A proposed rule under the Revolutionary FAR Overhaul would end the requirement that contracting officers apply the Rule of Two to orders placed under multiple-award contracts, including GSA Schedules. Right now, under FAR 8.405-5, a 2022 rule extended mandatory Rule of Two consideration to Schedule orders above the simplified acquisition threshold. The new proposal, issued under FAR Part 19 on September 26, 2025, keeps that requirement discretionary instead of mandatory for those orders specifically. Rule of Two itself is not going away. It stays mandatory for open-market, full-and-open awards above the micro-purchase threshold. This is not final regulatory text yet, it is a proposed rule still moving through the FAR Council’s rulemaking process. Here is exactly what changed, what stays the same, and what it means if you hold or are pursuing a GSA Schedule contract.
What Changed: Rule of Two and Multiple-Award Contract Orders
The core change sits in proposed FAR 19.104-1, part of the broader Revolutionary FAR Overhaul (RFO) that GSA is running under Executive Order 14275, “Restoring Common Sense to Federal Procurement.” The proposal consolidates prior threshold-based Rule of Two language into a single standard for open-market awards. Alongside that consolidation, it states plainly that Rule of Two is not directed for orders placed under multiple-award contracts.
In practice, that means a contracting officer placing an order against a GSA Schedule would no longer be required to check whether at least two small businesses can compete before opening the order to the full pool of Schedule holders. They would still be allowed to set the order aside for small business. They would simply no longer have to.
Why This Matters for GSA Schedule Small Businesses
Since 2022, FAR 8.405-5 gave small business Schedule holders a real, enforceable expectation: if two or more of you could compete on an order, the contracting officer had to consider setting it aside. If you need the full background on how that baseline rule works, our guide on What Is the Rule of Two in Government Contracting covers it in detail. That expectation is what this proposal removes for order-level competition, even though it keeps the base Rule of Two protection intact for open-market contracts.
This does not mean set-asides on Schedule orders disappear. Contracting officers can still choose to set an order aside for small business under the proposal. It means that choice becomes discretionary rather than required, which shifts real leverage toward the buying agency’s preference on any given order.
What Rule of Two Still Requires
It is worth being precise about what is not changing. Proposed FAR 19.104-1 keeps Rule of Two mandatory for contracts awarded through full and open competition above the micro-purchase threshold, consolidating what used to be separate rules for the range between the micro-purchase threshold and the simplified acquisition threshold versus contracts above it into one consistent standard.
The 8(a) program rules are also affected by the broader RFO, separate from this specific change: when an acquisition falls below the competitive threshold, contracting officers must first attempt it as a competitive 8(a) order using SBA-approved government-wide contracts before other approaches.
Where This Stands in the Rulemaking Process
This is a proposed rule, not a final one. The Revolutionary FAR Overhaul moves through two phases. Phase 1 released non-regulatory guidance and agency-issued deviations to work from ahead of formal rulemaking. Phase 2 is where formal rulemaking happens: a draft rule goes to the Civilian Acquisition Agency Council, the Defense Acquisition Regulation Council, OIRA, and OFPP for review, then gets published as a proposed rule in the Federal Register with a public comment period, typically around 30 days, before a final rule is adopted.
The Part 19 language discussed here was issued September 26, 2025 as part of that Phase 2 rulemaking. Until a final rule is published, this remains a proposed change, and public comments can still shape the final language.
What This Means If You Hold a GSA Schedule
If your business relies on Rule of Two protection to win orders against your Schedule, this proposal is worth watching closely, not reacting to as settled fact. Two things are worth doing now, independent of how the final rule lands.
First, do not assume order-level set-asides will keep happening automatically. Whatever the final rule says, contracting officer discretion is clearly the direction this is heading, which means winning orders increasingly depends on being the buyer’s obvious first choice, not on a regulatory guarantee.
Second, if you want to weigh in, proposed rules take public comments during the Federal Register comment period. That is the direct channel to influence the final language before it is locked in.
How This Fits Into the Broader FAR Overhaul
The Rule of Two change is one piece of a much larger rewrite. The RFO also centralizes commercial acquisition policy in Part 12, removes 46 clauses across the commercial item rules in Parts 8, 12, and 16, and introduces formal “on-ramping” and “off-ramping” authority letting agencies add or remove contractors from a multiple-award contract during its ordering period. Construction has also been added as a recognized commercial service under the overhaul.
Each of these shifts more decision-making toward contracting officer discretion and away from prescriptive, one-size-fits-all rules, which is the stated intent behind the RFO across the board, not unique to Part 19.
What to Watch Next
Two markers are worth tracking. First, whether Part 19 rulemaking reaches a final rule, and whether the final language matches this proposal or shifts after public comment. Second, whether GSA issues its own agency-level deviation or guidance on how contracting officers should handle Rule of Two for Schedule orders in the meantime, since agencies can move ahead of formal rulemaking through deviations during Phase 1 and Phase 2.
Frequently Asked Questions
Is the Rule of Two going away entirely?
No. It stays mandatory for open-market, full-and-open contract awards above the micro-purchase threshold. The proposed change only affects whether it is required for orders placed under multiple-award contracts, such as GSA Schedule orders.
Is this rule change final?
No. It is a proposed rule issued under FAR Part 19 on September 26, 2025, still moving through the Revolutionary FAR Overhaul’s Phase 2 rulemaking process, including a Federal Register public comment period before any final rule is adopted.
Does this affect all GSA Schedule orders?
It affects whether a contracting officer is required to consider a Rule of Two set-aside on an order placed under a multiple-award contract. Under the proposal, that consideration becomes optional rather than mandatory. Contracting officers can still choose to set an order aside for small business.
What can a small business GSA Schedule holder do about this?
Submit a public comment during the Federal Register comment period if you want to influence the final language, and do not rely on an automatic set-aside for future orders. Strengthening your GSA Advantage visibility and past performance record matters more, not less, if order-level competition becomes discretionary.
Sources
This piece draws on GSA’s FAST 2026 Virtual Acquisition Summit presentation on the Revolutionary FAR Overhaul, independent legal analysis published by SmallGovCon, and Federal Register filings on the RFO rulemaking process. Regulatory language is still moving through Phase 2 rulemaking as of this writing, and the final rule may differ from the proposal described here.
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