- Can I qualify for multiple SBA programs?
Yes. Your business can also be multi-certified in case it is qualified under two or more programs announced by the SBA. As a matter of fact, a company may be accredited as an HUBZone and a WOSB. This makes more set-aside opportunities accessible to you and makes you more competitive in federal contracting.
- Are set-aside programs only for federal contracts?
Primarily, yes. Federal contracting with SBA set-asides, the contracting agency sets aside certain types of contracts to provide opportunities to the following types of contractors: federal set-asides are modeled after the example of many state and local governments, which also utilize similar programs. They tend to be a reflection of the SBA certifications and can be an opportunity to further reach into other sources of revenue outside of federal opportunities.
Exploring Advantages of Small Business Set-Asides & Program Types
Understanding small business set-asides and program types can open doors into the world of federal contracting for women-owned businesses.
Overview
- According to the SBA and FAR guidelines, Small Business Set-Asides allow contractual reservations to federal agencies for eligible small businesses.
- Other programs, such as the 8(a), WOSB, HUBZone, and SDVOSB, offer exclusive access to contracts and expansion.
- SAM.gov, GSA eBuy, and other procurement portals advertise contracts that are open to certified small firms.
- Several certifications have the potential to increase the number of opportunities in the federal and local government market.
Introduction
Government contracting can be a confusing experience for those working in it for the first time as small business entrepreneurs. There is one effective tool that can unlock the doors: small business set-aside programs. Such programs enable small businesses to leverage their set-aside certifications and get equal opportunities to win contracts. Understanding small business set-asides can leverage your business potential and establish a smooth functioning.
As a small business entrepreneur in the federal contracting industry, set-aside programs are an essential way to tap into a reliable and profitable source of income.
What Are Small Business Set-Asides?
Small business set-asides requires federal agencies to reserve a specific percentage of their contracts for small businesses, as mandated by the Small Business Act. They are foundational to the U.S. procurement policy, which advocates the benefits of inclusion, innovation, and development to smaller businesses.
Set-asides level the playing field by providing small and disadvantaged businesses more opportunities to compete with prime contractors. They make a positive economic impact. In FY2023, 28.4 percent of federal contracts were awarded to small businesses, surpassing the statutory obligation of 23 percent. Consequently, billions of dollars are being invested in local economies, promoting diversity, innovation, and sustainable development of local communities.
What Are the Types of Small Business Set-Asides?
Types of small business set-asides can help you understand your business’s preference and federal contracting requirements. These can be classified as:
Competitive Set-Asides
The competitive set-asides are those applied in situations where two or more small businesses can meet the needs of a federal contract. This approach is most common for contracts ranging from $10,000 to $ 250,000, guaranteeing equal opportunities to compete between qualified small vendors.
Sole-Source Set-Asides
Sole-source set-asides are made in instances where there is only a single firm that meets the requirement and is a small company. This practice is widespread in such programs as 8(a), HUBZone, SDVOSB, whenever a mission-critical contract is delay-sensitive.
Total Set-Asides
A total set-aside dedicates a contract only to small businesses, whereas a partial set-aside allots large contracts partially to small businesses. This allows other vendors to compete for other sections of the contract.
Micro-Purchase and Simplified Acquisition Thresholds
Micro-purchases refer to smaller purchases below $10,000 and are usually awarded directly to small business firms without formal bidding. Contract awards less than the simplified acquisition threshold of $250,000 are reserved for small businesses before entering the open market.
SBA-Administered Socioeconomic Set-Aside Programs
These programs give qualifying businesses a competitive edge and exclusive access to certain government contracts.
8(a) Business Development Program
The entrepreneurs eligible for the 8(a) Business Development Program are from economically and socially disadvantaged backgrounds. Their net worth must be less than $850,000 to qualify with 51% ownership and control of the business. The mentorship presented by the SBA is linked to participating in competitive and sole-source contracts.
Women-Owned Small Business (WOSB) & Economically Disadvantaged WOSB (EDWOSB)
These are programs meant to identify business firms where women own at least a 51 percent stake or control in a business. In some NAICS, EDWOSBs can be awarded sole-source contracts. The certification occurs either via the SBA WOSB Portal or by using an authorized third-party certifier.
HUBZone Program
The HUBZone Program assists business enterprises based in Historically Underutilized Business Zones. To be eligible, the place of principle must be in a HUBZone with a minimum of 35 percent of the employees being residents there. It can help you to apply under the sole-source and competitive contracts. Businesses will be given a 10 percent evaluation preference in pricing.
