On April 16, 2025, the Trump Administration issued an Executive Order titled “Ensuring Commercial, Cost-Effective Solutions in Federal Contracts,” which establishes the Administration’s policy of procuring “commercially  available products and services, including those that can be modified to fill agencies’ needs, to the maximum extent practicable.” This includes procurements made pursuant to the Federal Acquisition Streamlining Act of 1994 (“FASA”).  This comes one day after the release of another Executive Order titled “Restoring Common Sense to Federal Procurement,” which McGuireWoods has previously covered.  Both Executive Orders are among the first of the Administration’s major policy positions as pertaining to reform of the federal government’s procurement process.

The Executive Order requires agencies to direct contracting officers within 60 days to conduct a review of all open agency pre-solicitation notices, solicitations, solicitation notices, award notices, and sole source notices for non-commercial products or services where the agency has not identified a satisfactory commercial option.  Contracting officers shall consolidate each such agency solicitation or notice into a proposed application requesting approval for the purchase of the non‑commercial products or services for submission to the agency’s approval authority.  The proposed applications shall include market research and price analysis used to determine the availability of commercial products and services to meet the Government’s needs and to justify the procurement of a non-commercial product or service, as well as the rationale for pursuing a Government-unique, custom-developed or otherwise non-commercial product or service.  This is not inconsistent with the preexisting requirements under FASA and the FAR as relating to the procurement of non-commercial products and services.

Approval authorities will then have 30 days from the date of the receipt of an application to (i) assess each proposed application’s compliance with FASA and (ii) make appropriate recommendations to advance the solicitation of commercial products or services sufficient to serve the applicable procurement needs.  Additionally, within 120 days of the date of the Executive Order and annually thereafter, each agency will be required to provide a report to the Director of the Office of Management and Budget (“OMB”) detailing the agency’s compliance with FASA and progress toward implementing the policies of the Executive Order.

Under the Executive Order, Agencies may propose to solicit a non-commercial product or service only when the relevant contracting officer provides the agency’s approval authority with a description of the proposed procurement—including specific reasons that a non‑commercial product or service is required.  The approval authority shall then conduct a review of the proposed solicitation prior to approving or denying the proposed solicitation. The approval authority may seek input from the Director of OMB on the proposal; in such case, the Director of OMB, in consultation with the Administrator for Federal Procurement Policy, shall review and assess the validity of the proposal, including the thoroughness of the market research and price analysis, and shall notify the approval authority whether the Director of OMB recommends that the proposal be approved or denied.

McGuireWoods is actively monitoring the rapidly evolving legal and regulatory landscape in the early months of the new administration, including this unprecedented overhaul of government procurement policy. Government contractors and other entities impacted by this Executive Order are encouraged to contact McGuireWoods for legal advice and strategic support.  For questions related to this Executive Order, or regarding government contracts generally, contact any of the authors or another member of the McGuireWoods government contracting team.