DoD Seeks Industry Feedback on FAR Overhaul and Microelectronics Ban
The Department of Defense has an open call for industry feedback on Phase 2 of its Federal Acquisition Regulation (FAR) overhaul, providing a window for contractors to help shape future contract models. Concurrently, the FAR Council's proposed ban on microelectronics linked to adversaries is increasing pressure on vendors to document their sourcing and cybersecurity practices. These regulatory changes follow the recent implementation of January class deviations to FAR/DFARS.
- The proposed microelectronics ban, stemming from the FY2023 National Defense Authorization Act, would prohibit executive agencies from buying products containing semiconductors from adversarial nations like China, Russia, Iran, and North Korea, with the rule set to take effect on December 23, 2027. - Specific Chinese firms targeted by the proposed semiconductor ban include Semiconductor Manufacturing International Corporation (SMIC), ChangXin Memory Technologies (CXMT), and Yangtze Memory Technologies Corp (YMTC). - The "Revolutionary FAR Overhaul" is a two-phase initiative driven by executive orders to streamline procurement regulations; Phase 1 involved issuing 31 class deviations that became effective as early as February 1, 2026. - For Phase 2 of the FAR overhaul, the DoD is actively seeking industry suggestions for changes to the FAR and DFARS to speed up technology fielding, increase wartime production capacity, and place the acquisition system on a "wartime footing". - The legislative authority for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs expired on September 30, 2025, halting new solicitations and awards and creating uncertainty for small tech companies. Industry groups like the Professional Services Council are urging Congress to reauthorize the programs, warning that the lapse could force small businesses to reduce staff or close. - A separate but related FAR Case, 2023-006, is underway to implement the "Preventing Organizational Conflicts of Interest in Federal Acquisition Act," which will update definitions and guidance on OCI and require new disclosure clauses in contracts. - The FY2026 National Defense Authorization Act mandates the DoD to create a new cybersecurity framework for the acquisition of AI/ML technologies, which will be incorporated into the DFARS and the CMMC program. - DoD Instruction 5000.90 establishes cybersecurity as a foundational requirement throughout the entire defense acquisition lifecycle, requiring program managers to continuously assess and mitigate cyber risks from the earliest stages of a program.
