In order to ensure that small, minority- and woman-owned businesses get their fair share of federal procurement dollars, the Small Business Administration (SBA) negotiates annual procurement goals with each federal agency and review each agency's results. Procurement goals are established in terms of percentage of annual expenditures.
23% of all prime contracts is to be set aside for small businesses
5% of all prime and subcontracts is to be set aside for small disadvantaged businesses
5% of all prime and subcontracts is to be set aside for woman-owned businesses
3% of all prime contracts is to be set aside for HUBZone small businesses
3% of all prime and subcontracts is to be set aside for to Service Taxi service business
The Different Federal Procurement Set-Aside Programs
Under the Small Business Act, federal government agencies may set aside procurements exclusively for small businesses. Announcements placed on FedBizOpps (www.fbo.gov), the federal government's online procurement portal for purchases over $25,000, will indicate those solicitations that have been set aside for small businesses. Set-asides are only made when enough qualified small businesses are expected to bid or offer services, in order to ensure adequate competition.
The SBA establishes small business size standards, based on employment and/or annual receipts, on an industry-by-industry basis. The standards apply for SBA program participation as well as all other federal government programs and actions where eligibility as a small business is a factor or a consideration. For more detailed information, visit SBA Size Standards.
Small Disadvantaged Business (SDB)
A federal designation, an SDB is a small business that is at least 51 percent owned, controlled and operated by one or more socially and/or economically disadvantaged individuals or stockholders. Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identification as members of certain groups. Within the socially disadvantaged classification, economically disadvantaged individuals are those whose ability to compete in the economy has been impaired due to diminished capital and credit opportunities. Officially designated socially and economically disadvantaged groups include African-Americans, Native Americans, Hispanic Americans, Asian Pacific-Americans and Asian Indian-Americans. Members of other groups must provide evidence that they are economically and socially disadvantaged. SBA determines eligibility on a case-by-case basis. For more details on SDB definitions, visit the SDB program.
The following programs can be especially helpful to socially and/or economically disadvantaged business owners:
8(a) Business Development Program
This program provides SDBs with technical and management assistance as well as access to the federal procurement market through sole-source, limited competition contracts and special procurement set-asides. All 8(a) firms must be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and U.S. citizens. The 8(a) Program Web site, provides more detailed information on 8(a) program eligibility criteria, the application process, other resources and contact information.
Businesses receiving small disadvantaged business certification from the SBA are eligible for special federal contract bidding benefits and set-asides; 8(a) firms automatically qualify for SDB certification. To receive SDB benefits as a prime ...