A little background – On April 15, 2025, Executive Order 14275, Restoring Common Sense to Federal Procurement, was issued. The intent of this order was to make revolutionary changes to the Federal Acquisition Regulations (FAR) to make the federal acquisition process more efficient and cost-effective. Section 2 states, “It is the policy of the United States to create the most agile, effective, and efficient procurement system possible. Removing undue barriers, such as unnecessary regulations, while simultaneously allowing for the expansion of the national and defense industrial bases is paramount. Accordingly, 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.”
When Will the Changes Become the New Requirements?
Sooner rather than later – On May 2, 2025, the FAR Council issued a memorandum providing guidance as to when the changes will be applicable. While the FAR Council goes through the standard regulatory promulgation process (i.e., proposed rules, public comments, and final rules), the changes will become applicable to new solicitations and contracts based on agency class deviations. The guidance is that “[a]gencies should generally issue agency-specific class deviations within 30 days after the Council’s class deviation text is released on the RFO [Revolutionary FAR Overhaul] website. Agencies should ensure their class deviations are disseminated throughout their contracting workforce to enable consistent implementation.”
We have found that finding class deviations is often not as easy as it should be. In this case, the FAR Council is providing access to all the issued class deviations by part overhauled on the RFO website. Of note is that no DoD class deviations are listed, and DoD’s class deviation webpage has no deviation as required by this guidance as of the date of this article.
What is the Risk?
Currently (as of July 2025), there is not much risk. The changes to the parts listed below have not been very significant. Mostly wording changes, eliminating the overly wordy writing from the 80s and 90s. So, the word count is down, but the requirements have not really followed suit.
- Part 1 - Federal Acquisition Regulation System (Issuance Date: May 2, 2025)
- Part 6 - Competition Requirements (Issuance Date: June 27, 2025)
- Part 10 - Market Research (Issuance Date: May 22, 2025)
- Part 11 - Describing Agency Needs (Issuance Date: June 18, 2025)
- Part 18 - Emergency Acquisitions (Issuance Date: June 12, 2025)
- Part 29 - Taxes (Issuance Date: July 17, 2025)
- Part 31 - Contract Cost Principles and Procedures (Issuance Date: July 17, 2025)
- Part 34 - Major System Acquisition (Issuance Date: May 2, 2025)
- Part 35 - Research and Development Contracting (Issuance Date: July 24, 2025)
- Part 36 - Construction and Architect-Engineer Contracts (Issuance Date: July 24, 2025)
- Part 39 - Acquisition of Information and Communication Technology (Issuance Date: June 12, 2025)
- Part 43 - Contract Modifications (Issuance Date: June 12, 2025)
- Part 52 - Solicitation Provisions and Contract Clauses (Related to the parts above)
Case in Point on Changes in Requirements?
The Executive Order states, “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.”
We would have expected this direction to have led to a much more significant change to FAR 31.205, Selected costs. 10 U.S.C. 3744(a)(13) and 41 U.S.C. 4304(a)(13) provide a listing of specific costs made unallowable by statute, which is substantially less than the current areas addressed in FAR 31.205. One would have thought that FAR 31.205 would have been brought into line with the statute, yet it was not. Additionally, we would have thought any allowability provisions simply stating a cost is allowable would have been removed. After all, a reasonable cost that is not specifically unallowable is allowable. At least we think so. FAR 31.205-29, Plant protection costs, is a great example of this.
Maybe we can move this in the right direction through public comments. Please jump on that bandwagon when it comes to town.
Staying Ahead of Evolving Requirements
Navigating changes to the FAR, especially those that impact allowability, requires a strong foundation in understanding the Government’s requirements and implementing an adequate accounting system by segregating unallowable costs. Redstone Government Consulting supports government contractors in adapting to regulatory shifts through training, system assessments, and ongoing compliance consulting. We would be happy to assist you with the ins and outs of dealing with these FAR changes, whether you need help interpreting class deviations, preparing public comments, or aligning your internal systems with updated expectations.
