The FAR Part 19 Overhaul: What Changed for Small Business Set-Asides

If you have been trying to figure out what the FAR overhaul did to small business set-asides, you have probably run into a confusing wall: the rewritten Part 19 has been circulating since September 2025, agencies are visibly operating under it, and yet the Federal Acquisition Regulation you can pull up on eCFR still reads exactly the way it always did.

Both things are true, and understanding why is the whole story. The new Part 19 is real and it is affecting how contracting officers behave right now. It is also not law. Here is what actually changed, what is still contested, and the one carve-out that matters most if you are a veteran-owned firm.

How the overhaul is actually being implemented

The Revolutionary FAR Overhaul grew out of an April 2025 executive order directing a rewrite of the FAR. Rather than begin with rulemaking, the FAR Council took a faster path: publish model deviation text part by part, and let agencies adopt it by issuing class deviations.

A class deviation is an authorized departure from the FAR. It changes what contracting officers do without changing what the FAR says. The FAR Council’s own guidance states that the deviations remain in effect “until the FAR is revised through the formal rulemaking process,” and describes the model text as “a preview of what is being considered for incorporation into the FAR.”

Part 19 model text was released on September 26, 2025. Agencies followed: GSA issued a Part 19 deviation effective November 3, 2025, the Department of Defense issued one in January 2026, and further deviations exist at VA, DHS, State, HHS, Treasury, Energy, SEC, and NARA.

So when a contracting officer at one of those agencies applies Part 19, they are applying the new text. When you or a protest forum reads the FAR, you are reading the old one.

Part 19 is not in any proposed rule yet

This is the single most misreported fact in the coverage, so be precise about it.

Formal rulemaking on the overhaul began on June 23, 2026, when the FAR Council published four proposed rules covering roughly twenty parts, with comments closing July 23, 2026. The Council has said it intends to issue twelve proposed rules in total.

Part 19 was not among the four. As of today there is no proposed rule and no final rule for Part 19. Nothing in the overhaul has been finalized at all — zero final rules exist across the entire effort. Industry observers expect Part 19 rulemaking sometime in 2027, but that is a forecast, not a commitment.

What this means practically: the new Part 19 could still change before it is ever proposed, and the codified rules that a court or GAO would apply have not moved.

What the new Part 19 looks like

The part was renamed from “Small Business Programs” to simply “Small Business” and reorganized around the acquisition lifecycle rather than by program. Three subparts now do the work: 19.1 Presolicitation, 19.2 Evaluation and Award, and 19.3 Postaward. The rewrite cuts more than 12,000 words, over a quarter of the prior text.

Set-aside authorities that used to be scattered are consolidated: 19.104 for small business set-asides, 19.105 HUBZone, 19.106 SDVOSB, 19.107 WOSB, 19.108 for the 8(a) program, and a new 19.111 covering orders under multiple-award contracts.

Change one: the socioeconomic-first sequencing is gone

Under the codified FAR, 19.502-2(b) points contracting officers to 19.203(c), which provides that the contracting officer “shall first consider an acquisition for the small business socioeconomic contracting programs” — 8(a), HUBZone, SDVOSB, or WOSB — “before considering a small business set-aside.”

The new Part 19 has no counterpart to that provision. The number 19.203 has been reused for “Equal low bids,” and nothing anywhere in the new part establishes an order of precedence.

Be careful how you state this. It is not that general small business set-asides now outrank socioeconomic ones. It is that the mandatory sequencing requirement was deleted and nothing replaced it in either direction. The choice is contracting officer discretion. The socioeconomic programs themselves were not substantively changed.

For a firm whose whole competitive position rests on a certification, that is a meaningful shift in expectation even though no program lost authority. Our overview of how federal set-asides work covers the underlying structure.

Change two: the Rule of Two survives, in a single reformulated test

The new 19.104-1 states that 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—(1) From two or more responsible small business concerns; and (2) That are competitive in terms of fair market prices, quality, and delivery.”

The old FAR ran two separate tests: one for acquisitions between the micro-purchase threshold and the simplified acquisition threshold, and a different one above it. The new text collapses both into one standard applied above the micro-purchase threshold, and it applies the fuller “fair market prices, quality, and delivery” language uniformly. Above the simplified acquisition threshold that is a marginally more demanding finding than the old formulation required.

The Rule of Two was not eliminated, weakened, or gutted at the contract level. If you want the mechanics, see our breakdown of the Rule of Two and the simplified acquisition threshold.

Change three: orders under multiple-award contracts

The new 19.111-2 is reported to state that a contracting officer’s decision to set aside, or not set aside, an order under a multiple-award contract is an exercise of discretion and not a basis for a protest.

Two things to understand about that.

First, it is largely continuity. Order-level set-asides were already discretionary — SBA’s own regulation says a contracting officer “may” set aside orders. What is genuinely new is the express statement that the decision cannot be protested.

