Capital Edge’s Tip Line #4: FAR Turns 40 & Agency Restructures

Capital Edge Tip Line – April 8, 2025

Navigating Government Contracting Updates with Chad Braley – Edition 4

Federal contracting is experiencing a seismic shift with the rewrite of the Federal Acquisition Regulation (FAR), agency restructures, and widespread layoffs that could disrupt programs and timelines. In this week’s Capital Edge Tip Line, CEO Chad Braley delivers a fast-paced breakdown of the latest developments, from the 40th anniversary of the FAR to looming compliance and audit implications across HHS, DCAA, and NIH.

Key Updates from This Week’s Tip Line

FAR Turns 40 – And It’s Getting Rewritten

????What’s happening? April 1 marked the 40th anniversary of the Federal Acquisition Regulation. Now, a major rewrite is underway.

???? What it means for you:

• The Office of Federal Procurement Policy (OFPP) is leading a complete FAR overhaul.
• Phase 1 begins with FAR deviations starting May 2025.
• Phase 2 includes a formal rulemaking process to launch the new FAR in FY 2026.
• Expect a restructured format separating statutory mandates from strategic acquisition guidance (buying guides).

Action Items: Contractors should prepare for evolving compliance requirements by reviewing current FAR sections and tracking FAR Council updates.

DCAA Reorganization – Realignment and Office Closures

???? What’s happening? The Defense Contract Audit Agency is undergoing significant restructuring.

???? What it means for you:

• DCAA is realigning into functional domains such as land, sea, and air.
• Up to 40 sub-office closures are planned to reduce lease footprint.
• Retirement buyouts have been accepted by several senior audit managers, leading to a loss of experienced personnel.
• This transition may affect audit consistency, timelines, and the availability of knowledgeable contacts.

???? Action item: Audit preparedness is more critical than ever. Ensure audit trails and documentation are up-to-date and compliant with current expectations.

HHS Layoffs – Program Offices Vanishing

???? What’s happening? Mass layoffs at Health and Human Services have eliminated entire program offices, leaving contractors with active contracts but no points of contact.

???? What it means for you:

• Uncertainty around who will manage terminations or modifications.
• Potential delays or confusion in executing existing contracts.
• Playbooks similar to USAID’s may be applied, requiring fast adaptation from contractors.

???? Action item: Immediately identify all HHS contracts and assess who your current contacts are. Prepare to act quickly on terminations or restructuring guidance.

NIH Indirect Rate Litigation – Still in Limbo

???? What’s happening? Litigation continues around NIH’s attempt to cap indirect rates on research grants.

???? What it means for you:

• No formal court resolution yet.
• If the rate cap holds, it could significantly impact research institutions’ cost recovery.

???? Action item: Stay in close contact with legal and grant management teams to monitor the case. Prepare budgets for both capped and uncapped scenarios.

Looking for Expert GovCon Guidence?

Stay Ahead with Capital Edge The pace of change in federal contracting has never been faster. The Capital Edge Tip Line is your trusted source for expert guidance on compliance, audit readiness, and regulatory transformation.

???? Have Questions? Need Help?
If any of these changes impact your business, don’t hesitate to reach out to Capital Edge Consulting for guidance.

???? Contact us today to discuss your specific challenges and compliance needs.

Stay informed. Stay compliant. Stay ahead.