FAR Overhaul & Mandatory EFT Payments: Two Federal Contracting Shifts You Can’t Ignore
If you’re a federal contractor—or trying to become one—two big changes just landed on your plate: the long-awaited Federal Acquisition Regulation (FAR) Overhaul and a new mandate requiring all federal payments to move to electronic funds transfer (EFT) by September 30, 2025. Neither is optional, and both will impact how you win contracts, get paid, and keep your business in compliance.
Let’s break it down in plain English.
What’s Changing
The FAR Overhaul, driven by Executive Order 14275 and OMB Memo M-25-26, is the first major rewrite of the Federal Acquisition Regulation in decades. The goal? Strip out non-statutory fluff, simplify language, and make it easier for contracting officers and businesses to navigate the rules. The Office of Federal Procurement Policy (OFPP) and the FAR Council have even launched a dedicated page on Acquisition.gov where you can track updates, see draft changes (right now covering FAR Parts 1, 6, 10, 11, and 34), and access practitioner tools.
At the same time, Executive Order 14247 is forcing every federal contractor to switch to EFT payments—goodbye paper checks—by 09/30/2025. Agencies will use direct deposit, prepaid cards, or other digital payment systems for all disbursements and receipts. The reasoning? Reduce costs, cut fraud, and speed up payment processing.
Why This Matters for Small Businesses
For small businesses—whether you’re pursuing SBA 8(a) certification, women-owned small business certification, or disabled veteran small business certification—these changes hit in two ways:
Compliance Risk – Miss the EFT deadline, and you risk delayed payments. Forget to adapt to the FAR changes, and you could lose out on awards because your proposals don’t align with the updated language or requirements.
Competitive Edge – The FAR rewrite is meant to make federal contracting simpler, but only for those who pay attention. If you get ahead now, you’ll be ready to pivot proposal language and internal processes before your competitors do.
Cash Flow Stability – Faster, secure payments via EFT mean less waiting on the mail and more predictable revenue—critical for firms juggling payroll, subcontractors, and material costs.
Action Steps You Should Take Now
Visit the FAR Overhaul Page – Go to Acquisition.gov/far-overhaul and bookmark it. Check the draft texts for FAR Parts 1, 6, 10, 11, and 34. If these touch your NAICS code for government contractors, start updating proposal templates now.
Review Your NAICS Codes and Certifications – This is a good time to make sure your contractor NAICS code and any federal contracting certifications (8(a), WOSB, SDVOSB, HUBZone) are current. The overhaul may indirectly change how agencies scope solicitations and set aside opportunities.
Update Your Payment Information – Contact your contracting office today to switch to EFT or FEDWIRE. Don’t wait until September. Confirm your banking details match SAM.gov to avoid mismatches that cause payment rejections.
Train Your Team – If you have a proposal writer or use outside government contract proposal writing services, make sure they understand the FAR changes. This applies whether you handle proposals in-house or outsource to experts in 8(a) contract services or SBIR grant assistance.
Audit Your Back Office – Make sure your accounting software and payment reconciliation processes are set up for EFT. This is especially important if you’re pursuing complex awards like SBIR/STTR grants or larger prime contracts.
Big Picture
Federal contracting is already competitive—just ask anyone chasing the best NAICS codes for small business awards. The FAR Overhaul is a rare opportunity to level the playing field for smaller firms that can adapt quickly, and the EFT mandate is a practical nudge toward modern, efficient payment systems. Together, they could make doing business with the government simpler and faster—if you prepare now.
Contractors who ignore these updates will scramble later. Those who take action now will glide into FY2026 with cleaner compliance, faster cash flow, and a stronger bid position.
For a deeper dive into aligning your NAICS codes and targeting the right opportunities post-overhaul, check out our related post: Top NAICS Codes for Small Business Federal Contracts in FY2025 (So Far).” It’s packed with strategies to make sure you’re chasing the right work, not just the first RFP you see.
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