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2025-09-02 Federal Market Insights Episode 22 — Session Overview

WPI Podcast Episode 22 Summary 

FAR 2.0 – Revolutionary FAR Overhaul

The Federal Acquisition Regulation System is also referred to as 48 Code of Federal Regulations (CFR). 48 CFR includes parts 1 through 9901. See https://ecfr.gov.  The main portion of 48 CFR applies to federal acquisition requirements. Additional portions of this section are agency supplements. Each executive agencies implements FAR through its supplement. Agency supplements tailored to the requirements of the FAR address agency requirements. Only executive agencies follow the FAR. Non-executive agencies such as the Federal Aviation Administration (FAA), US Postal Service and Government Printing Office issue their own procurement regulations.

The Code of Federal Regulations is divided into 50 broad parts. Each part implements statutory mandates. These mandates are general broad and general description of requirements and establish authority to act and a goal. They are passed by Congress and codified into the US Code. 

The CFR provides specific and technical requirements. Additionally, changes to the regulations are made over time through the rulemaking process, such as the rules related to the Cybersecurity Maturity Model Certification. More often than not new rules (regulations) are added, rather than removed. As a result, the totality of the regulations increases, as does the complexity involved with compliance. For companies involved with federal contracting for a number of years, many have evolved as the regulations have evolved. These companies understand what is required. However, for new entrants to federal contracting, understanding and complying with these regulations is a barrier to entry.

As a quick example, statutory guidance (broad and general) may state that the car owner shall wash their car weekly.

CFR regulations will specify specifics on how the owner will wash their car, what products to use, what products not to use and how to dispose of wash water and other materials.

In many cases the statutory guidance remains unchanged. The regulations will change to reflect specific needs, changes in products, concerns and other issues. As a result, regulations continue to expand, and often expand beyond the original requirements. Consequently, with each change, the regulations can become wordier, include more requirements, and exceptions. The result is that the regulations become more difficult to understand and implement.

The goals of the FAR rewrite are twofold. First, a major goal is to eliminate the excess regulatory language and instead focus on returning the Federal Acquisition Regulation (FAR) back to addressing only statutory requirements. The second goal is derived from achieving the first goal. The second goal is to make the FAR a document which is more easily used both by contracting officers and contractors. Businesses, especially small businesses that are new to federal contracting, will be able to read and understand the FAR and ultimately become more competitive more quickly.

The rewrite effort was initiated by Executive Orders published on April 15 and 16th. These orders stated that the changes were to be completed in 180 days. To date, 26 Parts of the 53 FAR Parts have been overhauled. Some of the changes are major. For example, FAR Part 51, Use of Government Sources by Contractors has been eliminated. In contrast, the changes to two FAR Parts: Part 31 – Contract Cost Principles and Procedures and Part 29 – Taxes  have been less extensive. These changes primarily involved removing unnecessary definitions. Based on these changes, it appears that there is no formula that is being used or mandate to reduce each section by a specified amount. Rather, the review considers what is required by statute and what is not.

It is noteworthy for contractors to remember that the bulk of the FAR Parts 1 through 51 state policy and procedures which apply to the contracting officers. FAR Part 52, Clauses and Provisions apply to contractors. Still, contractors will want to remain aware of changes and how such changes may affect their contracts and specifically their responsibilities.

It has also been noted that the Revolutionary FAR Overhaul may have an unintended impact on small business. For example, the rewrite of FAR Part 10 – Market Research removed reference to small business. This leads to the question, if agencies are not required to explicitly look for small businesses, then to what extent will small businesses be used? Removing the “Rule of Two” from FAR Part 19 has also been mentioned. The Rule of Two is not in statute, it is in SBA’s standard operating procedures, and it has been a tenant for behind the federal government’s support for small business.

Another impact mentioned is, to what effect the changes will impact contracting officers. To an extent, the current FAR provides details to be followed. If these details are removed, then contracting officers will have to create the details. In some cases, this will be good, as the contracting officer can tailor the requirements to the needs. In other cases, some may feel some discomfort having to create the requirements rather than relying upon requirements as stated in the FAR.

Interestingly, these changes will impact SAM.gov registration requirements. These requirements are contained in FAR Part 4. Currently, when a company registers in SAM there are three types of Representations and Certifications being created. They are entity-level, procurement-specific, and “by submission of this offer.” The question is: do all three types of Representations and Certifications belong in SAM? Certainly, the first type do,  but it seems reasonable that both procurement-specific and “by submission of offer” do not.

The rewrite continues. It has reached more than 50% of the FAR parts and is quickly approaching the stated deadline of October 12, 2025.

Needless to say, all companies involved in federal contracting will need to remain attentive to these changes, and clearly establish if they will impact a company’s business operations, how they will be impacts, and how to incorporate the changes into their business practices moving forward.

Resources –

  1. Executive Order 14275 – “Restoring Common Sense to Federal Procurement” – https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-26-Overhauling-the-Federal-Acquisition-Regulation-002.pdf
  2. Executive Order 14240 – Centralizing Procurement Under GSA – Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement – The White House

Revolutionary FAR Overhaul – https://www.acquisition.gov/far-overhaul