When you sign up to become a government contractor at the SAM.gov website, you will be asked about your set-aside codes. Understanding these codes and taking advantage of the opportunities they can provide is crucial to successful government contracting. Let’s take a quick look at set asides and what it all means.
The United States government has 15 departments, as well as a myriad of independent agencies, commissions and boards. Virtually all of these entities will need government contractors at some time or another. Most of these agencies, particularly the departments, such as the Department of Homeland Security or Department of Education, try to “set aside” a portion of their contracting jobs just for certain types of small businesses.
Are You A Small Business?
Before we do a deep dive into these small business set-asides, it’s important to note that you first need to discover whether or not your business qualifies as a small business. The government has specific requirements, based upon your number of employees and earnings, which you must meet in order to qualify.
To check to see if your business qualifies, go to the Small Business Administration’s webpage at https://www.sba.gov/federal-contracting/contracting-guide/size-standards and click on the Measure My Business tab. From there you will need to know your North American Industry Classification System (NAICS) codes. These are codes that identify the exact type of goods and services you provide.
There are more than a dozen set-aside codes and your business may qualify for one or more of these codes, which include:
Competitive 8(a) – These are small businesses that are owned by people or entities that are found to be socially or economically disadvantaged. These are persons that, according to the United States government, have been subjected to racial, ethnic or cultural prejudice. This includes a wide range of persons, from women to Native Americans to those with certain physical disabilities.
In order to qualify, your business must be at least 51% owned by someone is economically and socially disadvantaged, and be owned by someone with a personal net worth of $250,000 or less, someone with assets of $4 million or less and there are several other criteria.
Woman-Owned Small Business & Economically Disadvantaged Woman-Owned Small Business – These two set asides are a bit easier to understand. To qualify, a business must be at least 51% owned by a woman. Obviously to qualify for the economically-disadvantaged set aside, you will need to prove that your income and assets are within the limits set forth by the government.
Veteran-Owned Small Business & Service-Disabled Veteran-Owned Small Business – Again, this one is fairly straight-forward and these set asides are simply meant for business that are 51% or more owned by a veteran or a veteran that was disabled during their years of service in the military.
Indian Small Business Economic Enterprises & Indian Economic Enterprises – If your business or organization is 51% Native American-owned, there are many resources available to you and two set-aside codes. This can be a small business owned by an individual that is Native American or a small business owned by a tribe, band or nation.
Partial HBCU/MI & Total HBCU/MI – For this set aside, the HBCU stands for Historically Black College or University, while the MI stands for Minority Institution. These are set asides for qualifying colleges and universities that are seeking government grants or contracting jobs.
Emerging Small Business – These are set asides to help newer businesses get their start. Typically, these businesses must be 50% smaller than the small business standard set by the SBA and your NAICS codes. For instance, perhaps your business counts as small business if you have 100 employees or less, but you only have 40 employees. In this case, you may be eligible as an emerging small business.
Very Small Business – If your business size and profits are well below the SBA requirements as a small business. Typically, the contracts you would bid on would be fairly small, ranging from about $2,500 up to $50,000. Of course, if you are a small firm with just a few employees, this amount of money might not seem that small.
HUBZone – In some cases, your small business might be located in what is known as a HUBZone (Historically Underutilized Business Zones) or have at least 35% of its employees living in a HUBZone. These zones are found around the United States and the SBA has map showcasing all of these zones on its website.
It’s definitely smart to head to the SBA’s HUBZone Map to see if your business is located within one of these zones, as at least three percent of all government contracts are set aside for qualifying HUBZone businesses. That might seem like a small number, but if you are competing against other businesses for a contract and your business has a set-aside code, the agency may be much more likely to select your business.
But what does all of this have to do with the SAM.gov website? Well, when you register with SAM and add your set-aside codes, agencies looking for contractors may search for businesses that qualify for these codes so it’s crucial that you know which codes apply to you.
In addition to adding these codes when you register at the SAM.gov website, you also should register as a government contractor in your state. These set-aside codes don’t just apply to federal contracts; they also might help you acquire contracts from state government agencies, as well.
Of course, you can bypass the SAM.gov website and let us help with SAM registration. We can help you identify whether or not you qualify for any set-aside codes, and we can handle your entire SAM registration. The SAM registration process can be very time-consuming and frustrating, and we help hundreds of companies every year complete the initial registration process and the renewal process.
Rather than struggling for hours on the SAM.gov website, consider contacting Federal Contractor Registry and let us do the work. To get started, just go to our homepage and click on the green New Registration tab.