Between December 2025 and March 2026, federal agencies issued more than 50 class deviations to the Federal Acquisition Regulation and the Defense FAR Supplement. Every deviation changes how contracting officers write solicitations, evaluate proposals, or administer contracts. For government contractors, the question is not whether these FAR class deviations 2026 affect your business. The question is which ones hit your chart of accounts, your indirect rate structure, and your compliance documentation first.
Amerifusion Bookkeeping has reviewed each deviation and mapped it to the accounting functions it touches. Most legal commentary focuses on procurement strategy and contract formation. This article translates the deviations into bookkeeping action items: what changes in your general ledger, what triggers new documentation requirements, and where your existing policies need updates.
Class deviations are not proposed rules. They take effect immediately. If your accounting system still references pre-deviation clause numbers, cost thresholds, or documentation standards, the gap between your books and the current regulatory requirements is growing wider every week.
What FAR Class Deviations Are and Why They Matter Now
A class deviation is a temporary change to the FAR that applies across multiple contracts, issued by an agency head when immediate action is needed before formal rulemaking finishes [FAR 1.404]. Unlike a proposed rule, a class deviation takes effect on its stated date with no public comment period. Unlike an individual deviation, it applies to every contract action within the issuing agency’s scope.
The Revolutionary FAR Overhaul (RFO), launched by Executive Order 14275 on April 15, 2025, uses class deviations as its primary implementation tool [Acquisition.gov RFO]. The FAR Council publishes model deviation text. Each agency (DoD, GSA, DOE, HHS, DHS, and others) then issues its own class deviation adopting that text. The result: over 50 deviations across more than 30 FAR Parts, with effective dates ranging from October 2025 through March 2026.
For contractors, class deviations create a dual-compliance period. Existing contracts retain old language. New solicitations use deviated language. Your accounting system, proposal templates, and compliance documentation must handle both simultaneously.
Key Takeaway: Class deviations are interim rules with immediate effect. They are not suggestions, comment periods, or proposed changes. Every deviation listed in this article is enforceable today on new contract actions.
The Master Catalog: FAR Class Deviations 2026 with Bookkeeping Impact
Not every deviation affects your books equally. The table below catalogs the deviations with direct accounting, billing, or compliance documentation impact. Deviations that change only procurement procedures without touching cost accounting are excluded.
| FAR/DFARS Part | Subject | Effective Date | Bookkeeping Impact |
|---|---|---|---|
| Part 15 | Contracting by Negotiation | Feb 1, 2026 | Cost proposal formats change. “Discussions” replaced by “negotiations.” Competitive range redefined. Update proposal cost volume templates. |
| Part 16 | Types of Contracts | Feb 1, 2026 | New contract type flexibilities, simplified task/delivery order procedures. Revenue recognition and billing processes need review for new contract structures. |
| Part 19 | Small Business Programs | Feb 25, 2026 | Set-aside hierarchy eliminated. 8(a) sole-source restrictions tightened. Revenue projections and pricing strategies need recalibration for competitive awards. |
| Part 22 | Labor Laws (EEO Removal) | Oct 2025 | FAR 22.8 (Equal Employment Opportunity) deleted. Contractor EEO reporting and related overhead costs for compliance programs may be reclassified or eliminated. |
| Part 30 | CAS Administration | Oct 2025 | Structural reorganization from 6 subparts to 4. CAS waiver reporting thresholds changed. Cross-references to FAR Part 30 in your Disclosure Statement need updating. |
| Part 31 | Cost Principles | Feb 1, 2026 | Plain-language rewrite. No substantive changes to allowability rules, but all cross-references and section citations in your policies need updating to match new numbering. |
| Part 42 | Contract Administration | Nov 3, 2025 | Performance evaluations now mandatory (previously optional). Past performance data used beyond source selection. Document contract performance more rigorously. |
| Part 52 | Solicitation Provisions and Clauses | Feb 1, 2026 | Clause renumbering across all FAR 52.2xx provisions. Every internal document citing clause numbers needs a crosswalk update. Provisions reduced from 154 to 108. |
| DFARS 231 | DoD Cost Principles | Feb 1, 2026 | Cross-references updated to match overhauled FAR Part 31. Defense-specific cost policies retain substance but change section numbers. |
| DFARS 230 | CAS Waivers | Feb 1, 2026 | CAS waiver reporting threshold changed. Cross-references updated to overhauled FAR Part 30. |
| DFARS 252 (Cyber) | CMMC Clauses | Nov 10, 2025 | CMMC Phase 1 enforcement began. Cybersecurity compliance costs (Level 2: $50K-$200K for small businesses) are indirect costs. Clause renumbered under RFO. |
| NDAA FY2026 Sec. 1806 | CAS/TINA Thresholds | June 30, 2026 | CAS per-contract threshold rises from $2.5M to $35M. Full CAS coverage from $50M to $100M. TINA threshold from $2.5M to $10M. Major reduction in formal compliance obligations for small and mid-size contractors. |
FAR Part 31 Rewrite: What Actually Changed in Cost Principles
The Part 31 deviation rewrites the language of every cost principle section in plain English. The allowability rules themselves remain substantively unchanged [Acquisition.gov FAR Part 31 Deviation Guide]. Entertainment costs are still unallowable [FAR 31.205-14]. Alcohol is still unallowable [FAR 31.205-51]. The executive compensation cap still applies [FAR 31.205-6(p)]. Lobbying costs are still prohibited [FAR 31.205-22].
