Trump orders major changes to rules covering $1T in federal spending
The administration is directing the Office of Federal Procurement Policy to strip the FAR down to provisions “required by statute or essential to sound procurement” within 180 days.
Currently, the FAR makes doing business with the federal government bureaucratic and difficult, the Trump administration said. The White House tied the coming changes to the procurement regulations to its broader efforts to deregulate, as well as the work of Elon Musk’s Department of Government Efficiency. The cost-cutting unit has touted its push to cancel government contracts, although its record of cancellations and savings has been riddled with inaccuracies.
The order calls for agencies to work with OFPP and the FAR Council on streamlining the FAR, and to also bringing agency supplements in line with the reform effort under the direction of guidance coming within 20 days. Agencies have 15 days to designate someone to work on the effort. There will be deviation and interim guidance to follow until final reform rules for the FAR are published, the order stated.
The executive order also directs that when a new final rule is issued for the FAR, any provisions not required by statute but still deemed necessary will expire after four years, unless the FAR Council renews them. The administrator and FAR Council are also told to consider whether any new, non-statutory FAR provisions issued after the date of the executive order should similarly be given a four-year expiration.
The order follows efforts undertaken by the General Services Administration, NASA and OFPP to create a new framework that involves taking out language not required by statute. They are also pushing to remove non-essential regulations and put that material into a non-regulatory user guide, which would include a collection of best practices and lessons learned.
The second order calls for agencies to “prioritize the procurement of commercially available products and services, as required by the Federal Acquisition Streamlining Act of 1994 (FASA), rather than non-commercial, custom products or services,” according to a fact sheet outlining the directive.
Agencies may still have the capacity to procure custom products or continue with contracts for such products, so long as they file for a waiver that justifies its necessity within 60 days. Such waivers must be approved or denied in writing.
Many of the products and services governed by FASA are available through GSA's Multiple Award Schedule program, which agencies use to acquire those items at pre-negotiated pricing.
“Previous administrations evaded statutory requirements and abused the federal contracting framework by procuring custom products and services where a suitable or superior commercial solution would fulfill the Government’s needs,” the fact sheet stated, citing a 2019 Alliance for Digital Innovation report that asserted the government could have saved an estimated $345 billion over the last 25 years if it had abided by FASA.
That savings estimate was determined by comparing existing government IT spend over that time with a lower rate that matched 5% of revenue, far closer to the industry average for technology spend.
“This overreliance on custom items increased government spending and caused costly delays to the detriment of American taxpayers,” the fact sheet added.
FASA is the same law that Palantir relied on in a lawsuit — which it won in 2016 — challenging how the Army conducted a competition to build a battlefield intelligence system, dubbed Distributed Common Ground System-Army. Palantir argued the Army ignored FASA's requirement that agencies essentially first consider what is available on the commercial market before going down the custom development path.
FASA also requires agencies conduct market research before making that decision between purchasing a commercially-available or custom-built offering.
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