The Scale of Opportunity
In FY 2024, small businesses secured approximately $183 billion in prime contracts, 28.8% of eligible federal contracting dollars, marking the fourth consecutive year above the 23% goal. Of that, Small Disadvantaged Businesses received around $78 billion, SDVOSBs about $32.8 billion, WOSBs approximately $31.7 billion, and HUBZone firms roughly $17.5 billion.
The federal contracting world is undergoing a pivotal shift, and if you sell to the federal government, you must be aware of these changes. On September 26, 2025, the FAR Part 19 overhaul was announced. This overhaul reshapes how small businesses engage with the federal marketplace. The update was part of the broader “Revolutionary FAR Overhaul” initiative.
For years, Part 19 was titled “Small Business Programs.” Now, it’s simply “Small Business.” The content has been reorganized around the stages of acquisitions: Presolicitation (19.1), Evaluation & Award (19.2), and Post-Award (19.3). More than 12,000 words of legacy verbiage were removed.
Key Changes at a Glance
- Simplified Structure: Streamlined and reorganized into three clear sections.
- Rule of Two Updated: Greater flexibility, no longer prioritizes socioeconomic set-asides.
- 8(a) Program Modernized: Ends “once 8(a), always 8(a)” and emphasizes competition.
- SBA Oversight Retained: SBA continues its core roles in competency and subcontracting reviews.
In this blog, we explore the key changes in FAR Part 19 and provide actionable insights for small businesses to thrive in this new era.
Understanding the FAR Part 19 Overhaul
What is FAR Part 19?
FAR Part 19 is the regulation that governs the federal government’s small business programs, the rules, policies, and processes by which small businesses may compete for contracts, programs such as 8(a), HUBZone, SDVOSB (Service-Disabled Veteran-Owned Small Business), WOSB (Women-Owned Small Business), and so on.
1. Streamlined and Retitled
The headline change improves structural clarity. Part 19 is now titled “Small Business,” reorganized around the acquisition lifecycle, and simplified to reduce duplication. The new version of FAR Part 19 is retitled from “Small Business Programs” to simply “Small Business.” It has been reorganized into three clear parts aligned to the acquisition lifecycle:
- Presolicitation (19.1)
- Evaluation & Award (19.2)
- Postaward (19.3)
According to the analysis, more than 12,000 words of legacy material were removed or consolidated to promote readability and simplicity. For contracting professionals and business owners alike, this means fewer cross-references and more straightforward, plain-language instructions.
2. The Rule of Two – Preserved, with Order‑Level Discretion
The much-relied-upon “Rule of Two” remains — when there are at least two capable small businesses, a set-aside must be considered. But the overhaul changes how the rule applies in certain contexts. For example, for task orders under multiple-award contracts (MACs), the requirement is no longer mandatory, but discretionary.
Additionally, the hierarchy of socioeconomic set-asides (HUBZone, SDVOSB, WOSB) over general small business set-asides has been de-emphasized; the new regulations specify that there is no order of precedence among the small business socioeconomic programs.
3. Updates to the 8(a) Program – Follow‑Ons Can Move
One of the most discussed changes involves follow‑on work that used to stay within the 8(a) program. Under the new structure, agencies have more flexibility to shift follow-on requirements to other socioeconomic categories (HUBZone, WOSB, SDVOSB) and to prioritize competition over sole-source awards when applicable, primarily through approved government-wide vehicles.
4. SBA Oversight Remains – Subcontracting Still Counts
The Small Business Administration maintains its essential functions, including the Certificate of Competency process and oversight of subcontracting plans, with detailed plan requirements remaining central to large primes and the small firms that partner with them.
Why These Changes Matter
Taken together, these updates reduce the reading burden, expand competition in key scenarios (notably 8(a) follow‑ons and order‑level decisions on MACs), and cut down on repetitive compliance on order‑level reps. The overall effect: it’s easier to enter and compete in the federal market, but standing out will depend less on automatic set‑aside mechanics and more on positioning, proof of competitiveness, and presence in the market.
Implications for Small Businesses
1. Increased Competition and Opportunity
With the removal of the strict “once 8(a), always 8(a)” lock-in, firms that have served in the 8(a) program now may be eligible for follow-ons under other socioeconomic set-asides (HUBZone, SDVOSB, WOSB). This opens up new pathways that were previously less accessible. Also, other companies that are not 8(a) also have the option to bid and compete.
Task orders under multiple-award contracts (MAS, GWACs, IDIQs) are no longer automatically required to be set aside for small businesses. This means you must be competitive, but it also means more discretion in opportunities for small businesses if you build the relationship and position yourself well.
Also Read: FAR Overhaul: What Contractors Need to Know
2. Reduced Administrative Burden
Size and status determinations at the contract level (rather than at every task order) mean less repetitive paperwork for each order. According to the analysis, this shift aims to alleviate the burden of compliance, allowing small businesses to focus on execution.
The streamlined language and reorganization (three subparts) make the regulation more accessible, especially for newcomers to federal contracting. Missing cross-references and archaic rules have been removed.
The FAR Part 19 overhaul is more than just a cleanup; it’s a strategic reset. The text is clearer. The Rule of Two still safeguards small businesses on contracts, but order‑level discretion on MACs shifts the go‑to‑market rhythm. 8(a) follow‑ons can be completed through other socioeconomic lanes, which opens opportunities for some and raises standards for others. And contract‑level status reduces order‑level paperwork, allowing teams to focus on pursuits that matter.
The FAR Part 19 overhaul signals a new era in small business contracting, where knowledge, strategy, and adaptability are essential. iQuasar is here to help your business not only stay compliant but also thrive in this changing environment. At iQuasar, we stand ready to guide you into this new era. Whether your focus is prime contracting, subcontracting, or capturing government business at the state, local, or federal level, we can help you navigate the updated Small Business regulation, position yourself competitively, and grow with confidence.
