NAICS 541511 (Custom Software) - Prices, Top Agencies & Small-Business Tactics
If you sell custom software to the federal market, NAICS 541511 is where the action is. In the last 12 months, agencies posted 853 opportunities and awarded $6.3B across 974 winning companies—led by the Department of Defense and HHS. Below, we break down buyers, recent solicitations, and price signals you can use in your next bid.
TL;DR
- NAICS 541511 covers custom computer programming services—the bread and butter of federal software development contracts.
- $6.3B awarded in the last 12 months across 853 opportunities, with DoD ($2.1B) and HHS ($559.9M) leading the pack.
- Small business friendly: 60% of awards go to SB contractors, with size standard at $47M average annual receipts.
- Price signals: Labor rates range from $85–280/hour depending on clearance, specialization, and contract vehicle.
- CLEATUS tracks all 541511 opportunities in real-time, maps pricing trends, and identifies the best capture targets based on your profile.
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NAICS 541511: How to Win Custom Software Contracts in 2025
The federal government's appetite for custom software has never been stronger. From legacy system modernization to AI/ML implementations, agencies are investing heavily in bespoke technology solutions. NAICS 541511 (Custom Computer Programming Services) captures the lion's share of this market.
Understanding who's buying, what they're paying, and how to position your company is critical for sustainable growth in this competitive space.
Who's Buying 541511 Right Now?
The federal custom software market is dominated by four major players, each with distinct buying patterns and preferences:
| Agency | Total Awards (12mo) | Number of Awards | Avg Award Size | Key Focus Areas |
|---|---|---|---|---|
| Department of Defense | $2.1B | 377 | $5.6M | Mission systems, cybersecurity, data analytics |
| Health & Human Services | $559.9M | 280 | $2.0M | Healthcare IT, research platforms, compliance |
| Veterans Affairs | $401.2M | 156 | $2.6M | Electronic health records, veteran services |
| Homeland Security | $298.7M | 89 | $3.4M | Border tech, emergency systems, data integration |
DoD leads the pack with $2.1B across 377 awards, focusing heavily on mission-critical systems that require security clearances. The average award size of $5.6M reflects the complexity and duration of defense software projects.
HHS shows volume with 280 awards but smaller average sizes ($2.0M), indicating more discrete projects around healthcare modernization and regulatory compliance systems.
VA and DHS round out the big four, both showing steady, predictable buying patterns that make them excellent capture targets for companies with relevant past performance.
Capture Tip: Start with these four agencies. They account for 72% of all 541511 spending and have established procurement rhythms you can track and predict.
What Do Awards Look Like (Price Signals)?
Understanding recent award patterns helps you calibrate your Price-to-Win strategy and identify realistic ceiling ranges for similar work.
Notable Prime Contractors (12-Month Snapshot)
The market shows a mix of traditional systems integrators and emerging players:
- IBM: ~$634M across 23 awards (avg $27.6M) — Enterprise modernization, cloud migration
- Northrop Grumman: ~$1.3B across 18 awards (avg $72.2M) — Defense systems, classified environments
- CACI: ~$187M across 31 awards (avg $6.0M) — Intelligence community, data analytics
- SAIC: ~$156M across 19 awards (avg $8.2M) — Mission support, legacy modernization
- Booz Allen Hamilton: ~$143M across 28 awards (avg $5.1M) — Strategy, digital transformation
Labor Rate Ranges by Category
Based on recent RFQs and awarded contracts:
| Labor Category | Cleared Rate Range | Public Trust Range | Hot Skills Premium |
|---|---|---|---|
| Senior Software Engineer | $165–220/hr | $125–165/hr | +15% for AI/ML, cloud-native |
| Software Architect | $190–280/hr | $150–210/hr | +20% for microservices, DevSecOps |
| Full Stack Developer | $140–185/hr | $105–140/hr | +10% for React/Angular + cloud |
| Junior Developer | $95–130/hr | $75–105/hr | Standard rates, focus on certifications |
| DevOps Engineer | $175–240/hr | $135–180/hr | +25% for container orchestration |
| Project Manager | $155–210/hr | $120–160/hr | +10% for Agile/SAFe certification |
Price Reality Check: Cleared rates command 20–30% premiums, but factor in clearance processing time (6–18 months) and candidate availability when bidding.
