 Solution

The estimator $U=X_1{X}_2$ is unbiased for $p^2$ because the independent random variables $X_1,X_2$ satisfy $\mathbb{E}[X_1{X}_2]=p^2$. Given $T=t$, all placements of the $t$ successes are equally likely, soThus the Rao-Blackwellized estimator isIt is unbiased by the tower property. Since $n\ge 3$ and $p\in (0,1)$, the event $T=2$ has positive probability, and conditionally on it $X_1{X}_2$ takes both zero and one with positive probability. Hence $\mathbb{E}[\mathrm{Var}(X_1{X}_2\mid T)]>0$, so the new estimator has strictly smaller variance.