Cost, Compliance & Risks

The biggest danger may be misreading the order—and creating new exposure in the process.

On March 26, 2026, President Trump issued an executive order (EO) titled “Addressing DEI Discrimination by Federal Contractors.” Read at the headline level, the order can sound like another broad anti-diversity, equity, and inclusion (DEI) pronouncement. Read as a procurement directive, however, it is something more concrete and more consequential: a command to federal agencies to begin inserting a mandatory clause into covered contracts and contract-like instruments, including subcontracts and lower-tier subcontracts, within 30 days. That shift, from messaging to mechanics, is the real story.

Continue Reading Beyond the Headlines: The Real Contractor Risks in the New DEI Executive Order

As we move into spring—a season for tightening processes, clearing the backlog, and getting every detail right—a recent Government Accountability Office (GAO) bid protest decision delivers a timely reminder: in government contracting, a single compliance miss can be outcome determinative.

Last month, in Morrish-Wallace Construction, Inc. d/b/a Ryba Marine Construction Co., the GAO sustained a protest where the agency awarded a contract to a bidder that failed to acknowledge a material solicitation amendment. The decision is an instructive case study in why amendment acknowledgment is not just a box to check—it also is a binding legal act.

Continue Reading Spring Cleaning Your Proposals: GAO’s Latest Reminder That Compliance Is Critical

In every crisis, half the room runs in circles while the other half picks up a clipboard and starts taking stock. The Anthropic-Pentagon dispute is that crisis, and defense contractors are deciding which half they want to be in.

The short version: The government designated a FedRAMP-authorized, facility-cleared American AI company a national security supply chain threat, via social media, after the company refused to remove safety restrictions on autonomous weapons and mass surveillance. Anthropic sued days later, with the Pentagon’s own officials on the record stating the designation was “ideologically driven” with “no evidence of supply chain risk.”

Continue Reading Don’t Panic! How Federal Contractors Should Navigate the Anthropic Designation

“I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced.”

When Obi-Wan Kenobi says this in Star Wars: Episode IV – A New Hope, he senses that something profound just changed in the galaxy. A powerful presence has vanished. The balance of power shifting in ways that will ripple far beyond the immediate moment. As Yoda later describes the Force: “Life creates it, makes it grow. Its energy surrounds us, binds us.” In this way, artificial intelligence (AI) is beginning to play a role for the US Defense Industrial Base (DIB) not unlike the Force itself—quietly enhancing the capabilities of engineers, analysts, and compliance professionals across thousands of organizations supporting national defense programs.

So what could happen if a major AI player suddenly disappears from the board?

Continue Reading Orbiting A.I.-deraan? A Disturbance in the Force for the Defense Industrial Base

The Department of Justice (DOJ) recently announced that False Claims Act (FCA) settlements and judgments exceeded $6.8 billion in fiscal year 2025. This massive haul is the largest annual recovery in the statute’s storied history. Although health care enforcement continues to account for the majority of recoveries, DOJ’s annual statistics confirm that procurement fraud, cybersecurity compliance, pandemic-program enforcement, and trade-related fraud remain core enforcement priorities that government contractors should not ignore. The FY 2025 numbers reinforce a familiar message: FCA enforcement remains one of DOJ’s most powerful tools for policing federal spending, and contractors should expect continued scrutiny of their certifications, representations, and contract compliance systems.

Continue Reading Now That’s a Lot of Money: DOJ’s Record-Setting FCA Year Reflects Intensifying Enforcement Pressure on Government Contractors

The FY2026 National Defense Authorization Act (NDAA) became law on December 18, 2025, enacting a tidal wave of the Trump administration’s priorities with respect to Department of Defense (DoD) procurement. One key priority reflected in the NDAA is reducing compliance burdens so that (i) established DoD contractors are incentivized to pursue awards and (ii) more companies opt in to being a DoD contractor to grow the industrial base. Importantly, Section 1804 and Section 1806 of the NDAA take action on this priority by raising the dollar thresholds for complex domains of government contracting: the Cost Accounting Standards (CAS) and submission of certified cost or pricing data. While these changes are welcome developments, companies should be cognizant that a steady stream of compliance requirements remains even with these increased thresholds.

