OMB Pushes Biggest Federal Acquisition Reform in 50 Years

The Office of Management and Budget is overhauling how federal agencies procure goods and services, launching what officials describe as the most significant transformation of the federal acquisition system in decades. Driven by a series of executive orders, the effort substantially revises government procurement regulations with the goal of streamlining acquisition and prioritizing commercial solutions.

“The point is to change our procurement and acquisition system, transform it for the better. This is the most transformation we’ve had in roughly 50 years since the current system came into existence,” Kevin Rhodes, administrator of the OMB’s Office of Federal Procurement Policy told GovCIO Media & Research.

Revising 50 Years of Policy

President Trump signed two executive orders in April 2025, Restoring Common Sense to Federal Procurement and Promoting Efficiency, Accountability, and Performance in Federal Contracting. These two orders aim to improve how agencies acquire goods and services, directing agencies to prioritize competitive commercial solutions over government-specific offerings.

A key directive behind the executive orders was to streamline and revise the Federal Acquisition Regulations (FAR). The OMB was designated the point agency to direct this process.

Over the past year, under Rhodes’s leadership, OMB rewrote the FAR, trimming roughly 500 pages from the 2,000-page regulation. Officials also removed approximately 3,000 mandatory requirements from the FAR, eliminating “shalls” and “musts” deemed unnecessary, an OMB official said.

Focus on Rulemaking

OMB is now moving into the formal rulemaking phase. The revised rules will soon be released for public comment. Once this input has been collected and reviewed, the final rules will be formalized.

An OMB official noted that the agency has revised the entire FAR and “significantly redone” cost accounting standards that had remained largely unchanged since the 1970s. The broader goal, officials said, is to increase competition in federal acquisitions while reducing costs and accelerating delivery timelines.

“We have looked at and are reducing costs across the board for our entire government and agencies, and we are speeding our ability to deliver capability,” the official said.

Besides formalizing the changes and rulemaking, OMB is working to reduce agency supplements to the FAR. Every agency has its own supplement. For example, the official noted that the War Department has the Defense Federal Acquisition Regulation. Under the executive orders, agencies were directed to revise those supplements as well. There are 36 agency supplements across the federal government.

“It does us no good if we rewrite the FAR, reduce it to its statutory or sound procurement needs, make it usable and we have all these supplements that don’t do the same. If we don’t reduce those and align them with the FAR, we’ve failed,” Rhodes said.

Focus on Commercial Products and Services

Another major component of the acquisition overhaul is reinforcing the use of commercial products and services over bespoke government solutions.

On April 17, OMB Director Russell Vought issued a memo requiring agencies to report noncompetitive acquisition contracts for services such as IT. The memo builds on the requirements of the April 2025 executive order Ensuring Commercial, Cost Effective Solutions in Federal Contracts.

The memo states that the executive order “reaffirms and reinforces” longstanding federal policies requiring agencies to procure commercially available products and services whenever possible. One of the key statutes underpinning that requirement is the Federal Acquisition Streamlining Act of 1994, which directs agencies to prioritize commercial solutions.

Officials said previous administrations discussed acquisition reform but lacked the enforcement mechanisms to drive broad implementation. The Trump administration’s executive orders, they argued, created the momentum needed to accelerate change.

The U.S. government remains the world’s largest buyer of goods and services, with roughly $815 billion in procurement spending in 2025, the official noted.

“The reality is much of what we need to buy is already out there. We need to go and use those sources, get the product or service and then spend our time and energy if we have an agency specific need to focus on,” he said.

Cultural Shift

Beyond regulatory changes, however, officials said the greatest challenge remains changing procurement culture across agencies. The memo and the executive order help to install a commercial mindset in agency leadership down to individual teams, the official said.

The OMB is developing education programs and working with agencies to help with cultural change. Key to this is shifting mindsets from compliance-based procurement and acquisition systems to mission-first focused systems. The end goal of the FAR revisions and education efforts is creating a lasting structure and legacy within the federal government.

“I want to build a procurement and acquisition system that becomes the envy of the world,” Rhodes said. “The president has given us the visibility and the priority to do it. We are marching forward and delivering and we’re going to do it.”