The FAR Council’s June 23, 2026, proposed rules begin implementing the Revolutionary FAR Overhaul, with comments due July 23, 2026. Government contractors should evaluate how streamlined FAR text, revised clauses, security requirements, acquisition planning changes, and termination timelines may affect contract administration and compliance.
Highlights
- Proposed FAR Changes. On June 23, 2026, the FAR Council published four proposed rules to implement EO 14275, Restoring Common Sense to Federal Procurement.
- Public Comment Period. Public comments are due July 23, 2026, giving contractors a limited window to review proposed changes that may affect procurement procedures, clauses, and contract administration.
- Contractor Impact. While many revisions are directed at contracting officers, government contractors should understand how those changes may affect solicitations, communications, contract clauses, and post award administration.
- Security and Clause Updates. The proposed rules would consolidate several security requirements, prohibitions, and exclusions into FAR part 40, while revising or removing multiple FAR clauses.
- Termination and Acquisition Changes. Proposed revisions address termination timelines, audit discretion for settlement proposals, acquisition planning, market research, competition, and commercial contract terminations.
On June 23, 2026, the Office of Federal Procurement Policy (OFPP), Office of Management and Budget (OMB); Department of Defense (DoD); General Services Administration (GSA); and National Aeronautics and Space Administration (NASA) (i.e., the FAR Council) published four proposed rules to implement Executive Order (EO) 14275, Restoring Common Sense to Federal Procurement. The proposed rules addressed:
- FAR parts 1, 2, 4, 33, 39, 40, 52, and 53
- FAR parts 3, 49, and 52
- FAR parts 5, 24, 29, and 52
- FAR parts 6, 7, 10, 18, 26, 37, and 41
EO 14275 required the FAR Council to produce a streamlined FAR that is simpler, clearer, and structured for speed, making the FAR an agile, effective, and efficient regulation that contains only provisions required by statute or essential to sound procurement. These proposed rules are part of a series of rules that constitute the FAR Council’s efforts to obtain public comment through formal rulemaking.
How Revolutionary Was the FAR Overhaul?
For contracting officers, the impact was extensive. For government contractors sitting on the other side of the table, it is not as impactful as one might have hoped. However, government contractors need to know the changes impacting contracting officers, as they will impact how the contracting officer interacts with government contractors.
What Government Contractors Need to Know
The word “must” will replace “shall” in all the revised FAR parts. The word “shall” is considered outdated in most modern American English, especially in everyday speech. It also eliminates any ambiguity that the word “shall” may have left behind.
A future proposed rule will implement a “regulatory sunset” requirement as a built-in mechanism to prevent the accumulation of outdated or unnecessary regulations and to encourage regular review of the regulatory framework. This was required under Section 6 of EO 14275.
Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 1, 2, 4, 33, 39, 40, and 53
Federal Register Proposed Rule
Guiding Principles
FAR part 1 “prioritize a ‘mission first’ approach, positioning it as the paramount principle” and elevates the importance of price preferences and incentives for domestically sourced goods and services (i.e., Buy American laws, efficiency, cost-effectiveness, and accountability) with timely acquisition and delivery being essential for mission success.
Forms
All information pertaining to forms in FAR part 53 is being moved to FAR subpart 1.6 and a new website is being created as the authoritative repository for all acquisition related forms.
Changes to Definitions
Changes are being made to Commercial computer software, Commercial product, Commercial service, and Commercially available off-the-shelf (COTS) item.
- Commercial computer software means software developed or regularly used for nongovernmental purposes which (1) Has been sold, leased, or licensed to the public; (2) Has been offered for sale, lease, or license to the public; (3) Has not been offered, sold, leased, or licensed to the public but will be available for commercial sale, lease, or license in time to satisfy the delivery requirements of this contract; or (4) Satisfies a criterion expressed in paragraph (1), (2), or (3) of this definition and would require only minor modification to meet the requirements of the contract.
- Commercial product means some of the major changes include definition (1) clarifies governmental purposes (i.e., purposes that are not unique to a government); definition (3)(ii) removes the language related to minor modifications regarding factors, dollar values, and percentages when determining a modification minor; definition (6) nondevelopment item, removes the language regarding the procuring agency has to determine the product was developed exclusively at private expense.
- Commercial service mean language was added to definition (2) that services include construction and clarifies for catalog prices under (i) that the vendor regularly maintains the pricing and customers can inspect it.
- Commercially available off-the-shelf (COTS) item deleted construction material from the definition of supply and some other minor changes.
New Definitions
New definitions for Controlled unclassified information (CUI), Federal information system (FIS), and Information system are being added.
