Government Contracting – Key Developments in February 2025

Key Executive Orders and Policy Changes Impacting Contractors

The Biden-Trump administration’s executive orders have significantly reshaped the landscape for government contractors. Key policies include the rescission of Executive Order 11246, the prohibition of DEI programs, a mandated return to in-person work, and a 90-day federal hiring freeze. These changes introduce both opportunities and compliance challenges for federal contractors, particularly regarding workforce diversity, operational adjustments, and shifting procurement priorities. Contractors must stay vigilant as these policies evolve and agencies provide further implementation guidance. 

Key Details:

1. Rescission of Executive Order 11246 (Affirmative Action and Non-Discrimination Requirements)

• The administration revoked EO 11246, which previously mandated federal contractors to implement affirmative action programs and prohibited employment discrimination based on race, gender, religion, and other protected categories.
• Contractors no longer have obligations to develop or document affirmative action plans, easing administrative burdens.
• The Office of Federal Contract Compliance Programs (OFCCP) has ceased enforcement of DEI-related compliance requirements.
• Impact: While this change simplifies compliance, it raises concerns about workforce diversity and potential reputational risks for contractors who previously prioritized DEI efforts. 

2. Prohibition of DEI Programs in Federal Contracting

• Federal contractors and grant recipients are prohibited from implementing diversity, equity, and inclusion (DEI) initiatives in hiring, training, or procurement.
• Agencies are removing DEI-related requirements from federal contracts, eliminating past preferences for minority- and women-owned businesses in some procurement areas.
• Impact: While some firms will benefit from reduced compliance costs, others may struggle to maintain workforce diversity goals and face conflicts in private-sector partnerships that still prioritize DEI efforts. 

3. Return to In-Person Work for Federal Employees

• Federal employees are required to return to in-person work, reversing previous remote and hybrid policies.
• This change affects government contractors providing IT, staffing, and facility management services, as agencies will require more on-site support.
• Impact:
  • Increased demand for on-site contractors in security, IT support, and facility operations.
  • Operational shifts for firms previously reliant on remote or hybrid workforce models.
  • Recruitment challenges as job seekers increasingly expect flexible work options. 

4. Federal Hiring Freeze (90 Days, Effective January 2025)

• A 90-day hiring freeze on federal agencies (excluding national security and public safety roles) has been implemented.
• Impact:
  • New opportunities for contractors to fill staffing gaps as agencies outsource essential services.
  • Delays in new contract awards or renewals, impacting firms reliant on federal hiring trends.
  • Strained budgets for small contractors as agencies adjust to reduced hiring. 

5. Increased False Claims Act (FCA) Risks for Contractors

• The Ending Illegal Discrimination and Restoring Merit-Based Opportunity executive order introduces new compliance certification requirements.
• Contractors must certify compliance with federal anti-discrimination laws, making compliance violations potentially subject to False Claims Act (FCA) enforcement.
• Impact:
  • Increased legal risk for contractors who fail to align with new requirements.
  • Potential whistleblower lawsuits tied to False Claims Act violations.
  • Necessity for contractors to review internal policies and ensure compliance with evolving federal regulations.

 The recent executive orders introduce a major shift in federal contracting policies, with broad implications for workforce management, compliance, and procurement strategies. Contractors should take proactive steps to assess risk exposure, adjust hiring practices, and ensure
compliance with evolving federal requirements.

Key actions include:

• Reviewing Contractual Obligations: Ensure compliance with new non-discrimination policies and prepare for FCA-related certification risks.
• Monitoring Agency Guidance: Stay updated on how federal agencies will implement these orders and adjust procurement practices accordingly.
• Reevaluating Workforce Strategies: Prepare for increased demand for on-site personnel and potential talent acquisition challenges due to the return-to-office mandate.
• Engaging with Legal and Compliance Teams: Seek legal counsel to navigate changes in DEI regulations, hiring policies, and affirmative action compliance.

