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WASHINGTON- Today, House Small Business Committee Ranking Member Nydia Velázquez (D-NY), Congresswoman Lateefah A. Simon (D-CA), and Congressman Gilbert R. Cisneros Jr. (D-CA), announced two bills designed to protect small businesses during the federal government’s rewrite of its procurement regulations. Together, the bills will help ensure that when changes are made to these contracting rules, the statutory direction is clear and small businesses have a seat at the table. 

The President’s Executive Order entitled "Restoring Common Sense to Federal Procurement," issued on April 15, 2025, requires a revision of the government’s procurement regulations. The Executive Order encourages the elimination of provisions that have not been codified in statute—which include a key requirement that ensures small businesses have opportunities to compete for government contracts.

The Protecting Small Business Competitions Act, introduced by Ranking Member Velázquez and Rep. Cisneros, would codify that requirement, known as the “Rule of Two,” which is the current process used to trigger a small business competition. First, contracting officers must determine if small businesses can provide the products or services that they need at a competitive price. Then, if two or more can, the officer must set the contract aside and allow only small businesses to compete.

“The Rule of Two is the foundation of the small business industrial base, making it possible for small businesses to successfully enter, compete and remain in the federal marketplace,” said Ranking Member Velázquez. “If small businesses were required to compete with the large corporations, it would be nearly impossible to win a contract. We need to codify the Rule of Two now to remove uncertainty and preserve small business competitions, and therefore small business federal contractors.” 

“Small business owners are the backbone of our economy, and we must give them the support they need to succeed,” said Congressman Cisneros, Ranking Member of the Subcommittee on Contracting and Infrastructure, who recently co-led an opinion piece defending small business contracting programs: Attacks on small business contracting are misguided. “The Rule of Two gives small businesses a fighting chance and prevents large corporations like Tesla and SpaceX from boxing out their competition. Without it, small businesses will be left to fend for themselves. We must safeguard small businesses and protect their right to compete for government contracts.”

The Federal Acquisition Regulation (FAR) changes released to date highlight the need for immediate Congressional action, both to codify the Rule of Two and to ensure that small businesses are represented and heard during the rewrite process. As a recent Government Executive article summarized: “Of note in the FAR Part 10 revision: every mention of small business requirements in the current rules is marked for deletion.”

Accordingly, Congresswoman Simon has introduced the Small Business Representation in Contracting Rulemaking Act to add the SBA Administrator to the FAR Council and give small business government contractors a formal voice in this process.

“It is essential that the federal government prioritize small businesses in its procurement and contracting to stimulate economic growth, drive innovation, and ensure opportunity is available to all–not just large and well-established corporations,” said Congresswoman Simon. “My bill to add the Small Business Administration to the Federal Acquisition Regulatory Council is an important step towards ensuring small businesses have a voice at the table when the federal government considers a government-wide procurement policy.”

The Committee regularly hears from small businesses about how well-intended reforms can impose harmful unintended consequences on small business government contractors. These bills would help ensure that impacts on small businesses are considered and addressed during the decision-making process.

“The representation, input, and visibility of small firms as procurement policies are developed is critical to ensure that they have a level playing field and the maximum opportunity to compete, as required by the Small Business Act,” said Ranking Member Velázquez. “I am pleased to join Rep. Simon and give small businesses a seat at the decision-making table when the rules impacting their companies and their contracts are written.”

Small Business Committee Democrats have repeatedly expressed concerns about actions taken by the Trump Administration that have had direct and indirect impacts on small business government contractors, including:

·         Sending letters to the heads of federal agencies urging them to take concrete steps—including paying invoices in a timely manner and minimizing disruption, cancellations, and stop work orders—to limit the harm that the chaos of the Trump administration is inflicting on small business government contractors and the industrial base.

·         Raising concerns regarding the firing of small business personnel at federal agencies, including the mass firings of the Department of Health and Human Services’ Offices of Small and Disadvantaged Business Utilization (OSDBU) personnel. The letter highlighted the negative impact on the small business government contractors and raised questions regarding the Department’s compliance with the Small Business Act.

·         Demanding answers on how the arbitrary firings and Reductions in Force at SBA are being conducted and impacting their current mission objectives—and how the ability of entrepreneurs across the country to access SBA programs will be further jeopardized when SBA takes on the massive $1.6 trillion federal student loan portfolio.

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