The Weekly Update recaps recent legislative and regulatory updates affecting
government contractors and commercial businesses.
If you have questions concerning this content, please email marketing@pilieromazza.com.
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PilieroMazza Annual Review: Key Insights from Recent Bid Protest Decisions Shaping Government Contractor Success in 2026, PilieroMazza Webinar Replay, Katherine B. Burrows, Eric Valle
Join Katie Burrows and Eric Valle, attorneys in PilieroMazza’s Bid Protests and Government Contracts practice groups, as they break down recent decisions that will shape the bid protest landscape in 2026. This session equips government contractors with actionable insights to anticipate challenges, strengthen proposals, and protect their interests in a dynamic procurement environment. Click here to view the recorded session.
FALSE CLAIMS ACT / AUDITS & INVESTIGATIONS
PilieroMazza Annual Review: FCA Enforcement and Compliance Updates for Government Contractors—What to Watch in 2026, PilieroMazza Webinar Replay, Jacqueline K. Unger, Todd M. Reinecker
Join Jackie Unger and Todd Reinecker of PilieroMazza’s False Claims Act and Audits & Investigations teams for a practical discussion on recent enforcement activity and mitigation tactics designed to help government contractors reduce risk and avoid costly missteps. Click here to view the recorded session.
Upcoming Presentations
PM WEBINAR: CMMC Mission Readiness: Navigating Growth, Costs, and Competition for Defense Contractors, March 11, 2026, Isaias “Cy” Alba, IV
Congress Searches for Shutdown Off-Ramp As DHS Employees Start Missing Pay, Government Executive
Republicans are renewing their push to fully fund and reopen the Homeland Security Department, suggesting the war the United States launched against Iran over the weekend has heightened the need to end the single-agency shutdown that entered its third week on Monday. Read more here.
GovWin IQ: FAR Overhaul Prompts Compliance Uncertainty for Contractors, Says Sam Finnerty, PilieroMazza News, Samuel S. Finnerty
The so-called “Revolutionary FAR Overhaul” (RFO), launched after the issue of Executive Order 14275 (Restoring Common Sense to Federal Procurement) in April 2025, is the most sweeping rewrite of the Federal Acquisition Regulation (FAR) in its 40-year history. The long-term intent of the RFO is to simplify and streamline federal procurement, but certain concerns raised by FAR legal experts raise the question if its rollout is actively generating compliance risk for contractors. Read more here.
Department of Justice (DOJ) Press Release: Justice Department and Federal Trade Commission (FTC) Seek Public Comment for Guidance on Business Collaborations
On February 23, DOJ announced that its Antitrust Division and the FTC launched a joint public inquiry regarding potential additional guidance on collaborations among competitors. The joint inquiry seeks input on the value and potential content of guidance concerning the range of collaborations utilized to drive innovation and promote competition in the modern economy. Some of the specific areas of inquiry on which the Agencies are seeking public input and information include: What topics would benefit from additional guidance — for example, joint licensing arrangements? Conditional dealing with competitors? Other topics? What new technologies and business models would benefit from additional guidance — for example, algorithmic pricing, information and data sharing, or labor collaborations? What significant legal, economic, or technological developments should be considered in any revisions to the prior competitor collaboration guidelines? Read more here.
Pentagon Draws Scrutiny with Anthropic Threats, Defense Production Act (DPA), The Hill
The Pentagon is threatening to use the DPA against Anthropic amid a dispute over the company’s restrictions on its AI tools, in a move that many experts say is an unusual use of the measure. The Department of Defense (DOD) warned Anthropic on Tuesday that it could invoke the DPA, which gives the president broad authority to control domestic industries in the name of national defense, to use the AI firm’s tool on its own terms. Read more here.
DOD Plans to Spend Entire $152 Billion from Reconciliation Bill in One Year, Federal News Network
The Defense Department plans to spend all of the money available through last year’s reconciliation bill in fiscal 2026, despite the funding being available for several years. Read more here.
Pentagon to Spend $151 Billion on Ships, Missiles, Fighter Jets, Bloomberg Government
The Pentagon plans to spend $151.5 billion in mandatory spending with a focus on military capabilities in the Indo-Pacific region, air and missile defense, and munitions, according to a blueprint submitted to lawmakers. Read more here (subscription required).
Government Accountability Office (GAO) Reports:
- Defense Industrial Base (DIB): DOD Efforts to Develop Domestic Biomanufacturing. On February 26, GAO released a report providing questions and answers regarding DOD’s efforts to support domestic biomanufacturing. Since 2020, DOD has invested about $965 million in this area. DOD worked with industry partners to build biomanufacturing facilities. It has also supported labs in bringing projects to large-scale production. DOD expects to complete a roadmap of plans in 2026. Read more here.
