Federal contractors are operating in an unusually fast-moving environment. The Revolutionary FAR Overhaul is changing the acquisition rulebook. Executive orders are reshaping contracting policy. Cost Accounting Standards are being reconsidered. Fixed-price contracting is receiving renewed emphasis. And just as companies were preparing for the next phase of CMMC, the Department of War announced a significant change in implementation.
So, what should government contractors be paying attention to now?
That was the focus of a recent Federal Publications Seminars (FPS) Cocktails & Conversations panel featuring government contracting experts:
https://www.haynesboone.com/people/knight-stephen
Their discussion ranged from FAR reform and the FY26 NDAA to subcontracting, executive orders, CAS, cybersecurity and CMMC.
Although the topics were wide-ranging, one message surfaced repeatedly: in an environment where the rules are changing quickly, contractors need to know exactly what is in their contracts and understand how new requirements affect their businesses.
Is the Revolutionary FAR Overhaul Really Revolutionary?
The federal acquisition community is in the midst of the Revolutionary FAR Overhaul, an initiative designed to streamline the Federal Acquisition Regulation and make acquisition more efficient.
But the panel challenged contractors to look beyond the word revolutionary.
Their message was not that the FAR overhaul is unimportant. Far from it. Rather, contractors should avoid assuming that every rewritten FAR part fundamentally changes the underlying acquisition environment.
The panel pointed specifically to areas such as FAR Parts 15, 30 and 31, while also emphasizing that contractors should be watching developments outside the FAR itself, particularly the National Defense Authorization Acts and executive orders affecting federal procurement.
At the same time, some changes could have significant practical implications.
For example, the revised FAR Part 40 brings information security and supply chain security requirements together under a dedicated FAR part. It addresses areas including safeguarding information, security prohibitions and exclusions, and supply chain risk.
The larger challenge may be implementation.
As the panel discussed, contracting professionals and contractors can encounter legacy FAR provisions, agency deviations and newer proposed or rewritten provisions simultaneously. That makes clause management increasingly important.
The practical takeaway: Do not assume that knowing the "new FAR" is enough. Contractors need to know which clauses and which versions of those clauses actually apply to each contract.
Why Is Reading the Contract More Important Than Ever?
Perhaps the simplest advice from the entire discussion was also the most important:
Read your contract.
That recommendation surfaced repeatedly throughout the panel.
Why?
Because policy announcements, executive orders and regulatory initiatives do not necessarily change the obligations of an existing contract automatically.
Contractors should know what they actually agreed to, which clauses are incorporated, which deviations apply and whether subsequent modifications have changed those requirements.
The panel also emphasized documentation.
With multiple versions of clauses potentially circulating during the FAR transition, contractors should maintain records showing which requirements applied when the contract was awarded or modified.
The same discipline should extend downstream.
Prime contractors should review their flowdown processes, because changing FAR and DFARS requirements can affect what must, may or should be included in subcontracts.
The panel's recommendations can be distilled into four actions:
Read the solicitation. Read the contract. Document your decisions. Review your flowdowns.
And when something in a solicitation appears problematic, ask questions before award. The solicitation Q&A process may provide one of the best opportunities to identify ambiguities or raise concerns before they become contract administration problems.
What Does the Push Toward Fixed-Price Contracting Mean for Contractors?
One of the most consequential developments discussed by the panel is the federal government's renewed preference for fixed-price contracting.
On April 30, 2026, Executive Order 14402, Promoting Efficiency, Accountability, and Performance in Federal Contracting, established fixed-price contracts with performance-based considerations as the default and preferred procurement approach, subject to exceptions.
The FAR Council subsequently updated Revolutionary FAR Overhaul Parts 16 and 52 to implement the order.
Under the revised RFO Part 16, firm-fixed-price contracts are appropriate when supplies or services can be acquired using clearly defined functional or detailed specifications and a fair and reasonable price can be established at the outset.
That last point matters.
During the panel, Jeffery White raised an important practical question: What happens when the government wants a firm-fixed-price arrangement but the requirement itself is not sufficiently firm?
Unclear requirements do not disappear simply because a contract is fixed price. Instead, uncertainty can shift additional risk to the contractor.
That means contractors evaluating fixed-price opportunities should pay particularly close attention to:
- The clarity and completeness of the statement of work
- Assumptions incorporated into the proposal
- Pricing risk
- Potential changes during performance
- Equitable-adjustment provisions
- The allocation of risk between the government, prime contractor and subcontractors
The revised Part 16 itself recognizes that fixed-price contracts are not one-size-fits-all. It provides several fixed-price structures and allows for other contract types when circumstances warrant them.
For contractors, the important question is therefore not simply, "Is this fixed price?"
It is: "Do the requirement, price and allocation of risk make sense for fixed-price performance?"
Fixed-Price Opportunity Risk Review
Before pursuing or accepting a fixed-price opportunity, contractors should test the requirement against the following risk areas:
What Cost Accounting Standards Changes Should Contractors Watch?
Cost accounting was another major area of discussion.
Tom Reynolds highlighted several developments stemming from the FY26 NDAA and ongoing CAS Board activity, including changes involving CAS thresholds, cost-accounting practice changes and the treatment of fixed-price contracts in cost-impact calculations.
The panel viewed several of these developments as potentially positive for industry, particularly changes that could reduce unnecessary administrative burdens.
But there is an important caveat.
Legislation, proposed regulations and implementing regulations do not always become operational at the same time.
Contractors therefore need to distinguish between:
what Congress has directed, what regulators have proposed and what has actually been implemented.
That distinction is especially important when updating accounting policies, determining CAS applicability or flowing CAS requirements to subcontractors.
Contractors should also reconsider whether internal policies built around older CAS thresholds and practices remain appropriate as implementation continues.
