The Weekly Update recaps recent legislative and regulatory updates affecting
government contractors and commercial businesses.
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Small Business Administration (SBA) News Release 26-73: SBA Commends U.S. Department of War’s Suspension of CMMC Phase II for Small Defense Contractors
Yesterday, SBA commended the DOD for suspending its CMMC program Phase II requirements, which were originally scheduled to go into effect on November 10, 2026. The suspension follows months of engagement between the DOD, SBA, and small business stakeholders, who warned that the current CMMC framework imposes costly bureaucratic burdens on the small contractors that are essential to growing the U.S. Defense Industrial Base. These pressures caused many firms to leave or consider leaving defense-related work, prompting the DOD to launch a comprehensive review to recalibrate the CMMC program so it preserves strong cybersecurity while eliminating regulatory barriers that impede the Department’s ATS to rapidly expand defense supply chains. Read more here.
White House Press Release: White House Launches Gold Eagle Initiative for Unprecedented Cybersecurity Vulnerability Coordination
President Trump’s bold vision to secure and accelerate American artificial intelligence (AI) innovation is being actioned through the creation of “GOLD EAGLE,” a clearinghouse that enables unprecedented cybersecurity vulnerability coordination. Open-source software partners and American critical infrastructure companies built a coordinated system to receive and patch cyber vulnerabilities at a speed and scale never seen before using the existing authorities and resources of the federal government. Read more here.
Why Multi-Level Security Is Critical in the Air Force’s Push for Battlefield AI, GovCon Wire
The Department of the Air Force sees potential in artificial intelligence to secure a decision advantage on the battlefield. The service is cutting through red tape to accelerate the development and fielding of advanced AI capabilities to support missions. However, bringing AI to the tactical edge is creating complex challenges in data and security. Read more here.
Department of War (DOW) Memorandum: Class Deviation—Revolutionary Federal Acquisition Regulation (FAR) Overhaul (RFO) Part 16, Defense FAR Supplement (DFARS) Part 216, Revision 1
On July 15, DOW released a class deviation, effective immediately, revising its class deviation issued on February 20, 2026. This class deviation implements the requirements for the Secretary of War to eliminate or revise any unnecessary supplemental regulations or any other internal guidance, such as relevant parts of the Financial Management Regulation and Defense Federal Acquisition Regulation Supplement; fixed-price contracts as the default and preferred method of procurement; and additional guidance to federal agencies regarding the FAR overhaul. Read more here.
DoD Class Deviation Leaves Contractors With More Questions Than Answers, Federal News Network
The Defense Department’s recently released class deviation leaves defense contractors with many of the same questions they previously had about how they should comply with a series of restrictions aimed at severing ties with companies the Pentagon says support Beijing’s military. In fact, it adds even more ambiguity. Several China-related contracting restrictions enacted by Congress took effect on June 30, including banning the Defense Department from contracting with companies that retain consultants lobbying on behalf of companies designated by the Pentagon as Chinese military companies under its Section 1260H list, as well as prohibiting DoD from entering into, renewing or extending a contract for the procurement of goods, services or technology with those blacklisted firms. Read more here.
Office of Management and Budget (OMB) Notice: Statistical Policy Directive No. 8: North American Industry Classification System (NAICS) – Request for Comments on Proposed Updates for 2027
On July 13, OMB announced it is seeking public comment on the advisability of adopting the proposed NAICS updates for 2027 recommended by its Economic Classification Policy Committee (ECPC). The ECPC recommends an update of NAICS to clarify existing industry definitions and content, recognize new and emerging industries, and combine industries. Proposed revisions would become effective in the U.S. for publication of establishment data that refer to periods beginning on or after January 1, 2027. The notice is available here. Comments are requested as soon as possible and close August 12, 2026.
Office of Federal Procurement Policy (OFPP) Reduces, Modernizes Another 50-Year-Old Acquisition Policy, Federal News Network
OFPP checked off another accomplishment in its quest to modernize the federal procurement system. The 51-year-old approach to ensure government contractors measure, assign and allocate costs to contracts as a way to prevent waste, fraud and abuse has been simplified, updated and brought closer to commercial standards. In a final rule released earlier this week, the Office of Management and Budget and the Cost Accounting Standards Board wholly rescinded two sections and removed most provisions in two others as part of the goal to conform to Generally Accepted Accounting Principles. Read more here.
Department of Energy (DOE) Final Rule: Implementing Voluntary Agreements Under the Defense Production Act
On July 17, DOE published a final rule adopting the interim final rule published on August 25, 2025, as final, without change. This final rule establishes the procedures for developing and carrying out voluntary agreements and plans of action under the Defense Production Act. The Defense Production Act provides a defense from antitrust laws with respect to any action taken to develop or carry out any voluntary agreement or plan of action when certain criteria are met. The rule is available here and is effective as of July 17.
