The Bottom Line
The Trump administration has issued two Executive Orders very recently that will drive changes in federal procurement and defense procurement and impact federal contractors in the very near future. The Executive Orders are intended to simplify the procurement process, which has been criticized by many as being too heavily regulated and overly complicated. In the Executive Orders, President Trump directs agencies to pare back the Federal Acquisition Regulation (FAR) to only contain “essential” requirements, to prioritize commercial item purchases, and to utilize existing authorities to expedite acquisitions. These Executive Orders have the potential to significantly shorten procurement timelines and fundamentally reshape the federal contracting landscape. Businesses that contract with the federal government should be aware of these coming changes and prepare for them to be implemented in relatively short order.
The Executive Orders
On April 9, 2025, President Trump issued an Executive Order focused specifically on Department of Defense (DoD) contracting. Entitled, “Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base,” this Executive Order’s stated objective is to accelerate defense procurement and revitalize the defense industrial base by rapidly reforming defense acquisition processes and modernizing the duties and composition of the defense acquisition workforce. Additionally, the Executive Order requires the DoD to implement practices that will incentivize and reward risk-taking and innovation on the part of DoD acquisition personnel.
The Executive Order focuses on five (5) areas of reform and mandates change within fairly short timeframes:
1. Acquisition Process Reform. The Secretary of Defense is required to submit to the President, within 60 days of the publication of the Executive Order, a plan to reform DoD’s acquisition processes. The reform must utilize existing authorities to expedite acquisitions and set a preference for the use of commercial solutions and Other Transactions Authority (OTA) and any other authorities that will expedite procurement pursuant to the Adaptative Acquisition Framework. The Executive Order requires the DoD to immediately begin prioritizing the use of these authorities in all pending contract actions and to require continued application while the plan is reviewed by the President.
The Secretary of Defense is also required to perform a detailed process review of each functional support role within the acquisition workforce to eliminate unnecessary tasks, reduce duplicative approvals, and centralize decision-making. As a part of this review, program managers, contracting officers, engineering authorities, financial managers, cost estimators, and logisticians will be evaluated. Notably, acquisition attorneys are not included.
2. Internal Regulations Review. The Secretary of Defense is also required to oversee the review and revision of DoD instructions, implementation guides, manuals, and regulations relating to acquisition with the goal of eliminating unnecessary supplemental regulations or any other internal guidance.
3. Acquisition Workforce Reform. Within 120 days, the Secretary of Defense, in coordination with the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force, and Component Acquisition Executives, is required to develop and submit to the President a plan for consideration to reform, right-size, and train the acquisition workforce.
4. Major Defense Acquisition Program Review. Within 90 days, the Secretary of Defense, in coordination with the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force, the Under Secretary of Defense for Acquisition and Sustainment, and Component Acquisition Executives, are required to complete a comprehensive review of all major defense acquisition programs (MDAPs). As part of the review, any program more than 15% percent behind schedule based on the current Acquisition Program Baseline (APB), 15% over cost based on the current APB, unable to meet any key performance parameters, or unaligned with the Secretary of Defense’s mission priorities, will be considered for cancellation.
5. JCIDS Review. The Secretary of Defense, in coordination with the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force, and the Joint Chiefs of Staff, is required to complete a comprehensive review of the Joint Capabilities Integration and Development System (JCIDS) process within 180 days. The JCIDS process is the primary DOD method for determining military weapon systems requirements and includes assessing joint military capabilities, and identifying, approving, and prioritizing gaps in these capabilities, to meet applicable requirements established by the National Defense Strategy. The object of this review is to further streamline and accelerate acquisition efforts.
On April 15, 2025, President Trump issued Executive Order, “Restoring Common Sense to Federal Procurement.” This sweeping Executive Order broadened the acquisition reform beyond the DoD to the entire federal government by requiring that the Office of Federal Procurement Policy (OFPP) review and reduce the FAR, which applies to all federal agencies. The goal of this review and revision is to ensure that the FAR includes only statutory requirements and other provisions “essential to sound procurement.” This will likely result in a significant revision of the massive regulations. The OFPP and the Federal Acquisition Regulatory Council (which is comprised of representatives from the DoD, the General Services Administration, and NASA) have 180 days to make these revisions, which is not a lot of time to complete a task of this magnitude.
By May 5, 2025, the Office of Management and Budget is required to publish a guidance memorandum to agencies directing implementation of this Executive Order. The purpose of this guidance memorandum is to ensure consistency and alignment of policy objectives and implementation of changes to the FAR and each agencies’ supplemental acquisition regulations. The guidance memorandum will propose new agency supplemental regulations and internal guidance for adoption that will promote expedited and streamlined acquisitions.
Impact on Federal Contractors
The impacts of these Executive Orders will be felt first by federal acquisition professionals who are responsible for their agencies’ procurement functions. These federal employees will see changes in how they work immediately. In relatively short order, however, businesses that are competing for federal contracts will also experience the impacts of these changes. The Executive Orders demand deregulation to drive reform at a rapid rate with the goal of increasing speed, flexibility, and execution.
The Executive Orders will likely lead agencies to use more non-traditional contracting vehicles like OTAs, many of which may be drafted without incorporating any FAR clauses. OTAs are generally not considered “procurements” for purposes of bid protest jurisdiction. The Government Accountability Office (GAO) lacks jurisdiction over protests of OTA awards. GAO can only review bid protests related to an agency’s use of its OTA authority. Would-be protesters, then, are left to the costly and slower process of protesting at the Court of Federal Claims (COFC); and COFC’s jurisdiction over OTA bid protests has also been debated.
We also expect to see an increase in the use of sole source justifications, which may limit competition while also expediting the path to contract award. Finally, with the Executive Orders pushing the federal acquisition workforce to take risks and streamline the contracting process, we believe that more innovative source selections will be conducted, particularly as the FAR and applicable agency supplements are revised and reduced.
Takeaways
Companies that plan to bid on government contracts or have already responded to active solicitations should actively monitor communications related to procurements of interest to ensure that they understand any changes applicable to a specific source selection and the choice of contracting vehicle that will be used.
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