Trump Executive Orders: Key Developments for Government Contractors

Although there are many executive orders that will impact government procurement, in this Alert, we highlight four of the most significant executive orders:

• Executive Order 14275, Restoring Common Sense to Federal Procurement, which requires the rewriting of the Federal Acquisition Regulation (the “FAR”);
• Executive Order 14271, Ensuring Commercial, Cost-Effective Solutions in Federal Contracts, which reaffirms (and arguably expands upon) an existing preference for the procurement of commercial products and services;
• Executive Order 14240, Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement, which requires the consolidation of purchases of common goods and services under the General Services Administration (“GSA”); and
• Executive Order 14265, Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base, which calls for the Department of Defense (“DoD”) to review and reform its acquisition programs.

Together, these executive orders have the potential to significantly change how companies do business with the federal government.

The “Revolutionary FAR Overhaul” (Executive Order 14275)

Signed by President Trump on April 15, 2025, Executive Order 14275 will have a direct (and evidently near-term) impact on government contractors because it proposes changing the foundations upon which companies do business with the government. Under this executive order, President Trump directed the Office of Federal Procurement Policy (“OFPP”) and other stakeholders in the federal procurement process to “simplify and streamline” the FAR. Now known as the “Revolutionary FAR Overhaul” or “RFO,” Executive Order 14275 seeks to reduce the FAR to only those provisions that are required by statute or that are “otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests.” Agencies with FAR supplements must also revise those regulations to align with the revised FAR. The executive order also calls for a regulatory sunset provision that will cause any non-statutory FAR provisions to expire after four years unless otherwise renewed (a concept that now appears in revisions to FAR Part 1 (posted on acquisition.gov as discussed below)).¹

The executive order’s explicit premise is that, by reducing “an excessive and overcomplicated regulatory framework and resulting . . . onerous bureaucracy,” OFPP and the FAR Council will eliminate red tape, empower more businesses to compete for government contracts, and ensure taxpayer dollars obtain maximum value. A webpage titled “Revolutionary FAR Overhaul,” since added to the acquisition.gov website to track developments in the rewrite initiative, states that the initiative led by the FAR Council and OFPP aims to “return the FAR to its statutory roots, rewritten in plain language, and remove most non-statutory rules.” The webpage also states that non-regulatory buying guides will be forthcoming, and that these guides will provide “common sense thought” while remaining outside of the FAR.

On May 2, 2025, the Office of Management and Budget (“OMB”) issued a memorandum providing guidance on the implementation of the FAR overhaul. The memorandum introduced a new term, “Strategic Acquisition Guidance” or “SAG,” which refers to the streamlined FAR and the OFPP-endorsed buying guides. OMB announced that the FAR overhaul will occur in two phases: first, through FAR Council deviation guidance; and second, through formal rulemaking. The deviation guidance will be issued on a rolling basis, and agencies are expected to issue individual or class deviations to implement the model deviation text within 30 days of their release.² While the deviation process will include an opportunity for informal public comment, OMB indicated that the FAR Council will not formally respond to comments. Instead, it will consider the input in the future rulemaking phase. Once the deviation process has been completed, the FAR Council will turn to formal rulemaking using the notice and comment process required by 41 U.S.C. § 1707. With respect to the non-regulatory buyer guides, OMB’s memorandum states that they will include “proven innovative buying techniques for different phases of the acquisition lifecycle as well solutions and manageable procurement pathways for different types of common goods and services recognized by category management.”

If this sounds like an intense undertaking, it should. As it stands, Executive Order 14275 represents the most significant proposed change to the FAR in 40 years. The FAR currently has more than 2,000 pages, with regulations covering every aspect of government procurement and contract terms that have become familiar to an entire industry. Based on the initial guidance, it appears that the OFPP and the FAR Council are determined to significantly rewrite the rules under which contractors interact with the federal government. Yet as of this writing, there is more speculation available than fact. Little is known about which provisions the OFPP and the FAR Council will identify as “essential to sound procurement” or what rubric will be used to evaluate provisions under the broad catch-all categories quoted above. As it stands, the executive order appears to contemplate an exercise in deletion rather than addition, but new language and new provisions cannot be ruled out at this time. Additional guidance released in the coming weeks and months hopefully will provide further insight as to the breadth and scope of the changes.

