Article Plan: PARA 19 PDF (as of 12/16/2025 05:57:13)
This document details the updated FAR Part 19, released September 26, 2025,
focusing on small business participation and the ‘Rule of Two’.
Federal Acquisition Regulation (FAR) Part 19 stands as a pivotal component of the U.S. government’s procurement landscape, specifically designed to foster and support small business participation in federal contracting. As of today, December 16, 2025, 05:57:13, this regulation is undergoing significant evolution, culminating in a comprehensive update released by the FAR Council on September 26, 2025, as part of the Revolutionary FAR Overhaul (RFO).
This overhaul represents a substantial shift in how federal agencies engage with small businesses, aiming to streamline processes and enhance opportunities. FAR Part 19 has historically been the cornerstone of federal small business contracting policy, and this latest revision seeks to reinforce that position. Understanding these regulations is crucial for both contracting officers and businesses seeking to navigate the complexities of federal procurement. The updates address key areas like size standards, eligibility requirements, and set-aside procedures, impacting a wide range of contracts and industries.
Overview of FAR Part 19
FAR Part 19 governs the intricate processes surrounding small business participation within federal government contracting. It establishes the framework for agencies to achieve statutory goals related to small business utilization, encompassing a diverse range of programs designed to level the playing field. The regulation details procedures for determining small business eligibility, including size standards and status verification, as outlined in Subpart 19.3.
Key aspects include the use of set-aside contracts, where opportunities are exclusively reserved for qualified small businesses, and the ‘Rule of Two’ – a practice recently addressed in the FAR 2.0 update. Furthermore, Part 19 emphasizes the importance of good faith representation from offerors regarding their small business status. The recent updates, stemming from the September 26, 2025, RFO, aim to modernize these processes and promote greater transparency and efficiency in federal procurement.
Historical Context of FAR Part 19
FAR Part 19 has long been a cornerstone of federal small business contracting policy, evolving significantly since its inception. Initially established to address historical disadvantages faced by small businesses in competing for government contracts, it aimed to foster economic opportunity and innovation. Over the decades, the regulation has undergone numerous revisions to adapt to changing economic conditions and legislative mandates.
Prior to the Revolutionary FAR Overhaul (RFO) of September 26, 2025, Part 19 faced criticisms regarding its complexity and perceived limitations in effectively promoting small business participation. The updates sought to address these concerns, streamlining procedures and clarifying eligibility requirements. The regulation’s history reflects a continuous effort to balance the need for fair competition with the government’s commitment to supporting small businesses, recognizing their vital role in the national economy and innovation ecosystem.
The Revolutionary FAR Overhaul (RFO) — September 26, 2025
On September 26, 2025, the Federal Acquisition Regulation (FAR) Council unveiled a comprehensive update to FAR Part 19 as part of its Revolutionary FAR Overhaul (RFO). This overhaul represented a significant effort to modernize and streamline federal small business contracting procedures. The changes aimed to address longstanding issues of complexity and inefficiency, ultimately boosting participation from small businesses in government procurement.
Key objectives of the RFO included clarifying eligibility criteria, simplifying documentation requirements, and enhancing the effectiveness of small business set-asides. The update sought to empower contracting officers with clearer guidance, while also ensuring greater transparency and accountability throughout the procurement process. This overhaul signaled a renewed commitment to fostering a level playing field for small businesses seeking to contribute to federal projects and initiatives, impacting the entire landscape of federal contracting.
Core Principles of FAR Part 19
FAR Part 19 fundamentally centers on promoting equitable access to federal contracting opportunities for small businesses. A cornerstone principle is the establishment of clear guidelines for determining small business eligibility, outlined in Subpart 19.3, ensuring consistent application across all agencies.
Another core tenet is the emphasis on good faith representation from offerors regarding their small business status. The regulation mandates that businesses accurately portray their size and eligibility to avoid unfair competition. Furthermore, FAR Part 19 prioritizes the use of set-aside contracts, reserving specific procurements exclusively for qualified small businesses. These principles collectively aim to level the playing field, fostering economic growth and innovation within the small business sector while fulfilling federal procurement needs.
