The federal procurement landscape is shifting rapidly. Agencies, Congress, and the courts have pushed major changes recently that affect how contracts are written, awarded, challenged, and performed. Below is a concise survey of the most important emerging trends — and practical steps contractors should take now.
FAR Overhaul — Plain Language, Statutory Focus, Faster Acquisition
The Federal Acquisition Regulation (FAR) is undergoing the most comprehensive rewrite in decades. Agencies and the FAR Council are attempting to return the FAR to its statutory roots, rewriting provisions in plain language, and moving many non-regulatory “how-to” matters into nonbinding buying guides. The stated goal is to speed up acquisitions, reduce unnecessary regulatory detail, and improve clarity for contracting officers and industry.
- Why it matters – Solicitation language, flow-down provisions, and compliance expectations will change. Contractors should expect new standard clauses and should be prepared to interpret and adhere to those clauses.
- Action – Contractors should review existing compliance templates and master agreements for clauses that assume the “old” FAR structure. Contractors should also coordinate with contracting officers early when solicitations cite newly rewritten FAR text.
Bid Protest Pleading Standards and Evolving GAO Practice
The Government Accountability Office (GAO) has moved to tighten the pleading standard for bid protests following FY2025 NDAA direction. Specifically, the GAO has clarified that “protesters must provide, at a minimum, credible allegations that are supported by evidence and are sufficient, if uncontradicted, to establish the likelihood of the protester’s claim of improper agency action.” At the same time, the GAO’s statistics show that protest filings at the GAO have dropped in recent years, while protest filings at the U.S. Court of Federal Claims have increased.
- Why it matters – Heightened pleading standards can affect protest strategy (when to protest, what evidence to include, etc.).
- Action – Contractors shouldtighten proposal documentation (document evaluation criteria compliance), preserve contemporaneous procurement records, and prepare stronger factual bases before filing protests.
Cybersecurity and Software Supply-Chain Requirements (CMMC, SBOMs)
Cyber requirements are now mission-critical. DoD’s Cybersecurity Maturity Model Certification (CMMC) implementation and associated Defense Federal Acquisition Regulation (DFARS)/CMMC rules are being rolled out in phases with material consequences for award (including certification requirements at contract award for many solicitations). Parallel to CMMC, federal cybersecurity authorities (CISA, NSA and partners) have expanded Software Bill of Materials (SBOM) guidance and issued updated minimum elements and draft guidance to increase transparency of software supply chains. Contractors should expect procurements to require SBOMs, assessment evidence, and flow-downs to subcontractors.
- Why it matters – Noncompliance can make a vendor ineligible for awards, trigger contract terminations, result in negative CPARS, and increase audit risk.
- Action – Contractors should inventory software components, adopt SBOM tooling and practices, confirm whether solicitations require CMMC level or specific SBOM deliverables, and build subcontract flow-down clauses and assessment timelines into proposals and schedules.
AI Procurement, Governance and Related Rules
Federal AI procurement activity has accelerated, and agencies are being given explicit guidance for responsible AI acquisition. OMB and White House guidance (and agency AI plans) are directing agencies to adopt AI procurement controls and risk assessment processes, and the GSA and other agencies are standing up AI acquisition resources and vehicle options. Contractors offering AI products/services should expect special contract terms addressing explainability, bias mitigation, data provenance, and security.
- Why it matters – AI-specific clauses may impose new compliance burdens, testing, and warranty/indemnity regimes — and procuring agencies will favor vendors who can demonstrate governance and secure deployment.
- Action – Contractors should build an AI governance package (risk assessment, testing protocols, incident response, data handling policies). Contractors should also highlight AI components in proposals when appropriate and be prepared to negotiate responsible-use contract language.
Market and Budget Trends, Threshold Inflation and Consolidation
Federal spending priorities and contracting thresholds are changing. Inflation adjustments to acquisition thresholds, shifting agency budgets, and industry consolidation (fewer prime contractors in certain sectors) are reshaping competition dynamics. Agencies are also emphasizing commercial-item contracting and other streamlined approaches.
- Why it matters – Competition pools and subcontracting opportunities are shifting; small businesses and mid-market firms may need new strategies to remain competitive.
- Action – Contractors should reassess capture plans to reflect consolidation and threshold changes. Contractors should also consider teaming, mergers, or JV options. Further, contractors should consider targeting commercial-item pathways or set-aside opportunities.
Closing
The pace of regulatory and policy change in government contracts is unusually brisk — driven by technology (AI and software supply chain concerns), cybersecurity imperatives, statutory reforms, shifting political agendas, and evolving protest practice. For contractors, the key is proactive adaptation: update compliance playbooks, invest in cybersecurity/SBOM and AI governance, tighten proposal documentation, and revisit teaming and capture strategies. Staying ahead will not only reduce risk of noncompliance but also create competitive advantage in an environment that increasingly prizes secure, explainable, and well-documented solutions.
If you have any questions about any of the foregoing, please do not hesitate to contact Aron Beezley, Nathaniel Greeson, or Gabby Sprio.