FAR 6.203—Set-asides for small business concerns.
Plain-English Summary
FAR 6.203 explains how the Federal Acquisition Regulation treats set-asides for small business concerns within the competition framework. It covers three main topics: the authority of contracting officers to restrict competition to small businesses to satisfy statutory small business requirements, the inclusion of contract actions under the Small Business Innovation Research (SBIR) Program established by Pub. L. 97-219, and the fact that no separate justification and determination (J&A) is required under FAR Part 6 when a contract action is set aside for small business. It also points readers to Subpart 19.5, which contains the detailed policies and procedures governing set-asides. In practice, this section confirms that small business set-asides are a recognized and routine acquisition tool, not an exception that needs a Part 6 justification, but they must still be implemented in accordance with the small business rules in Part 19. For contracting officers, it means the decision to set aside is driven by small business policy and procedures rather than Part 6 competition exceptions. For contractors, it signals that some solicitations will be limited to eligible small businesses, including certain SBIR-related actions, and that eligibility and compliance with Subpart 19.5 are critical.
Key Rules
Small business set-asides allowed
Contracting officers may restrict a solicitation so that only small business concerns may compete when doing so helps fulfill statutory small business requirements. This is an affirmative authority to reserve work for small businesses, not merely a discretionary preference.
SBIR actions included
The rule expressly includes contract actions conducted under the Small Business Innovation Research Program established by Pub. L. 97-219. That means SBIR-related actions are treated as part of the small business set-aside framework addressed here.
No Part 6 J&A needed
A separate justification and determination and findings is not required under FAR Part 6 to set aside a contract action for small business concerns. In other words, the set-aside decision itself does not need the usual Part 6 justification used for other restrictive competition actions.
Follow Subpart 19.5
The detailed policies and procedures for small business set-asides are found in Subpart 19.5 and must be followed. This section is only the gateway rule; the operational requirements come from the small business regulations.
Responsibilities
Contracting Officer
May set aside solicitations for small business concerns when appropriate to meet statutory small business requirements. Must apply the policies and procedures in FAR Subpart 19.5 and should not prepare a separate FAR Part 6 J&A solely because the action is set aside for small business.
Agency
Must support implementation of small business set-aside policy through acquisition planning, internal procedures, and oversight consistent with FAR Part 19. The agency should ensure contracting personnel understand that small business set-asides are governed by Subpart 19.5 rather than Part 6 justification requirements.
Small Business Concern
Must meet the applicable small business eligibility requirements to compete for a set-aside action. For SBIR-related actions, must also satisfy the program-specific eligibility and proposal requirements applicable to that program.
Large Business Concern
Must recognize that some solicitations are properly limited to small businesses and may not be eligible to compete. Should review the solicitation carefully to determine whether the set-aside restriction applies and whether any subcontracting or teaming opportunities remain available.
Practical Implications
This section makes small business set-asides a normal acquisition tool, so contracting officers should think about them early in acquisition planning rather than as an afterthought.
A common mistake is treating a small business set-aside like another Part 6 competition exception and preparing an unnecessary J&A; FAR 6.203 says that is not required.
The real compliance work is in Subpart 19.5, so users must check the detailed set-aside rules there instead of relying on this section alone.
SBIR actions are specifically included, so teams should not assume research-related small business actions fall outside the set-aside framework.
Contractors should verify both the solicitation’s set-aside status and their own eligibility, because competing in a restricted procurement without qualifying as a small business can waste time and create proposal risk.
Official Regulatory Text
(a) To fulfill the statutory requirements relating to small business concerns, contracting officers may set aside solicitations to allow only such business concerns to compete. This includes contract actions conducted under the Small Business Innovation Research Program established under Pub.L.97-219. (b) No separate justification or determination and findings is required under this part to set aside a contract action for small business concerns. (c) Subpart 19.5 prescribes policies and procedures that shall be followed with respect to set-asides.