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Small Business Set-Asides for Government contracting


Introduction

If you are a small business owner, you have likely heard of the term “set-aside.” However, if you are unfamiliar with this term, don’t worry—there is no need to panic. A set-aside is not something to be afraid of; it is a benefit that many companies take advantage of as a way to increase their business capabilities and provide them with more opportunities for growth. But what exactly does being designated as a small business entail? And how can it benefit your company? In this article we will discuss these questions in detail so that the next time someone asks you about set-asides, you will be prepared with all the information necessary!


What is a small business set-aside?

  • Small business set-asides are special contracts that are reserved for small businesses.

  • They can be either mandatory or voluntary, depending on whether they're required by law or not.

Mandatory set-asides mean that a portion of each contract must be awarded to eligible small businesses based on the percentages listed in the FAR (Federal Acquisition Regulation). Voluntary set-asides are bids where all bidders are eligible regardless of size and there's no promise that any particular amount will go to small businesses; they're simply competing with their larger counterparts like any other company would when bidding on a government contract.


Historically, government contractors were required to meet a certain threshold or size standard based on their number of employees and their annual revenue.

Historically, government contractors were required to meet a certain threshold or size standard based on their number of employees and their annual revenue. This meant that small businesses were often at a disadvantage when it came to landing contracts for the federal government. To address this inequity, the United States Congress passed a series of small business programs known collectively as “set-asides”.

Set-aside programs are designed to give preference to companies that qualify as small businesses in order for them to compete against larger companies by reserving certain contracts exclusively for those who qualify as small businesses under federal law.


Small businesses were often at a disadvantage when it came to landing contracts for the federal government.

When it comes to government contracting, small businesses are at a disadvantage. They lack the capital and resources of larger corporations and have less capacity to compete for government contracts. Additionally, the federal government often doesn't know about smaller businesses or take them seriously enough when they do—but that's where set-asides come in!


Small business set-asides offer a way for small businesses to get their foot in the door when competing against major corporations for lucrative federal contracts. They're not perfect, but they can help level out some of those disadvantages I just mentioned above by giving you an extra boost when trying to win your share of these valuable opportunities.


To address this inequity, the United States Congress passed a series of small business programs known collectively as “set-asides.”

To address this inequity, the United States Congress passed a series of small business programs known collectively as “set-asides.” The first such program was created in 1958 and amended in 1963. In 1976, Congress passed the Small Business Act Amendments of 1976 (Public Law 94-305), which significantly expanded small business procurement opportunities for federal agencies by providing for preferences for award of contracts and subcontracts to various types of small businesses. The Small Business Act Amendments also created an Office of Advocacy within the Small Business Administration (SBA) to represent the interests of small businesses before Congress, federal agencies and federal courts; established a Council on Federal Procurement Practices; and required that each agency establish an annual goal for contracting with small firms across all categories—including manufacturing—and report on its progress in meeting those goals annually to SBA. In 1978, another set-aside was enacted when Congress authorized two new programs: (1) the SBIR Program to encourage technological innovation by America's small businesses; and (2) EDGE Program providing incentives for contractors bidding on federal projects to provide training opportunities for disadvantaged employees.


Under these programs, agencies are required to reserve a certain number of projects or contracts specifically for small businesses each year.

Set-aside programs are not preferential, they are required. Under these programs, agencies are required to reserve a certain number of projects or contracts specifically for small businesses each year.


In other words, set-asides can't be waived by the agency because you're too big or too small of a business. It's up to the SBA whether or not they will issue an exception to this rule; however it's important to note that there aren't any guarantees that the SBA will refuse your request for an exception.


As a result, small businesses have greater access to government work and the opportunity to develop the capacity needed to compete in the more open marketplace.

As a result, small businesses have greater access to government work and the opportunity to develop the capacity needed to compete in the more open marketplace. This can mean more money coming into your business, which is good news for everyone involved.


When we talk about the benefits of being able to participate in these SBA programs due to designation as a small business, we are talking about increased contract opportunities, increased funding and increased capacity. The bottom line is that it means more money coming into your business!

When we talk about the benefits of being able to participate in these SBA programs due to designation as a small business, we are talking about increased contract opportunities, increased funding and increased capacity. The bottom line is that it means more money coming into your business!