The upshot is that Executive Order 14275 envisions an entirely different procurement world in which contracts will include far fewer (and narrower) compliance obligations, supplemented with non-regulatory guidance. This vision could lead to less uniformity in each contract, instead favoring a more custom tailored fit for each specific procurement. But “flexibility” can be a double-edged sword. While lengthy and detailed, the current FAR does provide uniformity and, more importantly, predictability to federal contracting, to the benefit of industry and the government. Contractors generally can be assured of the terms upon which they will be doing business with the government, and those terms have been developed and revised based on contracting experience gained by the government and industry over multiple decades. As one example, there is now a significant question as to the extent to which OFPP and the FAR Council will revisit well-settled remedy-granting clauses in the FAR (such as those governing changes, terminations, and payments) that provide a measure of predictability. If those uniform provisions (and even concepts) are suddenly eliminated, individual contract negotiations could be drawn out as contractors seek adequate assurances that they will be protected during performance. Also, the prospect of changes to the FAR having immediate effect through FAR deviations only to go through a formal rulemaking process that could create further changes seems to create uncertainty for the foreseeable future. Thus, as is said often, the devil is in the details; this ambitious project will need to be closely monitored.

Prioritizing Commercial Products and Services (Executive Order 14271)

On April 15, 2025, President Trump also issued Executive Order 14271, directing all procuring agencies to comply with the mandate of the 1994 Federal Acquisition Streamlining Act (“FASA”), Pub. L. 103-355, to prioritize the procurement of commercially available products and services, including those that can be modified to fulfill an agency’s needs. Under the executive order, by June 14, 2025, the “approval authority” at each agency is required to direct the agency’s contracting officers to review all open solicitations, pre-solicitation notices, solicitation notices, award notices, and sole source notices for which the agency has not identified a commercial option. Each contracting officer will be directed to consolidate all such materials into proposed applications requesting approval for the purchase of the non-commercial product or service. These applications are to include the market research and price analysis conducted by the agency to determine whether there was an available commercial alternative to meet the government’s needs, along with the rationale for proceeding with a non-commercial procurement. The approval authority would then act on each proposed application within 30 days to assess the application’s compliance with FASA and make an “appropriate recommendation[] to advance the solicitation of commercial products or services where those products or services would be sufficient” to meet the agency’s needs.

Going forward, whenever an agency proposes to solicit a non-commercial product or service, the contracting officer for that procurement will be required to submit an application containing the information described above to the agency’s approval authority for review and a decision to approve or deny the application. The executive order also directs that by August 13, 2025, and then annually thereafter, each agency must submit a report to the Director of OMB detailing its compliance with FASA and its “progress toward implementing the policies of this order.”

Although FASA and the FAR already require agencies to implement a preference for commercial products and services, the premise of Executive Order 14271 is that agencies have not been doing enough to fulfill FASA’s mandate. So while the underlying motivations are not new, the executive order directs agencies to rededicate themselves to prioritizing the purchase of commercial products and services by imposing additional hurdles to clear when pursuing procurements for non-commercial products and services. As a result, government contractors, particularly in the information technology (“IT”) industry (see below), should prepare for the government to shift away from non-commercial procurements, although the extent and duration of this shift remains to be seen. The government undeniably requires goods and services that are not commercial, so even with a renewed focus on procuring commercial products and services, the government cannot entirely abandon government-unique items. Further, the implementation of the application and approval process set forth in the executive order will also play an important role in procurement decisions. The new process requires additional effort and levels of approval to pursue procurements of non-commercial products and services, and when combined with the executive branch’s actions to reduce staffing, this has the potential to create backlogs and delays in the issuance of new solicitations.

