Simply put – North American Industry Classification System (NAICS) Codes are for business functions, and Product and Service Codes (PSCs) are for what is being purchased. However, these collections of numbers and letters confuse even the most experienced vendors. Why? Because each taxonomy is used in its unique way when it comes to federal government vs. industry-at-large.
For example, in the federal government’s case, NAICS Codes determine small business set-aside eligibility. At the same time, PSCs are focused intentionally on market research and contract reporting in the Federal Procurement Data System (FPDS).
In the industry, vendors use these codes to determine qualification for small business status, search for opportunities, or determine federal buying trends.
Whatever the difference, NAICS Codes and PSCs are essential to any vendor’s federal contracting existence. Both codes, in their own right, literally define your organization as they serve as the first introduction of your offerings to all federal buyers and the general market.
To the federal government, these codes act as the first central “search filter” as they comb through 380k+ vendors to support their requirements. To your organization, they are a critical factor in determining if an opportunity is a good fit and, at times, if you can even compete.