Morrison Foerster’s Government Contracts Insights provides our in-depth analysis of developments and trends impacting government contracting. Through Insights, our attorneys offer a real-time assessment of the statutory, regulatory, legal, and business-related developments and trends that are shaping the industry. We also examine a full array of non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Morrison Foerster’s nationally recognized Government Contracts and Public Procurement practice represents the world’s leading companies in the aerospace and defense, intelligence, cybersecurity, information technology, financial and professional services, education, healthcare, infrastructure, and logistics support sectors. We are enlisted to address our clients’ most complex and important legal issues. Our work includes contract and subcontract negotiation and other transactional matters, business and regulatory compliance counseling, internal investigations, bid protests, and a wide array of enforcement and litigation matters. Our clients range from Fortune 50 companies to small and medium-sized companies just entering the public sector. We advise both U.S. and non-U.S. companies involved in municipal, state, federal, and non-U.S. procurement matters.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

Social

Search

GAO Protest Timeline

govcon-gao-protest-timeline-thumb.jpg

Govcon GAO Post Award Protest Timeline Article

Contract Disputes Act Claim Timeline

govcon-contract-disputes-timeline-thumb.jpg

The Bayh-Dole Act

govcon-bayhdole-thumb.jpg

Anatomy of a Protest

govcon-federalclaimsprotest-thumb.jpg

Allowability of Legal Costs

govcon-allowabilityoflegalcosts-thumb.jpg

Procurement Integrity Act

240715-procurement-integrity-act-resized.jpg

Govcon-Resources

Tina is Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmaceutical companies, with a focus on general contract counseling and compliance, particularly concerning intellectual property, and cybersecurity matters and federal grant funding.Tina counsels contractors on compliance with federal, state and local acquisition and ethics regulations and with the evolving myriad of requirements pertaining to data security and cybersecurity. She has been involved with numerous internal investigations and compliance reviews, and with mandatory and voluntary disclosures to agencies, and litigation of False Claims Act matters.Tina routinely advises clients concerning:<ul><li>Prime-subcontractor relationships</li><li>Sources of supply and country of origin requirements</li><li>Price reductions and price reporting issues</li><li>Organizational conflicts of interest</li><li>Safeguarding of intellectual property and other proprietary interests</li><li>Licensing and data rights issues</li><li>Handling of classified materials and controlled unclassified information</li><li>Agency suspension and debarment proceedings</li></ul>She also assists clients with due diligence and other activities related to the acquisition of government contracting concerns, and with the drafting and negotiation of teaming agreements, subcontracts, licensing agreements, and cooperative research and development agreements. She also assists clients applying for federal grants (including SBIR and STTR agreements), and those who seek to obtain other transactional authority agreements, as well as those competing for state and local government work.Tina’s litigation experience includes government contracts claims litigation in federal courts and before boards of contract appeals, bid protests before the Government Accountability Office and the Court of Federal Claims, and complex disputes in federal courts, including civil fraud and False Claims Act litigation and reverse Freedom of Information Act litigation.Prior to joining Morrison Foerster, Tina worked at another large national firm and as a trial attorney in the Office of the General Counsel of the Navy, Navy Litigation Office.<h4>Representative Experience</h4><ul><li>Negotiation of largest CHIPS Act federal funding agreement between multinational semiconductor corporation and U.S. Department of Commerce.</li><li>Negotiated prime contract and major subcontracts related to the Department of Energy’s next generation supercomputer program, including extensive IP rights negotiations and negotiation of associated patent rights waivers.</li><li>Negotiated series of other transaction authority agreements with DARPA and associated subcontracts with more than a dozen research universities on behalf of a firm biotech client, including complex IP rights allocations and material transfer agreements.</li><li>Assist clients with FedRAMP authorization process and with development of license agreements for software products sold to federal, state and local government agencies.</li><li>Cyber incident response counseling to some of the largest companies and organizations impacted by security incidents.</li><li>Advises clients on Bayh-Dole reporting of inventions and IP strategies for contracts and grants.</li><li>Conducts due diligence for major government contract mergers and acquisitions.</li></ul>

reynolds_tina_blog_150x150.png

reynolds_tina_common_640x280.jpg

reynolds_tina_heroretina_2700x1160.jpg

reynolds_tina_mobileretina_750x1040.jpg

reynolds_tina_social_600x600.jpg

Partner

Our government contracts and procurement attorneys counsel businesses on legal and compliance issues encountered when doing business with government entities.

Government Contracts + Public Procurement

Government Contracts and Procurement Attorneys

Band 1: National: Government Contracts

Tier 1: Government Contracts

Readers Choice Award: Government Contracting

Tina is co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She counsels a wide variety of government contractors on compliance with federal acquisition and ethics regulations. She drafts and negotiates contracts on their behalf and has been involved with numerous internal investigations and compliance reviews, and with bid protest, contract claims, and False Claims Act litigation. She also advises on M&A transactions involving government contractors.

