Federal agencies are supposed to spend money with SmallBusinesses and small businesses with Socio-economic designators, such as woman or veteran owned small businesses. If a contract is set aside then only companies with that designation can bid. Reducing competition

Identify your differentiators/ strengths

  • Assessing whether you are a small business:
    • If you are a brand new business then there’s a 99% chance you are also small
    • If you have made less than $10M/year over the last 3 years then there’s a 99% chance you are small
    • But if you are a successful commercial company and you are expanding into federal you could be a large business already. The math for determining if you are small is a little complex so please see our class below
  • Assessing whether you qualify for a socio-economic designation:
    • Veteran, woman, and minority owned: If more than 50% of a company is owned by one or more people who qualify for the designator then the company can qualify (e.g. if two women own 51% or more of a company then that company can qualify for the Woman Owned Small Business set-aside

Review the upcoming acquisition

  • Forecast items: Items listed in an agency forecast may contain the government’s current set-aside plan
  • Re-competing items: The governments generally defaults to the set-aside of the previous generation of the contract. For more on re-competing contracts see our classes on how the government buys
  • RFIs: When the government releases an RFI they typically share whether they anticipate setting it aside
  • Sources Sought: If the government releases a sources sought this generally indicates that they want to set the contract aside and just needs to justify that decision
  • RFP: Once an RFP is released it is too late to influence the set-aside.

Why your differentiator/strength helps the government

  • Price: Setting a contract aside reduces competition so is unlikely to push costs down
  • Quality: Setting a contract aside reduces competition so is unlikely to increase quality, with a couple exceptions:
    • Block the incumbent: If the government is unhappy with the current vendor they can block that vendor from bidding by using a set-aside they don’t have
    • If the contract relates to a group: If the government is buying educational services for women’s shelters or to survey the veterans community, or something similar where the contract specifically relates to a group then choosing a vendor connected to that group could lead to better outcomes
  • Speed: Arguably set-aside contracts move faster because there are fewer proposals to read/review
  • Administrative risk: If the government agency is below their set-aside spending targets in one of the set-asides you qualify for, then you can make the case that setting this contract aside helps them achieve their goals

Make your case/recommendation to the government

Along with all the typical ways to engage and influence government decision makers the government issues Sources Sought which give industry the opportunity to advocate for a contract being set aside. For more on the sources Sought see our linked class below

Other resources (Individual contract checks)

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List of further reading

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