Cost, Compliance & Risks

For just over a year, the federal government has been running a strange experiment in technology procurement. Through its OneGov program, the General Services Administration (GSA) put leading enterprise artificial intelligence (AI) platforms in agencies’ hands for $1 or less. Three of those offers were set to expire on September 30, 2026.

Now we know what comes next, at least for one of them. On September 10, GSA announced the first agreement in the next phase of its OneGov AI strategy. The $1 price was replaced by a 27-month consumption-based arrangement running from October 1, 2026, through December 31, 2028. During this period, agencies pay no platform fee and make no minimum commitment, but they pay for usage at 50% off token-based pricing. Usage eligibility extends not only to all three federal branches but also to state, local, and tribal governments. GSA notes that the deal includes a one-year check-in and requires providers to report utilization and cost-savings data (feeling very transactional data reporting-esque).

So the free trial isn’t exactly over, but the flat price that never rose with use is gone. That changes the question for agencies. It’s no longer about whether to try it; it’s about what the technology costs at scale and what it would cost to exit.

Continue Reading The $1 AI Honeymoon Is Over, and GSA Has Drafted a Postnup

Every driver knows the sound a missed exit makes. Silence, then 14 minutes of profane commentary. It is worse in October, when the ridgeline is on fire with color and the next turnaround is 11 miles out.

On September 1, 2026, the Cost Accounting Standards (CAS) Board (Board) published two final rules, 91 Fed. Reg. 56056 and 91 Fed. Reg. 56061. Both take effect October 1, 2026, and together they build contractors an off-ramp out of CAS. It is unmarked, and for existing contracts it does not open until your next full cost accounting period. Is your blinker on? Should it be?

Continue Reading Modified Behavior: The CAS Off-Ramp Almost Nobody Is Talking About

I’m totally aging myself (due to reruns) but The Jetsons (created by William Hanna and Joseph Barbera (1962-63)), promised us a future where you pushed a button and the “Food-a-Rac-a-Cycle,” a machine, made whatever you wanted. Dinner. Clothes. Maybe an off-brand Spacely sprocket or two. Additive manufacturing has gotten us remarkably close. Give a 3D printer the right digital file, the right material, and the right process parameters, and out comes the part. George Jetson would recognize the concept immediately. What George did not have was the Defense Federal Acquisition Regulation Supplement (DFARS).

Continue Reading Meet George Jetson’s Government Contractor: 3D Printing, CUI, and Who Owns the Recipe

In December 2025, Section 1826 of the FY 2026 NDAA created one of the most valuable classifications in defense contracting and most companies that qualify don’t know it yet. Qualify as a “nontraditional defense contractor” and you’re exempt from certified cost or pricing data, FAR Part 31, and the entire DFARS business-systems architecture. The kicker?

Why a clean name-match screen is no longer enough, and why the diligence meant to find hidden China exposure can create risk on the other side of the Pacific.

Picture the boardwalk version of supply-chain compliance. It’s August. Fingers are that odd combination of french fry-greasy and ice cream-sticky The arcade is humming. Someone hands you the mallet. The first mole pops up with a familiar name: Huawei. Easy. Then SMIC. Fine. Then a listed Chinese military company. Also easy. You swing, you hit the obvious targets, and for a moment the game looks like it’s under control.

Then the real game starts.

Continue Reading China Supply Chain Compliance Is Becoming Whack-a-Mole

What Federal Contractors Should Be Watching This Summer

Summer 2026 has arrived with a new wave of artificial intelligence (AI) policy from the White House. On June 2, 2026, President Trump signed an Executive Order titled “Promoting Advanced Artificial Intelligence Innovation and Security” (the Order). The Order directs federal agencies—on aggressive 30‑ and 60‑day timelines, with key deliverables due by July 2, 2026 and August 1, 2026—to harden federal information systems with AI‑enabled defenses, establish a voluntary framework for pre‑release federal access to so‑called “covered frontier models,” and prioritize criminal enforcement against malicious AI‑enabled cyber activity. Although the Order is framed as innovation‑and‑security policy and expressly disclaims any “mandatory governmental licensing, preclearance, or permitting requirement” for new AI models, it will have immediate operational consequences for federal information‑technology and cyber contractors, AI developers, critical‑infrastructure operators, and their service providers.

