The Federal Acquisition Regulation (FAR) is often described as the “bible” of federal procurement. For decades, it has governed how agencies acquire goods and services, and how contractors compete for, win, and perform government contracts. While incremental updates are common, the federal procurement community is now bracing for the implementation of an effort describing itself as a “revolutionary FAR overhaul” — a top-to-bottom “modernization effort” that could reshape the contracting landscape.
Why an Overhaul Now?
For some time, certain policymakers, acquisition officials, and industry stakeholders have criticized the FAR for being:
- Overly complex – Thousands of pages of regulations can overwhelm even experienced contractors.
- Outdated – Some provisions reflect procurement practices from the 1980s, ill-suited to today’s fast-moving tech environment.
- Inflexible – Agencies often struggle to adopt innovative solutions due to rigid rules.
The current change has its roots in an April 2025 Executive Order (E.O. 14275), entitled “Restoring Common Sense to Federal Procurement,” which has as its stated goal the revision of the FAR “to ensure that it contains only provisions that are required by statute or that are otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests.” Pursuant to that policy, the overhaul is intended to simplify processes, reduce barriers to entry for small and emerging businesses, and ensure that the federal government can access cutting-edge technology and services efficiently.
Key Changes
To date, those handling the overhaul have revised nearly all of the FAR’s 53 parts. The only ones not showing revisions yet are Part 2, Definitions, and Part 52, Solicitation Provisions and Contract Clauses. Nearly all the other parts proposed for revision already have at least some agency-specific deviations that will be going into effect in the coming weeks and months, pending the implementation of the overhaul officially through rulemaking. While the details are still emerging, several areas appear to be central to the FAR reform effort:
- Simplification and Plain Language
The overhaul is attempting to streamline the FAR’s dense and technical language into more accessible guidance, reducing ambiguity and contractor confusion. Whether the effort succeeds without losing the essential meaning of the regulations and without inadvertently changing settled law is an open question.
- Digital Acquisition and Emerging Technology
FAR Part 40, Information Security and Supply Chain Security, which currently has only one subpart that is concerned with drones, is being substantially revised to include information security topics currently housed in FAR Part 4, Administrative and Information Matters, including the TikTok, Huawei, and Kaspersky bans. While the new rules do not yet address artificial intelligence integration issues, when they are addressed, it will likely be in this section. Potentially, these changes could encourage agile procurement and data-driven IT acquisitions.
- Sustainability and Environmental, Social and Governments (ESG) Requirements
FAR Part 23, currently entitled “Environment, Sustainable Acquisition, and Material Safety,” which has a subpart devoted to requiring contractors to disclose greenhouse gas emissions, is being revised to a part entitled “Sustainable Acquisition, Material Safety, and Pollution Prevention,” which does not mention greenhouse gases at all. Sustainability is now linked to whether a product is cost-effective over the life of the product.
- Small Business and Socioeconomic Priorities
Despite the fact that some of the earliest executive orders of the current administration took the position that federal diversity, equity, and inclusion (DEI) programs were illegal, i.e., Ending Radical and Wasteful Government DEI Programs and Preferencing (E.O. 14151) and Ending Illegal Discrimination and Restoring Merit-Based Opportunity (E.O. 14173), the proposed overhaul of FAR Part 19, now called “Small Business,” leaves the Historically Underutilized Business Zone (HUBZone), the Women-Owned Small Business (WOSB), and the 8(a) programs in place. Indeed, the revised section reiterates the current policy of providing “maximum practicable opportunities in its acquisitions to small business and other small business socioeconomic categories.” As stated in the General Services Administration class-deviation, the goal of the reform involves streamlining the requirements and “reorganizing them to align with the actual workflow of a contracting professional.” The effect of these changes may be to broaden access for small businesses, including expanding mentor-protégé arrangements, easing compliance burdens, and strengthening set-aside programs.
What Contractors Should Do Now
Although the overhaul will not happen overnight, numerous agency-specific class-deviations are in the process of going into effect, so government contractors should begin preparing now. For example, contractors should:
- Monitor Proposed Rulemaking – Participate in public comment opportunities when draft rules are released. Industry input can shape final requirements.
- Assess Compliance Systems – Ensure your internal compliance infrastructure is adaptable — particularly in cybersecurity, reporting, and artificial intelligence areas.
- Invest in Training – Procurement and compliance teams should be prepared for a steep learning curve as familiar processes are rewritten.
- Engage with Agencies – Proactively communicating with contracting officers about how reforms may impact performance and pricing can provide valuable insights.
- Consult with Counsel – Contractors should consult with experienced government contracts counsel about how to interpret, adapt to, and comply with the new rules.
Looking Ahead
The revolutionary FAR overhaul promises to be the among the most significant procurement reform in decades. For federal contractors, this is not simply a regulatory update — it is a paradigm shift. Those who adapt early, stay engaged, and build flexible compliance systems will be well-positioned to thrive under the new regime.
