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What is a Government Certified Set-Aside

What are small business set-asides?

Every year, the federal government spends over $600 billion on contracts. By law (the Federal Acquisition Regulation or FAR), they have to try to spend at least 23% of that sum on small businesses.

Then, there are spending goals for specific types of small businesses which include:

  • Women-Owned Small Businesses (WOSBs)

  • Service-Disabled Veteran-Owned Small Businesses (SDVOSBs)

  • Historically Underutilized Business Zone (HUBZone) Small businesses

  • Small Businesses enrolled in the 8(a) Program

What are the benefits of these set-asides?

In the most basic sense, being registered as a small business and specifically one of the groups above boosts your chances of winning a federal contract.

To make sure their annual contracting budget gets distributed to small businesses and various set-asides, the government employs three methods.

  1. Creating exclusive bidding opportunities (for example an HVAC contract that can only be bid on by SDVOSBs)

  2. An increased incentive for agencies to hire set-aside designated businesses to reach their spending goals

  3. Increase incentives for prime contractors to work with small business subcontractors

A SAM registration will get you in compliance for federal contracts, but registering for a federal set-aside can greatly improve your chances of winning.

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