What Set-Asides Mean in Plain English
Set-asides can be confusing when you first start looking at government opportunities. This guide breaks down what they are, why they matter, and how to think about them when evaluating whether an opportunity may fit your business.
What is a set-aside?
A set-aside is a government procurement practice where certain contracts are reserved for specific categories of businesses. This means only businesses that qualify for the designated category can compete for the work, reducing competition from larger companies.
Common set-aside types
Total Small Business: Open to any business certified as small by SBA standards for the relevant NAICS code.
8(a): Reserved for businesses in the SBA 8(a) Business Development Program, which supports socially and economically disadvantaged businesses.
HUBZone: Reserved for businesses certified as being in Historically Underutilized Business Zones.
WOSB / EDWOSB: Reserved for Women-Owned or Economically Disadvantaged Women-Owned small businesses.
SDVOSB: Reserved for Service-Disabled Veteran-Owned Small Businesses.
Why set-asides matter
Set-asides can significantly reduce the number of competitors for a contract. Instead of competing against hundreds of businesses of all sizes, you may be competing against a smaller pool of qualified businesses in your category.
How to find out if you qualify
Eligibility for set-aside programs is determined by the SBA. If you believe your business may qualify, start by checking the SBA size standards for your NAICS code and exploring the relevant certification programs.