How do agencies determine which acquisitions to set aside for small businesses above the SAT?

Agencies determine which acquisitions to set aside for small businesses above the simplified acquisition threshold by applying the Rule of Two. Above the simplified acquisition threshold, the contracting officer shall set aside the acquisition for small business when there is a reasonable expectation of offers from at least two responsible small business concerns and award at fair market prices (FAR 19.502-2(b)).

This is different from acquisitions below the simplified acquisition threshold, where each acquisition must be set aside for small business unless the contracting officer determines there is not a reasonable expectation of offers from two or more responsible small business concerns that are competitive in price, quality, and delivery (FAR 19.502-2(a)).

To assess the market for larger set-asides, a contracting officer will often issue a sources sought notice or a Request for Information (RFI) on SAM.gov. They review the responses to determine if there are at least two small businesses capable of performing the work. This helps them make an informed decision on whether to proceed with a small business set-aside or an unrestricted competition. For state and local opportunities, the process is similar but governed by state procurement codes and their respective vendor guides.