- DOD Joint Bases: Actions Needed to Improve Sustainment of Facilities. On February 26, GAO released a report assessing the sustainment of facilities on joint bases. This report addresses, among other things, the extent to which DOD (1) met its funding goal for joint base facility sustainment in fiscal years 2018 through 2022, (2) assessed funding levels for supported component facilities on joint bases, (3) provided guidance and oversight to facility management offices for joint base facility maintenance, and (4) determined whether joint base facility management offices have sufficient workforces to meet their responsibilities. GAO recommends that DOD assess the risks to missions by not meeting its funding goal for facility sustainment, improve the quality of data on facility funding, and reevaluate the workforce levels for facility management offices. Read more here.
Several Trends are Shifting Defense Tech Toward Europe, Defense One
Donald Trump’s break with the liberal democracies of Europe couldn’t have come at a worse time for U.S. defense and tech giants, whose market dominance will be challenged by European competitors riding several favorable trends. One is geographic: EU policies now coming into force mean U.S. firms will have to alter their strategies and practices—or lose access to a critical market. On the military side, the role of Ukraine in military technology innovation benefits European partners that are closer to the front line. Another is technological: At a time when faster tech cycles and open-source software make it easier for startups to challenge the giants, venture capital is flowing to European defense firms and a few U.S. startups. Yet another is, perhaps, philosophical: Europe is souring on the 21st-century bargain in which U.S. tech services are purchased, in part, with access to European data. All this suggests that while Europe will find it difficult to uncouple quickly or entirely from the U.S. defense and tech industries, a new order is coming. Read more here.
Pentagon Eyes 2028 to Deliver Much-Delayed Background Investigation System, Federal News Network
The Defense Department’s next-generation background investigation system has made some progress after facing lengthy delays and cost overruns, but the Government Accountability Office warned that DOD’s projected schedule to deliver the $4.6 billion program by 2028 still isn’t reliable. Read more here.
Upcoming Presentations
SEMINAR: Government Contractors and Tariff Challenges: Strategies for Success, March 11, 2026, Jacqueline K. Unger
CONFERENCE: Federal Small Business Update — Threats and Opportunities in the Current Environment, March 12, 2026, Lauren Brier
Workforce Reclassified: Understanding DOL’s “New” Independent Contractor Classification Rule, PilieroMazza Blog, Nichole D. Atallah, Corey Bohn
On February 26, 2026, the Department of Labor (DOL) announced a long-awaited proposed rule — again adjusting how the DOL views the appropriate classification of workers as “employees” or “independent contractors” under the Fair Labor Standards Act (FLSA). Consequences of worker misclassification can be significant not only for wages and benefits but for various employment protections, for example the Family and Medical Leave Act (FMLA). Therefore, employers should be aware of changes to the independent contractor rule and evaluate their policies and procedures regarding employee classification to avoid expensive misclassification penalties under both federal and state laws. Read more here.
Department of Labor (DOL) Notice of Proposed Rule: Employee or Independent Contractor Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act
On February 27, DOL published a notice of proposed rule and request for comments regarding DOL’s proposal to rescind the analysis for determining employee or independent contractor status under the Fair Labor Standards Act (FLSA) currently set forth in 29 CFR part 795 and replace it with the analysis that it published and adopted in a prior final rule dated January 7, 2021, with a few modifications. In addition, DOL proposes to apply this analysis to the Family and Medical Leave Act and Migrant and Seasonal Agricultural Worker Protection Act, both of which incorporate the FLSA’s scope of employment. The notice is available here. Comments close April 28, 2026.
OFCCP Again in the Crossfire: Impact on Federal Government Contractors, PilieroMazza Blog, Nichole D. Atallah, Sara N. Strosser
On March 2, 2026, the Director of Office of Federal Contractor Compliance Programs (OFCCP) informed OFCCP staff that the agency would be undergoing a complete reorganization and restructuring, moving various staff members to a new branch and consolidating other divisions. All affected positions will likely see updates to job descriptions that reflect the reorganization. Additional details regarding to which branches or divisions OFCCP staff will be moved is not yet known. In light of these changes, employers with ongoing OFCCP audits or Affirmative Action Program (AAP) obligations should closely monitor the agency’s restructuring and assess how it may affect their compliance requirements and audit processes. Read more here.
Office of Personnel Management (OPM) Proposed Rule: Performance Appraisal for General Schedule, Prevailing Rate, and Certain Other Employees
On February 24, OPM published a notice of proposed rulemaking to increase the efficiency of performance management for non-Senior Executive Service (SES) employees, including General Schedule (GS) and prevailing rate employees. The proposed rule amends the approved patterns of summary levels by removing a “Level 2”; requires agencies to undergo biennial appraisal system certifications with OPM; requires a supervisory critical element for all supervisors covered under this subpart; removes the prohibition of a forced, or standardized, distribution of performance-rating levels; removes the option to grieve a performance rating; and removes the mandatory review of level 1 ratings. The notice is available here. Comments close March 26, 2026.
