The Exchange Daily is adopting a new structure aligned with the PAVE (Policy Aware Validation and Estimation) framework. Each day from Monday through Saturday, we focus on one of the six PAVE pillars. Today’s Tuesday edition centers on Pillar B: Policy & Compliance, examining active regulatory changes and new contractual requirements shaping federal acquisition.
Revolutionary FAR Overhaul Class Deviations Continue Rolling Out
Agencies are actively issuing class deviations to adopt Revolutionary FAR Overhaul model text for multiple parts. DoD has released numerous DFARS deviations, and updates to model text in early 2026 have incorporated additional executive order requirements. The overhaul aims to streamline the FAR, remove non-statutory rules, and increase acquisition flexibility.
Action for contracting teams: Monitor acquisition.gov for the latest model deviation text and ensure agency-specific deviations are current.
Section 875 Bid Protest Payment Withholding Nears Key Implementation Milestone
Section 875 of the FY 2026 NDAA directs DFARS updates allowing contracting officers to withhold up to 5 percent of payments from incumbent contractors who file GAO protests that extend performance. With the statutory timeline aligning with mid-June, key implementation details on documentation and process are expected imminently, creating new financial risk considerations for meritless protests.
Executive implication: Incumbent contractors should reassess protest strategies and pricing models to account for potential withholding exposure.
Section 812 Best Value Standard Remains in Effect for GSA MAS Orders
The statutory shift under Section 812 continues to require best-value evaluations for DoD purchases under the GSA Multiple Award Schedule. Evaluators must prioritize mission outcomes, capability durability, and long-term sustainment over lowest price alone.
Recommended step: Update source selection plans and evaluation criteria to reflect the best-value standard explicitly.
New Unbiased AI Principles Requirements Entering Solicitations
Contractual requirements for truth-seeking and ideological neutrality in AI systems are appearing in federal solicitations, consistent with Executive Order 14319 and OMB guidance. These obligations require large language models and applicable AI systems to prioritize factual accuracy, acknowledge uncertainty, and avoid embedding partisan or ideological judgments, with government evaluation rights for compliance.
Best practice: Review AI-related proposals and existing contracts for alignment with Unbiased AI Principles and prepare for testing or assessment provisions.
PAVE alignment: These developments directly support Pillar B objectives of enforcing compliance, truth-seeking, and mission-aligned acquisition under the evolving regulatory framework.
Topics We’re Tracking (But Didn’t Make the Cut)
Specific DFARS language and effective dates for Section 875 payment withholding (implementation details still emerging).
Additional agency class deviations or model text updates under the Revolutionary FAR Overhaul (rolling releases continuing).
Sources
DFARS Revolutionary FAR Overhaul Class Deviations and agency implementation updates (2025–2026) | https://www.acq.osd.mil/dpap/dars/
FY 2026 National Defense Authorization Act (P.L. 119-60), Sections 812 and 875 | Official text: https://www.congress.gov/ OMB Memorandum M-26-04 and related AI procurement guidance (December 2025–2026)
Recent analyses of FAR Overhaul and NDAA procurement reforms (Q2 2026)
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