As promised in our recent blog post, Revolutionary FAR Overhaul Update: Rulemaking Phase Begins with the Issuance of Four Proposed Rules, we’re now digging a bit deeper into FAR Case 2026-002 — one of the early pieces of the “Revolutionary FAR Overhaul.”
This proposed rule covers updates to:
- FAR Part 6 – Competition Requirements
- FAR Part 7 – Acquisition Planning
- FAR Part 10 – Market Research (removed and reserved)
- FAR Part 18 – Emergency Acquisitions (removed and reserved)
- FAR Part 26 – Emergency Assistance and Other Socioeconomic Programs
- FAR Part 37 – Service Contracting
- FAR Part 41 – Acquisition of Utility Services
A number of the edits are framed as streamlining, reorganization, and plain-language cleanup, but there are several changes with more operational impact — especially in Parts 6, 7, 37, and 41, plus “content migration” out of Parts 10 and 18.
FAR Part 6: Competition Requirements
At a high level, FAR Part 6 is the FAR’s “competition rulebook.” It sets the default expectation that agencies should pursue full and open competition to get the best value for the taxpayer — and to make sure vendors have a fair shot at Federal work.
Of course, the FAR also recognizes that there are situations where full competition isn’t realistic (or isn’t allowed). Part 6 lays out specific, limited exceptions for when an agency can restrict competition or go sole-source, and the requirements for documenting those decisions via Justification and Approval (“J&A”).
By way of background, a J&A is typically required under FAR Part 6 whenever an agency uses other than full and open competition to award a contract — i.e., when relying on certain exceptions in FAR 6.302 like Only One Responsible Source, Unusual and Compelling Urgency, or National Security (to name the more commonly used exceptions). A J&A must be signed by specific levels of authority depending on dollar value.
With that in mind, the Proposed Rule’s Part 6 changes are mostly about making the rules easier to use — while also updating approval thresholds:
- The proposed rule creates a new “Table 6-1” at FAR 6.104-2 (see Table below) that puts J&A approval levels into one consolidated chart. Practically speaking, this should make it easier for teams to quickly confirm who needs to sign based on dollar value.
- The J&A approval thresholds in that table are updated to align with FY2026 NDAA requirements, including different threshold breakpoints for DoD, NASA, and the U.S. Coast Guard at higher dollar values. If you support agencies working across both defense and civilian space, this “split threshold” approach matters.
- The rule also clarifies that the “public interest” exception to full and open competition requires an agency-head determination, but it does not require a J&A. That distinction has caused confusion in the current structure.
Here’s the proposed approval framework in a simplified view:
|
Value (including options) |
J&A Approval authority (summary) |
|
$900,000 or below |
Contracting officer (via certification required at FAR 6.104(a)(12)) |
|
>$900,000 – $20,000,000 |
Advocate for competition (not delegable) |
|
>$20,000,000 – $90,000,000 (or >$20,000,000 – $150,000,000 for DoD/NASA/USCG) |
Head of the procuring activity (delegable within limits) |
|
>$90,000,000 (or >$150,000,000 for DoD/NASA/USCG) |
Senior procurement executive (generally not delegable) |
FAR Part 7: Acquisition Planning
FAR Part 7 dictates the policies and procedures for federal agencies to conduct early, comprehensive Acquisition Planning — before the solicitation is drafted. It’s where the FAR sets expectations that agencies should think through basics like what they really need, whether commercial solutions exist, whether competition can be maximized, what contract type makes sense, whether an existing vehicle can be used, and how the acquisition strategy supports schedule and mission goals. Done well, acquisition planning is meant to avoid preventable problems later (for example, unclear requirements, avoidable sole-source rationales that become successfully challenged at Court or GAO, unrealistic schedules, poorly structured evaluation criteria, etc.) while ensuring broad industry participation. Done poorly, it’s just a paperwork drill.
In the Proposed Rule, FAR Part 7 gets a major rewrite that is aimed at creating a professional, critical thinking process tailored for each acquisition:
- The proposed rule would require acquisition planning for all acquisitions, but it would let agencies decide when a written plan is needed versus when an oral plan is enough.
- The FAR would focus more on planning outcomes (commercial buying, strong competition, appropriate contract type, and use of existing contracts where practical), while the specific contents of written acquisition plans have been moved to the FAR companion guide.
- Market research is folded into Part 7 (new Subpart 7.2), and FAR Part 10 is reserved. The Proposed Rule also deliberately becomes less prescriptive about how market research must be done, giving agencies flexibility to choose methods that fit the market.
- Industry engagement language moves from FAR 15.201 into FAR 7.105 to reinforce that talking with industry is part of smart planning. As the FAR council explained in its Public Feedback summary: this represents “a critical step that ensures businesses receive opportunities and successfully participate in the federal marketplace.”
