Historically Black Colleges and Universities (HBCU) Set-Aside

Historically Black Colleges and Universities and Minority Institutions (HBCU/MI) set-asides are federal procurement and grant preferences that direct a portion of federal research and development spending to academic institutions serving historically underrepresented communities. These preferences recognize that HBCUs and minority-serving institutions have historically received a disproportionately small share of federal research funding relative to their student populations and research capacity, and that federal investment in these institutions advances both research objectives and national equity goals.

What is an HBCU set-aside?

The primary statutory authority for HBCU/MI contracting preferences in the defense context is section 2323 of Title 10, United States Code (now recodified at 10 USC 4144 following the 2021 recodification). This provision directs the Secretary of Defense to set aside a percentage of defense research and development contracts for HBCUs and minority institutions. The DFARS implements this authority at DFARS 226.370 through 226.372, establishing procedures for set-aside competitions and sole-source awards to eligible institutions.

An HBCU is defined by the Higher Education Act of 1965 as an accredited institution of higher education established before 1964 whose principal mission was, and is, the education of Black Americans. The Department of Education maintains the official list of HBCUs. Minority institutions are defined separately as institutions where more than 50 percent of the enrolled students are from minority groups as defined under the Higher Education Act.

DoD agencies use the HBCU/MI set-aside authority primarily for basic and applied research contracts under the Broad Agency Announcement (BAA) process or through targeted program offices. HBCU/MI set-asides can be either competitive, where eligible institutions compete among themselves, or sole-source, where a specific institution has unique capabilities relevant to the research need. DFARS 226.370 requires agencies to conduct market research to identify interested and capable HBCU/MI performers before deciding between competitive and sole-source approaches.

Beyond set-asides, HBCUs are frequent participants in Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs when they partner with small business prime contractors, and in broad-based federal grant programs administered by agencies including NASA, NSF, NIH, and the Department of Energy.

Why it matters for contractors

For contractors working in the defense research and development space, HBCU/MI set-asides represent both a compliance consideration and a subcontracting opportunity. Prime contractors on large DoD research programs are sometimes required to include HBCU/MI participation goals in their subcontracting plans. Building relationships with HBCU research departments can fulfill those goals and bring specialized technical expertise in fields where HBCUs have research depth.

For HBCUs and minority institutions themselves, the set-aside program provides access to defense research funding that helps build institutional research infrastructure, faculty expertise, and laboratory capability.

Example

The Air Force Research Laboratory issues a Broad Agency Announcement for research into advanced materials for hypersonic vehicles. A portion of the BAA is set aside for HBCU/MI performers under DFARS 226.370. A materials science department at an HBCU with expertise in ceramic thermal protection systems submits a white paper and is invited to submit a full proposal. After evaluation, the Air Force awards a two-year base-period research contract to the HBCU for $1.8 million, with options for two additional years. The HBCU uses the contract funding to hire graduate researchers, upgrade its laboratory equipment, and publish research that advances the Air Force's hypersonic materials program.