Second, that statement is on shaky ground. In 2021, the Court of Federal Claims held in Tolliver Group, Inc. v. United States that the Rule of Two applies to “any” acquisition, and rejected the argument that satisfying it when a multiple-award contract was established excuses a separate analysis at the order level. Then, in January 2025, the FAR Council published two proposed rules that would have settled the question through notice and comment — one mandating order-level Rule of Two analysis, one declaring order set-aside decisions non-protestable. Both were withdrawn in June 2025.

So the non-protestability language now sits in deviation text that never went through notice and comment, after a materially identical proposal that was put through notice and comment got pulled. No GAO or Court of Federal Claims decision has tested it. Treat it as the most legally vulnerable provision in the new part, not as settled law.

The VA carve-out, which no FAR deviation can touch

If you are a VOSB or SDVOSB, this is the paragraph that matters most.

The VA’s Rule of Two does not live in the FAR. It lives in statute, at 38 U.S.C. § 8127. In Kingdomware Technologies v. United States (2016), the Supreme Court held it mandatory — including for orders placed against the Federal Supply Schedule.

An executive-order-driven FAR deviation cannot displace a statute. Veteran-owned priority at VA is unchanged by the overhaul. Everything above about discretion and non-protestability describes the non-VA landscape. See our SDVOSB and VOSB certification guide for how the certification side works.

What actually happened with 8(a) — and a correction worth making

You may have heard that the overhaul “revised 8(a) follow-on thresholds.” That garbles two unrelated changes.

What the overhaul changed is the follow-on release rule, which has nothing to do with thresholds. Under the new 19.108-11, a requirement is automatically released from the 8(a) program if the follow-on will be set aside under the HUBZone, SDVOSB, or WOSB programs — no request to SBA required. That is the end of “once 8(a), always 8(a)” in the FAR, and it is genuinely significant: work that used to stay locked in the 8(a) portfolio can now migrate to other set-aside programs.

Separately, 8(a) sole-source thresholds did rise — through an unrelated inflation adjustment effective October 1, 2025. They went from $4.5 million to $5.5 million for most acquisitions and from $7 million to $8.5 million for manufacturing. The same adjustment raised the micro-purchase threshold to $15,000 and the simplified acquisition threshold to $350,000. If you are reading a law firm alert written in September 2025, it may still quote the old figures.

The new 19.108-7 also adds a competition-first step: below the competitive threshold, contracting officers are to first try running the acquisition as a competitive 8(a) order using SBA-approved government-wide contracts before making a sole-source award. Our 8(a) program overview covers eligibility and the basics.

The unresolved conflict on size recertification

The new Part 19 moves toward determining size and socioeconomic status at the contract level rather than the order level, consolidating rerepresentation at 19.301 and 19.111-1.

Do not over-read that. SBA’s regulations still control eligibility, and they still permit order-level recertification requests. SBA’s rules at 13 CFR 121.404 and 125.12, including order-level provisions that took effect in January 2026, remain the operative source for how recertification affects eligibility for options and new awards. The new FAR text addresses how recertification affects the agency’s small business credit — not whether you remain eligible.

That is a live FAR/SBA conflict that has not been reconciled. If you are contemplating a sale, an investor, or a merger, get counsel before relying on the FAR’s framing.

What to do differently this month

• Check the buying agency’s deviation status before assuming which Part 19 applies. An agency without a deviation is still on codified Part 19.
• Stop building capture strategy around forcing an order-level set-aside outside VA. It was already discretionary; now it is discretionary and declared non-protestable.
• Contract-level set-aside decisions are still protestable. A failure to set aside a standalone contract above the micro-purchase threshold remains challengeable.
• VA work is unchanged. Statutory priority survives.
• Nothing changed about your certifications. SAM registration, size standards, NAICS assignment, and SBA certification all live in 13 CFR and SBA systems, outside the FAR entirely.

Key takeaways

• The rewritten Part 19 is being applied through agency class deviations. The codified FAR Part 19 is unchanged, and no Part 19 rule has been proposed or finalized.
• The requirement to consider socioeconomic set-asides before general small business set-asides was deleted. No hierarchy replaced it in either direction.
• The Rule of Two survives at the contract level, collapsed into a single test above the micro-purchase threshold.
• Order-level set-aside decisions are declared discretionary and non-protestable — language that is untested and sits in text that never went through notice and comment.
• VA’s Rule of Two is statutory and unaffected. Kingdomware still governs.
• The 8(a) change was to follow-on release rules, not thresholds. The threshold increases came from a separate October 2025 inflation adjustment.
• SBA’s recertification rules still control eligibility and conflict with the FAR’s contract-level framing.

Frequently asked questions

Is the new FAR Part 19 in effect? Not as law. Agencies that issued class deviations are applying it, so it governs how those contracting officers behave, but the codified FAR Part 19 is unchanged and the rewritten text has not been through rulemaking.

Did small businesses lose protest rights? Not at the contract level. The new text declares order-level set-aside decisions non-protestable, but that provision has never been tested and the notice-and-comment version of the same rule was withdrawn in June 2025.

Does any of this change my SDVOSB certification? No. Certification requirements live in SBA regulations, not the FAR. And at VA, the statutory Rule of Two is untouched.