Small Business Set Aside Program
The Federal Government is required to reserve a fair proportion of its total purchases and contracts for property and services for small business concerns.
The Government does this by reserving or "setting aside," entire procurements or parts of procurements for small businesses. This does not guarantee that any particular small business will receive a contract. It means that only small businesses may compete for the contract ("total small business set-aside") or the reserved portion ("partial small business set-aside").
The Government is also required to buy goods and services at competitive, fair market prices. Therefore, contracts are set aside only when at least two qualified small businesses are expected to submit offers that are competitive in terms of market prices, quality and delivery. In this context, "market price" means a price based on reasonable costs under normal competitive conditions, and not lowest possible cost.