Promoting Small Business Participation
FAR Part 19 actively encourages federal agencies to proactively seek opportunities to include small businesses in the contracting process. This is achieved through various mechanisms, most notably small business set-asides, which reserve specific contracts for eligible firms. The Contracting Officer plays a crucial role, making determinations regarding set-asides and documenting justifications when such set-asides are not implemented, as per FAR 2.0.
Beyond set-asides, the regulation emphasizes the importance of outreach programs and initiatives designed to connect small businesses with contracting opportunities. The Revolutionary FAR Overhaul (RFO) of September 26, 2025, further refined these strategies, aiming to streamline processes and enhance accessibility for small businesses navigating the complex federal procurement landscape. Ultimately, FAR Part 19 strives to create a more inclusive and competitive marketplace.
Cornerstone of Federal Small Business Contracting
FAR Part 19 fundamentally serves as the cornerstone for all federal government interactions with small businesses during procurement. It establishes the policies and procedures that govern how agencies identify, engage, and award contracts to these vital economic drivers. This regulation dictates eligibility criteria, size standards, and the overall framework for promoting small business participation in federal contracting.
The recent Revolutionary FAR Overhaul (RFO), finalized on September 26, 2025, reaffirms this foundational role, updating and modernizing the rules to address evolving market dynamics and ensure continued relevance. Holland & Knight highlights that FAR Part 19 shapes how agencies interact with small businesses. It’s a critical element in achieving socio-economic goals and fostering a diverse and competitive federal marketplace, impacting countless businesses nationwide.
Determining Small Business Size and Status (48 CFR Part 19 Subpart 19.3)
48 CFR Part 19 Subpart 19.3 meticulously outlines the process for determining whether a business qualifies as “small” for federal contracting purposes. This involves evaluating a firm’s size standards, which vary by industry, based on revenue or number of employees. Accurate size determination is crucial, as it unlocks access to set-aside contracts and other small business advantages.
According to the eCFR, to be eligible for award as a small business concern – as defined in 19.000(a)(3) – an offeror must provide a good faith representation of their size and status. This representation is a legally binding commitment. The regulation emphasizes the importance of honest and accurate self-certification, forming the basis for equitable competition and ensuring the integrity of the small business program.
Eligibility Requirements for Small Business Concerns (19.000(a)(3))
FAR Part 19.000(a)(3) defines the core eligibility criteria for businesses seeking to participate in federal small business programs. To qualify, a concern must be independently owned and operated, not dominant in its field, and meet applicable size standards. This ensures the program benefits genuinely small enterprises.
Crucially, eligibility hinges on a good faith representation from the offeror, as highlighted by the eCFR. This means the business must honestly and accurately portray its size, ownership, and operational independence. Misrepresentation can lead to serious consequences, including contract termination and potential legal penalties. The regulation aims to foster a level playing field and prevent larger companies from improperly accessing small business benefits.
Good Faith Representation
Good faith representation is a cornerstone of the FAR Part 19 regulations, specifically concerning eligibility for small business programs. As outlined in 48 CFR Part 19 Subpart 19.3, an offeror must represent, truthfully and accurately, their status as a small business concern.
This isn’t merely a formality; it’s a critical commitment to honesty in the federal contracting process. The representation encompasses size, ownership, and independence. A lack of good faith – intentional misrepresentation – carries significant risks, potentially leading to contract rescission, penalties, and debarment from future government contracts.
The FAR emphasizes that this representation is a foundational element for ensuring fair competition and directing resources to legitimate small businesses, upholding the integrity of the program.
Reportable Positions and Limits (17 CFR Part 19)
17 CFR Part 19 governs reporting requirements for individuals holding specific positions within entities dealing with cotton, establishing limits on those holdings. This regulation, while seemingly distinct from core small business contracting, demonstrates the broader scope of federal reporting standards.
The Commodity Futures Trading Commission (CFTC) enforces these rules, aiming to prevent market manipulation and ensure transparency. Crucially, the Commission delegates authority to the Director of the Division of Enforcement to define data submission formats and procedures – including electronic transmission – as per 19.00(b).
This delegation allows for adaptability in data collection, ensuring the CFTC receives accurate and timely information regarding reportable positions, ultimately safeguarding market integrity.
