A proposed rule issued by the Small Business Administration October 25th would apply the “Rule of Two” to multiple-award contract task and delivery orders, with some exceptions.  The proposed rule would cover virtually all multiple award IDIQ contracts, including GWAC’s, but would not impact GSA Multiple Award Schedule acquisitions.  Under the Rule of Two, unless an exception applies, an agency must set aside an award for small businesses in cases where there is a reasonable expectation of receiving offers from two or more small-business contract holders under the multiple-award contract that are competitive in terms of price, quality, and delivery. Documentation requirements apply where the agency decides not to move forward with a set-aside order.  The proposal is issued in accordance with the Biden Administration’s Better Contracting Initiative and had been expected for some time.  Companies of any size doing business via multiple award IDIQ’s, including the GSA Alliant and OASIS family of contracts, should most definitely take note of this proposed rule and submit comments on it by the December 24^th deadline.  While the Rule of Two currently applies to open market procurements up to the $250,000 Simplified Acquisition Threshold (SAT), there is no such cap in the proposed rule.  As such, task orders of any size would be subject to a potential small business set aside. The proposed rule further states, “when the number of small business contract holders on a multiple-award contract exceeding the substantial-bundling threshold is expected to be under 30 percent of all expected holders, the agency must document the acquisition plan with the rationale, including market research conducted, for not setting aside or reserving the contract for small business. The explanation should be reviewed by the agency’s small business specialist.  While agencies would also be able to not pursue a set-aside in cases where there are not at least two capable small businesses, they would be required to develop documentation of such a determination and provide to the agency small business specialist.  The proposed rule could have a substantial impact on the use of multiple award IDIQ’s in government.  Companies should closely read it here: https://www.federalregister.gov/documents/2024/10/25/2024-24716/small-business-contracting-increasing-small-business-participation-on-multiple-award-contracts and ensure that  both their views, and those of federal customers who rely on such vehicles, are made known.