Since January 20, the Trump administration has taken numerous executive actions that impact federal government contractors and grant recipients. In just a single day last week, the Trump administration issued a series of EOs and presidential memoranda that, among other things, seek to reform the defense acquisition system, bolster the U.S. maritime industry, and streamline foreign military sales.  The potential impact of these changes to Department of Defense (“DoD”) procurement policy are relatively self-evident.

At the same time, the Trump administration has taken various steps to reorganize and reduce the federal workforce, including significant changes to the DoD civilian workforce. The potential effects of these personnel policies are less obvious but may be equally meaningful for defense contractors. This blog focuses on one such executive action, Executive Order 14210 (titled Implementing the President’s ‘‘Department of Government Efficiency’’ Workforce Optimization Initiative) and its potential implications for the defense industrial base.

Executive Order (“EO”) 14210

President Trump issued EO 14210 on February 11, 2025.  The EO provides directives related to the Trump-administration hiring plan and reduction in force strategy first described by EO 14170 on January 20, 2025 (Reforming the Federal Hiring Process and Restoring Merit to Government Service) and the presidential memo implementing the government-wide hiring freeze. Under EO 14210, agencies are required to hire only one new employee for every four that leave. Additionally, the order directs agency heads to develop hiring plans in consultation with their Department of Government Efficiency (“DOGE”) Team Leads, and to prioritize reductions in force in non-essential and non-statutory functions.

EO 14210 also calls for revisions to hiring suitability criteria, including compliance with legal obligations and appropriate use of government resources, which the Office of Personnel Management is to address through rulemaking. The EO excludes military personnel and allows some exemptions for positions related to national security, immigration enforcement, law enforcement, and public safety.

Department of Defense Implementation of EO 14210

Formal DoD implementation of EO 14210 and the Trump administration’s other reduction in force strategies began on February 28, 2025 when the Secretary of Defense instituted a department-wide civilian employee hiring freeze.  This was followed by the mass termination of probationary employees on March 3, 2025 and additional guidance memos on the civilian hiring freeze that were issued on March 14, 2025 and March 18, 2025.

In addition to the hiring freeze and terminations, DoD has also sought to reduce its civilian workforce through voluntary attrition. In a series of memos beginning on March 28, 2025 (which can be found here, here, and here), the Department introduced a DoD Deferred Resignation Program (“DRP”) and began to offer early retirement to eligible DoD civilian employees under DoD’s Voluntary Early Retirement Authority (“VERA”). Agencies have limited authority to exempt employees or positions from DRP eligibility, and most DoD employees at least 50 years old with 20 years of creditable federal service (or any age with 25 years of creditable federal service) will be eligible for retirement under VERA. Department guidance established a deadline of yesterday, April 14, 2025, for DoD civilians to accept separation from the Department through the DoD DRP and all employees approved for the DRP or early retirement through VERA are required to leave federal service by September 30, 2025.

Key Takeaways and Practical Tips for Contractors

Given this, it is widely anticipated that DoD’s civilian workforce will shrink over the next several months, and defense contractors should take steps to prepare for this reality.

Preparing for Delays and Disruption

DoD workforce reduction are likely to result in disruptions and delays for contractors, at least in the short term. As we observed in this client alert, shrinking the civilian procurement workforce, including the number of warranted contracting officers, is a key component of the Trump administration’s efforts to cut costs and seek workforce efficiencies.  This has already resulted in increased workloads for the existing contracting personnel and delays in some contracting actions. DoD’s implementation of EO 14210 is likely to deepen these cuts to its procurement workforce and cause even more delays and disruptions.

Further, EO 14210 is likely to distribute cuts to the DoD procurement workforce unevenly and in ways that do not perfectly align with the resourcing needs of particular agencies or their contracting missions. This is because employee participation in the DoD DRP and VERA is voluntary, and agencies have limited authority to exempt personnel or positions from these programs. The losses agencies sustain under VERA may be particularly painful since VERA eligible federal employees are, by definition, among the most experienced workers in the federal government. Accordingly, at least in the short term, it will be the departing agency employees themselves who dictate where cuts are made and felt, not agency leadership or mission needs.