Tina D. Reynolds

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters. He has represented both protesters and awardees in scores of protests before the Government Accountability Office, the Court of Federal Claims, and procuring agencies, in acquisitions ranging from small business procurements to multibillion-dollar contracts of global significance. His representative protest matters span the aerospace sector, the Intelligence Community, base operations and logistics, healthcare, nuclear and environmental work, and information technology and software acquisitions. His protests have included both classified and unclassified programs. In addition to prevailing in published decisions, Jim has also secured favorable corrective action on behalf of clients in a wide variety of protests that were resolved without a published decision.Jim’s work also focuses on disputes over cost allowability and compliance with the Cost Accounting Standards, and he has appeared before the Armed Services and Civilian Boards of Contract Appeals, in size and status protests before Small Business Administration (SBA) area offices, and appeals before the SBA Office of Hearings and Appeals. Jim regularly counsels clients on contract interpretation, organizational conflicts of interest, and small business compliance.Jim graduated with high honors from the George Washington University Law School, where he focused his studies on federal procurement law, was a member of the Law Review, and interned with the General Services Administration’s suspension and debarment office. Jim also holds a degree in theology magna cum laude from the Pontifical Gregorian University in Rome and a bachelor’s degree in classical languages and literature summa cum laude from the University of Kentucky, where he graduated Phi Beta Kappa.

tucker_james_blog_150x150.png

tucker_james_common_640x280.jpg

tucker_james_heroretina_2700x1160.jpg

tucker_james_mobileretina_750x1040.jpg

tucker_james_social_600x600.jpg

Of Counsel

Jim maintains an active practice in bid protests before the Government Accountability Office and contracting agencies and counsels clients in contract disputes and compliance obligations.

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office. Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters.

James Tucker

<div style="margin-bottom: 15px;" class="videoWrapper"><iframe class="sticky-video" title="Meet Alex Ward, Government Contracts Practice Co-Chair" src="https://www.youtube-nocookie.com/embed/TkliwdSlTaQ?rel=0" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen="1" title="iframe"></iframe></div>J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. His practice covers a full range of government contracts matters, including investigations, bid protests, claims, general litigation, corporate transactions, and counseling. Alex strives in all matters is to provide his clients the highest level of efficient and effective representation.Alex represents contractors in internal and external investigations, disclosures to the government, and qui tam litigation, with great success in reducing or eliminating his clients’ exposure through active engagement with the government. His work in this area includes obtaining numerous declinations and dismissals of False Claims Act cases in their earliest stages, sparing his clients the cost, risk, and exposure of litigation.He has also served as lead counsel in dozens of bid protests involving military and civilian agency procurements of a wide range of products and services, including all manner of pre- and post-award protests in the GAO, the U.S. Court of Federal Claims, and state tribunals, as well as appeals to the U.S. Court of Appeals for the Federal Circuit and size protest appeals before the SBA’s Office of Hearings and Appeals.Alex handles all aspects of the claims process, from the initial assessment and drafting of requests for equitable adjustment through litigation in the Boards of Contract Appeals and the Court of Federal Claims. Alex’s practice also covers the full gamut of other controversies confronting government contractors, including prime-sub, teaming partner, employer-employee, competitor, and indemnification disputes. His litigation work also includes a wide variety of pro bono engagements, in which he has represented both individual and institutional clients in matters ranging from immigration and criminal defense to sustainable procurement and protection of the environment.Prior to joining the firm, Alex served in the U.S. Army as a commissioned officer and an Assistant to the General Counsel of the Army responsible for civil works and international matters, and as a clerk for judges on the U.S. Courts of Appeals for the Armed Forces and the D.C. Circuit. He is a member of the Boards of the Morrison & Foerster Foundation and the Chesapeake Bay Foundation and of Law360’s Government Contracts Editorial Board.

ward_alex_blog_150x150.png

ward_alex_common_640x280.jpg

ward_alex_heroretina_2700x1160.jpg

ward_alex_mobileretina_750x1040.jpg

ward_alex_social_600x600.jpg

Alex is co-chair of Morrison Foerster’s Government Contracts and Public Procurement practice. His practice covers a full range of government contracts matters, including bid protests, claims, investigations, corporate transactions, and counseling.

J. Alex Ward

favicon.ico

favicon-16x16.png

favicon-32x32.png

apple-touch-icon.png

MoFo Favicons

Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and procurement. Through Insights, attorneys from our nationally recognized Government Contracts and Public Procurement practice will offer a real-time assessment of the statutory, regulatory, legal, and business-related developments that are shaping the industry. This blog will also examine a full array of U.S. and non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Read about our <a href="http://govcon.mofo.com/editors/">Authors</a>.Never miss a post. Subscribe to get real-time updates.

gov-con-feature-image-thumb1.jpg

Welcome to the Government Contracts Insights Blog

Welcome to the Government Contracts Insights Blog

gov-con-feature-image_(1)1.jpg

The United States Capitol building

Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and proc

Announcements & Press

Blog - Terms of Use

Blog - Privacy Policy

Blog - Blog Disclaimer

Blog - Attorney Advertising

morrison-foerster-blog-logo.png

Provides insights and reports on the most current class actions lawsuits and product liability issues that affect consumer-facing companies.

Class Dismissed Blog

Class Dismissed

Looks behind the headlines to explore the trends, identify the opportunities, analyze the issues, and provide guidance for science and technology-based companies.

MoFo Tech

Mofo Tech

News and thought leadership from lawyers who are adding value to the legal profession and the communities we call home.

  External-Link

MoFo + Blog

Mofo+

Stay on top of emerging issues and stay informed of developments related to the law and business of social media.

Socially Aware

Our Government Contracts Insights blog provides in-depth analysis of developments and trends impacting U.S. government contracting and non-U.S. public procureme

Government Contracts Insights

  Linkedin

MoFo LinkedIN

Blog - Govcon RSS

Stay Connected

Never miss a post from Government Contracts Insights. Enter your email below to stay up-to-date.

