Government Contracts May 27, 2026

DoW Proposed Rule Would Impose New FOCI Disclosure and Risk Mitigation Requirements on Thousands of Defense Contractors

By Edwin O. Childs, Patrick Rowan, Abram J. Pafford, Jack White, Jason M. Vespoli, John Sullivan and Sophie Marsh

On May 7, 2026, the Department of War (DoW) published a proposed rule that would dramatically expand the population of defense contractors that are required to disclose beneficial ownership and foreign ownership, control, or influence (FOCI) information to the Defense Counterintelligence and Security Agency (DCSA) and to mitigate identified FOCI risks. At present, DCSA addresses FOCI only when a contractor requires access to classified information in the performance of a classified contract. The proposed rule, which amends the Defense Federal Acquisition Regulation Supplement (DFARS), would require reporting and mitigation of FOCI for DoW contractors and subcontractors that seek to perform on unclassified non-commercial contracts, as well as certain unclassified commercial contracts. The proposed rule would apply to DoW contracts and subcontracts valued in excess of $5 million and implements provisions of the National Defense Authorization Acts (NDAAs) for Fiscal Years 2020 and 2021 and DoD Instruction 5205.87.

The comment period closes on July 6, 2026. If finalized, DoW estimates that, when offerors and subcontractors are taken into account, the rule would impact over 37,000 entities, of which approximately 57% are small businesses. This alert summarizes the key provisions of the proposed rule, analyzes the practical implications for federal contractors and subcontractors, and outlines recommended steps for compliance.

Government Contracts May 18, 2026

New Executive Order Mandates Shift to Fixed-Price Contracting, Requires Review of Largest Cost-Reimbursement Contracts

By Edwin O. Childs, Jason M. Vespoli, Abram J. Pafford, Jack White, John Sullivan and Sophie Marsh

On April 30, 2026, President Trump signed an Executive Order titled “Promoting Efficiency, Accountability, and Performance in Federal Contracting” (the “Order”), directing executive branch agencies to default to fixed-price contracts and contracts that tie contractor profit to performance-based metrics in federal procurement. The Order also requires agencies to review and, to the maximum extent practicable, modify, restructure, or renegotiate their largest non-fixed-price contracts. For context, a companion White House Fact Sheet states that in Fiscal Year 2024, approximately $120 billion was obligated on cost-reimbursement consulting contracts, underscoring the scale of the shift the Order contemplates.

This alert summarizes the key provisions of the Order, analyzes its practical implications for federal contractors and subcontractors, and outlines recommended steps for compliance.

Enforcement and Prosecution Policy and Trends May 15, 2026

Monitor Upcoming Negotiations of Education Department’s AIM Committee to Inform Public Comments on Accreditation Amendments

By TW Bruno, Hannah Gourdie and David Aladdin Mollenkamp

Stakeholders negotiating sweeping amendments to federal accreditation regulations proposed by the U.S. Department of Education (ED) will begin their final session to achieve consensus on May 18, 2026.

A week-long effort in April revealed deep divisions among negotiators on the Accreditation, Innovation, and Modernization (AIM) Committee of the ED. Debates broke out over the ED’s “material error” and “safety valve” provisions, First Amendment compliance and separate-and-independent requirements — so much so that negotiators expressed doubt that consensus on all issues will be reached in the final round starting Monday.

Whether negotiators reach consensus or not, a Notice of Proposed Rulemaking will follow, and affected parties should pay attention to the negotiating record to inform their comment strategy. Read on to learn more about the ED’s proposed amendments, the negotiators’ initial responses to the proposed amendments and the likely outcome of the final session.

Read on to learn more about the ED’s proposed amendments, the negotiators’ initial responses to the proposed amendments and the likely outcome of the final session.

Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims May 7, 2026

DOJ’s New West Coast Strike Force Puts Health Care Providers on Notice

By Justin Givens, Mindy Sauter and Rhea Shahane

On April 30, 2026, the Department of Justice’s (“DOJ”) National Fraud Enforcement Division (“Fraud Division”) announced the formation of the West Coast Health Care Fraud Strike Force, a multi-district enforcement initiative spanning Arizona, Nevada, and the Northern District of California. [1] Announced by Assistant Attorney General Colin McDonald, the new Strike Force signals a significant escalation of federal health care fraud enforcement in the broader West Coast region and warrants close attention from health care providers, technology companies, and other industry participants operating in the area.

Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Government Contracts April 22, 2026

FAR Council Issues Implementation Guidance for Executive Order 14398: New DEI Contract Clause Requirements for Federal Contractors

By Edwin O. Childs, Jason M. Vespoli, John Adams, John S. Moran, Jack White, Abram J. Pafford, Sarah Wake, Farnaz Farkish Thompson, Julia Coleman, Elissa Baur, William Doyle, Brett Barnett, John Sullivan and Sophie Marsh

On April 20, 2026, the Federal Acquisition Regulatory (FAR) Council issued agency implementation guidance for Executive Order (E.O.) 14398, “Addressing DEI Discrimination by Federal Contractors,” which President Trump signed on March 26, 2026. The guidance introduces a new contract clause — FAR 52.222-90 — and establishes tight deadlines for agencies to incorporate the clause into new and existing contracts. Federal contractors, subcontractors, and their compliance teams should take immediate steps to understand the scope of the new requirements and prepare for implementation. Contractors should take note that the implementation of this new clause may be affected by a suit filed in Maryland federal court seeking to block the executive order.

This alert summarizes the key provisions of E.O. 14398, the FAR Council’s implementing guidance, and the practical steps contractors should consider in response.

Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Government Contracts April 14, 2026

GSA AI Procurement Rules Would Introduce New Disclosure and Use-Rights Requirements for Federal Contractors

By Jason M. Vespoli, Edwin O. Childs, Andrew Konia, Abram J. Pafford, John Sullivan and Sophie Marsh

The General Services Administration (GSA) Federal Acquisition Service has released draft contract terms and conditions related to artificial intelligence (AI)-related procurements through a new proposed GSAR clause 552.239-7001, “Basic Safeguarding of Artificial Intelligence Systems (FEB 2026) (GSAR Deviation), that would impose material new requirements on contractors and service providers supplying artificial intelligence capabilities to the federal government. If adopted, the clause would be inserted into all solicitations and contracts for AI capabilities and would govern data rights, disclosure obligations, security protocols, and performance standards for AI systems used in federal operations. Federal contractors, technology vendors, and their in-house operations and counsel teams should closely review the proposed terms, as they represent one of the most comprehensive efforts to date to regulate the procurement and use of AI systems across the federal enterprise.

Anti-Bribery and Corruption April 9, 2026

Old Wine, New Bottles? FinCEN Proposes to Codify AML/CFT Program Standards for Financial Institutions

By Elissa Baur, John Adams, Jeffrey M. Hanna, Jeffrey P. Ehrlich, Garen S. Marshall, Justin Givens and Lauren Mann

On April 7, 2026, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a Notice of Proposed Rulemaking (“NPRM”) that would formalize and, in certain respects, update the requirements for financial institutions’ anti-money laundering and countering the financing of terrorism (“AML/CFT”) programs under the Bank Secrecy Act (“BSA”). While FinCEN has characterized the proposed rule as the centerpiece of Treasury’s broader effort to modernize the U.S. AML/CFT regulatory and supervisory framework, many of its core elements reflect longstanding statutory requirements and supervisory expectations. The proposed rule fully supersedes a prior proposed rule FinCEN published on July 3, 2024, which the agency is withdrawing. Concurrently, the Office of the Comptroller of the Currency (“OCC”), the Federal Deposit Insurance Corporation (“FDIC”), and the National Credit Union Administration (“NCUA”) (collectively, the “Agencies”) issued their own joint NPRM proposing substantially aligned amendments to their respective AML/CFT program rules for banks they supervise. Public comments are due 60 days after publication in the Federal Register.

