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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CMMC Is Here—What It Means for Defense Contractors, PilieroMazza Client Alert, Isaias “Cy” Alba, IV, Daniel Figuenick, III, Joseph P. Loman
The Cybersecurity Maturity Model Certification (CMMC) Program is finally here. A final rule establishing the CMMC Program at Title 32 of the Code of Federal Regulations (CFR), Part 170 went live on December 16, 2024. Now, the Department of Defense (DOD) issued a final rule (Final Rule) codifying the CMMC Program in the Defense Federal Acquisition Regulation Supplement (DFARS). Contractors that process, store, or transmit Federal Contract Information (FCI) or Controlled Unclassified Information (CUI) need to understand what key changes were made in the Final Rule to ensure they are, or remain, eligible for certain upcoming DOD contracts. Read more here.
With CMMC Rule Final, DoD Focused On Training, Small Business Relief, Federal News Network
Defense Department officials are now rolling out acquisition training to get both government and industry up to speed on the implementation of the CMMC program. DoD officials have laid out a “phased” implementation approach for the sweeping cybersecurity requirements. Read more here.
Fight AI-Powered Cyber Attacks With AI Tools, Intelligence Leaders Say, Defense One
Cyber defenders need AI tools to fend off a new generation of AI-powered attacks, the head of the National Geospatial-Intelligence Agency said Wednesday. But the Pentagon can also make more use of “good old-fashioned automation,” NGA chief says. Read more here.
GAO Report GAO-25-108739: Veterans Affairs (VA): Key AI Practices Could Help Address Challenges
On September 11, GAO publicly released a report on the VA’s use of Generative artificial intelligence (AI) systems. The VA increased its number of AI use cases between 2023 and 2024. The VA has also identified challenges in using AI—such as difficulty complying with federal policies and guidance, having sufficient technical resources and budget, acquiring generative AI tools, hiring and developing an AI workforce, and securing sensitive data. GAO has identified a framework of key practices to help ensure accountability and responsible AI use by federal agencies—including VA—in the design, development, deployment, and continuous monitoring of AI systems. VA and other agencies can use this framework as they consider, select, and implement AI systems. The full report is available here.
Overcoming the Compliance Minefield of Cost-Reimbursement Contracts, Part 1: Preparing for a Surge in DCAA Audit Activity, PilieroMazza Webinar Replay, Isaias “Cy” Alba, IV
With audit activity from the Defense Contract Audit Agency (DCAA) on the rise, government contractors—especially small and mid-sized businesses—must be prepared for increased scrutiny. In Part 1 of this 3-part webinar series, “Overcoming the Compliance Minefield of Cost-Reimbursement Contracts,” hosted by PilieroMazza and GRF CPAs & Advisors, we explore factors driving the surge in audits, key areas of DCAA focus, and the most common compliance pitfalls. Attendees will gain practical strategies for audit readiness, documentation practices, and risk mitigation to ensure compliance and avoid costly findings. Click here to view the recorded session.
The Buy American Act and Trade Agreements Act: What Government Contractors Need to Know, PilieroMazza Webinar Replay, Jacqueline K. Unger, Abigail “Abby” Finan
In this timely webinar, PilieroMazza’s Jackie Unger and Abby Finan break down the current state of key BAA and TAA requirements and how they impact federal contractors across industries. From shifting domestic content thresholds to agency-specific enforcement priorities, this session offers practical insights to help you adapt your compliance strategies and protect your contract opportunities. Click here to view the recorded session.
OMB Seeks to Revise the Small Business Act – Another Shot at the Rule of Two, PilieroMazza Blog, Isaias “Cy” Alba, IV, Kristine “Krissy” Crallé
Concerns are mounting that the Revolutionary FAR Overhaul will eliminate the regulatory “Rule of Two” found in FAR Part 19. Now, the Office of Management and Budget (OMB) is going further—seeking to narrow the reach of the statutory Rule of Two by revising the Small Business Act. Specifically, OMB wants to change the requirement from applying to purchases “below the simplified acquisition threshold (SAT)” to applying only to purchases below “$250,000.” At the same time, OMB proposes raising the SAT to $10 Million by 2030. The combined effect would severely curtail the Rule of Two and diminish contracting opportunities for small business contractors. Read more here.