Subscribe

The latest updates and analysis from Morrison Foerster

Morrison Foerster - Footer

Blogs -  Home Button

Home

Blog - Topics

Acquisition Regulations

Artificial Intelligence + Robotics

Compliance

Coronavirus

Cybersecurity & Data Privacy

Data Rights

Defense

Domestic Preferences

False Claims Act

Federal Procurement

Foreign Corrupt Practices Act

Grants

Health Care

Intellectual Property

International Public Procurement

Labor & Employment

Mergers & Acquisitions

National Security

Protests & Litigation

Resources

Schedule Contracting

Small Business

Topics

Blog - Editors

Editors

Blog - About

About

Blog - Subscribe

More

James A. Tucker

Deregulating Federal Procurement: Implications of Three Recent Executive Actions

Kickstarting AI in the Federal Government: OMB’s Policy to Implement Executive Order 14179

Bid Protest Spotlight: Instructions, Price Evaluation, Standing

FAR Overhaul Underway

FedRAMP 20x: Reformulating the Authorization Process

LinkedIN

The Administration signed two Executive Orders (EOs or “Orders”) and one Presidential Memorandum (“Memo”) on April 9, 2025, that aim to make federal procurements faster and more efficient: <ol class="li-text-orange"><li class="li-text-orange"><a href="https://www.whitehouse.gov/presidential-actions/2025/04/modernizing-defense-acquisitions-and-spurring-innovation-in-the-defense-industrial-base/" target="_blank">Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base</a></li><li><a href="https://www.whitehouse.gov/presidential-actions/2025/04/reforming-foreign-defense-sales-to-improve-speed-and-accountability/" target="_blank">Reforming Foreign Defense Sales to Improve Speed and Accountability</a></li><li><a href="https://www.whitehouse.gov/presidential-actions/2025/04/directing-the-repeal-of-unlawful-regulations/" target="_blank">Directing the Repeal of Unlawful Regulations</a></li></ol>This article delves into the details of each EO and the Memo to explore their potential effects on federal contractors.<a href="#_ftn1">[1]</a>Modernizing Defense AcquisitionsThe EO titled “Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base” is likely of greatest interest to defense contractors. In a move to modernize the United States’ defense acquisition processes, the Order directs several key reforms.First, the Order establishes “speed, flexibility, and execution” as the hallmarks of the government’s defense procurement policy, with the express intent to “incentivize and reward risk-taking and innovation” by the defense acquisition workforce. Second, the Order directs the Secretary of Defense to submit a plan to “reform the Department of Defense’s acquisition processes” within 60 days. The plan, to the “maximum extent possible,” shall:<ul><li>Immediately prioritize a “first preference” for commercial solutions and a “general preference” for Other Transaction Authority (OTA) agreements, Rapid Capabilities Office policies, and any other Adaptive Acquisition Framework authority or pathway. The preferences apply to all “pending” contracting actions and those “pursued” during the formulation and consideration of the acquisition reform plan;</li><li>Include a detailed process review of “each functional support role” within the acquisition workforce, including program managers, contracting officers, cost estimators, and others; and</li><li>Establish a formal “Configuration Steering Board” to effectively manage risk.</li></ul>Third, the Department of Defense (DoD) must review and propose revisions to its instructions, implementation guides, manuals, and regulations, including the Defense Federal Acquisition Regulation Supplement (DFARS).<ul><li>The review is focused on eliminating or revising unnecessary regulations or guidance, with the DFARS and the Financial Management Regulation specifically identified.</li><li>Going forward, the Defense Secretary is directed to follow the “ten-for-one” rule (as described in EO 14192): for every new regulation added, ten must be deleted. </li></ul>Fourth, within 120 days, DoD is directed to develop a plan to reform, right-size, and train the acquisition workforce.<ul><li>Most notably, the EO directs the use of performance evaluations for acquisition workforce personnel based on their ability to “demonstrate and apply” a first consideration of commercial solutions, adaptive acquisition pathways through the Adaptive Acquisition Framework, and requirements “based on the perspective of the end user.” </li><li>Moreover, the EO mandates “policies, procedures, and tools” to incentivize acquisition officials to take “measured and calculated risks.”</li></ul>Fifth, within 90 days, DoD must conduct a comprehensive review of all Major Defense Acquisition Programs (MDAPs), defined as programs with significant budgets.<ul><li>All MDAPs will be scrutinized for consistency with the new policy, emphasizing speed, flexibility, and execution. Programs exceeding cost or schedule thresholds may face cancellation, prompting contractors to ensure rigorous project management and adherence to timelines.</li><li>Programs more than 15% over budget or more than 15% behind schedule are expressly targeted for review and potential cancellation. This is a more stringent version of the Nunn-McCurdy breach review process that already exists in statute.</li></ul>For contractors, these reforms signal a shift toward a more commercially focused defense acquisition environment. There is a notable emphasis on speed, innovation, and acceptance of risk that will inform pending and future procurements.Reforming Foreign Defense SalesThe second EO seeks to achieve a “rapid and transparent foreign defense sales system.” This order introduces several new measures.First, it announces the administration’s key policies, including improving accountability and transparency, consolidating parallel decision-making, reducing rules and regulations, increasing government-industry collaboration, and advancing the United States’ competitiveness abroad.Second, the Order requires DoD and the State Department to implement the National Security Presidential Memorandum 10 of April 19, 2018 (“United States Conventional Arms Transfer Policy”), and successor policy directives. Additionally, the agencies are directed to:<ul><li>Reevaluate restrictions imposed by the Missile Technology Control Regime on Category I items, including considering supplying certain partners with these items.</li><li>Submit a proposal to Congress to add an update to statutory congressional certification thresholds for proposed sales under the FMS and Direct Commercial Sales (DCS) programs in the Arms Export Control Act.</li></ul>Third, within 60 days of the Order, DoD and the State Department must develop a list of priority partners for conventional arms transfers and issue updated guidance regarding the list, develop a list of priority end-items for potential transfer to priority partners, and review, update, and reissue the lists of priority partners and military end-items on an annual basis.Fourth, within 90 days, DoD, the State Department, and the Commerce Department must submit a plan to improve the transparency of United States defense sales to foreign partners by developing metrics for accountability; secure exportability as a requirement in the early stages of the acquisition process; and consolidate technology security and foreign disclosure approvals.For contractors, this order represents a concerted effort to streamline foreign defense sales, potentially leading to more engagements and more predictability in those engagements with international partners.Memo for the Repeal of Unlawful RegulationsThe Memo, which builds on EO 14219, Ensuring Lawful Governance and Implementing the President’s “Department of Government Efficiency” Deregulatory Initiative, directs agencies to prioritize their deregulatory efforts in line with 10 Supreme Court cases. The EO established a 60-day review period for agencies to identify certain categories of unlawful and potentially unlawful regulations. That 60-day period will end on April 20, 2025.Once that review period is completed, the Memo directs agencies to repeal “facially unlawful regulations” immediately and without notice-and-comment rulemaking under the “good cause” exception in the Administrative Procedure Act. Within 30 days of the review period’s conclusion, agencies must submit a one-page summary to the Office of Information and Regulatory Affairs of each regulation not targeted for repeal despite being initially identified as within the EO’s scope of review.   The Fact Sheet accompanying the Memo summarizes each Supreme Court case and its relevance to the administration’s deregulatory efforts. Three cases stand out for their potential implications for federal procurement and, by extension, for government contractors:<ul><li>Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) ­­­– Agencies are directed to repeal any regulation that is either not consonant with the “single, best meaning” of the statute authorizing it or that was promulgated in reliance on the Chevron doctrine and that could be defended only by relying on Chevron deference.</li><li>West Virginia v. EPA, 597 U.S. 697 (2022) – Agencies are directed to repeal any regulation promulgated in violation of the Major Questions Doctrine as they cannot claim to discover vast delegations of power on an important issue in a statutory text that doesn’t clearly provide such authority. </li><li>Michigan v. EPA, 576 U.S. 743 (2015) – Agencies are directed to repeal any regulation where the “costs imposed are not justified by the public benefits,” or where such an analysis was never conducted to begin with because the Administrative Procedure Act requires agencies to properly consider the cost as well as the benefits in promulgating regulations.</li></ul>The decisions as interpreted by the Memo provide agencies with broad powers to deregulate. It is too soon to say how agencies will respond, and which regulations will be cut, but taken apace with the efforts to rewrite the Federal Acquisition Regulation, federal procurement appears poised for sweeping changes. Overall, these Executive Orders and the Memo reflect an effort to improve efficiency and foster innovation. At the same time, the Orders indicate that a wave of changes may be forthcoming, and contractors should be continuously monitoring for updates. Contractors should be sure they understand the changes, consider providing their own views to the relevant agencies, and be prepared to adapt to the changes once they are finalized.<a href="#_ftnref1">[1]</a>We separately analyze the April 15 EO, Restoring Common Sense to Federal Procurement, which calls for a previously <a href="/topics/far-overhaul-underway" target="_self">predicted</a> FAR overhaul.

