Government ContractSet-Aside Programs
Federal set-aside programs reserve billions in government contracts for certified small businesses. Understand each program, eligibility requirements, and how to find opportunities.
Definition
What are government set-aside programs? Government set-aside programs are federal procurement preferences that reserve certain contracts for certified small businesses. The four major programs -- 8(a), SDVOSB, WOSB, and HUBZone -- restrict competition to qualifying firms, giving them sole-source access and reduced competition for billions in annual contract spending.
Key Takeaways
- The federal government targets 23% of all prime contract dollars for small businesses, with specific subcategory goals for each set-aside program.
- Four major set-aside programs exist: 8(a) for disadvantaged businesses, SDVOSB for veteran-owned, WOSB for women-owned, and HUBZone for businesses in underutilized areas.
- Each program offers sole-source contracting authority, allowing agencies to award contracts without full competition below certain dollar thresholds.
- SBA certification is required for all four major set-aside programs. Certification timelines range from weeks to months depending on the program.
- Businesses can hold multiple certifications simultaneously, expanding the pool of set-aside opportunities they can compete for.
Federal Set-Aside Programs
Four major SBA-administered programs that reserve contracts for certified small businesses
8(a)
8(a) Business Development Program
SBA program for socially and economically disadvantaged small businesses. Offers sole-source contracts, mentoring, and business development support over a 9-year program term.
- Sole-source up to $4.5M (services)
- 9-year program term
- Mentoring and business development
SDVOSB
Service-Disabled Veteran-Owned Small Business
Set-aside program for businesses owned and controlled by service-disabled veterans. Federal agencies must meet annual SDVOSB contracting goals of at least 3%.
- Sole-source up to $5M (services)
- 3% federal contracting goal
- SBA VetCert certification
WOSB
Women-Owned Small Business
Program providing contracting opportunities for women-owned small businesses in industries where they are underrepresented. Includes the EDWOSB subcategory for additional opportunities.
- Sole-source up to $5M (services)
- 5% federal contracting goal
- NAICS-code restricted
HUBZone
Historically Underutilized Business Zone
Program for businesses located in economically distressed areas. Requires maintaining a principal office in a HUBZone and employing residents of HUBZones.
- 10% price evaluation preference
- Sole-source up to $4.5M (services)
- 3% federal contracting goal
Program Comparison
How the four major set-aside programs compare across key dimensions
| Factor | 8(a) | SDVOSB | WOSB | HUBZone |
|---|---|---|---|---|
| Competitiveness | High | Moderate | Moderate | Low-Moderate |
| Contract Volume | Very High | High | Moderate | Moderate |
| Sole-Source Threshold (Services) | $4.5M | $5M | $5M | $4.5M |
| Sole-Source Threshold (Manufacturing) | $7M | $7M | $7M | $7M |
| Federal Goal | 5% (SDB) | 3% | 5% | 3% |
| Eligibility Difficulty | Hardest | Moderate | Moderate | Hard |
| Certification Timeline | 3-6 months | 2-4 weeks | 2-4 weeks | 2-4 months |
| Program Duration | 9 years | Unlimited | Unlimited | Unlimited* |
| Price Preference | No | No | No | 10% advantage |
* HUBZone certification must be recertified every 3 years and requires ongoing compliance with principal office and employee residency requirements.
Why Set-Asides Matter for Contractors
Understanding set-aside programs can fundamentally change your federal contracting strategy
Reduced Competition
Set-asides limit the bidder pool to certified businesses in your category, significantly improving your win probability compared to full-and-open competition.
Sole-Source Authority
Contracting officers can award contracts directly to your business without competition, up to program-specific dollar thresholds.
Government Mandate
Federal agencies are required to meet annual small business contracting goals. Agencies actively seek certified businesses to fulfill these targets.
Pipeline to Larger Contracts
Set-aside contracts help you build past performance, which is critical for competing on larger full-and-open opportunities down the road.
Mentor-Protege Access
Programs like 8(a) include mentor-protege relationships with large businesses, providing access to resources, teaming, and subcontracting opportunities.
Multi-Certification Advantage
Holding multiple certifications multiplies your eligible opportunity pool. A business can be both SDVOSB and HUBZone certified simultaneously.
Related Resources
Explore tools and guides to help with your set-aside contracting strategy
Browse Set-Aside Contracts
Search live opportunities filtered by set-aside type
Get Certified
Professional assistance with SBA certification applications
NAICS Code Finder
Find the right NAICS codes for your business capabilities
Contracting 101 Guide
Beginner guide to government contracting fundamentals
SBA.gov
Official SBA certification and program information
SAM.gov Opportunities
Official government source for contract postings
Frequently Asked Questions
Common questions about government contract set-aside programs
What is a government contract set-aside?
A set-aside is a federal contracting preference that restricts competition for certain contracts to specific categories of small businesses. Under the Federal Acquisition Regulation (FAR), contracting officers must set aside acquisitions for small businesses when there is a reasonable expectation that at least two responsible small businesses will submit competitive offers.
How much of federal spending goes to set-aside contracts?
The federal government has a statutory goal to award at least 23% of all prime contract dollars to small businesses. Within that, specific goals include 5% for small disadvantaged businesses (including 8(a)), 3% for HUBZone businesses, 3% for service-disabled veteran-owned small businesses, and 5% for women-owned small businesses.
Can a business qualify for multiple set-aside programs?
Yes, a business can hold multiple certifications simultaneously. For example, a service-disabled veteran-owned business located in a HUBZone can hold both SDVOSB and HUBZone certifications. Having multiple certifications increases the pool of set-aside opportunities you can compete for.
What is the difference between a set-aside and a sole-source contract?
A set-aside restricts competition to certified businesses within a specific category but still requires competition among those businesses. A sole-source contract is awarded directly to a single business without competition. Each set-aside program has dollar thresholds below which sole-source awards are permitted.
How do I find set-aside contract opportunities?
Set-aside opportunities are posted on SAM.gov with specific set-aside type codes. You can filter by set-aside type on SAM.gov or use GCFinder to search and receive alerts for set-aside contracts matching your NAICS codes, certifications, and keywords.
Do I need to be SBA-certified to bid on set-aside contracts?
For most set-aside programs, yes. The SBA manages certification for 8(a), SDVOSB, WOSB/EDWOSB, and HUBZone programs. You must have an active certification in the relevant program at the time of bid submission. General small business set-asides only require that you meet SBA size standards for your NAICS code.
Find Set-Aside Contracts for Your Business
Search thousands of set-aside opportunities, get alerts for new postings, and track deadlines with GCFinder.