Understanding Socio-Economic Classifications for Government Set-Aside Funds
You should first know that our government wants fair and open competition. Many programs exist that level the playing field by providing opportunities that spread funds to those other than large corporations. Have you ever seen the movie, Rocky? Everyone loves the story of an underdog, it is the backbone of America.
A socio-economic set aside is just that. Money the government "set's aside" to different socio-economic classifications. Some examples of ways to give your business an advantage to win government contracts are:
Woman Owned - Be at least 51% owned and controlled by one or more women who are U.S. Citizens.
EDWOSB: Economically-Disadvantaged Women-Owned Small Business
Veteran Owned - Be at least 51% owned and controlled by a veteran of the U.S. government.
Minority Owned - Be at least 51% owned and controlled by a minimum of one U.S. citizen whose ethnice background is at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American.
Check out this map to see if you are located in a HubZone area.
8(a) Program - Must be a small business that has not previously participated in the 8(a) program with at least 51% owned and controlled by U.S. citizens who are socially and economically disadvantaged.
The Small Business Administration(SBA) has a certification website to apply for eligibility, or you can contact a local Procurement Technical Assistance Center(PTAC) to help you through the process at no charge.
You should also know that when at least two small businesses can perform the work or provide the products being purchased, the government sets aside the contract exclusively for small businesses. With few exceptions, this happens automatically for all government contracts under $150,000. See requirements below:
You should start forming relationships with agencies before you receive your certification. That is why we have created a course that will take you step-by-step on how to position your company to win government contracts called GovSales University. Don’t feel like you are on the government journey alone! Other businesses will want to partner with you to fulfill the scope of work requirements provided by the agency, and still be in compliance with set-aside funds. This happens frequently when it comes to grant money provided for specific initiatives.
Keep an open mind working with partners and find a way to meet the needs of an agency through collaboration!