Certifications & Set-Asides in the SLED Market: What You Need to Know Before You Bid

If you’ve already dipped a toe into the federal contracting world, you’re probably familiar with SBA 8a certification, women owned small business certification, and other set-aside programs that flow through federal procurement. But when you shift gears and look at the SLED market, state, local, and education agencies, you’re playing by a different set of rules.

Certifications still matter. But they don’t always follow the same structure or carry the same weight as they do at the federal level. In fact, understanding how state and local certifications work, and how they influence evaluation, scoring, and subcontracting, can be the key to unlocking more government contracting opportunities without the red tape of federal work.

Let’s break it down in plain English.

What Counts as a Certification in SLED?

State and local governments use their own programs to promote equitable participation in public contracts. While federal agencies rely on programs like SBA 8a certification, SDVOSB, WOSB, and HUBZone, the SLED market focuses more on:

• MBE (Minority Business Enterprise)

• WBE (Women Business Enterprise)

• DBE (Disadvantaged Business Enterprise)

• HUB (Historically Underutilized Business) – not the same as the federal HUBZone

• SDVBE or VBE (Service-Disabled Veteran or Veteran Business Enterprise)

• SBE (Small Business Enterprise) – usually defined by revenue or headcount at the local level

These certifications are typically issued by a state’s own procurement office or by a designated certifying partner like a city, county, or regional transit authority.

Some states also honor reciprocity, meaning they’ll accept a certification you earned in another state. Others won’t, so you may need to get re-certified in each state where you want to pursue work.

How SLED Certifications Affect Evaluation

This is where things get interesting, and more flexible than the federal side.

Many SLED agencies use point-based evaluation systems or bid preference formulas. That means you can gain a competitive edge just by holding a local certification. Here’s how it often plays out:

• Evaluation Points: A certified MBE or WBE might automatically earn 5–15 additional points in a technical evaluation.

• Bid Discounts: Some cities allow certified vendors to submit bids up to 10% higher and still win over non-certified firms.

• Tiebreakers: If two proposals are tied in cost or scoring, the contract may go to the certified vendor.

• Subcontracting Credits: If you’re a prime contractor using certified subcontractors, you may receive additional scoring credits or meet mandatory participation goals.

These advantages can make or break a bid, especially in highly competitive markets like construction, janitorial, IT staffing, and food services, which dominate many SLED contracting budgets.

Set-Aside vs Goal-Driven Programs

Here’s the key distinction: Most SLED certifications don’t operate as full set-asides. Instead, they’re used to:

• Set subcontracting goals on large contracts (e.g., 25% MBE/WBE participation)

• Influence proposal scoring through evaluation points or bonus criteria

• Track spending goals across departments or fiscal years

That’s different from SBA 8a certification services, where entire contracts may be sole-sourced or limited to 8a vendors only.

So in SLED, your certification is rarely the gatekeeper to eligibility. Instead, it’s a competitive advantage, one that primes often look for when building teams and checking boxes.

How to Take Action Now

If you’re already active in federal work, or just starting to explore government procurement, here’s how to lean into SLED certification benefits:

1. Know your state’s rules.
Each state has its own certification authority and application process. Texas’s HUB program is very different from California’s SB/DVBE program. Check with your state’s procurement office or M/WBE division.

2. Apply locally, even if you’re already certified federally.
A federal women owned small business certification doesn’t always translate to a WBE at the state level. You may need to apply through your city or state’s supplier diversity program.

3. Build your NAICS code alignment.
Some states assign local commodity codes in addition to NAICS. Crosswalk your offerings to ensure you’re discoverable by agencies and primes searching their local registries.

4. Target contracts with subcontracting goals.
Even if you’re not ready to prime, look for RFPs that require primes to meet MBE/WBE/DBE goals. Position yourself as the solution.

5. Market your certification advantage.
Add your certifications to your capability statement, proposal templates, and online profiles. Many SLED buyers search internal databases by certification category.

Final Thought: Federal Is Rigid. SLED Is Relational.

Federal set-asides and the Government contracting certification process are highly structured, but that also means a ton of red tape. The SLED market, on the other hand, offers more flexibility, faster timelines, and greater room for relationship-building.

If you’re certified, especially as a women business certification holder or with disabled veteran small business certification, you should be looking beyond SAM.gov. SLED contracts may not be as massive, but they’re often easier to win, renew, and grow.

Want more on how to position yourself in this space? Check out our post on States Are Expanding Small Business Set-Asides: What It Means for Federal Contractors.

If you aren't a Squared Compass partner, what are you waiting for? From getting your business set up with specific government set aside programs at both the State and Federal level, to being empowered by a Fractional Capture team to win government contracts, to receiving tailored government contract opportunities Squared Compass delivers immense value which helps propel our partners to success. Schedule a chat with our team today.