Small Business Set-Asides and SBA Certification Programs

Goals: SB / SDB / WOSB

23% / 5% / 5%

Goals: HUBZone / SDVOSB

3% / 5%

Where to apply

certifications.sba.gov (free)

8(a), HUBZone, WOSB sole source

$5.5M; $8.5M manufacturing

SDVOSB sole source

$5M; $8.5M manufacturing

8(a) program length

Up to 9 years

HUBZone residency rule

35% of employees in a HUBZone

Ownership required

At least 51%

What a set-aside is

A set-aside is a contract that only certain small businesses can compete for. Large companies cannot bid on it as prime contractors, so you compete with firms your own size. Set-asides are one of the main ways the government meets its small business goals.

Each set-aside names who can compete. A total small business set-aside is open to any business that is small under the NAICS code on the solicitation. Other set-asides are limited to firms in a specific SBA program, such as 8(a), HUBZone, women-owned or service-disabled veteran-owned businesses. A notice on SAM.gov shows the set-aside type at the top, and you can filter your searches by it.

Total small business set-asides and the rule of two

Contracting officers use what is called the rule of two. When they reasonably expect offers from two or more responsible small businesses at fair market prices, they set the contract aside for small businesses. This rule applies to contracts above the micro-purchase threshold of $15,000, and it was kept in the rewritten FAR Part 19 under the Revolutionary FAR Overhaul.

Purchases above $15,000 and up to the simplified acquisition threshold of $350,000 are generally reserved for small businesses when the rule of two is met. Agencies can also set aside part of a larger contract, called a partial set-aside, or reserve some awards on a multiple-award contract for small businesses. For orders under multiple-award contracts, set-asides are encouraged and left to the contracting officer.

Government-wide small business goals

Congress sets yearly goals for the share of federal contract dollars that go to small businesses. The goal for small businesses overall is 23 percent of prime contract dollars. The goals for small disadvantaged businesses and for women-owned small businesses are 5 percent each, the HUBZone goal is 3 percent, and the service-disabled veteran-owned goal is 5 percent.

These goals apply in fiscal years 2025 and 2026. The small disadvantaged business goal returned to its 5 percent statutory level in fiscal year 2025 after a temporary increase from 2022 through 2024. The service-disabled veteran-owned goal rose from 3 percent to 5 percent under the National Defense Authorization Act for Fiscal Year 2024. The SBA negotiates a goal with each agency, and agency small business offices work to meet them.

The 8(a) Business Development program

The 8(a) program helps small businesses owned by socially and economically disadvantaged people grow through training, mentoring and access to set-aside and sole-source contracts. To qualify, the business must be small and at least 51 percent owned and controlled by U.S. citizens who are socially and economically disadvantaged. Each disadvantaged owner must have a personal net worth of $850,000 or less, adjusted gross income of $400,000 or less, and total assets of $6.5 million or less.

Applicants generally need two years in business to show potential for success. The program lasts up to nine years, with four years of development followed by five years of transition, and participants complete an annual review. A firm or individual can take part only once, while firms owned by Alaska Native Corporations, Indian tribes, Native Hawaiian Organizations and Community Development Corporations follow separate rules.

A final SBA rule effective September 10, 2026 changed how applicants show social disadvantage. Applicants now give an individual showing that they were affected by discrimination or bias and harmed by it, instead of relying on group membership. This rule applies to new and pending applications from individually owned firms.

The HUBZone program

HUBZone stands for Historically Underutilized Business Zone. The program supports businesses in areas such as qualified census tracts, rural counties and tribal lands. To qualify, your business must be small, at least 51 percent owned and controlled by U.S. citizens or certain tribal or community entities, have its principal office in a HUBZone, and have at least 35 percent of its employees living in a HUBZone.

Certified firms can compete for HUBZone set-asides and get a 10 percent price evaluation preference in full and open competitions. You recertify every three years, and there is no limit on how long you can stay in the program. The SBA HUBZone map on sba.gov shows which addresses qualify, and parts of the map are scheduled for updates in 2026 and 2028.

