Federal procurement rules shift

Federal agencies are getting new marching orders on what they buy and how contractors describe their workplace programs. (acquisition.gov) On April 17, the Federal Acquisition Regulatory Council told agencies to add a new contract clause, FAR 52.222-90, to new solicitations and contracts over the micro-purchase threshold starting April 24, 2026. Agencies also were told to modify existing contracts by July 24, 2026, and the clause applies to commercial products and services performed in the United States. (acquisition.gov) That directive implements Executive Order 14398, signed March 26 and published March 31, which says agencies should not do business with contractors that engage in “racially discriminatory” diversity, equity, and inclusion activities. The order defines those activities as disparate treatment based on race or ethnicity in hiring, promotions, contracting, program access, or resource allocation. (federalregister.gov) The same day, the Office of Management and Budget issued Memo M-26-12 ordering agencies to push harder toward commercial buying. OMB said that in fiscal 2024, more than two-thirds of federal contract spending reported in the Federal Procurement Data System was for non-commercial products and services. (whitehouse.gov) OMB said that total included more than $130 billion in non-commercial contracting for common services such as professional support, information technology and telecom, and facilities operations. The memo requires covered agencies to send OMB a report by May 4, 2026, explaining their use of non-commercial buying and describing opportunities to shift work to commercial products and services. (whitehouse.gov) For vendors, the practical change is twofold: proposal language now faces closer scrutiny for race-based DEI programs, and agencies face new pressure to justify custom work instead of buying off-the-shelf offerings. Both moves run through the Federal Acquisition Regulation, the rulebook that governs most civilian and defense purchasing. (acquisition.gov) (whitehouse.gov) Small-business contracting is moving on a parallel track, not disappearing. The Small Business Administration says each agency still has statutory annual goals, while the government-wide targets remain 23% of prime contract dollars for small businesses, 5% for women-owned small businesses, 5% for small disadvantaged businesses, 3% for HUBZone firms, and 5% for service-disabled veteran-owned small businesses. (sba.gov) SBA also says it negotiates agency-specific goals before each fiscal year and requires agencies that miss any proposed prime or subcontracting goal to submit a justification and corrective action plan. That means the next fight is likely to be over how agencies balance commercial buying mandates with set-asides and other small-business requirements that are still embedded in procurement law. (sba.gov 1) (sba.gov 2) The deadlines are close enough that contracting shops and vendors are already in implementation mode: April 24 for the new DEI clause, May 4 for OMB’s commercial-buying reports, and July 24 for modifying existing contracts. In federal procurement, those dates can reshape solicitations long before Congress rewrites any statute. (acquisition.gov) (whitehouse.gov)