Contractors that sell technical data and software to the government face a rewritten data-rights regime, and companies that ignore a new anti-DEI clause could land on the debarment list. The FAR Council proposed both changes on September 18 in a Federal Register rule covering FAR Parts 9, 27 and 47, one of four Revolutionary FAR Overhaul proposals published that day. Comments are due October 19, 2026.

The FAR Council (OFPP, DoD, GSA and NASA) issued four rules covering FAR Case 2026-003 (Parts 8, 12, 13, 15, 38, 44 and 51), Case 2026-006 (Parts 16, 17 and 35), Case 2026-011 (Parts 9, 27 and 47) and Case 2026-010 (Parts 14, 28, 36 and 52). The Parts 9, 27 and 47 rule says the Council "is issuing twelve proposed rules that collectively, if finalized, would streamline the FAR in its entirety." Washington Technology reports that eight of the twelve are now published.

The rules implement E.O. 14275. The Council's Summary states: "The E.O. directs the elimination of excessive acquisition regulations to stop the inefficient use of American taxpayer dollars." It calls the package phase two: "This proposed rule is one of a series that constitute the FAR Council's phase two effort to obtain public comment through formal rulemaking."

How Would the DEI Clause Become a Debarment Cause?

Case 2026-011 implements E.O. 14398 of March 26, 2026, Addressing DEI Discrimination by Federal Contractors. The order establishes that agencies should not do business with contractors that engage in any racially discriminatory diversity, equity, and inclusion activities. The Council writes: "This rule proposes to add noncompliance with the resulting FAR clause, 52.222-XX, Addressing DEI Discrimination by Federal Contractors, to the list of causes for debarment and suspension at FAR 9.406-2(b)(1) and 9.407-2(a), respectively."

The clause number still reads "XX," so the text remains open to comment.

What Replaces FAR Subpart 27.4 on Data Rights?

The rule deletes FAR subpart 27.4, Rights in Data and Copyrights, and replaces it with analogous content derived from the Defense Federal Acquisition Regulation Supplement (DFARS), split across two subparts. Subpart 27.4 would address other-than-commercial technical data and software. A new subpart 27.5 would address commercial technical data and software. The rule also adds two DFARS-derived patent clauses: FAR 52.227-24, Patents--Reporting of Subject Inventions, and 52.227-25, Patent Rights--Ownership by the Contractor (Large Business).

What Changes for SBIR and STTR Data Protection?

The proposal aligns the FAR with the SBA SBIR/STTR Policy Directive effective May 3, 2023. The data protection period becomes a single, non-extendable 20-year period. When it expires, the government receives a Government purpose rights license, not an unlimited rights license.

Which Part 9 and Part 47 Provisions Disappear?

The rule removes subpart 9.6 (Contractor Team Arrangements), section 9.106 on preaward surveys, section 9.107 (AbilityOne surveys) and subpart 9.7 (defense production pools and research and development pools). It also implements section 812(a)(6) of the FY2026 NDAA, which struck 10 U.S.C. 3243(d)(2), which had required DoD to make a determination before bearing the cost for a small business to undergo qualification-requirement testing. The rule changes FAR 9.204(a)(2)(i) to exclude DoD.

Part 47 loses 33 clauses, every one of them in the 52.247 transportation series, and the Transportation Payment and Audit section shrinks from five paragraphs to a single sentence that states the statutory prepayment-audit requirement and points to 41 CFR part 102-118. The Council is also considering moving all Part 52 clauses to a new subpart, such as 52.4.

Why Does the Council Want a Permissive Contract-Type Framework?

Case 2026-006 rewrites Parts 16, 17 and 35 in part to reflect E.O. 14402, issued April 30, 2026. The Council says "The proposed rule, if finalized, would shift the guiding principles on contract type selection from a restrictive to a permissive framework, consistent with 10 U.S.C. 3321 and 41 U.S.C. 3901."

The E.O. makes fixed-price contracts with performance-based considerations the default and preferred procurement method. A new FAR 16.104 would require the agency head to approve a written justification before use of a covered contract or order, meaning one that is other than fixed-price or firm-fixed-price, level-of-effort term. The requirement applies at or above $100 million for DoD, $35 million for NASA, $25 million for the Department of Homeland Security and $10 million for other agencies. Emergency, contingency and research and development contracts are excepted. The rule also adds a "consumption-based solution" from NDAA FY2026 section 1825, treated as firm-fixed-price, plus on-ramps and off-ramps for multiple-award contracts, BPAs under them, and task-order ordering reorganized into 16.606 and 16.607.

Why Does the Council Cite Competition Data?

Case 2026-003 re-engineers Part 12 "to be user-centric" and closer to commercial practice. In Part 15 it shifts the emphasis from "discussions" to "negotiation" and revises the definition of "deficiency." The Council argues: "By focusing on negotiation, instead of holding discussions..., both the Government and industry can benefit from meaningful negotiations that lead to a more advantageous contract award for both parties." Meaningful negotiation with each offeror in the competitive range is still required.

The rule moves the policies of Part 51 into Part 8 and removes Part 38, which it calls duplicative of the GSAR or no longer necessary. In discussing the benefit of increased competition, it cites SAM data: "According to data in the SAM Contract Award Management, roughly 45 percent of contract dollars were awarded in FY 2025 either without competition or with competition that received only one offer." The Council presents the figure as a concern the overhaul aims to address.

What It Means for Contractors

Companies with technical-data or software deliverables should compare their licensing terms against proposed subparts 27.4 and 27.5. Firms that hold SBIR or STTR awards should note the single 20-year term, which cannot be extended.

Compliance teams should read the DEI language closely. Placing noncompliance among the causes for debarment and suspension raises the stakes of any dispute over the clause, and the October 19 deadline is the chance to press for definitions.

Commercial-item vendors should track the Part 12 rewrite, and Part 15 offerors should expect exchanges framed as negotiation rather than discussions.

Teaming arrangements lose their dedicated subpart. Bidders on covered non-fixed-price contracts above the proposed dollar thresholds should expect the agency head to approve a written justification under proposed 16.104. Multiple-award sellers should study the on-ramp and off-ramp provisions.

The four rules sit in separate dockets: FAR-2026-0003, -0006, -0011 and -0010.

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