The FAR Overhaul has Begun: FAR Part 1, the Accompanying OMB Memorandum, and the Executive Orders that Began the Overhaul
This update will go through briefly and in draft the Executive Orders Issued by President Trump, the FAR Part 1 Overhaul Issued on Friday, May 2, 2025, and the Accompanying OMB Memo Issued also Issued on May 2, 2025.
The Start of Regulatory Reform—The Executive Orders
· Executive Order 14192 of January 31, 2025—"Unleashing Prosperity Through Deregulation”
· Executive Order 14272 of April 15, 2025—The Start of Regulatory Reform—“Resorting Common Sense to Federal Procurement
On April 15, 2025, President Trump issued Executive Order 14272—“Restoring Common Sense Federal procurement.” This is the primary EO used for regulatory reform thus far. Link here: https://www.federalregister.gov/documents/2025/04/18/2025-06839/restoring-common-sense-to-federal-procurement
· The Purpose is to eliminate “excessive and overcomplicated regulations” for doing business with the Federal Government as governed by the Federal Acquisition Regulations (FAR). EO 142272 acknowledged that the FAR had received consistently negative assessments regarding its efficiency.
· The Policy is to create the most agile, effective, and efficient procurement system. The EO stated this will be done by removing “undue barriers, such as unnecessary regulations, while simultaneously allowing for the expansion of the national and defense industrial base . . .”
· “The FAR should contain only provisions required by statute or essential to sound procurement, and any FAR provisions that do not advance these objectives should be removed.”
· Regulatory Sunset
o Identify FAR Provision not required by statute that will remain in the FAR.
o Those provisions may still expire after 4 years after effective date unless FAR Council renews those sections.
o New FAR provisions may carry an automatic 4-year expiration unless renewed.
· Agency Alignment
o Issue guidance for agencies to fall in line with this EO—This is discussed and cited below as it was issued Friday.
o OMB will issue a Memo to eliminate 10 regulations for every regulation enacted as described in EO 14192 (the January EO). The Memo shall also propose new agency supplemental regulations and internal guidance that promote expedited and streamlined acquisitions.https://www.federalregister.gov/documents/2025/02/06/2025-02345/unleashing-prosperity-through-deregulation
The FAR Rewrite—Section 1—Comments Due in September
FAR 1 was published on Friday, May 2, 2025.
· The FAR rewrite closely follows the EOs discussed above, and it is heavy with redlining and elimination of provisions. Here is the link to FAR Part 1 as it is written now. https://www.acquisition.gov/far-overhaul/far-part-deviation-guide/far-overhaul-part-1
· The revised FAR Part 1 mandates that the Federal Regulations for Procurement will be implemented differently by a more consolidated system with fewer cooks in the kitchen (think less agency say input).
· It eliminates the Civilian Agency Acquisition Council (CAA), and it eliminates the Defense Acquisition Regulations Council (DAR).
· Practioner’s note—the two councils gave each agency a seat at the table—and divided it into civilian and defense sides—and gave each agency a voice within the ultimate FAR Council. Now it seems there is a very condensed FAR Council, and this may reflect the category management push rather than agency specific procurement.
· FAR Part 1 already has cross-references in it for other sections.
· FAR Part 1 seems to constrain agencies while giving contracting officers greater autonomy (already bound by tight systems).
· FAR Part 1 seems to back off of automatic ratification of certain actions by the government.
· FAR Part 1 seems to make sure that the contracting officer’s representatives’ (COR) have a letter in the contract file that lines out the authority of that COR. [That seems like a good thing and one that a contractor could ask to review.]
· FAR Part 1 makes it a requirement that if an agency asks for too many deviations from the FAR it shall propose a FAR amendment.
Here is the Link for the Lined Out Version of Part 1—45 pages: https://www.acquisition.gov/far-overhaul/far-part-deviation-guide/far-overhaul-part-1
The OMB Memo—Mary 2, 2025 “Deviation Guidance to Support the Overhaul of the Federal Acquisition Regulation”
· Purpose: To “ support their issuance of deviations to implement the Executive Order on Restoring Common Sense to Federal Procurement (the “Order”) and the OMB Memorandum, Overhauling the FAR.” This is EO 14272 linked above.
· Implementation:
o To implement the Order, the OMB Memorandum directs the Office of Federal Procurement Policy (OFPP) to lead the revolutionary FAR overhaul (RFO) in coordination with the other members of the Federal Acquisition Regulatory Council (the Council).
o The Council is issuing plain language class deviation text, by FAR part, which is intended to return the FAR to its statutory base.
o “The Council’s class deviation text will retain limited non-statutory coverage when necessary to advance core stewardship principles and practices.”
o The OMB Memo—referring to its prior Memo—requires that if agencies deviate from statutory language—they must justify why, and a limited deviation may be allowed for essential functions of the statute.
o In short, there will be easy to understand language for limited deviations that agencies should turn in that are specific to that agency—to enable that statute as Congress intended.
o The agency should turn those in to the FAR Council within 30 days the FAR provision is released, which will be turned around from the Council from 24 hours to five days and the message seems clear—not many will be issued—and it’s quicker to say no than yes. Not to mention the chilling effect this may have on agencies submitting deviations up to the person who has to submit to FAR Council within 30 days.
o Here is a link to the OMB Memo of May 2, 2025: https://outlooklaw.com/s/FAR-Council-Deviation-Guidance-on-FAR-Overhaul.pdf
Any one of these is a lot to absorb. Together it is a lot but also back each other up in both intent and force. There will be further analysis and much more to come and expect more changes that can be understood in order to address appropriately for you and your company.