This alert summarizes the key provisions of both proposals, describes the proposed changes to bank supervision and enforcement, and identifies practical implications for financial institutions and compliance professionals. As discussed below, many of the proposed requirements may be familiar to institutions with mature, risk-based AML/CFT programs.

Fraud, Deception and False Claims April 6, 2026

Ninth Circuit Ruling in FCA Case Predicated on 340B Pricing Violations Has Significant Implications for Pharma Manufacturers

By Craig B. Bleifer, Michael J. Podberesky and Jessica L. Vaughn, Ph.D.

On March 17, 2026, the U.S. Court of Appeals for the Ninth Circuit issued a significant opinion in United States ex rel. Adventist Health System of West v. AbbVie Inc., reversing the district court’s dismissal of a qui tam complaint brought under the False Claims Act (FCA) against four major drug manufacturers. The Ninth Circuit held that the FCA provides an independent mechanism for relators to bring claims alleging fraudulent drug pricing in violation of the Public Health Service Act’s Section 340B Program, even though Section 340B does not provide a private right of action.

Read on to learn more about the ruling and its important implications for pharmaceutical manufacturers participating in the Section 340B Program.

Enforcement and Prosecution Policy and Trends April 3, 2026

SEC Enforcement Speaks in 2026: Enforcement Division Moves “Full Steam Ahead” with Focus on Quality over Quantity, Procedural Fairness, and Targeted Pursuit of Non-Fraud Violations

By E. Andrew Southerling, Gary Leung, David Aladdin Mollenkamp, James Hornsby and Louis D. Greenstein

SEC Acting Enforcement Director Sam Waldon declared recently that his division is moving “full steam ahead” against those who “lie, cheat, and steal” but also is focusing on quality over quantity. He rejected traditional metrics — case counts, penalty totals and aggregate dollar amounts — as effective measures of the SEC’s enforcement program.

At the 2026 SEC Speaks Conference held last month in Washington, D.C., Waldon and senior enforcement leaders emphasized the division’s commitment to transparency and procedural fairness, as embodied by recent revisions to its Enforcement Manual. The more prominent revisions are intended to foster robust two-way engagement with defense counsel during the Wells process and articulate clearer guideposts for the staff’s assessment of public company cooperation under the Seaboard factors and corporate penalties under the Commission’s 2006 Penalty Statement. Waldon also confirmed that the division will continue to bring non-fraud cases in the right circumstances — with a more thoughtful approach. He said his division aims to distinguish between an entity that makes “an honest mistake, recognizes the mistake, fixes the mistake, takes steps to remediate and improves internal controls” and one that “engages in multiple mistakes, doesn’t think it’s a mistake, covers up the mistake, [and] didn’t take steps to remediate.”

Read on to learn more about Waldon’s remarks and what companies should take away from them.

Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Government Contracts April 2, 2026

New Executive Order Targets DEI Practices by Federal Contractors, Imposes Mandatory Contract Clause and FCA Liability

By Edwin O. Childs, Abram J. Pafford, Jack White, John Adams, Elissa Baur, James Dougherty, Brett Barnett, Michael J. Podberesky, David Greenspan, John E. Thomas, Jr., William Doyle, Elena Marcuss, Michael R. Phillips, Jason M. Vespoli, John Sullivan and Sophie Marsh

Continuing his Administration’s efforts to eliminate diversity, equity, and inclusion (DEI) activities, President Donald Trump signed an executive order, “Addressing DEI Discrimination by Federal Contractors,” on March 26, 2026 that directs all executive departments and agencies to include a new clause in all federal contracts and subcontracts prohibiting what the order defines as “racially discriminatory DEI activities.” The order represents another escalation of the Administration’s efforts to restrict DEI programs in the federal contracting space — building on Executive Order 14173 and the Department of Justice’s May 2025 Civil Rights Fraud Initiative — and carries substantial enforcement implications, including potential liability under the False Claims Act (FCA).

This alert summarizes the key provisions of the new executive order, analyzes the practical implications for federal contractors and subcontractors, and outlines recommended steps for compliance.

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