Small Business Implications Under the Revolutionary FAR Overhaul of FAR Part 19

In late September, the Federal Acquisition Regulation (FAR) Council released the long-awaited revision to FAR Part 19, which governs small business contracting. Comments are due by November 3, 2025. The proposed updates do not apply to pending awards.

The FAR Part 19 update, now titled “Small Business” versus “Small Business Programs,” removes close to 300 individual rules and subparts. This significantly streamlines the regulation along the acquisition lifecycle:

• 19.1 - Presolicitation
• 19.2 - Evaluation and Award
• 19.3 - Post Award.

This article focuses on the most significant changes to Subpart 19.1 Presolicitation, which consolidates policies and procedures related to SB pre-procurement activities. These include goals, size standards, set-asides, socio-economic programs and subcontracting plans. The figure below provides a snapshot of changes and SB impacts.

19.103 Small Business Size Standards and 19.104 Set-Asides

Subpart 19.103 removes the requirement for small businesses to re-represent their size status when competing for task orders. During a task order competition, the size status of firms submitting bids will be based on the size standard assigned at the time the master contract was awarded. Status re-representations will be addressed at contract modifications, such as exercising options, or during compliance monitoring processes. The subpart streamlines SB procedures, including all content related to NAICS codes, size standards and the appeal process for NAICS code designations. Rules related to total and partial SB set-asides no longer distinguish between “multiple-award” or “other than multiple-award” contracts for partial set-asides.

19.104 Socioeconomic (SE) Programs

The most significant changes within the SE programs were to the Rule of Two and the 8(a) Program.

Rule of Two:

• The rule is no longer limited to the SE programs but now includes all small businesses. Contracting officers (CO) must consider an overall SB set-aside before utilizing one of the SE programs.
• The rule remains mandatory for master-level contracts but gives COs discretionary authority over whether to set-aside task orders under multiple-award contracts (MACs).
• The rule cannot be used as the basis for a protest, limiting small businesses' ability to challenge decisions.

8(a) Program

• Follow-on 8(a) contracts are automatically released from the program if the solicitation procurement is set aside under another socioeconomic program. Contracting Officers are not required to notify the SBA or file a formal request.
• Stricter rules apply for awarding 8(a) Sole Source contracts. Contracting Officers must justify bypassing competition for requirements valued below the Simplified Acquisition Threshold (SAT). Before awarding a sole source contract for these requirements, agencies must first attempt to compete them as 8(a) set-asides under an SBA-approved government-wide acquisition contract (GWAC).
• Finally, the COs may award SDVOSB Sole Source awards even if the incumbent is an 8(a) firm or if the SBA has accepted the requirement under the 8(a) program.

Navigating the Change

The FAR 19 rewrite poses positive impacts and challenges for small businesses moving forward. The table below provides tips for navigating FAR 19 rewrites.

 

 

 

 

 

 

 

 

 

 

 

 

 

Conclusions

Phase I of the RFO concluded on September 30. Phase II began on October 1 with rewrites of the remaining FAR Parts continuing while Phase I revisions are implemented. Contractors must stay up to date not only on the RFO revisions but also on agency deviations. These drive agency-specific implementation, and some agencies incorporate those changes immediately. Ongoing RFO activity drives incentives for firms to pursue a MAC or Government-wide Acquisition Contract (GWAC), enabling them to compete on and prevent exclusion from a broader range of opportunities. Heightened competition and a more aggressive procurement landscape necessitate a more strategic, customer-focused proposals and increased investment to succeed in the evolving federal contracting market.

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