On May 9th, President Trump issued an executive order titled “Fighting Overcriminalization in Federal Regulations.” Some numbers cited in executive order: The Code of Federal Regulations contains over 48,000 sections, stretching over 175,000 pages, and by some estimates contained hundreds of thousands or strict-liability criminal provisions. In a country where received wisdom tells us that ignorance of the law is no excuse, that is more than any person, and almost any organization, can keep track of. It is also expensive. A report published by the House Budget Committee claimed that it costs the economy more than $2 Trillion annually to comply with those regulations.
On the same day, President Trump issued an executive order making it procedurally easier to reduce federal regulations.
These orders are consistent with at other statements by this administration, including an order to revise the Federal Acquisition Regulations, one to rescind a series of potentially unlawful regulations, and others. It is also consistent with the previous Trump administration, which famously had a rule to delete two regulations for every one enacted.
Of course, many regulations are necessary. Our firm focuses on the FAR, and having a baseline of well-known and understood contract clauses to begin negotiations with the government is extremely useful and efficient. Some of those clauses are unfair, of course, but at least contractors know that going in.
That said, there are FAR clauses that are indefensible and clauses that cause more problems than they solve. It is trite to hope that only the indefensible and inefficient clauses are removed because few people agree on which clauses fall into those buckets. Everyone will likely have clauses removed (or fundamentally rewritten) that they like, and ones left alone that they think should be removed.
The important thing for contracts is to focus on the changes and react quickly. Many changes to the FAR won’t impact contractors absent a contract modification, but no contractor should wait to hear from their CO before preparing to a published change. And those changes are coming soon. Indeed, some agencies have released deviations to help prepare for those changes. We’ve even started to hear some rumors on the substance of those changes.
If you have questions on the process, need help adjusting to the changes, or have information that you want to share on the new FAR or any other regulation change, please feel free to reach out to me at [email protected], or to any of our other attorneys.
