Insights

On April 16, 2025, the White House issued an Executive Order (“EO”), “Ensuring Commercial, Cost-Effective Solutions in Federal Contracts,” requiring agencies to meet their needs with commercially available products and services to the maximum extent practicable. The EO reiterates and builds upon the requirements set forth in the Federal Acquisition Streamlining Act of 1994 (“FASA”), which similarly encourages the use of commercial acquisition procedures. Specifically, the EO institutes a required review procedure for certain open acquisition actions and establishes an oversight procedure to be implemented for all acquisitions hereafter.

On April 15, 2025, the White House issued an Executive Order (“EO”), “Restoring Common Sense to Federal Procurement” calling for the reform of the Federal Acquisition Regulation (“FAR”) consistent with the aims of EO 14192, “Unleashing Prosperity Through Deregulation,” which sought to eliminate perceived unnecessary regulatory burdens. Specifically, the April EO notes that the FAR should only contain statutorily required provisions or those “essential to sound procurement,” and it recommends the removal of any FAR provisions that do not advance these objectives.

In Bitmanagement Software GMBH v. United States, Case No. 23-1506 (Fed. Cir. Jan. 7, 2025), the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) denied the appeal of Bitmanagement Software Gmbh (Bitmanagement) challenging the Court of Federal Claims’ (COFC) $154,400 damages award, and denying its demand for $85 million in damages resulting from the Navy’s infringement of Bitmanagement’s software copyright.  The Federal Circuit affirmed the COFC’s (1) use of a hypothetical negotiation approach to compute damages; and (2) decision to award damages using a “per use” rather than a “per copy” approach.

On December 17, 2024, the Department of Defense (DOD) published a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the data rights portions of the Small Business Innovation Research Program (SBIR) and Small Business Technology Transfer (STTR) Program Policy Directive, which itself was most recently amended in May 2023.  The changes from this final rule will be effective as of January 17, 2025. 

On December 23, 2024, the Servicemember Quality of Life Improvement and National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2025 (FY 2025 NDAA) (P.L. 118-159) was signed into law.  The final FY 2025 NDAA takes a narrower approach to acquisition policy and supply chain changes than watchers expected, but it still makes some consequential changes for contractors.  Read on as Crowell & Moring’s Government Contracts group discusses the FY 2025 NDAA’s new supply chain restrictions and requirements, changes to bid protest jurisdiction, cybersecurity requirements, and more.

On May 30, 2024, the Department of Defense (DoD) issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 803 of the 2023 National Defense Authorization Act, which modified 10 U.S.C. § 3455 to provide additional guidance regarding data requirements needed to support determinations of commerciality and price reasonableness under procurements for major weapon systems.  The rule applies to products that (i) have not previously been deemed commercial by the DoD; and (ii) are proposed as either a subsystem of a major weapon system or as a component or spare part of a major weapon system or subsystem. 

On May 13, 2024, the Department of Defense (DoD) issued an instruction implementing policies and procedures that DoD will use to identify contractors (including uncleared contractors) requiring foreign ownership, control, and influence (FOCI) determinations, review related information, and address FOCI concerns.  These policies and procedures were put in place pursuant to Section 847 of the 2020 National Defense Authorization Act[1] (Section 847).  These FOCI requirements will, for the first time, subject many uncleared DoD contractors to rigorous disclosure requirements, scrutiny, and potential mitigation by the Defense Counterintelligence and Security Agency (DCSA). 

On May 3, 2024, in Geospatial Technology Associates, LLC v. United States, COFC No. 16-346C, the U.S. Court of Federal Claims denied the government’s motion to dismiss for lack of jurisdiction and, alternatively, for summary judgment due to alleged inaccuracies in a copyright registration, holding that plaintiff Geospatial Technology Associates, LLC’s (“plaintiff” or “GTA”) patent and copyright infringement claims pursuant to 28 U.S.C. § 1498 raise issues that “must be addressed at trial.” This newest development follows GTA’s original March 2016 lawsuit against several government agencies—including the Department of the Army, the Department of the Air Force, and the National Geospatial-Intelligence Agency (“NGA”)—alleging patent and copyright infringement of the underlying software code of its product, “NINJA.pro.” 

