Sponsors (5)
The bill shifts more federal procurement toward small businesses—expanding opportunities and clarifying rules for contracting officers—but risks higher costs for taxpayers, reduced opportunities for large contractors, and added administrative burdens for agencies.
Small-business owners will see more opportunities to win federal contracts because procurements above the simplified acquisition threshold must be reserved when two or more responsible small businesses can compete, supporting small-business growth and competition.
Federal contracting officers will have clearer statutory guidance on when to reserve procurements for small businesses, reducing discretionary uncertainty in procurement decisions.
Taxpayers and federal agencies could face higher costs if reserving contracts reduces competition or results in higher bids compared with full-and-open competition.
Large businesses and some incumbent contractors could lose opportunities because they may be excluded from competing for contracts reserved for small businesses above the simplified acquisition threshold.
Some agencies will incur administrative costs to update procurement practices and provide training to contracting offices to implement reservation rules.
Based on analysis of 2 sections of legislative text.
Requires reservation of certain federal contracts above the simplified acquisition threshold for small businesses when two or more responsible small businesses are expected and a fair market price can be obtained.
Official title: To amend the Small Business Act to codify the Rule of Two, and for other purposes.
Introduced April 9, 2025 by Nydia M. Velázquez · Last progress April 9, 2025
Creates a statutory "rule of two" for many federal procurements by adding a new paragraph to 15 U.S.C. § 644(j). For any covered contract for goods or services with an anticipated value above the simplified acquisition threshold, contracting officers must reserve the procurement for small business concerns when they reasonably expect to receive offers from two or more responsible small businesses and can award at a fair market price. Delivery orders and task orders are excluded from the covered-contract rule. The change codifies a procurement preference that directs more prime contracting opportunities toward small businesses when competition among them is likely. It does not create new agencies, appropriate funds, or set effective dates in the text provided.