McNew & Associates, Inc. Blog

Small Business Requirements and Federal Procurement

We have been getting a lot of inquiries on the requirements the federal government uses as it relates to Small Business participation for government contracts. The following is a summary excerpt from the SBA Guide and Definitions for Small Business.  In general the government contacting officer designates the applicable size standard given the NAICS code for a particular procurement.  To bid on government contracts, a company must certify that it is a small business concern under the appropriate size standard for the solicitation.  To be awarded a government small business set-aside or 8(a) contract, the company must also be able to perform a given percentage of the contract. This provision limits the amount of subcontracting a concern may enter into with other firms.  The breakdown of those percentages is as follows:

Construction: General and heavy – 15%, Special Trade – 25%

Manufacturing: 50% of the cost of manufacturing, not including materials

Services: 50% (contract cost) of SB own employees must perform the service effort

It is extremely important for small businesses to accurately represent their size standard and ability to perform. Although being a small business can be a competitive advantage, criminal penalties may be considered for those businesses knowingly misrepresenting themselves in the conduct of federal procurement.

Get the entire SBA PDF at

McNew & Associates, Inc.                                                     

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