On April 15, 2025, President Trump issued a sweeping executive order (EO), “Restoring Common Sense to Federal Procurement.” As reflected in its accompanying Fact Sheet, the EO promises to rewrite the Federal Acquisition Regulation (FAR), eliminate most non-statutory provisions, and usher in the “most agile, effective, and efficient procurement system possible.” As the first comprehensive overhaul of the FAR in its nearly 40-year history, the forthcoming changes may dramatically reshape how businesses of all stripes engage with the federal government. But beyond its big promises and patriotic flair, the proposed overhaul raises critical questions: Can it really be done in six months? What happens to the thousands of existing regulations around which contractors have built compliance programs?
There are a lot of known unknowns here. So while the ink is still drying, let’s point out what federal contractors need to be watching.
What the Executive Order Actually Says
The EO paints a dire and not necessarily inaccurate portrait of federal procurement as “prohibitively inefficient and costly,” and notes that the FAR is saddled with over 2,000 pages of regulations. The administration’s proposed fix is to strip it down to just the essentials by directing the Office of Federal Procurement Policy (OFPP) and the FAR Council to do the following:
- Eliminate all FAR provisions that are not required by statute
- Any non-statutory provisions that are retained should be “essential to sound procurement” or “necessary for simplicity, usability, or national/economic security”
- Rewrite the FAR in a manner that supports “simplicity and usability”
Additionally, the EO calls for consideration of a four-year regulatory “sunset” for any non-statutory provisions that survive the review.
The Timeline (and Why It’s Raising Eyebrows)
If the EO is the opening act, the timeline is the dare. The administration has given itself just 15 days to mobilize, 20 days to guide, and 180 days to rewrite the most complex procurement rulebook in the world. This isn’t just a policy shift—it’s a regulatory sprint across a $1 trillion foundation that has been evolving for decades.
- Within 15 days (by April 30, 2025): All agencies must designate a senior procurement official to assist OFPP and the FAR Council.
- Within 20 days (by May 5, 2025): OFPP and the Office of Management and Budget must issue a memorandum to agencies with implementation guidance.
- Within 180 days (by Oct. 12, 2025): The entire overhaul must be complete.
Considering that regulations often take months (or longer) to migrate through the rulemaking process, this timeline may be deemed, graciously … um … ambitious.
In fact, since the EO targets non-statutory regulations, the administration is likely trying to bypass the typical notice-and-comment rulemaking process and will instead choose to rely on implementing class deviations and interim guidance. While this shortcut would result in quicker streamlining and a better opportunity to meet its self-imposed compressed timeline, the administration’s approach is likely to leave contractors scrambling to adjust with limited input or clarity.
FAR 2.0: What We Know and What We Think We Know
While the administration has been light on specifics, some things are clear:
- Statutory clauses will stay. Provisions that mirror the U.S. Code or those that are grounded in law (like 52.219-8, Small Business Utilization) aren’t going anywhere.
- EO-based clauses may vanish. This could impact everything from socio-economic preferences to environmental considerations (both of which are already starting to disappear from the FAR).
- Agency supplements (like DFARS and GSA’s GSAM) are also on the chopping block despite being critical to agency-specific missions.
But there’s a lot of uncertainty. Namely, what qualifies as “essential” or “necessary”? Will bedrock contract clauses like 52.203-13 (Contractor Code of Business Ethics and Conduct) and 52.216-7 (Allowable Cost and Payment) survive? And, perhaps more to the point, will this simplify procurement or create a parallel system of guidance, deviation memos, and confusion?
OK … So Now What?
Federal contractors should be vigilant at this point, but there is no need to panic. Keep doing what needs to be done under existing contracts. That said, it is clear that major changes are inbound. FAR 2.0 will likely reshape the playing field in significant and possibly unpredictable ways. Here are potential key risks and impacts you should be watching now:
- Compliance Could Get Easier … or Murkier: Cutting non-statutory clauses may reduce red tape—but it could also remove key safeguards that keep expectations clear and consistent. Take FAR 52.203-13, for example. This provision is not required by statute but mandates internal ethics programs and disclosure of certain types of violations. Eliminating this clause could weaken contractor accountability and create uneven standards across contracts and agencies. Other vulnerable areas include:
- Subcontracting plans that support small business participation
- Pricing oversight in FAR Part 15
- Cybersecurity protections of all kinds (e.g., FAR 52.204-21), many of which are policy-based, not statutory
Having fewer rules might sound appealing, but less structure can lead to confusion, risk, and harder contract execution.
