As a small business owner, you can access a steady new revenue stream through government contracts intended for small business owners. Since larger businesses often receive government contracts, the Small Business Administration (SBA) offers small business set-asides so your company can compete with the bigger companies in your industry. Read on to learn about how small business set-asides work.
A small business set-aside is a government contract that the agency in question will only offer to small business contractors. Set-aside contracts give small businesses a boost toward winning certain contracts that might otherwise prove far more difficult for these companies to access.
There are two primary types of set-aside contracts:
Additionally, some competitive set-aside contracts are reserved for small businesses with ownership or geographical conditions that meet one or more of the below socioeconomic classifications:
To bid on a small business set-aside contract, you’ll need to take three steps which allow you to search for and bid on these contracts. Here are the six steps for getting a small business set-aside:
Small businesses of all shapes and sizes are eligible for small business set-asides. The SBA definition of a small business varies immensely by industry, so you can use the agency’s size standards tool to determine if your business is considered a “small business.” Check these guidelines before moving ahead with a small business set-aside. If your business size exceeds the SBA size standard for your industry, you’re ineligible for small business set-asides.
Your company must have a nine-digit code called a D-U-N-S Number to receive government contracts. If you don’t yet have one, you can request one.
Similarly, you’ll need to register with SAM to make your company searchable to government agencies interested in small business contracting. Registration is free.
After you get a D-U-N-S number and register with SAM, you can place bids on set-aside contracts. Once you find a contract that interests you, set a reasonable price as the first step in your application. This factor may be the most important one – government agencies tend to select the least expensive contracts, but you should also avoid undervaluing your work just to secure a government contract.
Your worth includes more than just your pricing. That’s why, when you submit your bid, you should include proof that your company has completed similar projects while meeting deadlines and staying within budget. You should also prove that your customer satisfaction rates are high, and since some set-aside bids require applicants to include a past performance evaluation, you should include this report anyway to demonstrate your strong track record.
When it comes to small business set-asides, you shouldn’t be afraid to seek help. Even with all the guidance offered here, chances are that you’ll still have questions, and that’s expected – in fact, the SBA has a wealth of free online classes that can walk you through the set-aside bidding process. And if you still have more questions, the agency’s procurement center representatives are just a call away.
Need funding to build your business? Don’t waste time going from bank-to-bank filling out multiple applications. SmartBiz helps you find the best financing for your unique needs whether that’s an SBA loan, Bank Term loan, or other financing. About 90% of qualified applications we refer to banks are funded and our financial professionals are on hand to answer your questions. Discover if you’re pre-qualified here without impacting your credit scores and read the SmartBiz 5-star customer service reviews on TrustPilot.