

They overlap:
NAICS and PSC codes do not have clear boundaries, and a lot of codes sound similar.  So you will probably have to use multiple NAICS or PSC codes to make sure you get everything.  For example, let’s say you build custom software for clients.  Let’s look at all the codes that you will need to use:

1) 541715: R&D In The Physical, Engineering, And Life Sciences (Except Nanotechnology And Biotechnology)
2) 541519: Other Computer Related Services
3) 541712: R&D In The Physical, Engineering, And Life Sciences (Except Biotechnology)
4) 541511: Custom Computer Programming Services
5) 511210: Software Publishers
6) 541330: Engineering Services
7) 541512: Computer Systems Design Services

1) D302: IT And Telecom- Systems Development
2) D318: IT And Telecom- Integrated Hardware/Software/Services Solutions, Predominantly Services
3) R425: Engineering And Technical Services
4) 7A20: IT And Telecom – Application Development Software
5) AC32: National Defense R&D Services; Defense-Related Activities; Applied Research
6) R499: Support- Professional: Other
7) 7030: ADP Software
8) 7A21: IT And Telecom – Business Application Software

Coding errors:
If your search includes NAICS or PSC codes some good contracts will get filtered out because the government makes a coding error.

Single codes for diverse contracts:  A single government contract can include a wide range of products and services but there is only one NAICS and one PSC code per contract.  So if a contract has some cybersecurity work that you might be interested in, but the majority of the work is for something unrelated, and the government assigns the codes based on the major focus of the contract, then you will miss that sliver of work you are interested in.