Service-Disabled Veteran-Owned Small Business (SDVOSB)
This program offers set-asides specifically for companies that are majorly owned and controlled by a service-disabled veteran. Such companies are highly successful with governments such as the VA and the DoD. They are required to be certified through either channel, SBA or the VetCert system of the VA.
How Agencies Apply Set-Asides in Procurement
Agencies follow specific rules and processes to ensure fair competition and compliance in awarding set-aside contracts.
Rule of Two and Contracting Officer Role
The Rule of Two in FAR Part 19 necessitates setting aside a contract with market research for at least two competing offers from small businesses. This applies to FAR 52.219-14 (DISCLOSURE OF OFFERS). Contracting officers are crucial in determining these opportunities, according to market conditions and the agency’s needs.
How Set-Asides Are Published
Solicitations issued as set-asides would be marked with words such as Total Small Business Set-Aside, WOSB Set-Aside, or 8(a) Set-Aside. These labels are made visible on government purchase websites to enable qualified firms to notice them easily.
Where to Find Opportunities for Set-Asides
Knowing where to look is half the battle when it comes to securing set-aside contracts. Here are a few resources for discovering small business set-asides.
Where can you find federal set-aside contracts?
SAM.gov is the main portal to federal contract opportunities in which all active solicitations are posted. The GSA eBuy also has opportunities to meet the vendors with GSA Schedules. The SBA Dynamic Small Business Search (DSBS) enables businesses to associate with the contracting officers and primes.
Federal Opportunity Portals and Subcontracting Channels
Certain federal agencies also release contract forecasts so that opportunities can be seen far in advance as well. Subcontractors can find opportunities on the SubNet with large prime contractors. That can enable them to partner with existing primes as a means of gaining access to new business.
Need Help Navigating Set-Asides?
When it seems that the federal contracting world is too big an adventure, consulting firms such as FedGirls can assist small businesses. We can ensure that you are ready to be certified, aware of compatible opportunities, and eligible for set-asides.
Commonly Used Terms in Set-Aside Contracting
It is essential to learn basic terms and key agencies of government contracting. The SBA manages special programs for small business set-asides targeting various types of small firms.
NAICS Code
North American Industry Classification System (NAICS) is a system that gives a six-digit code to classify businesses based on their main services. It clarifies whether your business is in accordance with the SBA size standards to be eligible for the set-aside. Any federal contracting opportunity indicates a NAICS code on it. It is important to be aware of the codes that fit your product or service. Choosing the right NAICS code makes sure that you can be compliant with the eligibility requirements. It also makes your visibility better in the procurement search.
FAR (Federal Acquisition Regulation)
The Federal Acquisition Regulation (FAR) is the overall code of regulations concerning all federal acquisitions. FAR Part 19, in particular, encompasses small business programs (such as set-asides). The FAR is necessary to understand the contracting process, how agencies conduct market research, and identify the opportunities for small businesses.
SAM.gov
The official site where a vendor can list itself to do business with the U.S. federal government is SAM.gov. It helps to find federal contracting opportunities, as well as the set-aside solicitations. The registration is not paid. However, one needs to prepare extensively. Incomplete and inaccurate information may slow down the process of becoming eligible to compete to get contracts. You can create a searchable profile post registration. This can be used by contracting officers and prime contractors as a source for acquiring potential partners.
SBA Certification
A number of set-aside opportunities mandate SBA certification. Eligibility requirements for programs are rigorous, as per ownership, control requirements, size requirements, and even geographic or individual net worth. Certification has numerous benefits; it offers access to competitive funding opportunities, sole-source procurement, and other advantages in federal procurement.
DSBS (Dynamic Small Business Search)
The SBA maintains the Dynamic Small Business Search (DSBS), which is a searchable database that is available to the public. It has a list of small businesses registered on SAM.gov with their details of certifications, capabilities, and contact information. DSBS may also be used by contracting officers and prime contractors who require small businesses for the coming opportunities. A fully detailed and keyword-laden profile, DSBS, decreases the potential to miss prime-contract opportunities and subcontracting opportunities.
Conclusion
Small Business Set-Asides are an effective avenue through which entrepreneurs can compete in the federal market. Sufficient knowledge of the category, eligibility, and certification could help small businesses access special contract opportunities. These programs, such as 8(a), WOSB, HUBZone, and SDVOSB programs, are used to encourage inclusion and the growth of local economies. Knowing how agencies use set-asides is crucial for small businesses in finding ideal opportunities. Government contracts can become a long-term and steady stream of income, given the right preparation for your small business.