Set-asides are contracts awarded exclusively to small businesses to encourage their participation. There are several opportunities for small businesses to participate in business with the US government, the largest single buyer in the world. I would recommend the company to bid supply contracts under the prime contracts category. The company can benefit from the federal government’s goal that 23% of the total dollar value of contracts should be given to small businesses. Supplies are easy to deal with since no technical or specialized knowledge is required. Besides, the company qualifies for the contract since it is a small business and falls under the 8(a) Business Development Program. The program will be helpful since it provides access to credit, training, business counsel, capital as well as contracting opportunities ("About the 8(a) Business Development Program | The U.S. Small Business Administration | SBA.gov", 2017). The company must obtain certification by the SBA to qualify for this program.
However, the company will have to obey the non-manufacture rule. The rule provides that if the prime contract involves the supply of a product that the company does not manufacture itself, the company has to source the product from a small business manufacturer. The non-manufacture rule applies to all set-asides contracts except for construction and service contracts.
The company can secure the supplies contract then subcontract to other companies. This is allowed but will subject it to subcontracting limitations under the prime contracts set-asides. The company, must perform a minimum of 50% of the total cost of incurred in manufacturing the supplies unless the supplies qualify for the non-manufacture rule ("About the 8(a) Business Development Program | The U.S. Small Business Administration | SBA.gov", 2017). In this case, the company does not have to perform any part of the contract provided it sources all the supplies from a small business manufacturer. This implies the company can secure a large contract and perform only 50% and subcontract the rest to other companies. The sub-contracting limitations apply to supplies contracts that exceed $150,000 ("About the 8(a) Business Development Program | The U.S. Small Business Administration | SBA.gov", 2017).
References
About the 8(a) Business Development Program | The U.S. Small Business Administration |
SBA.gov. (2017). Sba.gov. Retrieved 25 January 2017, from https://www.sba.gov/contracting/government-contracting-programs/8a-business-development-program/about-8a-business-development-program
