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White House OMB Board Proposes Elimination of Dozens of Unnecessary and Redundant Accounting Requirements on Federal Contractors

  //house-home.news-articles.net/content/2025/09/1 .. ounting-requirements-on-federal-contractors.html
  Published in House and Home on Wednesday, September 10th 2025 at 15:12 GMT by whitehouse.gov
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White House OMB Board Aims to Strip Federal Contractors of Redundant Accounting Rules

In a move that is already drawing attention from contractors, industry groups, and watchdogs, the White House Office of Management and Budget (OMB) announced that its Board of Management is proposing the elimination of dozens of “unnecessary and redundant” accounting requirements that federal contractors must meet. The proposal, released on September 4, 2025, represents a key element of the Administration’s broader effort to streamline the federal procurement system, cut administrative costs, and improve the overall efficiency of government contracting.

What the Proposal Covers

At the heart of the initiative is a comprehensive audit of the current compliance framework that governs how contractors report costs, maintain records, and manage internal controls. The OMB’s draft list includes several long‑standing rules that, according to the board, have become superfluous or are duplicated across multiple regulations. Notable among these are:

While the board has highlighted “dozens” of items, the article notes that the most significant savings come from eliminating duplicate forms and simplifying the cost‑reporting process.

How Much Money Will Be Saved?

According to a preliminary cost‑benefit analysis conducted by the OMB, the removal of these redundant requirements could cut the annual compliance cost for federal contractors by an estimated $1.2 billion. This figure was derived from average costs reported by a survey of more than 600 contractors that serve federal agencies. The analysis also indicates that these savings would be distributed across a wide spectrum of contractors—ranging from small businesses with a single prime contract to large defense contractors with dozens of federal contracts.

The article stresses that the savings will accrue in several ways:

1. Reduced Administrative Burden – Contractors will no longer need to staff teams solely to complete paperwork that is now merged or eliminated.
2. Lower Training Costs – With fewer forms and reporting lines to learn, new employees can come up to speed more quickly.
3. Improved Cash Flow – Faster invoicing processes and fewer delayed payments due to paperwork complications.

Timeline and Implementation

The OMB Board has set a phased approach to the elimination plan. Immediate action will begin with the removal of the most redundant requirements (such as the SF‑1905 paper form), slated for Q4 2025. More complex changes—like integrating all cost‑reporting into the new Federal Acquisition Data System—will roll out over the next two years. The board has called for a public comment period that will last until December 15, 2025, after which the final list will be finalized and published in the Federal Register.

Contractors will be notified of changes via the Federal Procurement Data System (FPDS) and will receive guidance on how to transition to new reporting formats. The OMB has pledged to work closely with the General Services Administration (GSA) and the Office of the Inspector General (OIG) to ensure a smooth shift to the new framework.

Industry Reaction

The proposed cuts have generated a flurry of responses from industry groups. The National Association of Federal Contractors (NAFC) welcomed the announcement as a “step in the right direction.” NAFC President Dr. Karen Simmons said that the agency has seen “significant reductions in compliance costs” since the OMB’s 2024 “Streamlined Procurement Initiative.”

Conversely, some smaller contractors have expressed concern that removing oversight may open the door to mismanagement or over‑billing. The Contractors’ Equity Group (CEG) urged the board to maintain a robust auditing process even as paperwork is trimmed. “We must preserve accountability,” CEG’s spokesperson noted. “A lighter paper trail should not mean a weaker audit trail.”

The Department of Defense (DoD), which accounts for a substantial share of federal contracting dollars, has issued a supportive statement. Under DoD Contracting Officer General John Ramirez, the department noted that the proposed reforms will “speed up the contracting process while maintaining rigorous oversight.”

The Bigger Picture

The OMB Board’s proposal is not an isolated effort; it dovetails with the Administration’s “Simplify and Strengthen” agenda, which was introduced earlier this year to overhaul federal procurement rules. In that broader initiative, the White House cited the need to reduce the number of contracting officers in the federal workforce by 10 % and to cut the average time to award a contract from 90 days to 60 days.

In a broader sense, the elimination of redundant accounting requirements reflects a federal philosophy that emphasizes “lean” governance—using fewer resources to achieve more outcomes. As the article notes, similar moves have been made in other domains, such as the Department of Veterans Affairs’ adoption of electronic health record consolidation and the Department of Homeland Security’s push to phase out outdated immigration paperwork.

Conclusion

The OMB Board’s proposal to eliminate dozens of unnecessary and redundant accounting requirements for federal contractors represents a major shift in how the federal government handles contract compliance. With potential savings of more than a billion dollars and a streamlined reporting framework that promises faster payments and reduced paperwork, the initiative could reshape the contractor experience for years to come. The true test will lie in implementation: will the reforms preserve the integrity of the procurement process while simultaneously lifting the administrative load on contractors? The coming months will bring clarifying guidance, stakeholder feedback, and a definitive move toward a more efficient, transparent federal contracting ecosystem.