fisher_cody_blog_150x150.png

fisher_cody_common_640x280.jpg

fisher_cody_heroretina_2700x1160.jpg

fisher_cody_mobileretina_750x1040.jpg

fisher_cody_social_600x600.jpg

Associate

Cody Brianna Fisher

Cody Fisher

speidel_markus_blog_150x150.png

speidel_markus_common_640x280.jpg

speidel_markus_heroretina_2700x1160.jpg

speidel_markus_mobileretina_750x1040.jpg

speidel_markus_social_600x600.jpg

Markus Speidel is an associate in Morrison & Foerster’s Government Contracts & Public Procurement group, in Washington, D.C. Markus assists clients across a wide range of contract matters, including contract claims and disputes, bid protests, compliance counseling, and investigations.

Markus Gerhard Speidel

Markus Speidel

protests-and-litigation-600-300x148.jpg

protests-and-litigation-600-300x148

The <a href="https://www.acquisition.gov/" target="_blank">Federal Acquisition Regulation</a>, initially issued on April 1, 1984, appears poised to be rewritten. Several online sources reference a GSA announcement posted on Friday, April 4, that supposedly heralded a bottom-up rewrite of the regulation to streamline acquisition. Unfortunately, the <a href="https://acquisition-staging.gsa.gov/far-overhaul">link</a> provided across the sources seems inoperable. The sources suggest a forthcoming executive order will direct OFPP to take the lead in simplifying the regulatory framework, keeping only what is essential and required by statute and removing outdated content from the FAR. At least one source suggests the overhaul will proceed in two phases, with the first phase focused on revising each FAR part immediately available through issuance of class deviations (April 2025–October 2025). The second phase seemingly will finalize the new FAR through formal notice and comment rulemaking (October 2025, on). Non-regulatory content will be moved to “buying guides” to support smarter, faster acquisitions aligned with the simplified FAR. The last significant revision of the FAR by executive order dates to the Clinton administration and involved revising Part 15, Contracting by Negotiation, which took four years to proceed from <a href="https://www.archives.gov/files/federal-register/executive-orders/pdf/12866.pdf" target="_blank">executive order</a> to <a href="https://www.govinfo.gov/content/pkg/FR-1997-09-30/pdf/97-25666.pdf" target="_blank">final rule</a>.

