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Morgan Lewis Government Contractor Guidebook

YOUR GUIDE TO THE ISSUES THAT MATTER TO GOVERNMENT CONTRACTORS

GovCon Update: FY27 NDAA, FCA Enforcement, Transportation Funding

Recent developments in government contracting include the release of the House Armed Services Committee’s draft National Defense Authorization Act (NDAA) for Fiscal Year 2027, a new Department of Justice (DOJ) initiative aimed at accelerating review of certain False Claims Act (FCA) whistleblower cases, and the advancement of a major surface transportation reauthorization bill in the House of Representatives, highlighting continued congressional and executive branch focus on defense modernization, fraud enforcement, and major infrastructure investment.

House Armed Services Chair Unveils Draft FY27 Defense Bill

House Armed Services Committee Chairman Mike Rogers recently released the Chairman’s Mark of H.R. 8800, the NDAA for Fiscal Year 2027. The committee is scheduled to consider the draft legislation during a full committee markup on June 4, 2026.

Although the bill remains subject to amendment, Senate consideration, and conference negotiations, the draft NDAA provides an important early indication of congressional defense priorities. The proposal addresses a broad range of defense policy issues, including military readiness, force posture, acquisition reform, technology modernization, and industrial base capacity.

Several proposed acquisition-related provisions may be of particular interest to contractors, including efforts to balance price and quality by limiting use of lowest-price technically acceptable procurements, implementation of a risk-based approach to monitoring contractor business systems, and revisions to criteria governing the financial structures of Other Transaction Authority agreements.

For defense contractors, the draft NDAA is worth monitoring for not only overall authorization levels but also program-specific direction, reporting requirements, acquisition reforms, and restrictions placed on the Department of Defense. Even provisions that ultimately do not become law may signal congressional scrutiny of particular programs or practices and influence future acquisition planning.

DOJ Announces Faster Review of Certain Benefits-Fraud Qui Tam Cases

The DOJ Civil Division recently announced reforms designed to accelerate review of FCA whistleblower complaints alleging fraud involving federally funded, state-administered benefits programs.

The announcement follows the March 2026 executive order establishing the Task Force to Eliminate Fraud, which directed federal agencies to increase focus on potential fraud involving state-run benefit programs that receive federal funding.

Under the revised process, DOJ will prioritize review of these qui tam complaints and conduct an initial assessment within 60 to 120 days. Following that review, DOJ may allow the relator to proceed, determine that additional government investigation is warranted, or seek dismissal if the allegations lack sufficient specificity or are otherwise legally deficient.

DOJ also indicated that new benefits-fraud matters may be referred quickly to criminal enforcement components for evaluation of potential criminal violations and may be shared with affected agencies for administrative action, including suspension of payments.

The initiative reflects continued emphasis on FCA enforcement and signals that contractors operating in programs involving federal benefits funding may face faster government review and earlier enforcement decisions when whistleblower allegations arise.

House Committee Advances Major Surface Transportation Funding Bill

The House Transportation and Infrastructure Committee recently approved the BUILD America 250 Act, a bipartisan five-year surface transportation reauthorization bill covering highways, bridges, transit, rail, freight, highway safety, and motor carrier safety programs.

Approved by a vote of 62 to 2, the legislation would authorize approximately $580 billion between fiscal years 2027 and 2031, including $474.4 billion in Highway Trust Fund contract authority and approximately $106 billion subject to annual appropriations.

The proposal includes significant funding for the Federal Highway Administration, Federal Transit Administration, Federal Railroad Administration, bridge programs, discretionary grants, and other transportation initiatives. It also proposes changes to Highway Trust Fund revenue mechanisms and would establish a federal framework for autonomous commercial motor vehicles.

The bill emphasizes traditional transportation infrastructure, project delivery, state flexibility, bridge investment, safety, freight movement, and innovation. It would also repeal or realign certain existing programs while preserving other discretionary funding opportunities.

For contractors, the legislation could shape transportation-related procurement opportunities over the next five years. Portions of the proposal remain subject to annual appropriations, and current highway and transit authorities are scheduled to expire on September 30, 2026, meaning further legislative action will be necessary before final funding levels and program structures are determined.

Looking Ahead

These developments underscore continued federal focus on defense acquisition reform, fraud enforcement, and infrastructure investment. Contractors operating in these sectors should monitor legislative developments closely, particularly as Congress advances major authorization and funding bills and agencies continue refining enforcement priorities and oversight mechanisms.