In the meantime, taking the intent of the executive order at face value, contractors should consider whether their products or services are, or could be modified to be considered, a “commercial product” or “commercial service” (both of which are defined terms in the FAR). One potential consequence of this executive order is an increase in affirmative determinations of commerciality. Contracting officers may be able to assist in commerciality determinations and to help contractors seeking to identify and overcome potential barriers to obtaining a commercial determination. Contractors seeking to position their offerings as commercial should also be prepared for questions from contracting officers about the claim of commerciality, including requests for information about sales to the general public.

On the flip side, contractors that primarily furnish non-commercial products and services may wish to engage with contracting officers and program offices and prepare to make the case that the procurement of a non-commercial product or service is justified. Contractors should conduct their own market research to help educate contracting officers if there really are no commercial products or commercial services that can meet the agency’s needs. A written justification describing the necessity of the non-commercial product or service as well as market research and a pricing explanation will further assist contracting officers in preparing the newly required applications seeking approval to proceed with non-commercial acquisitions.

Consolidating IT and Other Procurements Within GSA (Executive Order 14240)

On March 20, 2025, President Trump issued Executive Order 14240, which aims to consolidate all domestic federal procurement for “common goods and services” under the GSA and to direct that GSA administer all government-wide acquisition contracts (“GWACs”) for IT across the government.

The Category Management Leadership Council within OMB defines “common goods and services” to include facilities and construction, professional services, IT, medical, transportation and logistics, industrial products and services, travel, security & protection, human capital, and office management. The consolidation contemplated by Executive Order 14240 is intended to improve efficiency and eliminate duplicative contracts across the government. Agencies must submit proposals to GSA for consolidating domestic procurement functions for the specified categories of goods and services by May 24, 2025. GSA must then submit a comprehensive plan for consolidating common goods and services to OMB by June 18, 2025.

Consistent with the directives in this executive order, on April 29, 2025, GSA launched its OneGov Strategy, which is designed to provide agencies with “easier access to IT tools with standardized terms and pricing,” and to allow agencies to engage directly with original equipment manufacturers (“OEMs”), as opposed to resellers, resulting in “more transparent pricing, streamlined acquisition, and improved cybersecurity protections.” GSA’s press release stated that the OneGov Strategy “will evolve over time, expanding into areas such as hardware, platforms, infrastructure, and cybersecurity services and other categories.”

Such an ambitious consolidation of procurement functions carries with it a significant risk of disruption to current contracts and future procurements. GSA will need to prepare to handle a significantly increased volume of procurements, and agencies that currently rely on internal contracting offices to complete such purchases will soon have to start interfacing with an entirely different agency to meet their procurement needs. New entrants to GSA’s Multiple Award Schedule (MAS) and multiple-award vehicles such as Oasis+, Alliant 2 and Polaris may result in more competition and a focus on price. Although the theory behind consolidating purchases of common goods and services within a single agency is to simplify purchasing and improve the terms and prices the government receives, the actual implementation of such a program will be a sea change in the current system and may ultimately result in significant delays. Here again, the details as to how the executive order is implemented will be key.

For now, any contractor with a GWAC for IT should be prepared for potential changes and assignment of that contract to GSA. This begins with a conversation with your contracting officer. Contractors offering “common goods and services” across multiple contracting vehicles should also be prepared to discuss pricing terms that extend across agencies. Moreover, it is possible that agencies will terminate or decline to renew or resolicit individual contracts for “common goods and services” as this consolidation effort moves forward. Finally, OEMs likely can expect more direct interaction with the government, and pressure to enter into contracts directly with the government. Given the current prevalence of resellers of many IT products and services, GSA’s initial statements regarding direct communications could also present a significant shift in how the government obtains these products and services.

Reforming Defense Acquisition Processes (Executive Order 14265)

Lastly, on April 9, 2025, President Trump signed Executive Order 14265 in order to “rapidly reform our antiquated defense acquisition processes with an emphasis on speed, flexibility, and execution.” While DoD is subject to the executive orders discussed above, Executive Order 14265 discusses specific changes that will be occurring within DoD and DoD’s procurement processes. In brief, the executive order aims to modernize the duties and composition of the defense acquisition workforce, as well as to incentivize and reward risk-taking and innovation within DoD.