Pentagon Seeks To Shift Billions To Cover Rising Personnel Costs, Federal News Network
The Pentagon is shifting money away from weapons and technology programs to cover “higher-than-expected” military personnel costs, according to a recently released $4.3 billion omnibus reprogramming request. Congress grants the Defense Department limited authorities to use funds for purposes other than what Congress originally approved — these authorities allow the department to transfer or reprogram money under certain conditions. Read more here.
Can The Pentagon’s Contracting System Keep Pace With The Demands Of Today’s Battlefield?, Federal News Network
Modern warfare puts a premium on speed. A new report argues that when the Pentagon can move quickly from identifying a need to fielding a solution, it can have a direct impact on military effectiveness. Read more here.
Closing The Delivery Gap: 3 Ways To Turn Federal AI Access Into Mission Use, Federal News Network
Federal agencies are past the abstract artificial intelligence debate. The real challenge has shifted from high-level policy mandates to execution on the ground. New guidance, acquisition pathways and enterprise agreements are giving leaders more ways to move from policy intent to implementation. That momentum is also visible in major enterprise agreements, including GSA’s OneGov AI offerings, which could make AI capabilities available to nearly 3.4 million users across government. Read more here.
A Comprehensive Guide to the Navy’s FY 2027 Budget Request, GovConWire
The Navy is making a major commitment to modernization and readiness in its fiscal year 2027 budget request. That’s why the service asked for $378 billion, 23 percent more than the $307 billion enacted in FY 2026. Read more here.
The Government’s Role In Innovation May Be Changing From Customer To Investor, Federal News Network
If agencies are no longer willing to wait for markets alone to deliver critical technologies, what comes next? Some are moving upstream, investing in companies and technologies much earlier than traditional procurement would allow. Read more here.
The Federal Government Is Going Beyond Funding Research, Federal News Network
For decades, government largely funded discovery and let the market handle commercialization. NSF is now building new pathways to move promising technologies from the lab into the economy. Read more here.
Pentagon Eyes End to PDFs for Budget Transfers, Federal News Network
For years, the Defense Department has used PDFs to manage how it spreads billions of dollars across the armed forces each year. Now a team of defense and industry officials are testing whether ditching PDFs for modern financial software could get that money out to troops faster. Read more here.
Small Business Administration (SBA):
- Notice: Meeting of the Advisory Committee on Audit and Financial Management: On July 17, SBA announced a meeting of the Advisory Committee on Audit and Financial Management (AFMAC). The AFMAC provides advice and recommendations to SBA on financial management, accounting, auditing, internal controls, and performance management. The meeting will be held on Friday, July 24, 2026, from 10:00 a.m. to 3:00 p.m. EDT. The meeting will be held virtually via Microsoft Teams. Information on how to access the meeting will be posted on SBA’s website prior to the meeting. More information is available here.
- News Release 26-72: SBA, Intel to Host Arizona Supplier Matchmaking Expo for Aerospace and Semiconductor Industries: On July 10, SBA announced that its third Supplier Matchmaking Expo will take place on Wednesday, July 29, 2026, at the Grand Hyatt Scottsdale Resort in Scottsdale, Arizona. Co-hosted by Intel, this Expo will feature the space and semiconductor industries, with a focus on strengthening domestic supply chains in these specific sectors. NASA and the Nuclear Regulatory Commission will also join SBA at the event, which is designed to help large companies and industrial producers connect with small domestic suppliers to reshore supply chains, create local jobs, and restore American industrial dominance in sectors that are critical to U.S. strength and competitiveness. Read more here.
Department of War (DOW) News Releases:
- Trump Announces $10B Investment in Defense Industry. On July 16, DOW announced that it will be investing roughly $10 billion in materiel production to support 4,000 defense industry jobs across Pennsylvania. Read more here.
- Declassification of the Department of War Internal After-Action Review of the Coronavirus Disease 2019 Vaccine Mandate Report. On July 15, DOW announced that Secretary Pete Hegseth directed the National Academy of Public Administration (NAPA) to conduct an After-Action Review (AAR) capturing lessons learned regarding Service members discharged under the COVID-19 vaccine mandate to improve future policy. Read more here.
CONFERENCE: Mission Critical: Compliance and Preparing Contractors for SBA’s Latest Rules, August 18, 2026, Meghan F. Leemon
CONFERENCE: Work Stoppage: Maximize Recovery from Delays, Terminations in Federal Contracting, August 18, 2026, Lauren Brier
CONFERENCE: Warfighting at Warp Speed: Why Defense Contractors Must Track the DOW’s Acquisition Overhaul, August 19, 2026, Lauren Brier
TRAINING: Past Performance: How to Use Yours, Benefit from Others’, and Defend It from Attacks, August 26, 2026, Josie Farinelli, Abigail “Abby” Finan
Department of Labor (DOL) News Releases:
- DOL Cites Big Rig Parts Distributor For Confined Space, Safety Hazards After Worker Fatality At Company’s Corpus Christi Facility: DOL has cited big rig parts distributor FleetPride Inc. for 16 serious safety violations after an investigation into a worker fatality found the company exposed workers to confined space and other safety hazards. DOL’s Occupational Safety and Health Administration (OSHA) initiated an inspection into FleetPride on Jan. 7, 2026, after an employee asphyxiated while inspecting a tanker trailer. OSHA cited the company for 16 serious and three other-than-serious safety violations, which include failure to implement a confined space program, lacking elements for its respiratory protection program, and exposing workers to electrical hazards. Read more here.
- DOL Cites Texas Contractor, Staffing Company After Worker Suffers Fatal Injury In Elementary School Crawl Space: DOL has cited a building contractor and a staffing company for safety violations after a worker suffered fatal injuries while operating a mini-excavator beneath an elementary school in Converse. OSHA opened an inspection after a Jan. 7, 2026, incident at Converse Elementary School involving a D L Bandy Constructors Inc. employee who was removing accumulated dirt from the school’s crawl space with a mini excavator and became trapped between the equipment and a concrete beam, resulting in fatal injuries. Read more here.
- DOL Fines Houston Utility Contractor $343K After Worker Hospitalized Following Excavation Collapse at Brazoria County Work Site: A DOL investigation concluded that a Houston utility construction company exposed employees to safety hazards after an excavation collapse hospitalized a worker. OSHA initiated an investigation into Blazey Construction Services LLC following the incident, which occurred while crews were installing sewer and water pipes for a residential development in Alvin, Texas. OSHA determined that the employer failed to adequately protect the excavation, provide a safe means of egress, and report the hospitalization within 24 hours as required by federal law. Read more here.
- New York-Based Automotive Service Provider Agrees To Pay $174K To Settle Safety Violations, Protect Workers After Federal Investigation: DOL has entered into a settlement agreement with auto service provider Monro Inc. requiring it to pay $174,000 in penalties to resolve seven safety violations found at its Norwich facility in July 2025. DOL’s Occupational Safety and Health Administration (OSHA) cited Monro Inc. after inspectors identified multiple safety hazards. Workers were exposed to slip, trip, and fall hazards from engine oil and transmission fluid spilled on a storage room floor, and from the accumulation of commercial trash, including tires, in an exterior storage area. Read more here.
- US Department of Labor Recovers More Than $500K In Back Wages From San Diego Deli For 6 Workers: The U.S. Department of Labor has recovered $500,256 in back wages for six deli workers who were not paid the local minimum wage for regular hours or overtime premiums for hours worked over 40 per workweek. The department’s Wage and Hour Division investigated Chau Deli, operating as A Chau Sandwich, and determined that the employer paid workers a flat rate of $100 per day despite often working 11-hour days, averaging 55 hours each week. The investigation found that the regular rate of pay for these workers was less than the local minimum wage. Read more here.
PM WEBINAR: Employee Organizing 101: What Employers Need to Know Before, During, and After Employees Organize, July 29, 2026, Sarah L. Nash, Georgianne “Georgi” Kokenis
WEBINAR: Federal Contractors, DEI, and Employment: Executive Order Defining Illegal Actions; New Obligations; Compliance Issues, August 5, 2026, Sarah L. Nash
WEBINAR: GovCon 101: Service Contract Act, August 24, 2026, Nichole D. Atallah
PM WEBINAR: AI, Privacy, and Employees: Understanding Legal Risks and Liabilities for Employers, August 26, 2026, Nichole D. Atallah, Corey Bohn
WEBINAR: Mergers & Acquisitions in Government Contracting: Novations and Recertification, August 11, 2026, Samuel S. Finnerty, Daniel Figuenick, III
CONFERENCE: Buying or Selling: Keys to Successful GovCon M&A Transactions, August 18, 2026, Abigail “Abby” L. Baker, Kristen Centre, Meghan F. Leemon
PM WEBINAR: Buying and Selling a Business: M&A Processes and Procedures, August 27, 2026, Kristen Centre
Contract Claims 101: Common and Uncommon Claims and Appeals, PilieroMazza Webinar Replay, Lauren Brier, Caitlin Trevillyan, Jonathan “Jon” R. Neri
Join PilieroMazza’s Lauren Brier, Caitlin Trevillyan, and Jon Neri for the next installment in our Contract Claims 101 series. This session will explore key claims doctrines every federal contractor should understand, with discussion spanning both general contracting issues and those frequently arising in construction projects. Topics will include foundational theories—such as constructive changes, delay claims, and scheduling disputes—as well as more nuanced concepts like differing site conditions, equitable estoppel, and bad faith. Click here to view the recorded session.