New Tariffs on Canadian, Mexican, and Chinese Imports: Impacts on Government Contractors 

On February 1, 2025, President Donald Trump issued three executive orders imposing tariffs on products imported from Canada, Mexico, and China, citing national security concerns related to drug trafficking and illegal immigration. These tariffs, effective February 4, 2025, are expected to increase the costs of goods frequently used in government contracts, affecting supply chains, pricing strategies, and compliance obligations. Contractors should proactively assess contractual mechanisms for cost recovery and develop risk mitigation strategies in light of potential retaliatory tariffs from trading partners. 

Key Details: 

1. Tariff Rates and Scope

• Canada & Mexico:
  • 25% tariffs on most imports.
  • 10% tariff on energy and energy resources from Canada.
  • Tariffs on Mexican goods delayed until March 2025 following a U.S.-Mexico agreement.
• China:
  • 10% tariffs on imported products.
• Additional Fees:
  • These tariffs are in addition to any existing duties, fees, or other charges.
  • The “duty-free de minimis treatment” (which previously exempted goods valued under $800) has been suspended, meaning all goods are now subject to tariffs. 

2. Timing and Implementation

• Tariffs apply to goods that are entered for consumption or withdrawn from warehouse on or after 12:01 a.m. ET on February 4, 2025.
• Exemptions:
  • Goods already in transit before February 1, 2025, will not be subject to tariffs if certified to U.S. Customs.
• Future Adjustments Possible:
  • If Canada, Mexico, or China retaliate, the President may increase or expand the tariffs.
  • Canada has already announced 25% retaliatory tariffs on U.S. cosmetics, beverages, and paper products.
  • Mexico and China may impose countermeasures in the coming weeks. 

3. Legal Justification for Tariffs

• The tariffs were issued under the International Emergency Economic Powers Act (IEEPA) in response to the national emergency declared over drug trafficking and illegal immigration.
• The administration argues the tariffs will pressure Canada, Mexico, and China to strengthen border security and stop the flow of illicit drugs into the United States. 

4. Government Contractor Considerations

• Potential Cost Increases: Tariffs will raise prices on materials sourced from these countries, affecting contract performance costs.
• Supply Chain Disruptions: Delays and shortages may arise as contractors adjust procurement strategies.
• Regulatory Adjustments: Contractors should review contracts for clauses that allow cost adjustments or performance delays. 

The new tariffs will significantly impact contractors supplying the federal government. Companies should take the following steps: 

1. Assess Contractual Cost Recovery Options

• FAR 52.229-3 (Federal, State, and Local Taxes): Allows for a contract price increase if a new tax (tariff) is imposed after contract award.
• FAR 52.216-4 (Economic Price Adjustment – Labor and Material): Provides a mechanism for adjusting contract pricing based on increased material costs.
• FAR 52.249-8(c) and FAR 52.249-10(b) (Excusable Delays): Protects contractors from penalties for delays caused by government actions.

2. Monitor Supply Chain Risks & Adjust Procurement Strategies 

• Engage with subcontractors and suppliers to lock in pricing before further tariff increases.
• Identify alternative suppliers that are not affected by the tariffs to mitigate risk. 

3. Factor Tariffs into Future Bids and Proposals 

• Adjust pricing models to account for increased costs on affected goods. 
• Consider long-term supply contracts to stabilize pricing. 

4. Prepare for Potential Retaliation from Trading Partners 

• Monitor tariff announcements from Canada, Mexico, and China. 
• Prepare contingency plans in case of further cost increases or supply chain restrictions. 

The federal government has not yet provided guidance on whether these tariff-related costs will be reimbursed, so contractors should communicate with contracting officers and legal advisors to understand their options. By taking proactive steps, government contractors can minimize financial risk, ensure compliance, and maintain competitiveness amid this evolving trade landscape.

The Federal Small Disadvantaged Business (SDB) Goal Drop: What It Means for Small Businesses 

The federal government sets annual contracting goals for small businesses, including specific goals for subsets such as Small Disadvantaged Businesses (SDBs), Service-Disabled Veteran-Owned Small Businesses (SDVOSBs), Women-Owned Small Businesses (WOSBs), and HUBZone businesses. These goals determine the percentage of federal contracting dollars that should go to small businesses. 

Under the Biden administration, the SDB goal was increased to 15% for Fiscal Year 2025, reflecting a push to increase federal contracting opportunities for disadvantaged businesses, particularly those participating in the SBA’s 8(a) Program. 

