President Trump Issues Executive Order Calling for Reform of the Federal Acquisition Regulation
The reforms called for could have a significant impact on how federal contractors and their subcontractors conduct business with the federal government.
On April 15, 2025, President Trump signed an executive order titled “Restoring Common Sense to Federal Procurement” (the Order). The Order calls for a comprehensive reform of the Federal Acquisition Regulation (FAR), the primary body of regulations governing federal agencies’ acquisition of supplies and services. Codified at Title 48 of the Code of Federal Regulations, the FAR includes standard solicitation provisions and contract terms used in federal contracts. The FAR first became effective on April 1, 1984.
According to the Order, “[f]ederal procurement under the FAR receives consistently negative assessments regarding its efficiency.” The Order aims to streamline the FAR’s “excessive and overcomplicated regulatory framework” to “create the most agile, effective, and efficient procurement system possible.” The Order notes that the removal of “undue barriers, such as unnecessary regulations” is “paramount” to the “expansion of the national and defense industrial bases.”
To effectuate this reform, the Order directs the Federal Acquisition Regulatory Council (FAR Council) — consisting of the Administrator for Federal Procurement Policy, the Administrator of General Services, the Secretary of Defense, and the Administrator of National Aeronautics and Space — as well as the heads of agencies, and the appropriate acquisition and procurement officials from agencies, to amend the FAR within 180 days. The amended FAR is expected to include only provisions that are required by statute “or that are otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests.”
The Order further directs agencies to consider amending the FAR to sunset those provisions not required by statute four years from the effective date of the amended FAR, unless those regulations are specifically renewed by the FAR Council. Agencies should also consider adding a four-year sunset provision to any new regulations promulgated after the effective date of the amended FAR.
The Order also requires agencies exercising procurement authority under the FAR to designate, within 15 days, a senior acquisition or procurement official to coordinate with the FAR Council to ensure that individual agency supplemental regulations to the FAR are aligned with any broader reforms, and to make recommendations for changes to agency-specific supplements.
In addition, within 20 days, the Director of the Office of Management and Budget, in consultation with the Administrator for Federal Procurement Policy, is expected to issue a memorandum to agencies providing guidance regarding expected changes to the FAR. The memorandum will also include proposals for new agency supplemental regulations and internal guidance. Agencies are expected to adhere to the 10-for-one requirement described in Executive Order 14192 (“Unleashing Prosperity Through Deregulation”) with respect to these proposals. (See our related blog post.)
Latham lawyers will continue monitoring and providing updates on the rollout of FAR amendments and related guidance.
