Government Set-Aside Programs: How to Qualify and Win Contracts

Set-aside programs are one of the biggest advantages small businesses have in government contracting. The federal government is required to award at least 23% of prime contract dollars to small businesses, and specific programs carve out even more for disadvantaged, veteran-owned, and women-owned firms.

If you qualify for a set-aside, you're competing against a smaller pool of contractors — dramatically improving your win rate.

What Is a Set-Aside?

A set-aside restricts competition on a contract to businesses that meet specific criteria. Instead of competing against large defense contractors, you compete against other qualifying small businesses.

The major federal set-aside programs are:

Small Business Set-Aside

The broadest category. You qualify based on SBA size standards for your NAICS code — typically measured by annual revenue or number of employees.

How to qualify: Register in SAM.gov and self-certify as a small business under your primary NAICS code. SBA size standards vary by industry — an IT firm can have up to $34 million in annual revenue and still qualify as "small."

8(a) Business Development Program

The most powerful set-aside. 8(a) firms can receive sole-source contracts up to $4.5 million (services) or $7 million (manufacturing) without competition.

Requirements:

• Owned by socially and economically disadvantaged individuals
• At least 51% owned and controlled by qualifying individuals
• Small business under SBA size standards
• Owner's personal net worth under $850,000 (excluding primary residence and business)
• In business for at least 2 years (can be waived)

Benefits: Sole-source contracts, mentorship programs, access to SBA resources, and a competitive advantage on set-aside solicitations.

Duration: 9 years in the program.

HUBZone (Historically Underutilized Business Zones)

For businesses located in and employing residents of economically distressed areas, the HUBZone program gives them a competitive edge in government contracting.

Requirements:

• Principal office in a HUBZone
• At least 35% of employees live in a HUBZone
• Small business under SBA size standards

Benefits: 10% price evaluation preference on full and open competitions, plus access to HUBZone set-aside contracts.

Use the SBA HUBZone Map to check if your address qualifies.

SDVOSB (Service-Disabled Veteran-Owned Small Business)

For businesses owned by veterans with service-connected disabilities, the SDVOSB program provides dedicated set-aside and sole-source opportunities.

Requirements:

• At least 51% owned by one or more service-disabled veterans
• Managed and controlled by qualifying veterans
• Small business under SBA size standards
• Veterans must have a service-connected disability rating from the VA

Benefits: Sole-source contracts up to $5 million (services) or $7 million (manufacturing), plus set-aside competitions.

WOSB (Women-Owned Small Business)

For businesses at least 51% owned and controlled by women, the WOSB program carves out set-aside contracts in industries where women are underrepresented.

Requirements:

• At least 51% owned by one or more women
• Managed and controlled by women
• Small business under SBA size standards
• Self-certification through SAM.gov (third-party certification also available)

Benefits: Access to WOSB set-aside contracts in industries where women are underrepresented. EDWOSB (Economically Disadvantaged WOSB) provides additional sole-source authority.

How to Use Set-Asides in Your Bid Strategy

1. Get certified. Register in SAM.gov, apply through SBA's certification portal, and keep your certifications current.
2. Filter for your set-aside. When searching for RFPs, filter by your set-aside type to find opportunities where you have a competitive advantage.
3. Highlight your status. In every proposal, prominently mention your certifications. Contracting officers have goals to meet for small business spending.
4. Pursue sole-source opportunities. If you're 8(a) or SDVOSB, proactively market to agencies. They can award you contracts directly without competition.

Next Steps

• Start your free trial — BidSparq filters RFPs by set-aside type so you find matching opportunities instantly
• Read our guide on finding RFPs for small businesses — complete search strategy
• Read our guide on finding government RFPs
• Learn about RFP vs RFQ vs IFB solicitation types
• Read our SDVOSB deep-dive: how to win SDVOSB set-aside contracts
• Explore VA contracts guide for veteran-owned business opportunities