National Labor Relations Board (NLRB) Final Rule: Withdrawal of 2023 Standard for Determining Joint Employer Status
On February 27, the NLRB published a final rule regarding the standard for determining joint employer status under the National Labor Relations Act. On October 27, 2023, the Board published a final rule (2023 Rule) that rescinded and replaced a prior rule regarding the standard. On March 8, 2024, the U.S. District Court for the Eastern District of Texas issued an order vacating the 2023 Rule. The Board is therefore revising its rules and regulations to replace the vacated regulatory text with the previous version of its rules that remain in effect due to the vacatur. The rule is available here and is effective February 27, 2026.
Appeals Court Declines to Block Trump’s Anti-Union EOs, Government Executive
A federal appeals court on Thursday declined to enforce a temporary decision blocking the Trump administration from stripping two-thirds of the federal workforce of their collective bargaining rights, dimming, though not extinguishing, the American Federation of Government Employees’ legal challenges against a pair of anti-union executive orders. Read more here.
California Unions Lobby for Passage of Workplace AI Restrictions, Bloomberg Government
California labor unions are making a renewed push at the state legislature for tighter rules on the use of artificial intelligence in the workplace. The campaign, which sets up a high-stakes clash with the business community, comes amid mounting concerns about AI’s potential to both eliminate jobs and give employers an upper hand in hiring, firing, and measuring the performance of workers. Read more here (subscription required).
Department of Justice (DOJ) Press Release: U.S. Patent and Trademark Office (USPTO) Employee Agrees to Pay $500,000 to Resolve Conflict-of-Interest Allegations
On February 25, DOJ announced that a USPTO patent examiner agreed to pay $500,000 resolving allegations that she violated conflict-of-interest rules during her employment with the USPTO. The settlement resolves allegations that, between January 2019 and May 2022, Wu worked personally and substantially on at least nine patent applications submitted by companies in which she had a financial interest. Read more here.
Upcoming Presentations
TRAINING: Labor Rules & Regulations: Federal Market Compliance, March 18, 2026, Sarah L. Nash
CONFERENCE: Ins and Outs of the Service Contract Act, March 23, 2026, Nichole D. Atallah
CONFERENCE: DMV Legal Compliance Toolkit: Practical Insights for Multi-Jurisdictional Employers, March 24, 2026, Sarah L. Nash
CONFERENCE: You’re Fired! Legal Risks of Personnel Management for Tribally Owned Entities, March 25, 2026, Nichole D. Atallah
EMPLOYEE INCENTIVE AND BONUS PLANS
Department of Labor (DOL) News Release: DOL Report to Congress Shows Continued Growth of Employee Ownership, Details Initiative to Promote Worker-Owned Businesses
On February 23, DOL announced that the Employee Benefits Security Administration issued a report to Congress providing updates on its initiative to promote employee ownership, increase workers’ financial security, and enhance their participation in the workplace. As outlined in the report, employee ownership – through employee stock ownership plans, worker cooperatives, or employee ownership trusts – has grown over the past 10 years, with the number of ESOP participants increasing by 8% and the number of worker cooperatives more than doubling. Additionally, employee ownership trusts have grown in popularity since the first one was established in the U.S. in 2014. Read more here.
Contract Claims 101: Common Disputes and How to Best Prepare for Them, PilieroMazza Blog, Lauren Brier, Abigail “Abby” Finan, Kelly A. Kirchgasser, Josie Farinelli
Last month, PilieroMazza’s REAs, Claims, and Appeals Group published the first blog in its “Contract Claims 101” series, introducing federal contractors to the basics of requests for equitable adjustment (REAs), claims, and appeals. This month, we’re analyzing the broad categories of contract administration disputes we expect to form the basis of federal contractors’ REAs, claims and appeals in 2026. In this second blog, we introduce federal contractors to disputes regarding stop work orders, terminations, and Contractor Performance Assessment Reports (CPARs), and how best to prepare at the outset for an appeal of an adverse decision from a contracting officer. Read more here.
Top 10 Killer Construction Contract Clauses, Part 4: Retainage Provisions, PilieroMazza Blog, Jessica A. duHoffmann, Jonathan “Jon” R. Neri
Retainage is a contractual practice that is unique to the construction industry. Most construction contracts entitle project owners as well as lower-tiers to withhold a percentage of each progress payment to contractors or subcontractors until the contracted work is substantially or finally completed. Retainage ensures that contracted work is completed properly, incentivizes timely completion of the work, and provides financial leverage attendant with defects in construction. While contracts largely govern the specific terms as to how much retainage will be withheld and when it will be released, there are federal and state laws that address retainage rights. It is, therefore, essential that each contracting party fully understand these provisions and any limitations on their enforceability to sufficiently manage risk in both public and private construction projects. Please visit this link to access Parts 1-3 in this blog series. Read more here.
Buying or Selling: Navigating the New Landscape of 8(a) M&A Transactions, PilieroMazza Webinar Replay, Isaias “Cy” Alba, IV|
Join us for an in-depth discussion grounded in real-world deals and current regulatory realities—designed to help buyers and sellers achieve a smoother, more compliant transaction. Click here to view the recorded session.
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