Small business set-asides explained: which federal contracts you can bid on

A set-aside limits who can bid on a contract. Most federal cleaning and grounds work in Virginia, Maryland, DC, Delaware and Pennsylvania is set aside. In our look at what these contracts are worth, 81% of competed awards were reserved for small businesses or for a certified group within them.

So the set-aside on a bid matters as much as the work itself. It tells you whether you can bid at all, and how many firms you'll be up against.

Why so much of the work is set aside

When a contracting officer expects offers from at least two capable small businesses at a fair price, the contract generally has to be set aside for small businesses. People call this the rule of two. Cleaning and grounds work usually meets it, because there are plenty of small firms that do it.

Veterans Affairs goes a step further. By law, the VA has to look first at service-disabled veteran-owned firms, then other veteran-owned firms, and set the work aside for them when the same test is met. That's why many VA contracts are open only to veteran-owned firms.

The types, and how often each is used

We counted the set-aside on every standalone contract and purchase order worth $25,000 or more in five trades: janitorial, landscaping, other building services, pest control and waste collection. Over the last two years in our five states, 164 of them were set aside.

Standalone contracts and purchase orders with place of performance in VA, MD, DC, DE or PA, first awarded October 2024 to September 2026, NAICS 561720, 561730, 561790, 561710 and 562111, from USAspending.gov. Orders under larger contracts aren't included, because they usually carry the parent contract's set-aside.

Two in three set-aside contracts were open to any small business. That's the one most firms should focus on first. The certified types are worth having if you qualify, since each one narrows the field, but none of them is common enough in our trades to build a business on alone.

Small business set-asides

There's no application. You state your size in your SAM.gov registration, and you count as small for a bid if your average revenue is under the size limit for that bid's NAICS code. That limit changes from code to code: $22 million for janitorial, $9.5 million for landscaping. Our guide to which NAICS codes to list has the limits for each trade.

Veteran-owned set-asides

To win a service-disabled veteran-owned set-aside, your firm needs SBA certification through VetCert. Saying so on SAM.gov isn't enough. The VA's veteran-first contracts also need a certified firm. If you qualify, apply early, since it can take a while.

Women-owned set-asides

Women-owned set-asides only apply in industries where the SBA has found women-owned firms are underrepresented, and they need SBA certification. For cleaning and grounds work there's a catch. On the SBA's list of eligible codes, janitorial, landscaping, carpet cleaning, other building services, pest control and waste collection are open only to the economically disadvantaged group, EDWOSB. Each woman owner must have personal net worth under $850,000, average income of $400,000 or less over three years, and personal assets of $6.5 million or less. Facilities support and commercial equipment repair are open to any certified women-owned firm. The building trades codes, such as plumbing, HVAC and electrical, aren't on the list at all.

HUBZone set-asides

HUBZones are areas the SBA designates, mostly based on income and unemployment. To qualify, your principal office has to be in one, at least 35% of your employees have to live in one, and you recertify every three years. You can check addresses on the HUBZone map. Certified firms also get a 10% price evaluation preference when a contract is open to everyone. HUBZone set-asides were rare in our count, so few firms are competing for them.

8(a) set-asides

Most 8(a) work in our count went sole source, meaning the agency chose a program firm directly rather than taking bids. The program is also changing. The SBA paused approvals of new 8(a) applications in August 2025, and new eligibility rules for individually owned firms took effect on September 10, 2026. If you're thinking of applying, talk to your local APEX Accelerator first, and don't plan your pipeline around it.

One rule that comes with every set-aside

If you win a set-aside service contract, you can't pay more than half of what it pays you to subcontractors that aren't in the same small business group. Plan to do at least half the work with your own crew. Some bids ask you to prove it in a staffing plan, and our guide on why bids get thrown out covers what happens when that's missing.

Agencies decide on set-asides before the bid is posted, partly from who answers their early notices. If you see a sources sought notice for work you do, answer it. GSA notes that if capable small businesses don't respond, the contract may not be set aside.