If you've worked in federal contracting for any length of time, you know the Federal Acquisition Regulation. All 2,000-plus pages of it. You've navigated its labyrinthine clauses, cross-references, and sub-sub-paragraphs. You've watched proposals balloon with compliance documentation that sometimes feels like it matters more than the actual solution you're offering.
That era is ending. And whether you're a seasoned prime contractor or a small business trying to break into the federal market for the first time, the changes underway right now will reshape how the government buys — and how you sell.
What's Actually Happening
In April 2025, President Trump signed Executive Order 14275, "Restoring Common Sense to Federal Procurement," directing the most comprehensive overhaul of the FAR since its creation in 1984. This isn't a tweak or an update. The administration is calling it the Revolutionary FAR Overhaul — and for once, the branding isn't an exaggeration.
The directive is straightforward: strip the FAR back to its statutory roots, rewrite it in plain language, and eliminate the nearly 3,000 directives that have accumulated over four decades of regulatory layering. Led by the Office of Federal Procurement Policy and the FAR Council — a joint body of the General Services Administration, the Department of Defense, and NASA — the effort aims to make federal procurement faster, more competitive, and less burdensome for everyone involved.
The Office of Management and Budget formalized the implementation plan in Memorandum M-25-26, which lays out the phased approach and establishes the criteria for what stays and what goes. The rule is simple: if a provision isn't required by statute or essential to sound procurement and national defense, it gets removed.
Two Phases, Moving Fast
The overhaul is structured in two phases, and Phase I is already complete.
Phase I (April – October 2025) used a class deviation approach. Rather than waiting for the formal rulemaking process — which can take years — the FAR Council issued model deviation texts that agencies could adopt immediately. This let agencies start operating under the streamlined rules right away while simultaneously gathering real-world feedback on what worked and what didn't.
The results from Phase I were significant. According to the White House, the FAR Council provided relief from more than 1,600 burdensome requirements for agencies and contractors during this period. That's not a typo — over 1,600 requirements eliminated or simplified in roughly six months.
Phase II (October 2025 – January 2027) is the formal rulemaking process currently underway. This is where the deviations from Phase I get permanently baked into the FAR through the standard notice-and-comment process via the Federal Register. The proposed rules are informed by the Phase I deviations, public input submitted through the RFO website, and agency feedback from months of operating under the new framework.
The Department of Defense, for its part, is simultaneously overhauling the Defense Federal Acquisition Regulation Supplement (DFARS). In February 2026, the Under Secretary of Defense issued a letter to the defense industrial base soliciting input on Phase 2 DFARS changes. If you hold defense contracts, that's a channel worth paying attention to.
Threshold Changes You Should Know About
Alongside the structural overhaul, FAR Case 2024-001 adjusted key acquisition thresholds for inflation — the first such adjustment in five years, as required by statute. Effective October 1, 2025:
- Micro-Purchase Threshold (MPT): Increased from $10,000 to $15,000
- Simplified Acquisition Threshold (SAT): Increased from $250,000 to $350,000
These numbers matter more than they might appear to at first glance. Federal Procurement Data System records from fiscal years 2022 through 2024 show that approximately 562,324 awards per year fell at or below the old $10,000 micro-purchase threshold, with another 49,321 awards valued between $10,000 and the new $15,000 ceiling. That's tens of thousands of additional transactions per year that can now be processed with significantly less paperwork.
For small businesses, the raised SAT is particularly meaningful. Acquisitions under the simplified acquisition threshold use streamlined procedures with less documentation, fewer evaluation criteria, and faster timelines. Pushing that ceiling from $250,000 to $350,000 means a larger pool of contracts will move through the simplified pipeline — which benefits both the government buyer trying to move quickly and the small business that can't afford to spend weeks on a proposal.
What's Replacing the Removed Regulations
Here's where the overhaul gets interesting — and where I think a lot of contractors are missing the story. The FAR isn't just getting shorter. The procurement guidance model is fundamentally changing.
