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FAR Part 19 Overhaul: 5 Essential Changes Government Contractors Need to Know
The Federal Acquisition Regulatory Council (FAR Council) issued a massive update to FAR Part 19 on September 26, 2025, introducing changes designed to streamline small business programs and clarify procedures, especially concerning multiple-award contracts and the 8(a) program. For government contractors, these updates promise a clearer operational guide and potentially less procedural burden, allowing firms to focus more on positioning, pricing, and performance.
Here are the most significant changes introduced by the FAR Part 19 overhaul.
1. A New Name and Structure for Small Business Rules
The overhaul begins with a complete structural reorganization. FAR Part 19 is officially renamed from “Small Business Programs” to simply “Small Business.”
The entire regulation has been rebuilt around the acquisition lifecycle, organized into three phases: Presolicitation (19.1), Evaluation & Award (19.2), and Postaward (19.3). This restructuring aims to make the rule read faster and reduces the need for constant cross-referencing between Parts 19 and 52. Importantly, the underlying government policy to maximize small business participation is firmly reaffirmed in the rewrite.
2. The Rule of Two Remains, but MAC Orders Gain Flexibility
The foundational “Rule of Two,” which requires setting aside acquisitions above the Simplified Acquisition Threshold (SAT) if there is an expectation of receiving competitive offers from two or more responsible small businesses, remains intact. The FAR Council specifically retained this rule, deeming it “essential to sound procurement.”
However, the application of set-asides for orders under Multiple-Award Contracts (MACs) has changed. Federal agencies now have discretion to set aside orders placed under MACs, and the Rule of Two does not apply to these orders. Crucially, an agency’s decision to exercise this discretion cannot be the basis for a bid protest.
3. Size Determination Shifts to the Contract Level
To standardize small business reporting and goal credit, the new rule dictates that small business representation and agency small business credit will be determined at the contract level.
This means that small business representation is generally only updated when specific contract-level events occur, such as the exercise of an option, a novation, or an acquisition. Agencies are no longer required to collect small business representations at the order level for the purpose of receiving small-business goal credit. However, this aspect presents potential regulatory inconsistencies, as other regulations (13 C.F.R. § 125.12 and 13 C.F.R. § 121.404) still permit contracting officers to request size or status certification at the order level.
4. Major Changes for the 8(a) Business Development Program
The updates significantly alter the execution of the 8(a) BD program, emphasizing competition and transition.
For procurements below the competitive thresholds, contracting officers are now required to first consider a competitive 8(a) BD acquisition, potentially utilizing governmentwide acquisition contracts (GWACS), before proceeding with an 8(a) BD program sole source award.
Perhaps the most notable shift is the departure from the long-standing premise that “once an 8(a), always an 8(a).” For follow-on procurements, the new FAR Part 19 provides for automatic release from the 8(a) BD program if the agency plans to set aside the requirement for other Small Business Administration (SBA) socioeconomic programs, such as HUBZone, Service-Disabled Veteran-Owned Small Business (SDVOSB), or Women-Owned Small Business (WOSB). This release does not require a formal request to the SBA.
5. Other Socioeconomic Programs Remain Steady
While the 8(a) program saw substantial structural and policy changes, the sections of the revised FAR Part 19 addressing SDVOSB, WOSB, and HUBZone concerns remain substantively the same. Rules related to size and status protests under these categories also appear to be verbatim copies of the former provisions.
Tags: FAR Part 19, Government Contracts, Small Business Programs, Rule of Two, 8(a) Program, Multiple-Award Contracts, MACs, Contract-Level Determination, Acquisition Lifecycle, Federal Acquisition Regulation, marketus