Anser Advisory

ARKA

Arlington Capital

Battle Investment Group

Behrman Capital

Cadmus

Chainalysis

CollabraLink

Definitive Logic

Emmes

Enlightenment Capital

Grant Thornton

Griffon Corporation

eTelligent

L3Harris

Jacobs

LinQuest Corporation

Micross

Sagewind

Sedgwick

Sigma Defense

teKnoluxion

The Building People

VariQ

specht_damien_blog_150x150.png

specht_damien_common_640x280.jpg

specht_damien_heroretina_2700x1160.jpg

specht_damien_mobileretina_750x1040.jpg

specht_damien_social_600x600.jpg

Damien is a partner in the firm’s Government Contracts & Public Procurement practice. He represents clients in all facets of government contracts transactions, as well as regulatory counseling, subcon

Damien Specht

Damien C. Specht

Jim Tucker is of counsel in Morrison & Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.
Jim’s practice runs the gamut of litiga

The incoming Trump administration has sent many signals that it intends to ramp up the Department of Defense’s use of nontraditional acquisition pathways to bridge the “Valley of Death” and bring innovative technologies to the warfighter.<a href="#_ftn1">[1]</a> This is not a departure from any recent administration, but yet another acceleration of a common trend. Perhaps the most familiar and well‑demonstrated such pathway is DoD’s Other Transactions (OTs) for prototyping projects and follow‑on production efforts. In the last decade, DoD’s use of that authority has steadily grown from a few hundred OTs and less than $1 billion in obligations in FY15<a href="#_ftn2">[2]</a> to more than 5,000 OTs and $15.5 billion in FY23.<a href="#_ftn3">[3]</a> Early reports for FY24 indicate nearly $18 billion in OT obligations.<a href="#_ftn4">[4]</a>Defense contractors need to be armed with reliable legal resources as they navigate this relatively new and evolving legal landscape. That is why we are compiling here our DoD OTs Desk Reference, with an infographic answering common questions and links to our many writings on the rules and risks of contracting through OTs. Bear in mind, although these references often focus on DoD Prototype OTs, several non-DoD agencies—including NASA, NIH, BARDA, DHS, TSA, and others—have some form of other transaction authority of their own. These agencies issue a variety of other transaction agreements (OTAs) that are likewise exempt from procurement laws and regulations, but are not subject to the same eligibility or other legal requirements of DoD Prototype OTs. <div data-reactroot=""><img class="rich-text-embed-image" alt="250214-dod-other-transactions-ots-desk-reference.jpg" src="https://media2.mofo.com/v3/images/blt5775cc69c999c255/blt2bf1c4469e957df8/67b4ea3d495942e653d0e19c/250214-dod-other-transactions-ots-desk-reference.jpg?format=auto&amp;quality=60"/></div>References:<a href="/topics/other-transaction-ot-bid-protests-a-call-for-clarity-and-consistency" target="_self">Other Transaction (OT) Bid Protests: A Call for Clarity and Consistency</a><a href="/topics/dod-dusts-off-other-transactions-ot-regulations" target="_self">DoD Dusts Off Other Transactions (OT) Regulations</a><a href="/topics/court-of-federal-claims-potentially-expands-its-other-transaction-ot-bid-protest-jurisdiction" target="_self">Court of Federal Claims Potentially Expands Its Other Transaction (OT) Bid Protest Jurisdiction</a><a href="/topics/gao-opens-the-door-to-certain-other-transaction-bid-protests" target="_self">Has the GAO Opened the Door to Certain Other Transaction (OT) Bid Protests?</a><a href="/topics/dod-issues-updated-other-transactions-ot-guide" target="_self">DoD Issues Updated Other Transactions (OT) Guide</a><a href="/topics/another-piece-to-the-puzzle-court-of-federal-claims-has-jurisdiction-over-bid-protest-where-the-disputed-other-transaction-could-lead-to-a-follow-on-production-contract" target="_self">Another Piece to the Puzzle: Court of Federal Claims Has Jurisdiction Over Bid Protest Where the Disputed Other Transaction Could Lead to a Follow-On Production Contract</a><a href="https://www.mofo.com/resources/insights/211015-new-contractor-insights" target="_blank">New Contractor Insights on ‘Other Transaction’ Bid Protests</a><a href="/topics/where-can-you-protest-an-other-transaction-award-insights-from-kinemetrics" target="_self">Where Can You Protest an Other Transaction Award? Insights from Kinemetrics</a><a href="/topics/congress-dod-encourage-use-of-other-transaction-authority-in-response-to-covid-19" target="_self">Congress, DoD Encourage Use of Other Transaction Authority in Response to COVID-19</a><a href="/topics/dods-other-transactions-data-rights-intellectual-property-simplified" target="_self">DoD’s Other Transactions: Data Rights & Intellectual Property Simplified</a><a href="#_ftnref1">[1]</a> See, e.g., Pete Hegseth, Opening Statement, Secretary of Defense Nomination Hearing, Senate Armed Services Committee (Jan. 14, 2025), available at <a href="https://www.armed-services.senate.gov/imo/media/doc/hegseth_opening_statement.pdf">https://www.armed-services.senate.gov/imo/media/doc/hegseth_opening_statement.pdf</a>.<a href="#_ftnref2">[2]</a> See Rhys McCormick, Ctr. for Strategic & Int’l Studies, Department of Defense Other Transaction Authority Trends 2 (Dec. 2020)<a href="#_ftnref3">[3]</a>See <a href="https://oldcc.gov/sites/default/files/resources/OT%20General%20Presentation%20%28July%202024%29.pdf">https://oldcc.gov/sites/default/files/resources/OT%20General%20Presentation%20%28July%202024%29.pdf</a>.<a href="#_ftnref4">[4]</a> See <a href="https://www.acq.osd.mil/asda/dpc/cp/policy/docs/newsletters/2024/Policy_Pulse_Newsletter_(Nov_2024).pdf">https://www.acq.osd.mil/asda/dpc/cp/policy/docs/newsletters/2024/Policy_Pulse_Newsletter_(Nov_2024).pdf</a>.

