The Trump administration's newly updated Federal Acquisition Regulation aims to support small businesses by retaining a rule that prioritizes them and slashing administrative barriers, but it could also reduce their chances of landing task orders and sole-source awards.
The Federal Acquisition Regulatory Council released new model deviation text for FAR Part 19, which covers small business programs, in late September. Although the new Part 19 retained the rule of two, which requires agencies to set aside contracts for small businesses when there's a reasonable expectation that at least two can offer competitive pricing, the council made clear that the rule does not apply to task and delivery orders, despite growing case law that says otherwise.
Elizabeth N. Jochum, a government contracts partner at Blank Rome LLP, said there's no question that the rule of two is beneficial to small businesses and government contracting and that "it's a relief to see that it will survive" for contracts above $350,000, even though it's not statutorily required. The "hiccup" is that the FAR rewrite drafters clearly intended to have the rule only apply to contracts, she said, making it so agencies aren't required to provide task order set-asides for small businesses.
"Small businesses would be right to be concerned that there may be less set aside procurements overall, because agencies don't feel obligated to abide by the rule of two at the task order level, and that's a big impact," Jochum said.
To read the full article, please click here.
"Far Rewrite Could Cut Small Biz from Task Orders," by Madeline Lyskawa was published in Law360 on October 7, 2025.
