Watch the Deep Dive of this post

Essential Insights: Navigating the FAR Part 19 Overhaul for Government Contractors

The Federal Acquisition Regulatory Council (FAR Council) recently delivered a significant update to FAR Part 19, the regulation governing small business programs. Issued on September 26, 2025, this overhaul streamlines and reorganizes the rules for small business participation, aiming to maximize their involvement in government contracting while clarifying long-standing ambiguities, especially concerning multiple-award contracts (MACs) and the 8(a) Business Development (BD) program.

This revision is designed to create a clearer operational guide and potentially translate into less procedural burden for contractors.

Core Policy and Structural Changes

An immediate and evident change is the renaming of FAR Part 19 from “Small Business Programs” to simply “Small Business.” As part of this overhaul, the regulation has been rebuilt around the acquisition lifecycle, making it read faster and reducing cross-references. The new structure organizes content around Presolicitation (19.1), Evaluation & Award (19.2), and Postaward (19.3). This reorganization reaffirms the government’s policy to maximize participation by small businesses.

Key Changes to Procurement Rules

The Rule of Two Remains Intact, with MAC Discretion

Despite concerns that the “Rule of Two” might be eliminated, it remains largely intact. This rule requires acquisitions above the Simplified Acquisition Threshold (SAT) to be set aside for small businesses if there is a reasonable expectation of receiving offers from two or more responsible, competitive small businesses.

However, a key modification addresses MACs. For orders placed under MACs, the Rule of Two does not apply. Instead, contracting officers have the discretion to set aside orders. Importantly for government contractors, an agency’s decision to exercise this set-aside discretion under a MAC is not a basis for a bid protest.

Small Business Representation

The update alters how small business status is tracked for goal credit. Agencies are no longer required to collect small business representations at the order level for calculating small-business goal credit. Moving forward, size and agency small business credit will be determined at the contract level and subsequently updated only when specific contract-level events occur, such as option exercise, novation, or acquisition.

Modernizing the 8(a) BD Program

The overhaul introduces multiple changes designed to shift the 8(a) BD program toward competition and widen access to other set-asides:

1. Competitive Preference: For procurements below the competitive thresholds, contracting officers must now first consider competitive 8(a) BD program acquisitions using government-wide acquisition contracts (GWACS) before proceeding with a sole source award.
2. Ending “Once 8(a), Always 8(a)”: The long-standing principle that “once an 8(a), always an 8(a)” is departing. For follow-on procurements, the revised FAR Part 19 provides an automatic release from the 8(a) BD program when the agency plans to set aside the procurement for other Small Business Administration (SBA) programs, such as HUBZone, Service-Disabled Veteran-Owned Small Business (SDVOSB), or Women-Owned Small Business (WOSB). This release no longer requires a formal request from the SBA.

Stability in Other Socioeconomic Programs

Contractors should note that the sections of the revised FAR Part 19 addressing SDVOSBs, WOSBs, and HUBZone concerns remain substantively the same. Furthermore, rules related to size and status protests appear to be verbatim carry-overs from the former regulation.

What Contractors Need to Track

While this update represents a revolutionary overhaul, contractors should recognize that the proposed changes generally do not impact awards that are currently pending or seeking approval. The updates apply to small business procurements moving forward. Additionally, contractors must track whether some federal agencies may choose to deviate from certain updates and maintain aspects of the original FAR Part 19.

Tags: FAR Part 19, government contracts, small business programs, Rule of Two, 8(a) BD program, multiple-award contracts, procurement, SDVOSB, HUBZone, WOSB, marketus