Sponsors (4)
The bill expands and clarifies reserved contracting opportunities for small businesses—boosting small-vendor participation and potential competition benefits—while raising risks of higher costs, administrative burden, and procurement performance problems if reservations are applied where specialized capacity is limited.
Small businesses (especially small-business owners and small government contractors) will gain more federal contracting opportunities because procurements above the simplified acquisition threshold must be reserved when two or more qualified small firms are expected to bid.
Taxpayers and federal agencies could pay lower prices and receive better service because increased competition among small firms for reserved procurements may drive down costs and improve quality.
Federal contracting officers and agencies will have clearer statutory guidance, reducing ambiguity about when to reserve procurements for small businesses and promoting more consistent decision-making.
Taxpayers and programs risk higher costs because some procurements may be reserved away from larger vendors, which can increase prices if small-business competition is limited for specialized goods or services.
Programs that require specialized suppliers (and the taxpayers and service recipients who rely on them) could face delays or performance problems if the rule is misapplied and less-experienced small contractors are used.
Contracting officers and federal agencies may incur greater administrative burden and legal risk because officers must document and assess whether two or more 'responsible' small businesses are likely, potentially increasing paperwork and protest exposure.
Based on analysis of 2 sections of legislative text.
Requires reservation of federal contracts above the simplified acquisition threshold for small businesses when two or more responsible small-business offers are reasonably expected and a fair market price can be obtained.
Introduced April 9, 2025 by Nydia M. Velázquez · Last progress April 9, 2025
Requires federal contracting officers to reserve any contract, task order, or delivery order for goods or services valued above the simplified acquisition threshold for small businesses when the officer reasonably expects at least two responsible small-business offers and can obtain a fair market price. It adds a statutory “Rule of Two” into the Small Business Act to increase set-aside opportunities for small businesses in federal procurement. This change creates a clear, statutory preference for awarding larger-than-threshold procurements to small businesses when two or more capable small firms are reasonably expected to compete, shifting some awards away from open competition with larger firms and formalizing procurement behavior for agencies and contracting officers.