Insights

On July 2, 2026, the Department of War (DoW) issued an Advance Notice of Proposed Rulemaking (ANPR) setting out a framework to implement the prohibition on acquisition of covered printed circuit boards (PCBs) from “covered nations”—North Korea, China, Russia, and Iran—enacted under sections 841 and 851 of the National Defense Authorization Acts (NDAAs) for Fiscal Years 2021 and 2022, respectively, and codified at 10 U.S.C. § 4873.  DoW invites industry to respond to specific questions and provide comments on the ANPR by August 31, 2026.

On June 5, 2026, President Trump issued National Security Presidential Memorandum (NSPM) 11 (NSPM-11) to accelerate AI adoption by the U.S. military and intelligence agencies. It directs updated AI management, acquisition, and use policies and seeks to compel AI companies to comply with Trump administration policies.  It calls for expanded training and enhanced security in collaboration with the private sector and orders the “termination for default or for convenience” of government contracts with AI companies that wish to limit how the government uses their products. NSPM-11 could also herald a major change in autonomous warfighting policy by directing the update of the Pentagon’s primary directive on autonomous weapon systems.

The Office of Management and Budget issued on May 29, 2026 a Proposed Rule that would significantly revise the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) at 2 C.F.R. Part 200, potentially impacting the full lifecycle of federal grants, cooperative agreements and other forms of financial assistance, from pre-award merit review through post-award administration and termination. These proposed changes are designed to implement the President’s policy priorities, executive actions related to diversity, equity and inclusion (DEI) activities, and Executive Order No. 14332, Improving Oversight of Federal Grantmaking (EO 14332).

On May 7, 2026, the Department of War issued the long-awaited Proposed Rule to implement Section 847 of the FY 2020 National Defense Authorization Act (NDAA) regarding Foreign Ownership, Control or Influence (FOCI) requirements for contractors. The proposed rule would expand the applicability of FOCI reviews, requiring contractors and subcontractors on unclassified “covered contracts” — defense contracts and subcontracts valued in excess of $5 million that are not for commercial products and services — to submit FOCI disclosures to the Defense Counterintelligence and Security Agency (DCSA) for FOCI risk assessment (and as applicable, mitigation) as part of contract award. This would effectively require DCSA assessment and adjudication of FOCI considerations prior to contract award. Thus, both cleared and uncleared defense contractors would be subject to the rigorous DCSA disclosure requirements, scrutiny, and FOCI mitigation. Crowell discussed the Section 847 requirements in a prior alert.

On April 30, 2026, President Trump issued an executive order (EO) titled Promoting Efficiency, Accountability, and Performance in Federal Contracting, requiring agencies to “default” to fixed-price contracting to “protect taxpayer dollars, hold contractors accountable, and achieve demonstrable returns on investment.” The EO directs new approval processes for contract awards going forward, modification of certain existing contracts, and amendments to the Federal Acquisition Regulation (FAR).

On March 26, 2026, President Trump issued an executive order (EO) titled Addressing DEI Discrimination by Federal Contractors. The EO declares diversity, equity, and inclusion (DEI) “activities” “unethical and often illegal,” and imposes new obligations on federal contractors and subcontractors related to DEI programming. Contractors that do business with the federal government — or that work as subcontractors for companies that do — should review the EO closely to determine the extent to which they are compliant with the new requirements.

On March 6, 2026, the General Services Administration (GSA) issued a significant proposed contract clause, GSAR 552.239-7001, Basic Safeguarding of Artificial Intelligence Systems (“Clause”), for inclusion in GSA Schedule solicitations and contracts for AI capabilities.  The proposed clause would impose substantial new requirements related to AI sources, intellectual property rights, data use, change management, and performance standards.  The Clause would also take precedence over any other contract terms (including commercial licensing terms) related to AI, including a Seller’s terms of sale and service to which the Government had previously agreed.  GSA requests comments by March 20, 2026.

On February 17, 2026, the Federal Acquisition Regulatory Council (FAR Council) released a Proposed Rule (Proposed Rule) to implement Section 5949(a) of the James M. Inhofe National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023 (Section 5949), following the FAR Council’s May 3, 2024 Advanced Notice of Proposed Rulemaking (ANPR).  Comments on the proposed rule are due by April 20, 2026.

