Class Deviation RFO-2025-16: FAR Class Deviation for FAR Part 16 in Support of Executive Order 14275, Restoring Common Sense to Federal Procurement

Class Deviation RFO-2025-16
September 29, 2025
MEMORANDUM FOR GSA CONTRACTING ACTIVITIES
FROM AND DIGITALLY SIGNED BY: Jeffrey A. Koses, Senior Procurement Executive, Office of Acquisition Policy (MV)
SUBJECT: FAR Class Deviation for FAR Part 16 in Support of Executive Order 14275, Restoring Common Sense to Federal Procurement

On this page:

Purpose
Background
Summary of changes
Instructions
Applicability
Authority
Effective date
Have a question?

1. Purpose

This memorandum approves a class deviation to Federal Acquisition Regulation (FAR) part 16 for purposes of implementing the FAR Council’s model deviation to FAR part 16.

2. Background

Executive Order (E.O.) 14275, Restoring Common Sense to Federal Procurement, signed April 15, 2025, mandates a comprehensive review and simplification of the Federal Acquisition Regulation.

The FAR is being updated to:

Eliminate non-statutory language.
Remove redundant or obsolete language.
Enhance clarity through plain language.
Align with the new FAR framework.
Preserve essential governmentwide acquisition standards.

This project is referred to as the Revolutionary FAR Overhaul (RFO) initiative. This initiative will make the FAR more concise, understandable, and focused on core procurement requirements.

3. Summary of changes

FAR part 16, Types of Contracts, clarifies complicated policies and procedures for selecting contract type and gives the acquisition workforce new tools and flexibilities to support the guiding principles for the FAR System.

Key new improvements and flexibilities to part 16 include:

Innovative contract types that empower contracting officers to use novel contract structures. Examples of innovative contract types are expected to be included in the FAR Companion and other strategic acquisition guidance.
Significant task and delivery order procedure simplification that will help reduce administrative errors, enhance consistency, and streamline the ordering process for both federal buyers and multiple-award contract holders.
On-and-off ramps to maintain current, competitive, and innovative pools of vendors on multiple-award contracts.
Blanket purchase agreements are allowed for repetitive requirements under all multiple award contracts, providing consistency with ordering procedures for Federal Supply Schedules.

Statutory requirements retained in the RFO FAR part 16 model deviation include, but may not be limited to, the following:

10 U.S.C. §§ 3321 et seq and 41 U.S.C. §§ 3901 et seq, Specific Types of Contracts
10 U.S.C. §§ 3371 et seq, Undefinitized Contractual Actions
10 U.S.C. §§ 3401 et seq and 41 U.S.C. 4101 §§ et seq, Task and Delivery Order Contracts
41 U.S.C. § 3302, Requirements for Purchase of Property and Services Pursuant to Multiple Award Contracts
Pub. L. 109-364 Section 814 and 41 U.S.C. § 4711, Linking of Award and Incentive Fees to Acquisition Outcomes