Accordingly, contractors should anticipate potential delays and disruptions to the procurement process and certain contract administration functions. These could include delayed solicitations, proposal evaluations, contract awards, and contracting officer determinations. There is also the potential for delays and disruptions to billings, financing payments, audits, business system reviews and claim processing. Steps contractors can take now to prepare include:

  • Prioritize Communication: Maintain regular and proactive communication with contracting officers and other DoD contacts to stay informed about personnel and assignment changes that could impact contract administration and other procurement processes.
  • Plan for Delays: Develop contingency plans for delayed solicitations, contract awards, and contract officer determinations, factoring these potential delays into project timelines and budgets.
  • Strengthen Relationships: Build and strengthen relationships with existing contracting personnel to facilitate smoother communication and address issues promptly.
  • Increase Internal Monitoring: Monitor compliance and contract performance closely and keep detailed records to facilitate audits and claim processing by contracting and auditing teams that may be less familiar with contractor personnel and operations.
  • Identify Dependencies in Performance: Identify whether key aspects of contract performance are dependent on government action or approval, and consider proactive engagement with government officials.
  • Optimize and Realign Resources: Consider reallocating resources and adjusting workforce plans to account for possible slowdowns in contract administration functions.
  • Explore Alternate Strategies: Identify alternate strategies for procurement, such as leveraging existing contracts and exploring opportunities for schedule flexibility.
  • Keep Tabs on Policy Developments: Stay informed about changes in DoD policies and implementation of EO 14210 to anticipate and respond appropriately.
  • Engage with Peers: Engage with industry groups and professional organizations to anticipate changes and advocate for sector-wide remedies for disruptions caused by workforce reductions.
  • Review Contract Terms: Revisit contract clauses related to schedule changes, delays, and dispute resolution to ensure you are adequately protected and prepared for potential issues.

New Opportunities for DoD Contractors

Finally, we should note that even though the Trump administration and DoD leadership may view the reduction of the civilian workforce as a necessary cost-saving and efficiency measure, these changes could well provide new contracting opportunities for some DoD contractors. For example, DoD agencies may need to rely, at least in part, on contracted services to replace departing employees. Additionally, while the civilian workforce may be shrinking, the Trump administration has signaled that they intend to expand federal spending in other areas. Accordingly, DoD contractors may see increased spending on contracts that align with the Administration’s policy priorities.

Tags: DRP, EO 14210, VERA
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Photo of Scott A. Freling Scott A. Freling

Scott Freling divides his practice between representing civilian and defense contractors in traditional government contracts matters and guiding buyers and sellers—including a number of leading private equity firms—through the regulatory aspects of complex government contracts M&A deals. Scott co-chairs the firm’s Government Contracts…

Scott Freling divides his practice between representing civilian and defense contractors in traditional government contracts matters and guiding buyers and sellers—including a number of leading private equity firms—through the regulatory aspects of complex government contracts M&A deals. Scott co-chairs the firm’s Government Contracts practice.

Scott is sought after for his regulatory expertise and his ability to apply that knowledge to the transactional environment. Scott has deep experience leading classified and unclassified due diligence reviews of government contractors, negotiating transaction documents, and assisting with integration and other post-closing activities. He has been the lead government contracts lawyer in dozens of M&A deals, with a combined value of more than $79 billion. This has included Warburg Pincus and Berkshire Partners’ pending deal to acquire TRIUMPH for approximately $3 billion, Advent’s acquisition of Maxar Technologies for $6.4 billion, Aptiv’s acquisition of Wind River for $3.5 billion, and Veritas Capital’s sale of Alion Science and Technology to Huntington Ingalls for $1.65 billion.

Scott also represents contractors at all stages of the procurement process and in their dealings with federal, state, and local government customers. He handles a wide range of government contracts matters, including compliance counseling, claims, disputes, audits, and investigations. In addition, Scott counsels clients on risk mitigation strategies, including obtaining SAFETY Act liability protection for anti-terrorism technologies.

Scott has been recognized by Law360 as a MVP in government contracts. He is a past co-chair of the Mergers and Acquisitions Committee of the ABA’s Public Contract Law Section.

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Photo of Homer La Rue Homer La Rue

Homer La Rue is an associate in the firm’s Washington, DC office and a member of the Government Contracts Practice Group. Drawing on his experience in industry and at the U.S. Department of Defense (DOD), Homer advises a diverse mix of clients on…

Homer La Rue is an associate in the firm’s Washington, DC office and a member of the Government Contracts Practice Group. Drawing on his experience in industry and at the U.S. Department of Defense (DOD), Homer advises a diverse mix of clients on a broad range of matters related to government contracting, including: complex regulatory compliance matters, high-stakes investigations, enforcement actions, corporate transactions, and prime contractor / subcontractor disputes. Prior to joining the firm, Homer spent over a decade at the Defense Contract Management Agency (DCMA) working in support of key Defense and Intelligence Community buying commands. As a warranted Corporate Administrative Contracting Officer (CACO), Homer’s duties included a wide range of enterprise-wide contract administration and audit resolution functions.

Homer also maintains an active pro bono practice focused on indigent criminal defense.

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