WOSB and EDWOSB

The Women-Owned Small Business program sets aside contracts in industries where women-owned firms are underrepresented. To qualify as a WOSB, your business must be small and at least 51 percent owned and controlled by women who are U.S. citizens, and women must manage daily operations and make long-term decisions. The SBA publishes the list of eligible NAICS codes.

An economically disadvantaged women-owned small business, or EDWOSB, meets extra limits. Each woman owner must have a personal net worth under $850,000, adjusted gross income of $400,000 or less averaged over three years, and personal assets of $6.5 million or less. Retirement account funds do not count toward net worth, and some set-asides are open only to EDWOSBs.

You can certify free through the SBA or through one of four SBA-approved third-party certifiers. Certified firms complete a program examination every three years. The SBA aims to decide within 90 calendar days of receiving a complete application.

SDVOSB and SBA VetCert

The SBA Veteran Small Business Certification program, called VetCert, certifies veteran-owned and service-disabled veteran-owned small businesses. To qualify as an SDVOSB, your business must be small and at least 51 percent owned and controlled by veterans who have a service-connected disability rating from the Department of Veterans Affairs. A spouse or permanent caregiver can help run a business owned by a permanently and totally disabled veteran.

VetCert opened on January 9, 2023, when certification moved from the VA to the SBA. Since January 1, 2024, SBA certification is required to win SDVOSB set-asides across the government, and new certifications last three years. Certified veteran-owned firms can also compete for VA set-asides reserved for veteran-owned businesses.

Sole-source thresholds

Certified firms can sometimes receive a contract without competition, called a sole-source award. Since October 1, 2025, the limit is $5.5 million for most contracts and $8.5 million for manufacturing contracts in the 8(a), HUBZone and WOSB programs. For SDVOSBs, the limit is $5 million, or $8.5 million for manufacturing. These figures rose from $4.5 million and $7 million, and $4 million and $7 million for SDVOSBs, under the 2025 inflation adjustment.

Firms owned by Alaska Native Corporations, tribes and Native Hawaiian Organizations can receive larger 8(a) sole-source awards. Awards above $30 million need a written justification, or above $150 million at the Department of Defense. An 8(a) firm can receive sole-source awards until its total reaches $168.5 million, and awards under $350,000 do not count toward that total.

How to apply

All four programs use the SBA's free MySBA Certifications portal at certifications.sba.gov. First, make sure your SAM.gov registration is active and lists your NAICS codes, since the portal pulls your business details from SAM.gov. Then create a MySBA Certifications account, check your eligibility with the online questions, and review the document checklist for each program.

Gather documents such as tax returns, ownership records, articles of organization and, for veterans, proof of service and disability rating. Submit your application in the portal and answer any SBA requests for more information promptly. You can apply for more than one program, and your certification appears on your SAM.gov and SBA search profiles once approved.

Free help is available. The SBA Certifications support team answers questions at 866-443-4110, and your local SBA district office and APEX Accelerator can review your application with you at no cost.

Sources

https://www.everycrsreport.com/files/2026-06-30_IN12018_6f51fa7436a86cc7af2612ae5a6aeea0ce180c18.html
https://public-inspection.federalregister.gov/2025-16412.pdf
https://www.sba.gov/federal-contracting/contracting-assistance-programs/8a-business-development-program
https://www.sba.gov/federal-contracting/contracting-assistance-programs/hubzone-program
https://sba.gov/wosb
https://legacy.sba.gov/article/2024/01/09/sba-marks-one-year-anniversary-veteran-small-business-certification-program
https://www.everycrsreport.com/files/2026-09-08_IF12853_1e52e52e6b1bbb89888dc2346415d62257b05b95.html
https://login.acquisition.gov/sites/default/files/page_file_uploads/MCC_RFO_Deviation_Part-19.pdf
https://certifications.sba.gov

Checked October 2026. Thresholds and rules change; each source above is the official page.