Understanding Set-Asides: 8(a), HUBZone, SDVOSB, and WOSB Programs

The federal government has a statutory goal to award at least 23% of all prime contract dollars to small businesses. To meet this goal, agencies use set-aside programs that restrict competition on certain contracts to qualifying small businesses. Understanding these programs and which ones you qualify for can dramatically improve your win rate.

Small Business Set-Asides

The most common type of set-aside simply restricts competition to businesses that meet the SBA's size standards for the relevant NAICS code. Size standards are based on either annual revenue or number of employees, depending on the industry. For example, most IT services firms qualify as small if they have less than $34 million in average annual revenue.

Any small business registered on SAM.gov can compete for small business set-asides. These represent the largest pool of reserved opportunities and should be a core part of every small contractor's strategy.

8(a) Business Development Program

The SBA's 8(a) program is designed for small businesses owned by socially and economically disadvantaged individuals. The program provides a nine-year development period during which participants can receive sole-source contracts up to $4.5 million for services and $7 million for manufacturing.

Eligibility requirements:

• At least 51% owned and controlled by socially and economically disadvantaged individuals
• Business must be a small business by SBA size standards
• Owner must have a personal net worth below $850,000 (excluding primary residence and business equity)
• Owner must demonstrate good character
• Business must have been in operation for at least two years

The 8(a) program is one of the most powerful set-aside vehicles because agencies can award sole-source contracts to 8(a) firms without full and open competition. This significantly reduces the cost and effort of pursuing contracts.

HUBZone Program

The Historically Underutilized Business Zones (HUBZone) program helps small businesses in economically distressed areas gain access to federal contracting opportunities. HUBZone-certified firms receive a 10% price evaluation preference in full and open competitions.

Eligibility requirements:

• Business must be a small business by SBA size standards
• Principal office must be located in a designated HUBZone
• At least 35% of employees must reside in a HUBZone
• Business must be owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, or an Indian tribe

You can check whether your business location qualifies as a HUBZone using the SBA's mapping tool at maps.certify.sba.gov.

Service-Disabled Veteran-Owned Small Business (SDVOSB)

The SDVOSB program reserves contracts for small businesses owned by veterans with service-connected disabilities. The federal government has a goal to award at least 3% of all contract dollars to SDVOSBs.

Eligibility requirements:

• At least 51% owned by one or more service-disabled veterans
• Management and daily operations controlled by service-disabled veterans
• Business must be a small business by SBA size standards

As of January 2023, SDVOSB certification is managed through the SBA's Veteran Small Business Certification (VetCert) program, replacing the previous self-certification process.

Women-Owned Small Business (WOSB)

The WOSB Federal Contracting Program restricts certain contracts to businesses owned and controlled by women. The program targets industries where women-owned businesses are underrepresented.

Eligibility requirements:

• At least 51% owned and controlled by women who are U.S. citizens
• Women must manage day-to-day operations and make long-term business decisions
• Business must be a small business by SBA size standards

Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) qualify for an even broader range of set-aside industries and can compete for both WOSB and EDWOSB set-asides.

Using Set-Asides with GovScout

GovScout makes it easy to filter opportunities by set-aside type. When you build your company profile, include your certifications and GovScout will automatically highlight opportunities that match your set-aside eligibility. Combined with AI relevance scoring, you can quickly identify the contracts where you have both the capability fit and the competitive advantage of a set-aside designation.

Set up your company profile to start seeing set-aside opportunities matched to your certifications.