The FAR Council has proposed raising the dollar threshold at which a sole-source contract justification requires higher-level approval to $10 million for the Defense Department, NASA, and the Coast Guard, leaving civilian agencies at the existing $900,000 level. The change appears in FAR Case 2026-002, a proposed rule published in the Federal Register on June 23, 2026, covering FAR Parts 6, 7, 10, 18, 26, 37, and 41. The rule is one of four published that day as part of the "Revolutionary FAR Overhaul" implementing Executive Order 14275, and comments are due July 23, 2026.
Background
Executive Order 14275 directs the FAR Council to strip the Federal Acquisition Regulation down toward statute-only requirements, removing prescriptive mandates that the administration views as unnecessary friction in federal buying. The June 23 tranche spans 20 FAR parts across four separate rulemakings. FAR Case 2026-002 is the piece that touches the core competition and acquisition-planning rules in Part 6 and Part 7.
Part 6 governs full and open competition and the justifications agencies must produce when they bypass it through a sole-source award. Under the current framework, the approval authority for those justifications escalates as the dollar value climbs, with senior officials required to sign off on the largest non-competitive buys. The threshold separating routine contracting-officer or competition-advocate approval from higher-level review has stood at $900,000 for most actions. The proposed rule keeps that figure for civilian agencies but quadruples-plus the trigger for the three named defense and security organizations.
The published proposed rule runs from pages 37636 to 37674 of Volume 91, No. 119 of the Federal Register. It arrives alongside companion rules that the FAR Council describes as giving contracting officers materially more discretion by reducing the number of mandatory clauses they must apply.
Key Details
The central change in Part 6 is the new $10 million figure. For DoD, NASA, and the Coast Guard, a contracting officer can approve a sole-source award up to that amount before the higher tier of approval applies. Civilian-agency contracting officers remain bound by the $900,000 ceiling, creating a two-track system in which the same non-competitive award could require different levels of internal sign-off depending on which agency is buying.
Part 7, which covers acquisition planning, folds market-research requirements directly into the planning process rather than treating them as a separate exercise. The proposed rule also adds industry-engagement language that encourages the use of draft requests for proposals and requests for information, reflecting the broader push to encourage early communication between agencies and prospective vendors before requirements are locked in.
The remaining parts in the case round out the package. Part 10 addresses market research, Part 18 covers emergency acquisition flexibilities, Part 26 handles other socioeconomic programs, Part 37 covers service contracting, and Part 41 governs acquisition of utility services. The FAR Council has positioned all of these revisions as part of the same deregulatory effort, paired with the reduced clause load described in the companion rules.
The comment period is 30 days, closing July 23, 2026. That window applies across the entire June 23 tranche of four proposed rules, each carrying the same deadline.
What It Means for Contractors
For companies that sell primarily to DoD, NASA, or the Coast Guard, the higher threshold changes the internal calculus around non-competitive awards. Sole-source justifications valued between $900,000 and $10 million will no longer climb to the higher approval tier inside those agencies, which could shorten the internal review chain for mid-size non-competitive actions. Incumbents holding sole-source positions in that range may find follow-on awards moving with less internal friction, while competitors who rely on the higher-level review as a check on non-competitive buying lose that procedural touchpoint.
The split between defense-side and civilian thresholds matters for firms that work across both. The same dollar value that triggers senior review at a civilian agency will sit well below the trigger at DoD, NASA, or the Coast Guard. Contractors with mixed portfolios will need to track which rule applies to each opportunity rather than assuming a single approval standard across government.
The Part 7 changes raise the importance of early industry engagement. With market research folded into acquisition planning and new language encouraging contact with industry, vendors who position themselves before requirements are finalized stand to shape how solicitations are written. That front-end window becomes more consequential as the companion rules reduce the prescriptive clauses that previously constrained how contracting officers structured deals.
Because the rule is proposed rather than final, the 30-day comment period is the immediate action item. Companies that have a view on the $10 million threshold, the market-research consolidation, or the industry-engagement provisions can file comments before July 23, 2026. Trade groups and individual contractors that want to influence the final text have a narrow window to do so, and the same deadline applies to the related FAR overhaul cases published the same day.
Contractors should also read this case alongside the broader EO 14275 effort. The reduction in mandatory clauses and the expansion of contracting-officer discretion mean more of the risk and the opportunity now sits in how individual solicitations are written. Firms that build relationships with the buying activities and understand each agency's approval thresholds will be better placed than those that treat the FAR as a single uniform rulebook.
