Qualifying based on ownership Whether a company qualifies for most set-asides comes down to the people that own that company. And in each of these cases the company must be
Over 50% owned by people who belong to the group
Actively led and managed by the people who belong to the group
Example: A company is 51% owned by two veterans, and those two vets actively manage and lead the company, then that company qualifies for the Veteran Owned Set-Aside
Ownership based set-asides are:
Woman Owned (WOSB)
Economically Disadvantaged Woman Owned (EDWOSB)
Veteran Owned (VOSB)
Service Disabled Veteran Owned (SDVOSB)
Disadvantaged
8(a)
Location Based Set-asides
Qualifying based on location: The HUBZone set-aside is the exception to the ownership model of determining whether a company qualifies. The HUBZone program is designed to help businesses that are located in economically disadvantaged areas so to qualify:
The company has to be headquartered in a HUBZone
The company’s major operations have to be in a HUBZone
One third of the company’s employees have to live in a HUBZone
Are you a small business: This is a more complicated question than you might think because the answer changes depending on what kind of work you are doing at the moment:
Every government contract has a NAICS code associated with it
Each NAICS code has a “cut-off” for how big a company can be and still be small
So a company could be small when they are bidding on work in NAICS code 123
But be a large business when they are bidding on work in NAICS code 456
Depending on the NAICS code the size standard is either assessed based on
The company’s number of employees
The company’s average revenue over the last three years
If you are a truly new business don’t worry about this, you are small: The lowest small business size cut off is a few million dollars or 100 employees, so if you just started and have less than a mil in revenue don’t worry, you are small.
The size standards: If you aren’t sure whether you are small calculate two numbers:
Number of employees: Your total number of employees and be sure to include:
Any owners
Part time employees
Consultants and contractors that do a lot of work for you
Your revenue: Get your revenue figures for the last three years, average those numbers. This is your revenue for the purposes of assessing whether you are a small business. And a couple notes:
Be sure to include all your revenue (including non-government sales)
If you have been in business for less than three years and your average revenue over the years you have been in business is close to the small business cut-off go talk to an accountant to help you compute your revenue.
For a list of the small business size cut-offs by NAICS code see the downloadable excel in this class’ Course Materials
