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542 Reasons to Change How You Use NAICS and PSC Codes (or ‘Are you looking for your opportunities in the right place(s)?)

GTBefore the North American Industry Classification System (NAICS) was adopted by government contracting, two other classification systems were in play. One, the Standard Industrial Classification (SIC) was replaced by NAICS and the other was all but forgotten, if it was known in the first place. Funny thing is, the Product and Service Codes (PSC) didn’t go away and remain an integral part of federal contracting for agencies and vendors.

This continues my ongoing ‘reveal’ of the relationship between PSC and NAICS Codes.

— The Chief Visionary

In an effort to help increase opportunity awareness for small federal contractors, I’ve published quite a few pieces related to NAICS Codes, PSC Codes, balanced naics-psc 36553291_lhow they are used by agencies and how vendors should ensure they understand how knowing and using both systems can add to identifying opportunities. Some of the more recent ones include:

I offer those as supplements to this current contribution. Ready to get started?

When agencies tag buys with Information Technology NAICS Codes…

The broad assumption is these agencies are planning to buy information technology supplies and services. This would make complete sense based on how NAICS Codes have generally been discussed and taught over the years. Additionally, because the Small Business Size Standards are attached to NAICS Codes, this only compounds the reason they get all of the attention.

So when I discuss agency spending when the following NAICS Codes are referenced:

  • 541511-CUSTOM COMPUTER PROGRAMMING SERVICES
  • 541512-COMPUTER SYSTEMS DESIGN SERVICES
  • 541513-COMPUTER FACILITIES MANAGEMENT SERVICES
  • 541519-OTHER COMPUTER RELATED SERVICES

one of the first things to happen is most of the product companies turn up their noses. Why? Look at the last word in the description each code, iStock_000015943882Medium stinks“Services.” Would you (Do You?) believe the same?

Next, the companies providing Professional or Administrative services not related to information technology follow suit because that’s not what they do. Neither group is incorrect in their beliefs based on how so many vendors are introduced to NAICS Codes. This is why re-education is important.

Granted, a significant number of opportunities for companies in these groups might occur in the form of a one-off buy such as a subcontract or outright vendor-based purchase from a prime, but what happens when that is not the case?

How many reasons do you need to reconsider your approach?

The title says ‘542’ so that’s what you’ll get, but only in summary. Trust me, you wouldn’t want the entire list.

The ‘542’ is based on the number of Product and Service Codes referenced by agencies during FY2015 when they made buys that referenced one of the four NAICS Codes mentioned earlier. The caveat to this is, there are actually more PSC Codes than that. Why? Because my report does not include the final ninety days of DoD spending for Fiscal Year 2015. That won’t be publicly available in full until January 1, 2016 due to the DoD OPSEC policy. I’ll update this report when that information is available.

Got Products?

Do you sell or manufacture products? Of the 542 total PSC Codes referenced, 165 of them are for products and they account for just over $4 billion of11224434_l question the spend. Product Group Codes represented include (but are not limited to):

  • Weapons
  • Nuclear Ordnance
  • Fire Control Equipment
  • Space Vehicles
  • Ship and Marine Equipment
  • Vehicular Equipment Components
  • Special Industry Machinery
  • Plumbing, Heating, Waste Disposal
  • Electric Wire, Power Distribution Equipment
  • Instruments and Laboratory Equipment
  • Photographic Equipment
  • Office Machines
  • Office Supplies and Devices
  • Musical Instruments
  • Clothing, Individual Equipment and Insignia
  • Metals, Bars, Sheets and Shapes

and of course:

  • ADP Equipment, Software, Supplies and Equipment
At Your Service(s)!

Of the remaining 377 PSC Codes not related to products, twenty five of them are in the Services Group for IT and Telecom. Now, those twenty-five codes account for $19 billion, leaving 352 services codes to split roughly $7 billion. Here are some of the other Services Group Codes:

  • Research and Development
  • Special Studies and Analyses – Not R&D
  • Architect and Engineering – Construction
  • Natural Resources and Conservation
  • Social Services
  • Quality Control, Testing and Inspection
  • Maintenance, Repair and Rebuilding of Equipment
  • Technical Representative
  • Operation of Government Owned Facilities
  • Installation of Equipment (Which means they bought it somewhere, right?)
  • Medical Services
  • Professional, Administrative and Management Support (e.g., Real Estate Brokerage, Policy Review, Market Research, Expert Witness, Physical Security, Human Resources, Patent and Trademark, Courier/Messenger, Transcription, Mailing/Distribution, Translation and Interpreting, Background Investigation, Accounting, Logistics Support, Public Relations, and more!)
  • Utilities and Housekeeping Services
  • Education and Training

connecting the dotsIf this is your first time reading one of my articles on this subject, this next statement is for you. It’s important to note as you take all of this in that PSC Codes are used by agencies to describe the primary product or service being purchased in each contracting action. Never noticed them before? Check out agency forecasts, FBO announcements and the Federal Procurement Data System – Next Generation.

Also bear in mind the transactions I researched in developing this report are indicative of purchases made by the agencies versus their contractors.

This is the kind of information that can have an immediate impact on the number of opportunities and quality of opportunities to which your company gets access. Conducting market research on NAICS Codes alone will provide too many unrelated opportunities, causing 9519853_l fishingyou more work. Don’t believe me? How many of the ‘542’ PSC discussed here are relevant to your company’s offering(s)?

Somebody’s going to have to sift through those results, right?

However, considering PSC Codes in your research in conjunction with NAICS Codes (and even on their own!) can help you gain some efficiency.

In the end, PSC Codes are one in a series of ‘dots‘ you need to understand in order to ‘connect the dots’ in government contracting. Use them to ensure you’re looking in the right places for direct and subcontract opportunities.

Peace!

Guy Timberlake, The Chief Visionary (bio)
http://www.theasbc.org/visionary

“The person who says it cannot be done should not interrupt the person doing it.”

About Editor-in-Chief Visionary

Guy Timberlake is the Editor-in-Chief Visionary of GovConChannel and oversees the creation and curation of relevant and timely 'News And Information That Matters To Small Government Contractors.'

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