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 M&A and Past Performance: Can Buyers Use a Target’s Experience After an Acquisition? – The GovCon M&A Playbook, Part 4
PilieroMazza Blog; Author: Samuel S. Finnerty
One of the most persistent misconceptions in GovCon M&A is that acquiring a contractor also means acquiring its past performance. Government contractors, investors, and acquirers frequently ask the same questions. Can the buyer use the target’s past performance? Does novation transfer past performance? Can the buyer rely on the target’s corporate experience in future proposals? The answer is sometimes, but not automatically. An acquisition does not turn the target’s past performance into the buyer’s own experience for every future competition. Read more here.
Three Initiatives Causing Industry New Concerns About DOD Acquisition Reforms
Source: Federal News Network
The Defense Department’s third message to industry since early May is prompting many contractors to strongly doubt whether Secretary Pete Hegseth’s goal of revitalizing the defense industrial base still is a priority. Deputy Defense Secretary Steve Feinberg’s Aug. 18 memo on cost and pricing is the latest example in the last three months of the Pentagon adding more compliance and complexity to contractors working for the DoD. Read more here.
DOS Interim Final Rule: International Traffic in Arms Regulations: Modification of Civil Aircraft to Incorporate Aircraft Survivability Equipment
Source: Federal Register
On August 28, DOS published an interim final rule amending the International Traffic in Arms Regulations (ITAR) to remove from the U.S. Munitions List (USML) certain aircraft that have been modified to incorporate aircraft survivability equipment (ASE) and to exclude from the ITAR certain activities that would otherwise meet the definition of reexport or temporary import of ASE incorporated into such aircraft. The rule is effective October 13, 2026. Comments are due September 28, 2026. The rule is available here.
DOS Final Rule: International Traffic in Arms Regulations: Extension of Temporary Modification of Category XI(b) of the U.S. Munitions List
Source: Federal Register
On August 28, DOS published a final rule extending a previous temporary modification of Category XI(b) of the USML. The rule is effective August 30, 2026, except for amendatory instruction 3, which is effective August 30, 2028. The rule is available here.
Army Overhauls Software Acquisition to Speed Delivery
Source: Federal News Network
A new Army memo is overhauling how the service buys software, turning to private-sector expertise to deliver new tools to the force faster. Army Secretary Dan Driscoll’s policy update, dated July 22 but published last week, all but abandons the longstanding practice of purchasing products that are custom-built for military needs. Instead, the Army will rely on commercial companies to tweak their existing products for soldiers to use. Read more here.
The Revolutionary MAS Overhaul
Source: Federal News Network
The June 26th FAR & Beyond blog highlighted the start of the formal rulemaking for the RFO. In doing so, the blog introduced a related opportunity for revolutionary procurement reform: the Revolutionary Multiple Award Schedule (MAS) Overhaul (RMO). The RMO is an opportunity to build on the RFO by streamlining processes, reducing administrative/procurement burdens for the General Services Administration (GSA) and its industry partners, and expanding access to cutting-edge commercial capabilities to meet customer agency mission requirements. The RMO should be a collective effort. GSA can solicit recommendations for MAS reform from stakeholders across the procurement community. Read more here.
Small Business Administration (SBA) Final Rule: Rescinding Unnecessary Notice and Comment Procedures
Source: Federal Register
On August 31, SBA published a final rule rescinding SBA’s policy of engaging in notice and comment rulemaking even where the Administrative Procedure Act (APA) does not require notice and comment rulemaking. As a result of this final rule, SBA will follow the default requirements of the APA. SBA will reserve the right to engage in voluntary notice and comment rulemaking even where not required by the APA as a matter of policy on a case-by-case basis. The rule is available here and is effective as of August 31, 2026.
National Archives Says Agencies’ AI Use Does Not Automatically Create Federal Records
Source: Government Executive
New guidance from the National Archives and Records Administration outlines when agencies should preserve AI-related materials as federal records and notes there is no “one size fits all” approach to doing so. Recent guidance issued by the National Archives and Records Administration says that the use of artificial intelligence platforms “does not, in and of itself, result in the creation of federal records,” although it notes that AI inputs and outputs may still qualify for recordkeeping if they influence broader agency operations. In an Aug. 21-dated memo to agencies, NARA says that “whether an AI material is a federal record depends on the circumstances surrounding the creation, maintenance, and use of the materials, such as whether the agency relies on it in decision-making, uses it to conduct official business, circulates the material to others, or incorporates it into an agency system.” Read more here.
Office of Federal Procurement Policy (OFPP) Final Rules:
Source: Federal Register
On September 1, OFPP published two final rules effective October 1, 2026.
- Conformance of Cost Accounting Standards to Generally Accepted Accounting Principles for CAS 407 Use of Standard Costs for Direct Material and Direct Labor. This rule rescinds Cost Accounting Standard (CAS) 407 to conform it to Generally Accepted Accounting Principles (GAAP). One definition is transferred to a different location. Read more here.
- Increase of Monetary Thresholds and Other Matters Related to Cost Accounting Standards Program Requirements. This rule increases the Cost Accounting Standards (CAS) thresholds and agency waiver authority, and issues clarifications on application of the CAS thresholds and exemptions to indefinite delivery contracts (IDCs). Read more here.
Multiple Award Schedule Activity Feed: Join GSA for MAS TDR Office Hours on 9/9 at 2-3 p.m. ET
Source: U.S. General Services Administration
On September 2, GSA posted the registration link for GSA’s next MAS TDR Office Hours on 9/9 at 2-3 p.m. ET for guidance on navigating monthly reporting requirements. During this session, GSA will cover key responsibilities and expectations for TDR participation. Read more here.
