A bipartisan group of senators is pushing legislation to cement a long-standing federal contracting safeguard for small businesses. The Protecting Small Business Competitions Act of 2025, introduced by Sens. Ed Markey (D-Mass.), Cory Booker (D-N.J.), Lisa Murkowski (R-Alaska), and Dan Sullivan (R-Alaska), would codify the “Rule of Two” — a requirement that federal contracts over $250,000 be set aside for small business competition when at least two qualified small firms are expected to submit competitive bids. The measure aims to ensure small businesses maintain a fair shot at billions in government work, shielding the policy from regulatory changes that could weaken it.
Markey said that writing the “Rule of Two” into law would give small businesses a guaranteed seat at the table. “Protections like the Rule of Two are critical for small businesses to effectively compete for federal contracts,” he said. “By writing this essential protection into law, we can ensure this long-standing requirement continues to give small businesses a seat at the table to compete for contracting opportunities, grow their business, and thrive.”
Booker framed the bill as an equity issue. “This bipartisan legislation would expand small businesses’ access to the nearly $700 billion in federal contracting that is awarded each year,” he said. “It will bring new opportunities for small businesses to grow, increase competition in the marketplace, and empower underserved entrepreneurs, including minority-, woman-, and veteran-owned businesses, to thrive.”
The proposal has drawn endorsements from 25 organizations and more than 200 small business advocates nationwide. In a joint letter, they argued that while the “Rule of Two” has existed for decades and been upheld by courts, it is vulnerable because it is not fully enshrined in statute. Codifying it, they said, would protect small business participation in a federal marketplace increasingly dominated by large-scale buying vehicles.
Advocates from the veteran, Native American, and small business contracting communities also voiced support. National Veteran Small Business Coalition CEO Scott Jensen called the measure “a smart, bipartisan step toward preserving innovation, growing local economies, and protecting the long-term health of the federal supply chain.” Jon Panamaroff and Haven Harris, co-chairs of the Native American Contractors Association board, said the legislation would “ensure small businesses remain a priority for the federal government to use when acquiring its goods and services.”
Todd McCracken, president and CEO of the National Small Business Association, noted that the “Rule of Two” is “crucial to maintaining a robust pipeline of small businesses in the federal procurement process” and that codifying it would allow small companies to operate with confidence that “the federal government wants to do business with them and will treat them fairly — regardless of the size of their contract.”
Supporters say the legislation would not only preserve fairness but also strengthen America’s industrial base, encourage innovation, and keep taxpayer dollars circulating in local economies. For many small business owners, the bill represents more than just policy — it’s about ensuring inclusion in a marketplace where access often determines survival.