Trump Orders Cost-Cutting Federal Contract Reforms

What’s Changing in Federal Procurement?

In a sweeping new executive order signed on April 16 President Donald J. Trump directed federal agencies to overhaul their procurement strategies by prioritizing commercially available, cost-effective products and services. The move targets wasteful spending tied to custom-developed solutions that could otherwise be replaced by off-the-shelf alternatives.

The order reaffirms the Federal Acquisition Streamlining Act of 1994 (FASA), which mandates government preference for commercial solutions. Trump’s directive enforces strict compliance and oversight, compelling agencies to justify non-commercial purchases through rigorous market research and price analysis.

Why It Matters: Curbing Waste and Delays

The executive order criticizes previous administrations for procuring government-unique systems unnecessarily, which led to:

Increased costs for taxpayers
Slower implementation of solutions
Missed opportunities to integrate cutting-edge commercial innovations

By redirecting focus to the private sector’s competitive marketplace, the administration argues this policy will deliver faster, more reliable, and more affordable services to American citizens.

Key Requirements Under the Executive Order

Within 60 days, agencies must:

Review all current non-commercial procurement solicitations
Submit justification reports for custom solutions, including:
- Market research results
- Price analyses
- Detailed rationale for non-commercial choices

Within 120 days, each agency’s procurement head must report to the Office of Management and Budget (OMB), detailing compliance progress with commercial preference mandates.

Oversight and Accountability

To ensure alignment with the order:

Contracting officers must receive internal approval for any custom or non-commercial procurements.
The OMB and the Federal Procurement Policy Administrator may intervene and review any proposal to assess its necessity and legality.

This multilayered oversight structure is designed to prevent abuse, ensure transparency, and promote adherence to federal procurement laws.

Complementary Tech Push: Streamlining Environmental Permits

In tandem with the procurement reform, President Trump also signed a Presidential Memorandum on April 15, directing agencies to modernize permitting processes for infrastructure projects. The memo calls for:

Digitization of environmental review systems
Automation of low-level reviews
Creation of a centralized interagency permitting platform

A Permitting Innovation Center will be established to prototype software solutions, aiming to reduce delays in key infrastructure developments.

Broader Implications for Industry and Innovation

These combined actions signal a strong shift toward deregulation and private sector engagement. By aligning federal operations more closely with commercial practices, the administration hopes to:

Reduce bureaucratic friction
Increase the speed of project delivery
Channel taxpayer dollars toward proven, market-tested technologies

Experts believe this approach could have major benefits for defense, infrastructure, energy, and technology sectors, opening new opportunities for firms offering scalable, off-the-shelf solutions.

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Trump Mandates Commercial Solutions in Federal Contracts to Cut Costs and Red Tape