The Trump administration recently announced three significant initiatives to reshape the federal procurement landscape. These include three new executive orders aimed at modernizing defense acquisitions, reforming foreign defense sales, and—perhaps most consequential—restoring common sense to federal procurement practices.
- Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base (April 9, 2025)
- Reforming Foreign Defense Sales to Improve Speed and Accountability (April 9, 2025)
- Restoring Common Sense to Federal Procurement (April 15, 2025)
Restoring Common Sense to Federal Procurement
Government contractors should be aware that the Trump administration intends to enhance competition and efficiency in federal procurement by amending the Federal Acquisition Regulations (FAR) for the first time since 1984. By mid-October of 2025, the Office of Federal Procurement Policy (OFPP) and the FAR Council will amend the FAR to ensure it contains only those provisions that are required by statute or otherwise necessary to support the simplicity and usability of the FAR, strengthen the efficacy of the procurement system, or protect economic or national security interests.
In sum, the FAR will be amended to remove all clauses and/or provisions that have not been codified by an act of Congress, are duplicative, and/or are deemed unnecessary to achieve the federal government’s procurement goals. While agency-specific supplemental regulations, such as the Defense Federal Acquisition Regulation Supplement (DFARS), will fill the gaps left behind by these changes, these supplements must align with the executive order’s objective of fostering efficient, economical, and simplified procurement.
Even if a non-statutory FAR clause or provision is discretionarily retained in the amended FAR, any such provision will automatically expire after four years if the FAR Council does not affirmatively renew it. This means that changes to the FAR and its agency-specific supplements will occur every four years after the amended FAR is finalized. Contractors should be aware of this reality and remain up to date on any such renewals or expirations.
The executive order’s language is broad, so federal contractors can expect more clarity in the coming weeks. Within 20 days, the Office of Management and Budget (OMB) will issue a memorandum providing further guidance on how federal agencies are meant to enforce the order. Similarly, the OFPP and the FAR Council will issue interim guidance as appropriate until the final FAR provisions are published.
To finalize the new regulations, the OFPP and the FAR Council will need to open a “notice and comment” period during which interested parties can provide feedback on the proposed revisions. Federal contractors should be aware of the “notice and comment” period and provide feedback on the revised FAR to protect their interests.
Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base
The U.S. Department of Defense’s (DoD) federal acquisition system is set to drastically change as the Trump administration implements its policies to enhance government efficiency. On April 9, 2025, President Trump issued an executive order aimed at reforming the DoD’s acquisition system. The order explains that the new processes will emphasize “speed, flexibility, and execution” while modernizing the “duties and composition of the defense acquisition workforce.”
The order directs the Secretary of Defense to submit a plan to the President within 60 days of issuance explaining how the DoD plans to achieve modernization of its acquisition system. Most importantly for defense contractors, this plan must explain how the agency plans to shift its current acquisition procedures to include a first preference for “commercial solutions” and a general preference for non-traditional Other Transactions Authority (OTA) acquisitions. Accordingly, the DoD will soon prefer contracts that provide the agency with commercial products and services, and not traditional defense products and services. The DoD will also heavily emphasize awarding OTAs—contract instruments not regulated by the FAR, which will cause significant variation in how federal contractors can contract with the DoD. These changes to the DoD’s acquisition system will alter the landscape of defense contracting in ways that are yet to be fully determined.
Aside from this shift in contracting preferences, the DoD must also provide the President with a detailed explanation of how it plans to “eliminate unnecessary tasks, reduce duplicative approvals, and centralize decision-making.” To that end, the DoD must now provide the President with a detailed process on how the Under Secretary of Defense for Acquisition and Sustainment, Service Acquisition Executives, and Component Acquisition Executives “can effectively manage risk for all acquisition programs through a formal steering board” called the Configuration Steering Board; and provide a plan to the President on how the DoD will train contracting officers to implement the administration’s policy goals.
Finally, any defense contractor performing work for the DoD under a major defense acquisition program (MDAP) must be aware that the DoD is tasked with reviewing whether each program aligns with the Trump administration’s goal of government efficiency. As a result, within 90 days of the order being signed, the DoD must review and potentially cancel any MDAP that is:
- 15% behind schedule based on the Acquisition Program Baseline;
- 15% over-calculated cost based on that same baseline;
- Unable to meet performance goals; or
- Unaligned with the Secretary of Defense’s” mission goals.
A defense contractor working under an MDAP should be mindful of their contract status with the DoD to ensure that the contractor’s work aligns with the requirements listed in the order. After the DoD completes its review of MDAPs, it will conduct the same review for all other major systems.
Reforming Foreign Defense Sales to Improve Speed and Accountability
Defense contractors manufacturing conventional arms and other defense end-items should be aware that the federal government intends to revamp the foreign defense sales system to improve defense cooperation between the United States and its allies. The federal government will place allies that support the foreign policy objectives of the United States on a “priority list” under which they may purchase American-made conventional arms and other defense end-items on a priority basis. While the list of allies and military end-items receiving priority treatment will be updated annually to align with the United States’ foreign policy goals as they evolve, the first iteration of these lists will be issued in early June 2025. Defense items exclusively available for purchase through the Foreign Military Sales (FMS) process and the United States Munitions List may be affected, as the federal government plans to revise these lists to include only the most sensitive and sophisticated U.S.-made technologies. Defense contractors should be on the lookout for the priority list of allies, the priority list of military end-items, and revisions to the FMS-only and United States Munitions List to remain competitive on procurements relating to foreign defense sales, as the “exportability” of a defense contractor’s product(s) will be considered in the early stages of the acquisition process.