Under the executive order, by June 8, 2025, the Secretary of Defense must submit a plan to the President to reform DoD’s acquisition processes. The plan must incorporate, “to the maximum extent possible,” the utilization of existing authorities to expedite acquisitions, including a “first preference” for commercial solutions and a “general preference” for Other Transactions Authority (“OTA”), application of Rapid Capabilities Office policies, or “any other authorities or pathways to promote streamlined acquisitions under the Adaptive Acquisition Framework.” DoD shall “prioritize use of these authorities” where appropriate and consistent with applicable law in all pending and future DoD procurements.

The executive order also instructs DoD to review and revise relevant DoD instructions, implementation guides, manuals, and regulations (including the DoD FAR Supplement (“DFARS”)) with an eye toward eliminating or revising any unnecessary supplemental regulations or any other internal guidance, and toward promoting expedited and streamlined acquisitions.

The executive order also directs the Secretary of Defense to review all major defense acquisition programs (“MDAPs”). Any program more than 15 percent behind schedule based on the current Acquisition Program Baseline (“APB”), 15 percent over cost based on the current APB, unable to meet any key performance parameters, or unaligned with the Secretary of Defense’s mission priorities must be considered for potential cancellation. A list of all MDAP contracts, along with performance against original and approved government cost estimates, must be provided to the Director of OMB. The Secretary of Defense is also required to provide the Director of OMB with a plan for reviewing all remaining major systems.

Finally, the Secretary of Defense is directed to complete a comprehensive review of the Joint Capabilities Integration and Development System (“JCIDS”) — DoD’s process for defining capability requirements — by October 6, 2025, with the goal of streamlining and accelerating acquisition.

In sum, Executive Order 14265 lays the groundwork for revisions to DoD procurement policies and processes, including DoD’s acquisition methods, regulations, and procurement staff. Read in conjunction with the executive orders discussed above, this executive order emphasizes a clear policy initiative by the administration to reduce regulations, strengthen the preference for commercial products and services, and make the procurement process more efficient and flexible. The executive order also clearly signals increased scrutiny of DoD’s largest programs, and indicates that the administration may have less patience with programs that are over budget and behind schedule. But for now, as with the other executive orders, the details of how these DoD-specific goals will be implemented will determine how, and to what extent, these new approaches impact defense contractors. While guidance on the revisions is pending, defense contractors may see expanded opportunities under non-traditional Commercial Solutions Openings or prototype or follow-on production Other Transaction agreements. Additionally, to the extent that the DFARS will undergo revisions to align with the FAR overhaul noted above, defense contractors should monitor changes to the FAR for insights into future changes to the DFARS.

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Notwithstanding the benefits to contractors associated with streamlined regulations, the loss of acquisition personnel arising from reductions in force and the new processes and policies advanced by the executive orders above could adversely impact the speed with which procurements are conducted, at least in the short term. The revisions to bedrock procurement regulations could also result in increased uncertainty, both for contractors and agency procurement personnel. Certain aspects of the procurement process could no doubt use reforming, and it is undeniable that these executive orders have the potential to bring about significant changes in how the government does business with industry. But it remains to be seen how such sudden and significant changes will impact the procurement process in both the near and long term. As a result, while the beginning of the second Trump administration has been eventful, it will be the subsequent months and years that will determine whether these executive orders have meaningful and lasting consequences.

Vinson & Elkins will continue to monitor updates as information becomes publicly available.

¹ The FAR Council’s revision of FAR Part 1 (Federal Acquisition Regulation System), which was posted online on May 2, 2025, for use in agency FAR deviations, includes this sunset provision at Section 1.109.

² On May 2, 2025, the FAR overhaul page was updated to include model deviation language for FAR Part 1 (Federal Acquisition Regulation System) and FAR Part 34 (Major System Acquisition). The remaining parts of the FAR are listed as “awaiting overhaul.”