The FAR Council is undertaking a systematic approach to revising the FARs. On August 15, 2025, it released its revisions to FAR Part 4, Administrative and Information Matters, FAR Part 8, Required Sources of Supplies and Services, FAR Part 12, Acquisition of Commercial Products and Commercial Services, FAR Part 38, Federal Supply Schedule Contracting, and FAR Part 40, Information Security and Supply Chain Security; FAR part 51, Use of Government Sources by Contractors.
Redlines showing the additions and deletions to each of these sections of the FAR are available here:
FAR Part 4, Administrative and Information Matters
The FAR Council explained that FAR Part 4:
has been reorganized within each subpart to follow the acquisition process (i.e., steps to take before solicitation versus after award). This new structure makes it easier and faster to find needed information at each stage of a procurement. A significant amount of content is also relocated to FAR part 40 to better align with security requirements.
Changes include the following:
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- Section 4.001, Definitions – includes definitions of “Executive”, “First-tier subcontract”, “Generic entity identifier”, and “Total compensation”. These terms are consolidated from the former subparts 4.6, 4.14, and 4.17.
- 203, System for Award Management– Streamlines exceptions to SAM registration and clarifies procedures for verifying active registration. Moves the list of 33 representations and certifications from 4.1202 into 52.204-7, with procedural details now in the provision.
- 208, Solicitation Provisions and Contract Clauses– Revised to serve as a central hub for solicitation- and award-phase provisions and clauses, gathering prescriptions from multiple subparts (e.g., 4.1105, 4.1303, 4.1403) into a single point of reference.
- 306, Executive Compensation– Reporting is no longer required for commercial services contracts.
Contract clauses located at FAR 52.204-3, -6, -8, -16, -17, and -20 have been consolidated into two clauses, FAR 52.204-7 and FAR 52.204-90:
Similarly, FAR 52.204-12 and 52.204-18 have been integrated into other contract clauses:
Specific changes include the following:
Definition of First Tier Subcontractor. The FAR revision added a definition of “first tier subcontractor” that provides a clearer definition of subcontractor by specifically noting that vendor and supplier agreements that benefit multiple contracts and/or are costs normally charged to overhead are not subcontracts under the FAR:
First-tier subcontract means a subcontract awarded directly by the Contractor to acquire supplies or services (including construction) for performing a prime contract. It does not include the contractor’s supplier agreements with vendors, such as long-term arrangements for materials or supplies that benefit multiple contracts and/or the costs of which are normally applied to a contractor’s general and administrative expenses or indirect costs.
SAM.gov Registration: The FAR revision also reflects the recent final rule providing that a contractor only need an active SAM.gov registration at the time of offer and at the time of award, and that lapses in a SAM.gov registration in the time between offer and award will not preclude award of a contract.
Signatures. The FAR revision includes specific language regarding the form of signature that will be required for a contract:
(a) Individuals. A contract with an individual must be signed by that individual. A contract with an individual doing business as a firm must be signed by that individual, and the signature must be followed by the individual’s typed, stamped, or printed name and the words “, an individual doing business as ______________________” [insert name of firm].
(b) Partnerships. A contract with a partnership must be signed in the partnership’s name. Before signing for the Government, the contracting officer must obtain a list of all partners and ensure that the individual(s) signing for the partnership have the authority to bind the partnership.
(c) Corporations. A contract with a corporation must be signed in the corporate name, followed by the word “by” and the signature and title of the person authorized to sign. The contracting officer must ensure that the person signing for the corporation has authority to bind the corporation.
(d) Joint venturers. A contract with joint venturers may involve any combination of individuals, partnerships, or corporations. The contract must be signed by each participant in the joint venture in the manner prescribed in paragraphs (a) through (c) of this section for each type of participant. When a corporation is participating, the contracting officer must verify that the corporation is authorized to participate in the joint venture.
(e) Agents. When an agent is to sign the contract, other than as stated in paragraphs (a) through (d) of this section, the agent’s authorization to bind the principal must be established by evidence that satisfies the contracting officer.
The revision also includes a new clause confirming that digital signatures are acceptable.
Contract Close Out. The FAR revision added a helpful table of the timelines for contact closeouts:
Contractor Record Retention. The FAR revision also includes a new table of contractors’ record retention requirements, as well as an explanation of when the retention period starts.
The following is the new table:
The revised FAR specifies the following with regard to the start of the retention period:
The retention periods in 4.705 are calculated from the end of the contractor’s fiscal year in which an entry is made charging or allocating a cost to a Government contract or subcontract. If a specific record contains a series of entries, the retention period is calculated from the end of the contractor’s fiscal year in which the final entry is made. The contractor should cut off the records in annual blocks and retain them for block disposal under the prescribed retention periods.
FAR Part 8, Required Sources of Supplies and Services
The FAR Council described the revisions to FAR Part 8 as “simplify[ing] mandatory source guidance, makes clear that Governmentwide Best-In-Class (BIC) contracts are mandatory, and retains focus on the importance of the AbilityOne Program.”
Ordering procedures have been moved to General Services Acquisition Manual (GSAM/R) Part 538, FAR Parts 38 and 51have been deleted, with their content moving to FAR Part 8 and GSAM/R Part 538.
The FAR Council provided the following graphic summarizing the consolidation and changes to FAR Part 8, FAR Part 38, and FAR Part 51.
The revisions to FAR Part 8 continues the administration’s focus on using commercial products and solutions, as well as Federal Supply Schedules and Blanket Purchase Agreements. The new FAR 8.104 states that for services or supplies for which there is not a mandatory source (such as Federal Prison Industries, Inc. or AbilityOne Participating Nonprofit Agencies), contracting officers must, to the maximum extent possible, use commercially available products or services that are available on existing contracts or Blanket Purchase Agreements:
(a) When supplies or services are unavailable from the mandatory sources listed above, agencies should procure commercial products and commercial services, including those that can be modified to fill agencies’ needs, to the maximum extent possible, in accordance with the policy of Executive Order 14271, Ensuring Commercial, Cost-Effective Solutions in Federal Contracts. When a commercial product or commercial service meets an agency’s needs and is available on an existing contract or Blanket Purchase Agreement awarded for Governmentwide use (such as the Federal Supply Schedule, Governmentwide Acquisition Contract, or other Indefinite-Delivery, Indefinite-Quantity contracts), the agency –
(1) must use the existing government-wide contract or blanket purchase agreement to buy the supply or service if the contract has been designated by the Office of Federal Procurement Policy as best-in-class, unless the head of the contracting activity provides an exception (e.g., because the contract’s terms and conditions, scope, or performance period do not meet the agency’s needs); and
(2) should consider the use of the existing government-wide contract or blanket purchase agreement if the contract has not been designated as best-in-class and there is not a suitable best-in-class contract to meet the agency’s requirements.
(b) Agencies should also consider the use of shared services to fulfill requirements. A shared service is a business or mission function provided by one agency for consumption by multiple other agencies, either within or between federal agencies.
FAR Part 12, Acquisition of Commercial Products and Commercial Services
The FAR Council stated that FAR Part 12 has been:
Fundamentally re-engineered in its structure, scope, and operational mechanics. These changes reflect an effort to create a user-centric part that champions streamlining, flexibility, and innovation when acquiring commercial products and services. Commercial procedures, as well as terms and conditions, are now significantly consolidated in Part 12.
Specific changes include the following.
Simplified Acquisition Procedures. For contracts up to $7.5 million, the FAR revision permits contracting officers to use a request for quotation followed by a purchase order:
For acquisitions valued at greater than $7.5 million, use the procedures in this subpart in conjunction with the procedures in part 15 for requests for proposals (RFPs) or part 14 for invitations for bids (IFBs), as appropriate. Use of an RFP is the preferred method because it includes consideration of past performance when evaluating offers (see 12.203(a)(2)).
This is intended to simply procurements for contracts less than $7.5 million, and will permit contracting officers to avoid formal procurement policies and steps, including not adopting formal evaluation factors and negotiating with firms submitting offerors without giving all offerors the opportunity to submit a revised offer:
12.201-1 Simplified procedures.
(a) Requirement. For acquisitions valued up to $7.5 million, issue a request for quotations (RFQ) followed by a purchase order.
(b) Legal effect of quotations.
(1) Neither a quotation nor the purchase order issued by the Government in response to a quotation forms a binding contract. The purchase order is the Government’s offer to a supplier to buy certain products or services upon specified terms and conditions.
(2) A binding contract is formed when the supplier accepts the Government’s offer, either by written acceptance of the purchase order or substantial performance of the purchase order. The contracting officer may request that the contractor provide written acceptance of the order.
(c) Method. To promote competition to the maximum extent practicable—
(1) Normally, post RFQs in the Governmentwide Point of Entry (GPE). Use the Standard Form (SF) SF 1449, Solicitation/Contract/Order for Commercial Products and Commercial Services; or SF 18, Request for Quotations; or similar agency form or automated format. For acquisitions greater than the SAT, combine the presolicitation notice and the RFQ according to 12.202(b).
(2) For acquisitions at or below the SAT, the contracting officer may choose to solicit quotations directly from suppliers. When soliciting directly-
(i) Post a presolicitation notice in the GPE according to subpart 5.1, unless an exception in 5.101(b) applies;
(ii) Solicit quotations from at least three sources; and
(iii) Whenever practicable, solicit quotations from two sources not included in the previous solicitation.
(d) Innovation. In line with 1.102, Guiding principles for the System, agencies are encouraged to use additional innovative approaches to the maximum extent practicable when soliciting quotations and issuing purchase orders to—
(1) Reduce administrative costs and lead time;
(2) Improve opportunities for small business concerns;
(3) Promote efficiency and economy in contracting; and
(4) Avoid unnecessary burdens for agencies and contractors.
(e) Other flexibilities. The following are examples of flexibilities that may be leveraged when using simplified procedures:
(1) Standing price quotation. Instead of soliciting new quotations for each purchase (see 12.201-1(c)(2)), a contracting officer may rely upon standing price quotations, as long as the contracting officer validates before award that the pricing is current and reasonable.
(2) Unpriced purchase order. An unpriced purchase order is an order for supplies or services, the price of which is not established at the time of issuance of the order.
(i) An unpriced purchase order may be used only when it is impractical to obtain pricing in advance of issuance of the purchase order. Examples of such situations include:
(A) Repairs to equipment requiring disassembly to determine the nature and extent of repairs;
(B) Material available from only one source and for which cost cannot readily be established; or
(C) Supplies or services for which prices are known to be competitive, but exact prices are not known (e.g., miscellaneous repair parts, maintenance agreements).
(ii) When issuing an unpriced purchase order, include-
(A) A realistic monetary limitation (either for each line item or for the total order) that is an obligation subject to adjustment once a firm price is established; and
(B) The following statement:
This is a firm order ONLY if your price does not exceed the maximum line item or total price in the Schedule. Submit invoices to the Contracting Officer. If you cannot perform in exact accordance with this order, Withhold Performance, and notify the Contracting Officer immediately, giving your quotation.
(iii) Follow up on each order to ensure timely pricing. Review the invoice price and, if the price is reasonable (see 12.204(a)), process the invoice for payment.
(3) Blanket purchase agreement. A blanket purchase agreement (BPA) is a method of filling anticipated repetitive needs for supplies or services by establishing “charge accounts” with qualified sources of supply. The Government is only obligated to the extent that authorized orders are placed under BPAs.
(i) BPAs may be established with-
(A) More than one supplier for supplies or services of the same type to provide maximum practicable competition; or
(B) A single firm from which numerous individual purchases at or below the simplified acquisition threshold will likely be made in a given period.
(ii) If, for a particular purchase greater than the micro-purchase threshold, there is an insufficient number of BPAs to ensure maximum practicable competition, the contracting officer shall-
(A) Solicit quotations from other sources and make the purchase as appropriate; and
(B) If practical, establish additional BPAs to facilitate future purchases if recurring requirements for the same or similar supplies or services seem likely and qualified sources are willing to accept BPAs.
(iii) The existence of a BPA does not justify soliciting from only one source or avoiding small business set-asides. The requirements in 12.102 and 12.103 apply to each order under the BPA.
(iv) The BPA must include-
(A) A statement that the supplier will furnish supplies or services, described in general terms, if and when requested by authorized individuals during a specified period and within a stipulated aggregate amount, if any.
(B) A statement that the Government is obligated only to the extent of authorized purchases actually made under the BPA.
(C) The dollar limitation for each individual purchase under the BPA, which may not exceed the threshold for use of simplified procedures at 12.201-1(a) (including the increased threshold at 12.001(c).
(D) A list of individuals authorized to place orders or make purchases under the BPA.
(E) Information that must be included in delivery or shipment documentation.
(F) Instructions for proper invoicing under the BPA (e.g., process for periodic billings).
(G) Any clauses that may be applicable to purchases under the BPA (see 12.205(b)).
(v) Review BPAs at least annually to ensure that authorized procedures are being followed. Maintain awareness of changes in market conditions, sources of supply, and other pertinent factors that may warrant making new agreements with different suppliers or modifying existing agreements.
Preference for Firm Fixed Price Contracts. The FAR revision provides that firm fixed priced contracts, with economic price adjustment clauses, are preferred and should be used ‘[t]o the maximum extent practicable’:
12.104 Contract type.
(a) Preference for fixed-price contracts. To the maximum extent practicable, use firm-fixed-price or fixed-price with economic price adjustment contract types to procure commercial products or commercial services. Follow the procedures in part 16 to use these contract types.
(b) Time-and-materials or labor-hour contracts. A time-and-materials or labor-hour contract may be used for commercial services that are procured on a competitive basis, if the services are commonly sold to the general public using these types of contracts.
FAR Part 38, Federal Supply Schedule Contracting
The FAR council deleted FAR Part 38 in its entirety. Its provisions were moved to General Services Acquisition Manual (GSAM/R) Part 538 and FAR Part 8.
FAR Part 40, Information Security and Supply Chain Security
FAR Part 40 was reorganized into three subparts:
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- Subpart 40.1, Processing Supply Chain Risk Information
- Subpart 40.2, Security Prohibitions and Exclusions
- Subpart 40.3, Safeguarding Information
New contract clauses have also been developed.
Contract clauses at FAR 52.204-24, -26, -29, -20, and -25 have been consolidated into FAR 52.240-90:
Contract clauses FAR 52.204-23, -25, -27, -28, and -30, and FAR 52.225-13, and FAR 52.240-1 have been consolidated into FAR 52.240-91:
New clause FAR 52.240-92, Security Requirements, replaces FAR 52.204-2, Security Requirements, and new clause FAR 52.240-93, Basic Safeguarding of Covered Contractor Information Systems, replaces FAR 52.204-21, Basic Safeguarding of Covered Contractor Information Systems.
FAR Part 51, Use of Government Sources by Contractors
The FAR council deleted FAR Part 51 in its entirety. Its provisions were moved to General Services Acquisition Manual (GSAM/R) Part 538 and FAR Part 8.
The opinions expressed herein are solely those of the author. This article does not constitute legal advice. For legal advice for your situation, you should contact an attorney.
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