On September 1, 2026, the Cost Accounting Standards (“CAS”) Board published two final rules implementing seismic changes to cost accounting requirements for federal government contractors. The most significant change implements a requirement in last year’s National Defense Authorization Act (“NDAA”), doubling the dollar value threshold for full coverage under CAS.
Continue Reading CAS Board Rolls Out Two Changes with Significant Impact on Federal Contractors
SBA Proposes Overhaul of Size Standards That Would Reclassify Tens of Thousands of Contractors as “Small”
On August 20, 2026, the U.S. Small Business Administration (“SBA”) issued a proposed rule that would reset small-business size standards across the economy and a companion white paper proposing a new methodology for calculating them. The proposed rule—Small Business Size Standards, 91 Fed. Reg. 53,741—would establish new size standards for 338 industry groups and industries. The accompanying white paper—Revised Size Standards Methodology, 91 Fed. Reg. 54,096—supplies the analytical framework SBA used to derive the standards in the proposed rule. Notably, SBA calculated the proposed standards using a methodology that is itself out for notice-and-comment, with both comment periods closing the same day, September 21, 2026.
Continue Reading SBA Proposes Overhaul of Size Standards That Would Reclassify Tens of Thousands of Contractors as “Small”DSCA Expands FMF Eligibility for Direct Commercial Contracts
Earlier this year, the Defense Security Cooperation Agency (“DSCA”) issued updated policy guidance implementing a significant expansion of the universe of countries authorized to use Foreign Military Financing (“FMF”) for direct purchases of U.S. defense items. Previously, only ten countries were eligible for use of FMF for direct commercial contracting
Continue Reading DSCA Expands FMF Eligibility for Direct Commercial ContractsThe $10 Million TINA Threshold Is Now in Effect: What Contractors and Subcontractors Need to Know
Last December, we previewed the significant cost accounting and pricing data disclosure changes contained in the Fiscal Year 2026 National Defense Authorization Act (“NDAA”), including Section 1804(c)’s increase to the threshold governing the Truthful Cost or Pricing Data Statute (formerly the Truth in Negotiations Act, and still commonly called “TINA”). That change is no longer on the horizon: it is here. The FY 2026 NDAA was signed into law on December 18, 2025, and the higher TINA threshold has taken effect for contracts entered into after June 30, 2026. This post focuses on what that means, in practical terms, for prime contractors and subcontractors.
Continue Reading The $10 Million TINA Threshold Is Now in Effect: What Contractors and Subcontractors Need to KnowPentagon Releases Artificial Intelligence Strategy
The past month has marked a series of announcements from the Department of War (the “Department”) emphasizing rapid deployment of artificial intelligence (“AI”) industry partnerships. These announcements signal opportunities for not only the defense industrial base, but also nontraditional defense contractors focused on technology and data.
On January 9, 2026, the Department released two key memoranda: (1) Artificial Intelligence Strategy for the Department of War, setting out measurable pace-setting projects, barrier removal authorities, and mandated data access; and (2) Transforming the Defense Innovation Ecosystem to Accelerate Warfighting Advantage, which aims to unify the defense innovation ecosystem under the Under Secretary of War for Research & Engineering as Chief Technology Officer (“CTO”).
Shortly after, on January 12, Secretary Hegseth delivered a speech, presenting an overhaul of the Department’s innovation and acquisition ecosystems.
The January 9 memoranda and Secretary Hegseth’s speech signal the Department’s intent to formalize a single, CTO-led innovation operating system designed to produce three outputs: next-generation technology, scalable products, and new ways of fighting—and to do it at “wartime speed,” with AI as the first major proving ground.
Continue Reading Pentagon Releases Artificial Intelligence StrategyFY26 NDAA Aims to Raise the Dollar Thresholds for the Applicability of CAS and TINA
Among the most challenging areas of regulatory compliance for federal contractors are cost accounting and cost and pricing data disclosure requirements. Indeed, many companies place guardrails on the nature and scale of their business relationships with the U.S. government precisely to avoid the application of these requirements. In a move that seems consistent with the federal government’s push towards expanding the defense industrial base and working with more commercial companies, Congress recently released the final negotiated language of the FY 2026 National Defense Authorization Act (“NDAA”). The draft text, currently awaiting a full Senate vote, contains impactful changes to reduce the applicability of federal Cost Accounting Standards (“CAS”) and the Truthful Cost or Pricing Data Statute (formerly the Truth in Negotiations Act, commonly referred to as “TINA”).
Continue Reading FY26 NDAA Aims to Raise the Dollar Thresholds for the Applicability of CAS and TINAJuly 2025 AI Developments Under the Trump Administration
This is part of an ongoing series of Covington blogs on the AI policies, executive orders, and other actions of the Trump Administration. This blog describes AI actions taken by the Trump Administration in July 2025, and prior articles in this series are available here.
White House Issues AI
Continue Reading July 2025 AI Developments Under the Trump AdministrationForging a Modern Strategic Production Base: Senate Proposes Stand-Alone Defense-Production Powers for the Pentagon
The Defense Production Act (DPA) has long been viewed as the primary federal mechanism for managing and supporting defense production. Since it was enacted in September 1950—just months after the Korean War began—the DPA has armed the President with wartime-style powers to prioritize contracts, allocate scarce materials, and finance surge defense production capacity. These DPA industrial authorities are subject to periodic reauthorization, with the current sunset set for September 30, 2025. While the reauthorization of the DPA remains pending, the Senate Armed Services Committee (SASC) has advanced a new NDAA provision that would convert the extant Industrial Base Fund (IBF) (10 U.S.C. section 4817) into a Pentagon-controlled toolkit that closely mirrors—but is not identical to—DPA’s Title III authorities. The introduction of section 849A of the FY 2026 NDAA suggests that the SASC is no longer willing to entrust the re-armament of the Pentagon and revitalization of the Defense Industrial Base (DIB) solely to reauthorization of the DPA—a process that lives or dies in other committees’ jurisdictions.
Continue Reading Forging a Modern Strategic Production Base: Senate Proposes Stand-Alone Defense-Production Powers for the PentagonApril 2025 AI Developments Under the Trump Administration
This is part of an ongoing series of Covington blogs on the AI policies, executive orders, and other actions of the Trump Administration. This blog describes AI actions taken by the Trump Administration in April 2025, and prior articles in this series are available here.
White House OMB Issues
Continue Reading April 2025 AI Developments Under the Trump AdministrationMarch 2025 AI Developments Under the Trump Administration
This is part of an ongoing series of Covington blogs on the AI policies, executive orders, and other actions of the Trump Administration. This blog describes AI actions taken by the Trump Administration in March 2025, and prior articles in this series are available here.
White House Receives Public
Continue Reading March 2025 AI Developments Under the Trump Administration