When It Comes to Prevailing Wage Laws, the New Revolutionary FAR Overhaul is Not Very Revolutionary in Spirit

You say you want a revolution, well, you know
We all wanna change the world
You tell me that it's evolution, well, you know
We all wanna change the world

But when you talk about destruction
Don't you know that you can count me out?”

 --John Lennon, The Beatles

The so-called Revolutionary FAR Overhaul (“RFO”) is ostensibly driven by President Trump's April 2025 Executive Order (E.O. 14275), to simplify the Federal Acquisition Regulation (“FAR”). The Executive Order identifies the current FAR as “an excessive and overcomplicated regulatory framework” that has resulted in “an onerous bureaucracy” and aims create a more streamlined FAR containing “only provisions required by statute or essential to sound procurement.” As presented, the President wants to strip away non-statutory rules, cut through red tape, and encourage innovation by returning to core statutory requirements and introducing non-regulatory buying guides for agile purchasing. This overhaul aims for faster acquisitions, increased competition, and greater efficiency. The idea is to bring plain language to the FAR rewrite and allow for immediate agency-level "class deviations" to bypass lengthy rulemaking.

This is by its nature a very political goal. De-regulate industry, get rid of the rules which complicate government procurement, and thereby create efficiencies. That then justifies less bureaucracy. Indeed, something ostensibly similar has been a goal of both political parties since the Clinton-era effort to reinvent government. It is a goal many can at least understand and which has bipartisan appeal.

However, critics claim that if you rip off the mask off this de-regulatory effort, the implementation is meant to defang regulatory agencies, cripple enforcement efforts, and profit business interests. It is more reactionary than revolutionary in impetus. And the contracting agencies have for decades wanted to rid themselves of the procurement rules, avoid bid protests, and increase their bureaucratic powers. So, the Revolutionary FAR Overhaul has many advocates, and most of them aren’t revolutionaries.

Beyond the above, I am not going to comment on the full scope of the reforms and rewrite, but I have looked at the FAR Part 22 labor and employment provision changes. To my eyes they don’t seem so “revolutionary.” Mostly, what they do is move the interpretive regulations to the new FAR Companion or other resources. That may reduce their importance. And that may make it easier to evade compliance. But that isn’t likely to change much for the prevailing wage field since the FAR regulations were simply a restatement of the Department of Labor’s (“DOL’s”) Part 4 and 5 regulations found in 29 Code of Federal Regulation. Those DOL regulations have been around for a long time. Taking provisions out of the regulatory book (yet leaving DOL’s regulatory scheme in place) and leaving existing statutory provisions on the books, does NOT a “revolution” make. The final story hasn’t been written yet, and the FAR rewrite has yet to go into effect. But transferring of a few of the FAR labor rules duplicating coverage elsewhere (to a separate companion publication) isn’t likely to significantly change the status quo.

When it comes to Part 22 of the FAR and the labor and employment rules, here are the Service Contract Act (“SCA”) provisions being fiddled with and removed:

• Administrative limitations, variations, tolerances, and exemptions (former 22.1003-4(a))

• Examples of contracts covered by the Service Contract Labor Standards statute (former 22.1003-5)

• Requirement to obtain wage determinations, (former 22.1007(b) & (c))

• Wage determinations based on collective bargaining agreements (former FAR 22.1002-3(b))

• Service Contract Labor Standards, Applicability, General (former 22.1003-1)

• Repair distinguished from remanufacturing of equipment (former FAR 22.1003-6)

•  Department of Labor responsibilities and regulations (former FAR 22.1004)

• Obtaining wage determinations (former FAR 22-1008-1)

• Successorship with incumbent contractor collective bargaining agreement (former FAR 22.1008-2(d)(2))

• All possible places of performance not identified (former FAR 22.1009-4(a)(b))

• Statement of equivalent rates for Federal hires (former FAR 22.1016(b))

Looking at this list of regulatory changes, my conclusion is that the changes are likely to be modest. I will give you just two examples. First, the overhaul directs the removal of FAR 22.1016(b) from the FAR. However, essentially, these same requirements are still found in the DOL rules and in SCA statute itself. You can’t eviscerate a statutory requirement to list the equivalent grade of federal workers if the work was to be performed in house, as useless as the requirement now is. It is embedded in an early 1970’s law passed by Congress. You need to change the law. Just shuffling the regulatory furniture around is not real reform. Secondly, the same point can also be made with the FAR provisions on collective bargaining and section 4(c) of the SCA. They still have even more detailed coverage in the DOL regulations and the SCA statute. Shuffling these items out of the FAR into a FAR Companion publication won’t substantively alter the SCA requirements.

One thing they will do is make it harder for agency officials and contractors to know exactly what is required. They are going to have to look beyond the FAR. One reason for the inclusion of these provisions in the FAR in the first place was to ease the administrative compliance effort. Just read the current FAR Part 22 provisions and for the most part they tell you what to do. Now, when this reform goes into effect, you are on your own; you will need to do a deeper research dive, and that means we are naturally going to have less compliance. Of course, the absence of mandatory regulations in the FAR may open up some gaps in the enforcement of the wage laws and may give agency lawyers more defenses to contractor claims for money, since the agency is really getting more discretion, not less.

The real wild card here are the expanded provisions allowing agency FAR class deviations. This will happen contracting agency by agency. Indeed, it is happening right now. It needs to be watched closely and that will likely have the more significant impact on federal procurement.