The Trump administration has released its changes to federal procurement regulations, mostly keeping in place the so-called “Rule of Two” that enables small businesses to win contracts.
The changes follow President Trump’s April Executive Order “Restoring Common Sense to Federal Procurement,” which called for overhauling the Federal Acquisition Regulations (FAR), the set of rules that govern how federal agencies procure goods and services.
According to the White House Office of Federal Procurement Policy (OFPP) and the Federal Acquisition Regulatory Council (FAR Council), the goal is to “return the FAR to its statutory roots, rewritten in plain language, and remove most non-statutory rules.”
There were concerns that the overhaul could try to do away with small business set-asides, including the “Rule of Two,” which requires that agencies must set aside contracts for small businesses if two of more of them could provide the products or services that they need at a competitive price. Although a centerpiece of federal contracting for decades, the Rule of Two is codified into law only between the micro-purchase threshold (MPT) and the Simplified Acquisition Threshold (SAT), which currently is generally $250,000.
Recognizing that the vast majority of CRM firms are defined as small businesses, ACRA has been engaging with the administration and Congress on the issue.
The good news is that the changes, announced Sept. 26, maintain the Rule of Two – mostly.
The FAR Council indicated that they have “retained the rule of two above the SAT as essential to sound procurement.”
The less-good news is that the FAR Council has reaffirmed that the Rule of Two continues not to apply at the task or delivery order level under multiple award contracts, leaving it to the discretion of contracting officers (COs). The new rules go further, stating that the CO’s “decision to set-aside or not-set aside an order placed under a multiple-award contract is an exercise of discretion and not a basis for a protest.”
The new rules also reaffirm that, in the words of the FAR Council, “it is the Government’s policy to provide maximum practicable opportunities in its acquisitions to small business, 8(a) participants, and other small business socioeconomic categories (i.e. veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns).” The new rules do make minor changes in these programs, although they appear to leave them intact.
As with many regulations, the devil is in the details. While agencies are permitted to use these new rules immediately, they may undergo changes in the coming months. Please let ACRA know at info@acra-crm.org if you have any questions or concerns.