Recent developments in government contracting highlight growing federal attention to artificial intelligence (AI) governance, technology supply chain security, domestic industrial capacity, and contractor compliance obligations. The latest updates include new General Services Administration (GSA) rulemaking affecting information and communication technology (ICT) acquisitions, a significant Department of Defense (DoD) investment in domestic rare earth processing, and two Department of Justice (DOJ) settlements reinforcing continued enforcement priorities in the small business and cybersecurity arenas.
Morgan Lewis Government Contractor Guidebook
YOUR GUIDE TO THE ISSUES THAT MATTER TO GOVERNMENT CONTRACTORS
The US Department of Justice (DOJ) is changing how it reviews certain False Claims Act (FCA) whistleblower cases, and organizations participating in federally funded benefits programs should take notice.
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.
While M&A involving government contractors continues to attract strategic buyers and sponsors, with these deals comes a different level of diligence than a typical commercial transaction. The reason is straightforward: when a company does business with the government, contract performance, compliance, and enforcement risk are often closely linked. In addition to creating operational friction, a diligence issue may affect valuation or future eligibility for work or expose the buyer to inherited liability.
The March 16, 2026 executive order establishing the new interagency Task Force to Eliminate Fraud signals a more coordinated, enforcement-focused approach to fraud risks in federally funded benefit programs. The initiative emphasizes front-end eligibility and identity verification, expanded data sharing across federal and state systems, and increased reliance on civil enforcement tools, including the False Claims Act (FCA). With accelerated implementation timelines and broad agency participation, the order points to heightened scrutiny for contractors, grantees, and other entities involved in administering or receiving federal funds.
A recent executive order targeting diversity, equity, and inclusion (DEI) practices in federal contracting signals a significant escalation in enforcement risk, particularly under the False Claims Act (FCA). The order introduces a broad definition of prohibited conduct, mandates new contract clauses with short implementation timelines, and directs more aggressive use of whistleblower-driven enforcement. These changes point to heightened scrutiny of contractor policies, subcontractor oversight, and internal compliance systems.