How the Revolutionary FAR Overhaul Rewires Part 34

The Revolutionary Federal Acquisition Regulation (FAR) Overhaul’s (FAR 2.0) changes to FAR Part 34 – Major System Acquisition provide a great example of the opportunities and challenges industry will face as the government shifts responsibilities from centralized federal regulation to acquiring agency judgment.

Introduction

On  May 6, 2025, the Office of Management and Budget (OMB) launched Revolutionary FAR Overhaul (RFO) Phase 1 of “FAR 2.0,” with the stated intent of cutting red tape and making it easier for agencies to buy cutting-edge solutions[1]. The changes proposed for FAR 2.0 are implemented as FAR deviation guidance, with formal change approvals planned for late Government Fiscal Year (GFY) 25 and beyond.

FAR 2.0 is advertised as promoting speed and reduced cost by moving non-statutory requirements for acquisition of capabilities away from a FAR-based central prescription to delegated agency judgment. Under FAR 2.0, the FAR retains only requirements mandated by statute; other content may be deleted or relocated to nonbinding federal “buying guides.” By converting mandatory clauses into advice in a buying guide, the FAR Council seeks to prove that innovation will thrive when standards are set closer to the mission. OMB memo M‑25‑26, Overhauling the Federal Acquisition Regulation, underscores this intent, urging agencies to take ownership of their acquisition frameworks rather than wait for government-wide updates.

Three Impacts on GovCon

These changes have the potential to dramatically impact government contracting (GovCon) business development, especially in pre-solicitation customer engagement and capture. Industry can expect to see a significantly increased need (and, hopefully, commensurate opportunity) to provide acquiring agencies with recommendations on how best to obtain capability and systems. This, in turn, demands an increased emphasis on understanding and rapport with those acquiring agencies.

For preparing proposals, industry needs to respond to this philosophical change in approach by viewing solicitations through the following lens: (1) anything that appears in Sections L, M, or the clause block is mandatory; (2) if the RFP elsewhere references a playbook, buyer guide or similar non-binding guidance, compare the benefit of following it against cost and schedule, and document the rationale; and (3) consider modifying your compliance/traceability matrix to distinguish mandatory from guidance.

This blog describes how the RFO’s proposed “first wave” of changes to FAR Part 34 provides a good example of the opportunities and challenges industry will experience as a result of FAR 2.0.

From FAR to FAR 2.0: A Quick Refresher

When the FAR was first issued in 1984, Part 34 – Major System Acquisition was a key part of an acquisition architecture intended to curb cost overruns and schedule slips. The intent was to impose a common, government-wide management discipline on projects whose size or technological complexity made failure especially expensive. To do that, Part 34 required agencies to: (1) describe mission need in economic and performance terms before committing to a solution; (2) structure the program around milestone decision points where senior officials could (re)assess cost, schedule, and technical risk; (3) maintain performance-measurement tools such as Earned Value Management Systems; and (4) promote competition and thereby prevent vendor “lock-in.

The RFO’s first wave revises FAR Parts 1, 34, and 52. Changes to Part 34 matter—a lot—because changes there cascade through billions of dollars in spend. The RFO’s revision of Part 34 gives agencies more freedom to shape major system acquisitions to their mission while keeping only the oversight tools that Congress and OMB have mandated in law. For industry, this means less emphasis on compliance and more responsibility to deliver the same—or better—insight and accountability than the government obtained through a 2,000+ page acquisition regulation.

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The Shift in FAR Part 34 Approach

The RFO’s changes to FAR Part 34 are consistent with the intent of moving away from a central prescription toward delegated agency judgment[2]. Table 1 summarizes the most impactful changes resulting from the FAR Part 34 revision.

Table 1: FAR Part 34 Change Impacts You Need to Know

RFO Change	What It Did	Why It Matters to Industry
Process and Paperwork Streamlining	Deleted §§ 34.000–34.005. Removes prescriptive acquisition strategy and general and system acquisition phase-specific guidance for major systems acquisition.	Gives acquiring agencies more flexibility in choosing how they obtain major systems.
Lean EVMS policy	Trimmed §§ 34.2 and reserved FAR 52.234‑2 & ‑3. Agencies are compelled to invoke Earned Value Management Systems (EVMS) only when OMB A‑11 triggers apply.[3]	Grants agencies greater authority in deciding when EVMS is to be used for sub-major acquisitions. Performance dashboards or CDRL‑based metrics may be an acceptable substitute.
Integrated Baseline Review (IBR) policy	Replaced §§ 34.202(a)–(d) with a single statement mandating that an IBR be conducted when the acquiring agency uses EVMS.	Likely to move all prescriptive components of the IBR to federal “buying guides,” leaving determination of IBR timing and content to the acquiring agency.

For acquiring agencies, the upside of these changes is the freedom to tailor metrics, reporting, and contracting to the technology and threat environment at hand. The other side of the coin is accountability; program executives must now be prepared to justify decisions such as choosing not to use EVMS. This comes at a time when agencies’ workforces are stretched thin and their most experienced practitioners may have left. Agencies that fail to grow those skills could face audit findings or protest risks as government best practices diverge across the federal landscape.

Acquisition philosophy aside, the “Lean EVMS Policy” referenced in Table 1 also comes with a significant trade-off. EVMS gives both government and industry a common, well-understood language for measuring and reporting cost and schedule health. Under the relaxed FAR Part 34 regime, programs have greater flexibility to create custom digital dashboards and reporting mechanisms, but a lack of standardization can incur costs by creating tooling churn and the potential for data‑rights disputes.