House Republicans Advance Justice, Science Agency Budget Cuts, Bloomberg Government
House appropriators advanced along party lines a $76.8 billion bill to fund the Departments of Commerce, Justice, and Science agencies like NASA, through fiscal 2026. Lawmakers on the House Appropriations Committee on Wednesday approved the spending package in a 34-28 vote. The measure, if passed, would cut spending by 2.8% compared with fiscal 2025. Republicans say the bill would strengthen national security and support US competitiveness against China. Read more here (subscription required).
Government Pacing Toward Increased It Contract Spending Despite Doge Cuts, Government Executive
Despite a change in presidential administrations and a host of new initiatives under President Donald Trump, including the cost-cutting Department of Government Efficiency, the federal government appears to be on track to spend a record amount on IT contracts in fiscal 2025. Read more here.
Trump’s Department Of War Will Have To Await Legal Name Change, Bloomberg Government
President Donald Trump will have to wait a while for the legal renaming of the Department of Defense to the Department of War, as the House won’t debate the new moniker as part of the annual defense authorization bill. The House Rules Committee on Tuesday proposed 298 amendments to the massive defense policy bill, but an amendment mandating the department’s name change didn’t make the list. Read more here (subscription required).
Small Business Defense Tech Firms Ask Congress To Re-Up Programs, Bloomberg Government
Industry groups are urging lawmakers to reauthorize two programs to direct federal research dollars to small businesses without putting new caveats on how funds can be awarded. Authorization for the Small Business Innovation Research and Small Business Technology Transfer programs is set to lapse after Sept. 30, which could threaten billions in small business R&D funding awarded to small companies and research institutions. Read more here (subscription required).
Office Of Management And Budget (OMB)
- Final Rule: Conformance Of Cost Accounting Standards (CAS) To Generally Accepted Accounting Principles (GAAP) For Operating Revenue And Lease Accounting: On September 11, OMB’s Office of Federal Procurement Policy (OFPP) published a final rule to conform the CAS to GAAP. This rule eliminates “operating revenue” as historically defined in CAS and the reliance of “revenue” reported in compliance with GAAP for CAS purposes reduces the regulatory footprint associated with CAS and places reliance on commercial accounting practices under GAAP. The rule is available here and will be effective October 14, 2025.
- Notice Of Proposed Rulemaking (NPRM): Conformance Of Cost Accounting Standards (CAS) To Generally Accepted Accounting Principles (GAAP) For CAS 404, 408, 409, And 411: On September 11, OMB’s Office of Federal Procurement Policy (OFPP) published an NPRM and request for comments regarding conformance of specific CAS to GAAP. The NPRM is available here. Comments close October 14, 2025.
Legislation To End Government Shutdowns Returns To Capitol Hill, Government Executive
With three weeks left in the fiscal year and yet another potential budget crisis looming, Rep. Jodey Arrington, R-Texas, and Sen. James Lankford, R-Okla., are trying their hand again at ending government shutdowns for good. Rep. Jodey Arrington, R-Texas, and Sen. James Lankford, R-Okla., brought back a bill aimed at ending the costly budget impasses, a proposal that historically had little success in Congress. Read more here.
