FAR Council Launches “Revolutionary” Overhaul: What Contractors Should Watch

On June 23, 2026, the Federal Acquisition Regulatory (FAR) Council released its first set of proposed rules implementing what the Council calls its “Revolutionary FAR Overhaul.” The package spans multiple FAR parts, including acquisition planning, competition, protests, and contract terminations. The changes are intended to formalize the class deviations implemented by many agencies over the past year.

Taken together, the four proposed rules run over 1,100 pages and reflect a broader effort to rewrite and streamline the FAR, beyond mere technical edits. It’s a significant volume of material, and the pace appears intentional. Nevertheless, the members of the Government Contracts Team at Womble Bond Dickinson are tracking matters and are here to provide guidance.

Key Features of the Proposed Rules

At a high level, the direction is consistent across the rulemakings: reduce prescriptive requirements, consolidate existing provisions, and expand contracting officer discretion.

More discretion across core acquisition functions.

Across Parts 6, 7, 10, and 18, the FAR Council continues the shift away from detailed procedures toward principle-based discretion. Competition, acquisition planning, market research, and emergency acquisition requirements are all trending toward flexibility rather than mandated processes.

Streamlining and relocation of guidance.

The FAR Council’s revisions to the rules reorganize and consolidate material currently spread across the FAR and remove or relocate non-statutory “how-to” guidance to non-regulatory sources (such as the FAR Companion). The stated goal is a shorter, easier to navigate, more statute-aligned FAR.

Targeted updates to protests (FAR Part 33).

The core protest framework remains largely intact, but the rules introduce procedural changes, including providing protesters access to a redacted source selection decision in certain agency-level reviews—changes that may encourage greater use of agency-level protest forums.

Controlled unclassified information (“CUI”) deserves particular attention.

The proposed rule represents an effort to establish a more uniform governmentwide FAR-based treatment of CUI, rather than continuing to rely primarily on agency-specific requirements, most notably DoD’s DFARS 252.204-7012 and the CMMC framework. If successful, this could reduce one of the most persistent contractor frustrations: differing agency interpretations of what constitutes CUI, how it must be marked, and what cybersecurity controls apply.

At the same time, the proposal warrants close attention. It places greater responsibility on the government to identify CUI requiring protection while continuing to hold contractors accountable for safeguarding identified information under established NIST standards. If implemented as proposed, noncompliance and proposal adequacy in this area may become more important discriminators in source selections.

Revisions to contractor conduct and terminations (FAR Parts 3 and 49).

The proposal continues a shift toward more risk-based approaches in areas such as ethics, conflicts, and termination administration, replacing uniform procedural requirements with more flexible standards.

The proposed changes in the area of terminations for convenience (Part 49) are significant. The proposed rule replaces the mandatory termination settlement proposal audit requirement for proposals at or above the certified cost or pricing data threshold to a risk-based approach in which the CO decides if audit support is needed based on a facts and risk analysis rather than a dollar threshold. In addition, the timeline for submission of termination settlement inventory schedules would be reduced from 120 days to 60 days, with extension requests due within 30 days of the termination notice versus 120 days. The deadline for submission of termination settlement proposals would be dramatically shortened from one year to 90 days, with an extension request due within 60 days instead of one year.

Supply chain and exclusion-related consolidation.

The package also includes efforts to centralize information security and supply chain requirements, including the creation of a single “do not buy” list for products, services, and sources excluded from the federal supply chain for national security reasons.

Process and Timing

The FAR Council has provided a 30-day comment period, reflecting an aggressive timeline for completing the rulemaking process.

Industry groups – including the Professional Services Council, American Bar Association, and Procurement Round Table – are mobilizing quickly to review and comment on the proposals, with a particular focus on how the rules will be implemented in practice. The compressed schedule makes targeted comments especially important, particularly where the proposed rules may affect implementation, consistency across agencies, protest strategy, termination administration, CUI handling, and the balance between binding regulation and non-binding guidance.

