Federal contractors may soon find it easier to staff service contracts with people who lack a college degree, and contracting officers who want to keep a degree requirement will have to explain why in writing. The enrolled text of H.R. 5235, the Skills-Based Federal Contracting Act of 2025, adds a new section to title 41 of the U.S. Code that bars minimum education requirements for proposed contractor personnel unless the solicitation carries that justification. The Senate passed the bill unanimously late Wednesday, Sept. 30, FedScoop reported, after the House approved it in February. It now needs a presidential signature, and no signing appeared in the sources reviewed for this article.

What New 41 U.S.C. 3313 Requires of Contracting Officers

The operative language is short. Under the new section 3313(a), "A solicitation may not set forth any minimum education requirement for proposed contractor personnel in order for a bidder to be eligible for award of a contract unless the contracting officer includes in the solicitation a written justification that explains why the needs of the executive agency cannot be met without any such requirement and clarifies how the requirement ensures the needs are met."

The bill does not ban degree requirements outright. It shifts the burden: an agency that wants a degree floor must put its reasoning in the solicitation itself, where bidders can read it. The justification has two parts. It must explain why the agency's needs cannot be met without the requirement, and it must clarify how the requirement ensures those needs are met.

Does "Degree or Equivalent Experience" Still Count?

Yes. The definitions in section 2(g) close what would otherwise be the obvious workaround. An "education requirement" includes a requirement that can be met through education alone, through education or experience, or through a combination of education and experience. Labor categories that read "bachelor's degree or four additional years of experience" fall inside the definition and need the same written justification as a flat degree mandate.

"Education" is defined broadly too. It covers an associate, baccalaureate, graduate or professional degree, as well as specified coursework or other educational attainment, awarded by a junior or community college, college or university that is accredited or approved by the appropriate state education authority to grant associate or higher degrees.

OMB's 180-Day Guidance and the 15-Month Start Date

The bill sets out a staged rollout. Within 180 days of enactment, the director of the Office of Management and Budget must issue guidance to agency heads. That guidance must include instructions for contracting officers on the justifications, "including a requirement that each use of an education requirement be determined, justified, and reviewed," and instructions that encourage "the use of alternatives to education requirements."

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The new restriction applies only to solicitations issued on or after the date 15 months after enactment. Solicitations already on the street, and those released in the first 15 months after the bill becomes law, are not covered.

Section 2(e) repeals Section 813 of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 (Public Law 106-398), as implemented in subpart 39.104 of the Federal Acquisition Regulation as in effect on Jan. 3, 2025. The repeal takes effect on the date the OMB guidance becomes effective. Within three years of enactment, the Government Accountability Office must give Congress an evaluation of agency compliance with section 3313.

From an IBM Witness to a Unanimous Senate Vote

Rep. Nancy Mace (R-S.C.) sponsored the bill with Rep. Raja Krishnamoorthi (D-Ill.), and Rep. Marie Gluesenkamp Perez (D-Wash.) co-sponsored it. Mace has traced its origin to January 2024 House testimony from an IBM executive who said "federal contractors are rarely able to place an individual without a four-year degree on a technology services contract, regardless of their qualifications," according to FedScoop's coverage of the House vote.

The House passed the bill on Feb. 23. Introducing it on the floor, Rep. William Timmons (R-S.C.) said, "We should not prohibit those with the right technical skills from performing federal contract work just because they lack a traditional degree." Rep. Suhas Subramanyam (D-Va.) argued that "federal agencies put unnecessary degree requirements on contractor positions," and Mace acknowledged some work will still call for a degree: "we expect a doctor to have a medical degree, but only a small fraction of federal contract work falls into these types of categories."

The bill advanced out of Senate committee in August before the unanimous floor vote. At a press briefing the next day, Mace pitched it in economic terms. "This opens up thousands of jobs to people who deserve them, and so it is a jobs bill," she said. Mace said the bill would be transmitted to the White House within "the next couple of days" or "up to a week," and that she had not received any indication whether President Donald Trump would sign it or veto it.

Could Hourly Labor-Category Pricing Lose Its Footing?

One commentator argues the bigger effect lands on how the government prices services. In a FedScoop opinion piece published Oct. 14, Laurie Nicol, an economist and founder of the AI bidding company Tendl, wrote that a degree requirement "is also, in effect, a requirement that a certain kind of person does the work."

In Nicol's view, removing it weakens the case for paying by the hour. "Part of what justified the rate for each labor category was the degree reinforcing it," she wrote. She also argued: "Many large incumbents are built around benches of junior staff billed by the hour, and degree requirements suited that model." Dropping them, she wrote, "opens space for firms whose delivery relies on AI and small teams." She acknowledged that whether those firms win depends on other barriers, including past performance and clearances. These are Nicol's views; the bill itself says nothing about pricing structure or contract type.

What It Means for Contractors

  • Read the labor categories. Once the 15-month clock runs out, any education floor in a solicitation, including "degree or equivalent experience" language, should come with a written justification. A requirement without one is a question to raise with the contracting officer before proposals are due.
  • Watch OMB. The 180-day guidance will set how contracting officers determine, justify and review education requirements, and will encourage alternatives. It also triggers the repeal of the Section 813 provision implemented in FAR 39.104.
  • Revisit staffing plans. Firms that hire through apprenticeships or skills-based programs may be able to bid people who were previously ineligible on paper. Resumes and key-personnel narratives may need to demonstrate skills directly rather than lean on credentials.
  • Track the signature. None of the clocks start until the bill is enacted. As of Mace's Oct. 1 briefing, its fate at the White House was unknown.

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