The Rule of Two, and why the VA is different

What the rule says

At the Department of Veterans Affairs, a contracting officer must award using restricted competition among veteran-owned small businesses where two or more are reasonably expected to submit offers and the award can be made at a fair and reasonable price that offers best value to the United States. It is a duty, not an option — subject to the exceptions the statute itself sets out, including purchases from the AbilityOne Procurement List and the noncompetitive routes in the neighbouring subsections.

Source: 38 U.S.C. 8127

Why it matters more than the percentage goals

A goal is measured after the fact across an agency’s whole portfolio. The Rule of Two bites on the individual procurement, before it is competed. For a certified firm in a field where the VA buys regularly, it is the single most useful provision in federal contracting.

The rest of government is different

Outside the VA, a contracting officer may set a requirement aside for service-disabled veteran-owned small businesses. A sole-source award is available where the officer does not expect two or more certified firms to bid, within the dollar ceilings. The government-wide 5 percent goal creates pressure to use these tools, but no obligation on any particular contract.

Source: FAR subpart 19.14

What to do with it

Make yourself easy to find before the market research happens, because the Rule of Two turns on what the contracting officer reasonably expects. Being visible and clearly certified in the right industry code is what creates that expectation.