News

Overview

The federal government has launched a sweeping effort to re-write and streamline the Federal Acquisition Regulation (“FAR”), paired with a package of procurement-law changes proposed to Congress. If carried through, these moves could simplify buying, lower compliance burden, and expand opportunities, especially for commercial providers and small businesses. For now, these are directional shifts and many elements remain in development or pending legislation.

What This Could Mean for Federal Contractors

• Lower Barriers to Entry: If adopted, higher thresholds and commercial-first policy could open more work to streamlined procedures and wider competition.
• Commercial Advantage: Vendors with ready-to-ship commercial offerings may find solicitations increasingly tailored to their strengths.
• Compliance Shifts: The scope of clauses based on non-statutory or DEIA-related requirements may narrow, making it essential to track agency deviations and FAR Council developments.
• Litigation/Policy Risk: Expect continued court activity around DEI-related policies and potential challenges to deregulatory steps.
• Opportunities for Innovators & Small Firms: Expanded pilots and simplified pathways may make it easier for new entrants to participate.

Key Changes to the FAR
(We group each theme and briefly note the Executive track (Executive Orders + FAR Council/ Office of Management and Budget (“OMB”) actions and the Legislative track (General Services Administration (“GSA”)/OMB proposals pending in Congress)

1. Simplified and Emergency Procurement

• Higher Thresholds & Emergency Procurement:
  • Executive Track: Near-term inflation adjustments (effective this fall) will lift common thresholds, which could make simpler procedures available more often.
  • Legislative Track: Proposals would phase up the simplified acquisition and micro-purchase thresholds over several years and rationalize emergency authorities, aiming to move routine and urgent buys through leaner processes, especially for commercial items.

2. Prioritizing Commercial Solutions

• Commercial Products First:
  • Executive Track: Agencies may now be required to prioritize commercially available products and services. Custom or government-unique solutions will require formal justification and high-level approval, which may make it easier for commercial vendors to compete.
  • Legislative Track: Lawmakers are being asked to expand authorities that let agencies use streamlined procedures for commercial buys and pilots, so commercial pathways may become the default rather than the exception.

3. Streamlining and Deregulation

• Plain Language Rewrite:
  • Executive Track: The FAR appears poised to be rewritten in clear, accessible language to reduce complexity and make compliance more straightforward for contractors.
  • Legislative Track: Congress is being asked to reinforce this direction by removing outdated statutory triggers and simplifying notice/competition thresholds that currently add process steps.

4. Small Business and Innovation Support

• Executive Track: Training, playbooks, and model deviations are expected to encourage wider competition and lower barriers that have accumulated over time.
• Legislative Track: Congress is being asked to make permanent authorities that ease acquisition of innovative tech and to bolster Small Business Innovation Research (SBIR)/ Small Business Technology Transfer (STTR) style avenues so new entrants and small firms can participate more readily.

5. Implementation and Accountability

• Executive Track: Agencies are expected to designate senior procurement leads, issue class deviations that mirror the FAR Council’s model text as it’s released, train the workforce, and provide periodic status reports.
• Legislative Track: A modest user-fee concept and other operational changes are being proposed to fund the shared acquisition IT infrastructure and workforce development necessary for this transition. The proposed user fees for the Integrated Award Environment (IAE) would apply to all users, with no exceptions for small businesses, and the exact fee amounts are not yet finalized.

6. Diversity, Equity, Inclusion, and Accessibility (“DEIA”) Rollback

• Executive Track: Recent executive actions point toward rolling back prior DEIA-related contracting requirements; any resulting clause/policy removals are being implemented in stages. Some DEIA-related executive actions are subject to ongoing litigation and preliminary injunctions, which could affect the timing and implementation of related policy changes.
• Legislative Track: No specific statutory rewrites are required for this shift, but Congress could weigh in as part of broader reform packages.

Next Steps

• Rolling agency action: The FAR Council is posting model deviation text by FAR Part on a rolling basis; agencies are expected to issue class deviations within thirty (30) days of each posting and begin training accordingly. To date, the FAR Council has posted draft deviation text covering:
  • FAR Parts 9, 33, 46, and 49 (responsibility determinations, protests/disputes, quality assurance, and termination policies) (Aug. 21, 2025);
  • FAR Parts 28, 30, and 48 (bonds and insurance, cost accounting standards, and value engineering) (Aug. 27, 2025);
  • FAR Parts 7, 8, 24, and 44 (acquisition planning, protection of privacy/freedom of information, and subcontracting policies) (Sept. 5, 2025).
  • Contractors may need to regularly review the posted deviation texts at the dedicated federal government website, https://www.acquisition.gov/,  to assess how changes may impact their current and future contracts, including any modifications to mandatory certifications, representations, or flow-downs.

• Buying Guides: The Office of Management and Budget and FAR Council are releasing non-regulatory guidance tools in tandem with the FAR deviation roll-out. The first FAR Companion Guide (Version 1.0) was posted Sept. 9, 2025, covering FAR Parts 1, 4–6, 8–12, 18, 26, 28–29, 31, 33–36, 38–40, 43, 46, 49–51. In addition, the FAR Council is issuing Practitioner Albums for every set of FAR parts released with model deviation text. These albums provide practical insights, summaries, and tools to support agency and contractor implementation. Contractors should review both the FAR Companion and Practitioner Albums at https://www.acquisition.gov/ to anticipate evaluation criteria, update internal processes, and ensure proposals align with evolving requirements.
• Inflation rule (final): FAR threshold inflation adjustments were published Aug. 27, 2025, and take effect Oct. 1, 2025 (e.g., Micro-Purchase Threshold (“MPT”) from $10,000 to $15,000; Simplified Acquisition Threshold (“SAT”) from $250,000 to $350,000; with related increases across parts). The proposed increases to the SAT and MPT would be phased in over several years, rather than implemented all at once.
• Quarterly reports: Agencies will need to submit quarterly status reports on deregulation and alignment 15 days after the end of each quarter, beginning July 15, 2025, and continuing through Jan. 15, 2027.
• Informal input window: The FAR Council is collecting informal feedback on posted deviation text ahead of formal rulemaking. Stakeholders may submit feedback on each deviation package through the FAR Council’s informal docket at the federal government website until formal notice-and-comment rulemaking begins.
• Formal notice-and-comment: After the deviation phase covers all Parts, the Council plans to move into formal rulemaking. Exact Notice of Proposed Rulemaking (NPRM) dates are not yet announced.
• On the Hill: GSA and OMB transmitted their reform package on July 16, 2025, including 16 legislative proposals. Among these was Legislative Proposal No. 11: “Providing Best Value Through the Multiple Award Schedule Program (“MAS”),” which would establish best-value as the government-wide default standard for MAS awards.  Portions of these proposals may be incorporated into annual defense authorization or appropriations bills, with the timing contingent on congressional action.

(These developments remain subject to change. Many aspects are provisional until finalized in the FAR or enacted by Congress. For the latest updates, visit: https://www.acquisition.gov/)

For tailored guidance on how the FAR overhaul and GSA legislative proposals may impact your business, or to discuss strategies for federal contracting in this new environment, including reviewing deviation texts, the FAR Companion, and Practitioner Albums to anticipate evaluation criteria, update processes, and align proposals, please contact our team.

This client alert is for informational purposes only and does not constitute legal advice.