What This Means for You

For contractors, the most important point is not any individual change. It is the cumulative effect.

These proposals cut across foundational areas of procurement: competition, planning, protests, and terminations. But they consistently move in the same direction: fewer mandatory steps and more judgment calls at the contracting officer level.

Several practical implications follow.

The “tree shaking” is real—and useful.

Revisiting long-standing requirements and stripping out non-statutory provisions is healthy. Even if not every change proves transformative, the process forces agencies and contractors to reexamine assumptions that have developed over decades.

Most contractors will not feel this immediately.

As with most FAR changes, the practical impact will not appear all at once. Many companies will only engage with these changes when they begin to affect a specific procurement, protest, or performance issue. For many contractors, especially those operating under existing large contracts, including OASIS+ and SEWP VI, changes may or may not hit contracts immediately.

When the impact arrives, it may not look like the rule text suggests.

The most meaningful shift will come from expanded CO discretion, not just reorganized parts, plain English, and shorter provisions. The FAR may be easier to read, but it may provide less leverage where contracting officers have broader discretion.

Discretion at scale introduces variability.

The federal acquisition workforce numbers in the tens of thousands. At that scale, despite the government’s self-styling, the system functions less like a centralized buyer and more like a bazaar of acquisition officials, each executing according to their own interpretations. Expanding discretion across that population is more likely to produce variation in procurement actions.

Workforce dynamics compound the issue.

Increased discretion is arriving at a time of significant turnover within the acquisition workforce. As experienced personnel depart and newer contracting officials exercise broader authority, contractors should expect less consistency in interpretation and application.

CUI may be an early test case.

A governmentwide CUI baseline could be a meaningful improvement, particularly for contractors dealing with inconsistent agency practices. But the benefit will depend on whether agencies identify CUI clearly, mark it consistently, and apply cybersecurity expectations predictably. If they do not, the new rule could simply move old ambiguity into a new framework.

Less prescriptive rules mean fewer guardrails.

As requirements move from detailed procedural mandates to shorter rules and non-binding guidance, contractors will have fewer bright-line regulatory hooks. Outcomes will depend more heavily on how individual contracting officers exercise judgment and document decisions.

Implementation will matter more than drafting.

It is easier to draft a new rule than to achieve consistent, meaningful implementation across a procurement system of this scale. The success of the overhaul will depend on how agencies translate a more flexible FAR into day-to-day acquisition practice.

Taken together, the practical impact of the FAR overhaul will not turn on any single revision. It will come from the combination of shorter rules, greater discretion, and fewer uniform constraints across an evolving workforce.

What Contractors Should Do Now

Review and submit targeted comments, including through your professional networks and associations. The compressed timeline requires focused input on areas where increased discretion may lead to inconsistent or high-risk outcomes. CUI, protest procedures, terminations, and the treatment of non-regulatory guidance are obvious candidates for careful review. Comments coordinated through industry groups are more likely to carry weight than individual submissions.

Reassess internal assumptions. Compliance strategies built around current FAR structure, or historic understandings and experience, and mandatory requirements should be revisited.

Evaluate CUI practices. Contractors should assess how they currently identify, receive, mark, handle, and protect CUI across different agencies. A more uniform rule may help, but only if contractors can show they understand and follow the applicable safeguarding obligations.

Plan for greater variability. Capture and proposal strategies should reflect increased differences across agencies and across contracting officers. You always need to know your customer. That will be doubly true when these rules finalize.

Monitor implementation closely. The practical impact will emerge through agency practice and contract-level decisions, not the regulatory text alone.

What WBD Will Be Watching

The RFO has ambitious goals. Whether it reaches its goals will depend on agency implementation. We expect comments to these proposed rules to address several aspects of the rulemaking. In particular, comments are likely to focus on the scope of CO discretion, reliance on non-regulatory guidance, consistency among agencies, relationship to DFARS and CMMC requirements, protest implications, CUI evolution, and transition to the new FAR.

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