For additional analysis, HKA's Government Contracting Regulatory Update includes recent commentary from Tom Reynolds on CAS Board activity, DCAA developments and Executive Order 14402.
How Should Contractors Respond to the Growing Number of Executive Orders?
Executive orders generated some of the liveliest discussion of the evening.
The panel's central advice was straightforward: pay attention to executive orders, but do not confuse an executive order with a contractual requirement.
An executive order can direct agencies to take action and can ultimately result in new FAR provisions, deviations, solicitation requirements or contract clauses. But contractors should determine how the policy has actually been implemented and whether it applies to the contract at issue.
This is another reason the panel repeatedly returned to the importance of reading the contract.
The speed of implementation also matters.
Eric Crusius noted that contractors increasingly need to monitor executive actions because procurement policies can move from executive direction toward implementation much faster than organizations may have experienced historically.
Among the executive-order issues discussed were:
- The preference for commercial products and services
- The push toward fixed-price contracting
- DEI-related contractor requirements
- Government purchasing consolidation
- Contractor costs and investments
The broader lesson is not that contractors should react immediately to every executive order.
Instead, organizations should establish a process to answer four questions:
What changed? Does it apply to us? Has it reached our contracts? What operational changes, if any, are required?
Why Should Subcontractors and Flowdowns Be Part of Every Compliance Conversation?
One of the strongest themes of the panel was that regulatory change cannot be viewed only from the prime-contract level.
Changes frequently move through the supply chain.
That means prime contractors need to understand not only their own obligations but also which requirements must be flowed down, which suppliers are affected and how subcontracting policies need to change.
This becomes particularly challenging when different versions of FAR clauses, deviations and agency-specific requirements are circulating simultaneously.
The panel emphasized the need to revisit policies and procedures rather than relying on processes built for the previous regulatory environment.
For organizations subject to Contractor Purchasing System Reviews, the issue can be particularly important. Procurement teams need to ensure that their procedures, files, clause matrices and subcontract documentation remain aligned with current requirements.
This is not simply a contracts-department issue.
Legal, contracts, procurement, supply chain, finance, cybersecurity, compliance and business-development teams may all see different pieces of the same regulatory change.
Connecting those functions is increasingly critical.
Is CMMC Going Away?
No.
This may be one of the most important points for defense contractors following the July 2026 CMMC announcement.
On July 13, 2026, the Department of War announced the immediate suspension of CMMC Phase II requirements, which had been scheduled to take effect November 10, 2026. The Department also began a comprehensive review of the program.
But the Department explicitly stated that Phase I self-assessment requirements remain firmly in place.
That distinction was central to Eric Crusius's comments during the panel.
CMMC is a mechanism for verifying cybersecurity compliance. The underlying obligations to safeguard sensitive government information do not simply disappear because one phase of the certification process has been paused.
The Department currently says it will continue enforcing cybersecurity compliance with NIST SP 800-171 Rev. 2 through self-assessments and select government-led assessments during this period.
For contractors, that means treating the Phase II suspension as permission to abandon cybersecurity controls would be a serious mistake.
What Should Contractors Do About Cybersecurity Right Now?
Keep going.
Organizations handling Controlled Unclassified Information should continue assessing their cybersecurity posture, documenting compliance and addressing weaknesses.
The panel made an important distinction between the cost of implementing cybersecurity controls and the cost of obtaining a CMMC assessment. Those are not necessarily the same thing, and conflating the two can obscure where the real compliance burden exists.
The Department's review may ultimately change aspects of the CMMC framework. In fact, the government is actively seeking industry input on the burdens associated with CMMC and NIST SP 800-171 implementation.
But cybersecurity itself is not on pause.
For official updates, contractors can follow the Department of War CMMC resource center.
What Is the Biggest Takeaway for Government Contractors?
There may be no single regulation contractors can master today and then consider the job finished.
The regulatory environment is moving too quickly.
Instead, the panel's discussion points toward a broader capability organizations need to build: the ability to recognize change, understand its contractual impact and respond across the organization.
That means contractors should:
- Read every solicitation and contract carefully. Know which clauses, deviations and versions apply.
- Monitor the FAR overhaul, NDAAs and executive actions. Do not rely on a single source of regulatory information.
- Ask questions before award. Clarify unclear requirements and contract terms during the solicitation process whenever possible.
- Document decisions. Maintain a record of which requirements applied and how the organization responded.
- Review subcontract flowdowns. Regulatory changes rarely stop with the prime contractor.
- Evaluate fixed-price risk carefully. Make sure requirements are sufficiently defined and that pricing accounts for the risk the contractor is assuming.
- Do not stop cybersecurity work because CMMC Phase II is paused. The underlying security requirements remain important and, where applicable, enforceable.
- Train across functions. Contracts, procurement, finance, compliance, cybersecurity and business-development professionals need a shared understanding of how changes affect the organization.
The rules may be changing, but the underlying discipline remains familiar: know your contract, understand your obligations and make sure the people responsible for executing them know what has changed.
Stay Current as Federal Contracting Changes
Federal Publications Seminars helps government contracting professionals understand and apply changes across the federal contracting lifecycle through instructor-led courses, virtual programs, webinars, on-demand learning and timely resources.
As the FAR overhaul, NDAA implementation, executive actions, cybersecurity requirements and other regulatory developments continue to evolve, the FPS Intelligence Hub will continue bringing together practical guidance and insights from experienced government contracting professionals.
Subject Matter Experts
This article is based on a July 2026 FPS Cocktails & Conversations panel discussion. Panelist comments reflect their individual perspectives. Regulatory requirements continue to evolve, and contractors should review applicable statutes, regulations, agency guidance and individual contract requirements.