However, new guidance under the Trump administration has revised the SDB goal to 5% for FY2025, a significant decrease from the previous target.

Key Changes in the FY2025 Small Business Goals 

According to the Small Business Procurement FY2025 Goals Document you provided: 

• The overall prime small business contracting goal remains at 23%.
• The prime contracting goal for Small Disadvantaged Businesses (SDBs) has dropped to 5% across all federal agencies.
• Other goals remain unchanged:
  • SDVOSB Goal: 5%
  • WOSB Goal: 5%
  • HUBZone Goal: 3%
• Subcontracting goals remain aligned with the 5% SDB target. 

Implications for Small Businesses

1. Fewer Set-Asides for SDBs & 8(a) Businesses: With a lower target, federal agencies may conduct fewer set-aside competitions specifically for SDBs or 8(a) firms. This could mean more contracts are open to unrestricted competition or allocated to other small business categories.
2. Increased Competition for Limited SDB Contracts: SDBs and 8(a) firms will now compete for a smaller share of federal contracts, potentially making it harder for businesses in these categories to secure awards.
3. Potential Reduction in Mentor-Protégé and Sole-Source Opportunities: The 8(a) Business Development Program allows sole-source contracts and mentor-protégé arrangements that help small businesses grow. With a lower SDB goal, agencies might rely less on these mechanisms.
4. Shift in Agency Priorities: Some agencies, particularly those that previously exceeded SDB targets, may maintain their historical contracting levels. However, agencies that previously struggled to meet the higher 15% goal may quickly adjust to the lower requirement.
5. Impacts on Minority-Owned Businesses: Many minority-owned businesses qualify as SDBs. This policy shift could limit opportunities for these firms, particularly in industries where federal contracts represent a significant source of revenue. 

What Small Businesses Can Do 

• Diversify Contracting Strategies: Small businesses that relied on SDB set-asides should explore other categories (e.g., SDVOSB, HUBZone) or pursue subcontracting opportunities. 
• Leverage Teaming Agreements & Joint Ventures: Partnering with other businesses can enhance competitiveness in full-and-open competitions. 
• Monitor Agency Procurement Trends: Some agencies may still prioritize SDB contracting despite the goal drop. Engaging with agency, and small business offices can provide insights into upcoming opportunities. 
• Stay Engaged with SBA & Industry Advocates: Advocacy groups may push for changes or alternative programs to support small disadvantaged businesses. 

This reduction marks a significant shift in federal small business policy, potentially impacting thousands of SDBs and 8(a) firms. While the overall small business contracting goal remains at 23%, the specific drop in SDB targets could reshape federal contracting dynamics in FY2025. Small businesses should adapt by seeking alternative avenues, enhancing their competitive positioning, and staying informed on future policy developments.

SBA Emphasizes Compliance for 8(a) Joint Ventures: Key Takeaways from OHA’s Decision

The Small Business Administration (SBA) has reaffirmed the importance of compliance with joint venture requirements in its Office of Hearings and Appeals (OHA) decision regarding Chenega Base and Logistics Services, LLC v. SBA. This ruling serves as a critical reminder for 8(a) Program joint ventures to ensure full regulatory compliance, not just size eligibility, when competing for federal contracts. 

Key Issues in the Case

• Size Protest by Chenega Base and Logistics Services:
  • The protest challenged whether DPG Services JV LLP, an 8(a) joint venture, met SBA’s two-year rule under 13 C.F.R. § 121.103(h).
  • Although DPG exceeded the two-year limit, the SBA Area Office determined that the joint venture was still small and, therefore, eligible.
• Appeal to OHA:
  • The appellant argued that beyond size eligibility, DPG failed to meet key 8(a) joint venture requirements outlined in 13 C.F.R. § 124.513(c) and (d).
  • These rules require joint ventures to specify resource contributions, labor sources, contract responsibilities, and that the 8(a) partner must perform at least 40% of the work. 

