Custom Computer Programming Services

NAICS 541511 is the federal government’s primary procurement code for custom software development services— the work agencies buy when they need bespoke applications, modernization of legacy systems, integration code on internal data, or specialized programming inside an existing platform. It is distinct from NAICS 541512 (Computer Systems Design), which covers the broader systems-architecture and integration work, and from 541513 (Computer Facilities Management) for outsourced ops.

Federal agencies put $2.69B through this code over the last 12 months across 2,496 individual awards. That makes 541511 one of the densest competitive arenas in federal IT procurement: 1,120vendors competed, with the top 15 pulling roughly 60% of the dollars. If you’re a federal IT services firm, this NAICS is either your home market or one you compete in adjacent to your primary code.

1,142 contracts in this NAICS expire in calendar year 2026 alone, totaling roughly $1,876.5M in obligated value. Another 464 expire in 2027 ($1,105.7M), and 56 more in 2028.

The 2026 wave is happening now — capture planning for those re-competes is already underway at most of the incumbent firms below. For challengers, the window to position is closing fast: agencies typically issue Sources Sought 9–12 months ahead of an RFP, meaning the late-2026 expirations are being sourced this quarter, and the early-2026 ones are already past the influence window. The agency mix concentrating these recompetes is heavily weighted toward DoD (~$870M of last-12-month obligations) and HHS (~$421M).

For more on how to read displacement signals on contracts like these, see our research on the true competitive displacement rate (segmented analysis of 27,004 re-competes)— which, after segmenting structural vs. competitive losses, lands at 20.5% (not the raw 30%).

Custom Computer Programming Services covers establishments primarily engaged in writing, modifying, testing, and supporting software to meet the needs of a particular customer. In federal procurement, this is the code agencies use when they need bespoke development — integrating a new module into a benefits-management platform at HHS, building data analytics pipelines for the Defense Department, modernizing legacy COBOL systems at the IRS, or developing custom decision-support tools at intelligence agencies.

The work is usually delivered as labor-hours-by-task-order under multi-year IDIQ contracts or as fixed-price firm-deliverable agreements. NAICS 541511 sits adjacent to Computer Systems Design Services (NAICS 541512) (the deliverable is a working system, not just code), Computer Facilities Management Services (NAICS 541513) (running someone else’s systems), and Other Computer Related Services (NAICS 541519) (the catch-all).

The SBA size standard for 541511 is $34M in average annual receipts (3-year average). Firms below that threshold qualify as small businesses for federal procurement and become eligible for these set-aside programs:

• 8(a) Business Development — sole-source up to $4M, competed for larger awards. Largest small-business slice in 541511.
• HUBZone — principal office and 35% of employees in a Historically Underutilized Business Zone.
• WOSB / EDWOSB — Women-Owned / Economically Disadvantaged Women-Owned. ~$18M annually in 541511.
• SDVOSB / VOSB — Service-Disabled Veteran / Veteran-Owned. ~$21M annually here.

Of the ~$2.18B awarded in 541511 over the last 12 months, roughly $260M (12%) went to small-business-reserved set-asides. The remaining $1.9B (88%) is full-and-open competition where small businesses bid head-to-head against the mega-primes. If you’re a small-business federal IT firm holding 541511 as a primary code, that 12% reserved share is your protected addressable market — the rest is contested. For broader context on set-aside dynamics, see our analysis of the $24.3B set-aside rotation cliff through FY27.

Palantir is the only top-10 vendor in this NAICS that doesn’t fit the federal IT services template. With just 23 contracts pulling in $333.8M over the last 12 months — a $14.5M average per contract— Palantir’s pattern is the inverse of the typical incumbent (high-volume, low-dollar staff augmentation). Compared to GDIT’s 45 contracts at $3.8M avg, Booz Allen’s 55 at $1.4M avg, and Peraton’s 42 at $0.6M avg, Palantir is winning a small number of very large software-platform contracts under 541511.

This is consistent with Palantir’s product strategy — Foundry, Gotham, and AIP deployments are licensed at platform scale rather than billed as developer hours — and it makes 541511 dollar concentration look misleading. If you’re benchmarking competitive density against Palantir, you’re not in the same market they’re in. Their contracts compete with other commercial-data-platform vendors (Databricks, Snowflake, custom integrators) on platform fit and licensing economics, not against IT services primes on labor rates. Filter Palantir out of the 12-month $2.18B total and the addressable-services market for everyone else is closer to $1.85B.

Mixed in among the GDIT / Booz Allen / Accenture / CACI federal IT mega-primes in the table above are two notable digital-services challengers: Skylight (Florida, small business) with 15 contracts pulling $39.9M in the last 12 months, and Nava PBC(Washington DC, public-benefit corporation) with 6 contracts at $34.0M. Both are products of the post-Healthcare.gov digital-services movement — smaller teams, modern engineering practices, design-led delivery, and a track record of winning prestige modernization work at HHS, VA, and CMS.

They aren’t displacing the mega-primes at scale. Booz Allen alone has 4× their combined contract count, and GDIT has 3× their combined dollar total. But they are winning the kind of high-visibility, high-stakes builds — CMS modernization, VA.gov work, internal-use-product redesigns — where the choice of vendor signals an agency’s intent to deliver, not just to procure. If you’re a small-business federal IT firm watching this NAICS, the Skylight/Nava trajectory is the most interesting positioning template available.Their proposals lean on demonstrated user-research and engineering rigor rather than past-performance volume, and they win on RFPs where the buying agency has already decided that staff-augmentation isn’t enough.

DoD alone accounts for ~40% of last-12-month obligations. The DoD/HHS/DHS top three together represent ~66%. If you don’t have past performance with at least one of the top five, your addressable market in 541511 is meaningfully smaller than the headline number suggests.

These are live picks from Pursight’s recompete pipeline — specifically, the highest-vulnerability 541511 contracts that haven’t yet expired. A vulnerability score of 48 doesn’t mean a 48% chance of incumbent loss; it means the contract scores in the top percentile across the structural factors (bridge history, original offer count, time-since-action, end-date urgency) that historically correlate with displacement. See the full vulnerability scoring methodology and weighting factors.

Federal obligations under 541511 peaked at ~$3.5B in FY2022 and have declined to ~$1.6B in FY2025 — a 54% drop in three years. Some of that decline is methodological (USAspending modification cleanup made FY2022 totals look inflated). But part of it appears to be a real shift: federal IT services work has been migrating toward broader system-design contracts under Computer Systems Design Services (NAICS 541512) and toward GWAC/MAC vehicles like OASIS+ and Alliant 3 where the work isn’t tagged with a single granular NAICS. If you’re sizing the federal IT services market overall, looking at 541511 in isolation will understate the pipeline.

If you bid in 541511, you almost certainly bid (or could bid) in one or more of these adjacent codes: