The FAR Council is undertaking a systematic approach to revising the FARs. On July 17, 2025, it released its revisions to FAR Part 29 – Taxes and FAR Part 31 – Contract Cost Principles and Procedures.
Redlines showing the additions and deletions to each of these sections of the FAR below:
FAR Part 29 – Taxes
In its explanation accompanying the revisions, the FAR Council explained that:
FAR Part 29 is rooted in complex statutes, primarily tax regulations. As such, the primary revision under the RFO focused on plain language rewrite and was updated to be more direct, active, and accessible, resulting in an approximately 20% reduction in word count.
FAR Part 31 – Contract Cost Principles and Procedures
In its explanation accompanying the revisions, the FAR Council explained that:
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- The majority of the text was retained because “it supports appropriations law.”
- “Most definitions and procedures are retained to maintain uniformity across the Government.”
- “Plain language edits were made throughout to enhance readability and remove redundant, unclear, or non-essential language, decreasing the word count by more than 1,300 words”; and
- “Definitions that are well-known business definitions or otherwise defined in the Cost Accounting Standards.”
The FAR Council also included in its “Practitioner Album” a chart of the “Contractor Compensation Cap” for contracts awarded after June 24, 2014. Under 41 U.S.C. 4304 and 10 U.S.C. 3744, compensation paid to certain contractor employees in excess of a specific benchmark are unallowable costs. The benchmark increases based on inflation and the current cap, according to the FAR Council, is $671,000.
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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