- Controlled unclassified information (CUI) means information that the Government creates or possesses, or that an entity creates or possesses for or on behalf of the Government, that a law, regulation, or Governmentwide policy requires or permits an agency to handle using safeguarding or dissemination controls. CUI does not include—(1) Information that a Contractor possesses in its own system that did not come from, or was not created or possessed by or for, an executive branch agency or an entity acting for an agency (see 32 CFR 2002.4); or (2) Federally-funded basic and applied research at colleges, universities, and laboratories in accordance with National Security Decision Directive 189; or (3) Information a Contractor creates or possesses that a law, regulation, or Governmentwide policy does not specifically require the Contractor to handle using safeguarding or dissemination controls.
- Federal information system (FIS) means an information system used or operated by an executive agency, by a contractor of an executive agency, or by another organization on behalf of an executive agency (40 U.S.C. 11331).
- Information system means a discrete set of information resources organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of information (44 U.S.C. 3502(8)).
Security Requirements, Prohibitions, and Exclusions
The related provisions and clauses are being moved from FAR part 4 to FAR part 40. FAR part 40 is being used to merge and consolidate regulations found in multiple FAR parts and subparts into a single, logically organized part. Creates a single “do not buy” list, reducing and harmonizing over a dozen different provisions and clauses related to security prohibitions and exclusions as well as adding requirements for handling controlled unclassified information. Updates to address American Security Drone Act of 2023, Unmanned Aircraft System List of Associated Elements interim rule, and reference to 41 CFR 201-1.101 for the list of associated elements to be identified by the Federal Acquisition Security Council (FASC). FAR part 40 will cover:
- A reasonable inquiry standard that clarified what level of effort is required to determine if there are any prohibited products or services;
- Standardize the incident reporting requirement to 72 hours;
- Controlled Unclassified Information;
- Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment;
- Prohibition on Contracting with Entities Using Certain Telecommunications and Video Surveillance Services or Equipment;
- Federal Acquisition Supply Chain Security Act (FASCSA) of 2018;
- Implementation of FASCSA Orders;
- Prohibition on a ByteDance Covered Application;
- Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab Covered Entities; and
- Prohibition on Unmanned Aircraft Systems from Covered Foreign Entities.
Bid Protests
Changes cover:
- Encouraging potential protesters to use current FAR part 15 alternative to obtain post-award explanations and debriefings prior to filing a protest.
- Increased confidence in using agency level protests.
- Removal of FAR regulatory text that repeats or summarizes Government Accountability Office (GAO) protest regulations and instead points the contracting officer to the applicable GAO regulations at 4 CFR part 21.
Contract Clauses
- FAR 52.204-10, Reporting Executive Compensation; 52.204-14, Service Contract Reporting Requirements; and 52.204-15, Service Contract Reporting Requirements for Indefinite-Delivery Contracts, are being removed from commercial FAR part 12 acquisitions.
- FAR 52.204-8, Annual Representations and Certifications, will be removed and FAR 52.204-13, System for Award Management-Maintenance, consolidated to entity level information. SAM.gov will only require “entity level” representations and certifications. Representations and certifications that are procurement-specific (i.e., different for each procurement of products or services, rather than being entity-level such as a question about the offeror's status) or completed by submission of an offer will be removed from SAM.gov and used in solicitations as prescribed in the FAR.
- Numerous other FAR 52.204 provisions and clauses are being removed and consolidated.
- FAR 52.233-1, Disputes, removes the current paragraph (i) and replaces it with paragraph (i) in Alternate I. Clarifies that agencies can require performance to continue regardless of whether the claim was filed.
- FAR 52.239-1, Privacy or security safeguards, is being removed as the requirements are inconsistently used and no longer needed to safeguard privacy or security. FAR 52.240-5, Covered Federal Information, will adequately address this area in the future.
Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 3 and 49
Federal Register Proposed Rule
Retained Requirements
FAR part 3, Improper Business Practices and Personal Conflicts of Interest, was limited to statutory and Executive Orders requirement in 10 U.S.C. 4651; 10 U.S.C. 4655; 41 U.S.C. 4704; 18 U.S.C. 208; 18 U.S.C. 218; 41 U.S.C. 2101 et seq.;41 U.S.C. 3509; 41 U.S.C. 4712; 41 U.S.C. 8701 et seq.; and Executive Order No. 12731, Principles of Ethical Conduct for Government Officers and Employees; among others. The long-standing requirements for ethical conduct, including but not limited to, avoidance of conflicts of interest, rules related to gifts and gratuities, and protection of sensitive information remain in effect.
