Set-aside contracts
Set-aside contracts, or set-asides, are federal contracts that are exclusive to qualified small businesses. Government contracts that are valued between $3,500 to $150,000 are automatically considered as set-asides.
This type of contract is further divided into two kinds: competitive set-asides and sole-source set-asides. The former goes like every other federal contract—you have to outbid other small businesses to win the contract. And the latter does not require small businesses to bid because there are some cases where there is only one small business that is capable of delivering the tasks stated in the contract.
GSA Schedule Contracts
Also known as Multiple Award Schedule (MAS), government agencies use these long-term government-wide contracts to procure products and hire services in bulk at fair prices. These transactions are managed by the General Services Administration (GSA) to ensure the efficiency and effectiveness of each contract.
Federal subcontracts
Unlike the previously mentioned government contracts, federal subcontracts are not issued directly by a government agency. Instead, it is awarded by another government contractor, also known as the prime contractor.
Subcontracting is a practice in the federal contracting industry where prime contractors outsource specialists for a specific area of their contract. Small businesses that want to test the waters first usually take their shot at subcontracting. This business pursuit allows them to gain experience in the field without going through the tedious process of applying to become a government contractor.
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