As the US government expands procurement of commercial products and services, technology companies, from startups to established firms, have growing opportunities to sell to and collaborate with federal agencies.
Morgan Lewis Government Contractor Guidebook
YOUR GUIDE TO THE ISSUES THAT MATTER TO GOVERNMENT CONTRACTORS
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.
The White House’s recent executive order on federal contracting could significantly reshape how agencies structure procurements and allocate performance risk. Executive Order 14402, Promoting Efficiency, Accountability, and Performance in Federal Contracting, directs executive agencies to default to fixed-price contracts unless they can justify and obtain approval for another contract type.
Recent developments in government contracting include a major Department of Commerce initiative to fund domestic quantum computing capabilities, continued implementation of the administration’s fixed-price contracting directive, and legislative efforts to codify the small business “Rule of Two” into statute. Together, these developments reflect continued emphasis on industrial policy, procurement reform, and preservation of longstanding small business contracting requirements.
Recent developments in government contracting include a proposed US Department of Defense rule expanding foreign ownership, control, or influence (FOCI) requirements, a Government Accountability Office report focused on procurement reform and oversight, and a major False Claims Act settlement tied to customs duty evasion.
Recent developments in government contracting highlight increased scrutiny of domestic sourcing and country-of-origin certifications, anticipated enforcement of cybersecurity requirements, and Small Business Administration activity focused on small business program compliance. These developments reflect continued alignment of procurement and enforcement priorities with supply chain security, data protection, and program integrity, directly impacting contractors across the federal marketplace.
Recent developments in government contracting include a new executive order focused on procurement discipline, two federal court decisions addressing agency discretion and grant conditions, and additional updates under the ongoing FAR Overhaul initiative. Together, these developments signal continued emphasis on cost control, performance accountability, and policy-driven procurement, with practical implications for contractors across the federal marketplace.
Recent developments in government contracting include a notable US Court of Federal Claims decision involving US Agency for International Development (USAID) contract terminations, a significant Federal Acquisition Regulation (FAR) deviation implementing Executive Order 14398, new Defense Production Act (DPA) actions by the administration, and an Office of Management and Budget (OMB) memorandum aimed at increasing the use of commercial products and services in federal procurement.
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 US Department of Defense (DOD) has implemented the Cybersecurity Maturity Model Certification (CMMC) program as of November 2025. The final rule implementing CMMC established new cybersecurity requirements for federal contractors and subcontractors and, resultingly, heightened the risks of noncompliance, including potential False Claims Act (FCA) risks.