- Commercial Item Contracting at Risk: One of the biggest federal procurement success stories in the past 30 years has been the commercial item framework, which simplified how the government buys products and services already sold in the private sector. At the center of this model is FAR 52.212-4, Contract Terms and Conditions—Commercial Products and Commercial Services. By consolidating key terms like acceptance, warranties, payments, termination, and risk of loss into a standard format, commercial tech, software, and service providers have had a much easier time doing business with the government without extensive customization or cost-adding compliance requirements. But 52.212-4 is built on policy guidance and regulatory streamlining, not statute. Its elimination or serious revision could result in a loss of uniformity across agencies; higher barriers to entry for commercial firms unable to navigate complex, government-unique terms; slower procurement cycles due to increased legal review, negotiation time, and risk assessment; and reduced competition, particularly from small and nontraditional vendors.
- Payment Structures Could Get Shaky: If clauses like 52.216-7, Allowable Cost and Payment, are removed or revised, contractors may face greater financial risk—especially on cost-type or long-term contracts. While with FAR 52.232-25, Prompt Payment, the rendition of prompt payment itself is protected by statute (see 31 U.S.C. Chapter 39), many frameworks that govern invoicing, cost allowability, and progress payments are not. Removing or modifying those provisions could inject uncertainty into timing, eligibility, and payment mechanisms—and create cash flow challenges during performance.
- Socioeconomic Programs Could Take a Hit: Statutory programs like 8(a), HUBZone, and core small business requirements (including those for NHOs, ANCs, and Tribal entities) are expected to remain intact. However, the FAR rewrite could eliminate preferences grounded in EOs, such as those benefiting veteran-owned, women-owned, and other disadvantaged businesses. If those preferences disappear midstream, the impact on existing contracts could be significant: Contractors may face eligibility criteria tied to past awards. Agencies and contractors could be forced to reassess small business goals, partnership strategies, and compliance requirements in real time, disrupting performance and creating new layers of legal and operational uncertainty.
- Increased Risk of Protests and Litigation: As standard clauses like FAR 52.212-4 (commercial item terms), 52.204-7 (SAM registration), and others are removed or rewritten, agencies may create customized or inconsistent contract language. This fragmentation could lead to uneven application of terms, more ambiguity in solicitations, and a spike in disputes over contract interpretation. Without a clear, centralized regulatory foundation, contractors may be more likely to file bid protests over unclear evaluation criteria, scope shifts, or procedural inconsistencies—and may also face more disputes during performance. In short, fewer standard clauses may mean more arguments about what’s “standard.” That’s a recipe for delays, legal fees, and increased risk exposure on both sides of the deal.
- Delays and Disruptions Are Likely: Expect bumps in the road: New awards might slow down, contracting officers might get conflicting guidance, and the transition could temporarily jam up procurement pipelines. If you rely on fast turnarounds, prepare for turbulence. Additionally, fewer regulatory tools means more dependence on legislation to fix or add protections down the road. In a polarized political environment, that could mean slower relief if things go sideways.
Watch Closely, but Keep Working
The EO is bold. It might even be necessary in certain respects. But be careful when cheering for a rewrite before seeing the script. There’s no question that the FAR is complex. But complexity doesn’t always mean inefficiency, and oversimplifying may expose contractors—and taxpayers—to more risk, not less. For now, contractors should keep operations anchored in current law. Nothing has changed yet. But pay attention. Assess and reassess risk. Be ready to pivot when FAR 2.0 emerges—whether it’s a streamlined masterpiece or a rushed rewrite that results in more questions than answers.