On April 16, 2025, President Trump issued another in a series of Executive Orders (EO) aimed at improving government procurement, this one entitled “Ensuring Commercial, Cost-Effective Solutions in Federal Contracts.”
Instead of introducing new procurement rules, this EO emphasizes the contracting officer’s role in complying with existing federal commercial item preferences dating back to the Federal Acquisition Streamlining Act (FASA) passed by the Clinton Administration in 1994.
This EO requires contracting officers to justify and receive approval before procuring custom-developed or non-commercial products or services. Agencies can expect ongoing solicitations subject to this EO to experience delays of one month or longer.
Review of Non-Commercial Solicitations (60 Days)
Agencies have 60 days to direct all contracting officers to review open solicitations for non-commercial item or service acquisitions and submit “applications” consisting of market research and pricing data to their agency’s approval authority for review. Currently awarded contracts are not affected.
Agency approval authorities will have 30 days to act on each application, which could include an advisory consultation with the Office of Management and Budget (OMB). Agencies can take one of three actions on each application:
- Approval of the existing acquisition plan to purchase non-commercial or developmental products or services
- Denial of the application, along with appropriate recommendations on seeking commercial products or services
- Identification of deficiencies in the application and requiring contracting officers to conduct additional research
Reports of Agency Compliance with FASA (120 Days)
Consistent with the administration’s ongoing push to ensure executive agencies fully support administration priorities, each must submit a commercial item “report card” assessing that agency’s compliance with the FASA, within 120 days.
Agencies could find this task difficult, as identifying and aggregating this data in retrospect may be impractical. Thus, this report could end up focused on current agency policies rather than past acquisition performance.
Analysis
Commercial items are preferable to the government because market competition pushes companies to keep production costs like supplies and labor as low as possible. On the other hand, country-of-origin restrictions such as the Trade Agreements Act (TAA) and domestic product content requirements such as the Buy American Act (BAA) and the Build America, Buy America Act (BABAA) (not to mention tariffs) tend to artificially increase prices until they are no longer competitive in the marketplace.
As the Trump Administration continues to push both domestic preferences and commercial item acquisition, it must address how these competing priorities can work together harmoniously.
This EO emphasizes efficiency and cost savings, potentially leaving open the question of quality in the areas of supply chain and cybersecurity risk. Commercial items are not developed to government security specifications, and agencies may find it difficult to meet increasing security standards with commercially available products. Read together with the recent EO’s focus on efficiency over all else (see our review of that EO here), the administration should address its posture on security issues soon.
Conclusion
The preference for commercial items is over 30 years old, but its implementation still finds sharp critique among industry observers. Efforts to address failures in acquisition process reform, market understanding, and agility have historically languished. This EO represents a less nuanced approach, centered on personal accountability – a move characteristic of the administration’s other efforts.
Industry leaders will watch carefully to see whether this approach appreciably increases commercial item acquisition or merely exhausts another attempt to fix what has been a growing problem for decades.
