Summary
Executive Order 14275, known as the Revolutionary FAR Overhaul (RFO) or "FAR 2.0," marks a historic effort to comprehensively modernize the Federal Acquisition Regulation (FAR), which has remained unchanged for over 40 years. Signed in early 2025, this order aims to create an agile, efficient procurement system by stripping away unnecessary regulations and focusing on statutory mandates. This follow-up to my article, Federal Procurement: Centralized, Commercial Goods, and More, explores the EO's progress, emerging details, and implications for contractors and agencies as of June 5, 2025.
Introduction
Executive Order 14275, also known as the Revolutionary FAR Overhaul (RFO) or “FAR 2.0,” marks a historic effort to modernize the Federal Acquisition Regulation (FAR), which has remained largely unchanged for over 40 years. Signed in early 2025, this order aims to create an agile, efficient purchasing system by removing unnecessary regulations and focusing on statutory mandates. Following up on my article, Federal Procurement: Centralized, Commercial Goods, and More, this article explores the EO’s progress, emerging details, and implications for contractors and agencies as of June 5, 2025.
Key Provisions and Progress
So, EO 14275 directs the Office of Federal Procurement Policy (OFPP) to revise the FAR to include only provisions required by statute or essential for simplicity, usability, and economic or national security interests. Essential key actions include:
- FAR Reform: Eliminating non-essential provisions and adopting a “ten-to-one” deregulation rule (per EO 14192), requiring the elimination of ten regulations for each new one added.
- Agency Alignment: Ensuring that agency-specific supplements, like the Defense Federal Acquisition Regulation Supplement (DFARS), align with the revised FAR.
- Sunset Provisions: Introducing a four-year expiration for non-statutory FAR requirements.
- Strategic Acquisition Guidance (SAG): Replacing non-statutory regulations with OFPP-endorsed buying guides.
As of May 2, 2025, the Office of Management and Budget (OMB) issued deviation guidance, emphasizing “plain language” class deviations starting with FAR Part 1. Consequently, the General Services Administration (GSA) has released model deviation text for FAR Parts 1, 10, 34, and 52, targeting contract categories that are misaligned with administrative priorities. Agencies are implementing these deviations within 30 days, pending formal rulemaking.
Current Developments
- Class Deviations: Agencies are actively issuing deviations, with OMB reviewing agency-specific proposals within five business days. If no response is received, agencies may proceed, speeding implementation.
- Public Engagement: The FAR Council has opened comment periods for draft changes, encouraging contractor input to inform the development of the SAG and final regulations.
- SAG Development: Early drafts of buying guides are available for comment, focusing on simplified procurement processes and commercial solutions.
Implications for Contractors
- Opportunities:
- Simplified FAR provisions may reduce compliance burdens, reducing costs and barriers to entry for small businesses and new entrants.
- Expanded industrial base aligns with national security goals, potentially increasing contract opportunities in critical sectors.
- Public comment periods provide an opportunity to influence regulations, ensuring practical and industry-friendly outcomes.
- Challenges:
- Rapid deviations create uncertainty, requiring contractors to monitor changes closely to avoid non-compliance.
- Aligning internal policies with changing FAR requirements demands investment in training and process updates.
- Sunset provisions may introduce instability, as non-statutory rules expire unless rejustified.
- Action Steps:
- Track FAR Council announcements and GSA deviation texts via acquisition.gov.
- Participate in rulemaking comment periods to advocate for clear, practical regulations.
- Maintain open dialogue with contracting officers to clarify the impacts of deviations on existing contracts.
Implications for Agencies
- Streamlined Operations: Simplified FAR and buying guides should allow agencies to focus on mission-critical tasks and reduce administrative burdens.
- Compliance Pressure: Agencies must align supplements and implement deviations promptly, requiring robust coordination with OMB.
- Cultural Shift: Adopting plain language and deregulation requires training and mindset changes for acquisition professionals.
Looking Ahead
Ultimately, the RFO’s success hinges on creating a balance between deregulation and effective procurement. Formal rulemaking, expected to conclude in late 2025 or early 2026, will solidify changes. Contractors should prepare for a leaner FAR but remain watchful for deviations that could affect contract performance. By engaging proactively, contractors and agencies can shape a purchasing system that delivers value and efficiency.
