In Spring 2025, President Trump issued Executive Order 14271, titled “Ensuring Commercial, Cost-Effective Solutions for Federal Contracts” which informed agencies that they should emphasize procuring commercially available products and services as much as possible. Fast forward a year later, and it would seem the White House’s Office of Management and Budget (“OMB”) is not seeing the push for utilizing commercially available products and services they expected among federal agencies. So a few weeks ago, almost a year to the day of President Trumps 2025 Executive Order, OMB issued a memo to federal agencies driving home the points of President Trump’s 2025 Executive Order and placing reporting requirements on agencies, which could effect the direction of future possible procurements across federal contracting.
On April 17, 2026, OMB released memorandum M-26-12, titled “Increasing the Acquisition of Commercial Products and Services.” This memorandum was issued by OMB to further emphasize and put into place the aims of President Trump’s April 2025 Executive Order informing agencies to emphasize utilization commercially available products and services. OMB makes clear in this new memorandum that 1994’s Federal Acquisition Streamlining Act (FASA) has “required federal buyers to give a preference to commercial products and services and Part 12 of the Federal Acquisition Regulation” for decades, but in Fiscal Year 2024, OMB did not see the shift in procurements it expected.
According to OMB “more than two-thirds of total federal contract spending reported” in FPDS (this data is transitioning to SAM.gov) was non-commercial products and services. Of that, more than $130 billion was for “non-commercial contracting for common services, such as professional support services, information technology and telecom services, and operation of facilities” often through cost-reimbursement contracts. OMB apparently see this as a risk for the federal government, as it could “allow undefined deliverables that increase the Government’s exposure to loss.” Consequently, OMB is now placing requirements upon agencies (called “stewardship actions” in the memorandum) to strengthen and push for the utilization of commercially available products and services rather what they deem “risky” alternative procurement methods.
The actions OMB directs agencies to take are quite varied. This includes: “Reporting”; “Strengthened Responsibilities of the Competition Advocate”; “Improved Data Collection and Benchmarking”; and “Consultation with OMB.”
For Reporting, OMB is generally asking agencies to provide the following:
- Information about recent non-commercial awards, including but not limited to:
- Value of noncommercial contracts awarded from April15, 2025 through September 30, 2025.
- List of Procurement Instrument Identifiers.
- For contracts over $10 million, date of next option, action planned by the agency after reviewing contracts, and an explanation, including market research and price analysis, for why a commercial solution is not planned for the next option (if applicable).
- Acquisition planning for upcoming (phrased as “near-term”) awards of non-commercial items, including:
- Total number of all open or pre-award actions for non-commercial products or services that were in process April 15, 2025 or later, and were initiated by March 31, 2026.
- And for those actions which exceed $10 Million, description of the requirement, contract type, cost estimate, action planned by the agency after this review, and if there is no plan for a commercial solution, a justification of such.
- Future procurement information, including “internal mechanisms put in place, including guidance to ensure any future planned award of a non-commercial award is reviewed” by the agency.
Regarding strengthening responsibilities of the “agency competition advocate” the OMB memorandum expects agencies to confirm that whomever is serving as the agency’s competition advocate is “at a level not lower than the head of the contracting activity or deputy SPE” (meaning senior procurement executive), likely hoping this person wields more authority within the agency. Agencies have to report who this person is and information about that position by May 4, 2026. OMB then provides a list of the “minimum” activities which this competition advocate would take, including among other things, provide recommendations on how to maximize commercial buying, work with the agency to support implementation of the RFO Part 12 deviation, work with the agency’s small business director “to lower barriers to entry for commercial providers and encourage the participation of new entrants offering commercial solutions,” improve data collection, and support developing progress reports to OMB regarding compliance with FASA.
To improve data collection and benchmarking there will be a review of how to improve tracking commercial products and services buying in FPDS, and an examination of how GSA could “baseline and benchmark agency acquisitions of commercial products and services.”
Finally, the OMB memorandum explains that an agency may seek the input of OMB if they are contemplating soliciting non-commercial products or services. Such request for input from OMB should include many points of information, such as description of the planned requirement, reason for the requirement market research, competition plans, cost estimate information, and other items.
With all this in mind, OMB seems to be taking the push for utilizing commercially available products and services very seriously. While this memorandum puts a lot of work on agencies, it is not to be ignored by contractors. OMB in this memorandum shows that the federal government will be shifting to more and more commercially available products and services, and FAR part 12 procurements, regardless of if the agencies want to or not. So contractors should prepare for such procurements, and to potentially offer such items if possible. This will obviously be something that the current administration will continue to monitor, and contractors should expect procurements to continue to shift more towards FAR Part 12 and commercially available products and services over time. We will keep an eye on this shift in procurements, If you have any federal government contracting law questions about this push towards commercially available items and services, be sure to contact federal government contracting lawyers such as ourselves.
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