Upcoming Government Contract Presentations
TRAINING: Joint Venture and Mentor-Protege Bidding Strategies, October 2, 2025, Peter B. Ford, Meghan F. Leemon
PM WEBINAR: Managing the Financial Impact of Tariffs on Your Government Contract, October 7, 2025, Jacqueline K. Unger, Ryan Boonstra
PM WEBINAR: Overcoming the Compliance Minefield of Cost-Reimbursement Contracts, Part 2: Mastering DCAA Audits in Cost-Plus-Fixed-Fee Contracts, October 14, 2025, Isaias “Cy” Alba, IV
PM WEBINAR: Avoiding Common Teaming and Subcontracting Pitfalls, October 16, 2025, Jon Williams
TRAINING: Legal Considerations: How Best to Structure Your Company as a Federal Contractor, October 21, 2025, Isaias “Cy” Alba, IV
TRAINING: Past Performance: How to Use Yours, Benefit from Others’, and Defend It from Attacks, October 28, 2025, Daniel Figuenick, III, Abigail “Abby” Finan
TRAINING: Limitations on Subcontracting: Key Updates and Tips for Compliance, November 4, 2025, Emily A. Reid, Abigail “Abby” Finan
TRAINING: Unlocking the Secrets of Debriefings, Government Evaluation of Proposals and Protests, November 6, 2025, Katherine B. Burrows, Eric Valle
PM WEBINAR: Maximizing Recovery: Tactics for Stop Work REAs and Termination Proposals, November 6, 2025, Legal Strategies & Capture Planning, November 7, 2025, Lauren Brier
PM WEBINAR: Overcoming the Compliance Minefield of Cost-Reimbursement Contracts, Part 3: Ready, Set, Comply! Build Indirect Rates That Stand Up to DCAA Scrutiny, November 12, 2025, Isaias “Cy” Alba, IV
CONFERENCE: Mission Critical: Compliance and Preparing Defense Manufacturers for SBA’s Latest Rules, November 17, 2025, Isaias “Cy” Alba, IV
GSA Activity Feed Announcement, 8/21 MAS Office Hours Presentation, Q&A, And Video Now Available
On August 21, GSA hosted MAS Office Hours on Highly Configurable Products and the Cloud SIN for Transactional Data Reporting (TDR). The recording is available here. The presentation slides and Q&A summary is attached. The full notice is available here.
GSA News Release: Treasury Partners With GSA To Launch SAVE Program With Strengthened Oversight Role
On September 10, GSA announced that it partnered with the Department of the Treasury to launch the Savings Award for Verified Efficiencies (SAVE) Program. This joint initiative is intended to empower federal employees to identify and eliminate wasteful spending in federal contracts and deliver measurable savings for taxpayers while maintaining mission readiness. Under GSA’s leadership, successful elements of the Treasury program may be expanded government-wide. Read more here.
GSA Email Update: Service Contract Reporting To Be Modernized In SAM.gov On September 12
On September 10, GSA announced that it will modernize the SCR functionality in SAM.gov starting September 12. Contractors now submit reports directly in SAM.gov through the Service Contract Reporting widget, providing required details such as Total Amount Invoiced and Prime Contractor Hours Expended, along with optional Tier 1 subcontractor data. The transition will introduce seven core automation features that directly replace the outdated manual or limited processes. The major features include (1) Reporting Fiscal Year Element – Simplifies identification of annual activity; (2) Automated Archiving – Data is archived at year-end; (3) Historical record preservation – Historical submissions are preserved when contracts move from eligible to ineligible; (4) Systematic Contract Archival – Contracts active at the close of a reporting cycle are automatically archived for long-term use; (5) Daily Data Loading – Shifts from a bi-weekly schedule to daily updates, reflecting contract changes in near real time; and (6) Audit Tracking – A dedicated log ensures full traceability of reporting activities. The quick start guide for federal users is available here. The quick start guide for non-federal users is available here.