The bookkeeping impact is operational, not substantive. Every internal policy, procedure manual, or training document that cites a FAR Part 31 section number needs verification against the new text. Section numbers within Part 31 remain the same, but the language surrounding them changed. If your unallowable cost identification policy quotes specific FAR language (and it should), compare that quoted language against the deviated text.
DFARS 231, the Defense supplement to Part 31, follows the same pattern. Cross-references updated to match the overhauled FAR. Substance unchanged. If you hold DoD contracts, check both the FAR and DFARS versions of every cost principle your policies reference.
Key Takeaway: The Part 31 rewrite did not change what costs are allowable or unallowable. It changed how those rules are written. Verify every regulatory citation in your accounting policies against the new text. A policy that quotes outdated FAR language signals to a DCAA auditor that your compliance documentation is not current.
CAS and TINA Threshold Changes: The Biggest Relief for Small Contractors
Section 1806 of the FY2026 NDAA delivers the most significant cost accounting threshold shift in over a decade [Forvis Mazars NDAA 2026 Analysis]. Three numbers change everything for contractors under $100 million in annual awards:
- CAS per-contract applicability rises from $2.5 million to $35 million. A single contract must exceed $35 million before CAS applies at the contract level.
- Full CAS coverage rises from $50 million to $100 million in aggregate annual CAS-covered awards.
- TINA threshold rises from $2.5 million to $10 million. Certified cost or pricing data is no longer required for contracts under $10 million.
These thresholds take effect for contracts awarded after June 30, 2026 [Government Contracts Law: FY26 NDAA CAS/TINA Updates].
Section 1806 also restructures the CAS Board itself. Beginning January 1, 2028, DCAA officials become ineligible for Board membership. The two federal government representatives must have substantial experience administering covered contracts. The Board gains up to two additional nonvoting members from academia or private sector accounting standards bodies. Staff support increases from two to at least four senior members.
What This Means for Your Books
A contractor billing $8 million annually across three DoD contracts previously triggered CAS applicability on any single contract exceeding $2.5 million. Under the new thresholds, none of those contracts require CAS compliance individually. The formal requirement for a CAS Disclosure Statement (DS-1) disappears for firms below $100 million in aggregate awards.
The TINA threshold increase eliminates the certified cost or pricing data requirement for contracts under $10 million. The documentation burden for proposals in the $2.5 million to $10 million range drops significantly. No more Certificate of Current Cost or Pricing Data. No more risk of defective pricing findings on mid-size awards.
Do not confuse reduced formal requirements with reduced audit exposure. DCAA still audits incurred costs on every cost-reimbursement contract regardless of CAS applicability. Your indirect rate calculations still need to withstand audit scrutiny. The smart move: maintain CAS-grade accounting as a competitive advantage, not a compliance burden. Contracting officers trust numbers from firms that exceed minimum requirements.
