HHSAR Class Deviation 2026-05

Signature Date: March 29, 2026

1. EFFECTIVE DATE:

Immediately upon signature.

2. EXPIRATION DATE:

This CD is effective until incorporated into the HHSAR, superseded, or otherwise rescinded.

3. PURPOSE:

This HHSAR CD implements requirements to comply with EO 14275, Restoring Common Sense to Federal Procurement, and the Revolutionary FAR Overhaul (RFO) initiative. This CD revises HHSAR parts 316 and applicable portions of 352 to align with the FAR Council’s RFO model deviation text for FAR parts 16 and 52.

4. APPLICABILITY:

The requirements in this CD are applicable to all HHS Divisions for applicable solicitations, contracts, and orders.

5. ROLES AND RESPONSIBILITIES:

Heads of the Contracting Activities (HCAs) must ensure this CD is disseminated to the acquisition workforce and ensure compliance with the requirements in the CD. Additionally, HCAs must review and update any applicable internal procedures and guidance to reflect the policies and guidance contained herein.

6. BACKGROUND:

On April 15, 2025, EO 14275, Restoring Common Sense to Federal Procurement, was signed. Section 2 of the EO establishes the policy that the FAR “should only contain provisions required by statute or essential to sound procurement, and any FAR provisions that do not advance these objectives should be removed.”

Under the RFO initiative, the FAR is being updated to:

• Remove language that is not required by statute
• Remove duplicative or outdated language
• Clarify or provide more plain language
• Revise language for the new FAR framework
• Retain language necessary for governmentwide acquisition standards.

The FAR Council released their RFO FAR part 16 model deviation text and affected part 52 solicitation provisions and contract clauses on September 30, 2025.

These changes flow down to and directly impact the HHSAR and require immediate updates.

41 U.S.C. 1707(a)(1) requires that a procurement policy, regulation, procedure, or form, including an amendment or modification, may not take effect until 60 days after it is published for public comment in the Federal Register if it “(A) relates to the expenditure of appropriated funds; and (B)(i) has a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form; or (ii) has a significant cost or administrative impact on contractors or offerors.”

However, to ensure alignment with recently issued EOs, it is necessary to issue this CD in advance of a proposed rule to ensure HHS solicitations, contracts, and orders consistently reflect the policies and priorities of the Administration. HHS intends on developing a rule after the release of this CD.

7. POLICY/GUIDANCE:

HHS contracting staff must comply with the following:

1. Follow the RFO HHSAR part 316 deviation text, including the corresponding part 352 deviation text, instead of HHSAR parts 316 and corresponding 352 as codified at 48 CFR Chapter 3. The RFO HHSAR deviation text is shown in the Attachment listed in Section 11.
   • Clean (without markup) versions of RFO HHSAR deviation texts are available at https://www.hhs.gov/grants-contracts/contracts/contract-policies-regulations/hhsar-overhaul/index.html.
2. When issuing new solicitations, contracts, or orders:
   1. Do not include the following clause:
      • 352.216-70 Additional Cost Principles for Hospitals (Profit and Non-Profit) (DEC 2015)
   2. Include, if applicable, the following deviated clause using the deviated text shown in the Attachment listed in Section 11:
      • 352.216-70 Allowable Cost and Payment for Hospitals (Profit or Non-Profit) (MAR 2026) (RFO DEVIATION)
3. For open solicitations:
   1. Amend the solicitation to remove the clause listed in B.1 above.
   2. Amend the solicitation to include, if applicable, the deviated clause listed in B.2 above.
4. For existing contracts and orders, at the next available opportunity:
   1. Modify the contract or order to remove the clause listed in B.1 above.
   2. Modify the contract or order to include, if applicable, the deviated clause listed in B.2 above.

8. AUTHORITY:

This CD is issued under the authority of RFO FAR 1.304, Class deviations; RFO HHSAR 301.103, Authority; and RFO HHSAR 301.302, Policy.

9. SUMMARY OF HHSAR CHANGES:

To implement or align with the requirements of the RFO, the HHSAR is deviated, renumbered, revised, and updated with plain language edits. Notable changes are summarized below, and all changes are reflected in the Attachment listed in Section 11.

• HHSAR Part 316 – Types of Contracts
  • Subpart 316.3 – Cost Reimbursement Contracts
    • Renumbered section 316.307 to 316.305.
    • Replaced two existing prescriptions, one of which included an outdated regulatory reference, with a single prescription referencing the updated HHSAR clause 352.216-70.
  • Subpart 316.5 – Indefinite-Delivery Contracts
    • Removed section 316.505 and its underlying content because task-order and delivery-order ombudsman requirements are addressed in a new section.
    • Added section 316.507 and subsection 316.507-2 to direct the public and contractors to the current list of task-order and delivery-order ombudsmen.
  • Subpart 316.6 – Time-and-Materials, Labor-Hour, and Letter Contracts
    • Removed this subpart, and its underlying section and subsection, because the existing text is more appropriate for internal agency guidance than regulation.
  • HHSAR Part 352 – Solicitation Provisions and Contract Clauses
  • 216-70, Additional Cost Principles for Hospitals (Profit and Non-Profit)
    • Retitled the subsection and clause title to “Allowable Cost and Payment for Hospitals (Profit or Non-Profit)”.
    • Updated the prescription.
    • Simplified the clause by removing prescriptive language that duplicated or conflicted with existing cost principles and contained outdated references, and replaced it with a single, streamlined sentence establishing cost allowability and incorporating updated regulatory references.

10. CONTACT:

Acquisition workforce members with questions regarding this CD should contact their cognizant Division Acquisition Office or Acquisition Policy Council (APC) Representative(s), as appropriate.

The current list of APC Representatives may be found on the Acquisition Councils and Workgroups Page of the HHS Acquisition Portal (HHSAP). (Note: The HHSAP is accessible only by HHS employees and contractors on the HHS network. It is not publicly accessible.)

All other questions should be directed to Acquisition_Policy@hhs.gov.

11. ATTACHMENT(S):

Attachment 1 – RFO HHSAR Part 316 & Applicable Part 352 Deviation Text