Set-Aside Contracts

Set-aside contracts are government contracts reserved for specific categories of small businesses. By limiting competition to qualifying firms, set-asides help small businesses win contracts they might not win in full and open competition.

How It Works

The federal government has statutory goals for small business contracting: 23% overall small business, 5% small disadvantaged/8(a), 5% women-owned, 3% SDVOSB, and 3% HUBZone. Contracting officers must consider set-asides before opening competition to all businesses. Types include total set-aside (only qualifying firms) and partial set-aside (a portion reserved for qualifying firms).

Example

A GSA contract for office supplies is set aside for small businesses. Only firms meeting the SBA size standard for that NAICS code can submit bids. Large corporations cannot compete.

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