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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GovCon Due Diligence: The Assets Investors and PE Buyers Need to Understand Before Closing – The GovCon M&A Playbook, Part 3
PilieroMazza Blog; Author: Samuel S. Finnerty
A private equity fund acquires an SDVOSB with strong revenue, attractive contract vehicles, and a promising pipeline. The financial diligence checks out, and the customer relationships appear solid. The employees stay and integration proceeds as planned. Then the buyer discovers the company can no longer compete for many of the opportunities that drove its growth projections. A major contract vehicle no longer offers the same access to future work. A mentor-protégé joint venture is less valuable than expected. A facility clearance requires additional government review. Past performance the buyer planned to leverage receives less credit than anticipated in future proposals. Nothing necessarily went wrong operationally. The buyer simply misunderstood what it was buying.
When you acquire a government contractor, you are acquiring more than revenue, customers, and employees. You are also acquiring access to set-aside contracts, positions on contract vehicles, cleared work, joint ventures, past performance, and certifications, each of which depends on the target’s ownership structure, size, control, and regulatory status in ways that traditional commercial diligence often fails to capture. Whether those assets retain the same value after closing is frequently one of the most important questions in the transaction. The central question in any GovCon acquisition is whether the value you are paying for will survive closing. Answering that question requires a different kind of diligence than most buyers are accustomed to performing. Read more here.
The Shifting Landscape for Foreign Ownership, Control, or Influence, Part 2: The Current Landscape
PilieroMazza Blog; Authors: Isaias “Cy” Alba, IV, Daniel Figuenick, III, Cole R. Fox
In Part 1 of this series, we examined the Department of Defense’s Proposed Rule and how it would broaden the reach of Foreign Ownership, Control, or Influence (FOCI) obligations across the defense industrial base. Before looking ahead, it helps to understand how the current framework works. In this installment, PilieroMazza attorneys walk through the foundation of the existing system: obtaining and maintaining a facility security clearance, securing personnel security clearances for the people who run and safeguard the business, and, where a company is under FOCI, implementing mitigation measures. Read more here.
Small Business Administration (SBA) Notice: Small Business Size Standards: Revised Size Standards Methodology
Source: Federal Register
On August 20, SBA published a notice and request for comments regarding its revised white paper explaining how it establishes, reviews, and modifies small business size standards. The revised white paper provides a detailed description of SBA’s size standards methodology, including changes from SBA’s 2024 Revised Size Standards Methodology. The notice is available here, and comments close September 21, 2026.
Small Business Administration (SBA) Wants to Give 114,000 More Companies Access to Small Business Contracts
Source: Federal News Network
The Small Business Administration is trying to open the federal contracting door to more small businesses. SBA is proposing to reduce the number of NAICS codes, simplify the approach to them, and reduce the total size standard categories from nearly 1,000 to 338. Read more here.
The Government is Digging into Who’s Really Doing Work Under Small-Business Contracts
Source: Federal News Network
Recent enforcement actions are giving contractors a clearer picture of what federal investigators are looking for in small-business set-aside programs. Many of the cases turn on a simple question: who is actually controlling and performing the work? Read more here.
Small Business Administration (SBA) News Release: SBA and DoW Establish Smaller War Plants Commission in Historic Effort to Strengthen Defense Industrial Base (DIB) Capacity
Source: U.S. Small Business Administration
On August 25, SBA announced an initiative to expand American military capacity, capability, and resilience by establishing the Smaller War Plants Commission (SWPC). Created through a new Memorandum of Understanding (MOU), the Commission will marshal federal resources to expand production capacity, eliminate burdensome regulations, accelerate innovation, and provide targeted capital and support to small business suppliers. Read more here.
New Contract Aims to Keep Space Force’s Multi-Billion-Dollar Projects on Budget
Source: Defense One
As the Space Force takes on new multi-billion-dollar national security programs, the service has awarded a new contract to keep those projects on track and on budget, Defense One has learned. Read more here.
General Services Administration Acquisition Regulation (GSAR) Implementation of Executive Order (EO) 14275, Acquisition of Utility Services
Source: Office of Management and Budget
GSA is proposing to amend the GSAR to return it to its statutory and EO origins where applicable, rewriting it in plain language, and retaining policies for sound procurement. The rule will implement EO 14275, Restoring Common Sense to Federal Procurement, issued April 15, 2025, and includes proposed revisions to GSAR parts 541, Acquisition of Utility Services. Read more here.
General Services Administration Acquisition Regulation (GSAR) Implementation of Executive Order (EO) 14275, FSS Ordering Procedures.
Source: Office of Management and Budget
GSA is proposing to amend the GSAR by returning it to its statutory and EO origins where applicable, rewriting it in plain language, and retaining policies for sound procurement. The rule will implement EO 14275, Restoring Common Sense to Federal Procurement, issued April 15, 2025, and include proposed revisions to GSAR parts 538, Federal Supply Schedule Ordering Procedures. Read more here.
CMMC Review: DoD’s Inconsistent CUI Marking Continues to Plague Program
Source: Federal News Network
While there are differing opinions about how the Pentagon could improve the Cybersecurity Maturity Model Certification program, most organizations agree that the Defense Department’s inconsistent and unclear process for marking controlled unclassified information continues to be a critical problem driving CMMC costs and confusion. Read more here.
Department of Defense (DOD) Class Deviation: Revolutionary Federal Acquisition Regulation (FAR) Overhaul Part 5, Defense FAR Supplement (DFARS) Part 205
Source: U.S. Department of War
On August 24, DoD issued a class deviation, effective immediately, revising its class deviation issued on December 18, 2025. This class deviation implements policy that requires accessibility and clarity in covered notices for small business concerns. Read more here.
