The current administration’s efforts to reform the Federal Acquisition Regulation (FAR) are now officially underway. On April 15, 2025, in an Executive Order titled Restoring Common Sense to Federal Procurement (EO or “Order”), the White House directed the Office of Federal Procurement Policy (OFPP) to trim the FAR. As anticipated, the Order directs OFPP to remove any provision not “required by statute or essential to sound procurement.” The Order gives OFPP broad discretion to determine which provisions are essential and which are not. Below, we outline key provisions of the Order and discuss their potential implications for government contractors.
Key Provisions of the Executive Order
In what the White House heralds as “a sweeping review and rewrite,” dubbed the “Revolutionary FAR Overhaul (RFO),” the Order directs OFPP to identify “unnecessary regulations” or other “undue barriers” and excise them from the FAR. The stated policy goal is to create “the most agile, effective, and efficient procurement system possible.” The intended result: a leaner set of regulations that, as described by the General Services Administration’s Acquistion.gov, returns the FAR “to its statutory roots, rewritten in plain language, and remove[s] most non-statutory rules.”
- The Order directs OFPP to lead the FAR Council, the heads of agencies, and appropriate senior acquisition and procurement officials to “take appropriate actions” within 180 days to amend the FAR to ensure it contains “only provisions that are otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests.”
- Contractors may expect changes much sooner than in 180 days. Within 15 days, agencies are to “provide recommendations regarding any agency-specific supplemental regulations to the FAR.” Within 20 days, the Office of Management and Budget is to “propose new agency supplemental regulations and internal guidance” that promote expedited and streamlined acquisitions and instruct agencies, by memorandum, on the “implementation of this order.” In issuing new regulations, the Order directs agencies to “adhere to the ten-for-one” rule, issued in EO 14192, which requires rescinding 10 regulations for every new one promulgated.
- New revisions will likely be implemented almost immediately upon release. OFPP and the FAR Council are to issue “deviation and interim guidance” even as the rule changes go through the notice-and-comment rulemaking process. This approach means the government will operate as if the revised FAR provisions were already final, in full force and effect, before the public has had an opportunity to weigh in. Restoration of improvidently removed text and the correction of other unintended consequences will have to wait for a final rule.
- Finally, the Order mandates the consideration of sunset provisions for non-statutory requirements retained within the FAR. OFPP and the FAR Council are to identify all non-statutory FAR provisions not immediately removed, and to consider amending the FAR to automatically sunset all such provisions within four years, unless renewed by the FAR Counsel. Similarly, OFPP and the FAR Council shall consider extending the sunset provisions to any new provision not required by statute. In effect, if approved, many non-statutory provisions within the FAR will be subject to expiration every four years, unless renewed by the FAR Council.
Key Takeaways
No one can predict with guaranteed accuracy which exact regulations will be removed, modified, or kept in place, but recent procurement reform efforts suggest likely outcomes. By carving out regulations “essential to sound procurement” or “to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests,” the Order allows retention of favorable or successful non-statutory provisions. We provide the following takeaways for contractors to consider as the government begins the process of overhauling the FAR.
- First, non-statutory clauses that are in the government’s interests are likely to remain. For example, the government’s power to terminate a contract for its convenience, a tool favored by the current administration, is very likely safe. As OFPP and the FAR Council review the FAR, even these regulations may be subject to streamlining to further protect the government’s interests.
- Second, on the other-hand, non-statutory FAR clauses implementing social policies are very likely candidates for removal, especially those that FAR 52.212-5 requires to be inserted in contracts for commercial products and services. The Section 809 Panel, which the Order cites with approval, previously recommended the removal from commercial item contracting of those policy clauses that are derived from executive orders and agency policy or regulations.
- Third, government contractors should keep a sharp eye out for class deviations that impact multiple contract actions that are issued in the interim period between now and the promulgation of final rules. Such deviations may provide the first notice of specific FAR revisions. Keeping up with these class deviations will aid contractors as they identify new contracting opportunities.
- Fourth, until the government renegotiates or terminates existing contracts, contractors must continue to comply with their obligations as written in their contracts. Even class deviations, unless imposed through a contract modification, are not automatically retroactive in effect. As for the non-statutory provisions subject to the sunsetting, even if those provisions come to expire during a contract’s period of performance, the terms of the contract are likely to prevail over the broader regulations (unless the contract is modified to remove a dead clause). Contractors should therefore remain compliant with the terms of their contract, even if certain provisions are no longer in the FAR or set to expire.
Government contracting is set to change. We’ve previously analyzed other recent executive actions and their likely effects on government contractors, including those related to deregulation and tariffs, and will continue to do so.
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