We have talked a good deal about the Small Business Rule of Two (not to be confused with the separate VA rule of two for veteran-owned businesses) over the years. The (very) general gist of the rule is this: If the procurement is above the simplified acquisition threshold, the agency must set it aside for small businesses if two or more small businesses can perform the work at fair prices. If the agency has a reasonable expectation that two or more SDVOSB/VOSBs, EDWOSBs/WOSBs, 8(a) participants, or HUBZone participants can perform work under a procurement, the agency must consider setting aside the procurement for that particular category (i.e., if it believes two or more 8(a) participants can perform the work, it can set aside the procurement for 8(a) participants). However, it appears there remains a good deal of confusion about what the Rule of Two requires, as opposed to what it simply permits. In a recent GAO protest, a contractor learned this the hard way, and today, we’ll explore that decision.
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FAR Council Removes Rule on Small Business Orders
A couple FAR notices have removed proposed SBA rules relating to orders on multiple award contracts. This withdrawal seems to have the affect of decreasing the overall application of the small business Rule of Two, as discussed here. However, it only impacts the application of the rule of two to orders under multiple award contracts that were not restricted to small businesses. So, it’s impact is relatively narrow.
Continue readingUpdate: SBA Proposed Rule Would Require “Rule of Two” Application to Multiple Award Contract Task and Delivery Orders (Part II)
In Part I of this two-part blog, we covered an SBA proposed rule that would require agencies to apply the Rule of Two to most standard multiple award contracts (MACs) and task and delivery orders thereunder. In that blog, we covered the Rule of Two generally and the basics of SBA’s proposed changes to it. Well, as promised, this Part II blog is going to dig in a bit deeper to this proposed rule, its driving policies, and its potential impacts. But a whole lot has changed in the federal government contracting landscape (even since Part I of this blog). So, I will also address the elephant in the room (as best I can) by providing information regarding the big questions, “will the proposed rule stand a chance–and will there even still be a Rule of Two–under the new administration?“
Continue readingGame Changers for Government Contractors: Understanding the Small Business Rule of Two
Thanks to Michael LeJeune for hosting me on his podcast, Game Changers for Government Contractors. It’s always great talking to Michael and this is a very pertinent topic for a lot of contractors. The Rule of Two is undergoing some changes in proposed rules and federal contractors need to be aware of those changes. In this episode, I discuss what the Rule of Two is, how it impacts small business set-asides, and the recent changes affecting task orders under multiple award contracts (MACs). We also discuss valuable insights on the differences between the SBA’s Rule of Two and the VA’s version, key exceptions, and how small businesses can respond if they see non-compliant procurements. If you’re a small business looking to leverage the Rule of Two to win more contracts, this episode is packed with actionable strategies and expert advice to help you navigate these changes effectively.
To listen on your favorite podcast platform, click below:
🎙️FA: https://federal-access.com/ep-352-understanding-the-small-business-rule-of-two/
🎙️Apple Podcasts: https://apple.co/3y4sNdA
🎙️Spotify: https://spoti.fi/3SPTZoB
📺To watch, click here: https://youtu.be/xDeoiIEpBeI
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Update: SBA Proposed Rule Would Require “Rule of Two” Application to Multiple Award Contract Task and Delivery Orders (Part I)
SBA’s recently proposed rule seeks to officially broaden the reach of its “Rule of Two”–a government contracting requirement fundamental to supporting our nation’s small business infrastructure, policies, and goals. I emphasize “officially” because, even though this is technically a proposed change to SBA’s rules, it is really more of a “regulatory implementation” of judicial law than anything (don’t worry, we will go into more detail on this point later). Specially, SBA’s proposed rule would require the Rule of Two’s application to task orders and delivery orders under most standard multiple award contracts (MAC). This Part I blog will briefly explain what the Rule of Two is and detail SBA’s proposed update to it. But keep your eyes out for the soon-to-follow Part II blog on this topic. There, we will dig in a bit deeper to the Rule of Two, the policies driving it, and the potential implications for SBA’s proposed Rule of Two update.
Continue readingGAO: Small Business Rule of Two Must be based on Accurate Market Research
The small business rule of two requires agencies to restrict procurements for small businesses when there is a “a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery.” FAR 19.502-2. Agencies often use market research to assess whether the small business rule of two is met. But what happens when an agency amends its solicitation terms after conducting market research? Can the new terms render the agency’s market research, and therefore its set-aside decision, unreasonable? In a recent decision, GAO concluded that yes, market research may be insufficient to establish a set-aside if an agency amends the solicitation’s terms.
Continue readingWhy File: A Rule of Two Protest
The Rule of Two is the federal contracting rule requiring agencies to set aside a solicitation for competition only between small businesses when there are at least two small businesses that could do the work for a fair price. But that rule does have some exceptions. These exceptions can make it difficult to know the situations that would justify filing a Rule of Two protest. Read on to find out.
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