ARTICLE
26 May 2025

An Overhaul Of The Federal Acquisition Regulation Was Needed!

C
Caldwell

Contributor

Caldwell is a premier global law firm at the forefront of innovation and legal excellence delivering best-in class intellectual property, litigation, and corporate advice. The firm is a trusted legal partner for forward-thinking, high-growth companies, ranging from well-known venture capital funds to unicorns to listed corporates in Asia and the US, which seek truly strategic legal counsel.
Under President Trump's Executive Order 14278 [1] on April 15, 2025, the federal government is undertaking a comprehensive overhaul of the Federal Acquisition Regulation (FAR).
United States Government, Public Sector

Under President Trump's Executive Order 14278 [1] on April 15, 2025, the federal government is undertaking a comprehensive overhaul of the Federal Acquisition Regulation (FAR). According to White House fact sheets [2], the Order mandates that the FAR be stripped of any provisions not required by statute or essential to efficient, secure, and cost-effective procurement. It also requires agencies to adopt interim "model deviation" guidance.

The Purpose of the Executive Order

The federal government is the single largest purchaser in the world, spending nearly $1 trillion annually on everything from office supplies to advanced defense systems, and yet, the sheer weight of more than 2,000 pages of the Federal Acquisition Regulation has long turned straightforward transactions into onerous and costly ordeals. By issuing an Executive Order to "restore common sense" to federal procurement, the Trump administration is trying to tackle bureaucracy directly: stripping the FAR back to only those rules required by statute or essential to security and efficiency. Every agency must follow this simpler rule set, and any extra provisions will expire after four years unless they are renewed.

Current Updates

Following the Executive Order, the General Services Administration's (GSA) Office of Governmentwide Policy has issued Class Deviation RFO-2025-01 [4], which immediately replaces the existing FAR Part 1 text for all GSA procurements with the FAR Council's "Revolutionary FAR Overhaul" (RFO) model deviation language. Under this deviation, GSA contracting staff must stop using the codified FAR Part 1 and begin using the RFO Part 1 model text immediately. The change aligns Part 1 with Executive Order 14278 by retaining only those provisions required by statute, such as 31 U.S.C. § 3702 and 41 U.S.C. §§ 13, 17, 1908, 3102, and removing duplicative, outdated, or non-statutory subparts (e.g., OMB control-number listings, Subpart 1.2, and Subpart 1.5). It also establishes a "mission first" principle, emphasizes maximizing taxpayer value and time savings, and reorganizes language to eliminate obsolete cross-references. Any future class deviations will generally need the FAR Council approval, unless an agency is acting under its own statutory or executive authority, and this deviation will remain in effect until it is formally incorporated into the FAR or rescinded. For the most recent updates on the FAR, please visit FAR Parts and Agency Deviations. [5]

Implications for Investors and Acquirers of Government Contractors

Investors and buyers can anticipate a more simplified regulatory framework and significant declining disapproval risk as the FAR overhaul takes hold. In fact, median procurement administrative lead times (PALT) have already decreased by over 20 percent, from 41 days in the fiscal year (FY) 2019 to 32 days in FY 2022, reflecting tangible efficiency gains.[6] Meanwhile, the Government Accountability Office (GAO) sustained only 16 percent of bid protests decided on the merits in FY 2024, reinforcing that contract awards are rarely overturned. [6] As the GSA implements simplified model deviations and eliminates non-statutory requirements, both PALT and protest sustain rates are expected to continue trending downward. This translates into faster award cycles, lighter due-diligence burdens, and diminishing transactional risk for buyers pursuing government-contracting targets.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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