Set-Aside Contracts

What Is a Set-Aside Contract in Government Procurement?

A set-aside contract is a type of federal contracting opportunity reserved exclusively for certain categories of businesses—most often small businesses. In other words, when an agency issues a set-aside, it limits competition to companies that meet small-business or socio-economic criteria.
Understanding what is a set aside in government procurement is key for any company looking to enter the federal marketplace. These contracts are part of the government’s effort to promote diversity, innovation, and fair access to federal spending.

How Set-Aside Contracts Work

The federal government sets aside a portion of its annual contracting dollars specifically for qualified small businesses. When a procurement officer determines that at least two or more small businesses can perform the work competitively, the opportunity is typically offered as a small-business set-aside.
This means only small businesses (as defined by the Small Business Administration, or SBA) can bid on the contract. Larger companies are excluded, leveling the playing field and encouraging broader participation.

Types of Small-Business Set-Asides

There are two main types of small-business set asides:
Total set-aside: Only small businesses can compete.

Partial set-aside: Part of a larger contract is reserved for small businesses, while the rest remains open to all vendors.

These contracts often fall under major government-wide acquisition vehicles (GWACs) or agency-specific contracting programs, giving small businesses access to recurring opportunities in IT, logistics, construction, and professional services.

Socio-Economic Set-Aside Programs

Beyond general small-business set-asides, the SBA also supports specific socio-economic categories. These programs help historically underrepresented groups compete more effectively for government contracts.
Key examples include:

• 8(a) Business Development Program: For socially and economically disadvantaged businesses.

• SDVOSB (Service-Disabled Veteran-Owned Small Business) Program: For veteran entrepreneurs with service-connected disabilities.

• WOSB (Women-Owned Small Business) and EDWOSB (Economically Disadvantaged WOSB) Programs: For women-owned firms in underrepresented industries.

• HUBZone Program: For businesses operating in historically underutilized areas.

When an agency issues an sdvosb/8a set aside, it means only companies certified under those designations can compete for the award. These set-asides are critical for expanding diversity and driving small-business participation in the federal supply chain.

Benefits of Set-Aside Contracts

For small businesses, set-aside contracts are an entry point into federal contracting and a way to build long-term customer relationships. Key benefits include:

• Reduced competition with large prime contractors

• Access to recurring revenue through long-term IDIQ or BPA awards

• Enhanced visibility among agency procurement officers

• Opportunities for growth through subcontracting and teaming

• For agencies, set-asides ensure compliance with SBA goals and support economic development across diverse communities.

Eligibility for Set-Aside Programs

To qualify for a set-aside contract, a business must:
Meet SBA size standards based on NAICS codes.

• Register in the System for Award Management (SAM.gov).

• Obtain relevant SBA certifications (such as 8(a), SDVOSB, HUBZone, or WOSB).

• Maintain active compliance with federal and state regulations.

• Certification requirements can vary by program, but all help the government verify eligibility and promote fair competition.

How GovDash Helps Contractors Pursue Set-Aside Contracts

Finding and managing set-aside opportunities can be challenging without the right tools. GovDash helps small businesses identify open solicitations, track upcoming set-aside opportunities, and manage proposal development in one place.
From sdvosb/8a set aside opportunities to general small-business set asides, GovDash automates capture planning and keeps teams organized through every step of the process. Contractors using GovDash can quickly filter by agency, category, and certification type to find the right contracts faster.

Conclusion

Set-aside contracts are one of the most effective tools for promoting small-business success in federal contracting. By understanding how these programs work and which socio-economic categories qualify, contractors can unlock millions in potential revenue while contributing to equitable economic growth.

With platforms like GovDash, navigating small-business set-asides and certification requirements becomes easier—empowering businesses to compete confidently and grow in the federal marketplace.

FAQs About Set-Aside Contracts

1. What is a set aside in government procurement?
   It’s a contracting mechanism that reserves opportunities for small or socio-economically disadvantaged businesses, excluding large competitors.

2. What types of set-asides exist?
   There are small-business set asides and socio-economic set asides, including 8(a), SDVOSB, WOSB, and HUBZone programs.

3. Who qualifies for a set-aside contract?
   Businesses must meet SBA size standards and hold the proper certification for the designated program.

4. What are sdvosb/8a set aside contracts?
   They are procurement opportunities restricted to Service-Disabled Veteran-Owned Small Businesses or 8(a) certified firms, promoting diversity and inclusion in federal contracting.

5. How can GovDash help with set-aside opportunities?
   GovDash helps businesses track, organize, and manage set-aside opportunities from capture through submission—simplifying compliance and increasing win rates.