Upcoming GSA Federal Supply Schedules Presentations
PM WEBINAR: Key Changes in GSA Schedule Contracting: What You Need to Know, October 2, 2025, Jon Williams
Federal Acquisition Regulation (FAR) Model Deviation Text for FAR Parts 3, 17, 27, and 45
On September 11, the FAR Council released the model deviation text for the following FAR Parts:
- FAR Part 3, Improper Business Practices and Personal Conflicts of Interest. FAR Part 3 was retained with minimal deletions and minor updates made for plain language and streamlining. The fundamental rules of ethical conduct remain exactly the same. The General Services Administration’s (GSA) memorandum and class deviation fully incorporating the same into all GSA procurements are available here and will be effective November 3, 2025. Informal feedback is due October 27, 2025.
- FAR Part 17, Special Contracting Methods. FAR Part 17’s revisions can be characterized by three overarching themes: organizing information in a way that’s easier to understand and use; combining related topics and removing repeated information; and making the language clearer through simpler sentences and formatting. The GSA memorandum and class deviation fully incorporating the same into all GSA procurements are available here and will be effective November 3, 2025. Informal feedback is due October 27, 2025.
- FAR Part 27, Patents, Data, and Copyrights. FAR Part 27 has been updated with important plain language updates, enhanced clarity, and improved readability. Section 27.405, Other Data Rights Provisions, has been revised and the approach for special works and existing works has been fundamentally altered. This section now provides descriptive guidance, instructing that contracts “must specifically address the Government’s rights” and that agencies are “authorized to specially negotiate” terms. 52.227-23, Rights to Proposal Data (Technical) was removed. The GSA memorandum and class deviation fully incorporating the same into all GSA procurements are available here and will be effective November 3, 2025. Informal feedback is due October 27, 2025.
- FAR Part 45, Government Property. FAR Part 45 was retained with minimal deletions and minor updates made for plain language. No changes were made to provisions or clauses. The GSA memorandum and class deviation fully incorporating the same into all GSA procurements are available here and will be effective November 3, 2025. Informal feedback is due October 20, 2025.
New “Required” Vehicles May Challenge BICs: BGOV Contracting, Bloomberg Government
The use of best-in-class contract vehicles for IT purchases may be affected by new changes to the Federal Acquisition Regulation. The latest updates to Part 8, which focuses on procurement sourcing, direct agencies to leverage “required use” contracts or blanket purchase agreements for procurement of common goods and services, of which IT purchases are designated. Amendments to the August proposed revisions also walks back language mandating the use of “best-in-class” designated contracts. Read more here (subscription required).
Federal Acquisition Regulation (FAR) Overhaul, FAR Companion Version 1.0
On September 9, the FAR Council released the initial version of the FAR Companion for the following FAR Parts: 1 (Federal Acquisition Regulation System); 4 (Administrative and Information Matters); 5 (Publicizing Contract Actions); 6 (Competition Requirements); 8 (Required Sources of Supplies and Services); 10 (Market Research); 11 (Describing Agency Needs); 12 (Acquisition of Commercial Products and Commercial Services); 18 (Emergency Acquisitions); 26 (Other Socioeconomic Programs); 29 (Taxes); 31 (Contract Cost Principles and Procedures); 34 (Major System Acquisition); 35 (Research and Development Contracting); 36 (Construction and Architect-Engineer Contracts); 39 (Acquisition of Information and Communication Technology); 40 (Information Security and Supply Chain Security); 42 (Contract Administration and Audit Services); 50 (Extraordinary Contractual Actions and the SAFETY Act); and 51 (Reserved – formerly Use of Government Sources by Contractors). FAR Council requests feedback by October 31. The FAR Companion is available here.
