FAR 19.1405 SDVOSB Set-Aside Checklist for Construction
Federal agencies frequently reserve construction solicitations for Service-Disabled Veteran-Owned Small Business (SDVOSB) contractors. For prime contractors building federal bids and specialty trade subcontractors evaluating teaming agreements, understanding the precise procedural roadmap contracting officers must follow prevents bid-day surprises. The primary framework governing these competitions is outlined in Acquisition.GOV's FAR 19.1405 Set-Aside Procedures. Estimators can use this checklist to track how federal agencies justify, verify, and resolve SDVOSB set-aside procurements.
Phase 1 Checklist: Order of Precedence and Acquisition Thresholds
Before a contracting officer issues a solicitation restricted to service-disabled veteran-owned firms, federal procurement policy requires specific procedural hurdles to be satisfied:
- Comply with 19.203 first: The contracting officer shall comply with FAR 19.203 before making the final determination to set aside an acquisition under the SDVOSB Program.
- Exceed the micro-purchase threshold: The contracting officer may set aside acquisitions exceeding the micro-purchase threshold for competition restricted to eligible SDVOSB concerns, provided competition criteria are met.
- Prioritize competition over sole-source awards: Under the regulations, the contracting officer shall consider SDVOSB set-asides before considering SDVOSB sole source awards under FAR 19.1406 or general small business set-asides under FAR subpart 19.5.
Reviewing these ordering rules ensures trade contractors know whether an opportunity must be competitively bid or could potentially shift into standard small business channels.
Phase 2 Checklist: Market Research and the Rule of Two
Federal agencies cannot simply restrict a project on a whim. The contracting officer may restrict competition to eligible SDVOSB concerns only when market research produces a reasonable expectation that:
- Two or more eligible offers will arrive: The agency expects that two or more SDVOSB concerns eligible under the SDVOSB Program will submit offers.
- Fair market pricing is maintained: The contracting officer reasonably expects that award will be made at a fair market price.
When preparing bids, estimators should recognize that market research establishes this competition pool. Trade contractors planning their prime proposal strategies can review SBA Size Standards for Federal Set-Asides: Estimator Checklist to confirm how business size limits align with federal market assessments.
Phase 3 Checklist: Offeror Eligibility and SAM Verification
Effective January 1, 2024, strict verification mandates apply to every offeror submitting a proposal under an SDVOSB set-aside. Under FAR 19.1405, contracting officers must execute the following evaluation steps:
- Verify SBA certification in SAM: The contracting officer must verify that the offeror is designated in the System for Award Management (SAM) as an SDVOSB concern certified by the Small Business Administration (SBA).
- Check pending applications: Alternatively, the contracting officer verifies whether the firm represented itself as an SDVOSB concern in SAM and submitted an application for certification to the SBA on or before December 31, 2023. These pending applications reside in the SBA Veteran Small Business Certification database at https://veterans.certify.sba.gov.
- Advance or disqualify: If the offeror meets either verification condition, the contracting officer proceeds with the offer evaluation. If the offeror does not satisfy these criteria, the contracting officer shall remove the offeror from consideration because the firm is not eligible for award.
To avoid immediate disqualification at bid opening, teams should review their active status using our guide on SAM.gov Entity Registration: Quick-Reference Guide for Contractors.
Phase 4 Checklist: Single Offers and Solicitations Withdrawn
What happens when market research expectations fail to materialize on bid day? Contracting officers must follow explicit instructions depending on the number of acceptable proposals submitted:
- Only one acceptable offer received: If the contracting officer receives only one acceptable offer from an eligible SDVOSB concern in response to the set-aside, the contracting officer should make an award to that concern.
- Zero acceptable offers received: If the contracting officer receives no acceptable offers from eligible SDVOSB concerns, the SDVOSB set-aside shall be withdrawn. If the agency requirement remains valid, it must be set aside for small business concerns, as appropriate under FAR 19.203.
Phase 5 Checklist: SBA Appeals and Set-Aside Rejections
When an agency attempts to reject an SBA recommendation to set aside work, structured dispute timelines govern the process under FAR 19.402 (except for acquisitions not exceeding the simplified acquisition threshold) and FAR 19.202-1:
- Notice of intent within 5 working days: If the contracting officer rejects a recommendation from the SBA procurement center representative (PCR) to set aside an acquisition for SDVOSBs, the SBA PCR shall notify the contracting officer in writing of the intent to appeal within 5 working days of receiving the rejection notice.
- Mandatory suspension of procurement: Upon receiving this notification, the contracting officer shall suspend action on the acquisition, unless the head of the contracting activity issues a written determination that urgent and compelling circumstances significantly affecting Government interests exist.
- Formal appeal within 15 working days: Within 15 working days of the initial notification, the SBA shall file its formal appeal with the head of the contracting activity; otherwise, the agency may consider the appeal withdrawn.
- Final decision within 15 working days: The head of the contracting activity shall reply to the SBA within 15 working days after receiving the formal appeal. That decision is final.
Sources
Federal Acquisition Regulation rules cited in this guide are maintained by the Federal Acquisition Regulatory Council and published at Acquisition.GOV:
Published October 30, 2026. No affiliate links on this page. Facts come from the sources linked above; check them for updates.