Deletions
FAR part 3 removed references to the superseded Executive Order No. 11222, Prescribing Standards of Ethical Conduct for Government Officers and Employees, 30 FR 6469 (1965), in subsection 3.101-3, Agency Requirements; removal of section 3.301, General, which was informational in nature; removal of agency guidance in section 3.406, Records; streamlining of section 3.700, Scope of Subpart; and removal of section 3.907, Whistleblower Protections Under the American Recovery and Reinvestment Act of 2009, which is now obsolete. These deletions do not eliminate whistle blower protections for contractor employees as much broader and more “permanent” protections for whistle blowers remain in effect under FAR 52.203-17. Such protections are also included in 41 U.S.C. 4712.
Clarifications
FAR 3.104-4 will be revised to modernize and clarify the procedures for protecting contractor bid or proposal information and source selection information.
Retained Requirements
FAR part 49 termination framework was limited to statutory requirements in 10 U.S.C. 3201 et seq.; 41 U.S.C. 3301 et seq; 41 U.S.C. 3901; 40 U.S.C. 502; 41 U.S.C. 1303; 41 U.S.C. 3901; 41 U.S.C. Ch 13; 41 U.S.C. 6502; 41 U.S.C. 7101-7109; 10 U.S.C. 3201 et seq.; among others.
Deletions
FAR 49.108-7, Government Assistance in Settling Subcontracts; FAR 49.113, Cost Principles; and FAR 49.405, Completion by Another Contractor, contained narrative guidance or explanatory text that duplicated requirements addressed elsewhere in the FAR. The deletion of FAR 49.113 may create confusion as the application of FAR part 31 cost principles are still required by the FAR 52.249, Contract clauses.
Audit of Prime and Subcontract Settlement Proposal
FAR 49.107 is being changed to replace the mandatory termination settlement proposal audit requirement with a permissive, risk-based approach. This revision removes the certified cost or pricing data thresholds as a “trigger” for audit and provides the termination contracting officer (TCO) discretion as to whether an audit would be needed.
Termination Timelines
This is big. Shortened the timeframe for submission of inventory schedules (e.g., SF 1428) from 120 days to 60 days from the date of termination and limits extensions to 30 days. Reduces the timeframe for submission of termination settlement proposals from 1 year to 90 days and limits extensions to 60 days. These reduced timelines provide more timely information for the contracting officer. However, they do present problems for contractors getting information assembled and submitted.
Profit
Adds plain-language stating that the TCO may use any reasonable method to determine a fair profit. This allows the TCO flexibility to establish profit based on the complexity of the terminated contract and should reduce oversight and justification necessary to document why a certain percentage was used to award profit.
Default Terminations
Clarifies procedures in FAR subpart 49.4, Termination for Default, to ensure consistent use of cure notices and show-cause notices. This will refine when the contracting officer issues a cure versus a show-cause notice to preserve the Government’s rights as well as reduce potential for misinterpretation.
Commercial Acquisitions
Changes will be made to support terminations of commercial FAR part 12 contracts.
Contract Clauses
FAR 52.249-2, FAR 52.249-3, FAR 52.249-5, and FAR 52.249-6 will be updated to match timeframes above.
Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 5, 24, and 29
Federal Register Proposed Rule
Reorganization
FAR part 5 will be reorganized into three subparts: Subpart 5.1, Pre-solicitation; Subpart 5.2, Solicitation; and Subpart 5.3, Award.
Retained Requirements
FAR part 5 governing publicizing noncommercial contract actions was limited to statutory requirement in 5 U.S.C. 552, 15 U.S.C. 637(e), 637(k), 637b, 644, and 41 U.S.C. 1708, among others.
Deletions
FAR subpart 5.4, Release of Information, which was duplicative of the general posting guidance throughout the part; subpart 5.6, Publicizing Multi-Agency Use Contracts, which was duplicative and outdated; subpart 5.7, Publicizing Requirements Under the American Recovery and Reinvestment Act of 2009 (ARRA), which was removed as the funds appropriated for ARRA have expired.
Clarifications
FAR part 5 will be revised to explicitly reaffirm that public notices are posted in the Governmentwide Point of Entry (GPE) and directly convey the purpose of publicizing noncommercial actions using plain language. Moving all requirements related to commercial acquisitions to FAR part 12. Clarify that, even when an agency relies on the national security authority at FAR 6.103-6, posting a pre-solicitation notice is required unless posting the notice would reveal sensitive information. Revise FAR subpart 5.201, Solicitation Notice, to clearly identify circumstances when a solicitation does not need to be posted to the GPE.
Posting Requirements
New tables will be added to clarify when and how pre-solicitation notices, solicitation notices, and award notices must be posted, and identify trade agreement implications where applicable.
Retained Requirements
FAR part 24 providing essential protections for privacy and freedom of information was limited to statutory requirements in 5 U.S.C. 552, Freedom of Information Act; 5 U.S.C. 552a, Privacy Act of 1974; 5 U.S.C. 574, Confidentiality; 10 U.S.C. 3309 and 41 U.S.C. 4702, Prohibition on Release of Contractor Proposals; 10 U.S.C. 3705 and 41 U.S.C. 3505, Submission of Other Information; and OMB Circular A-130, Managing Information as a Strategic Resource.
