Sweeping changes to the U.S. federal acquisition framework are reshaping how public works projects are designed and built. Early data indicate that modular construction methods are outpacing traditional delivery timelines across several agency programs. The reforms, anchored by executive actions issued in 2025, compress bidding cycles, establish pre-qualified supplier frameworks, and push standardized component interfaces - changes that modular manufacturers and general contractors say remove long-standing procurement barriers that had limited off-site construction to a fraction of the public sector pipeline.
Background
The policy impetus traces to two executive orders signed on April 15, 2025. President Trump issued the pair to streamline government procurement. The first - "Restoring Common Sense to Federal Procurement" - directs the Office of Federal Procurement Policy to reform the Federal Acquisition Regulation (FAR) by eliminating all requirements not mandated by statute or otherwise necessary to strengthen procurement efficacy. The White House and the FAR Council pursued an aggressive agenda to remove non-statutory rules, with regulatory guidance indicating that over 500 FAR provisions may be eliminated or retired.
For construction, a critical downstream effect is the shift toward commercial-item acquisition. Executive Order 14271, "Commercial First," prioritizes commercially available products over customized government builds - a framing that directly favors factory-manufactured modular units over bespoke site-built structures. Success in the reformed procurement environment may also hinge on performance-based payments, modular procurement, and other creative contract terms.
On the standards side, the sector received a significant technical development: in April 2025, the Center for Offsite Construction Consensus Committee began developing CfOC/ICC 1220-202x, a new standard on configurations and connections for off-site construction. The standard provides requirements for the location and specifications of module-to-module and building-to-module connections across structural, plumbing, electrical, mechanical, fire protection, and data systems. It is intended to serve as design criteria adopted by owners, designers, manufacturers, lenders, and governments to support efficiency and certainty in delivering off-site construction components.
Details
Early project outcomes suggest meaningful schedule gains. At optimum efficiency, modular project schedules can run 20 to 50 percent faster than comparable stick-built projects, potentially driving 5 to 10 percent in total cost savings. A military housing case offers a concrete federal benchmark: the Metropolitan Education Training Command (METC) dormitory program deployed modules that were 80-90 percent complete upon factory delivery, enabling concurrent site preparation and module installation that expedited occupancy. The project combined Hensel Phelps as general contractor with Warrior Group as modular manufacturer.
Cost data from the broader market reinforce the trend. Traditional stick-built construction averages $150 to $250 per square foot, making modular methods 10 to 25 percent cheaper than conventional building. Schedule compression also carries financing benefits: modular homes typically reach completion in two to six months versus six to twelve months for traditional builds, translating to lower carrying costs, reduced construction loan interest, and faster occupancy.
Pre-qualified supplier frameworks, a feature of the reformed procurement model, address a structural constraint identified by analysts. Modular facilities require significant upfront investment, and cost savings diminish sharply if modules must be transported long distances - requiring factories to be sited locally and making manufacturers reluctant to invest without a sufficient pipeline of local demand. Guaranteed demand through pre-qualified pools and volume commitments directly counters this hesitation.
Challenges
Procurement reform has not resolved two persistent obstacles. While some nations and several U.S. states - including Montana, Utah, and Virginia - have adopted modular building codes, the United States lacks a singular national modular building code. The industry is primarily regulated at the state level, with requirements varying by jurisdiction but generally covering plant inspection processes, quality control, and how building plans are submitted, reviewed, and approved. Federal projects that cross jurisdictions face compounded approval complexity as a result.
Labor allocation also remains contested. Many modular projects have documented time savings through a reduced number of required workers or shorter labor durations. However, on-site construction relies on a distinct workforce with fewer requirements and regulations than an off-site workforce. Trades unions and specialty subcontractors have raised risk-allocation questions about who bears financial responsibility across the factory, transport, and assembly phases. In June 2025, there were 246,000 open construction jobs in the U.S., and 78 percent of firms reported difficulty filling craft roles - a pressure that modular's factory model may ease on-site even as it shifts workforce requirements into new skill categories.
Outlook
The global modular construction market was valued at USD 103.82 billion in 2024 and is projected to reach USD 343.4 billion by 2035, reflecting a compound annual growth rate of 11.50 percent from 2025 to 2035. Whether federal procurement reform delivers a comparable domestic trajectory will depend on whether the FAR overhaul reaches formal completion. Significant uncertainty remains about scope and timeline: EO 14275 directs that appropriate actions to amend the FAR be taken within 180 days, but the FAR Council's input timelines suggest the process may extend well beyond that date as notice-and-comment rulemaking proceeds across all 53 parts of the FAR. Private sector developers are nonetheless watching public works pilots closely, expecting that any standardized interface specifications and pre-qualified supplier lists validated through federal programs could become commercial benchmarks for large-scale private modular pipelines.