Continue Reading AI Heats Up: New Executive Order on Promoting Advanced Artificial Intelligence Innovation and Security

Given the slew of Executive Orders (EOs) last year focusing on diversity, equity, and inclusion (DEI) and roiling the funding and operations of recipients of federal financial assistance such as universities and nonprofits, recipients may be forgiven for passing over EO 14398, dated March 26, 2026. As we’ve been covering (here and here), EO 14398 marks a second phase of the administration’s focus on “racially discriminatory DEI activities.” Where EOs from 2025 focused on broad policy shifts and internal agency operations, 2026 EOs seek prospective operationalization of the administration’s policy preferences by baking restrictions on DEI activities into federal contracts.

Continue Reading Recipients of Federal Financial Assistance Can Look to the New DEI Clause to Prepare for Potential Increased Scrutiny of Their Own Awards

The Department of Defense’s proposed rule implementing Section 847 of the FY 2020 NDAA could fundamentally reshape how foreign ownership, control, or influence (FOCI) is monitored across the defense industrial base. Through proposed DFARS Part 240, the rule would extend recurring FOCI disclosure, National Industrial Security System (NISS) reporting, and Defense Counterintelligence and Security Agency (DCSA) oversight far beyond the traditional facility-clearance context and into ordinary government contracting. For foreign-owned contractors, allied-country suppliers, private equity sponsors, and federal subcontractors, the proposal signals the emergence of a permanent compliance regime built around continuous visibility rather than one-time vetting.

Friends, Romans, contractors, lend me your ears;
I come to disclose your owners, not to debar them.
The FOCI that contractors do is oft assessed;
The clearances are oft interred with their bones.
So let it be with allies. The honorable rule
Hath told you that we treat all foreigners alike;
If it be so, it is a grievous form,
And grievously hath the SF-328 answered it.

The speech may be a little ridiculous, but in its way, it’s also a little accurate. The proposed DFARS rule implementing Section 847 of the FY 2020 NDAA is not unkind to allies. It is, as was Mark Antony, scrupulously polite to them, right up to the moment it asks them to register as suspects.

Continue Reading Section 847 and the New Era of DOD Continuous FOCI Monitoring

A 2026 federal executive order reshapes federal procurement policy by directing agencies to use fixed-price contracts as the default under FAR Part 16, while requiring written justification and higher-level approval for cost-reimbursement, time-and-material, and labor-hour contracts. The order also establishes agency approval thresholds, carve-outs for R&D and contingency work, and a phased implementation schedule through OMB guidance and FAR Council rulemaking. For government contractors, the change affects how agencies structure acquisitions, allocate risk, and modify existing and future contracts, with significant implications for federal procurement strategy and compliance in 2026.

Continue Reading Cost-Plus Out. Fixed-Price In.

If your supply chain crosses a border, your FAR 52.222-90 flowdown is probably already wrong. Either it overpromises in ways an EU, UK, or South African supplier cannot sign without violating local law, or it underpromises and creates False Claims Act (FCA) exposure on the US side. Both versions of the problem land on the same desk, and they land on a clock.

As we covered in a prior post, FAR 52.222-90 is not a routine flowdown. It reaches subcontract administration, records access, reporting obligations, bilateral modifications, suspension and debarment, and FCA materiality. In cross-border scenarios, those same hooks meet a thicket of foreign equality, pay-transparency, sustainability, human-rights, privacy, and disclosure-blocking regimes. The result is predictable confusion, and confusion in this clause is expensive.

Continue Reading FAR 52.222-90 Goes Global: Cross-Border Supply Chains and the Limits of a US Flowdown