Clause Renumbering: The Hidden Accounting Operations Problem
The RFO renumbers hundreds of contract clauses across FAR Part 52 and DFARS Part 252. The total number of provisions and clauses dropped from 154 to 108 [Redstone GCI: DoD RFO Class Deviations]. Specific examples:
- Basic safeguarding: FAR 52.204-21 moved to FAR 52.240-93
- DFARS assessment clause: 252.204-7020 became 252.240-7997
- DFARS 252.204-7019 (NIST SP 800-171 provision): eliminated entirely
Every clause reference in your accounting operations touches this renumbering. Proposal cost volume templates cite FAR clauses. Subcontract flowdown matrices list clause requirements. Internal policies reference specific FAR sections for cost allowability. Timekeeping system configurations tie labor categories to contract clause requirements. Your DCAA compliance documentation cites specific clauses when describing how your accounting system meets government requirements.
Build a crosswalk document mapping old clause numbers to new ones. Assign one person to own the crosswalk. Update it each time the FAR Council releases additional deviation text. Existing contracts retain original clause numbers. New solicitations use deviated numbers. Your team will operate in both systems simultaneously for years.
Deviations Beyond the RFO: CMMC, DEI, and Performance Evaluations
Not every class deviation in 2025-2026 comes from the Revolutionary FAR Overhaul. Three non-RFO deviations carry significant bookkeeping implications.
CMMC Phase 1 Enforcement (DFARS, Nov 10, 2025)
DoD began including CMMC requirements in select solicitations on November 10, 2025 [DoD CIO CMMC]. Phase 1 runs through November 9, 2026. The DoD estimates 65% of the Defense Industrial Base will be affected. CMMC Level 2 compliance costs run $50,000 to $200,000 for small businesses.
Those costs are legitimate indirect expenses when required by contract. Classify CMMC assessment fees, remediation costs, and ongoing monitoring expenses in your overhead or G&A pool based on how they benefit your contracts. If CMMC applies to all your DoD work, G&A treatment is appropriate. If it applies to specific contract lines, overhead allocation may be more accurate. Document the allocation basis and keep it consistent [CAS 402].
EEO Requirement Removal (FAR Part 22, Oct 2025)
The RFO deleted FAR 22.8, eliminating the Equal Employment Opportunity reporting requirements for federal contractors that had been in place since 1965 [Acquisition.gov FAR Part 22]. Contractor EEO-1 reporting to the Department of Labor, affirmative action plan requirements, and related compliance infrastructure are no longer required under the FAR.
The bookkeeping question: what happens to the overhead costs you allocated to EEO compliance? If you maintained dedicated staff, software, or consulting arrangements for EEO reporting, those costs may shift from a compliance activity to a voluntary HR function. Review your indirect cost pools. Costs previously classified as required compliance overhead may need reclassification. The costs themselves are still allowable under FAR 31.205-6 (compensation) or 31.205-33 (professional services) if reasonable. The allocation rationale changes.
Mandatory Performance Evaluations (FAR Part 42, Nov 2025)
The Part 42 deviation converts several previously optional contractor performance evaluation elements into mandatory requirements [GSA: FAR Part 42 Deviation]. Past performance information now extends beyond source selection to the full acquisition lifecycle. The subpart count dropped from 17 to 13.
For contractors, this means contract performance data carries more weight in future awards. Invest time in accurate, timely performance reporting. From a bookkeeping perspective, track project performance metrics with the same rigor you apply to financial reporting. A pattern of late deliveries or cost overruns recorded in mandatory performance evaluations affects your ability to win future work, which directly impacts your revenue pipeline and indirect rate base.
Five Steps to Update Your Accounting System Before June 30, 2026
June 30, 2026 is the hard deadline for CAS and TINA threshold formalization. Use that date as your target for a complete accounting system review against all active class deviations.
- Audit every regulatory citation in your policies. Pull your timekeeping policy, compensation policy, travel policy, unallowable cost policy, and indirect rate methodology. Search for every FAR, DFARS, and CAS reference. Verify each citation against the deviated text. Update quoted language where the plain-language rewrite changed wording.
- Build the clause crosswalk. Create a spreadsheet mapping every old FAR Part 52 and DFARS Part 252 clause number to its new number. Include the clauses that were eliminated entirely. Distribute the crosswalk to everyone who touches proposals, subcontracts, or compliance documentation.
