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Last Word: So, What Is your NAICS Code?

Cissy Van DamAs a trenchless rehabilitation contractor, under what NAICS code do you list yourself? First, let’s understand what a NAICS code is and why it is important to be represented correctly.

“The North American Industry Classification System (NAICS) is the standard used by the Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing and publishing statistical data related to the U.S. business economy.”-Census Bureau. According to the Office of Management and Budget (OMB), this standard was first called a SIC code that used only four digits. It was developed in the 1930s to be used by the United States, Canada and Mexico. The SIC codes covered the entire field of economic activities by defining industries in accordance with the composition and structure of the economy. Periodically the OMB revises the codes to reflect the changing economy. I feel the rise of “no dig” or “trenchless construction” would fall under this section and needs to recognize. The underground rehabilitation market is a changing segment of our economy and is rapidly growing each year.

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Think of it this way… Why is it important for the census bureau to count every person in the United States? The answer is… to help the government decide how many seats are assigned per state in the House of Representatives. It also uses the classifications of companies to understand what types of companies there are and where the concentrations are to make a variety of industry based decisions. Around 1977 the SIC system was expanded to include six digits and was renamed the NAICS. This allowed for more flexibility in designing subsectors and provided for additional details regarding work types and work climates. The NAICS code, also, allows one to search for a specific type of company with a specific work type.

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Over the last 40 years the trenchless rehab market has grown and yet we are not represented with a NAICS code or even a subset of a current code. In a 2017 report issued by Stratview Research it was projected that the global CIPP market would reach $2.5 billion by 2022! That’s two years away. That did not include the TV and grouting, manhole rehab, UV CIPP, pipe bursting, boring and tunneling, I&I reduction and all the other subsets.

Underground rehabilitation is specialized and requires workers who are trained and should be recognized. Not everyone is able to do this kind of work. Therefore, purchasing agents should be able to easily find qualified, specialized contractors. Our own NAICS code would be the most effective way to locate a qualified contractor.

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If you want to know what the federal government is spending on underground rehab services go to the USA Spending website at usaspending.gov/#/ and put in your work type. This will show the contracts that have been issued, who issued them and the dollar amount. It is eye opening. That is just what has been reported by the federal government contracts. It does not include all the communities, cities and private work done. If you want to get into government work you must have a correct NAICS code.

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I am a minority contractor who does underground culvert lining and the raising of manhole castings. NOTE: I do not do dig and replace work. I line failing culverts that are made new again with no disruption of traffic. I do other underground related work, also. The only NAICS codes I can use are 237310, 237990 or 237110.

When prime contractors are looking for companies to help them satisfy their minority participation requirements, they have no way of finding my company without looking through all heavy highway codes. It is my opinion rehabilitation contractors should have their own NAICS code helping to make it easier to locate a qualified trenchless construction contractor.

So, what are we to do? NAICS codes are reviewed every five years and new codes can be added if it is, “felt an industry has become large enough or has developed new technology.” Call or write your congressman and ask for their help in developing a NAICS code for underground rehab contractors. Go to census.gov click on the link at the right side of the page titled The Revised 2022 NAICS Update Process Fact Sheet and send a message to john.burns.murphy@census.gov chair, Economic Classification Policy Committee and ask him what code you should use as a trenchless contractor? Why is there no code for trenchless rehab contractors even when we represent such a fast growing segment of the economy?

I am interested to know what NAICS your company uses. Please e-mail your thoughts and comments to cvandam@davandam.com or via my web at davandam.com.