OHA’s Ruling: More Than Just Size Matters

• OHA found that the Area Office failed to evaluate whether the joint venture agreement complied with the 8(a) requirements in 13 C.F.R. § 124.513(c) and (d).
• Joint ventures competing for 8(a) set-asides must meet both size and program-specific requirements.
• A regulatory gap exists: SBA’s removal of the pre-award joint venture review process has made it unclear how contracting officers and unsuccessful offerors can challenge a joint venture’s compliance.
• OHA clarified that the size protest process remains the only method to ensure compliance with the joint venture rules for 8(a) procurements.

Implications for 8(a) Joint Ventures

• Size is not the only eligibility requirement – Compliance with all 8(a) joint venture regulations is mandatory.
•  Failure to meet program-specific requirements can result in contract award challenges.
•  Offerors and contracting officers should carefully review joint venture agreements to ensure they meet SBA’s 40% performance rule and managerial control requirements.
•  The size protest process remains the only path to challenge a non-compliant 8(a) joint venture.

This case underscores the importance of meticulously structuring and documenting 8(a) joint ventures to avoid disqualification. If you are forming a joint venture under the SBA’s socioeconomic programs, ensure full regulatory compliance or risk losing your contract award.

SBA Issues Correction to HUBZone Program Updates and Clarifications

On February 18, 2025, the U.S. Small Business Administration (SBA) issued a correcting amendment to its final rule on HUBZone Program updates, initially published on December 17, 2024. The corrections address technical errors, omitted text, and misplacements in the HUBZone, Small Business, and 8(a) Business Development regulations. These adjustments clarify key provisions regarding size protests, financial reporting requirements, and long-term investment provisions. 

These corrections do not change SBA policy but ensure accurate application of the regulations. 

Key Details:

1. Size Protests for Recertifications (13 CFR § 121.1001 & § 121.1004) 

• SBA corrected an error in the size protest regulations by removing an unintended paragraph (§ 121.1001(a)(12)) and consolidating the provisions into § 121.1001(a)(11).
• New provision:
  • Size protests can now be filed in response to size recertifications for Set Aside or Reserved Awards, as defined in § 125.1.
  • The following parties may file a protest:
    • The Contracting Officer.
    • The SBA program manager (Director of HUBZone, Associate Administrator for Business Development, or other relevant officials).
    • Other multiple-award contract holders (for contracts with multiple awardees).
• Timeliness Update:
  • SBA added a new time limit for filing size protests.
  • A size protest must be submitted before the close of business on the 5th business day after the protestor receives notice of the prospective awardee (via bid opening, email, oral notice, or electronic posting). 

2. Financial Reporting Threshold Adjusted (13 CFR § 124.602) 

• The financial reporting threshold for audited financial statements was corrected from $10 million to $20 million in all relevant sections.
• What this means:
  • 8(a) firms with gross annual revenues of $20 million or more must submit audited financial statements instead of compiled or reviewed statements.
  • This change reduces compliance costs for small businesses earning between $10 million and $20 million annually. 

3. HUBZone Certification Definition Corrected (13 CFR § 126.103) 

• The incorrect reference to “Certify” was replaced with “Certification or certify”
• New definition:
  • Certification or certify means SBA’s process for determining eligibility of a business for HUBZone status and listing it in the Dynamic Small Business Search (DSBS) database. 

4. HUBZone Long-Term Investment Example Clarified (13 CFR § 126.200) 

• Technical correction to the long-term investment rule.
• Example adjusted for clarity:
  • If a firm was certified on March 31, 2021, and purchased a building on July 20, 2021, the 10-year clock for HUBZone status eligibility starts on July 20, 2021 (date of investment).

Next Steps for Contractors:

• Monitor size recertifications to anticipate protests. 
• Adjust financial reporting for the new $20M threshold. 
• Confirm HUBZone certification details in DSBS. 
• Plan HUBZone real estate investments carefully.

NASA SEWP VI RFP Submission Closed – Awaiting Next Steps 

The NASA SEWP VI RFP (Solicitation No. 80TECH24R0001) proposal submission period officially closed on February 24, 2025, at 1:00 PM EST. With the final deadline passed, offerors now await evaluation, potential award decisions, and updates regarding pending protests.

Key Developments Leading Up to the Deadline 

Final Amendment 14 (February 19, 2025)

• Commitment to Sustainability Removed: Section A.3.7.3(b)(2) was eliminated and was not evaluated in any proposal submissions.
• Proposal Deadline Extended: NASA extended the deadline from February 19 to February 24, 2025.
• No Resubmissions Required: Offerors who included the removed section in their proposals did not need to make modifications. 

