FAR 19.502-3—Partial set-asides of contracts other than multiple-award contracts.
Plain-English Summary
FAR 19.502-3 explains when and how a contracting officer may use a partial set-aside for small business participation in acquisitions other than multiple-award contracts. It covers the threshold conditions for using a partial set-aside, including market research showing that a total set-aside is not appropriate, the ability to divide the requirement into distinct portions, the inapplicability of simplified acquisition procedures, and the expectation that at least two responsible small business concerns can compete at fair market prices, quality, and delivery. It also requires that the acquisition be subject to the applicable small business program eligibility rules in FAR part 19 and that the resulting contract will not be a multiple-award contract. The section then addresses solicitation content: the contracting officer must identify which portions are set aside and which are not, and must explain how offers are to be submitted for the set-aside and non-set-aside portions. Finally, it establishes how offers from non-small businesses are treated on the set-aside portion and requires SBA size-determination procedures before rejecting an otherwise eligible offer based on size questions. In practice, this rule is about structuring a mixed procurement so small businesses get a fair opportunity on separable work while the agency still satisfies its full requirement efficiently and lawfully.
Key Rules
Partial set-aside only when justified
A contracting officer may reserve only part of an acquisition for small business when market research shows a total set-aside is not appropriate and the requirement can be divided into distinct portions. This is a targeted tool, not a default approach, and it is unavailable for construction under this section.
Competition must be realistic
The set-aside portion must be expected to attract at least two responsible small business concerns that can compete on fair market price, quality, and delivery. The officer should not use a partial set-aside unless there is a reasonable basis for expecting meaningful small business competition.
Not for simplified acquisition procedures
This rule does not apply to acquisitions conducted under simplified acquisition procedures. If the procurement is within simplified acquisition thresholds and otherwise eligible, different small business set-aside rules govern.
Program eligibility still applies
The specific eligibility requirements of the applicable small business program in FAR part 19 must be met. The partial set-aside mechanism does not override HUBZone, SDVOSB, WOSB/EDWOSB, 8(a), or other program-specific rules when those programs are being used.
No multiple-award contracts
The solicitation must result in a contract other than a multiple-award contract. Partial set-asides under this section are tied to a single-award outcome, not a multiple-award structure.
Solicitation must clearly divide work
When a requirement is partially set aside, the solicitation must identify exactly which portion or portions are reserved for small business and which are not. It must also tell offerors how to submit offers for the set-aside and non-set-aside portions.
Non-small business offers on set-aside portion
Offers from concerns that do not qualify as small businesses are nonresponsive and must be rejected for the set-aside portion. If the issue is the accuracy of a size representation, the contracting officer must obtain an SBA determination before rejecting an otherwise eligible offer.
Responsibilities
Contracting Officer
Determine whether market research supports a partial set-aside instead of a total set-aside; confirm the requirement can be divided into distinct portions; verify the acquisition is not using simplified acquisition procedures; ensure the expected small business competition is adequate; apply the correct FAR part 19 program eligibility rules; confirm the solicitation will not result in a multiple-award contract; clearly identify set-aside and non-set-aside portions in the solicitation; state how offers must be submitted; and reject non-small business offers on the set-aside portion, while obtaining SBA size determinations when size status is in question.
Small Business Concerns
Compete only on the portions reserved for small business if they qualify under the applicable program rules; submit offers in the format and manner required by the solicitation; and maintain accurate size and program-status representations to avoid rejection or referral for SBA review.
Other Than Small Business Concerns
Refrain from competing for the set-aside portion because offers on that portion are nonresponsive and will be rejected; compete only on the non-set-aside portion if the solicitation allows it and if their offer complies with the solicitation instructions.
SBA
Provide size determinations when the contracting officer has questions about a size representation and before an otherwise eligible offer is rejected on size grounds. SBA’s role is to resolve size-status disputes under subpart 19.3.
Agency/Requirement Owner
Support market research and acquisition planning by identifying separable portions of the requirement and helping determine whether a partial set-aside is feasible and appropriate.
Practical Implications
This rule is most useful when a requirement can be split into discrete pieces, such as line items, task areas, or geographic segments, allowing small businesses to compete for part of the work without forcing a full set-aside.
A common mistake is using a partial set-aside without solid market research or without a reasonable expectation of at least two responsible small business offers; that can undermine the procurement and create protest risk.
The solicitation must be very clear about what is reserved and how offers are to be structured. Ambiguity here can lead to mispriced offers, evaluation errors, and disputes over responsiveness.
Contracting officers must distinguish between a true non-small business offer on the set-aside portion and a size-status question. If the issue is size representation, SBA must be consulted before rejection.
Because this section does not apply to construction or simplified acquisitions, users should first confirm the procurement type before trying to use a partial set-aside approach.
Official Regulatory Text
(a) The contracting officer shall set aside a portion or portions of an acquisition, except for construction, for exclusive small business participation when— (1) Market research indicates that a total set-aside is not appropriate (see 19.502-2 ); (2) The requirement can be divided into distinct portions; (3) The acquisition is not subject to simplified acquisition procedures; (4) Two or more responsible small business concerns are reasonably expected to submit offers on the set-aside portion or portions of the acquisition that are competitive in terms of fair market prices, quality, and delivery; (5) The specific program eligibility requirements identified in this part apply; and (6) The solicitation will result in a contract other than a multiple-award contract (see 2.101 for definition of multiple-award contract). (b) When the contracting officer determines that a requirement is to be partially set aside, the solicitation shall identify which portion or portions are set aside and not set aside. (c) The contracting officer shall specify in the solicitation how offers shall be submitted with regard to the set-aside and non-set-aside portions. (d) Offers received from concerns that do not qualify as small business concerns shall be considered nonresponsive and shall be rejected on the set-aside portion of partial set-asides. However, before rejecting an offer otherwise eligible for award because of questions concerning the size representation, an SBA determination must be obtained (see subpart 19.3 ).