Set-Aside Programs

The federal government has a statutory goal of awarding at least 23% of all prime contract dollars to small businesses. To meet this goal, contracting officers can "set aside" contracts so that only small businesses (or specific subcategories) can compete. This eliminates competition from large corporations.

Major set-aside categories include Small Business (SB), 8(a) Business Development, HUBZone, Service-Disabled Veteran-Owned Small Business (SDVOSB), and Women-Owned Small Business (WOSB). Each program has specific eligibility requirements and certification processes.

For startups, set-aside programs dramatically improve your odds of winning. Instead of competing against Boeing or Lockheed Martin, you compete only against other small businesses. Some set-aside contracts are even sole-sourced to a specific category, further reducing competition.

Contracting officers are incentivized to use set-aside programs to meet their agency’s small business goals. Understanding which programs you qualify for — and certifying your eligibility — is one of the highest-leverage activities a small business can undertake.