Small and Disadvantaged Business Utilization

Small Business Participation

GSA and the Small Business Administration (SBA) strongly support the participation of small business concerns in the GSA Schedule Program. To enhance small business participation, SBA policy allows agencies to include in their procurement base and goals the dollar value of orders expected to be placed against GSA Schedule contracts. Actual orders placed against Schedule contracts may be reported as accomplishments and credited toward ordering activities' small business goals.

At the discretion of the buying contracting officer, orders and BPAs may be set aside for small businesses for any of the socioeconomic categories listed at FAR 19.000(a)(3), if market research shows that three or more such firms are capable of providing the products and/or services required. However, for 8(a) set-asides, the SBA offer and acceptance process must be accomplished at the order level.

GSA Schedule set-asides are conducted under FAR 8.405-5 procedures, which states that the ordering procedures at FAR 8.405-1, -2, and -3 must be followed when setting aside an order or establishing a set-aside BPA. These procedures require that the ordering activity get three quotes or place the solicitation on GSA eBuy. Since FAR Part 19 procedures do not apply to Schedule orders, the "rule of two" is not applicable in the Schedule environment.

GSA Provides Guidance for Buying Agencies

When conducting evaluations and making a best value determination before placing an order, buyers should consider including, if available, at least one small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, women-owned small business, or small disadvantaged business Schedule contractor. Buyers should also give preference to the items of small business concerns when two or more items at the same delivered price will satisfy the requirement.

In accordance with FAR 8.405-5(a), government buyers should rely on the small business representations made by Schedule contractors at the contract level. Small business representation.

Approximately 80 percent of all GSA contractors are small businesses. They are identified by indicators on GSA eLibrary (listing of available contractors) and GSA Advantage! (online shopping and ordering system):

Indicator Company Status
s Small Business
o Other than Small Business
w Woman-Owned Business
v Veteran-Owned Small Business
dv Service Disabled Veteran-Owned Small Business
d SBA Certified Small Disadvantaged Business
8a SBA Certified 8(a) Firm
h SBA Certified HUBZone Firm

Small Business Set Asides

Through the Schedule Program, GSA increases contracting opportunities for small businesses, and assists buyers in achieving or exceeding their socioeconomic goals. Customers now have the ability to set aside orders.

Here are some helpful resources for acquisition planning:

Orders placed against a Schedule contract can be credited toward small business goals. Vendors can learn more about small business contracting at GSA's Office of Small and Disadvantaged Business Utilization.

Small Business Set Aside FAQs

Yes. Although not mandatory, FAR 8.405-5 authorizes set-asides, at the contracting officer's discretion.

Yes. FAR 8.405-5(a)(1) expressly states that agencies may set aside orders and BPAs for any of the small business concerns identified in 19.000(a)(3).

No. It is entirely up to the ordering contracting officer to decide whether or not it is in the best interest of the government to set aside an order for small business. See FAR 8.405-5.

No. Special documentation is not required if the agency is conducting a competitive set-aside. However, if the agency is limiting the number of small business sources considered to fewer than three, as outlined in FAR 8.404 and 8.405, the agency must prepare documentation to justify the limitation. Given that there are more than 15,000 small businesses participating in the Schedules Program, there should be few instances where an agency is unable to give consideration to a sufficient number of small businesses to comply with the competition requirements set forth.

Agencies must take the following steps:

  1. Perform market research. Determine if there are at least three small businesses capable of performing the desired work. Given that there are more than 15,000 small business Schedule contract holders, agencies should easily be able to identify at least three small businesses that are capable and competitive.
  2. Include a statement in the RFQ, for an order or BPA, that it will be set aside. The contracting officer should include the following language in the RFQ:

    "This is a notice that this order is a total set-aside for (insert either "small business concerns" or specify a subset of small business concern). Only quotes submitted by (insert either "small business concerns" or specify a subset of small business concerns) will be accepted by the government. Any quote that is submitted by a contractor that is not (insert either "a small business concern" or specify a subset of small business concern) will not be considered for award."

