H.R.2804 - Protecting Small Business Competitions Act of 2025 (119th Congress)
Summary
H.R.2804, the Protecting Small Business Competitions Act of 2025, aims to codify the 'Rule of Two' within the Small Business Act. This rule mandates that government contracts exceeding the simplified acquisition threshold be reserved for small businesses. This reservation occurs when there's a reasonable expectation of receiving offers from at least two responsible small business concerns and awarding the contract at a fair market price.
The bill seeks to strengthen opportunities for small businesses in federal contracting. It formalizes existing practices into law.
By codifying the Rule of Two, the bill intends to promote competition and ensure small businesses have a fair chance to participate in government procurement.
Expected Effects
The primary effect of this bill, if enacted, would be to legally require federal agencies to prioritize small businesses for certain contracts.
This could lead to an increase in the number of contracts awarded to small businesses. It may also foster greater competition among these businesses.
It could also create more bureaucratic overhead as agencies must document their compliance with the rule.
Potential Benefits
- Increased opportunities for small businesses to secure government contracts.
- Enhanced competition among small businesses, potentially leading to innovation and better value for the government.
- Potential for job creation within the small business sector.
- Formalization of a practice already in use, providing clarity and legal certainty.
- Could lead to a more diverse range of vendors for the government.
Potential Disadvantages
- Potential for increased costs if small businesses are not as efficient as larger firms.
- Possible delays in procurement processes due to the requirement to prioritize small businesses.
- Risk of 'set-aside' abuse, where larger firms may try to circumvent the rules to qualify as small businesses.
- May limit the government's ability to choose the absolute best vendor, regardless of size.
- Could create additional administrative burden for contracting officers.
Constitutional Alignment
The bill appears to align with the spirit of the Constitution, particularly the General Welfare Clause, by aiming to promote economic opportunity and support small businesses. Congress has the power to legislate in areas related to commerce and economic regulation, as outlined in Article I, Section 8.
However, the bill's focus on a specific class of businesses (small businesses) could raise questions under the Equal Protection principles, although such classifications are common and generally upheld if rationally related to a legitimate government interest.
There are no apparent conflicts with individual rights or freedoms guaranteed by the Bill of Rights.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).