How to Decipher Government Codes Relating to Contracting

The term "alphabet soup" comes to mind when dealing with the government's contracting process. Knowing how to interpret all of the acronyms is essential, even if it at first seems to be a tedious undertaking.

Anyone who does business with the government can't help but be confused at times by the different types of codes that the government uses to identify, classify and inventory the products and services that it uses. However, it is important for you to understand the importance and purpose of each type.

The types of government codes you'll be working with are the Federal Supply/Service Code, the National Stock Number, and the SIC and NAICS codes.

Federal Supply/Service Code

This is a four-digit code used by government buying offices to classify and identify the products, supplies, and services that the government uses and buys. An understanding of which FSCs apply to your products or services is crucial to finding opportunities. For instance, you will need to know the FSCs that apply to your products in order to register to do business with the government. And since buying offices have responsibility for specific products, you can also use your FSCs to identify potential buying offices.

And since government buyers often use the registration databases to identify the companies that can meet their needs for products and services, it is important that you know all of the FSCs that apply to your company's end products so buyers can find you. Knowing the appropriate FSCs will also help you identify which buying offices issue contracts for the item.

In addition, you can do marketing research based on the FSC when reviewing the buying forecasts that the buying office issues. All four digits of a product code are numeric, for example 1015. In this example, 10 designates a weapon item. The second two numbers, 15, identify the size of the weapon item, in this instance, 75mm through 125mm.

Product service codes (PSC). These are alpha/numeric, from "A" to "Z," with "I" and "O" not used. Three numbers are added to the alpha to further define what type of service is needed.

In the service code D308, the D3 indicates that the general type of service is Automatic Data Processing and Telecommunication Services, and the 08 indicates that the specific service is Programming Services. In another example, R608, the R means that the general type of service is Professional, Administrative and Management Support Services, and the 608 means that the specific service is Translation and Interpreting Services (including sign language).

Need help finding the FSC codes that apply to your products and services? The government issues a manual called the "Product and Services Codes Manual" that lists all the service and product codes. Look up your end product(s) in the manual and make a note of the code(s). Knowing the codes that apply to your capabilities will not only help you identify the government buying offices that have a need for your product or service, but will also help you register and search for bid opportunities.

The Product and Services Codes Manual is free. Just call the Federal Procurement Data Center at 703-773-4810 to request a copy.

You may also search for applicable FSC codes by keyword on the Internet at the Defense Logistics Information Service website.

Understanding National Stock Number NAICS and SIC Codes

The NSN (National Stock Number) is the 13-digit number that the federal government assigns, for purposes of identification and inventory control, to every piece of supply, equipment and material that it uses and buys. You can think of the NSNs as a federal cataloging system based on the concept of one NSN for any one item and one single item manager for each particular class of product. (Note that, because services are not inventoried, services don't fit this model. For services, only the first four digits are used. See the discussion of FSCs, above.)

In a typical NSN, for example, 4720-00-101-9817, the first four numbers are the Federal Supply Code (FSC), which places the item in a specific category. In this example, 4720 is Pipe, Tubing, Hose, and Fittings because it starts with 47. The second two numbers, 20, identify the item as Hose and Flexible Tubing, which includes air duct, metallic, nonmetallic, and textile fiber hoses and their assemblies, etc. The next two numbers, in our example, 00, identify the country that buys the item; 00 or 01 is the code for the U.S. The remaining numbers of the NSN, 101-9817, are referred to as the National Item Identification Number (NIIN) and are used to index NSNs.

How does all of this help you? Understanding the NSN, while at first somewhat of a challenge, is one of the keys that will open up some doors of opportunity for you. The NSN classification system helps to identify the offices and agencies that have control over the item and/or buy that item. Remember, for this to be useful, you must know the complete NSN.

If you know the NSN, searching on the NIIN can assist you in finding previous buying trends, previous supplies, and procurement history. Also, if the NSN "gets lost," you can sometimes use the NIIN to locate where it was reassigned since the NIIN tends to remain with an item over time.

You can do an Internet search based on NSNs at the Defense Supply Center's website.

