The Most Competitive Federal Contracting NAICS Codes of 2024 (and How Small Businesses Can Still Win)
Federal contracting can feel like a crowded race, especially for small businesses trying to break in. Some contract opportunities get swarmed with bids, while others fly under the radar. Using fresh Fiscal Year 2024 data, our team has analyzed which NAICS codes to see the fiercest competition (measured by the number of offers per solicitation) and which might offer small firms a better shot. Knowing where the crowd is (and isn’t) helps you strategize which opportunities to chase.
Why It Matters: If you’re a small business contractor, understanding competition levels in your NAICS category is crucial. More bids per solicitation = tougher odds. This isn’t just theory – federal data backs it up. Some routine service contracts get 10 or more offers, whereas niche technology procurements sometimes get only a single offer. This gap affects how you position your bid:
In high-competition NAICS, you’ll need sharper pricing, clear differentiators, and perhaps niche capabilities to stand out among many contenders.
In lower-competition NAICS, you might face fewer rivals, but the work could require special qualifications or certifications.
The Top 10 NAICS Codes & Their Competition Levels: (Based on FY 2024 solicitations across all agencies, ranked by average number of offers per solicitation)
Janitorial Services (NAICS 561720) – Competition: Very High. Average bids: 7.07. Janitorial and facilities maintenance contracts often see fierce competition. These are typically small-business set-asides that attract many local and regional contractors. It’s common to have a double-digit number of bids for a single cleaning contract, since the work is straightforward and many firms qualify. Small Biz Tip: Emphasize any specialty (e.g. medical facility cleaning experience or green cleaning certifications) to differentiate your bid in a crowded field.
Other Computer Related Services (NAICS 541519) – Competition: Moderate-High. Average bids: 3.57. This is a catch-all IT code for services like data processing, hosting, etc.. Many small businesses list 541519, but agencies use it slightly less often than 541511/541512 for prime opportunities. Still, when used, it draws multiple offers in most cases. Small Biz Tip: Leverage any niche expertise (cloud hosting, GIS services, etc.) that falls under 541519. A specialized skill can set you apart in a field where many offer general IT help.
Administrative & General Management Consulting Services (NAICS 541611) – Competition: Very High. Average bids: 2.88. This broad consulting category is one of the most used in government contracting. From policy consulting to business process improvement, agencies issue many 541611 solicitations – and many small consulting firms respond. Expect a high number of offers, especially for simpler consulting tasks or simplified acquisitions that make it easier for multiple offers to come in quickly. Small Biz Tip: Highlight relevant past performance and consider teaming to cover all task areas – agencies often pick vendors who can “do it all” in a crowded consulting competition.
Engineering Services (NAICS 541330) – Competition: Moderate. Average bids: 2.66. Engineering contracts (design, civil, mechanical, etc.) see a healthy number of bids, but not as overwhelming as generic services. Why? Many engineering projects require specific licenses (PEs) or domain expertise (e.g. aerospace engineering for NASA). So, while plenty of firms qualify, the truly relevant pool is smaller per project. Small Biz Tip: If you’re a niche engineering firm (say, an expert in environmental engineering), target solicitations in that niche – you might only face a few competitors who have the same specialized credentials.
Computer Systems Design Services (NAICS 541512) – Competition: High. Average bids: 2.64. Another IT-focused NAICS, covering systems integration and design. Average bids are high as many IT integrators (large and small) compete for this work, especially given the government’s growing IT modernization efforts. Small Biz Tip: Obtain relevant certifications (like ISO, CMMI, cybersecurity credentials) – they can be a deciding factor when several IT firms are in the running. Also, watch for agency-specific vehicles (like DHS Eagle II or similar) that may restrict competition; getting onto these can reduce open-market rivals.
Custom Computer Programming Services (NAICS 541511) – Competition: High. Average bids: 2.43. This IT services code (software development, IT consulting) is heavily used by agencies. Multiple IT firms regularly bid on each solicitation, though competition might be moderated if the work is on a contract vehicle (like a GSA schedule or IDIQ). Still, in open-market solicitations, expect several offers from qualified tech companies. Small Biz Tip: Emphasize innovative solutions or past success with similar tech stacks. Also, pursue set-aside opportunities (e.g. 8(a) or SDVOSB set-asides under this NAICS) to limit the competition to a smaller field of small businesses.
Facilities Support Services (NAICS 561210) – Competition: Moderate. Average bids: 2.15. This code often refers to integrated facilities management or base operations support. Contracts here can be large, and not every small business can cover the scope (some are even done by mid-sized or large firms). When set aside for small companies or broken into smaller tasks, competition increases, but for very large facility contracts, the field narrows (perhaps a handful of serious contenders). Small Biz Tip: Teaming is key. If the contract scope is broad (security, maintenance, utilities all in one), consider a joint venture or subcontracting plan to cover all bases. A strong team can outshine individual small competitors and even go head-to-head with larger incumbents.
