GSA Federal Acquisition Regulation (FAR) Reform Proposals Submitted By OMB To Congress

“FEDERAL NEWS NETWORK” By Richard Beutel

“A team of acquisition specialists from the Baroni Center for Government Contracting were engaged by GSA to assist in creating the statutory foundation for this sweeping consolidation mandate. In July, without any fanfare, GSA released the final version of those legislative proposals on its website.”

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“In a major legislative push, the General Services Administration has unveiled a comprehensive suite of acquisition reform proposals aimed at streamlining procurement processes, enhancing competition and encouraging innovation across federal agencies. The legislative package touches nearly every facet of government contracting — from simplified acquisition thresholds to commercial innovation pilots and small business support.

We think that industry should be aware of this major legislative push, particularly given that this year’s appropriations act statutorily codified the Trump executive order mandating this consolidation, thereby granting the executive order the full force of law.

Here are some of the details of the GSA legislative proposal.

One of the central proposals by GSA focuses on enhancing Simplified Acquisition Procedures for small-dollar contracts. Under this initiative, the threshold for simplified purchases will gradually increase as follows:

(A) $2,000,000 through Sept. 30, 2027;

(B) $5,000,000 from Oct. 1, 2027 through Sept. 30, 2030; and

(C) $10,000,000 after Sept. 30, 2030.

The goal is to reduce administrative burden, promote efficiency and maintain competitive integrity by requiring agencies to evaluate all timely offers under these streamlined procedures.

In parallel, GSA proposes broader Emergency Procurement Authority, which would enable faster response during crises or contingency operations. Thresholds for such procurements would rise to $15,000 domestically and $25,000 internationally, while the simplified acquisition thresholds would be set at $750,000 and $1.5 million, respectively. This change is designed to facilitate urgent mission-critical acquisitions without compromising oversight.

Also included is a substantial overhaul of the Micro-Purchase Threshold, which will increase from $10,000 to $100,000 over five years. Despite the flexibility this would bring, the Buy American Act will still apply to all micro-purchases above $10,000, preserving domestic preference. GSA anticipates the move could streamline over half a million transactions annually, significantly reducing the workload on contracting officials.

A key innovation-driven proposal would grant permanent Commercial Solutions Opening (CSO) authority to the Department of Homeland Security and GSA. By increasing the contract ceiling to $100 million and mirroring the Defense Department’s authority, GSA seeks to create a long-term channel for agile acquisitions from non-traditional vendors, particularly small tech firms and startups. A similar provision would authorize NASA to employ CSO procedures for acquiring cutting-edge technologies, enabling the agency to remain competitive in the rapidly evolving commercial space sector.

In addition to these procurement authorities, GSA has proposed a series of improvements to the way federal agencies issue task and delivery orders, with an emphasis on simplifying procedures, promoting fair pricing, and reducing ambiguity in service contract acquisitions. A companion provision aims to expand Section 876 of the National Defense Authorization Act, restoring its original intent by ensuring all services contracts — including construction — can benefit from price competition at the order level. This clarification comes in response to a 2023 court ruling that curtailed Section 876’s scope.

That same ruling, part of the Polaris contract protest, dealt a blow to GSA’s use of 876 authority. The court held that GSA’s interpretation was overly broad, limiting its use to time-and-materials and labor-hour contracts — a structure that is often disfavored. This ruling disrupted GSA’s multibillion-dollar IT acquisition plans and underscored the need for statutory fixes to harmonize procurement rules across agencies.

Another notable initiative addresses funding shortfalls in the Integrated Award Environment — the government’s central hub for contractor registration and contract opportunity listings. GSA proposes a nominal user fee, potentially generating $40 million annually to close a $73 million funding gap. The fee structure includes a $75 to $125 charge for new Unique Entity Identifiers and a $25 to $50 annual maintenance fee.

To strengthen the acquisition workforce, GSA recommends raising the Acquisition Workforce Training Fund contribution from 5% to 7.5% of fees collected from executive agencies. The additional funding would support the training programs of the Federal Acquisition Institute and the Defense Acquisition University, critical institutions that help train contracting officers and other acquisition workers.

Other proposals focus on supporting small businesses through expanded Small Business Innovation Research and Small Business Technology Transfer acquisition assistance, standardizing task and delivery order protest thresholds across defense and civilian agencies, and replacing outdated procurement standards with a clearer “best value” benchmark. GSA’s flagship Multiple Award Schedule program, which accounted for more than $51 billion in federal contracting in fiscal 2024, would be modernized to better reflect commercial practices and reduce entry barriers for small vendors.

The agency also aims to update cost accounting standards by raising the applicability threshold from $2 million to $35 million and eliminating outdated exemption triggers — changes designed to retain compliance over 90% of contract dollars while easing burdens on small businesses.

In a nod to longstanding contractor complaints, GSA seeks to repeal executive compensation reporting requirements, eliminate duplicative service contract inventory reports and streamline Federal Activities Inventory Reform (FAIR) Act reporting to remove obsolete data requirements. These actions, according to GSA, would reduce administrative burdens without compromising transparency.

Finally, the legislative package includes measures supporting state and local divestment from Sudan-linked companies, offering a safe harbor for investment managers adjusting their portfolios, and clarifying congressional support for fiduciaries acting on credible public data in divestment decisions.

With Congress poised to take up acquisition reform as part of the fiscal 2026 National Defense Authorization Act, GSA’s legislative agenda represents one of the most ambitious procurement modernization efforts in decades. Whether these proposals will be fully enacted remains to be seen, but their scope and focus mark a major step toward a faster, fairer and more flexible federal marketplace.”

ABOUT THE AUTHOR:

Richard Beutel is a senior researcher at the George Mason Baroni Center for Government Contracting and the founder of Cyrrus Analytics LLC. As a congressional staffer, Beutel was the original author of the Federal IT Acquisition Reform Act (FITARA) and is a nationally recognized expert in IT acquisition management and cloud policy with 25 years of private sector experience and more than a decade on Capitol Hill working on IT acquisition issues.