With the SEWP VI submission window now closed, NASA will begin the proposal evaluation process based on the final RFP requirements outlined in Amendment 11 and subsequent clarifications. 

Outstanding Protests and Potential Impact on SEWP VI Awards 

Although the submission phase has ended, multiple Government Accountability Office (GAO) protests are still pending, which may impact the award timeline: 

• Active Protests Against SEWP VI GWAC:
  • Avalogics LLC (B-423306.4) – Decision expected by May 27, 2025.
  • Copia Consulting Group, LLC (B-423306.3) – Decision expected by May 19, 2025.
  • Next Step Group, Inc. (B-423306.2) – Decision expected by May 19, 2025.
• Recent Protest Dismissal:
  • One of Avalogics LLC’s protests (B-423304) was dismissed on February 21, 2025. 

While protests may cause delays in contract awards, NASA will continue its proposal evaluation unless GAO or the agency issues a corrective action. 

What’s Next for SEWP VI? 

• Proposal Evaluation: NASA will now review submissions to determine compliance with the final solicitation requirements.
• Protest Resolutions: GAO will decide on the pending protests, which could affect the procurement timeline.
• Award Announcements: If no further delays arise, NASA is expected to announce initial contract awards later this year. 

Stay Updated

Offerors and industry stakeholders should monitor NASA’s SEWP VI page on SAM.gov and GAO protest decisions for further developments.

GSA Temporarily Pauses OASIS+ Program and Issues Amendment 0007 for Regulatory Updates 

The General Services Administration (GSA) has temporarily paused the OASIS+ program, halting on-ramping activities to reassess acquisition strategies and commitments under new leadership. No timeline has been provided for when the program will resume. Additionally, GSA issued Amendment 0007 on February 3, 2025, updating FAR provisions related to the System for Award Management (SAM) pre-award registration requirements. This amendment applies only to offerors who submitted timely proposals by October 20, 2023, ensuring compliance with the latest federal regulations. 

Key Details: 

1. OASIS+ Program Temporary Pause (February 5, 2025)

• GSA halted on-ramping activities for OASIS+ indefinitely to review its procurement strategies. 
• No estimated timeline for resumption has been provided.
• The pause aligns with GSA’s broader efforts to streamline acquisition processes and ensure compliance with evolving regulations.
• Industry members, including Robert Turner, received official notifications of the update.
• Contractors are advised to stay informed through official GSA announcements and GSA Interact for further updates. 

2. Amendment 0007 to OASIS+ Solicitations (February 3, 2025) 

• Purpose: Ensures compliance with FAC 2025-01 Interim Rule (FAR Case 2023-018) by incorporating the amended FAR provision 52.204-7 (Nov 2024) regarding SAM pre-award registration. 
• Applicability: Applies only to offerors who submitted proposals by October 20, 2023 and have not yet been awarded an OASIS+ contract. 
• No Required Action:  
  • Offerors do not need to acknowledge or sign this amendment. 
  • Proposal revisions are not permitted in response to this update. 
• Impact: The amendment aligns OASIS+ solicitations with updated regulatory requirements but does not affect awarded contracts. 

3. Where to Access Amendment 0007 

The amendment applies to six OASIS+ solicitations, accessible on SAM.gov for the following categories: 

• Total Small Business (SB) 
• SBA-Certified 8(a) Small Business (8a) 
• SBA-Certified HUBZone Small Business (HZ) 
• SBA-Certified Women-Owned Small Business (WOSB) 
• SBA-Certified Service-Disabled Veteran-Owned Small Business (SDVOSB) 
• Unrestricted (UR) 

The temporary pause on OASIS+ introduces uncertainty for contractors waiting on new awards or on-ramping opportunities. Firms that submitted proposals but have not yet been awarded contracts should closely monitor GSA announcements to track any changes. Meanwhile, Amendment 0007 ensures that proposals align with updated FAR requirements, reinforcing the importance of SAM pre-award registration compliance. Contractors should verify their registration status on SAM.gov to avoid delays in future contract eligibility. While the GSA’s acquisition strategy review may lead to further procedural adjustments, businesses should remain agile and prepared for upcoming regulatory changes.