bell_locke_blog_150x150.png

bell_locke_common_640x280.jpg

bell_locke_heroretina_2700x1160.jpg

bell_locke_mobileretina_750x1040.jpg

bell_locke_social_600x600.jpg

Locke Bell is a partner in the firm’s Government Contracts & Public Procurement practice.

Locke Bell

Tina is a partner in Morrison & Foerster’s Government Contracts practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmace

Tina Reynolds

DoD Other Transactions (OTs) Desk Reference

President Trump has called himself the “Tariff Man” and has said that “Tariffs are the greatest thing ever invented.”<a href="#_ftn1" target="_self">[1]</a> It therefore should come as no surprise that, in the first month since taking office, he has announced sweeping tariffs against <a href="https://www.whitehouse.gov/presidential-actions/2025/02/imposing-duties-to-address-the-situation-at-our-southern-border/" target="_blank">Mexico</a>, <a href="https://www.whitehouse.gov/presidential-actions/2025/02/imposing-duties-to-address-the-flow-of-illicit-drugs-across-our-national-border/" target="_blank">Canada</a>, and <a href="https://www.whitehouse.gov/presidential-actions/2025/02/imposing-duties-to-address-the-synthetic-opioid-supply-chain-in-the-peoples-republic-of-china/" target="_blank">China</a>. Although President Trump has since negotiated deals with Canada and Mexico to halt the proposed tariffs, and a similar deal with China could materialize too, one thing is clear: the new administration intends to leverage tariffs as a tool in international diplomacy.One of the many practical implications of this approach to foreign policy is that government contractors may be collateral damage in a looming trade war that could significantly increase the costs of supplies and materials in unforeseeable ways. This article discusses what steps government contractors can take to preserve their interests in a rapidly changing landscape.The ProblemTariffs increase the cost of imported materials and thus can lead to price increases when manufacturers of finished goods who rely on those materials pass their increased material costs to customers. But this may not be feasible for government contractors with firm fixed-price contracts and options, who cannot pass along higher input prices until they sign new contracts. Tariff-driven cost increases could also affect certain flexibly priced contracts, including cost-type contracts with incentive fee provisions. Moreover, tariffs may indirectly increase the price of domestically produced goods by reducing competition from foreign sources, or lead to temporary shortages while foreign suppliers sell their products overseas on more favorable terms and domestic suppliers ramp up production to fill the gap.Potential SolutionsConsider Whether and How Tariffs Affect Your Contract Tax ProvisionsThe FAR’s tax provisions may provide the best solution to the tariff issue, at least in the first instance. FAR 52.229-3, Federal, State and Local Taxes, provides for a price increase for after-imposed taxes that a contractor is “required to pay or bear as the result of legislative, judicial, or administrative action taking effect after the contract date.” Covered taxes include “any new or increased Federal excise tax or duty,” FAR 52.229-3(a), which likely includes new tariffs. FAR 29.401-3 calls for the inclusion of FAR 52.229-3 in solicitations and contracts if (1) the contract is to be performed in the United States; (2) a fixed-price contract is contemplated; and (3) the contract is expected to exceed the simplified acquisition threshold.The inclusion of FAR 52.229-3 in a government contract may mitigate the risk of tariff-related cost increases under fixed-price contracts, but contractors should keep in mind that the FAR clause only protects contractors against tariffs that they pay directly. It does not protect against tariff-driven cost increases that contractors incur on domestically produced goods. See Pangea, Inc., ASBCA No. 62,561, 22-1 BCA ¶ 38,026 (Jan. 5, 2022) (holding that FAR 52.229-3 did not allow contractors to recover for higher domestic costs that are indirect result of tariffs on foreign products).Contractors should also note that FAR 52.229-3(g) requires contractors to “promptly notify the Contracting Officer of all matters relating to any Federal excise tax or duty that reasonably may be expected to result in either an increase or decrease in the contract price and shall take appropriate action as the Contracting Officer directs.” Thus, if and when a contractor determines that new tariffs “reasonably may” affect its pricing, it must provide prompt notice to the relevant contracting officer. In addition, a contractor must warrant in writing that the cost of the tariff was not already factored into the contract price before it can receive a price adjustment. FAR 52.229-3(c).Economic Price Adjustment ClausesIf the tax clauses are unavailing—for example, because a contractor experiences increased costs from domestic suppliers due to secondary market effects—the FAR’s Economic Price Adjustment (EPA) clauses might provide an alternative remedy. Those clauses are included in some fixed-price contracts “for upward and downward revision of the stated contract price upon the occurrence of specified contingencies.” FAR 16.203-1(a).There are several types of economic price adjustments, each with its own contract clause, so it is essential to determine which—if any—is included in a given contract. For example, the clause for “Labor and Material” calls for the Contracting Officer to negotiate a price adjustment upon receiving notice of a price change. FAR 52.216-4(b). Because contractors normally must provide that notice within 60 days, it is essential to be on the alert for any price increases and to provide prompt notice to the government to avoid timeliness or waiver problems. FAR 52.216-4(a).Even where relief is available under one of the EPA