- Reassess CAS and TINA obligations. Run your contract portfolio against the new thresholds effective June 30. Identify which contracts no longer trigger CAS or TINA. Do not dismantle your accounting infrastructure. Reclassify the effort from “mandatory compliance” to “competitive advantage.”
- Review indirect cost pool classifications. Check whether EEO compliance costs, CMMC costs, or other expenses affected by 2025-2026 deviations need reclassification within your indirect rate structure. Verify that new costs (CMMC) are allocated consistently with your established methodology.
- Update proposal templates and subcontract flowdowns. Replace old clause references in cost volume templates, subcontract agreements, and flowdown matrices. New solicitations issued after the deviation effective dates use the new numbering. A proposal citing old clause numbers signals outdated systems to the contracting officer.
Key Takeaway: The June 30, 2026 deadline is not when you should start updating. It is when you should finish. Contractors who wait until contracting officers flag outdated references during source selection pay the highest price: lost awards.
Frequently Asked Questions
What are FAR class deviations 2026?
FAR class deviations 2026 are temporary changes to the Federal Acquisition Regulation that apply across multiple contracts. Over 50 deviations were issued between October 2025 and March 2026 under the Revolutionary FAR Overhaul and the FY2026 NDAA. They take effect immediately without a public comment period and remain active until replaced by formal rulemaking.
How do FAR class deviations differ from final rules?
A class deviation is an interim measure with immediate effect, issued by an agency head under FAR 1.404. A final rule is a permanent change to the FAR itself, published through the Federal Register after notice-and-comment rulemaking. Class deviations are temporary by design. When an agency needs the change permanently, it proposes a formal FAR revision.
Did the FAR Part 31 cost principles actually change?
No. The Part 31 deviation rewrites the language in plain English but preserves all existing allowability rules, cost categories, and statutory anchors. Entertainment, alcohol, and lobbying costs remain unallowable. The executive compensation cap still applies. The change is linguistic, not substantive. Update your policy citations to match the new wording.
Do small contractors still need CAS compliance under the new thresholds?
Formal CAS applicability now requires a single contract exceeding $35 million (up from $2.5 million). Most small business contracts fall below this threshold. DCAA still audits incurred costs on cost-reimbursement contracts regardless of CAS applicability. Maintaining CAS-grade accounting remains a competitive advantage even when not formally required.
How does CMMC Phase 1 affect my indirect rates?
CMMC compliance costs (assessments, remediation, monitoring) are allowable indirect expenses when required by contract. Classify them in your overhead or G&A pool based on which contracts benefit. Level 2 compliance costs range from $50,000 to $200,000 for small businesses. Document the allocation basis and maintain consistency under CAS 402.
When do the CAS and TINA threshold increases take effect?
The FY2026 NDAA threshold increases apply to contracts awarded after June 30, 2026. The CAS per-contract threshold rises from $2.5 million to $35 million. The TINA threshold rises from $2.5 million to $10 million. Contracts awarded before June 30 retain the old thresholds for their duration.
What should I update first in my accounting system?
Start with your clause crosswalk. Map every FAR Part 52 and DFARS Part 252 reference in your policies, proposal templates, and subcontract flowdowns to the new numbering. Then verify all FAR Part 31 citations in your cost accounting policies against the plain-language rewrite. Complete both before responding to any new solicitation.
Where This Leaves Government Contractors
The 2025-2026 wave of FAR class deviations is the largest single regulatory shift government contractors have faced since the FAR was first published in 1984. The RFO alone covers more than 30 FAR Parts. Add the NDAA threshold changes, CMMC enforcement, and EEO requirement removal, and the scope of required updates across your accounting system is substantial.
The good news: for small and mid-size contractors, the net effect leans toward relief. Higher CAS and TINA thresholds reduce formal compliance obligations. Plain-language rewrites make the rules easier to follow. Reduced clause counts simplify proposal preparation.
The risk sits in the transition. Contractors who do not update their systems, policies, and templates create gaps between their documentation and current requirements. Those gaps become audit findings, proposal weaknesses, and lost awards.
If your accounting system needs a compliance review against the 2026 class deviations, take the free Compliance Readiness Check or schedule a consultation with Amerifusion Bookkeeping. A CPA-managed review of your policies, clause references, and indirect rate structure against the current regulatory framework takes hours. Fixing the problems a DCAA auditor finds takes months.
