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 TINA
White House Issues Executive Order Focused on “Improving Oversight of Federal Grantmaking”
On August 7, 2025, President Trump issued Executive Order 14332, “Improving Oversight of Federal Grantmaking,” (“EO 14332” or “the EO”) to “strengthen oversight and coordination of, and to streamline, agency grantmaking” and “ensure greater accountability for use of public funds.” Sec. 1. Among other things, the EO: (1) directs agencies to review discretionary funding opportunities for consistency with agency priorities; (2) provides principles for agencies to use in assessing discretionary awards; (3) directs the Office of Management and Budget (“OMB”) to revise the Uniform Guidance applicable to federal financial assistance; and (4) requires agencies to include terms and conditions in their discretionary grant agreements allowing for termination for convenience and preventing recipients from drawing down funds without prior written explanation and approval. Through these methods, EO 14332 focuses on increased political oversight of discretionary funding, ensuring broad termination for convenience rights, and limiting indirect costs. The EO arrives at the intersection of recent efforts by the Trump Administration both to cancel, terminate, or otherwise pause federal funding viewed as inconsistent with the Administration’s policy priorities and to streamline federal procurement regulations.Continue Reading White House Issues Executive Order Focused on “Improving Oversight of Federal Grantmaking”
SPEEDing up Procurement?: House Armed Services Bill Seeks to Reform Defense Acquisition
The Trump Administration continues to focus on procurement reform aimed at increasing acquisition efficiency, including through the “Revolutionary FAR Overhaul” and reinforced preference for commercial products. Now, with the House Armed Services Committee (HASC) introducing a defense procurement reform bill, it is clear that HASC leadership is also targeting increased efficiency as a key goal of the Fiscal Year 2026 National Defense Authorization Act (FY26 NDAA). We cover the bill’s key proposals and their potential impact on defense contractors below.Continue Reading SPEEDing up Procurement?: House Armed Services Bill Seeks to Reform Defense Acquisition
Digital Force Technologies, Inc.: A “SBIR-Derived Component” Can Be Sufficient For SBIR Phase III
In a recent bid protest decision— Digital Force Technologies, Inc., B-423319 (May 19, 2025), the Government Accountability Office (“GAO”) denied a protest of a Small Business Innovation Research (“SBIR”) program Phase III sole source solicitation issued by the Air Force, concluding that the Air Force had properly procured work from a successor-in-interest entity that derives from, extends, or completes efforts under prior SBIR contracts. Notably, GAO found that a single SBIR-derived component of the overall system to be procured can be a sufficient link to prior SBIR work for an agency to exercise its authority to issue a sole source SBIR Phase III contract.
This decision builds on previous GAO decisions in ASRC Federal Data Network Technologies, LLC, B-418765, Aug. 28, 2020, 2020 CPD ¶ 339 (“ASRC II”)[1] and Toyon Research Corporation, B-409765, Aug. 5, 2014, 2014 CPD ¶ 235, in which GAO had explained that “it must be evident that the requirements for the second effort incorporated original concepts, findings, ideas, or research results that were generated in the first.”[2]
This blog post briefly summarizes background on the SBIR program and requirements for Phase III sole source awards, as backdrop to GAO’s findings in Digital Force Technologies. The post then analyzes particular aspects of GAO’s decision suggesting an expansion of existing case law in this area and concludes with a brief discussion of practical considerations for government contractors.Continue Reading Digital Force Technologies, Inc.: A “SBIR-Derived Component” Can Be Sufficient For SBIR Phase III
Trump Administration Issues Executive Order Aimed At Modernizing Defense Acquisitions And Spurring Innovation
On April 9, 2025, President Trump issued an Executive Order (“EO”), “Modernizing Defense Acquisitions and Spurring Innovation In the Defense Industrial Base,” that may have significant implications for federal government contractors doing business with the Department of Defense (“DoD”), and particularly those with touchpoints to Major Defense Acquisition Programs (“MDAPs”).Continue Reading Trump Administration Issues Executive Order Aimed At Modernizing Defense Acquisitions And Spurring Innovation
New Executive Actions Address the Defense Acquisition System, U.S. Maritime Industries, Foreign Military Sales, and “Unlawful” Regulations
President Trump issued a series of executive orders (“EOs”) and presidential memoranda on Wednesday, April 9, that could impact government contractors across a broad range of industries. Among other initiatives, these executive actions seek to reform the defense acquisition system, reinvigorate the U.S. maritime industry, and streamline foreign military sales. The actions also reflect President Trump’s goal of catalyzing innovation and economic growth by reducing regulatory burdens, both in general and in the energy industry specifically.
