On April 15, 2025, President Trump issued a sweeping Executive Order (EO) aimed at "Restoring Common Sense to Federal Procurement." This directive mandates a complete overhaul of the Federal Acquisition Regulation (FAR) within 180 days, requiring that it "contain only provisions required by statute or essential to sound procurement." For organizations doing business with the federal government, this complete overhaul of the FAR is expected to have a sizeable impact on how suspension and debarment (S&D) proceedings—currently governed by FAR 9.4—will operate in the future. Understanding these changes will be critical for any organization with federal contracts or those considering entering the federal marketplace.

Key takeaways from the EO include:

  • FAR 9.4 faces major transformation or elimination of key procedural and substantive protections for companies as the Executive Order requires removal of any FAR provisions not "required by statute or essential to sound procurement."
  • Agency authority for S&D may be consolidated or delegated to a few agencies or boards rather than distributed across all major agencies as currently structured.
  • The overhaul of the FAR and accelerated implementation timeline using class deviations clearly signal the Administration's urgent intent to transform all government procurement processes.
  • Organizations should prepare for uncertainty during this transition period as interim guidance will be issued on a rolling basis and the use of class deviations to implement revised FAR provisions and clauses prior to completion of mandatory notice and comments will create a rapidly shifting compliance landscape.
  • The "regulatory sunset" provision means that even the “legacy” portions of the FAR that survive the initial cut will expire in four years unless renewed by the FAR Council.

The implications for suspension and debarment proceedings under this Executive Order cannot be overstated. FAR 9.4 currently provides individual agencies with broad and reciprocal authority to suspend or debar contractors they determine lack "present responsibility" on behalf of the entire federal government. This decentralized approach has, at times, led to inconsistent application across agencies and created compliance challenges for contractors operating in multiple federal spaces. The Executive Order's mandate to streamline the FAR could result in a more centralized quasi-judicial S&D process, potentially consolidating legal authority under specific agencies or creating centralized debarment boards. However, decades of caselaw that ensured procedural due process protections for contractors and other entities facing exclusion actions and shaped the current regulatory debarment regime cannot be overturned by mere regulatory revision.

For federal contractors, this transition period creates both risks and opportunities. On one hand, a more streamlined and consistent S&D process could create more predictable outcomes. On the other hand, the heightened uncertainty during the transition—with potential interim guidance, class deviations, shifting enforcement priorities, and evolving standards—requires vigilance. Organizations should closely monitor developments from the Office of Federal Public Procurement Policy and the FAR Council over the coming months, as these will shape the new landscape of contractor responsibility determinations and what promises to be an entirely new debarment regime.

The EO's mandate to reform the FAR represents a once-in-a-generation opportunity to reshape how the federal government approaches suspension and debarment. Organizations doing business with the government should proactively prepare for these changes by strengthening compliance programs to adapt to new enforcement priorities, monitoring regulatory developments and enforcement trends, and seeking legal guidance to navigate the transition. Fluet's experienced Government Contracts team is closely tracking these developments and can help your organization understand the implications of these transformations to your business and develop strategies to mitigate risks while capitalizing on opportunities in this evolving regulatory environment.