Most of the non-statutory regulations being removed from the FAR will be replaced with OFPP-endorsed buying guides that sit outside the regulation itself. These guides will highlight proven innovative buying techniques for different phases of the acquisition lifecycle and provide practical procurement pathways for common categories of goods and services.
Think of it this way: the FAR is becoming the rulebook — just the rules, nothing more. The buying guides are becoming the playbook — practical, flexible, and easier to update without going through formal rulemaking every time the government wants to adopt a better practice.
This is a significant shift in philosophy. For decades, the approach has been to codify best practices directly into regulation, which sounds good in theory but creates a system where adopting new approaches requires navigating the same bureaucratic process the regulations were supposed to streamline. Separating the mandatory rules from the recommended practices gives agencies more flexibility to innovate while still maintaining the guardrails that statute requires.
Small Business: Protected, Not Forgotten
One concern I've heard repeatedly from small businesses is whether the overhaul will weaken the protections that give them access to federal contracts. It's a fair worry. When you hear "deregulation," small business set-asides and socioeconomic programs can feel like they might be on the chopping block.
The evidence so far suggests otherwise. The Office of Federal Procurement Policy and the Small Business Administration issued a joint statement in September 2025 reinforcing that small business participation in federal contracting remains a priority. The revised FAR Part 19 preserves the statutory requirements for agencies to set aside contracts when two or more competitive small businesses can perform the work.
In fact, the overhaul's proponents argue that simplification actually helps small businesses more than anyone. Large contractors have compliance departments and proposal teams that can navigate a 2,000-page regulation. A 15-person IT firm trying to win its first federal contract does not. Reducing the regulatory burden lowers the barrier to entry — which is exactly the kind of increased competition the executive order is designed to encourage.
The Defense Dimension
The FAR overhaul doesn't exist in a vacuum. It's running parallel to a broader push to modernize defense acquisition specifically. In January 2026, the White House issued a separate executive order, "Prioritizing the Warfighter in Defense Contracting," and the Department of Defense released its Acquisition Transformation Strategy in late 2025.
For IT contractors working in the defense space, these parallel tracks matter. The Army has already published its assessment of how the FAR overhaul impacts Army acquisition, and other services are following suit. The message across the board: procurement speed is a national security issue, and the old way of buying isn't fast enough.
What Contractors Should Be Doing Right Now
The formal rulemaking window is open through early 2027. That means the final shape of the new FAR is still being determined, and your input can influence it. Here's what I'd recommend:
- Read the deviation texts. The acquisition.gov FAR overhaul page has the model deviation text for every FAR part. Don't wait for the final rule — understand what's changing now, because agencies are already operating under these deviations.
- Review the FAQs. The FAR Council published a detailed FAQ page that addresses common concerns about how the overhaul affects existing contracts, pending solicitations, and ongoing procurements.
- Submit comments during Phase II. When proposed rules hit the Federal Register, the public comment period is your opportunity to shape outcomes. If a proposed change would negatively impact your business or your ability to serve government clients, say so — with specifics.
- Update your internal processes. If you've built compliance workflows around FAR provisions that are being eliminated, now is the time to streamline. Don't keep doing things the old way just because you've always done them that way.
- Watch the thresholds. The raised MPT and SAT change the competitive landscape for smaller acquisitions. If you've been focused on contracts above $250,000, consider whether the $350,000 simplified acquisition threshold opens new opportunities.
The Bottom Line
The Revolutionary FAR Overhaul is real, it's moving fast, and it will change how the federal government buys goods and services. The 2,000-page regulation that has defined federal procurement for forty years is being fundamentally restructured — not just trimmed around the edges.
For contractors willing to pay attention and adapt, this is an opportunity. A simpler, faster procurement system means less time on compliance paperwork and more time competing on the merits of what you actually deliver. That's a change worth watching closely.