Contracting Cone

Small Business Set-Asides (FAR Subpart 19.5)


Set-asides are a method to reserve a total acquisition or a portion of an acquisition exclusively for small businesses. Qualifying small business concerns include one or more of the following categories:

  • Small Business Set-Asides (FAR Subpart 19.5)
  • Small Disadvantaged Business (8(a)) Program (FAR Subpart 19.8)
  • Historically Underutilized Business Zone (HUBZone) Program (FAR Subpart 19.13)
  • Service–Disabled Veteran-Owned Small Business (SDVOSB) Program (FAR Subpart 19.14)
  • Women-Owned Small Business (WOSB) Program (FAR Subpart 19.15)


There is no order of precedence among the 8(a) Program, HUBZone Program, Service-Disabled Veteran-Owned Small Business (SDVOSB) Procurement Program, or the Women-Owned Small Business (WOSB) Program. In determining which socioeconomic program to use, the contracting officer should consider:

  • Results of market research that was done to determine if there are socioeconomic firms capable of satisfying the agency’s requirement
  • Agency progress in fulfilling its small business goals

Common Applications

  • All types of supplies and services
  • Defense Business Systems
  • Solutions and technologies
  • IT software and products
  • Research and development
  • Advisory and assistance services
  • Engineering services
  • Special studies




Small businesses provide culture of flexibility and innovation offering acquisition programs unique solutions to solving capability gaps Many small businesses do not have approved cost accounting systems limiting selection of contract types
Set-asides increase chance to provide maximum opportunity to use small businesses in acquisitions
Providing opportunities to small businesses grow the industrial base and strengthen the economy.


  • Acquisitions below the Simplified Acquisition Threshold (SAT) must be reserved exclusively for small businesses unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery
  • Acquisitions over the SAT, must set aside if there are two or more small businesses that could do the work and award will be made at fair market prices