House Small Business Committee advances HR 2804 to codify Rule of Two
Codification protects the baseline rule while leaving the task-order discretion that drives speed in day-to-day agency buying.
TL;DR
Former GSA Administrator Emily Murphy told Federal News Network that HR 2804, the Protecting Small Business Competitions Act of 2025, cleared the House Small Business Committee by voice vote and would put the small-business Rule of Two into statute. As marked up, the bill applies to contracts but no longer extends the requirement to task and delivery orders above the simplified acquisition threshold. Small businesses get a statutory floor; contracting officers keep task-order discretion.
HR 2804 is a small-business bill with a FAR-rewrite subtext. Murphy told Federal News Network the Rule of Two has long operated as a regulatory compromise under Section 15 of the Small Business Act: if two or more small businesses can compete at a fair and reasonable price, the procurement is supposed to be set aside. The bill would move that expectation into statute, which matters because the administration’s FAR rewrite is explicitly sorting rules into provisions required by law, essential provisions and everything else, as Federal News Network previously reported here.
The marked-up version also shows where Congress stopped. Murphy said Rep. Nydia Velázquez’s introduced version would have covered task and delivery orders above the simplified acquisition threshold. The committee substitute still covers contracts, but not necessarily task orders. That is the operational compromise. Small-business advocates get protection against a Rule of Two deletion. Agencies keep room to use task-order buying without turning every order into a set-aside fight.
For contracting officers, nothing changes Monday. HR 2804 still has to move, whether as a standalone bill, through the Senate companion, or as something attached to the defense authorization process. But if it becomes law, the Rule of Two stops being merely a FAR artifact and becomes harder for any acquisition-reform project to sand down.
Published ·Deep Fathom