Change	Description
Retained	16.001, “Definitions”, is retained without changes. All provisions and clauses have been retained (or remain reserved) with no changes except for four noted in the “Moved/Updated” section below.
Moved/updated	16.000, “Scope of Part”, is updated to add an important new sentence: “Except for limited instructions regarding the placement of task and delivery orders, the entirety of this part applies to the pre-solicitation phase and is meant to guide in acquisition planning.” Subpart 16.1, “Selecting Contract Types”, has been significantly restructured to consolidate policies, emphasize documentation, and provide greater flexibility to contracting officers. 16.101(a), “Policies”, clarifies that “contract types that promote the best interests of the Government, but are not described in this regulation, are permitted for use in accordance with agency procedures”. This replaces the more restrictive policy in the former 16.102(b), which stated that unlisted contract types “shall not be used, except as a deviation under subpart 1.4”. This update represents a deliberate shift from a restrictive to a permissive framework, empowering contracting officers to use novel and innovative contract structures consistent with the “Guiding Principles for the System” in RFO FAR 1.102. 16.104, “Solicitation Provision”, updates the prescription for using the provision at “52.216-1, Type of Contract”. It has been changed from mandatory (“The contracting officer shall…insert”) to discretionary (“The contracting officer may…insert”). A new Alternate I has been added for use when the solicitation allows offerors to propose an alternative contract type, reinforcing the push for greater flexibility and industry input. Subpart 16.2, “Fixed-Price Contracts”, is retained and streamlined to include updated guidance for ease of the reader. Subpart 16.3, “Cost-Reimbursement Contracts”, has been substantially streamlined and reorganized by consolidating descriptions and relocating all incentive-based contract types to subpart 16.4, “Incentive Contracts”. This restructuring declutters the subpart by removing redundant text and consolidating guidance for complex incentive contract types. New 16.302, “Cost contracts”, and 16.303, “Cost-sharing contracts”, are reduced to single-sentence descriptions, whereas the former text included separate subsections for “Description”, “Application”, and “Limitations”. The content for “Cost-Plus-Incentive-Fee” (former 16.304) and “Cost-Plus-Award-Fee” (former 16.305) contracts has been deleted from this subpart and moved to 16.405 and 16.402-3, respectively. Subpart 16.4, “Incentive Contracts”, has undergone a complete reorganization to consolidate all incentive-related policies and contract type descriptions into a single subpart. The changes centralize content, particularly for award-fee contracts, to ensure consistent application. Subpart 16.5, “Indefinite-Delivery Contracts”, has been revised to clearly outline for the acquisition workforce the types of task and delivery order contracts and how to utilize them. 16.504-4, “On-ramps and off-ramps”, is a new subsection that authorizes “on-ramping” (adding new contractors) and “off-ramping” (removing contractors) from a multiple-award contract during its ordering period. The content of the former 16.505, “Ordering”, is now distributed across three new sections: New 16.506, “Postaward Procedures for Placement of Task and Delivery Orders”, consolidates the general administrative requirements for contents of orders (formerly in 16.505(a)(7)) and other general post-award rules. New 16.507, “Additional ordering procedures for multiple-award contracts”, is now the central location for all rules related to the requirement to provide fair opportunity to be considered for orders or Blanket Purchase Agreements (BPA). It is broken down by dollar value and contains the rules for orders below the micro-purchase threshold (MPT), fair opportunity for orders and BPAs above the MPT, exceptions to fair opportunity, brand-name justifications, and the new authorization for BPAs. 16.507-2(a)(2), under “Fair opportunity procedures”, emphasizes that the contracting officer has broad discretion to develop appropriate order placement procedures and encourages innovative techniques highlighted in the Periodic Table of Acquisition Innovations. 16.507-2(c)(3), “Blanket Purchase Agreements”, is a new subsection that explicitly authorizes the establishment of BPAs under multiple-award IDIQ contracts to fill repetitive needs, if authorized in the master contract. Note - Contracting Officers must establish ordering procedures in the BPA that ensure BPA holders (but not other multiple-award contractors) are provided the fair opportunity procedures in 16.507-3 through -5. 16.507-3 through -5 consolidate fair opportunity procedures and documentation requirements fororders valued above the MPT, above the SAT, and above $7.5 million ($6 million prior to October 1, 2025). 16.507-4(a), clarifies the requirement to provide fair notice of intent to place an order for orders or BPAs valued above the SAT. 16.507-5(a) clarifies additional fair notice requirements for orders or BPAs valued above $7.5 million ($6 million prior to October 1, 2025) (previously at 16.505(b)(1)(iii)-(iv)). New 16.508, “Protests of orders”, consolidates all rules regarding the protest of task and delivery orders (previously at 16.505(a)(10)). Subpart 16.6, “Time-and-Materials, Labor-Hour, and Letter Contracts” is improved for readability and to provide clarity on these high-risk contract types. Subpart 16.7, “Agreements”, is updated with structural formatting updates to improve clarity. The following provision and clauses have been updated to reflect plain language, update cross-references, or to correspond with updates made within the part: 52.216-1 (Provision), Type of Contract 52.216-7 (Clause), Allowable Cost and Payment 52.216-21 (Clause), Requirements 52.216-22 (Clause), Indefinite Quantity The FAR Companion is expected to include best practice information on the following: Selecting contract types Factors in selecting contract type Guidance when ceiling prices are established for fixed-price contracts with prospective price redetermination Guidance on cost controls of fixed-ceiling-price contracts with retroactive price redetermination Guidance on when to consider use of a completion or term form of a cost-plus-fixed-fee contact Guidance on application of technical performance incentives Guidance on structuring and applying firm and successive target fixed-price incentive contracts Guidance on application of cost-plus-incentive fee contracts
Removed	Obsolete American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5) (ARRA) Provision (from former 16.505(a)(11)): All requirements related to publicizing orders funded by the ARRA have been removed as obsolete.

This table is not an exhaustive list.

4. Instructions

The GSA acquisition workforce shall follow the RFO part 16 model deviation text instead of FAR part 16 as codified at 48 CFR chapter 1. The Council’s RFO part 16 model deviation text is available at Acquisition.gov/far-overhaul, and is incorporated into this class deviation.
For new solicitations or contracts, when using any provisions or clauses that have been revised, utilize the RFO model deviation language at RFO FAR part 52.
For open solicitations or awarded contracts, the contracting officer has discretion regarding the need to enforce or amend the provisions or clauses. Note that without some of the removed provisions or clauses, the contracting officer may be required to separately address certain aspects in the contract.
Contracting officers for multiple award contract vehicles established prior to the effective date of this deviation, using part 16 procedures, are encouraged to modify existing contracts to allow for the establishment of BPAs (see 16.504-5(h)(2)).
Contracting activities must review templates and related standard operating procedures to align with this class deviation and remove unnecessary processes and steps.

5. Applicability

This class deviation applies to all GSA procurements.

6. Authority

This class deviation is issued under the authority of EO 14275, OMB Memo M-25- 26 [PDF], 48 CFR 1.4, and RFO FAR 1.304.

7. Effective date

This class deviation is effective November 3, 2025 and remains in effect until rescinded or incorporated into the FAR.

8. Have a question?

Try asking GSAi first (upload the new RFO language and GSA’s implementing deviation, then ask your question. Please note, GSAi is accessible to GSA employees only). If you still need clarification, email the GSA Acquisition Policy Division at GSARPolicy@gsa.gov.