Department of Defense (DOD) Class Deviation: Revolutionary Federal Acquisition Regulation (FAR) Overhaul Part 33, Defense FAR Supplement (DFARS) Part 233
Source: U.S. Department of War
On August 24, DOD issued a class deviation, effective immediately, revising its class deviation issued on December 18, 2025. This class deviation implements policy that increased the dollar value at which contracting officers must terminate or suspend performance of task or delivery orders in the event of a protest. Read more here.
Department of Energy (DOE) Direct Final Rule: Rescinding Regulations for Loans for Minority Business Enterprises Seeking DOE Contracts and Assistance
Source: Federal Register
On August 26, DOE published a direct final rule further delaying the effective date of “Rescinding Regulations for Loans for Minority Business Enterprises Seeking DOE Contracts and Assistance,” which was published on May 16, 2025. Effective August 26, 2026, the direct final rule will be further delayed until December 24, 2026. The rule is available here.
Department of Labor (DOL) Final Rules
Source: Federal Register
On August 21, DOL’s Office of Federal Contract Compliance Programs (OFCCP) published the following three final rules, effective September 21, 2026:
- Modifications to the Regulations Implementing Section 503 of the Rehabilitation Act of 1973, as Amended, available here.
- Modifications to the Regulations Implementing the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as Amended, available here.
- Rescission of Executive Order 11246 Implementing Regulations, available here.
PM WEBINAR:
Employee Organizing 101: Government Contractor Compliance Essentials
September 10, 2026
Speakers: Sarah L. Nash, Georgianne “Georgi” Kokenis
CONFERENCE:
Federal Government Contracting 101: A Roadmap for Commercial Businesses, ACRA’s 32nd Annual Conference
October 15, 2026
Speaker: Nichole D. Atallah
LABOR & EMPLOYMENT / LITIGATION & DISPUTE RESOLUTION
Unions Accuse Mediation Agency of ‘Doublespeak’ in Updated Lawsuit
Source: Government Executive
The Federal Mediation and Conciliation Service’s new policy allows it to investigate the arbitrability of disputes if an agency objecting to participating in them exceeds the “ministerial” agency’s authority, labor groups argue. Read more here.
LITIGATION & DISPUTE RESOLUTION
Small Business Administration (SBA) Press Release: SBA Refers $34 Million in Past-Due SVOG Debt to U.S. Treasury for Collection
Source: U.S. Small Business Administration
On August 19, SBA announced that it has referred $34 million of SVOGs to the U.S. Department of the Treasury for collection. These awards were referred based on alleged failure to resolve repayment obligations through SBA’s debt resolution. Read more here.
AUDITS & INVESTIGATIONS / LABOR & EMPLOYMENT
Watchdog: NSA’s NDAs Do not Comply with Whistleblower Law
Source: Government Executive
As the Trump administration weighs instituting a standardized non-disclosure agreement for employees across government, one agency that already uses them routinely fails to educate workers about their whistleblower rights. The NSA routinely fails to inform employees of their rights under whistleblower protection laws when they sign non-disclosure agreements, the intelligence agency’s inspector general concluded this week. Read more here.
AUDITS & INVESTIGATIONS / WHITE COLLAR DEFENSE
Department of Justice (DOJ) Press Release: DOJ Announces Launch of National Fraud Detection Center to Combat Fraud Against Taxpayer-Funded Programs
Source: U.S. Department of Justice
On August 24, DOJ announced the launch of the National Fraud Detection Center (NFDC), a prosecutor-led, multi-agency team designed to investigate federal government program fraud. The NFDC will work with law enforcement agencies and analytical capabilities to generate criminal leads. Read more here.
Five SBA 7(a) Changes that Could Reshape Business Acquisitions
PilieroMazza Blog; Authors: Isaias “Cy” Alba, IV, Abigail “Abby” L. Baker, Ashley Krause
On August 14, 2026, the SBA announced the issuance of Standard Operating Procedure (SOP) 50 10 8.1, Lender and Development Company Loan Programs, which will become effective on October 1, 2026, according to SBA Policy Notice 5000-880695. SOP 50 10 8.1 will apply to all lending applications that are issued an SBA loan number on or after October 1, 2026, and is intended to build upon the 7(a) lending criteria that were reintroduced pursuant to SOP 50 10 8.0, which went into effect on June 1, 2025, and replaced SOP 50 10 7.1. While some of the changes to the SBA 7(a) lending provisions described under SOP 50 10 8.1 are meant to streamline the lending process altogether, these changes also signal a shift toward more conservative underwriting and lending practices, and they make it increasingly important for buyers and sellers to structure the transaction around SBA requirements from the beginning. This blog examines certain key changes and, more importantly, what SOP 50 10 8.1 could mean for buyers, sellers, and lenders as they negotiate and structure SBA-financed acquisitions. Read more here.
Upcoming Presentations
PM WEBINARS:
Starting a Nonprofit: What Every Business Leader Should Know
October 1, 2026
Speaker: Kristen Centre
Buying and Selling a Business: M&A Processes and Procedures
October 21, 2026
Speaker: Kristen Centre
GSA, Treasury Kick Off Post-Quantum Initiatives to Protect Against Cyber Threats
Source: Federal News Network
The Trump administration still has four months to update the National Quantum Strategy, but that does not mean agencies are waiting for that document, expected by late December, to get started. GSA is updating its Federal Identity, Credential and Access Management architecture as Treasury launches a new task force for the financial sector. Read more here.