CMS Launches $3.5 Billion RMADA 3 IDIQ Recompete 

The Centers for Medicare & Medicaid Services (CMS) has officially released the Research, Measurement, Assessment, Design, and Analysis (RMADA) 3 IDIQ solicitation, valued at $3.5 billion. This contract opportunity, under Solicitation ID 75FCMC25RJ018, seeks to provide analytic support and technical assistance for healthcare-related models and demonstration programs derived from the Patient Protection and Affordable Care Act (ACA). 

Key Details of RMADA 3 IDIQ

• Solicitation Release Date: February 19, 2025 
• Proposal Due Date: March 27, 2025, by 10:00 AM EDT 
• Place of Performance: Windsor Mill, MD 
• Contract Type: Indefinite Delivery/Indefinite Quantity (IDIQ) 
• Estimated Value: $3.5 billion 
• NAICS Code: 541720 – Research and Development in the Social Sciences and Humanities 
• Product Service Code (PSC): AN42 – Health R&D Services (Applied Research) 
• Inactive Date: April 11, 2025

Scope of Work 

Under RMADA 3, contractors will be responsible for supporting healthcare innovation models and payment/service delivery initiatives to reduce Medicare, Medicaid, CHIP, and uninsured beneficiary costs while improving quality. The services will focus on: 

• Designing, implementing, and evaluating research-based models 
• Analyzing healthcare delivery systems for efficiency and cost savings 
• Providing technical assistance and program evaluation for CMS initiatives

What This Means for Contractors

• Prime & Subcontracting Opportunities: Large firms and qualified small businesses should explore teaming arrangements. 
• Key Expertise Areas: Healthcare analytics, policy research, and economic modeling are critical. 
• Regulatory Compliance: Offerors must align with CMS and ACA regulatory frameworks.

Next Steps

• Review the Full Solicitation on SAM.gov: Click here
• Prepare Proposals: Ensure compliance with CMS requirements by March 27, 2025.
• Engage with APEX Accelerators: Small businesses can seek assistance for bidding strategies and compliance.

This high-value contract represents a major federal healthcare analytics opportunity, with significant implications for government contractors in health policy research and evaluation.

MAPS RFP Draft 3 Feedback Period Concludes – Next Steps for Offerors 

The Marketplace for the Acquisition of Professional Services (MAPS) procurement has reached a key milestone with the conclusion of the Draft 3 feedback period on February 14, 2025. The Department of the Army, through ACC-APG, released Draft 3 of the MAPS RFP under Solicitation ID W15P7T-25-R-MAPS, seeking industry feedback to refine the solicitation before final release. 

Key Takeaways from MAPS RFP Draft 3 

• Refined Evaluation Criteria & Performance Requirements: Incorporates industry feedback from previous drafts. 
• Compliance & Reporting Clarifications: Enhances transparency in contract execution. 
• Adjustments to Contract Structure & Ceiling Values: Ensures alignment with acquisition strategy. 
• Expanded Technical & Professional Services Scope: Covers IT, R&D, engineering, logistics, and program management services. 

What’s Next? 

Now that the Draft 3 feedback period has ended, the final MAPS RFP is expected to be released in the coming months. Offerors should:

1. Monitor SAM.gov for updates on the final RFP release. 
2. Prepare proposals based on the expected evaluation criteria and scope. 
3. Review past feedback submissions to ensure compliance with refined requirements.

MAPS IDIQ Overview 

MAPS is a major IDIQ contract providing knowledge-based professional services across multiple domains:

1. Technical Services: Engineering, logistics, manufacturing readiness.
2. R&D & Testing: Applied research, prototyping, simulation.
3. Management & Advisory: Financial services, program management. 
4. High-Level IT Services: Cloud computing, cybersecurity, AI/ML. 
5. Low-Level IT Services: Help desk support, IT management.
6. Place of Performance: Aberdeen Proving Ground, MD 

With a long-term performance period and broad scope, MAPS represents a significant opportunity for IT and professional services contractors.

Stay Updated on SAM.gov: View MAPS Opportunity