    If using eBuy, this statement will be added automatically to the set-aside RFQ posting. See the response to question #12 for more details.

No. Since the FAR requires agencies to get three quotes, and the "rule of two" does not apply to Schedule orders, the ordering activity is required to release the RFQ as unrestricted in order to get three quotes and maximize competition.

For orders under the SAT, the ordering activity shall provide the RFQ to at least three contractors.

For orders above the SAT, the RFQ should be posted to GSA eBuy or sent to enough eligible Schedule contractors so that at least 3 quotes are received.

Yes, you can do a set-aside for a specific small business socioeconomic category against a set-aside SIN and/or the TAPS Schedule. For example, you can choose to set aside an order against TAPS for HUBZone small business concerns. However, as always—market research must indicate that there are sufficient eligible small business concerns capable of performing the work before you can set aside the order for that small business socioeconomic category.

Yes. If an order is not being set aside exclusively for small business concerns, contracting officers can use socioeconomic status as an evaluation factor in RFQs.

Some of the small business programs identified in FAR Part 19 have special circumstances under which you can set aside an acquisition. For example, for an order to be set aside under the Women-Owned Small Business (WOSB) Program, the contracting officer shall verify that the offeror:

  1. Is registered in the System for Award Management (SAM);
  2. Is self-certified as an EDWOSB or WOSB concern in SAM; and
  3. Has submitted documents verifying its eligibility at the time of initial offer to the WOSB Program Repository. The contract shall not be awarded until all required documents are received.

In order to facilitate the set-aside of orders in eBuy, the system has been changed to remove an RFQ from the view of those Schedule contractors that are not eligible to respond to a particular set-aside order. For example, if an RFQ is set aside for service-disabled veteran-owned small business concerns, only those Schedule holders that are awarded the relevant Schedule and SIN(s), and are service-disabled veteran-owned small businesses will be able to view it. Other Schedule-holders will not be able to view the set-aside RFQ The set-aside RFQ posting on eBuy will include a label identifying what kind of a set-aside it is, and language stating that quotes from Schedule contractors who are not eligible for the set-aside will not be considered for award.

Note that contracting officers still have to comply with the ordering procedures in FAR 8.405-1, 8.405-2, or 8.405-3 before proceeding with a set-aside (i.e., make sure there are sufficient contractors eligible to participate in the set-aside or follow the requirements for limiting sources in FAR 8.405-6).

All members of the CTA must be small (or whatever sub-set the order is set-aside for) for the CTA to be eligible for that order. It is important to note, that for an MAS CTA, all team members must hold a Schedule contract, they each are responsible for their portion of the work, and each member maintains privity of contract. These rules apply in both an order and BPA environment against Federal Supply Schedules. For more information on CTAs, visit our contractor team arrangements page.

Section 1331 of the Small Business Jobs Act and FAR 8.405-5(a) (1) only authorizes set-asides of orders under multiple award contracts, not sole source.

Currently, agencies do not have goals for 8(a) small business concerns but they do have goals for small disadvantaged businesses. Since 8(a) firms are by definition small disadvantaged businesses, an order placed against an 8(a) Schedule-holder will be credited towards the ordering agency's small disadvantaged business goal.

Yes, the Non-Manufacturer Rule (NMR) does apply to Schedule orders set-aside for small business. The NMR requires that a small business performing under a set-aside contract/order must provide the product of a small business manufacturer.

No. Size is assigned to a particular Schedule contract based on the Schedule contractor. A large business Schedule contractor cannot use a small business dealer's size status in order to compete for a set-aside order.

Under an MAS CTA the Team must perform fifty percent (50%) of the value of the work in the aggregate. For example, on a team consisting of three contractors, the Team Leader could perform thirty percent (30%) of the work and each Team Member could perform ten percent (10%) of the work to meet the fifty percent (50%) requirement. The remaining fifty percent (50%) of the work may be performed by subcontractors working under any of the team members Schedule contracts. Socioeconomic restrictions do not apply to subcontractors; i.e., they may be large business.

Last Reviewed: 2023-02-08