The U.S. Court of Appeals for the Federal Circuit held in Avue Technologies Corp. v. Department of Health and Human Services that an appellant’s non-frivolous allegation of a contract with the government via an end-user license agreement (EULA) incorporated into another contractor’s Federal Supply Schedule (FSS) agreement was sufficient to establish jurisdiction under the Contract Disputes Act (CDA).

On December 19, 2022, DoD issued a DFARS proposed rule that seeks to (1) implement the data-rights portions of the May 2, 2019 Small Business Innovation Research Program and Small Business Technology Transfer Program Policy Directive (SBIR/STTR Policy Directive), and (2) impose significant changes to technical data and computer software marking requirements.  The SBIR/STTR portion of the proposed rule follows DoD’s advance notice of proposed rulemaking issued on August 31, 2020 (see 85 FR 53758) and incorporates the eight written public comments that DoD received. The proposed changes to marking requirements go beyond the SBIR/STTR Policy Directive and respond to the Federal Circuit’s decision in The Boeing Co. v. Secretary of the Air Force, 983 F.3d 1321 (Fed. Cir. 2020).

On December 1, 2022, Department of Defense (DoD) Secretary Lloyd J. Austin III announced the establishment of the DoD Office of Strategic Capital (OSC).  The mission statement of the OSC is to build an “enduring technical advantage” for the United States by helping partner contractors with private investment to develop national security critical technologies, including those related to advanced materials, next-generation biotechnology, and quantum science.  OSC will coordinate with existing organizations such as the Defense Advanced Research Projects Agency (DARPA) and the Defense Innovation Unit (DIU), which promotes acceleration of the military use of commercial technologies.

On September 30, 2022, President Biden signed the SBIR and STTR Extension Act of 2022 (the Act), reauthorizing the Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR), and six pilot programs for three years, until September 30, 2025.  The Act includes new due diligence and reporting requirements, award restrictions, and clawback provisions related to national security risks—particularly regarding firms with ties to China, Russia, North Korea, and Iran—and increased minimum performance standards for multiple SBIR/STTR award winners.  The passage and signing of the Act averted a potential lapse of these programs, which were set to expire the day of the reauthorization.

On Friday September 9, 2022, the Principal Director for DoD Defense Pricing and Contracting (DPC) issued a Memorandum titled “Managing the Effects of Inflation with Existing Contracts.”  The Memorandum provides guidance to Contracting Officers about the range of approaches available to address the effects of inflation on the Defense Industrial Base.  Of note, it highlights two paths contractors may pursue to recover for inflation under fixed-price contracts.

On June 6, 2022, President Biden issued a White House Fact Sheet (“Fact Sheet”) outlining President Biden’s “Bold Executive Action to Spur Domestic Clean Energy Manufacturing” along with five related Defense Production Act (“DPA”) Presidential Determinations[1] (“Presidential Determinations”) and a Declaration of Emergency and Authorization for Temporary Extensions of Time and Duty-Free Importation of Solar Cells and Module from Southeast Asia (the “Declaration”).  The Fact Sheet states the President is (1) authorizing use of the DPA to accelerate domestic production of clean energy technologies; (2) encouraging domestic solar manufacturing capacity through the use of master supply agreements with enhanced domestic preferences; and (3) creating a two-year trade regulation bridge as domestic manufacturing for solar products scales up.  The White House stated that these actions are being taken to lower energy costs, reduce risks to the power grid, and mitigate climate change.  The Department of Energy (“DOE”) also released a statement on June 6 about the DPA Presidential Determinations which describes DOE’s concerns with regard to each material or technology for which a determination was issued.  The statements made by the White House and DOE also make clear that these actions to employ the DPA are part of the Administration’s broader “all of government” approach to addressing Environmental Justice, with the intention to “strongly encourage projects with environmental justice outcomes that empower the clean energy transition in low income communities historically overburdened by legacy pollution.”

