This executive order aims to reform the Federal Acquisition Regulation (FAR) to create a more efficient and effective government procurement system.
The order addresses the FAR's excessive length and complexity, which negatively impact efficiency and cost, citing reports from the Senate and expert panels.
It mandates a review and amendment of the FAR within 180 days, focusing on retaining only essential provisions.
Further, the order requires agencies to align their supplemental regulations and promotes the use of expedited acquisition methods while implementing a four-year regulatory sunset provision to ensure ongoing review of regulations.
Arguments For
Improved Efficiency and Cost Savings: Streamlining the FAR reduces bureaucratic complexities, leading to faster and more cost-effective procurement processes. This is supported by reports like the 2024 Senate committee report "Restoring Freedom's Forge" and the 2019 Advisory Panel report, which highlighted the FAR's inefficiencies.
Reduced Regulatory Burden: The order aims to eliminate unnecessary regulations, easing the burden on businesses and reducing administrative costs associated with government contracting. This aligns with Executive Order 14192's focus on deregulation.
Strengthened National Security: A more efficient procurement system can expedite the acquisition of essential goods and services, including defense systems, enhancing national security. This is explicitly mentioned in the order's focus on maintaining economic and national security interests.
Enhanced Public Trust: By promoting transparency and accountability in the procurement process, the reform fosters greater public trust in the Federal Government's use of taxpayer funds.
Arguments Against
Unintended Consequences: Simplifying regulations could inadvertently create loopholes or compromise essential safeguards, potentially leading to increased risks of fraud, waste, or abuse in government spending.
Implementation Challenges: Overhauling the extensive and complex FAR requires significant coordination across multiple federal agencies, which could face resistance or logistical hurdles.
Potential Negative Impact on Small Businesses: Simplification might unintentionally disadvantage smaller businesses that lack the resources to navigate even streamlined procurement processes, potentially reducing competition.
Insufficient Timeframe: The 180-day deadline for completing the FAR reform might be too short to adequately address the intricate details and complexities of the existing system.
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered:
Section 1. Purpose. The Federal Government is the largest buyer of goods and services in the world –- yet conducting business with the Federal Government is often prohibitively inefficient and costly. More than 40 years ago, the Federal Acquisition Regulation (FAR) was implemented to establish uniform procedures for acquisitions across executive departments and agencies (agencies). The “vision” of the Federal Acquisition System, codified at section 1.102 of the FAR, is to “deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives[,]”, but since its inception, the FAR has swelled to more than 2,000 pages of regulations, evolving into an excessive and overcomplicated regulatory framework and resulting in an onerous bureaucracy. Federal procurement under the FAR receives consistently negative assessments regarding its efficiency. Comprehensive studies such as the 2024 Senate committee report entitled “Restoring Freedom’s Forge” and the 2019 report by the Advisory Panel on Streamlining and Codifying Acquisition Regulations, created by the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114-92) and made up of experts in acquisition and procurement policy, conclude that the FAR is a barrier to, rather than a prudent vehicle for, doing business with the Federal Government. Its harmful effects permeate various items paid for by American taxpayers, from commercial products like laptops and office supplies to major defense weapons systems. The management and expenditure of nearly $1 trillion annually in procurements cannot continue on this trajectory. Fortunately, its inadequacies are self-inflicted and can be remedied through a comprehensive reform of the FAR. Executive Order 14192 of January 31, 2025 (Unleashing Prosperity Through Deregulation), established that the policy of the executive branch is to be prudent and financially responsible in the expenditure of funds and to alleviate unnecessary regulatory burdens placed on the American people. Reforming the FAR will advance this objective.
This section establishes the purpose of the executive order.
It highlights the inefficiency and costliness of the current Federal Acquisition Regulation (FAR) system, which has grown to over 2000 pages.
The order cites reports indicating the FAR hinders, rather than helps, business with the Federal Government.
It emphasizes that reforming the FAR will align with the administration's broader policy of financial responsibility and deregulation.
Sec. 2. Policy. It is the policy of the United States to create the most agile, effective, and efficient procurement system possible. Removing undue barriers, such as unnecessary regulations, while simultaneously allowing for the expansion of the national and defense industrial bases is paramount. Accordingly, the FAR should contain only provisions required by statute or essential to sound procurement, and any FAR provisions that do not advance these objectives should be removed.
