On April 15, President Trump issued two new executive orders that will have a direct impact on federal contractors:

• • Restoring Common Sense To Federal Procurement directs federal agencies to eliminate from the FAR any provisions that are not (1) required by statute, or (2) necessary to support the efficacy of the procurement system or protect economic or national security interests.
  • Ensuring Commercial, Cost-Effective Solutions in Federal Contracts requires federal agencies to use commercial products instead of custom products unless a waiver is granted.

Related to these executive orders, the OMB published a notice last week that invited interested parties to identify regulations that should be rescinded or revised.

Federal Procurement Executive Order

In Restoring Common Sense To Federal Procurement, President Trump directed:

• • That the FAR be amended in the next 180 days to eliminate any provisions that are not (1) required by statute, or (2) necessary to “support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests”
  • Federal procurement agencies to appoint a senior acquisition or procurement official to work with the OMB and the FAR Council to identify FAR provisions for removal or revision, and to “ensure agency alignment with FAR reform and to provide recommendations regarding any agency-specific supplemental regulations to the FAR”
  • The OMB to prepare and distribute a memorandum to all federal procurement agencies within the next 20 days which provides guidance on the implementation of this executive order

Any new regulations proposed as part of this process must be in compliance with the “10 for 1” executive order we previously discussed, such that 10 regulations must be removed for any 1 new regulation implemented.

The order also directs the OMB and the FAR Council to consider adopting regulations that would result in the automatic expiration of any non-statutorily mandated regulation after four years, unless the FAR Council specifically reauthorizes that regulation:

In amending the FAR under section 4 of this order, the Administrator, in coordination with the FAR Council, shall:

(a) identify all FAR provisions not required by statute that will remain in the FAR;

(b) consider amending the FAR such that any provisions identified in accordance with subsection (a) of this section will expire 4 years after the effective date of the final rule promulgated in accordance with section 4 of this order unless renewed by the FAR Council; and

(c) consider whether any new FAR provision not required by statute that is promulgated after the effective date of the final rule promulgated in accordance with subsection (b) of this section should include a provision stating that it will expire 4 years after its effective date unless renewed by the FAR Council.

This executive order could have far-reaching implications for federal contractors. From a substantive perspective, it could result in the elimination of burdensome FAR provisions that impose substantial administrative obligations on federal contractors in furtherance of prior administrations’ social/political goals.

Non-statutorily mandated FAR provisions that could be removed, and that may have a significant impact on federal contractors, include the paid sick leave requirements under FAR 22.2105, which has no statutory basis and is based on a prior executive order. Another example are the regulations that implemented the Davis-Bacon Act, since they expanded statutory authority but were not clearly mandated by Davis-Bacon.

On the other hand, the order could also provoke significant uncertainty because federal contractors have developed systems, policies, and approaches that align with the current regulatory framework. If that framework is removed, contractors may be subject to more variance in how Contracting Officers regard and implement the remaining FAR provisions, which could result in potentially disparate interpretations, approaches, and obligations.

Finally, given this directive by executive order, the FAR Council and procurement agencies may take the approach that notice and comment is not available or required for actions to rescind non-statutorily mandated regulations. Federal contractors may not enjoy an opportunity for formal notice and comment, so they might wish to contact their advocacy agencies or other resources to raise any concerns or proposals regarding implementation of this executive order.

Commercial Solutions EO

In Ensuring Commercial, Cost-Effective Solutions in Federal Contracts, President Trump “directs the administration to prioritize the procurement of commercially available products and services, as required by the Federal Acquisition Streamlining Act of 1994 (FASA), rather than non-commercial, custom products or services.”

This executive order:

• • Directs contracting officers to review all pending contracts for non-commercial products or services within 60 days and submit proposed waivers that justify their necessity; any waivers must include market research and price analysis to demonstrate why commercial solutions cannot meet the government’s needs
  • Directs agencies to submit reports to the OMB within 120 days and annually thereafter which detail compliance with FASA and progress on implementing the executive order’s policies
  • Establishes that waivers for non-commercial procurements must be reviewed and approved or denied in writing

The goal of this executive order is to reduce the federal government’s procurement of “custom products” in favor of commercially available items.

This order may affect small business contractors as the federal government reduces its use of specially designed software programs and other products that can potentially be served by commercial products. Given this change, small business contractors might consider how they can meet the SBA’s non-manufacturer rule, since that would provide a potential mechanism for providing commercial items to the federal government pursuant to a small business set-aside contract, including 8(a) directed awards and HUBZone contracts.

OMB Request For Deregulation Proposals

Finally, on Friday, April 11, the OMB published a request that interested parties “identify rules to be rescinded and provide detailed reasons for their rescission.” It did not limit its request to any particular agency or industry, but instead “invites comments about any and all regulations currently in effect.”

The OMB’s request is part of the Trump administration’s implementation of Executive Order 14192, titled “Unleashing Prosperity Through Deregulation,” the purpose of which is to “promote prudent financial management and alleviate unnecessary regulatory burdens.”  We previously discussed that executive order here, and its requirement that:

• • For every one (1) new regulation to be promulgated, an agency must identify at least ten (10) existing regulations to repeal
  • For Fiscal Year 2025, each agency must ensure the “total incremental cost of all new regulations, including repealed regulations, being finalized this year, shall be significantly less than zero…”
  • Any new costs imposed by a new regulation must be offset by the elimination of costs imposed by at least ten (10) existing regulations

The deadline to submit comments in response to the OMB’s solicitation is May 12, 2025. Interested parties may want to consider whether to identify regulations for recission pursuant to this process.

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.