What RFO Changes to Part 34 Mean for Industry

Industry must increase its emphasis on building rapport with the acquiring agency’s Contracts staff as a result of these and other RFO changes to the FAR. The RFO’s changes to Part 34 shift authorities from federal regulation to acquiring agencies’ standards and choice in using buying guides. This suggests there will be increased space and opportunity during the pre-RFP period for companies to make recommendations directly to the acquiring agency for solicitation instructions, evaluation criteria, and requirements that serve both their company’s and the agency’s best interests.

Example: Influencing Opportunities from FAR Part 34 Changes

Companies with DCAA-certified EVMS will advocate for the benefits of proven EVMS techniques for tracking performance. Companies that lack EVMS experience will argue for the flexibility of custom dashboards and lightweight performance tracking tools. The acquiring agency will make the determination for sub-major system acquisitions.

Industry should consider investing in analytical tools and data that can show that FAR 2.0 changes are having a positive effect on outcomes.Industry might benefit by providing data that validates the RFO’s thesis, which suggests that changes to the FAR will result in lower costs and faster acquisitions. Through analysis that demonstrates the impact of the RFO’s changes to the FAR, this sort of validation can be provided both pre-RFP and in the actual proposal submissions. For example, we can expect that acquiring agencies will show interest in the prospective offeror that demonstrates that an innovative, customized approach to the Integrated Baseline Review (IBR) saves time and reduces cost over more traditional approaches.

Customer Engagement and Capture practitioners will need to become experts in the federal buyer guides. Industry will need to invest in teaching their growth staff how to best advocate for their offerings by recommending (or not) ideas from the federal buying guides and other sources. Generative artificial intelligence platforms can be trained on the guide and prompted for suggestions, but practitioners ultimately decide what makes the most sense.

Industry must monitor how its current and prospective acquiring agency customers are choosing to utilize advisory guidance from buyer guides and other sources.The original FAR Part 34 was created to provide regulations that prevent the cost, schedule, and performance issues that consistently plagued major system acquisitions. Industry growth teams will need to study how acquiring agencies are selecting guidance to ensure these highly desirable outcomes are still met.

Industry will need to assess and manage risks for sub-major acquisitions where the acquiring agencies choose to use cost, schedule, and performance dashboards that lack a common vocabulary, baseline, or data rights. Differences in interpretation by acquiring agency and industry providers can lead to inconsistent performance tracking across contracts, disputes over reporting formats, and increased litigation or claims post-award.

The government will welcome proof from industry that enables comparison of outcomes from alternative acquisition and execution strategies. With decisions pushed to the acquiring agency (and, potentially, programs), contracting officers will place greater weight on whether a bidder’s in-house analytics team can prove the efficiencies claimed from dashboards, predictive metrics, and model-based evidence.

Industry needs to be prepared for a transition period and potential pre-RFP schedule impacts resulting from the new need for Contracting Officers and Contract Specialists (GS-1102s) to interpret discretionary buying guides and justify skipping former FAR mandates. Industry should be ready to support the GS-1102 cadre with recommendations during pre-RFP shaping. The streamlining of federal acquisition regulations may continue for an extended period; therefore, industry needs to be prepared to invest in providing ongoing support.

Conclusion

The RFO’s changes to FAR Part 34 retain two foundational controls at the federal level: (1) programs that meet OMB Circular A-11’s “major acquisition for development” definition must use an EVMS or equivalent; and (2) offerors lacking a validated EVMS may not be excluded if they submit a credible plan to reach ANSI/EIA-748 compliance after award. The FAR Part 34 changes otherwise largely relocate the how-to components of FAR Part 34 to agency discretion.

The question of whether original Part 34 safeguards that are being removed would work better when centralized is, obviously, wide open. The efficiencies gained from establishing and using a shared set of definitions, content, cost-accounting data elements, and reporting schemas for major system acquisitions are not known, so it remains to be seen whether, in some cases, the baby is being thrown out with the bathwater. FAR Part 34 was established to allow the Government Accountability Office (GAO), OMB, and Congress to compare performance across agencies and spot systemic overruns early. Leaving those entirely to individual programs recreates the potential for the same cost overrun and schedule slippage risks that FAR Part 34 was created to address 40 years ago.

Bottom line: The FAR Part 34 changes entrust agencies with achieving unchanged objectives through tools that fit their missions. Where uniformity is essential for taxpayer visibility, statutory mandates remain; where flexibility is presumed to drive better outcomes, authority now resides closer to the program.

Relevant Information

• Use Mega Bids to Drive Business Growth

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By Bruce Feldman, Vice President, Lohfeld Consulting Group

Lohfeld Consulting Group has proven results specializing in helping companies create winning captures and proposals. As the premier capture and proposal services consulting firm focused exclusively on government markets, we provide expert assistance to government contractors in Capture Planning and Strategy, Proposal Management and Writing, Capture and Proposal Process and Infrastructure, and Training. In the last 3 years, we’ve supported over 550 proposals winning more than $170B for our clients—including the Top 10 government contractors. Lohfeld Consulting Group is your “go-to” capture and proposal source! Start winning by contacting us at www.lohfeldconsulting.com and join us on LinkedIn, Facebook, and YouTube^(TM).

SOURCES:

[1] OMB memo M‑25‑26, Overhauling the Federal Acquisition Regulation

[2] Part 34 – Major System Acquisition

[3] Note that companies are not required to have a DCAA-certified EVMS to bid on major acquisitions, per FAR Part 34.201(b): “If the offeror proposes to use a system that has not been determined to be in compliance with the Electronic Industries Alliance Standard-748 (EIA-748), the offeror shall submit a comprehensive plan for compliance … Offerors shall not be eliminated from consideration for contract award because they do not have an EVMS that complies with these standards.”