FAR Overhaul gives contracting officers more flexibility on contract type

In addition to a proposed rule focused on commercial buying, the FAR Council simultaneously released a batch of other changes focused on contract types that should give acquisition officials greater flexibility.

The proposed rule posted Friday rewrites Federal Acquisition Regulation Parts 16, 17 and 35. These sections cover types of contracts, special contracting methods, and research and development contracting.

The proposal is intended to shift what the council calls the “guiding principles” for contract type selection from a restrictive to a permissive framework. The council seeks to allow agencies to more easily utilize contract types not explicitly mentioned in the FAR.

As with the other proposals, the rewrite is intended to give acquisition teams more flexibility to pick the contract type that best fits the mission and the objectives of the contract.

The guiding principle is essentially to pick the contract type that “promotes the best interest of the government and is not expressly prohibited by statute,” according to the proposed rule.

The rule also folds in the executive order Promoting Efficiency, Accountability, and Performance in Federal Contracting, issued in late April

That order sets fixed-price contracts with performance-based considerations as the default contracting choice. Agencies will have to justify, in writing, any use of non-fixed-price contract types above certain dollar thresholds.

Other notable changes in the proposed rule:

• A formal definition of "consumption-based solutions" — supplies or services billed on actual usage, like cloud computing capacity — treating them as a form of firm-fixed-price contracting, per the 2026 National Defense Authorization Act.
• New policies for "on-ramping" and "off-ramping" contractors from multiple-award contracts, aimed at keeping vendor pools competitive over a contract's life.
• Authorities to issue blanket purchase agreements under multiple-award contracts, similar to what is already allowed under the GSA schedule.
• Removal of the general five-year limit on contract duration, replaced with a requirement to follow whatever statutory or regulatory limits actually apply.
• Expanded use of the "option to extend" and "option for increased quantity" clauses to cover both services and supplies, not just one or the other as under current rules.

Comments on this rule (FAR Case 2026-006, Docket No. FAR-2026-0006) are due Oct. 19, the same deadline as the other rules published on Friday.

The FAR Council also published a third proposed rule the same day covering Parts 14, 28 and 36. These sections with sealed bidding (Part 14) and bonds and insurance (Part 28).

The council says in the proposed rule that they don’t expect the changes to have a significant impact on industry. Comments are due Oct. 19

The changes to Part 36 deal with construction and architect-engineer policies by removing redundant text, but do not change fundamental requirements.