FAR Part 19 Explained for Small Businesses

What is FAR Part 19?

FAR Part 19 (Small Business) governs how federal agencies promote, evaluate, and award contract opportunities that involve small businesses. It ensures small concerns have a meaningful opportunity to compete for government work by reserving certain contracts for small business participation and administering related socioeconomic programs. 1

This part outlines eligibility, set-aside procedures, subcontracting assistance, preferences, and SBA coordination. 2

How FAR Part 19 Helps Small Businesses

• **Contract Set-Asides:** Agencies reserve certain procurements exclusively for small business competition. 3
• **Rule of Two:** If at least two responsible small business firms can provide an item at fair market price, the acquisition must be set aside for small business concerns. 4
• **Socioeconomic Programs:** Includes programs such as 8(a) Business Development (disadvantaged), HUBZone, Women-Owned (WOSB/EDWOSB), and Service-Disabled Veteran-Owned Small Business (SDVOSB). 5
• **Documentation and SBA Coordination:** Agencies coordinate with the SBA to determine eligibility, size status, and compliance under these programs. 6

Set-Asides: Total, Partial, and Reserves

A “set-aside” reserves all or part of a procurement for competition only among qualifying small business concerns. 7

Total Small Business Set-Asides

For acquisitions above the micro-purchase threshold and below the simplified acquisition threshold, agencies must set aside the requirement if there’s a reasonable expectation of receiving offers from at least two small businesses at fair market prices. 8

Partial Set-Asides

Agencies may divide work into separate components, setting aside a portion for small business competition if justified. 9

Reserves and Multiple-Award Contracts

FAR Part 19 allows agencies to reserve certain awards or portions of multiple-award contracts for small business competitive participation. 10

Size Status & SBA Certification Rules

To benefit from small business set-asides and program preferences, a firm must represent itself as a small business at the time of proposal submission and meet the applicable NAICS size standard. A challenge to size status is resolved by the SBA. 11

Size status is crucial — misrepresenting it can lead to penalties and loss of contract awards. 12

Small Business Programs Under FAR Part 19

• 8(a) Business Development: Targeted support for socially and economically disadvantaged businesses. It includes competitive and sole source opportunities through the SBA. 13
• HUBZone Program: Incentives for businesses in Historically Underutilized Business Zones. 14
• SDVOSB & Veteran-Owned: Preferences for service-disabled veteran-owned small business concerns. 15
• Women-Owned Small Business (WOSB/EDWOSB): Targeted set-aside programs for women-owned firms. 16
• Small Disadvantaged Business (SDB): Applies to firms owned by individuals who are economically disadvantaged. 17

Common Contractor Pitfalls & Practical Tips

• Assuming a set-aside automatically means small business win — some require proof of capability and competitive pricing.
• Not checking NAICS and size standards before proposal preparation — eligibility rules vary by code.
• Failing to maintain proper SBA profile and representations in SAM.gov.

FAQ

What is the “Rule of Two”?

The Rule of Two requires set-asides for small businesses if there’s a reasonable expectation that two or more qualified small business concerns will submit competitive offers at fair market price. 18

Do all small businesses qualify for FAR Part 19 set-asides?

A firm must meet the SBA’s size standards and socio-economic status requirements defined in its NAICS code to qualify. 19

How can I tell if a solicitation is set aside for small business?

The solicitation should include a clause such as FAR 52.219-6 (Notice of Total Small Business Set-Aside) if it’s reserved. 20

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