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FAR and DFARS › FAR Part 19: Small Business Programs › Subpart 19.5

FAR 19.501 General.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section explains that small business set-asides limit an acquisition exclusively to small business concerns, while small business reserves award multiple-award contracts under full and open competition. It also describes the contracting officer's role in deciding set-asides or reserves and requires solicitations to state the NAICS code and size standard. A set-aside cannot be used if the agency's cost would exceed the fair market price, unless authorized by law.

Applies to: Contracting officers and acquisitions involving small business set-asides or reserves

What it requires

  • Review acquisitions to determine if they can be set aside, in total or in part, or reserved for small business
  • Make available for review any proposed acquisition in excess of the micro-purchase threshold at the request of an SBA PCR
  • Specify the NAICS code(s) and corresponding size standard(s) in solicitations involving set-asides or reserves
  • Not award a contract as a result of a small business set-aside if the cost to the awarding agency exceeds the fair market price, except as authorized by law

Key terms: small business set-aside · small business reserve · contracting officer · NAICS code · size standard

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a)(1) The purpose of small business set-asides is to award certain acquisitions exclusively to small business concerns. A “set-aside for small business” is the limiting of an acquisition exclusively for participation by small business concerns. A small business set-aside may be open to any of the small business concerns identified at 19.000(a)(3). A small business set-aside of a single acquisition or a class of acquisitions may be total or partial.

(2) The purpose of small business reserves is to award one or more multiple-award contracts to any of the small business concerns identified at 19.000(a)(3), under a full and open competition. A small business reserve shall not be used when the acquisition can be set aside, in total or in part.

(b) The contracting officer makes the determination to make a small business set-aside, in total or in part, or a reserve. The Small Business Administration (SBA) procurement center representative (PCR) (or, if a PCR is not assigned, see 19.402(a)) may make a recommendation to the contracting officer.

(c) The contracting officer shall review acquisitions to determine if they can be set aside, in total or in part, or reserved for small business, giving consideration to the recommendations of agency personnel in the Office of Small and Disadvantaged Business Utilization, or for the Department of Defense, in the Office of Small Business Programs. Agencies may establish threshold levels for this review depending upon their needs.

(d) At the request of an SBA PCR (or, if a PCR is not assigned, see 19.402(a)), the contracting officer shall make available for review at the contracting office (to the extent of the SBA representative's security clearance) any proposed acquisition in excess of the micro-purchase threshold.

(e) All solicitations involving set-asides, in total or in part, or reserves shall specify the NAICS code(s) and corresponding size standard(s) (see 19.102).

(f) Except as authorized by law, a contract may not be awarded as a result of a small business set-aside if the cost to the awarding agency exceeds the fair market price.

(g) For the applicability of the limitations on subcontracting and the nonmanufacturer rule, see 19.505.

Sections it refers to

  • 19.000 Scope of part.
  • 19.402 Small Business Administration procurement center representatives.
  • 19.102 Small business size standards and North American Industry Classification System codes.
  • 19.505 Limitations on subcontracting and nonmanufacturer rule.

Sections that refer to it

  • 201.303 Publication and codification.

← 19.403 [Reserved] · 19.502 Setting aside acquisitions. →

Rule changes for FAR Part 19

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 19.501 General · SpendQuery