On May 18, 2022, President Biden issued Presidential Determination No. 2022-13, delegating certain authorities under Section 101 of the Defense Production Act, 50 U.S.C. § 4511 (DPA) for purposes of ensuring an adequate supply of infant formula. Implicit in this directive, the President determined that the ingredients necessary to manufacture infant formula are scarce and critical material essential to the national defense, and that such national defense requirements cannot be met without creating a significant dislocation of the normal distribution of such material in the civilian market. Specifically, the Presidential Determination stated that, the supply chain “disruption threatens the continued functioning of the national infant formula supply chain, undermining critical infrastructure that is essential to the national defense, including to national public health or safety.” The President delegated to the Secretary of Health and Human Services authorities to require performance of contracts or orders for such national defense needs over performance of other contracts or orders, and to allocate materials, services, and facilities with respect to all health resources, including ingredients needed to manufacture infant formula. The President also authorized the Secretary to exercise DPA authorities to determine the proper nationwide priorities and allocation of all ingredients necessary to manufacture infant formula, including controlling the distribution of such materials in the civilian market for purposes of responding to the domestic shortage of infant formula. Frequently asked questions concerning the DPA are included here.

In 4DD Holdings, LLC v. United States, No. 15-945C (Fed. Cl. March 31, 2022), the Court of Federal Claims (“COFC”) decided cross-motions for summary judgment on a claim by 4DD Holdings, LLC and T4 Data Group, LLC (collectively, “4DD”) brought pursuant to 28 U.S.C. § 1498(b) and alleging that the government violated 4DD’s copyright by over-installing copies of 4DD’s computer program, TETRA, in contravention of the parties’ end-user license agreement (“EULA”). The government countered that 4DD waived the right to further compensation for additional copies of TETRA through a release signed as part of a modification to the contract, and, alternatively, that the government was entitled to make the additional copies of TETRA under copyright law. 

On April 28, 2022, the DoD issued a final rule that, effective immediately, requires the government to treat a contract previously awarded using FAR part 12 procedures as a prior commercial item determination (“CID”) for the acquired product or service, unless the head of contracting activity determines that the prior use of FAR part 12 procedures was improper or is no longer appropriate. The final rule implements section 848 of the NDAA for 2018, and applies to DoD contracts regardless of dollar value. Note, however, that prior FAR Part 12 purchases made pursuant to 41 U.S.C. 1903 (for supplies or services to be used to facilitate defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack) or 10 U.S.C. 2380a (for supplies or services from nontraditional defense contractors) may not serve as a prior commercial item determination unless the products or services purchased in that prior acquisition otherwise received a CID. 

In an effort to boost the domestic mining industry for critical minerals, on March 31, 2022, President Biden issued Presidential Determination 2022-11, the Memorandum on Presidential Determination Pursuant to Section 303 of the Defense Production Act of 1950, as amended (“Presidential Determination”).  The Presidential Determination states that sustainable and responsible domestic mining, beneficiation, and value-added processing of strategic and critical materials for the production of large-capacity batteries, including lithium, nickel, cobalt, graphite, and manganese, are essential to national defense.  The Presidential Determination will allow the Department of Defense (“DoD”) to pursue various investment, purchase commitment, and purchase vehicles to support strategic and critical material mining and production in the United States pursuant to Title III of the Defense Production Act (“DPA”). 

On March 17, 2022, the National Institute of Standards and Technology (“NIST”) published an initial draft of its Artificial Intelligence (AI) Risk Management Framework (“AI RMF”) to promote the development and use of responsible AI technologies and systems.  When final, the three-part AI RMF is intended for voluntary use and to improve the ability to incorporate trustworthiness considerations into the design, development, use, and evaluation of AI products, services, and systems.  NIST has only developed the first two parts in this initial draft: