Glossary / Contracts
Set-Aside
A set-aside is a federal solicitation reserved for competition among a specific category of firms, such as all small businesses, 8(a) Business Development Program participants, Women-Owned Small Businesses (WOSB/EDWOSB), Service-Disabled Veteran-Owned Small Businesses (SDVOSB), HUBZone firms, or other designated groups. Set-asides are a primary tool for meeting small-business contracting goals. The rule of two (FAR 19.502-2) requires the contracting officer to set aside an acquisition over the simplified acquisition threshold when at least two responsible small businesses are expected to offer at fair market prices. The FAR overhaul now in rulemaking keeps the rule of two for new contracts above that threshold.
Why it matters to your pipeline
Set-asides narrow the field of competition for qualifying firms. Certified small businesses can compete for set-aside work they would struggle to win in full-and-open competition. Strategic positioning around set-asides (which certifications to pursue, how to structure joint ventures, when to recertify) are among the biggest business development decisions a small firm makes.
When this term shows up in an opening GovSmith finds for you, your vCM explains what it means for that pursuit and does whatever it calls for. You decide; we do the work.
Example
An agency sets aside a $12M IT services re-compete for 8(a) firms under the Rule of Two. Only 6 8(a) firms submit proposals versus the 22 firms that responded to the prior full-and-open. The winning bidder's capture investment per award is a fraction of what it would have been in open competition.
Find out what applies to you
Some terms will matter to your business right away and some won’t for years. A vCM can tell you which are which.