Sponsors (4)
The bill shifts more federal procurement toward small businesses to boost small-business awards, competition, and innovation, at the trade-off of higher potential costs to taxpayers, extra administrative and legal burdens for agencies, and possible loss of economies of scale or delivery delays.
Small business owners will win more federal contracts because procurements above the simplified acquisition threshold must be reserved when two or more qualified small businesses are expected to bid.
Small businesses can secure awards at fair market prices because contracting officers must expect an award at a fair market price when reserving procurements, protecting smaller bidders from being forced into uncompetitive pricing.
Small businesses and government procurement generally may see increased competition and innovation as higher small-business participation in federal contracting broadens the pool of bidders and ideas.
Taxpayers may face higher costs if reserving contracts for small businesses results in higher prices than open competition.
Government agencies and contracts may lose economies of scale and face slower delivery when larger contractors are excluded from many procurements above the threshold, potentially delaying projects or raising total program costs.
Federal contracting officers and agencies will face additional administrative burden and greater legal exposure because they must justify 'reasonable expectation' determinations about reserving procurements.
Based on analysis of 2 sections of legislative text.
Statutorily requires reserving acquisitions above the simplified acquisition threshold for small businesses when two or more responsible small businesses are reasonably expected to offer.
Official title: Amend the Small Business Act to codify the Rule of Two, and for other purposes.
Introduced August 1, 2025 by Edward John Markey · Last progress August 1, 2025
Creates a mandatory "Rule of Two" reservation for certain federal purchases: any contract, task order, or delivery order for goods or services expected to exceed the simplified acquisition threshold must be reserved for small businesses when the contracting officer reasonably expects at least two responsible small business offers and a fair-market-price award. The bill simply adds that requirement to the Small Business Act; it contains no funding, deadlines, or other agency directives.