What is the rule of two?
As of 12 November 2026: It is the common name for the FAR requirement to set aside an acquisition for small business when the contracting officer reasonably expects offers from at least two responsible small businesses and award at fair market prices. Under FAR 19.502-2, acquisitions above the micro-purchase threshold up to the simplified acquisition threshold are set aside unless that expectation is lacking, and acquisitions above the threshold are set aside when it exists.
Updated , checked against the official sources below.
What do the official sources say?
| Source | What it says | Read |
|---|---|---|
| FAR 19.502-2(b) Total small business set-asides | "The contracting officer shall set aside any acquisition over the simplified acquisition threshold for small business participation when there is a reasonable expectation that" | |
| FAR 19.502-2(b)(1)-(2) | "Offers will be obtained from at least two responsible small business concerns; and (2) Award will be made at fair market prices." | |
| FAR Overhaul (RFO) Part 19, 19.104-1(a) | "For contracts above the micro-purchase threshold, the contracting officer must set the contract aside for small business if there is a reasonable expectation of obtaining offers" |
Questions people also ask
- What is a small business set-aside?
- A small business set-aside limits a federal acquisition exclusively to small business concerns. It can be total or partial, and set-aside solicitations must state the NAICS code and size standard that define who counts as small.
- What is the SBA 8(a) program?
- The 8(a) Business Development program is an SBA program for small businesses at least 51% owned and controlled by U.S. citizens who are socially and economically disadvantaged. Certified firms can compete for 8(a) set-aside and sole-source contracts (sole source up to $8.5 million for manufacturing NAICS codes and $5.5 million for others) and get business development help during a maximum nine-year term.
- What is a WOSB set-aside?
- A WOSB set-aside is a contract limited to firms in SBA's Women-Owned Small Business Federal Contract program, in industries (NAICS codes) where SBA has found women-owned small businesses underrepresented. Some are limited further to economically disadvantaged WOSBs (EDWOSBs), and firms must be certified through SBA Certifications (or an SBA-approved third-party certifier) to compete.
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This page restates official sources; it is not legal advice. Bid Watch US is run by Bikoosh, an independent tracker, not affiliated with SAM.gov or the US government.