Deregulating Federal Procurement: Implications of Three Recent Executive Actions

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:

1. Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base
2. Reforming Foreign Defense Sales to Improve Speed and Accountability
3. Directing the Repeal of Unlawful Regulations

This article delves into the details of each EO and the Memo to explore their potential effects on federal contractors.[1]

Modernizing Defense Acquisitions

The 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:

• 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;
• Include a detailed process review of "each functional support role" within the acquisition workforce, including program managers, contracting officers, cost estimators, and others; and
• Establish a formal "Configuration Steering Board" to effectively manage risk.

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).

• The review is focused on eliminating or revising unnecessary regulations or guidance, with the DFARS and the Financial Management Regulation specifically identified.
• 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.

Fourth, within 120 days, DoD is directed to develop a plan to reform, right-size, and train the acquisition workforce.

• 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."
• Moreover, the EO mandates "policies, procedures, and tools" to incentivize acquisition officials to take "measured and calculated risks."

Fifth, within 90 days, DoD must conduct a comprehensive review of all Major Defense Acquisition Programs (MDAPs), defined as programs with significant budgets.

• 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.
• 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.

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 Sales

The 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:

• Reevaluate restrictions imposed by the Missile Technology Control Regime on Category I items, including considering supplying certain partners with these items.
• 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.

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 Regulations

The 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:

• 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.
• 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.
• 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.

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.

[1]We separately analyze the April 15 EO, Restoring Common Sense to Federal Procurement, which calls for a previously predicted FAR overhaul.