Small Business Administration (SBA) Notice and Request for Comments: Updated Minimum Performance Standards for Commercialization for Firms That Receive Funding Through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs
Source: Federal Register
On September 2, SBA published for public comment updated minimum performance standards for commercialization for firms funded through the SBIR and STTR Programs. This commercialization benchmark establishes a minimum share of annual revenue that a Small Business Concern (SBC) must derive from sources other than SBIR or STTR program funding in order to remain eligible for a new Phase I or Direct-to-Phase II award, where that SBC has received more than 25 Phase II awards during the five most recently completed fiscal years, excluding the current fiscal year. The revised benchmark will supersede the benchmark announced at 78 FR 48537 and 78 FR 59410. The notice is available here. The standards take effect November 15, 2026, and comments are due on October 31, 2026.
Shutdown Threat Possibly Lifted as House Passes Stopgap Spending Bill
Source: Government Executive
The House approved a stopgap spending bill on Tuesday that will keep the federal government funded through early December, taking a government shutdown off the table ahead of midterm elections this fall. The House voted 370-48 to pass a continuing resolution that will keep the federal government funded through Dec. 11. The continuing resolution includes a provision that temporarily blocks the Office of Management and Budget’s proposed rule that would put federal grant funding under review by political appointees. It also includes language that would prevent the Trump administration from transferring funds from other programs to Border Patrol. Read more here.
Department of Defense (DOD) News Release: ChatGPT, Grok Added to War Department’s AI System Options
Source: U.S. Department of War
On September 1, DOD announced it increased its artificial intelligence offerings by launching versions of Grok and ChatGPT to GenAI.mil, to go alongside Google’s Gemini. Read more here.
Federal Disability Employment Program Faced Widespread Compliance Problems, Whistleblower Investigation Finds
Source: Government Executive
A federal agency that oversees a program intended to increase job opportunities for employees with disabilities may not be doing enough to ensure that its government contracts are supporting such workers, an investigation prompted by a whistleblower complaint found. The AbilityOne Commission countered that “many of the compliance concerns cited by [the Office of Special Counsel] occurred during periods of operational disruption, including the pandemic.” Read more here.
PM WEBINAR:
Employee Organizing 101: Government Contractor Compliance Essentials, September 10, 2026
Speakers: Sarah L. Nash, Georgianne “Georgi” Kokenis
CONFERENCE:
Employment Law Updates: Hot Topics, September 17, 2026
2026 DC SHRM Annual Conference
Speaker: Sarah L. Nash
Federal Government Contracting 101: A Roadmap for Commercial Businesses, October 17, 2026
ACRA’s 32nd Annual Conference
Speaker: Nichole D. Atallah
LITIGATION & DISPUTE RESOLUTION
House Passes Bill Adding Texas, California Court Sites
Source: Law360
The House voted 378-10 on Monday evening to expand access to federal courts in Texas and California, the two most populous states in the nation. Read more here (subscription required). The full article is attached.
Government Accountability Office (GAO) Report: National Security Space: DOD Has Opportunities to Improve Its Use of Commercial Data and Related Services
Source: U.S. Government Accountability Office
On August 27, GAO released a report examining the Department of Defense’s (DOD) use of equipment—like satellites—to protect the U.S. from foreign adversaries both at home and abroad. This equipment provides DOD with data, like an enemy’s location, via coordinates. DOD also relies on companies in the commercial space sector to provide data about activities on Earth and in space. GAO found that some officials are missing opportunities to use this data due to licensing costs, perceived use restrictions, and concerns over long-term data access. Read more here.
GSA’s $13 Billion Fraud Claim Relies on Cases Predating Task Force
Source: Government Executive
The settlements cited add up to just $117 million, and at least one case predates the Trump administration. The General Services Administration (GSA) claims it has uncovered more than $13 billion in suspected fraud by federal contractors since launching its anti-fraud task force in March. The White House Task Force to Eliminate Fraud is using governmentwide contract data, public reporting, and inspector general enforcement information to uncover the fraud, GSA said in its announcement. Read more here.
INTELLECTUAL PROPERTY & TECHNOLOGY RIGHTS
NSA Wants Access To ‘All’ AI Models, Top Official Says
Source: Government Executive
The National Security Agency wants access to artificial intelligence models across the commercial market and is holding extensive discussions with leading developers as it moves to carry out new White House directives on the technology, the agency’s deputy director said Thursday. 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
The Agentic AI and Quantum Convergence: Innovation and Cybersecurity Imperatives for US Government Agencies and Contractors
Source: GovCon Wire
By 2026, national security is being shaped by a technology competition that is shifting from incremental advancements to rapid prototyping and convergence. The United States government and industry are adapting to the growing interdependence of artificial intelligence, quantum technology, autonomous systems and space capabilities. Read more here.
Quantum Security ‘Drumbeat’ to Grow Louder In Federal Procurement
Source: Federal News Network
Federal agencies will increasingly seek out technology products that use quantum-resistant encryption, as cybersecurity leaders also eye ways to validate the cryptography used in critical systems. A code-breaking quantum computer holds the potential to break classical encryption methods, putting sensitive systems and communications at risk. And even though such a computer is not yet known to exist, organizations are also concerned that hackers could steal sensitive encrypted data today and decrypt it in the future. Read more here.
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