I did some searching on the forums & didnt really see this anywhere.
Can you change your faction?
Im the Feds right now & want to switch, How dod I do that?
I’ve used other ships but it just seems to decrease the rep I get witht hese guys & doesnt give me anything else with other factions. 
What do I do?
Contracts.
I have the same question, and really want to change from Federation. I suppose you just sign another contract?
From FAQ
Do I have to change my race if I want to level up another line of ships ?
No, your race only determines your player’s bonus (see above). If you change your faction, you will begin ranking up in the race associated with your faction.
Why should I change my faction ?
By changing faction, you will be able to develop another branch of faction items.
Also, as your faction determines the race you are ranking up, you will be able to rank up in a new race and develop this race’s ship tree.
Can I change my faction without loosing my current faction rank ?
You don’t loose your previous faction’s level when changing. But you will have to pay the fee if you want to switch back to your previous faction.
How can I change my faction ?
You can change faction on the contracts window. You have to pay a fee for resigning your long term contract with your faction. You can only change your faction once you reach rank 2 in any faction.