Commission Authority and Delegation (19.00(b))
Section 19.00(b) of 17 CFR Part 19 outlines the Commodity Futures Trading Commission’s (CFTC) authority to delegate responsibilities related to reporting requirements for individuals holding reportable positions in the cotton market. This delegation is vital for efficient oversight.
Specifically, the CFTC empowers the Director of the Division of Enforcement – or a designated employee – to provide detailed instructions concerning data submission. This includes determining the precise format, coding structure, and electronic data transmission procedures necessary for compliance.
This delegation isn’t a relinquishment of authority, but rather a strategic move to ensure specialized expertise guides the practical implementation of reporting rules, maintaining market transparency and preventing manipulation.
Director of the Division of Enforcement Role
The Director of the Division of Enforcement holds a pivotal position within the framework of 17 CFR Part 19, acting as a key delegate of the Commodity Futures Trading Commission (CFTC). This role centers on the practical application of reporting regulations for those exceeding position limits.
Crucially, the Director possesses the authority to issue specific instructions regarding how data records and other required information must be submitted. This encompasses defining the format, coding structure, and electronic data transmission procedures – ensuring standardized and efficient reporting.
The Director’s ability to designate other employees to carry out these functions further streamlines the process, allowing for specialized expertise to be applied effectively. This delegation is not permanent, remaining subject to review and potential modification by the CFTC itself.
Small Business Set-Asides
Small business set-asides are a core component of FAR Part 19, designed to actively promote participation from smaller enterprises in federal contracting. The contracting officer plays a critical role in determining whether a contract should be specifically reserved – or ‘set aside’ – for eligible small businesses, as outlined in FAR 2.0.
This determination isn’t automatic; the contracting officer must proactively evaluate each opportunity. Importantly, any decision not to set aside a contract for a small business requires documented justification, ensuring transparency and accountability within the procurement process.
The updated FAR Part 19, released as part of the Revolutionary FAR Overhaul (RFO) on September 26, 2025, continues to emphasize the importance of these set-asides, reinforcing their position as a cornerstone of federal small business contracting policy.
Contracting Officer Determination (FAR 2.0)
The contracting officer’s determination regarding small business set-asides, as detailed in FAR 2.0, is a pivotal step in the federal procurement process. This determination, specifically outlined in paragraph (a), dictates whether a contract will be exclusively available to qualified small businesses.
Crucially, if the contracting officer decides against a set-aside, a clear and concise reason must be documented. This documentation isn’t merely a formality; it’s a vital element of transparency and accountability, ensuring that decisions align with the overarching goals of promoting small business participation.
The recent updates to FAR Part 19, stemming from the September 26, 2025, Revolutionary FAR Overhaul (RFO), reinforce the significance of this determination and the necessity for thorough justification when set-asides are not implemented.
Documentation Requirements for Non-Set-Aside Contracts
When a contracting officer opts not to utilize a small business set-aside – as governed by the updated FAR Part 19 following the September 26, 2025, overhaul – meticulous documentation becomes paramount. FAR 2.0 explicitly mandates that the rationale behind this decision be thoroughly recorded.
This documentation isn’t simply a procedural checkbox; it serves as a critical audit trail, demonstrating due diligence and adherence to federal regulations. The justification must clearly articulate why a set-aside wasn’t feasible, potentially citing factors like limited competition or the specialized nature of the requirement.
Proper documentation safeguards against potential challenges and ensures transparency in the procurement process, aligning with the core principles of the small business program and the broader goals of responsible government contracting.
Electronic Data Transmission Procedures
FAR Part 19, particularly concerning reports from entities holding reportable positions, emphasizes standardized electronic data transmission. The Commission, as of current regulations (17 CFR Part 19), delegates authority to the Director of the Division of Enforcement to define these procedures.
This delegation allows for agility in adapting to evolving technological landscapes, ensuring efficient and accurate data submission. The Director can specify the precise format, coding structure, and transmission protocols required for all information mandated under this part of the regulation.
Compliance with these electronically defined procedures is crucial for all reporting entities, streamlining the data collection process and facilitating effective oversight by the Commission. These procedures are subject to change, so regular updates are essential.
