The federal government is legally required to award a significant percentage of contracts to small businesses. For defense contractors, these set-aside programs create a protected competitive space where small businesses compete against each other—not against billion-dollar corporations. Understanding and leveraging these programs is one of the most effective strategies for building a defense contracting business.
Federal Small Business Goals
Government-Wide Goals
The Small Business Act establishes minimum goals for federal contracting:
DoD Performance
The DoD consistently exceeds these goals:
Types of Set-Aside Programs
Small Business Set-Aside
Eligibility: Meet SBA size standards for your NAICS code
How it works: Contract competed only among small businesses
Threshold: Contracting officers must set aside contracts when there's a reasonable expectation of receiving offers from at least two responsible small businesses
8(a) Business Development Program
Eligibility: Socially and economically disadvantaged small businesses
Benefits:
Duration: 9-year program
HUBZone Program
Eligibility: Principal office in a HUBZone; 35% of employees reside in HUBZones
Benefits:
Service-Disabled Veteran-Owned Small Business (SDVOSB)
Eligibility: 51%+ owned by service-disabled veteran(s)
Benefits:
Women-Owned Small Business (WOSB)
Eligibility: 51%+ owned by women; economically disadvantaged (for EDWOSB)
Benefits:
Maximizing Your Set-Aside Advantage
Strategy 1: Stack Certifications
You can hold multiple certifications simultaneously:
Strategy 2: Target the Right Opportunities
Not all set-asides are equal. Focus on:
Strategy 3: Build Relationships with Contracting Officers
Contracting officers decide whether to set aside contracts. Help them by:
Strategy 4: Use Mentor-Protégé Programs
Partner with larger firms through:
Strategy 5: Leverage Joint Ventures
8(a) and mentor-protégé joint ventures allow:
Common Set-Aside Myths
Myth: "Set-asides are charity"
Reality: Set-asides are competitive. You still must offer the best value. They simply ensure small businesses get a fair chance to compete.
Myth: "Big companies can't participate"
Reality: Large businesses can participate as subcontractors. Many set-aside contracts include subcontracting to large firms.
Myth: "Set-asides are only for small contracts"
Reality: Set-aside contracts can be worth hundreds of millions of dollars, especially IDIQ vehicles and multiple-award contracts.
Myth: "Once you graduate, you lose everything"
Reality: Past performance and relationships built during set-aside programs carry forward. Many successful defense contractors started with set-asides.
The Numbers: Set-Aside Contract Values
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Conclusion
Small business set-aside programs are the most powerful tools available for entering and growing in the defense market. They provide protected competitive spaces, sole-source opportunities, and mentoring that accelerate your path to success. If you qualify for any of these programs, certification should be a top priority.
Ready to Take the Next Step?
Whether you're a small manufacturer seeking defense contracts, a government buyer looking for qualified suppliers, or a business owner pursuing CMMC certification, KDM & Associates and the V+KDM Consortium are here to help.
Join the KDM Consortium Platform today:
Schedule a free introductory session to learn how we can accelerate your path to government contracting success.
Whether you're a small manufacturer seeking defense contracts, a government buyer looking for qualified suppliers, or a business owner pursuing CMMC certification, KDM & Associates and the V+KDM Consortium are here to help.
Join the KDM Consortium Platform today:
*Schedule a free introductory session to learn how we can accelerate your path to government contracting success.*