In January 2025, Covington issued a client alert noting that the National Defense Authorization Act (“NDAA”) for Fiscal Year (“FY”) 2025, which sets annual spending and policy for the Pentagon, introduced new China-related prohibitions on defense contractors and their consultants. The provision is finally set to take effect on June 30, 2026. Covington’s latest
Latest from Inside Government Contracts
GAO Scrutinizes DoD Civilian Workforce Cuts: What the Report Means for Federal Contractors
The Government Accountability Office recently issued a report on the Department of Defense’s civilian workforce reductions. It offers a concrete record of how DoD has reduced staffing, where those reductions have occurred, and how the Department has assessed their effects. GAO’s report matters not only as a workforce-management review, but also as a practical resource
Proposed Rule Would Fundamentally Impact Federal Grant and Financial Assistance Framework
On May 29, 2026, the Office of Management and Budget (“OMB”), together with several other federal agencies, published a proposed rule that would fundamentally change many aspects of the regulations in 2 CFR Part 200 governing federal financial assistance awards, including grants, cooperative agreements, loans, and loan guarantees. The comment period will be underway until
From Paper Reform to Practice: How Agencies Are Actually Implementing the Revolutionary FAR Overhaul
Over one year ago, on May 2, 2025, the FAR Council took the first concrete step in the administration’s “Revolutionary FAR Overhaul” (“RFO”) initiative by issuing the initial round of rolling model deviation guidance—a deliberate move to translate reform of the Federal Acquisition Regulation (“FAR”) from an abstract policy goal into acquisition text. That moment
The Pentagon’s New Sub-Unified Command for Autonomous Warfare: What It Means and Where It Might Land
On April 29, 2026, Secretary of War Pete Hegseth told the House Armed Services Committee that the Pentagon will “shortly announce a sub-unified command of autonomous warfare.” The announcement came as the Department of War (DoW) unveiled its fiscal year (FY) 2027 budget request, which proposes approximately $54 billion for the Defense Autonomous Warfare Group
The New Executive Order on “Promoting Efficiency, Accountability, and Performance in Federal Contracting”: What Federal Contractors Need to Know
On April 30, 2026, President Trump issued an Executive Order (EO) titled, “Promoting Efficiency, Accountability, and Performance in Federal Contracting.” This EO directs agencies to make fixed-price contracts the default form of contracting, and requires agency officials to execute written justifications to use other forms of contracting. Of particular note for large contractors,
SBIR/STTR Is Back and the Department of War Is Wasting No Time
On April 20, 2026, one week after President Trump signed the Small Business Innovation and Economic Security Act (Public Law 119-83) into law, the Department of War (“DoW”) issued a press release announcing that it was “immediately advancing” a “redesigned and more focused initiative to accelerate the delivery of advanced capabilities to the warfighter.” As
Revolutionary FAR Overhaul Incorporates New “Addressing DEI Discrimination” Executive Order Provisions
As we previously covered, on March 26, 2026, President Trump issued Executive Order (EO) 14398, “Addressing DEI Discrimination by Federal Contractors,” to address “racially discriminatory DEI activities” in federal contracting. Among other things, EO 14398 directed the FAR Council to issue deviation and interim guidance within 60 days to implement the new
Indirect Doesn’t Mean Exempt: ASBCA Rejects Cross‑Motions Over U.S.-Flag Transportation Costs
The Armed Services Board of Contract Appeals’ (ASBCA) decision in Lockheed Martin Aeronautics Co., ASBCA No. 63621, reinforces a critical principle for government contractors: contract performance requirements operate independently of cost accounting classifications. Contractors cannot avoid substantive FAR and DFARS obligations—here, U.S.-flag transportation requirements—by treating costs as indirect rather than direct. In a nearly
New “Addressing DEI Discrimination” Executive Order: What Federal Contractors Need to Know
On March 26, 2026, President Trump issued an Executive Order (EO) titled “Addressing DEI Discrimination by Federal Contractors,” the latest in a series of Executive Orders and related actions by the Administration targeting what it views as unlawful Diversity, Equity, and Inclusion (“DEI”) related practices. Most notable about this EO is that, unlike