Federal Government Contracting Small Business Set-aside Designations

A small business set-aside designation can be a valuable tool if adequately documented, registered, certified and prudently used for bidding work that your enterprise is capable of performing successfully.

The following are the major small business set-aside designations in federal government contracting:

1.  Small Business - Established by North American Industry Classification (NAICS) Code for all categories of government business (Please download the "SBA Small Business Size Standards" SBA Table of Size Standards for further information). Federal contract solicitations  have a NAICS Code assigned to them when thy are registered at the below web site:

System for Award Managment (SAM)

2. Minority Business Enterprise (MBE) - A  good interim designation while an 8(a) application is in process for minority-owned companies:

National Minority Supplier Development Council MBE Information

3. Woman-Owned Business - Applicable to Women-Owned Businesses only:

SBA Woman-Owned Business Information and Application Site

4. Veteran-Owned Business - Applicable to Veteran-Owned Businesses only

SBA Veteran-Owned Business Program Information

5. Service Disabled Veteran-Owned Business - Applicable to Service Disabled Veteran-Owned Businesses only

SBA Service Disabled Veteran-Owned Business Information

6. Small/Disadvantaged Business SBA 8(a) Program - Requires 2 years in business and a lengthy application process with the SBA at the following web site:

SBA 8(a) Information and Application Site

7. Historically Under-Utilized Business (HUB) Zone Located - Pertains to small businesses located in geographic areas with a historical record of low government contracting. This designation requires application at the following HUB Zone Site Web Site:

Hub Zone Information and Application Site

QUALIFICATIONS, REGISTRATION, CERTIFICATIONS AND REPRESENTATIONS

To qualify as a small business for a given solicitation an enterprise must have registered at the System for Award Management Web Site under the applicable NAICS code for the procurement and meet the SBA eligibility size standards for that code.

A small business certifying under the above must have individuals qualifying for the designations with at least 51% ownership interest and an operating role in the company. 60% is recommended to avoid the appearance of a front. Silent partners and investors without qualifying status or an operating role in the firm do not count toward the designation. It is suggested that ownership interest be specified by name on the articles of incorporation with the state and by % of ownership in an operating agreement or similar document.

To qualify as a HUB Zone Enterprise the business must be located in a HUB Zone and a qualifying percentage of the members (owners or employees) of the business must also live in the applicable HUB Zone.

SUMMARY

Carefully select your small business designations when preparing your business and marketing plans for federal government contracting. Keep in mind that self-certifications are verified through records checks and site visits by contracting officers, DCMAO and Source Selection Boards for federal procurements before contract awards are made.

U.S. Small Business Administration Offers Help to Veterans

"MINNEAPOLIS STAR TRIBUNE"

"The U.S. Small Business Administration has resources available for veterans who want to start their own businesses or for small businesses that may have been affected by employees who have been deployed.

The numbers are substantial, according to the SBA: Nearly one in 10 small businesses in this country are veteran-owned; veterans are 45 percent more likely to be self-employed than non-veterans; and businesses owned by female vets have increased 297 percent from 2007 to 2012.

The SBA’s website has collected a list of programs that can offer help, especially in navigating the complexities of returning home for members of the Guard or Reserve after being deployed.

It has information on starting a business, financing, mentoring and training and selling to the government. It can be found on the website Veteran Owned Businesses

One example of a resource is the Military Economic Injury Loan, which provides funds to eligible small businesses to meet operating expenses when an essential employee is called to active duty. The filing period for businesses to apply begins on the date the essential employee is ordered to active duty and ends one year after the essential employee is discharged or released from active duty.

Another aspect to consider are laws that make federal contracting more attractive to veterans, particularly those with a service-connected disability. The Veterans Entrepreneurship and Small Business Development Act of 1999 established an annual government-wide goal of awarding at least 3 percent of all federal contracts to small businesses owned or controlled by service-disabled veterans.

There’s also Boots to Business, a two-step entrepreneurship training program open to service members and their spouses. The two-day course introduces participants to the opportunities and challenges of business ownership. An eight-week online course allows participants to work through the fundamentals of developing a workable business plan."

SBA Offers Help to Small Business