clauses, upward adjustments typically are limited to ten percent of the unit price. FAR 52.216-4(c)(4). In addition, contractors must ensure that any EPA clause in their contract covers the supplies for which prices increased. See Delfasco LLC, ASBCA Nos. 63,280, 63,402, 23-1 BCA ¶ 38,441 (Sep. 25, 2023) (holding no compensation warranted for higher iron prices when EPA was expressly limited to steel).For Department of Defense contractors, the Defense FAR Supplement provides additional guidance on price adjustments for basic steel and aluminum products and for nonstandard steel items. See DFARS 216.203-4-70; 252.216-7000; 252-216-7001. As with the FAR clauses, the DFARS clauses require prompt notice to the Contracting Officer and impose a 10 percent maximum on the price increases. A contractor seeking a price adjustment may also be required to show its math, including by making available all relevant records used in the computation. See DFARS 252.216-7001(f)(3).Although EPA clauses may offer a solution for some contractors, not all contracts contain the requisite clause. The government is under no obligation to compensate contractors for sudden price increases when a contract does not contain an EPA clause. See Ace Elecs. Def. Sys., ASBCA No. 63,224, 22-1 BCA ¶ 38,213 (Oct. 5, 2022) (no compensation, even when government recognized “financial stress” that cost increase placed on contractor). Contractors should carefully review their contracts for EPA clauses that may allow a price increase in light of escalating material costs.Other RemediesRemedies beyond those afforded by the tax and EPA clauses noted above are limited. A claim based on a changes clause or breach of contract theory is unlikely to succeed. Contractors frequently turn to the changes clauses when government action interferes with their ability to perform the contract as agreed. Those remedy-granting clauses recognize that the government has extraordinary power to change the terms of its contracts unilaterally, and, in return, contractors are entitled to an equitable adjustment in the contract price or schedule.In tariff context, however, the government has not formally changed the contract. Instead, government conduct has the effect of indirectly increasing the cost of performance; therefore, contractors considering this path must show that a “constructive change” has occurred. A constructive change occurs when the government has taken actions that have the same effect as a written change order signed by the contracting officer. The imposition of new tariffs likely would not constitute a constructive change. See FAR 52.243-1 to 7.The changes clauses identify the possible modifications or events that could qualify as a constructive change. For example, FAR 52.243-1 applies to fixed-price contracts when government action has the effect of modifying the specifications, the method of shipment or packing, or the place of delivery. Similarly, FAR 52.243-3 applies to time-and-materials or labor-hours contracts when government action modifies the description of services to be performed, the time of performance, the place of performance of the services, specifications for supplies, the method of shipment or packing of supplies, the place of delivery, or the amount of government-furnished property. None of the modifications identified in the changes clauses addresses the imposition of new tariffs. Accordingly, it is unlikely that the new tariffs would qualify as a constructive change. Instead, such conduct may be covered by the Sovereign Acts Doctrine, discussed below.Sovereign Acts DoctrineUnder the Sovereign Acts Doctrine, the United States Government is not liable for breach of a contract resulting from a public and general act within its sovereign power. The enactment of a tariff likely falls under this doctrine, which stems from the Court of Claims’ decision in Deming v. United States, 1 Ct. Cl. 190 (1865). In Deming, the court held that the United States is not liable for losses caused by duties imposed by Congress after the contract was formed. The facts of the case are relatively straightforward. Deming entered into a contract to provide rations to the Marine Corps. After the contract was formed, Congress imposed an additional duty on some of the supplies needed to perform the contract. As a result, Deming performed the contract at a loss. He claimed that the government’s action imposed new conditions upon his performance of the contract, which caused him to suffer monetary damages. The court differentiated between the government acting as a party to a contract and the government “exercising its sovereign power of providing laws for the welfare of the State.” Deming, 1 Ct. Cl. at 191. In dismissing the case, the court explained:<blockquote>A contract between the government and a private party cannot be specially affected by the enactment of a general law. The statute bears upon it as it bears upon all similar contracts between citizens, and affects it in no other way. In form, the claimant brings this action against the United States for imposing new conditions upon his contract; in fact he brings it for exercising their sovereign right of enacting laws.