Small Business Set-Aside
A small business set-aside restricts competition for an acquisition, or a distinct portion of one, to small business concerns. Between the micro-purchase and simplified acquisition thresholds the set-aside is automatic; above the SAT it is required whenever the rule of two is met.
The Small Business Act promises small firms a fair proportion of federal contract dollars, with a governmentwide goal of not less than 23 percent of prime contract value (15 U.S.C. 644). FAR Subpart 19.5 enforces it: 19.502-2(a) reserves every acquisition between the micro-purchase and simplified acquisition thresholds for small business, and 19.502-2(b) requires a total set-aside above the SAT when the rule of two is met and award is expected at fair market prices.
When a total set-aside will not work but the requirement divides into distinct portions, 19.502-3 directs a partial set-aside outside simplified acquisition procedures; other-than-small offers on the set-aside portion are rejected. A set-aside that draws no acceptable offers is withdrawn and resolicited unrestricted.
The finding lives or dies on market research. Sources-sought responses and recent competition history carry the two-offer expectation; a set-aside built on capability statements invites withdrawal, and an unrestricted award without a documented rule-of-two analysis invites a protest.
Regulatory Reference
FAR Subpart 19.5; FAR 19.502-2; FAR 19.502-3; 15 U.S.C. 644
RFO Status
The Part 19 model deviation consolidates set-asides at 19.104 — one total set-aside test at 19.104-1 that adds quality and delivery to the price factors, partial set-asides at 19.104-2, order-level set-asides at 19.111-2; Part 19 is not in the June 2026 first-batch proposed rules, so FAR Subpart 19.5 controls absent an agency deviation.
Category
Processes & Methods
How AcqBot Helps
AcqBot flags requirements that meet the 19.502-2 test from your market research record, recommends total versus partial structure when the work divides, and drafts the set-aside determination with the withdrawal path documented.
Related glossary entries
Sources Sought Notice
A Sources Sought Notice is a pre-solicitation announcement, typically posted to SAM.gov, asking companies to identify their interest and capability to perform a prospective requirement — primarily used as market research to shape competition and set-aside decisions.
Request for Information (RFI)
A Request for Information (RFI) is a formal market research instrument used to gather industry input on capabilities, approaches, pricing structures, or draft requirements when the government is not yet ready to solicit — responses are voluntary and non-binding.
Lowest Price Technically Acceptable (LPTA)
Lowest Price Technically Acceptable (LPTA) is a source selection process that awards to the lowest-priced offeror whose proposal meets minimum acceptability standards — no credit is given for exceeding requirements, and tradeoffs between price and quality are not permitted.
Best-Value Tradeoff
The best-value tradeoff process permits award to other than the lowest-priced or highest-rated offeror when the source selection authority documents that the superior proposal's benefits are worth its price premium, or that a cheaper proposal's savings outweigh its weaknesses.