Independent · not SAM.gov

The FAR overhaul, without the jargon

Updated September 2026

The Revolutionary FAR Overhaul is being called the biggest rewrite of federal procurement rules in more than 40 years, and most coverage of it is written for acquisition lawyers, not the small business actually trying to figure out what changed. Here's the plain version.

The headline change: higher thresholds, less paperwork

The dollar thresholds that trigger the most burdensome compliance requirements are going up in 2026, in one case fourteenfold. Strictly, these increases come from the FY2026 National Defense Authorization Act and the Cost Accounting Standards Board, not from the FAR rewrite itself, and one of them applies only to Defense Department contracts. Two matter most for a contractor that is growing:

• Cost Accounting Standards (CAS). From October 1, 2026, a CAS Board final rule (91 FR 56056) exempts negotiated contracts and subcontracts up to $35 million, up from $2.5 million, drops the $7.5 million trigger-contract test, and raises full CAS coverage from $50 million to $100 million. The Board estimates about 60% fewer business segments will be CAS-covered, while over 90% of the dollars now subject to CAS stay covered. One thing does not change: contracts and subcontracts with small businesses were already exempt from all CAS requirements, and still are. The new threshold matters once you outgrow your size standard or win large unrestricted negotiated work.
• Certified cost or pricing data. For Defense Department prime contracts awarded after June 30, 2026, the threshold rose from $2.5 million to $10 million, under the FY2026 NDAA's change to 10 U.S.C. 3702 and DoD class deviation 2026-O0048. Civilian agency contracts stay at $2.5 million under FAR 15.403-4. Below the threshold, or when an exception such as adequate price competition or a commercial product or service applies, certified data is not required at all.

What this means practically

For most small businesses the CAS change alters nothing day to day, because contracts awarded to them were already exempt. It helps the firm that is about to stop being small: a $20 million negotiated contract that would have pulled you into CAS last year no longer does. The DoD change helps anyone negotiating a defense contract between $2.5 million and $10 million without adequate price competition, a sole-source award for example, because the certified data package is no longer required. If you have been avoiding certain contract sizes because of the compliance burden, re-check whether a contract you ruled out is now more reachable.

What stayed the same

Small business set-asides and the Rule of Two (the requirement that contracting officers set a contract aside for small business competition if two or more qualified small businesses can reasonably be expected to bid) remain intact under the overhaul. This wasn't a rollback of small business protections, it was a simplification of the compliance machinery around larger and more complex contracts.

The unglamorous but real catch: clause renumbering

FAR and DFARS clause numbers are being renumbered as part of this process. If you have old proposal boilerplate, compliance checklists, or internal templates that reference specific clause numbers, verify they still point to the current numbering before you reuse them. This is exactly the kind of small detail that causes a proposal to look sloppy or non-compliant for no substantive reason.

Faster buying lanes

More federal purchasing is moving into simplified, faster acquisition pathways as part of the same overhaul, meaning shorter timelines from solicitation to award on qualifying purchases. If you're registered and ready (see our SAM.gov registration checklist if you're not there yet), this can mean less time between finding an opportunity and actually winning it.

The honest bottom line

This overhaul is a genuine simplification for smaller contractors, not a marketing description of one. Together with the separate 2026 threshold increases, fewer contracts trigger the heaviest compliance requirements, and the ones that do have higher thresholds before the burden kicks in. It doesn't change your eligibility, your registration requirements, or the fundamentals of how you win a contract, and it doesn't remove the need for basic financial recordkeeping regardless of CAS status.

The formal rulemaking is still under way. On September 18, 2026 the FAR Council published four more proposed rules, covering commercial buying, negotiated proposals, contract types and construction, with comments due October 19; our breakdown of the September 2026 proposed rules covers what they would change for a small business. As of September 28, 2026, the FAR Council's own tracking table shows 8 of the 12 planned rules published. The four still to come include FAR Case 2026-004, which carries part 19's small business programs, and FAR Case 2026-009, which carries part 32 on contract financing and payments.

Rule changes of this scale roll out in phases and details can shift during implementation. This describes the overhaul as reported through September 2026. The CAS and certified cost or pricing data figures were checked on September 28, 2026 against the CAS Board rule, DoD class deviation 2026-O0048 and FAR 15.403-4; verify specific thresholds and effective dates against the current text or with your contracting officer before relying on them for a live procurement.

Independent information, not legal advice. Confirm status and rules on sam.gov and the current FAR text.