Change is Coming: What the Tech Industry Expects from the Revolutionary FAR Overhaul
A Series Examining the Implications of the U.S. Federal Acquisition Regulation Reform Effort
The U.S. government’s monumental effort to overhaul the Federal Acquisition Regulation (FAR) — the playbook for how the government buys goods and services — is coming to a close. Soon, the Federal Acquisition Regulatory (FAR) Council will publish the results of its months-long effort to reduce existing regulations and eliminate or streamline many previous contracting requirements to promote efficiency and limit administrative burdens. This structural update aims to deliver a regulatory compendium that closely tracks how the acquisition lifecycle works — from “cradle to grave.”
These sweeping changes will have a lasting impact on the way the commercial technology industry works with the federal government. As the Revolutionary FAR Overhaul moves forward, ITI’s team of experts will examine key aspects of the effort and what it means for government acquisition and the tech industry more broadly.
To kick off our analysis series, here are some of the most “revolutionary” reforms we expect:
- Simpler procedures for more commercial acquisitions. FAR Part 12: Acquisition of Commercial Products and Commercial Services is expanded and will now function as a standalone guide for buying commercial solutions from the private sector. Most of FAR Part 13 has now been merged into FAR Part 12, which expands the universe of commercial acquisitions (e.g., contracts up to $7.5 million) that can be conducted using simplified procedures. Government buyers are encouraged to use innovative buying approaches to further streamline the commercial acquisition process, including removing onerous evaluation criteria and adopting a “comparison” model where proposals are evaluated directly against each other. While these changes will hopefully make the bid and proposal process simpler and less costly, it remains to be seen how the government will preserve much-needed transparency and competition.
- More flexibility and authority for Government Services Administration (GSA). FAR Part 8: Required Sources of Supplies and Services updates how the government uses large multi-award governmentwide contract vehicles to leverage its buying power and streamline the acquisition process. Notably, the Federal Supply Schedule (FSS) buying procedures have been moved from FAR Part 8 to GSA’s individual acquisition regulatory supplement (GSAR). This gives GSA maximum flexibility and control over how the rest of the government interacts with GSA-managed governmentwide contract vehicles.
- New mandatory governmentwide contracts. FAR Part 8 also establishes a new tier of governmentwide contracts — known as “required use” contracts — for which governmentwide use is mandatory. This furthers the policy of Executive Order 14271, Ensuring Commercial, Cost-Effective Solutions in Federal Contracts, by requiring agencies to procure commercial products and commercial services to the maximum extent possible, using a contract designated by the Office of Federal Procurement Policy (OFPP) as a “required use” contract, when available. This explicit preference for purchasing commercial solutions is an important step towards encouraging government buyers to leverage private sector innovation. Questions remain, however, as to how OFPP and GSA will ensure “required use” contracts still promote competition and opportunities for new and innovative offerings in the federal marketplace.
- Consolidating the government’s buying power for technology. Although not directly part of the Revolutionary FAR Overhaul, GSA’s role in the federal acquisition landscape continues to expand, including its support of the OneGov Strategy. OneGov is designed to consolidate and leverage governmentwide demand to increase access to volume discounts for key solutions, starting with software. GSA started with software because that is where the government “can quickly deliver the greatest savings direct from the source.” The government will not stop at software, however, and it is unclear how GSA will apply its OneGov methodology to other IT categories such as hardware.
- Changes to contractor and subcontractor relationships. As part of OneGov, GSA has also signaled its intent to transfer prime contracts from technology resellers (many of which are small businesses) to large original equipment manufacturers (OEMs). Value-added resellers (VARs) play a critical role in the federal contracting ecosystem. While GSA seems to be encouraging industry to flip the relationship between OEMs and VARs (i.e., requiring OEMs to hold prime contracts with VARs as subcontractors), it is unclear how this significant shift will work in practice. It also remains to be seen whether these changes increase efficiencies and result in the government’s desired cost savings.
- More responsibilities — but also more resources — for the government acquisition workforce. The federal acquisition workforce’s role in executing contracting reforms cannot be overstated. Alongside the regulatory overhaul, the FAR Council has invested significant time and resources into establishing non-regulatory resources to educate and support acquisition professionals. The FAR Companion and Practitioner Albums provide implementation guidance and practical tips for government contracting officers and other personnel when using the rewritten FAR. These comprehensive discretionary resources are designed to support acquisition innovation. It is unclear, however, whether these resources will be sufficient to educate and support the shrinking acquisition workforce, especially as acquisition professionals have been asked for years to do increasingly more with less.
Despite these lingering questions and challenges, ITI and the broader government contracting community is optimistic about the prospect of real reform through the Revolutionary FAR Overhaul. The success of this initiative depends on the government’s willingness to engage with industry; invest in its acquisition workforce; and continuously learn, adapt, and improve along the way. We look forward to our ongoing partnership with the Trump Administration on this transformative initiative.
Author
