WASHINGTON — A key defense industry organization is urging the Trump administration to make more aggressive changes to the federal acquisition process, according to details shared with Breaking Defense.
In a Dec. 2 letter to the Office of Management and Budget, the Aerospace Industries Association wrote that the administration has taken “significant steps” to reform the Federal Acquisition Regulations (FAR) but could “go farther to achieve President Trump’s vision of faster acquisitions, greater competition, and better results.”
The FAR hasn’t gone through a comprehensive overhaul since it was first implemented in 1984, making this a “once in a generation opportunity” to realize the administration’s goal of speeding up the acquisition process, said Margaret Boatner, AIA’s vice president of national security policy, in an interview with Breaking Defense.
“We think that they’ve done some really, really great things in there. But again, this is a really rare opportunity to attack some of those requirements that are most burdensome,” she said. “That’s what we try to identify in this letter — where can we go further in streamlining those requirements that really are the ones that add to the timelines, and that are the ones that disincentivize certain elements of industry from participating.”
Of the five recommendations listed in the letter, Boatner highlighted two items that stand above the rest in terms of the impact they could have on simplifying the acquisition process.
The first calls for the administration to streamline the requirements for industry to submit cost and pricing data. Industry has long argued that these requirements — which force companies to disclose information about the cost of goods and services so that the government can ensure pricing is fair — is overly burdensome and leads to some companies choosing not to work with the government.
The revised FAR put forward by the government tries to handle this by directing contracting officers to “obtain the type and quantity of data required to establish a fair and reasonable price, but not more data than is needed.” However, AIA argues that this guidance is not specific enough and recommends that the government conduct a comprehensive review of the language surrounding cost and pricing, which would allow it to streamline regulations down to only what is required by law.
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“It is one of those single levers that, if streamlined, would really make a very significant impact on shortening procurement timelines and enabling the process to move faster,” Boatner said.
The other critical recommendation involves “allowable costs,” the term used to describe what costs are reimbursable by the government to a contractor. AIA contends that the revised FAR does not “substantively change” the current framework, which forces contractors to absorb certain costs, thus leaving it up to companies whether to spend their own funds on investments that could improve readiness and innovation.
For example, “there’s lots of calls from Secretary [Pete] Hegseth and other Pentagon leadership to industry to be able to surge production,” Boatner said. “But industry cannot put excess capacity costs on a federal contract. We’re literally prohibited from doing it. So it’s very frustrating for industry.”
In the letter, AIA also makes recommendations aimed at enabling the procurement of commercial products and maintaining competition, as well as changes that could make it easier for contracting officers to understand and follow the new FAR.
The Trump administration’s FAR overhaul, triggered by an April executive order, comes as the Pentagon and congressional defense committees move forward with their own acquisition reform efforts.
As the administration enters the formal rule making stage of the FAR overhaul, AIA is currently formulating specific language that can be implemented for some of its recommendations, including for allowable costs and cost and pricing data, Boatner said.
“We would love for them to bring industry in and work on these two problems in particular, to come up with a proposed solution set prior to that formal rule making, so that we’re still leveraging all of this momentum that everybody has with the FAR overhaul to make really good progress here,” she said.