Government Contracts Intelligence Briefing

A memo signed this week by Deputy Secretary of War/Defense Stephen Feinberg signals one of the more potentially consequential shifts in defense pricing policy in years. The directive, addressed to senior Pentagon leadership and the directors of the military services and defense agencies, calls for a “reset” of the Department’s expectations around contractor cost and pricing data and floats a tool that would let the Pentagon reach directly into contractors’ financial systems to get it. This, coupled with the broader push to fixed-price contracts, would push contractors to take all of the financial risk in contracts without a potential upside.

When world events move quickly, the government contracting space is one area where impacts are felt immediately. Just within the last few days, the Trump administration launched an effort to remove Anthropic’s AI tools from the federal supply chain and executed extensive strikes against the Iranian regime. Both of these news stories will have a broad impact on the government contracting community.

In a series of releases, the Department of Defense/War announced in writing and on social media that it is reviewing 8(a) and small businesses awarded contracts to ensure compliance with subcontracting requirements and current priorities. Contracts that do not comply will be terminated for convenience.

Earlier this week, the Department of Defense (War) announced plans to significantly remake how it will purchase goods and services from government contractors in its Acquisition Transformation Strategy (the Strategy). Central to these reforms will be the use of portfolio management to break down the walls within the Pentagon.

Defense contractors received some clarity into the shutdown plans for the Department of Defense/War (Department) when the Department released a memo outlining its contingency plans during this lapse in funding. 

After years of starts and stops, the United States Department of Defense (DoD) has finished its roll-out of the Cybersecurity Maturity Model Certification (CMMC) program with the release of its implementing regulations. This program, first proposed about seven years ago, requires contractors to verify compliance with existing cybersecurity requirements through self-assessments, third-party certifications, or DoD-led reviews.