Deletions
Removes FAR subpart 24.301, Privacy Training, as it duplicates content found in FAR 52.224-3, Privacy Training.
Retained Requirements
FAR part 29 governing Federal tax obligations in procurement was limited to statutory requirements in provisions implementing 26 U.S.C. (Internal Revenue Code), state and local tax exemptions under 40 U.S.C. 501, and applicable international agreements.
Deletions
FAR 29.101 was removed, as this content summarized IRS procedures for obtaining tax exemption certificates and interacting with IRS offices. Information in FAR 29.304 regarding special consideration matters is removed, with content regarding North Carolina taxes now reflected in Section 29.303. Additionally, FAR 29.402-4, Prescribing Tax Requirements for Foreign Contracts in Afghanistan, FAR 52.229-13, Taxes—Foreign Contracts in Afghanistan; and FAR 52.229-14, Taxes—Foreign Contracts in Afghanistan (North Atlantic Treaty Organization Status of Forces Agreement) has been removed in its entirety because the Status of Forces Agreement (SOFA) expired in 2021.
Clarifications
FAR 29.201(a), Federal Excise Taxes, will be revised to clarify that Subtitle D of the Internal Revenue Code spans multiple subchapters and that other statutory and regulatory provisions may apply, while retaining a general reference to the primary excise tax requirements.
Contract Clauses
FAR 52.224-2 and FAR 52.224-3 were revised to clarify subcontract applicability to commercial products and commercial services.
Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 6, 7, 10, 18, 26, 37, and 41
Federal Register Proposed Rule
Competition
Yes, it is still required. FAR part 6 was simplified and streamlined but the underlying requirement for contracting officers to use “full and open competition” or justify why not is still in place.
Market Research
Yes, it is still required. It was moved from its own section in FAR part 10 to FAR subpart 7.2, “because market research is fundamentally an integral component of acquisition planning.” The contract clauses at FAR 52.210-1 requiring contractors to perform market research will now be FAR 52.207-7.
Emergency Acquisitions
Most of FAR part 18 was moved to a website as it was not statutorily required. FAR subpart 18.2 addressing contingency operation, defense or recovery from certain events, emergency declaration or major disaster declaration, and humanitarian or peacekeeping operation was moved to FAR subpart 26.2.
Service Contracting
FAR part 37 was simplified and streamlined but the underlying policy and procedures were not substantively changed.
Utilities Acquisitions
FAR part 41 was simplified and streamlined as well as directing civilian agencies to GSA for their procurements of utilities.
Contract Clauses
Removes FAR 52.207-1, Notice of Standard Competition; FAR 52.207-2, Notice of Streamlined Competition; and FAR 52.207-3, Right of First Refusal of Employment, as Congress has consistently placed a statutory hold on A-76 competitions since 2008.
Public Comments
Public comments are due by July 23, 2026, and can be submitted through Federal eRulemaking portal.
Maintaining Contract Readiness During FAR Changes
As the FAR overhaul moves through rulemaking, government contractors should focus on how revised text, reorganized requirements, clause updates, security obligations, and proposed termination timelines may affect contract administration. Redstone GCI supports this work by reviewing contract clauses and solicitation language, assessing subcontract flowdowns, aligning purchasing and accounting procedures with FAR requirements, evaluating termination preparation steps, and providing training for contracts, finance, and operations personnel responsible for compliance and implementation.
Frequently Asked Questions (FAQs)
- What is the Revolutionary FAR Overhaul? It is a federal effort to streamline and reorganize parts of the Federal Acquisition Regulation. The goal is to make the FAR clearer, more efficient, and focused on requirements that are statutory or essential to procurement.
- Who issued the proposed FAR changes? The proposed rules were published by the FAR Council, which includes OFPP, OMB, DoD, GSA, and NASA. The rules were published on June 23, 2026, with public comments due July 23, 2026.
- Are these changes final? No. These are proposed rules, which means they are open for public comment before final rulemaking. Contractors should understand that proposed changes can still be revised.
- Why should government contractors pay attention? Many changes are aimed at contracting officers, but they may still affect how solicitations, clauses, communications, and contract administration work. Contractors need to understand how the process around them may change.
- Does the overhaul remove contractor compliance obligations? Not necessarily. Some FAR text may be reorganized, clarified, or removed, but several underlying requirements remain in place. Contractors should not assume that streamlined language means reduced responsibility.
- What areas may be most important for contractors to watch? The article points to areas such as security requirements, contract clauses, termination procedures, acquisition planning, market research, and public posting requirements. These areas can affect how contractors respond to solicitations and manage awarded contracts.