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Deep Dive: Analysis of the Overhaul of FAR Part 10

This page provides a detailed analysis of the RFO changes to FAR Part 10 - Market Research.

Executive Summary

The overhaul of FAR Part 10 (Market Research) represents the most direct procedural attack on the "Rule of Two" and small business set-asides in the entire RFO initiative. The new official text confirms the complete removal of all language that previously required contracting officers to search for small business capabilities. These enforceable rules have been replaced with discretionary guidance and a new, explicit hierarchy of sources that directs agencies to prioritize large, existing government-wide contracts. This effectively erases the primary regulatory trigger for small business participation, making it easier for agencies to justify bypassing small business solutions.

Detailed Breakdown of Changes

The RFO initiative removed the core procedural requirements from the old FAR Part 10 that mandated consideration of small businesses during market research. The new conformed text confirms the deletion of these foundational triggers and replaces them with a new framework that prioritizes existing large contract vehicles.

Deletion of Mandatory Small Business & Set-Aside Considerations

What the Rule Used to Say: The previous version of FAR Part 10 contained several explicit, mandatory triggers requiring contracting officers to conduct market research to:
- Consider impacts of consolidation or bundling on small businesses.
- Effectively identify the capabilities of small businesses and new entrants.
- Determine if the acquisition **should utilize any of the small business programs** in FAR Part 19, including an analysis of whether two or more capable small businesses were likely to submit offers (the **Rule of Two**).
The Practical Consequence: The new, streamlined conformed text at 10.001 contains no mention of small business, bundling, consolidation, or the Rule of Two. The specific, enforceable language that triggered set-asides has been entirely removed from the market research regulation.

Introduction of a New Hierarchy of Sources

What the New Rule Says: The new conformed text at 10.001(f) establishes a new, mandatory "order of priority" for market research. Agencies must now first determine if a commercial product or service is available on an **existing government-wide contract** before considering other sources.
The Practical Consequence: This new hierarchy procedurally forces contracting officers to look at large, pre-existing contract vehicles (like GSA Schedules) first. This structurally favors the large incumbents already on those vehicles and makes it much more difficult to justify creating a new, standalone procurement that could be set aside for small businesses.

Replacement of Rules with Non-Binding Guidance

What Was Done: The official RFO page for Part 10 now directs acquisition professionals to non-regulatory resources like a "Practitioner Album" and "Smart Accelerators" for guidance on market research techniques. These replace the specific procedural steps previously listed in the FAR.
The Practical Consequence: While presented as offering "flexibility," this shift turns enforceable procedures into optional "best practices," reducing accountability and consistency. A contracting officer is no longer bound by the regulation to use any specific technique to ensure a fair and comprehensive search for small business solutions.

In-Depth Small Business Impact Analysis

The seemingly technical changes to FAR Part 10 have the most direct and damaging impact on small business prime contracting opportunities of any part of the RFO initiative.

Direct Attack on the Rule of Two: The removal of the requirement for contracting officers to use market research to identify at least two capable small businesses is a direct procedural attack on the Rule of Two. This trigger was the primary mechanism that compelled agencies to create set-aside opportunities for contracts above the Simplified Acquisition Threshold. Without it, the Rule of Two becomes a 'rule' with no required process to invoke it.
New Hierarchy Favors Large Incumbents: The new conformed text at 10.001(f) creates a formal hierarchy that directs agencies to prioritize existing government-wide contracts first. This structurally favors the large, established prime contractors who dominate these vehicles and makes it much more difficult to justify creating a new, standalone procurement that could be set aside for a small business.
Increased Contracting Officer Discretion Creates Risk: While the administration frames these changes as providing "flexibility," they create significant risk for small businesses. A busy or risk-averse contracting officer is now procedurally directed to default to a large, existing contract vehicle instead of doing the necessary work to create a new small business set-aside, even if capable small firms exist.
Weakened Grounds for Protest: By removing the explicit procedural steps from the regulation, the administration has made it much more difficult for a small business to successfully protest an agency's failure to set aside a contract. It is harder to argue an agency violated the rules when the rules themselves have been erased.

APA & Procedural Compliance Failures

The changes to FAR Part 10 represent a clear violation of federal law, specifically 41 U.S.C. §1707. This statute requires that any procurement policy change with a "significant cost or administrative impact on contractors" must be published for public comment in the Federal Register before it can take effect. The removal of the primary regulatory triggers for the Rule of Two is undeniably a significant change with massive financial implications for tens of thousands of small businesses. Implementing this change via an unpublicized class deviation, and replacing enforceable rules with a new framework that prioritizes large contract vehicles, directly contravenes the legal requirements for transparency and public participation.

Agency Implementation Tracker

The following agencies have been confirmed to have issued class deviations adopting the FAR Council's model text for the overhaul of FAR Part 10. The lockstep adoption of nearly identical text by these diverse agencies provides overwhelming evidence of a centrally-directed policy implementation, not a series of independent decisions.

Commodity Futures Trading Commission (CFTC)
Consumer Product Safety Commission (CPSC)
General Services Administration (GSA)
Merit Systems Protection Board (MSPB)
Millennium Challenge Corporation (MCC)

External Commentary & Expert Analysis

Federal acquisition experts have been direct and unambiguous about the severe impact of the changes to FAR Part 10, identifying them as a primary mechanism for undermining small business protections. Their concerns are validated by the official "conformed text" of the new regulation.

"They're stripping away critical market research provisions from FAR Part 10—these procedures were fundamental triggers for small business set-asides."
— Jim Nagle, Former Chief Counsel, U.S. Army Corps of Engineers

"If you remove clear market research requirements, you're directly undermining the foundational process that ensures small business gets considered."
— Vern Edwards, Former Senior Procurement Official

Furthermore, the new conformed text at 10.001(f) institutes a new hierarchy of sources that directs agencies to prioritize existing government-wide contracts first. As procurement expert Emily Murphy noted in a Federal News Network interview, this creates a significant new risk:

"[The new Part 10] changed the prioritization to say that first you're going to look at a government-wide multiple award contract... My concern is that... not all commercial technologies go, and as their first step... to a government-wide acquisition contract... It's going to require some nuance and education... of when to look outside of the GWAC."
— Emily Murphy, Senior Fellow, GMU Baroni Center for Government Contracting