What Is a Set-Aside in Government Contracting?

A set-aside is a federal contracting mechanism that restricts competition for a contract to certain categories of small businesses. Set-asides are a key tool the government uses to meet its statutory goals for awarding contracts to small businesses.

Common set-aside categories include Small Business (SB), 8(a) Business Development, HUBZone, Service-Disabled Veteran-Owned Small Business (SDVOSB), and Women-Owned Small Business (WOSB). Each category has specific eligibility requirements and certification processes.

Contracting officers are required to conduct market research to determine if there are enough qualified small businesses to justify a set-aside. If at least two capable small businesses can be identified, the Rule of Two requires the contract to be set aside. Understanding set-aside categories is critical for small businesses seeking federal contracts.