Principal comment on the Revolutionary FAR Overhaul — Parts 5, 6, 7, and 10

FILED 2026-07-09 · FAR CASES 2026-002 & 2026-005 · PUBLIC COMMENT

On 23 June 2026 the FAR Council proposed rewriting Parts 5, 6, 7, and 10 of the Federal Acquisition Regulation under the Revolutionary FAR Overhaul. The American Small Business Chamber of Commerce™ filed a sixteen-page comment on 9 July, two weeks ahead of the deadline, grounded in our own analysis of approximately 30 million federal contract actions covering FY2022 through FY2026, reconciled to the Small Business Administration's published goaling figures.

The defenders of the overhaul say the statutory Rule of Two is preserved. Our comment shows what that preservation is worth.

The Rule of Two is three layers, not one

The Rule of Two is usually described as a single protection. It is three, resting on three different legal foundations — and only the first is statutory.

The statutory floor reserves for small business each contract above the micro-purchase threshold and not greater than the simplified acquisition threshold. Above that threshold, the Rule of Two rests entirely on regulation, which can be narrowed or removed by rulemaking. At the order level, under the large multiple-award vehicles, the statute is discretionary by its own terms.

Classifying every federal contract action from FY2022 through FY2026 by which layer protects it produces the number that matters. The statutory band — the layer that survives untouched — holds 1.23% of all federal contract dollars and 3.59% of small-business dollars. The order-level channel the proposed rules carve out carries 60.84% of small-business dollars in above-SAT orders alone, and 67.83% counting all orders.

For every small-business dollar the statutory floor still reaches, roughly twenty-seven dollars sit in the layers the proposed rules convert to discretion or remove. The mandatory protection survives where the money is not.

One word is worth $53.1 billion

The proposed rules change the Rule of Two's unit of analysis from "acquisition" to "contract." Whether the statutory reservation reaches orders placed inside the protected size band turns entirely on that word.

Priced against the same five-year table, the difference is $53.1 billion in small-business dollars — a mandatory floor covering 10.6% of small-business dollars under the "acquisition" reading, against 3.59% under "contract." The computation is arithmetic, not modelling.

The exposure is growing by design

The federal marketplace has been migrating for two decades from standalone contracts into orders under consolidated vehicles, and the migration runs steepest exactly where small firms are.

Across FY2022–FY2026, 56.7% of all federal dollars moved through the order channel, against 67.8% of small-business dollars. The overall market's order share stayed roughly stable, between 53% and 59%, ending near where it began. Small-business dependence rose every single year — from 66.0% in FY2022 to 70.7% in the current partial fiscal year. This is not general market weather. It is concentrated on the firms the statute protects.

Meanwhile the same overhaul mandates routing new requirements into consolidated governmentwide vehicles. The package that mandates the migration redefines the Rule of Two to exclude the migration's destination. Every year, by the government's own hand, a larger share of the marketplace moves into the channel the redefinition abandons — so the protected share shrinks even if not one further rule changes.

What consolidation costs is not speculative. When the government last consolidated office supplies into managed strategic-sourcing vehicles, the small-business supplier base fell from several hundred Schedule 75 vendors to roughly twenty-four awardees. The GAO decision denying the protests recorded the arithmetic.

The market gets harder to see

The proposed rules narrow visibility at both ends.

At the entry end, the tier requiring fifteen days' advance notice before a solicitation issues rises from $25,000 to $45,000, replaced by a ten-day minimum posting duration — and the preamble is explicit that the ten days is a posting duration, not a pre-issuance lead time. Award notices keep the $25,000 tier, preserving the lower threshold for announcing what the government has already bought while raising it for what small firms could still compete for.

This operates directly on the statute. The reservation releases where a contracting officer is unable to obtain offers from two or more competitive small businesses — and whether two offers arrive depends on who sees the notice and how long they have to act. Compressing the window inside the band Congress reserved makes the release condition easier to satisfy without amending a word of the statute.

At the top end, public announcement of the government's largest awards converts from mandatory to permissive.

What we asked for

The comment makes twelve specific requests. Among them:

• Keep small-business consideration mandatory and inside the FAR at acquisition planning, market research, and competition — not relocated into non-binding buying guides.
• Affirm that the Rule of Two applies at the order level of the vehicles the overhaul routes work into.
• Restore a sustainable protest ground for failure to conduct market research supporting a set-aside determination.
• Keep the large-award public announcement mandatory, and restore the fifteen-day notice tier for acquisitions between $25,000 and $45,000.
• Commit on the record to continuity of award-level, order-level, subcontract-level, and socioeconomic data through the FPDS-to-SAM transition.
• For each removal of a small-business protection, identify the mechanism by which the removal increases small-business participation.

The record

Filed 9 July 2026 into FAR Case 2026-002 (Parts 6, 7, 10) and FAR Case 2026-005 (Part 5), with process comments applicable to Cases 2026-001 and 2026-007. Posted 13 July 2026.

• FAR Case 2026-002 — FAR-2026-0002-0014 · tracking mre-1b61-i14u
• FAR Case 2026-005 — FAR-2026-0005-0010 · tracking mre-1rke-g43a

Signed by Charmagne Giardina, President.

Download the filed comment (PDF, 16pp)

The underlying analysis is published in full and reproducible as the Federal Marketplace Index™ v0.2, ASBCC's open compilation of the government's own procurement data. Methodology · archived release