NAICS and SIC

The NAICS (North American Industry Classification System) and the SIC (Standard Industrial Class) codes identify products and services by type of industry and are used by the government to evaluate economic performance. The NAICS codes, which replaced the SICs in October 2000 as the codes the government uses to classify businesses and industries, were developed jointly by the U.S., Canada, and Mexico to provide new comparability in statistics about business activity across North America.

You will need to know the NAICS codes that apply to your business in order to register with the government. You should also be able to identify all the NAICS and SIC codes that apply to your capabilities in order to help ensure your chances of success in doing business with the government. For example, government buyers looking for contractors use the codes of the products and services they wish to buy when searching for businesses profiled on the CCR and Pro-Net systems.

You can access the NAICS/SIC manual at the Small Business Administration's website (http://www.sba.gov). Or you can search for your products and services by keyword at the NAICS website.

Although NAICS codes are now the official codes being used by the government, SIC codes may continue to be used by some agencies for some time during the transition.

Solicitation Numbers Reveal Much About Bidding Opportunities

The Solicitation Number for a specific bid opportunity is a wonderful source of information that can help you identify a procurement office and the type of products or services that are sought. Using the Defense Logistics Agency (DLA) buying centers, let's look at what the number means and the type of contract that is contemplated.

Case Study: Sample Solicitation Number: SPO450-05-Q-1234

SPO450 is the alpha/numeric identifying the buying office that issued the solicitation as the Defense Supply Center Richmond. DLA has used the facility location to designate which center is the buying office (i.e., DSCC is in Columbus, Ohio; DSCP is in Philadelphia; and DSCR is located in Richmond, Va.). Here are the alpha/numeric designations for the three centers, note that Philadelphia has four major commodity areas:
SPO100 - DSCP (Philadelphia) - Clothing and Textile
SPO200 - DSCP (Philadelphia) - Medical
SPO300 - DSCP (Philadelphia) - Subsistence
SPO400 - DSCR (Richmond) - Industrial and aerospace equipment and supplies, misc.
SPO500 - DSCP (Philadelphia) - General and Industrial
SPO700 - DSCC (Columbus) - Electronics

Sometimes you will see that the last two digits of the six-digit number are different, as in our sample solicitation number: the DSCR identification is SPO450, not SPO400. This indicates that the solicitation comes from the same buying office, DSCR, but a different commodity area within that buying office.

The next two digits (character position seven and eight) designate the fiscal year that the solicitation was issued, so 05 is 2005, 02 was 2002, 03 was 2003, etc.

The next digit (in the ninth location) is an alpha character that identifies the type of solicitation and contract. This is important. In our sample solicitation number, that letter is a "Q," SPO450-05-Q-1234. Here are the explanations for the various letters that are used:

T — Indicates that the item meets the criteria for award by computer. The computer will determine what terms would apply and attempts to award the solicitation two days after the closing under the PACE (Procurement Automated Contract Evaluation) System. The value of these awards is usually below $2,500 and just for fun, no human is involved.
Q — Represents a solicitation generally more complex then a T bid. It might have a higher level of inspection, restricted drawing, first article or long-term contract terms. A "buyer" is involved who can answer questions, review/evaluate offers and award contracts. An offeror can submit quotes up to the point of award.
U — Signifies a manual bid, similar to a Q, but designated as a PACE award candidate by the buyer. The terms and conditions of PACE will apply; the same as for T bid solicitations.
X — Belongs to an express quote or award. It is usually issued orally by the buyer because of the need for quick award, therefore, time is shortened by a few days and the purchase is not posted on the Procurement Gateway. The buyer will usually only go to known sources and the value will be under $25,000.
R — Identifies a large buy solicitation over $100,000 through negotiated procurement. Offers must be mailed in on the original solicitation format and must be received prior to the closing date of the bid. These bids are posted on FedBizOpps. If you're late on these, you're out of luck.
B — Reveals that the solicitation is "Invitation for Bid" or "Sealed Bid," which are less frequently used. The requirements are clear and the technical data complete. All offers received are opened at a public meeting at a specific time and date. The apparent low offeror is known by the conclusion of the opening.

The last series of numbers, 1234, in our sample solicitation number are nothing more than a sequential number series in a log that keeps track of the number of solicitations issued.