Data Records and Information Submission
FAR Part 19 necessitates meticulous data records and information submission, particularly from those holding reportable positions exceeding established limits, as outlined in 17 CFR Part 19. The Commission’s delegation to the Director of the Division of Enforcement is pivotal here.
This delegation empowers the Director to dictate the specific data required, ensuring comprehensive oversight of relevant activities. Submissions must adhere to the format, coding structure, and electronic transmission procedures established by the Director, promoting consistency and clarity.
Accurate and timely submission of these data records is paramount for regulatory compliance. Failure to comply can result in penalties. The evolving nature of these requirements necessitates continuous monitoring of updates issued by the Director.
Format, Coding Structure, and Instructions
Detailed instructions regarding the format, coding structure, and electronic data transmission procedures for submissions under FAR Part 19 are crucial for compliance. The Commission, through the Director of the Division of Enforcement, holds the authority to define these specifics, as per 19;00(b).
These instructions aren’t static; they are subject to change as the regulatory landscape evolves. Entities required to submit data must proactively seek updates from the Director to ensure adherence to the latest guidelines. Consistent formatting and coding are vital for efficient data processing and analysis.
Clear, concise instructions are intended to minimize errors and streamline the submission process. Utilizing the prescribed electronic transmission procedures is mandatory, facilitating secure and reliable data transfer.
Recent Updates and Changes to FAR Part 19
The most significant recent update to FAR Part 19 occurred on September 26, 2025, as part of the Revolutionary FAR Overhaul (RFO) initiated by the FAR Council; This overhaul represents a comprehensive revision of the regulations governing small business participation in federal contracting.
The update aims to modernize the small business program, addressing long-standing challenges and promoting greater equity in procurement opportunities. Key changes focus on streamlining processes, enhancing clarity, and strengthening oversight. These revisions directly impact how agencies engage with small businesses.
Understanding these changes is paramount for both contracting officers and small business concerns seeking to navigate the federal procurement landscape. The FAR Council’s update signifies a renewed commitment to fostering a vibrant and competitive small business sector.
Impact of the FAR Council’s Update
The FAR Council’s September 26, 2025, update to FAR Part 19 has a substantial impact on federal contracting, particularly concerning small business set-asides; The continued viability of the “Rule of Two,” as outlined in FAR 2.0, directly influences contracting officers’ decisions regarding small business participation.
Agencies must now meticulously document their rationale when declining to set aside contracts for small businesses, ensuring transparency and accountability. This heightened scrutiny aims to encourage greater utilization of small business capabilities. The update also clarifies eligibility requirements and good faith representation standards.
For small businesses, the changes necessitate a thorough understanding of the revised regulations to effectively compete for federal opportunities. Proactive compliance with documentation requirements and accurate size/status representation are now critical for success.
Key Changes in Small Business Contracting Policy
The recent overhaul of FAR Part 19 introduces several key shifts in small business contracting. A significant change is the reinforced emphasis on the contracting officer’s determination process for small business set-asides, requiring detailed documentation when a set-aside isn’t pursued.
Furthermore, the update clarifies the requirements for offerors to demonstrate a “good faith” representation of their small business status, as defined in 48 CFR Part 19 Subpart 19.3. This includes accurate self-certification and adherence to size standards.
The delegation of authority to the Director of the Division of Enforcement, outlined in 17 CFR Part 19, impacts data submission procedures and format requirements. These changes collectively aim to promote increased participation and equitable access for small businesses within the federal procurement landscape.
Resources for Understanding PARA 19
Navigating the updated FAR Part 19 requires access to reliable resources. The Electronic Code of Federal Regulations (eCFR) provides a continuously updated online version, though it’s not an official legal edition. Access it for the latest regulations and subparts, like 19.3 concerning size and status determination.
Holland & Knight’s insights offer expert analysis of the Revolutionary FAR Overhaul (RFO) and its impact on small business participation. SmallGovCon provides practical guidance on specific aspects, such as the ‘Rule of Two’ and contracting officer determinations (FAR 2.0).
Consult official government websites and legal counsel for definitive interpretations. Staying informed about updates and changes is crucial for compliance and maximizing opportunities within federal contracting.