Set-asides and eligibility for foreign firms
What a set-aside is, and how small-business eligibility is actually defined in the regulation — quoted directly from the FAR and the SBA's own rule. Confirm applicability to any specific opportunity against that solicitation's own clauses.
Verified against official sources: 2026-09-01
This guide quotes and organizes official sources. It is not advice.
This guide quotes and organizes primary material that a government or official body already publishes, translating it only where the source is in Japanese. It contains no views or advice of Hashike's own. Check how it applies to a specific opportunity against that solicitation and the responsible agency's own information.
What a set-aside is
FAR Subpart 19.5 defines a set-aside as "the limiting of an acquisition exclusively for participation by small business concerns." It covers total set-asides, partial set-asides, and reserves under multiple-award contracts.
FAR 19.000(a)(3) lists the related categories: ordinary small business, 8(a), HUBZone, SDVOSB (service-disabled veteran-owned), and WOSB (women-owned). All of them require first qualifying as a "small business concern."
The definition of a "small business concern": the location test
The SBA's regulation at 13 CFR 121.105 defines an eligible "business concern" as one organized for profit that has "a place of business located in the United States" and either "operate[s] primarily within the United States" or "make[s] a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor."
Source: eCFR — 13 CFR 121.105 ↗
This US place-of-business requirement is a separate eligibility condition from the size standard (employee count or receipts). The SBA's own guidance page likewise lists being "physically located and operat[ing] in the U.S. or its territories" as a general small-business requirement.
Source: SBA — Basic Requirements ↗
Size standards are a separate question
The SBA describes size standards as varying by NAICS code, with a general rule of thumb: "most manufacturing companies with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million, will qualify as a small business." Size determinations also count the employees or receipts of any affiliates.
Source: SBA — Basic Requirements ↗
Eligibility is therefore two separate tests: the location requirement (a US place of business, as a rule) and the industry-specific size standard. Both must be met to qualify as a "small business concern" and compete for a set-aside. Failing the first test generally excludes a firm from set-asides regardless of how small it is by the second.
Paths that aren't set-asides
A notice without a set-aside — "full and open competition" — has a broader pool of eligible offerors. Actual eligibility for any specific notice still depends on that notice's own clauses (which may include origin or export-control requirements).
DLA's "Steps to Success" lists subcontracting as its own step, separate from bidding as a small-business prime: "Consider Subcontracting." It's presented as an officially recognized path — working under a prime contractor.
Source: DLA — Steps to Success (Small Business Overview, April 2025) ↗
Sources
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This page is informational only, not legal advice. Confirm eligibility and procedural details against the official solicitation and the relevant agency.← Back to all guides