Blog

Welcome to the FedScout blog. Our articles provide analysis, thoughts, and perspectives on the federal market and how to be successful in it.

Recent Posts

Sep 12, 2021

Set-aside Goals and Federal Performance (2020)

Time to read: 4 min

What are Set-aside goals:

Congress wants to use some of the federal government's massive spending power to help small businesses and entrepreneurs who come from certain groups. These are the set-aside goals, typically expressed as a % of federal agency spending that goes to each group

Why do you care:

In general we think that people make too much out of their set-asides (and we feel compelled to say it again, having a set-aside is not a value proposition, and it is not enough to get contracts pushed your way.  However, if you are evaluating different federal customers, and you see that one of them has missed their set-aside target in a set-aside that you qualify for, it will help.

Difference between prime and sub targets:

  • Prime contracts: Prime contracting goals are pretty straight forward, the government awards $100M in contracts and the goals say that $3M of that should go to woman owned small businesses.
  • Sub contracts: When the government awards a large prime award the government will expect the winner to subcontract to small businesses with set-asides to help them hit their overall set-aside targets

In the charts below you will see the data broken out by prime and sub spending achieved versus target.  If an agency missed their prime target, and you have that set-aside they will be incentivized to help you win prime work, while if they missed their sub target the government will be incentivized to connect you with a prime that you can sub to.

From a new businesses perspective this difference doesn't mean much.  If the government help you win prime contracts that's great, you get past performance which is great.  If the government helps you connect to a prime that you sub to you'll build critical relationships with that prime.  Either way you win.

 

  Small Disadvantaged business (5% goal)   Woman Owned Small Business (5% goal)   Service Disabled Veteran Owned (3% goal)   HUB Zone (3% Goal)
Agency Prime Sub   Prime Sub   Prime Sub   Prime Sub
USAID 6% 3%   5% 5%   0% 0%   0% 0%
Agriculture 19% 2%   10% 4%   2% 0%   7% 0%
Commerce 17% 15%   12% 12%   4% 2%   13% 3%
Defense 9% 4%   4% 5%   3% 2%   2% 1%
Education 8% 9%   5% 7%   1% 0%   0% 3%
Energy 4% 9%   3% 10%   1% 3%   0% 3%
HHS 10% 5%   5% 6%   1% 1%   1% 1%
DHS 15% 11%   6% 13%   5% 4%   4% 2%
HUD 10% 8%   4% 8%   -5% 3%   6% 5%
Justice 14% 4%   5% 7%   6% 1%   2% 2%
Labor 27% 18%   12% 18%   6% 9%   5% 10%
State 20% 4%   5% 6%   4% 2%   6% 1%
the Interior 31% 9%   14% 6%   5% 2%   7% 0%
the Treasury 8% 4%   9% 5%   3% 0%   2% 1%
Transportation 19% 11%   8% 14%   3% 2%   3% 0%
Veterans Affairs 9% 1%   2% 3%   20% 0%   1% 0%
EPA 18% 12%   5% 11%   2% 4%   2% 3%
GSA 22% 4%   10% 4%   8% 2%   4% 1%
NASA 7% 9%   4% 9%   1% 3%   0% 3%
NSF 9% 13%   5% 0%   4% 4%   3% 0%
NRC 34% 0%   12% 4%   7% 0%   7% 0%
OPM 45% 11%   46% 15%   7% 1%   8% 9%
SBA 73% 22%   63% 0%   9% 1%   7% 2%
SSA 7% 11%   5% 12%   3% 4%   1% 4%