</blockquote>Id. The upshot is that—in the absence of contract provisions such as the Federal, State, and Local Taxes clause or an Economic Price Adjustment clause—the government cannot be made to pay for the financial consequences of a generally applicable tax or duty.The ASBCA clarified the reach of the Sovereign Acts Doctrine during the COVID-19 pandemic, when an array of shutdowns, public health measures, and supply chain disruptions impeded contract performance. When a health order had general applicability—i.e., contractors were not singled out for different treatment—the Sovereign Acts Doctrine protected the government and prevented contractor recovery. See, e.g., JE Dunn Const. Co., ASBCA No. 62,963, 22-1 BCA ¶ 38,123 (Apr. 25, 2022); Aptim Fed. Servs., LLC, ASBCA No. 62,982, 22-1 BCA ¶ 38,127 (Apr. 28, 2022). Tariffs generally will fall into this category of general applicability.However, the Sovereign Acts Doctrine does not give a contracting office license to forgo cooperating with a contractor in good faith to mitigate the harms of the government action. See McCarthy HITT – Next NGA West, ASBCA No. 63,571, 2023 WL 9179193 (Dec. 20, 2023). Contractors thus should work with the government to mitigate the impacts of tariffs, even when they are unlikely to receive compensation for cost increases.Side Effects: Shortages and Schedule DelaysIn addition to the obvious financial consequences of tariffs, one potential side effect may be supply shortages and schedule delays. Although they are intended to bolster domestic manufacturers, tariffs may create a temporary reduction in the availability of goods as foreign suppliers look elsewhere to sell their products on more favorable terms and domestic suppliers have not yet increased their production capacity to supply domestic needs. If so, contractors may face schedule delays due to an inability to acquire necessary materials. Fortunately, those delays may be excusable.Excusable delays in fixed-price supply and service contracts are governed by the Default clause contained in FAR 52.249-8(c), which states that “the Contractor shall not be liable for any excess costs if the failure to perform the contract arises from causes beyond the control and without the fault or negligence of the Contractor.” The clause provides a list of examples that would entitle a contractor to an excusable delay, which includes “acts of Government in either its sovereign or contractual capacity.” FAR 52.249-8(c)(2). Similarly, excusable delays in fixed‑price construction contracts are dealt with in the Default clause in FAR 52.249-10(b), which states that “[t]he Contractor’s right to proceed shall not be terminated nor the Contractor charged with damages under this clause if – (1) the delay in completing the work arises from unforeseeable causes beyond the control and without the fault or negligence of the Contractor.” Relevant causes may include “acts of the Government in either its sovereign or contractual capacity.” FAR 52.249-10(b)(1)(ii).Consistent with these clauses, the courts and boards have recognized that a contractor that experiences supply shortages beyond its control is entitled to a schedule extension. For example, in J.D. Hedin Construction Co. v. United States, 408 F.2d 424, 428-30 (Ct. Cl. 1969), the Court of Claims held that a delay caused by an unforeseeable cement shortage may give rise to an excusable delay. And in Maverick Diversified, Inc., ASBCA No. 19454, 75-1 BCA ¶ 11,114 (Feb. 12, 1975), the Armed Services Board of Contract Appeals recognized that, where a contractor establishes that a steel shortage is the cause of its delay, that delay is excusable.If a contractor is entitled to an excusable delay but the contracting officer does not grant a schedule modification, then the contractor may be entitled to compensation for “<a href="/topics/contracting-in-the-fog-of-war-recovering-costs-caused-by-an-epidemic" target="_self">constructive acceleration</a>.” Under that theory, the excusable delay implicitly modifies the contract, to allow the contractor an extended period of performance. When the contracting officer insists that the contractor must stick to the original schedule, that is another government-caused modification, for which the contractor is entitled to compensation. See, e.g., Ace Constructors, Inc. v. United States, 70 Fed. Cl. 253, 281 (2006) (finding constructive acceleration when delay was excused but contracting officer did not move deadlines); IAP Worldwide Servs., Inc., ASBCA Nos. 59397, 59398, 59399, 17-1 BCA ¶ 36763 (May 17, 2017) (holding that government constructively accelerated performance of contract for supply of power plants in Afghanistan when it failed to grant an extension for excusable delay due to border closure).What the Future HoldsTo quote the Magic Eight Ball, the picture is cloudy. It is clear the new administration views tariffs very favorably and intends to deploy them, at minimum, as a negotiation tactic. This alone creates significant uncertainty and could result in cascading economic effects. Whatever the future holds, however, contractors should take stock of their contractual rights now so they can swiftly provide notice under any applicable contract if and when a tariff creates impacts. Contractors should also consider what, if any, impact potential tariffs may have on active or pending bid or proposal activities and closely examine the remedy‑granting clauses that may be included in the resulting contracts.Even contractors who do not buy goods subject to tariffs may see ricochet effects from possible retaliatory measures, such as reductions in foreign government purchases of U.S. defense and aerospace technology and platforms. If a tariff squabble becomes a trade war, those purchases may become one of the frontlines. Those unintended and unpredictable knock-on consequences might eventually become the tariffs’ most significant effect on U.S. defense and aerospace contractors.Ethan Sterenfeld, a law clerk in our Washington, D.C. office, contributed to the writing of this article.<a href="#_ftnref1" target="_self">[1] </a>Trump Favors Huge New Tariffs. How Do They Work? PBS News, Sep. 27, 2024, <a href="https://www.pbs.org/newshour/economy/trump-favors-huge-new-tariffs-how-do-they-work" target="_blank">https://www.pbs.org/newshour/economy/trump-favors-huge-new-tariffs-how-do-they-work</a> (last accessed Feb. 6, 2025).

IAP Worldwide Servs., Inc.

Flight Support, Inc.

DynCorp Int’l LLC

Raytheon Co.

DynCorp International, LLC v. United States

URS Federal Servs., Inc.

Deja Vu All Over Again: Trump’s Tariffs and their Impact on Government Contractors