Congress has not passed funding bills to keep key parts of the government funded for the remainder of Fiscal Year 2026—including the Departments of Defense, State, Treasury, Labor, Health and Human Services, Transportation, Housing and Urban Development, and Homeland Security, as well as independent agencies, the judiciary, and national security and foreign operations functions. As Congress continues to negotiate a deal in advance of the expiration of funds on January 30, parts of the government may still face a short shutdown, given the time needed for both the Senate and the House to consider and approve legislation. In anticipation of that possibility, agencies whose funding is uncertain are preparing for a shutdown; contractors, grant recipients, and companies that work with those agencies should do the same. Our team is ready and available to advise through the shutdown process.

On December 18, 2025, the Fiscal Year 2026 National Defense Authorization Act (FY 2026 NDAA) (P.L. 119-60) was signed into law. The Act makes significant changes to defense acquisition, sourcing restrictions, and interactions between the Defense Industrial Base (DIB) and the Department of Defense (DOD). 

On November 7, 2025, Secretary of War Pete Hegseth announced the Department of War’s (“DoW”) Acquisition Transformation Strategy (the “Strategy”) during a speech to military leaders and industry at the National War College on Fort McNair.  The Strategy sets out five pillars for acquisition reform, each containing near-and long-term actions to “ensure delivery of capabilities to the American warfighter” at a more rapid pace.  

Yesterday, the Department of Energy (“DOE”) announced its termination of 321 grants and other awards supporting 223 energy projects.  The terminated awards were issued by the Office of Clean Energy Demonstrations, Office of Energy Efficiency and Renewable Energy, Office of Fossil Energy, the Grid Deployment Office, the Office of Manufacturing and Energy Supply Chains, and the Advanced Research Projects Agency-Energy.

Congress has not passed crucial funding bills for the start of Fiscal Year 2026.  If Congress fails to act by September 30, the government may be forced to shut down for lack of funding.  In anticipation of that possibility, agencies government-wide are preparing for a shutdown, and contractors and companies that work with the government should do so as well.  Our team is ready and available to help advise companies through the shutdown process.

On September 18, 2025, the Director of National Intelligence (DNI) issued the first order under the authority conferred by the Federal Acquisition Supply Chain Security Act (FASCSA), requiring exclusion and removal of products and services by an identified source.[1]

On August 25, 2025, the Department of Defense (DoD) issued the Final Rule implementing Section 812 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2024 (P.L. 118-31).  The Final Rule will take effect on October 24, 2025 via a new solicitation provision, DFARS 252.209-7012 (Prohibition Relating to Conflicts of Interest in Consulting Services – Certification).

On August 7, 2025, President Trump issued an Executive Order (EO) titled, “Improving Oversight of Federal Grantmaking,” setting out the framework for sweeping changes to the grantmaking process.  The order purports to address the Administration’s concerns about federal grants supporting controversial or ineffective programs and incurring excessive administrative costs.  The EO implements three key changes to federal grant requirements. 

On May 15, 2025, U.S. Department of Energy (“DOE” or the “Agency”) issued a memorandum outlining the Agency’s new policy for evaluating financial assistance awards (e.g., grants, cooperative agreements, and technology investment agreements) to identify waste, fraud, and abuse. Businesses, universities, non-profit organizations, and other entities that have received DOE financial assistance awards now face increased risk of investigation and potential award termination, withholding of funding, and project modification.

On March 20, 2025, the White House issued Executive Order (“EO”), “Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement,” to consolidate domestic civilian contracting for “common goods and services” within one agency—the General Services Administration (“GSA”). The EO defines “common goods and services” as those described in the Category Management system first developed as part of a previous effort, dating back to 2014, to coordinate spending across the government.

On February 24, 2025, the Small Business Administration (SBA) issued a “Day One” memo outlining SBA Administrator Kelly Loeffler’s priorities. 

On February 13, 2025, Judge Amir Ali of the U.S. District Court for the District of Columbia issued a temporary restraining order in two combined cases—one filed by U.S. Agency for International Development (USAID) contractors, a second by USAID grant recipients—challenging Executive Order 14169, “Reevaluating and Realigning United States Foreign Aid,” which paused almost all foreign assistance funding.