Small-Business Angle (FAR 19.5 Set-Asides)
NAICS 541511 is exceptionally friendly to small businesses, with 60% of all awards going to SB contractors over the past 12 months. Here's why this market works for smaller players:
Size Standard & Qualification
- Size Standard: $47M average annual receipts for the preceding 3 years
- Revenue Threshold: Most small software companies qualify easily
- Employee Count: Typically translates to 200–400 employees depending on labor mix
Set-Aside Patterns by Agency
| Agency | SB Set-Aside % | SDVOSB % | 8(a) % | Best Vehicles |
|---|---|---|---|---|
| DoD | 45% | 18% | 12% | OASIS SB, SeaPort-e, SEWP |
| HHS | 72% | 8% | 15% | CIO-SP3 SB, OASIS SB |
| VA | 38% | 31% | 9% | T4NG, OASIS SB |
| DHS | 67% | 14% | 11% | EAGLE II, OASIS SB |
Competitive Advantages for Small Businesses
Fewer qualified bidders: SB competitions typically see 3–6 bidders vs. 8–15 for full & open, improving your odds significantly.
Faster decision-making: Small teams can pivot quickly on technical approaches and pricing strategies during the proposal process.
Direct customer access: SB contractors often get better access to program managers and technical SMEs during capture.
Subcontractor appetite: Large primes actively seek 541511 SB partners to meet subcontracting goals—leverage this for teaming opportunities.
Verification Tip: Always check the solicitation's NAICS code section to confirm the size standard. Some agencies mistakenly use 541512 (Computer Systems Design) which has a different threshold.
Price-to-Win Quick Method
Use this framework to calibrate your labor rates and total price positioning:
Step 1: Gather Baseline Data
Pull 12-month award data for similar 541511 contracts in your target agency. Focus on:
- Contract value range (your sweet spot)
- Labor categories (match your team structure)
- Geographic area (locality pay impacts)
- Security requirements (cleared vs. public trust)
Step 2: Apply Agency-Specific Adjustments
| Agency Type | Rate Sensitivity | Typical Adjustment | Key Factors |
|---|---|---|---|
| Defense (DoD) | Low | +5% to +15% | Mission criticality, clearance requirements |
| Civilian (HHS, VA) | Medium | -3% to +8% | Budget constraints, compliance focus |
| Intelligence | Very Low | +10% to +25% | TS/SCI clearances, specialized skills |
Step 3: Vehicle & Competition Analysis
- GWAC/CIO-SP3: Typically 3–8% lower rates due to pre-competed vehicles
- Direct awards: Market rates or slight premium for speed/specialization
- IDIQ task orders: Rates locked at contract award, focus on competitive mix
Step 4: Calibrate with Live RFQs
Cross-reference your target rates against recent award data from similar 541511 contracts. If your rates are >15% above recent awards for similar work, reassess your positioning or value proposition.
Frequently Asked Questions
Is NAICS 541511 good for small businesses?
Yes—exceptionally so. With 60% of awards going to SB contractors and a $47M size standard, this NAICS code offers the best opportunities for smaller software development companies in the federal space. The key is targeting the right agencies (HHS and DHS show 67–72% SB set-aside rates) and building relevant past performance.
Which agencies buy the most custom software?
DoD leads in total dollars ($2.1B), but HHS shows the highest volume (280 awards) and SB-friendly procurement patterns. VA and DHS round out the top four, each offering steady opportunities with predictable buying cycles. Start your capture efforts with these four agencies—they account for 72% of all 541511 spending.
How do I find today's 541511 RFPs and RFQs?
For real-time alerts, comprehensive requirement analysis, and automated opportunity matching based on your capabilities, track all live 541511 opportunities here.
What's the difference between 541511 and 541512?
541511 (Custom Computer Programming Services) covers bespoke software development, application programming, and custom coding services. 541512 (Computer Systems Design Services) is broader, including systems architecture, network design, and IT consulting. Most pure software development work falls under 541511, which has more favorable SB opportunities.
Do I need security clearances to compete in 541511?
Not always. While Defense and Intelligence work typically requires clearances (and commands 20–30% rate premiums), civilian agencies like HHS, VA, and DHS often use public trust positions. Focus on your clearance status when targeting specific agencies—cleared staff opens DoD opportunities but isn't required for the full market.
How long are typical 541511 contracts?
Most awards are structured as 2–3 year base periods with 1–3 option years, resulting in 3–6 year total contract lifecycles. IDIQ vehicles often run 5–10 years but with individual task orders of 6 months to 3 years. This structure provides revenue predictability while allowing for technology evolution.
Stop Hunting. Start Winning Custom Software Contracts.
The 541511 market moves fast—new opportunities post daily, requirements evolve quickly, and winning teams combine market intelligence with rapid response capabilities.
Track Live 541511 Opportunities & Buyers →
About CLEATUS
CLEATUS is an AI-powered government contracting platform that helps software development teams find opportunities, analyze requirements, track competitors, and win more contracts—at a fraction of traditional capture costs. We aggregate federal, state, local, and city opportunities; our GovCon Copilot analyzes solicitations and your internal documents to deliver actionable market intelligence that drives revenue growth.