Recent developments in government contracting include new restrictions on the use of certain AI technologies in federal systems, a US Department of Justice (DOJ) initiative offering financial incentives for whistleblower reports, and two court and Government Accountability Office (GAO) decisions addressing bid responsiveness and domestic sourcing requirements. Together, these developments highlight evolving compliance obligations, potential enforcement exposure, and the importance of closely reviewing solicitation and procurement requirements.
DHS Order Excludes DeepSeek Products from Federal Systems
Effective immediately, a new Federal Acquisition Supply Chain Security Act (FASCSA) order issued by the Department of Homeland Security (DHS) requires federal civilian agencies to exclude DeepSeek technology from procurements and remove DeepSeek-related products from agency information technology systems.
DeepSeek is a China-based AI research company and large language model developer whose data security practices have recently been the subject of investigations in South Korea, Italy, and the Netherlands.
Notably, the DHS restriction extends beyond products supplied directly by DeepSeek to include products and services developed using DeepSeek implementations. As a result, the order may trigger contractual disclosure, remediation, and removal obligations for government contractors that have used or incorporated DeepSeek models into proprietary software, AI platforms, or government-facing services, even where DeepSeek is not a direct supplier.
Contractors should assess whether products or services delivered to federal customers incorporate or were developed using DeepSeek technology and evaluate any resulting compliance and remediation obligations.
DOJ Launches New Whistleblower Rewards Program
On October 20, 2026, DOJ announced a new Whistleblower Rewards Program offering payments of $10,000 to $30,000 for actionable tips leading to federal criminal charges involving specified categories of fraud.
Unlike traditional whistleblower reward programs, payments under the new initiative do not require a conviction, financial recovery, or minimum loss amount. Whistleblowers may also remain eligible for larger awards under other applicable programs if their information results in substantial financial penalties or forfeitures.
The program covers fraud involving programs or benefits administered by the US Departments of Agriculture, Labor, Health and Human Services, Housing and Urban Development, Education, Veterans Affairs, and War, as well as the Small Business Administration.
The extent to which payments will be made under the program remains uncertain, however, as DOJ indicated that the president would retain discretion over award eligibility.
For contractors, the prospect of an upfront payment could encourage additional reports of suspected fraud to DOJ. Companies should therefore assess the effectiveness of their internal reporting, investigation, and remediation procedures to ensure that credible allegations are promptly investigated and appropriately escalated. Policies should also be reviewed to ensure they do not discourage protected whistleblowing or improperly restrict communications with regulators.
GAO Decision Reinforces Strict Bid Responsiveness Requirements
In Prestique Inc., GAO recently denied a small business' protest challenging the Air Force's rejection of its lowest-priced bid for roof repairs and replacements because the bid failed to comply with solicitation requirements.
The Air Force's invitation for bids required bidders to provide a warranty satisfying several specific requirements. It also included a general instruction stating that, by submitting a bid, offerors warranted that they could meet all project requirements.
The Air Force rejected the protester's bid because the submitted warranty included some, but not all, of the required terms. The protester argued that its general assurance of compliance with all project requirements effectively satisfied the warranty requirements.
GAO disagreed, concluding that the general assurance did not substitute for the specific commitments required by the invitation for bids.
The decision underscores that even the lowest-priced bid may be rejected when it fails to address each material solicitation requirement. Contractors should not rely solely on generalized statements of compliance where an invitation for bids requests specific assurances. Instead, bidders should ensure that each required representation, warranty, or commitment is expressly addressed in their submissions.
DC Circuit Clarifies Buy America Waiver Requirements
The US Court of Appeals for the District of Columbia Circuit recently upheld a Federal Railroad Administration (FRA) nonavailability waiver permitting the foreign manufacture of high-speed trains, clarifying how domestic availability should be assessed under the applicable Buy America requirements.
The court concluded that domestic availability must be evaluated at the time an agency issues a waiver, rather than based on a manufacturer's plans to establish domestic production capabilities before contract performance.
The court also clarified that unsuccessful domestic bidders may have standing to challenge waivers benefiting foreign competitors based on lost profits and a substantial likelihood that invalidating the waiver would redirect business to them.
For contractors seeking nonavailability waivers, the decision suggests that existing domestic manufacturing capacity will be central to the agency's analysis, even where a domestic competitor proposes to develop qualifying production capabilities in the future.
The ruling also confirms a potential avenue for domestic offerors to challenge awards benefiting foreign manufacturers that obtain Buy America waivers.
Although the decision specifically addresses the FRA's Buy America requirements, its reasoning may inform waiver determinations and challenges under other domestic sourcing regimes.
Looking Ahead
These latest developments reinforce the importance of accurate compliance representations, careful proposal preparation, and continued monitoring of federal procurement restrictions. Technology contractors should assess potential exposure under the new DeepSeek exclusion order, while companies participating in federally funded programs should evaluate internal reporting and investigation procedures in light of DOJ's new whistleblower incentives. Contractors should also ensure that bids address all material solicitation requirements and closely monitor how agencies evaluate domestic sourcing availability and waiver requests.
Law clerk Marina Rioux contributed to this blog post.