The Office of Management and Budget (OMB) has taken the next major step toward implementing the General Services Administration’s (“GSA”) Revolutionary FAR Overhaul (RFO), submitting to Congress 16 legislative proposals aimed at modernizing federal acquisition law and easing statutory burdens on both agencies and contractors on July 16, 2025. The proposals, published here, underscore GSA’s commitment to aligning statutory authorities with the RFO’s ambitious deregulatory vision.
As detailed in our prior blog posts, the FAR modernization process is already well underway, with class deviations issued by FAR part and proposed rules expected in the fall. GSA has emphasized that the RFO is not limited to rewriting the FAR, however — GSA will also actively engage with Congress and the White House to remove unnecessary burdens imposed by statute or Executive Order. This legislative package shows that that effort has begun in earnest.
Below are a few highlights from the proposals.
Cost Accounting Standards
Perhaps the most significant proposal in the package would raise the threshold for Cost Accounting Standards (CAS) applicability from $2 million to $35 million. According to OMB, this change would exempt nearly half of the contractors currently covered by CAS, while still preserving coverage for more than 90% of total federal contract dollars. The proposal would also eliminate the so-called “trigger contract” threshold, which requires contractors to comply with CAS once they’ve received a covered contract above the threshold amount, another long-standing industry concern. If enacted, this change could dramatically reduce the compliance burden on small and mid-sized firms without compromising transparency on large-dollar procurements.
Raising Thresholds
The proposals would also significantly expand the availability of streamlined procedures. OMB recommends:
- Phasing in over a five-year period increases to the Simplified Acquisition Threshold (SAT)—up to $10 million for commercial purchases and $50 million for Special Simplified Procedures;
- Raising the Micro-Purchase Threshold (MPT) from $10,000 to $100,000 over the same five-year period;
- Aligning task and delivery order protest thresholds across civilian and defense agencies at $35 million;
- Adjusting statutory acquisition thresholds for inflation every three years instead of five.
Together, these changes would reduce acquisition lead time and lower costs for government and industry alike.
What Comes Next
The proposals could be folded into the FY 2026 National Defense Authorization Act or move independently through authorizing committees. In the meantime, contractors and agencies should prepare for parallel tracks of reform: continued class deviations and regulatory updates under the FAR Council, and now, the potential for statutory change. With the full FAR rewrite ongoing, the RFO is accelerating on all fronts.