When the FAR Isn’t the Rulebook: A Quiet Reminder from the GAO OIG’s Latest Semiannual Report
Federal contractors often speak about “the FAR” as if it were synonymous with federal purchasing itself—an assumption that is usually directionally helpful, but occasionally hazardous. A brief entry in the GAO Office of Inspector General’s Fall Semiannual Report for the second half of fiscal year 2025 offers a clean illustration of why. The OIG reports that it initiated an investigation based on an allegation “that a GAO procurement violated the Federal Acquisition Regulation (FAR),” then closed the matter because “GAO is not subject to the FAR and had the authority to complete the procurement.”
At first glance, that closure looks like an administrative footnote—one line in a table of closed investigations. In practice, it is a useful doctrinal reminder that “federal procurement” is not a single, uniform legal system. The FAR is the dominant framework for executive-branch acquisitions, but it is not a universal code that binds every federal actor in every buying context. Some organizations operate under organic statutes, agency-specific acquisition regulations, grants/cooperative frameworks, nonappropriated fund (NAF) regimes, or other authorities that displace or substantially modify FAR-based expectations. The GAO OIG’s short explanation does not attempt to map that universe; it merely confirms that, for GAO’s own procurements, the FAR is not the controlling baseline.
For contractors, the practical risk is not academic. “FAR-default” thinking can drive three common categories of error. First, it can distort bid/no-bid judgments and compliance posture. If offerors assume FAR-based procedures, clauses, and protest rights, they may misread what is mandatory versus optional in a solicitation governed by a different authority, and they may overbuild compliance artifacts that are not requested while underinvesting in what is actually evaluated. Second, it can produce contract-interpretation mistakes during performance—particularly around changes, disputes processes, socioeconomic representations, and flowdowns—where contractors reflexively reach for FAR concepts that may not be incorporated, may be modified, or may be replaced entirely. Third, it can create avoidable friction in negotiations. When a customer’s procurement office is not operating under the FAR, insisting that it “must” behave like a FAR-based contracting activity can weaken credibility and delay resolution on points that are better addressed through the governing authority and the solicitation’s stated terms.
The more constructive takeaway is a disciplined alternative to FAR-default: treat the solicitation, the governing procurement authority, and the incorporated terms as the operative hierarchy—and force clarity early when the hierarchy is ambiguous. That means identifying, at the capture stage, what legal regime the buyer is using, how source-selection rules are established, what dispute and remedies framework applies, and what oversight mechanisms exist. This is not merely a legal exercise; it shapes pricing risk, schedule commitments, and the documentation burden you will carry throughout performance.
The GAO OIG report is also a reminder that oversight attention can arise even when a complaint rests on an incorrect legal premise. The OIG describes its investigative mandate as covering “potential violations of criminal, civil, and administrative statutes and policies involving or impacting GAO programs, contracts, and operations,” including matters involving “contractors” and other entities connected to GAO operations. In other words, even a quickly-closed allegation can still consume attention and reinforce the value of clean files, traceable decision rationales, and careful communications around procurement authority and procedure.
If you want a single sentence to carry forward into your capture and compliance playbooks, it is this: before you argue about whether a procurement complied with the FAR, confirm whether the FAR applies at all. The GAO OIG’s closure of the “FAR violation” allegation is a crisp demonstration that sometimes the most important compliance question is the threshold one—what rulebook governs.
Credit: This post is based on the GAO Office of Inspector General, Fall Semiannual Report (OIG-26-1SP) for the period April 1, 2025 to September 30, 2025. The report is transmitted under the signature of Inspector General L. Nancy Birnbaum.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. While care has been taken to accurately summarize the cited source, readers should review the underlying report and consult qualified counsel for advice regarding specific procurements, authorities, and contract terms.