Hunton Retail Law Resource

We recently wrote about the Trump administration’s efforts to streamline the Federal Acquisition Regulation (“FAR”).  The FAR contains approximately 2,000 pages of regulations that guide hundreds of billions of dollars in acquisitions each year.  Some clauses in the FAR are mandated by a statute while others have been adopted over time to fix a problem, institute an Executive Order or because regulators thought it would be a best practice.  As detailed in a recent blog, the administration’s current effort is aimed at confining the FAR to provisions mandated by statute “or essential to sound procurement.”

The FAR Council, in coordination with the Office of Management and Budget, is expected to release revisions of each FAR Part as proposals, but effectively require agencies to issue class deviations and adopt each section before the revisions become final. This means contractors may see dramatic change in short order.  It is important to remember, however, that updated FAR sections do not immediately require compliance; that only occurs when a solicitation is issued with an updated provision or a contracting officer successfully modifies a contract to include them.

To start, the administration has released proposed revisions to FAR Parts 1 and 34. 

FAR Part 1, entitled, “The Federal Acquisition System,” lays out fundamentals of the FAR and how it works.  Some important changes include:

• Elimination of language surrounding the purpose and goals for the FAR such as “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.” FAR 1.102(a).
• Deletion of nearly the entire “performance standards” clause. This includes language that “[t]he System must be responsive and adaptive to customer needs, concerns, and feedback. Implementation of acquisition policies and procedures, as well as consideration of timeliness, quality and cost throughout the process, must take into account the perspective of the user of the product or service.” FAR 1.102-2(a)(2). Also, “[w]hen selecting contractors to provide products or perform services the Government will use contractors who have a track record of successful past performance or who demonstrate a current superior ability to perform” and “[t]he Government will maximize its use of commercial products and commercial services in meeting Government requirements” and “[i]t is the policy of the System to promote competition in the acquisition process.”  FAR 1.102(a).
• Other deleted provisions talk to minimizing administrative costs and conducting business “with integrity, fairness, and openness.” FAR 1.102(c).
• FAR applicability language deleted. Elimination of the language regarding the applicability of the FAR: “[t]he FAR applies to all acquisitions as defined in part 2 of the FAR, except where expressly excluded.” FAR 1.104.
• Potential increase in agency-specific regulations. The allowances for agencies to issue their own supplemental regulations was left largely untouched, but limitations on those regulations in FAR 1.302 have been proposed for deletion.  This may allow agencies more flexibility to issue supplemental regulations, potentially at the expense of regulatory consistency across agencies.
• Elimination of the requirement for public comment. The provisions requiring public comment for “significant” FAR revisions has been deleted.  FAR 1.501-2.
• Contracts may be entered into by individuals other than contracting officers. Part of FAR, Section 1.601, is being proposed for deletion: “[c]ontracts may be entered into and signed on behalf of the Government only by contracting officers.”
• The content of Determinations and Findings are no longer required to clearly and convincingly justify the specific determination made under FAR 1.704. The requirement for expiration dates was also deleted.

It is altogether possible that the deletions will be moved to guidance, but it is an open question whether that guidance will be as enforceable as a FAR provision where these requirements previously resided.

We will continue to monitor changes to the FAR and provide updates as warranted.