We briefly summarize below the six April 9 executive actions most likely to impact government contractors.Continue Reading New Executive Actions Address the Defense Acquisition System, U.S. Maritime Industries, Foreign Military Sales, and “Unlawful” Regulations
Fifth Circuit Adds New Wrinkle to Ongoing Fight Over Federal Contract Worker Minimum Wage Requirement
Update: On March 14, 2025, President Trump issued an Executive Order, “Additional Rescissions of Harmful Executive Orders and Actions,” which revoked Executive Order 14026, discussed below. The U.S. Department of Labor has stated it is “no longer enforcing Executive Order 14026 or the implementing rule (29 CFR part 23) and will take steps, including rescinding 29 CFR part 23, to implement and effectuate the revocation of Executive Order 14026.” We will continue to monitor further developments.
Earlier this month, the Fifth Circuit ruled in favor of a Biden administration order raising the minimum wage of many types of federal contract workers. The executive order remains subject to litigation (in both the Fifth Circuit and elsewhere), but is currently effective throughout the country, with a narrow exception for certain state agencies.
President Biden’s Executive Order 14026 (“the EO”), issued in April 2021, raised the hourly minimum wage to $15.00 for federal contract workers for the following contract types:
- Procurement contracts for construction projects covered by the Davis-Bacon Act (“DBA”);
- Service contracts falling under the Service Contract Act (“SCA”);
- Concessions contracts, including those excluded from the SCA by DOL regulations at 29 C.F.R. 4.133(b); and,
- Contracts related to federal property or lands and connected to providing services for federal employees, their dependents, or the general public.
EO 14026 directs the U.S. Department of Labor to annually update the hourly minimum wage. We wrote in October 2024 about DOL’s annual update effective January 1, 2025, which raised the minimum wage for covered contracts from $17.20 to $17.75. More details are below.Continue Reading Fifth Circuit Adds New Wrinkle to Ongoing Fight Over Federal Contract Worker Minimum Wage Requirement
President Trump Issues Numerous Executive Orders with Potential Impacts on Federal Contractors and Grant Recipients
In his first few days in office, President Trump issued several executive orders (“EOs”) and memoranda, many of which may have implications for federal contractors and grant recipients, including the following:Continue Reading President Trump Issues Numerous Executive Orders with Potential Impacts on Federal Contractors and Grant Recipients
It Takes Two: SBA Proposes Applying “Rule of Two” to Multiple-Award Contracts
SBA’s “Rule of Two” often requires federal agencies to set aside an acquisition for small businesses whenever there is reasonable expectation that offers will be obtained from at least two small businesses that are competitive in terms of fair market prices, quality, and delivery.
On Friday, SBA issued a Proposed Rule that would extend the reach of the Rule of Two by applying it to orders issued under many multiple-award contracts. As such, under SBA’s proposal, agencies would be required to set aside an order under a multiple-award contract when there is a reasonable expectation of obtaining competitive offers from two or more small business contract holders, unless an exception – including an exception for Federal Supply Schedule (FSS) contracts – applies.
SBA believes that this rule, if adopted, would: (1) align multiple-award contract purchases with the Small Business Act’s requirement that a fair proportion of the total purchases and contracts for goods and services be awarded to small businesses; (2) resolve confusion created by contradictory interpretations of the Rule of Two; and (3) increase contracting opportunities for small businesses, particularly small disadvantaged businesses (SDBs).
More details are below. Continue Reading It Takes Two: SBA Proposes Applying “Rule of Two” to Multiple-Award Contracts
Public Comments to Proposed Rule Underscore the Need for Additional Clarity on SBA Recertification Requirements
The Small Business Administration (“SBA”) recently issued a proposed rule that would significantly change the rules concerning small business recertification in M&A transactions and other events (the “Proposed Rule”). SBA has framed the Proposed Rule as a consolidation of what is currently a scattered set of regulations, but the rule goes further than consolidating and clarifying existing law. It would expand recertification requirements in several key ways, including eliminating exemptions that currently allow contractors to continue to utilize set-aside multiple award vehicles after a so-called “disqualifying recertification” (i.e., a recertification as other than small or other than disadvantaged).
SBA invited public comment on the Proposed Rule. The deadline for submitting comments passed last week. We have spent some time reviewing the comments submitted thus far, which provide insight into the issues that affect both small business contractors and the industry writ large. As discussed below, many of the comments describe the potential chilling effects of the Proposed Rule, which could deprive contractors of key income streams just as they graduate from small business status and discourage investors and other contractors from acquiring small businesses that hold multiple award contracts.
The sections below describe the Proposed Rule in greater detail and provide an overview of the comments to the Proposed Rule.Continue Reading Public Comments to Proposed Rule Underscore the Need for Additional Clarity on SBA Recertification Requirements