Continue Reading Swept Away: FY2026 NDAA Updates to CAS and Certified Cost or Pricing Data Thresholds

This year, The Rocky Horror Picture Show celebrates the 50th anniversary of its release. While that cult classic film has stood the test of time, another relic of the 1970s, the Cost Accounting Standards (CAS), is showing its age. When CAS was initially promulgated, Congress determined that the generally accepted accounting principles (GAAP) were not enough to satisfy the government’s requirements for evaluating contract costing and pricing. However, in the decades since, GAAP has evolved, and there are now areas of overlap that have arisen since CAS was first promulgated. Recognizing this overlap, the government has set in motion a review to determine which parts of CAS could be addressed by GAAP, which is the commercial standard regularly used by companies. If there were accounting areas where GAAP could stand in place of CAS, the government wants to reduce the overall burden in the procurement process by allowing contractors to more heavily rely on GAAP, which they are already using to report on their daily business activities.

Continue Reading CAS Madness Takes Its Toll: The Detailed Work of Conforming CAS to GAAP

Earlier this year, we addressed a growing sense of confusion and unease among federal contractors relating to shifting diversity, equity, and inclusion (DEI) standards. Specifically, awardees had to take stock of the Department of Justice’s (DOJ) newly launched Civil Rights Fraud Initiative. DOJ explained that it intended to pursue False Claims Act (FCA) cases against “any recipient of federal funds that knowingly violates federal civil rights law,” with an emphasis on unlawful DEI workplace programs. But given this year’s abrupt shift regarding DEI standards, contractors were left to guess which conduct could put them in DOJ’s crosshairs. On July 29, DOJ elaborated on what it considers “unlawful discrimination,” issuing Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination (“Guidance”) to all federal agencies. The Guidance outlines what DOJ deems “best practices” so that any organization that receives federal financial assistance—e.g., universities, local governments, and nonprofit organizations—can take practical steps “to minimize the risk of violations.”

Continue Reading New “Unlawful Discrimination” Guidance from DOJ Underscores Risks to Federal Grant Recipients

“Beware the Jabberwock, my son! The jaws that bite! The claws that catch!”

– Lewis Carroll: “Jabberwocky,” Through the Looking-Glass, and What Alice Found There (1872)

There is a growing sense of confusion and unease among many federal contractors and grant recipients in these early days of the second Trump administration. In a time when some agencies face dislocation and downsizing (or, as with USAID, effective disbandment), contractors may feel like Alice stepping through the Looking Glass into a world strangely inverted from the one they knew. This shift is especially evident in the administration’s rejection of seemingly all diversity, equity, and inclusion (DEI) policies—long used to prevent discrimination, comply with civil rights laws, and foster inclusive environments in the American workforce.

Continue Reading Through the Looking Glass: Shifting DEI Standards Expose Contractors to False Claims Act Risk

The California Privacy Protection Agency (CPPA) recently fined clothing retailer Todd Snyder almost $350,000 for two types of consumer privacy errors. Due to technical errors during a 40-day period, it was impossible for Todd Snyder website users to request to opt out of having their information sold or shared. When users clicked the button for the Cookie Preferences Center, the consent banner would appear but instantly disappear, thus making it impossible for anyone to actually opt out. For those who were able to actually access the preferences center, Todd Snyder over-collected information from its users who wanted to opt out of having their information sold or shared. Todd Snyder’s data request form required users to verify their identity by submitting a photograph of themselves holding their identity document, even when they wanted to opt out.

Continue Reading Check Your Process or Pay Your Fine: Recent 6-Figure Fines from the California Privacy Protection Agency