Major Reform of US FAR: Engineering Contracting Market Ushers in Rule Restructuring

Major U.S. FAR Reform: Engineering Contracting Market Ushered into Rule Restructuring

Introduction The U.S. Federal Acquisition Regulation (FAR) is the core regulation governing how the federal government conducts procurement of goods and services, covering a wide range of areas including defense, infrastructure, and scientific research. In 2025, with the signing of Executive Order 14275, "Restoring Common Sense in Federal Procurement," the FAR initiated a comprehensive reform described as "revolutionary." The reform aims to streamline processes, improve efficiency, and have a profound impact on major buyers such as the U.S. Department of Defense. For global engineering contractors and infrastructure investors, understanding the direction and pace of this reform is a prerequisite for participating in U.S. federal projects.

Project Background: Why Rewrite the FAR? Since its promulgation in 1984, the basic framework of the FAR has remained unchanged for decades, drawing criticism from the industry for its lengthy processes and high compliance costs. In defense engineering in particular, contractors often have to deal with multi-level approvals and complex clauses. The issuance of Executive Order 14275 signals a policy-level determination to reshape the procurement system with "common sense." According to the reform plan, every part of the FAR will be systematically rewritten, accompanied by a "Companion Guide" to explain the new rules. As of April 2026, revised versions of FAR Parts 1-51 have been published as searchable PDFs on acquisition.gov/far-overhaul, with the second edition of the Companion Guide also being rolled out successively.

Key Progress: Timeline and Participation Mechanisms - Official Platform: The FAR Overhaul official website has become the authoritative channel for accessing the new provisions, with both the revised PDFs and Companion Guides available for download. - Crowdsourced Feedback: The U.S. Office of Federal Procurement Policy (OFPP) is collecting industry suggestions through a crowdsourcing platform, with a deadline of January 12, 2026. Industry professionals can submit comments under categories such as "Start Practicing" and "Stop Practicing," offering an important opportunity to influence rulemaking before the new regulations are officially released. - Clause Updates: FAR Part 52 (Contract Clauses) has been fully refreshed in HTML format, with a "Practitioner's Handbook" and a clause change matrix clearly listing deleted, updated, or retained clauses.

For the engineering and construction industry, the revision of FAR Part 36 (Construction and Architect-Engineer Contracts) is particularly critical. It directly governs the procurement methods, design competitions, and contract types for federal construction projects, and its changes will reshape bidding strategies and project execution models.

Industry Impact: Opportunities and Challenges for Engineering Contractors The FAR reform centers on "simplification" and "efficiency," which means a two-way impact for engineering contractors. On one hand, streamlined processes are expected to shorten procurement cycles and reduce bidding costs, especially easing compliance burdens for small and medium-sized contractors. On the other hand, substantive changes to contract clauses require contractors to reassess risk allocation, payment terms, and dispute resolution mechanisms.It is worth noting that the reform's tilt toward Department of Defense procurement may bring more flexible arrangements, but it may also strengthen information security (FAR Part 40) and supply chain security requirements. Contractors need to make early preparations at both technical and management levels to cope with higher entry barriers. In addition, during the reform, the "class deviation" mechanism allows some agencies to adopt the new rules first, resulting in inconsistent implementation standards across agencies in the short term. Contractors must carefully verify the applicable FAR version before bidding.

Challenges and Risks: Uncertainty During the Transition The asynchronous nature of regulatory revisions brings the risk of "fragmentation"—some sections have been updated while others are still being drafted, which may lead to confusion in contract citations. Although crowdsourced feedback provides a channel for participation, whether the final rules will adopt industry opinions remains unknown. To this end, contractors are advised to: - Establish a dedicated tracking team to continuously monitor updates on the FAR Overhaul website; - Submit feedback through the OFPP platform before January 12, 2026; - Strengthen compliance review of solicitation documents during the transition period and clarify the applicable version; - Enhance cybersecurity capabilities to prepare for the new requirements of FAR Part 40.

Future Outlook: Reshaping a New Paradigm for Public Works Procurement If the reform proceeds smoothly, the efficiency of the U.S. federal procurement system is expected to improve significantly, infrastructure project delivery may accelerate, and more contractors will have the opportunity to enter the federal market, thereby enhancing competition and reducing public costs. At the same time, the digitalization and standardization of procurement processes will create institutional conditions for the integrated application of engineering technologies such as BIM and digital twins. Globally, the U.S. FAR reform also signals a trend of government procurement rules evolving toward greater efficiency and flexibility. For multinational engineering enterprises, adapting to the new U.S. rules is a key step in capturing global infrastructure investment opportunities.

Conclusion The U.S. FAR reform is one of the most influential institutional changes in the global public procurement sector in recent years. Although details are still being refined, the direction of the reform is already clear. For engineering contractors, design firms, and infrastructure investment institutions, understanding and adapting to the new rules as early as possible is the core strategy for winning U.S. federal projects. As the reform continues to advance, a leaner and more efficient era of procurement is arriving.

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This article is based on information from: Wiley Rein LLP – FAR Overhaul Class Deviations