What You Need to Know
- Key takeaway #1Agencies and contractors may see an increase in commercial and commercial-off-the-shelf procurements in the coming months. The EO may create opportunities for businesses offering adaptable commercial products and services to meet government needs.
- Key takeaway #2Federal contractors may want to review their commercial products and services to inventory whether they could be modified or strategically adjusted to align with potential government needs.
- Key takeaway #3Contracting officers for currently open non-commercial products or services solicitations and procurements may conduct additional market research or actions if the underlying market research and/or price analysis is deemed insufficient.
- Key takeaway #4It remains to be seen whether the approval process established by the EO will cause delays in open and future procurements.
On April 16, 2025, the White House issued an Executive Order (“EO”), “Ensuring Commercial, Cost-Effective Solutions in Federal Contracts,” requiring agencies to meet their needs with commercially available products and services to the maximum extent practicable. The EO reiterates and builds upon the requirements set forth in the Federal Acquisition Streamlining Act of 1994 (“FASA”), which similarly encourages the use of commercial acquisition procedures. Specifically, the EO institutes a required review procedure for certain open acquisition actions and establishes an oversight procedure to be implemented for all acquisitions hereafter.
Review Procedure: Applications for Approval for Open Requirements
Within 60 days of the EO (by June 16, 2025), each agency’s designated senior procurement authority (“approval authority”) must direct the agency’s contracting officers to take action with respect to open agency solicitations, pre-solicitation notices, solicitation notices, award notices, and sole-source notices for non‑commercial products or services. Contracting officers must review and consolidate such acquisition notices into an application for approval to purchase non-commercial products and services. Each application must contain the (1) relevant notices and open agency solicitations, (2) the market research and price analysis used to determine the unavailability of commercial equivalents; and (3) the agency’s rationale for pursuing a non-commercial product or service.
Within 30 days of receiving the proposed applications, the agency’s approval authority must assess the applications’ compliance with FASA—including the sufficiency of the included market research and price analyses—and take appropriate action regarding any deficiencies. Permitted action includes, but is not limited to, returning a proposed application to the contracting officer in part or full to conduct additional research or take further action with respect to potential commercial products or services. Within this same 30-day period, the agency’s approval authority must also make appropriate recommendations to advance the solicitation of commercial products or services where those products or services would be sufficient to serve the applicable procurement needs.
Within 120 days of the EO (by August 13, 2025) and annually thereafter, each agency’s approval authority must detail the agency’s compliance with FASA and progress towards implementing the EO’s policies in a report to the Director of the Office of Management and Budget (“OMB”).
Oversight of Non-Commercial Procurements on a Going Forward Basis
The EO also impacts forthcoming procurements. For all new procurements for a non‑commercial product or service, contracting officers must submit to the agency’s approval authority a proposal detailing the specific reasons a non-commercial product or service is required, inclusive of the underlying market research and price analysis. The approval authority must review and provide a written approval or denial of the contracting officer’s proposal. To assist in its determination, the agency’s approval authority may seek input from the OMB Director, who—in consultation with the Administrator for Federal Procurement Policy—will review and assess the validity of a proposal, including the thoroughness of the market research and price analysis and issue a written recommendation to the approval authority on whether the proposal should be approved or denied.
For further information, please contact:
Jonathan M. Baker, Partner, Crowell & Moring
jbaker@crowell.com