- The proposal also unifies sections addressing consolidation, bundling, and substantial bundling into a single streamlined framework, effectively streamlining and standardizing the analysis, determination, and notification requirements. The practical benefit here is fewer separate rules for teams to learn and apply.
FAR Part 10: Market Research
Historically, FAR Part 10 has been the FAR’s home base for market research — including when it’s required and how it supports competition, commerciality decisions, and acquisition strategy. This section is now marked “Reserved,” as the content has moved into FAR Part 7.
FAR Part 18: Emergency Acquisitions
FAR Part 18 has traditionally addressed special acquisition flexibilities that may apply in disasters, contingency operations, and other urgent situations. This section is now marked “Reserved,” with much of its content having moved to FAR Part 26.
FAR Part 26: Emergency Assistance and Other Socioeconomic Programs
FAR Part 26 covers a handful of contracting program goals that don’t fit under the other socioeconomic parts (like small businesses rules, addressed at FAR Part 19).
The Proposed Rule moved much of the emergency acquisition content here to “streamline the policies and procedures pertaining to other socioeconomic programs.” Specifically:
- Emergency acquisitions policy from former FAR Subpart 18.2 is consolidated into a new FAR Subpart 26.2. So for many users, Part 26 becomes the new place to start when dealing with certain disaster/emergency-related acquisition issues.
- The Indian Incentive Program content is moved (and significantly streamlined), with more reliance on the existing contract clause framework (at FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises) rather than detailed non-statutory procedures in the FAR text. According to the Proposed Rule, “[t]he intricate policy detail provided negligible value, and the streamlined approach reduces relevant text significantly while improving readability.”
FAR Part 37: Service Contracting
FAR Part 37 establishes policies for acquiring services by contract. For example, it defines service contracts and distinguishes between different types, for example, Part 37 helps distinguish between non-personal services (where contractors retain control over their employees) and personal services (which create an employer-employee relationship with the government and generally can’t be awarded unless specifically authorized). It is also where the government draws a firm line against contractors performing inherently governmental functions, and it sets guardrails to keep service contracts aligned with mission needs and proper oversight.
Under the Proposed Rule, Part 37 is substantially reorganized, with a strong push toward clearer structure and more outcome-focused service contracting:
- Performance-based acquisition policy is consolidated into a single Subpart 37.1, rather than being spread across multiple subparts.
- The rule removes duplicative or nonessential definitions in Part 37 to reduce clutter and confusion.
- The proposed revision shifts several “miscellaneous policies” that do not apply to services contracts generally, and did not necessarily warrant a dedicated subpart, to a newly established FAR subpart 37.8, Other Service Considerations.
- Inherently governmental functions policy moves from FAR Subpart 7.5 into a new FAR Subpart 37.3. The Proposed Rule explained that this is “because determining which functions must remain governmental is a critical component of acquisition planning specifically for service contracts. Acquisition planners cannot properly plan a services acquisition without first understanding what work can legally be performed by contractors versus what must be performed by Government personnel. This reorganization recognizes that inherently governmental determinations are integral to service contract planning and should be addressed alongside other service contracting considerations.”
- The definition of “service contract” is revised to remove “identifiable task” language and better align with the FAR’s performance-based, outcomes-oriented approach (including how performance work statements are framed).
FAR Part 41: Acquisition of Utility Services
FAR Part 41 covers how agencies buy utility services — like electricity, gas, water, and sewer services. These acquisitions can be their own special category because they may involve tariffs, regulated providers, utility cooperatives, and unique local/legal constraints that bear unique operational risk.
The edits in the Proposed Rule are mainly structural, but there are two practical changes that stand out:
- The proposed rule directs civilian agencies to GSA for their procurements of utilities.
- FAR 52.241-13 is updated so it addresses compliance with utility cooperative terms more broadly, rather than focusing primarily on capital credits.
- The definition of “Utility Service” is also revised for clarity, including a cleaner structure around what is excluded from the definition.
Bottom line
As has been reiterated throughout the FAR overhaul process, FAR Case 2026-002 has been restructured to address the following two initiatives: (1) reorganize the FAR so related topics live together and (2) make the FAR easier to read by moving some “how-to” detail out of the regulatory text and into supporting resources.
For agencies, that likely means process changes, updated internal guidance, and training the acquisition workforce to employ critical thinking into every acquisition. For contractors, the benefits and risks are mostly indirect, but the ripple effects can be real, especially where changes affect planning and solicitation structure.
Stay tuned for additional blog posts from Sheppard addressing new FAR cases as they’re released.