Federal IT spending is poised for significant growth in 2025, with billions of dollars allocated to modernizing systems, enhancing cybersecurity, and adopting cutting-edge technologies like artificial intelligence. If your business operates in the IT sector, focusing on the right NAICS codes can position you for success in the federal marketplace. Learn which codes to prioritize and how federal spending trends are shaping opportunities in this high-demand industry.

What Are NAICS Codes and Why Do They Matter in IT Contracting?

The North American Industry Classification System (NAICS) assigns codes to categorize businesses by their services or products. For federal contractors, NAICS codes are essential—they determine eligibility for specific contracts, including small business set-asides. Identifying and leveraging the right codes ensures your business is aligned with federal priorities and competitive in the bidding process.

The Top IT NAICS Codes to Watch in 2025

541511 – Custom Computer Programming Services
This code covers the development and design of custom software solutions tailored to specific federal agency needs. In 2025, demand is expected to grow as agencies seek advanced automation tools, data analytics solutions, and artificial intelligence applications. Major buyers include the Department of Defense (DoD) and Department of Homeland Security (DHS), both of which require mission-specific software to address unique challenges.

541512 – Computer Systems Design Services
This category includes the design and integration of complete computer systems. Federal agencies are prioritizing IT modernization and cloud migration projects under this code, creating opportunities for businesses offering secure and scalable solutions. Many of these contracts are structured as small business set-asides, making them accessible for firms seeking to enter the federal market.

541519 – Other Computer-Related Services
Encompassing IT infrastructure support, disaster recovery, and cybersecurity services, this code is among the most versatile for contractors. The increasing emphasis on safeguarding critical systems is driving consistent growth in this category. Cybersecurity solutions in particular will remain a key focus in 2025.

518210 – Data Processing, Hosting, and Related Services
Federal cloud-first policies continue to drive investments in secure data storage and hosting services. Agencies are looking for solutions that ensure both resilience and compliance, including FedRAMP-certified hosting platforms. This code is particularly relevant for contractors specializing in data security and cloud infrastructure.

511210 – Software Publishers
This code includes the licensing and sale of software products, including subscription-based platforms and Software as a Service (SaaS) models. As agencies adopt enterprise-level solutions to enhance collaboration and efficiency, this area is expected to see sustained growth in federal spending.

Key Spending Trends in Federal IT Contracts

1. Cybersecurity: With a projected $20 billion in annual spending, agencies are prioritizing Zero Trust architecture and compliance with federal security frameworks.
2. Cloud Migration: Cloud solutions remain a critical investment, with billions allocated to replacing legacy systems and ensuring scalable, secure platforms.
3. Artificial Intelligence: AI spending continues to rise, with defense, healthcare, and data analytics being the most prominent sectors.
4. IT Modernization: Federal agencies are replacing outdated technology with modern infrastructure, driving demand for contractors with innovative solutions.

CMMC and Cybersecurity: A Vital Focus for Federal IT

The federal government’s focus on cybersecurity is creating significant opportunities for IT contractors. The Cybersecurity Maturity Model Certification (CMMC) ensures contractors meet strict requirements for protecting controlled unclassified information (CUI). Initially developed for DoD contracts, CMMC requirements are expanding across agencies, increasing the need for certified contractors in IT-related NAICS codes like 541519 – Other Computer-Related Services and 541512 – Computer Systems Design Services.

Opportunities in cybersecurity are growing due to:

• Zero Trust Initiatives: Agencies are adopting Zero Trust principles, driving demand for secure system design and implementation.
• Broadening CMMC Compliance: Non-DoD agencies are beginning to adopt CMMC-like standards, requiring all contractors to prioritize cybersecurity measures.
• Small Business Set-Asides: Many contracts under cybersecurity-related NAICS codes are reserved for small businesses, creating significant opportunities for growth.

USFCR’s CMMC compliance services ensure your business is prepared to meet these evolving requirements so you can compete in this expanding market.

How to Leverage These Opportunities

1. Update Your SAM Registration: Ensure your registration includes all relevant NAICS codes, especially for IT and cybersecurity.
2. Pursue CMMC Compliance: Meeting cybersecurity requirements is increasingly essential for federal IT contracts.
3. Focus on Small Business Programs: Explore set-aside opportunities designed for small and emerging contractors.
4. Partner Strategically: Subcontracting with established primes can help you gain experience and access to larger contracts.

Get Ready to Win IT Contracts in 2025

Federal IT spending is accelerating, and now is the time to align your business with the right opportunities. USFCR offers expert support for SAM registration, market research, and compliance so you can confidently pursue high-value contracts. Let us help you position your business for success in 2025.

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