This section outlines the policy goal: to create the most agile, effective, and efficient procurement system possible.
The order emphasizes the need to remove unnecessary regulations while supporting the growth of national and defense industries.
The FAR should only include necessary provisions, with redundancies removed.
Sec. 3. Definitions. (a) “FAR” means the Federal Acquisition Regulation codified at title 48 of the Code of Federal Regulations. (b) “Administrator” refers to the Administrator of the Office of Federal Public Procurement Policy. (c) “Agency” means an executive department, a military department, or any independent establishment within the meaning of 5 U.S.C. 101, 102, and 104(1), respectively, and any wholly owned Government corporation within the meaning of 31 U.S.C. 9101.
This section clarifies key terms used in the order.
It defines "FAR" as the Federal Acquisition Regulation, "Administrator" as the head of the Office of Federal Public Procurement Policy, and "Agency" as encompassing various governmental entities.
Sec. 4. Reforming the Federal Acquisition Regulation. Within 180 days of the date of this order, the Administrator, in coordination with the other members of the Federal Acquisition Regulatory Council (FAR Council), the heads of agencies, and appropriate senior acquisition and procurement officials from agencies, shall take appropriate actions to amend the FAR to ensure that it contains 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.
This section details the action required.
The Administrator, working with the FAR Council and agency officials, must amend the FAR within 180 days.
Amendments should focus on retaining only statutory requirements or provisions crucial for system efficiency, usability, and national security.
Sec. 5. Aligning Agency Supplements to the FAR. (a) Within 15 days of the date of this order, each agency exercising procurement authority pursuant to the FAR shall designate a senior acquisition or procurement official to work with the Administrator and the FAR Council to ensure agency alignment with FAR reform and to provide recommendations regarding any agency-specific supplemental regulations to the FAR. The Administrator, the FAR Council, and each agency designee under this subsection shall collaborate to identify and appropriately address FAR provisions that are inconsistent with the policy objectives described in section 2 of this order. (b) Within 20 days of the date of this order, the Director of the Office of Management and Budget, in consultation with the Administrator, shall issue a memorandum to agencies that provides guidance regarding implementation of this order. That memorandum shall ensure consistency and alignment of policy objectives and implementation regarding changes to the FAR and agencies’ supplemental regulations to the FAR. (c) The memorandum issued pursuant to subsection (b) of this section shall propose new agency supplemental regulations and internal guidance that promote expedited and streamlined acquisitions. With respect to such proposals, the Administrator shall direct the appropriate agency and its subordinate agencies to adhere to the ten-for-one requirement described in Executive Order 14192. (d) The Administrator and the FAR Council shall issue deviation and interim guidance, as appropriate and consistent with applicable law, until final rules reforming the FAR are published.
This section outlines steps to align agency-specific regulations with the FAR reform.
Agencies must appoint officials to collaborate on changes.
The Office of Management and Budget will issue guidance to ensure consistency.
The order also promotes expedited acquisitions and specifies adherence to the ten-for-one requirement detailed in Executive Order 14192.
Interim guidance may be issued until final rules are complete.
Sec. 6. Regulatory Sunset. In amending the FAR under section 4 of this order, the Administrator, in coordination with the FAR Council, shall: (a) identify all FAR provisions not required by statute that will remain in the FAR; (b) consider amending the FAR such that any provisions identified in accordance with subsection (a) of this section will expire 4 years after the effective date of the final rule promulgated in accordance with section 4 of this order unless renewed by the FAR Council; and (c) consider whether any new FAR provision not required by statute that is promulgated after the effective date of the final rule promulgated in accordance with subsection (b) of this section should include a provision stating that it will expire 4 years after its effective date unless renewed by the FAR Council.
This section introduces a "regulatory sunset" provision.
The Administrator and FAR Council must identify non-statutory FAR provisions to remain and consider a 4-year expiration date for them unless renewed.
Similarly, consideration is given to applying the 4-year expiration for new non-statutory provisions going forward.
Sec. 7. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect: (i) the authority granted by law to an executive department, agency, or the head thereof; or (ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals. (b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations. (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
This section includes general provisions.
It clarifies that the order does not affect existing legal authority or the OMB's functions.
Implementation is subject to existing laws and available funding.
Importantly, the order does not create any new legal rights.