GSA’s Draft AI Procurement Rule Has Improved But Needs Further Reforms, Contractors Say, NextGov/FCW
The General Services Administration’s proposed large language model-specific acquisition regulations unveiled last month are an improvement over rules introduced in March, contractors and experts told federal regulators during a Tuesday listening session. Contractors have until August 3 to give GSA feedback on a proposed overhaul to large language model procurements. Read more here.
General Services Administration (GSA) News Release: GSA Solicits Industry Feedback to Enhance American-Made Product Procurement
GSA issued a Request for Information to gather industry insights on how to reinforce American producers that provide goods and materials to federal agencies through the GSA Advantage! marketplace. “As we celebrate the 250th anniversary of the United States, GSA is prioritizing American suppliers and seeking industry feedback to reach this goal most effectively,” said GSA Administrator Edward C. Forst. “The Trump Administration’s and GSA’s enhanced focus on procuring US-made products will strengthen our economy, create resilient supply chains, and bolster America’s workforce.” Read more here.
Small Business Administration (SBA) News release 26-72: SBA Expands Use of Palantir Software to Accelerate Pandemic Fraud Crackdown
On July 14, SBA announced a new phase in its anti-fraud initiative in which it is deploying Palantir Technologies (Palantir) software to advance the agency’s ongoing efforts to identify, investigate, and help prosecute fraud in pandemic-era small business relief programs, including the Paycheck Protection Program (PPP) and COVID Economic Injury Disaster Loan program. This collaboration formalizes the Fraud Prevention Pilot Program that the agency launched earlier this year with Palantir software, using advanced technology and artificial intelligence to surface data and leads, support criminal enforcement, and assist in the recovery of funds for American taxpayers. Read more here.
Government Accountability Office (GAO) Report: Priority Open Recommendations: General Services Administration (GSA)
On July 13, GAO released a report in which it added six priority recommendations for the GSA to the eight it identified in May 2025. GAO highlighted the following three areas that warrant timely and focused attention: (i) Managing federal real property; (ii) Improving agency shared services; and (iii) Improving oversight of federal awards. The full report is available here.
Office of Inspector General (OIG) Announcement – OA-2026-04 – Central Nonprofit Agencies’ (CNAs) Use of AbilityOne Program Fees
On July 10, the OIG announced it is initiating an audit of the CNAs’ Use of AbilityOne Program Fees. The objective is to determine whether the CNAs’ use of AbilityOne Program Fees is consistent with the U.S. AbilityOne Commission’s requirements. Specifically, the audit will assess whether program fee expenditures are properly supported and advance the objectives of the AbilityOne Program. The review period will cover January 1, 2025, through June 30, 2026. Read more here.
Department of Energy (DOE) Final Rule: Administrative False Claims and Procedures
On July 13, DOE published a final rule to revise its regulations issued under the Program Fraud Civil Remedies Act of 1986, amended by the Administrative False Claims Act of 2023. The final rule updates DOE regulations to reflect recent amendments to the statute. The updates reflect the new title; increase the maximum amount for claims from $150,000 to $1 million; allow for reverse false claims; define new terms; extend the statute of limitations for bringing claims; require DOE to notify the Attorney General before settlement of allegations; and establish a process for crediting recovered costs. The rule is available here and is effective July 13, 2026.
Department of Justice (DOJ) Press Releases:
- Genesee Valley Club Agrees To Pay $1.05 Million To Resolve False Claims Act (FCA) Allegations: On July 10, DOJ announced Genesee Valley Club agreed to pay $1,050,000 to resolve allegations that it improperly obtained a Paycheck Protection Program loan from the U.S. Small Business Administration (SBA), which it was not eligible to receive. This action is part of the Trump Administration’s Task Force to Eliminate Fraud. Read more here.
- Canadian-Owned Companies Agree To Pay $223,618 To Resolve Fraud Allegations Related To Receipt Of A Small Business Innovation Research (SBIR) Program Award: On July 10, DOJ announced Advanced Global Services, Ltd., Paradigm Shift Technologies, and Gennady Yumshtyk agreed to pay $223,618 to resolve allegations, arising under the FCA, that they submitted false claims in connection with a SBIR program award funded by the United States Air Force and the United States Navy. Read more here.
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