What Are Set-Aside Contracts? The Small Business Advantage

Set-aside contracts are federal contract opportunities restricted to a specific category of businesses. Instead of competing against large defense contractors and Fortune 500 companies, set-aside contracts level the playing field so that small businesses — including woman-owned, veteran-owned, and HUBZone businesses — compete only against each other.

Why Set-Asides Exist

Congress mandated that the federal government award at least 23% of all contract dollars to small businesses. Within that, specific goals exist for subcategories: 5% for small disadvantaged businesses, 5% for woman-owned small businesses, 3% for HUBZone businesses, and 3% for service-disabled veteran-owned businesses.

The 7 Main Set-Aside Programs

SBA — Total Small Business Set-Aside

The broadest category. If your business qualifies as small under your NAICS code size standard, you're eligible.

WOSB — Woman-Owned Small Business

For businesses at least 51% owned and controlled by women.

EDWOSB — Economically Disadvantaged WOSB

A subset of WOSB for businesses owned by economically disadvantaged women.

SDVOSB — Service-Disabled Veteran-Owned

For businesses at least 51% owned by veterans with service-connected disabilities.

VOSB — Veteran-Owned Small Business

For businesses at least 51% owned and controlled by veterans.

HUBZone — Historically Underutilized Business Zone

For businesses whose principal office is in a Historically Underutilized Business Zone.

8(a) — Business Development Program

A 9-year SBA program for socially and economically disadvantaged small businesses. Includes sole-source awards.

Not sure which programs you qualify for? Take the free IEContracts qualifier quiz — 8 questions, instant results.