FAR 19.502-4—Partial set-asides of multiple-award contracts.
Plain-English Summary
FAR 19.502-4 explains when and how a contracting officer may partially set aside portions of a multiple-award contract for small business participation. It covers the discretionary authority to reserve one or more portions of the requirement for eligible small business concerns, the threshold conditions that must be met before using a partial set-aside, and the special rule that this authority does not apply to construction. The section also requires the solicitation to clearly identify which portions are set aside and which are not, and to tell offerors how to submit offers for each portion. Finally, it addresses offer evaluation by requiring rejection of offers from firms that do not qualify as small business on the set-aside portion, while also protecting offerors from being rejected on size issues until SBA has made the required size determination. In practice, this provision gives agencies a flexible tool when a total set-aside is not suitable but some small business participation is still feasible, while ensuring the competition structure is clear and legally defensible.
Key Rules
Discretionary partial set-asides
Contracting officers may, at their discretion, set aside a portion or portions of a multiple-award contract for eligible small business concerns. This authority is based on the Small Business Jobs Act and is limited to the small business categories identified in FAR 19.000(a)(3).
Not for construction
This authority does not apply to construction acquisitions. If the requirement is construction, the contracting officer cannot use FAR 19.502-4 to partially set aside portions of the multiple-award contract.
Use only when total set-aside is unsuitable
A partial set-aside is appropriate only when market research shows that a total set-aside is not appropriate. The contracting officer must also be able to divide the requirement into distinct portions and must not be using simplified acquisition procedures.
Adequate small business competition required
The contracting officer must reasonably expect at least two responsible small business concerns to submit competitive offers for the set-aside portion or portions. Those offers must be competitive in terms of fair market prices, quality, and delivery.
Program eligibility rules still apply
The specific eligibility requirements of the applicable small business program in FAR Part 19 still apply. The contracting officer must ensure the chosen set-aside portion aligns with the relevant program rules and eligibility standards.
Solicitation must clearly identify portions
When a requirement is partially set aside, the solicitation must identify which portion or portions are set aside and which are not. This is essential so offerors understand the competition structure and can prepare compliant proposals.
Offer submission instructions must be stated
The contracting officer must specify in the solicitation how offers are to be submitted for the set-aside and non-set-aside portions. Clear instructions help avoid ambiguity, improper pricing, and evaluation disputes.
Non-small business offers on set-aside portions
Offers from firms that do not qualify as small business concerns are considered nonresponsive and must be rejected for the set-aside portion. If there is a question about size status, however, 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; ensure the acquisition is not under simplified acquisition procedures; verify that at least two responsible small business concerns are reasonably expected to compete on the set-aside portion; apply the correct small business program eligibility rules; draft the solicitation to identify set-aside and non-set-aside portions; state how offers must be submitted; and reject ineligible offers on the set-aside portion, while obtaining an SBA size determination when size status is in question.
Small Business Concerns
Compete only on the portions reserved for them if they meet the applicable program eligibility requirements; submit offers in the manner required by the solicitation; and ensure their size and program status representations are accurate and supportable.
Other Than Small Business Concerns
May compete only for the non-set-aside portions identified in the solicitation; must not submit offers on the set-aside portion as if eligible for award there; and should understand that offers on set-aside portions will be rejected if the firm does not qualify as small business.
SBA
Provide the required size determination when a contracting officer has questions about an offeror’s size representation before the offer is rejected for the set-aside portion.
Agency
Support market research and acquisition planning that justify whether a total set-aside is appropriate or whether a partial set-aside is the better approach; ensure solicitation templates and acquisition staff understand the distinction between set-aside and non-set-aside portions.
Practical Implications
This rule is a planning tool, not a default approach: the contracting officer must justify why a total set-aside is not appropriate before using a partial set-aside.
The solicitation has to be very clear about what is reserved and what is open, or the agency risks confusion, protests, and evaluation errors.
The requirement must be divisible into distinct portions; if the work cannot be cleanly separated, a partial set-aside is usually not workable.
Size status matters at the time of evaluation: a firm that is not a qualifying small business cannot receive award on the set-aside portion, but the CO must get SBA input before rejecting an offer when size is disputed.
Contractors should pay close attention to submission instructions, because the solicitation may require separate pricing, separate proposals, or other distinct treatment for the set-aside and non-set-aside portions.
Official Regulatory Text
(a) In accordance with section 1331 of the Small Business Jobs Act of 2010 ( 15 U.S.C. 644 (r)(1)), contracting officers may, at their discretion, set aside a portion or portions of a multiple-award contract, except for construction, for any of the small business concerns identified at 19.000 (a)(3) 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 an offer on the set-aside portion or portions of the acquisition that are competitive in terms of fair market prices, quality, and delivery; and (5) The specific program eligibility requirements identified in this part apply. (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 ).