Federal Contracts Can Now Skip Lowest Price Requirement for 'Best Value' Under New Procurement Bill

The Value Over Cost Act of 2025 is shaking up how the federal government buys things, and it’s a big deal for anyone who cares about how taxpayer dollars are spent. Currently, when federal agencies—both civilian and defense—use the Multiple Award Schedule program (a pre-approved vendor list), they usually have to pick the contract that results in the lowest overall cost. This bill changes that fundamental rule. It allows the Administrator of General Services (GSA) to authorize agencies to choose a contract that is not the cheapest if they determine that the higher-priced option provides the “best value” for the government’s interests. This change applies to both civilian contracts (updating Section 152(3)(B) of title 41, U.S. Code) and defense contracts (updating Section 3012(3)(B) of title 10, U.S. Code).

The Shift from 'Cheapest' to 'Best'

Think of it this way: Right now, the government is often forced to buy the generic, lowest-bid office chair, even if everyone knows it will break in six months and cost more to replace than buying the slightly more expensive, ergonomic one upfront. This bill aims to fix that by allowing agencies to prioritize quality, reliability, or advanced technology over the initial price tag. For defense agencies, this could mean purchasing a slightly more expensive piece of equipment that is proven to last longer in the field, ultimately saving taxpayers on maintenance and early replacement costs—the 'Total Cost of Ownership' argument. For civilian agencies, it might mean choosing a sophisticated software solution that costs more initially but drastically cuts down on administrative labor.

Who Benefits, and Where’s the Catch?

This is great news for vendors who offer superior, high-quality products or specialized services that often cost more than their competitors. They can now compete on features and reliability, not just price. It also benefits agencies that have been frustrated by having to settle for lower-quality goods that barely meet the minimum requirements. However, this shift introduces a significant element of subjectivity. The term “best value” is inherently vague, and the bill grants the GSA Administrator significant discretion to override the lowest-cost requirement. While this flexibility is needed, it also reduces a key, objective check on federal spending.

The Real-World Oversight Challenge

For taxpayers and those who monitor government spending, this is where the concern lies. When contracts are awarded based on “lowest cost,” the justification is clear and easily audited. When the standard becomes “best value,” the justification for spending more money must be robust and transparent. If those justifications aren't ironclad, this change could open the door to less accountability, potentially allowing agencies to favor established contractors or make choices that benefit specific companies without clear, demonstrable value to the public. For small businesses that often compete successfully by offering competitive low prices, this change could make it harder to win bids if larger, more established companies can justify a higher price point based on intangible “value” metrics. The success of this law will depend entirely on how rigorously the GSA defines and enforces the “best value” standard to ensure that we are truly getting quality, not just paying more.