LITIGATION & DISPUTE RESOLUTION
Artificial Intelligence or Artificial Interference?: How AI is Reshaping Litigation for Better and Worse, PilieroMazza Blog, Matthew E. Feinberg, Kaavya Ramesh
Artificial intelligence (AI) is rapidly transforming the modern-day legal landscape, offering tools for research, drafting, document review, and jury selection, and even predicting case outcomes. If used correctly and with robust safeguards, some attorneys and litigants may benefit from the use of AI to streamline litigation projects. However, AI also can pose serious risks and dangerous pitfalls when misused or used without adequate quality control measures in place. Recently, for instance, dozens of attorneys have faced sanctions in federal court for filing briefs containing fake (“hallucinated”) case citations or incorrect statements of the law generated by AI. And the Government Accountability Office (GAO) has scolded protesters about the use of AI for drafting bid protests for similar reasons. Outside the parameters of legal research and drafting, litigants are now using AI for more novel and potentially even more troubling purposes. One such example is a recent Arizona criminal case where the family of a crime victim offered an AI-generated victim impact statement for use at sentencing. The use of AI to provide a witness statement raises serious concerns for the accuracy of the information provided and the fairness of the proceedings, begging the question: Does the use of AI in litigation represent true artificial intelligence, or is it artificial interference preventing a just outcome? Read more here.
Department Of Labor (DOL) News Release: DOL’s Administrative Review Board Launches Major Website Improvements To Simplify Appeals Process For Workers
On September 10, DOL announced an overhaul of its website to increase transparency and provide the public with a greater understanding of its processes and procedures. The Administrative Review Board’s website updates are intended to improve workers’ ability to file, track, and process cases, while also allowing the board to act with more transparency. Read more here.
Unions Urge VA To Restore Bargaining Ahead Of Deadline, Government Executive
The leaders of more than half a dozen federal employee unions last week urged Veterans Affairs Secretary Doug Collins to restore collective bargaining rights for most departmental employees, after President Trump’s executive order expanding his push to ban unions for two-thirds of the federal workforce extended a deadline for agencies to exempt labor groups from the edict. President Trump’s order extending a ban on collective bargaining to additional agencies opened the door for more labor groups to continue representing employees at the Veterans Affairs and Defense departments. Read more here.
FEMA Letter Signers Claim Retaliation By DHS, Federal News Network
Employees at the Federal Emergency Management Agency who signed a public dissent letter say the Department of Homeland Security violated whistleblower laws when placing them on administrative leave last week. Read more here.
Trump DOL Places Overtime Update on Regulatory Backburner, Bloomberg Government
The US Labor Department listed an update to overtime pay eligibility on its “long term action” regulatory agenda, in a sign the Trump administration doesn’t plan to move on the rule quickly. The DOL re-released its Spring 2025 regulatory agenda, after publishing and deleting it from the Office of Management and Budget website in August. Read more here (subscription required).
Upcoming Labor & Employment Presentations
PM WEBINAR: Multijurisdictional Employers, Part 4: Marijuana and Other Drug Testing in the Workplace, September 25, 2025, Sarah L. Nash, Sara N. Strosser
TRAINING: Labor Rules & Regulations: Federal Market Compliance, October 22, 2025, Nichole D. Atallah
CONFERENCE: Unpacking and Seizing Opportunity in Changes to Labor and Employment, November 20, 2025, Nichole D. Atallah
NATIVE AMERICAN LAW & TRIBAL ADVOCACY
Office of Tribal Relations, USDA: Tribal Advisory Committee
On September 8, the USDA announced a meeting of the Tribal Advisory Committee on Thursday, September 18, 2025, at 12:00 p.m. Eastern Standard Time. The Committee is authorized under the Agriculture Improvement Act of 2018 (the 2018 Farm Bill) and operates in compliance with the Federal Advisory Committee Act. The purpose of the Committee is to provide advice and guidance to USDA on matters related to Tribal and Indian affairs. The full notice is available here.
FALSE CLAIMS ACT / AUDITS & INVESTIGATIONS
Login.gov Leans Into Its Role As A ‘Foundational’ Anti-Fraud Tool, Federal News Network
The federal government’s online hub to access benefits and services is leaning into its role as a tool to combat fraud in government spending. Director Hanna Kim said on Wednesday that her team recently launched a cross-agency threat intelligence working group. Read more here.
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