R&D in Physical, Engineering & Life Sciences (NAICS 541712) – Competition: Low (specialized)*. Average bids: 2.13. Research and development contracts can be niche – think cutting-edge science projects. Many R&D solicitations (especially SBIR/STTR programs) are limited to small businesses by design, but even then the technical specificity means relatively few firms can respond. It’s not unusual for an R&D BAA (Broad Agency Announcement) or RFP to get only a handful of proposals, sometimes just one truly viable offer. Small Biz Tip: If you have a unique technology or research capability, go for these opportunities. The lower number of bids improves your chances, and agencies are often eager to work with innovative small firms. Just be prepared for a rigorous technical evaluation – with fewer competitors, your solution must clearly shine and meet the research objectives.
Offices of Physicians (NAICS 621111) – Competition: Low to Moderate. Average bids: 2.1. Healthcare service contracts (like on-site physician or telemedicine services for agencies) are specialized. Often, only a few qualified vendors (clinic groups or staffing firms) will bid, and sometimes agencies might sole-source if only one provider is feasible. For example, a contract for a medical specialist at a remote facility might see 1–2 offers total. Small Biz Tip: Certifications and compliance (e.g. having credentialed staff, meeting healthcare regulations) are paramount. If you meet the criteria, your odds are good simply because not many competitors can. Market directly to agencies like the VA, DoD, or Health and Human Services – they frequently need medical services and often aim to include small business providers.
Other Management Consulting Services (NAICS 541618) – Competition: High. Average bids: 1.71 Similar to 541611, this category covers a range of advisory services. It’s also popular and accessible to many small businesses, leading to numerous bids per solicitation. Small Biz Tip: Carve out a niche. For instance, specialize in strategic planning for a specific agency’s needs. Fewer direct competitors means your proposal won’t get lost in a stack of generic offers.
Actionable Advice for Small Businesses:
Know Your Competitive Landscape: Before bidding, research how many offers similar solicitations received. You can find this info in award databases like SAM.gov or USAspending (check the “Number of Offers Received” on past awards). If an upcoming RFP is in a NAICS that typically gets 15 offers, you’ll approach it differently than one that usually gets 2 offers. Use this intel to set realistic win strategies.
Leverage Set-Asides and Certifications: All of these NAICS codes have plenty of small-business set-aside opportunities. If you qualify for 8(a), HUBZone, SDVOSB, WOSB, etc., target contracts with those set-asides. It narrows the field. For instance, a 541511 solicitation open to all may draw large integrators (tough competition), but the same under an 8(a) set-aside will be a smaller pool of peers. Also, agencies have goals to hit for each set-aside category – use that to your advantage.
Differentiate Your Offer: In highly competitive NAICS arenas, small touches can make a big difference. Highlight what makes you special. Do you have proprietary software for your janitorial service that tracks quality? A former agency official on staff who deeply understands the consulting requirement? A past project almost identical to the RFP scope (reduced risk to the government)? Make sure that’s front and center in your proposal.
Team or Subcontract to Build Capabilities: If the competition is steep because the scope is broad, consider partnering. A teaming arrangement can combine the strengths of multiple small businesses (or a small with a larger firm) to present a stronger solution. For example, a facilities support (561210) bid might be strengthened if you team a cleaning specialist, a maintenance firm, and a security firm together – the agency gets an all-in-one solution, and you share the work. Just ensure your partnerships still meet small business participation rules if it’s a set-aside.
Focus on Relationships in Lower-Competition Fields: When fewer bidders are in play (like some medical or R&D contracts), building agency relationships is key. If an agency already knows your small business and your capabilities, you might even help shape a sole-source or directed award if only one offer is expected. Attend industry days, reach out to agency small business offices, and respond to RFIs – becoming a known quantity can sometimes reduce competition for you even in a competitive NAICS.
Why Some High-Competition NAICS Are Still Worth It: You might wonder, if some of these codes are so crowded, why pursue them at all? The answer: they represent huge slices of federal spending. For instance, IT and engineering services account for tens of billions in obligations each year. Janitorial and facility contracts are recurrent and numerous across all federal installations. There’s plenty of pie to go around. The key is to be strategic:
Pick your spots: Maybe you focus on a specific agency where your past performance gives you an edge, or a sub-niche
Start small: In very competitive fields, try going after smaller contracts first (perhaps under the Simplified Acquisition Threshold, where processes are simpler). These often have less competition and can build your track record.
Use macro trends: Pay attention to government-wide priorities. If the budget is increasing for a certain area, new opportunities will abound – sometimes faster than the competition can grow.
Big Picture / Final Thoughts: Competition in federal contracting isn’t uniform – it swings widely by NAICS code and the nature of the work. For small businesses, knowledge is power. By understanding which NAICS codes are crowded and which are less so, you can make informed decisions on where to invest your bid and proposal energy. Remember, even in the most competitive arenas, small businesses win contracts every day. The federal government must meet small business goals and is actively looking for capable small contractors. So whether you decide to dive into the deep end of a high-competition IT services bid or target a quieter niche like specialized R&D, approach it armed with data and a clear strategy. Stay persistent, keep learning from each bid (win or lose), and continuously refine your approach. The landscape may be competitive, but with savvy positioning, there’s ample opportunity for those prepared to compete smartly. By combining these insights with the knowledge of competition levels, you’ll be better equipped to target the right contracts and increase your win rate in FY 2025 and beyond. Good luck out there!
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