Full Breakdown
FAR Council Unveils Major Overhaul of Federal Acquisition Regulation
6/27/2026, 1:35:43 AM
Legislative Background and Agency Objectives
The Federal Acquisition Regulatory Council (FAR Council) began its current revision after President Donald Trump issued Executive Order 14275, “Restoring Common Sense to Federal Procurement,” on April 15, 2025. The order directs agencies to simplify the Federal Acquisition Regulation (FAR) and eliminate non-statutory requirements that hinder efficient use of taxpayer funds. Agency statements say the overhaul also seeks to boost small-business participation and strengthen the federal supplier base.
Scope and Scale of the Proposed Overhaul
On June 23, 2026 the FAR Council, acting through the Office of Federal Procurement Policy (OFPP) within the Office of Management and Budget (OMB) and with the Department of Defense (DoD), GSA and NASA, released four proposed rules that amend roughly one-third of the FAR. Nineteen FAR parts are revised, covering definitions (Part 2), business practices (Part 3), protests (Part 33), information and supply-chain security (Part 40), contract terminations (Part 49), and related Part 52 clauses.
Key Regulatory Changes
The proposals revise core areas. Sustainable-acquisition definitions are removed and new terms—“Controlled Unclassified Information,” “commercial products,” “commercially available off-the-shelf,” and “simplified acquisition procedures”—are added. Agency-level protests must be reported to the head of contracting; contractors seeking review above the contracting officer receive redacted technical reports, protestor proposals, and source-selection decisions, a change intended to reduce GAO protests. Updated clauses require civilian contractors to protect Controlled Unclassified Information and disclose cybersecurity incidents, with a less onerous approach than earlier drafts. Supply-chain rules finalize the Federal Acquisition Supply Chain Security Act, ban certain Chinese telecommunications and video-surveillance products, prohibit specific applications on designated devices, and restrict drone sales from foreign-covered entities. Audits of termination settlement proposals shift to a risk-based model, and default terminations follow a standardized pathway. Finally, Part 53 forms move to Part 1 and are hosted online at https://www.acquisition.gov/FARforms, removing the need for rulemaking on routine form updates.
Implementation Timeline and Public Comment
The public comment period closes on July 23, 2026. The FAR Council plans to issue final rules before the end of 2026, after which agencies will apply the new provisions to newly awarded contracts. Existing contracts will continue under the current FAR unless expressly updated. Remaining FAR parts are slated for OMB review in the coming weeks, with proposed versions expected within two months and final versions later in the year.
Anticipated Impact on Federal Procurement and Contractors
Agency statements emphasize that the overhaul aims to streamline procurement, reduce confusion for small businesses, and enhance the resilience of the federal supplier base. By consolidating forms, simplifying definitions, and adopting risk-based audit practices, the Council expects faster contract award cycles and clearer compliance pathways for contractors of all sizes.
Remaining Gaps and Future Steps
While the June 2026 proposals address a substantial portion of the FAR, the Council acknowledges that additional rulemaking will be required to complete the overhaul. The timeline for those subsequent releases remains dependent on OMB review and the outcome of the public comment process.
