If you are one of the folks I’ve spoken to recently that’s had a tough time identifying customers and related opportunities for one reason or another, or if you are just outright befuddled by how agencies ‘describe’ current and upcoming solicitations based on the known classification systems, take a few minutes to review this piece.
Now that FY2016 is in the books and the 90-day lag for DoD transactions has passed, we can get a good look at how things shaped up for the year, which to me and many others, offers a view of things to come, in more ways than one. The graphic below provides information about Uncle Sam’s use of NAICS Codes, one of the classification systems used by Government and Industry alike, but for different reasons. Then it goes a bit deeper and provides you additional insights about Product Service Codes, the other classification system that goes largely ignored by some, unknown to many.
Got all of that? Understand the implications? Try this on for size.
As far as PSC Codes are concerned, what you need to understand is that codes containing 4 digits (such as 3610) represent goods (in this case, Printing, Duplicating and Bookbinding Equipment). Codes starting with an A, such as AC61, represent Research & Development (R&D – Defense System: Electronics/Communications Equipment (Basic Research)). Finally, alphanumeric codes beginning with other than the letter “A” represent services, as in the case of C211 – Architect and Engineering – General: Landscaping, Interior Layout and Designing. With that said, I still find myself in deep philosophical-like discussions regarding the NAICS and PSC classifications. Specifically, the differences, similarities and uses by both sides. The use of both systems is fraught with misunderstanding, by both sides, especially industry.
Here’s why I say this. If we take one of the NAICS Codes from the graphic, let’s say 541519 – Other Computer Related Services with a little over $13B in FY2016 obligations, it seems pretty straightforward. Opportunities and previous buys referencing this NAICS would represent agencies buying services related to computers, right? Let’s see, how do I say this? No.
Remember the 3 PSC Codes two paragraphs up? Each of them was referenced under NAICS 541519 and represent $15.5M collectively. In fact, under this NAICS Code, 152 ‘product’ codes represent $4.1B in obligations, 24 R&D codes account for $83M and 214 ‘service’ codes reflect $8.7B in obligations. Of the service codes referenced, only 25 of them are truly ‘Information Technology‘ codes, representing $6.7B of the remaining spend. The others are an array of services essential to agency operations but not specifically of the IT variety.
Trust me when I say I can do this all day. After all, there are more than double the number of PSC Codes than there are NAICS Codes referenced each fiscal year.
Here’s my question to you. If some or all of this information made you realize you don’t know what you don’t know about these classifications, are you willing to change how you use NAICS Codes and PSC Codes in government contracting?
“The person who says it cannot be done should not interrupt the person doing it.”