Check, Not Checkmate: Staying Ahead of 2026 Federal Contracting Changes 

The first half of 2026 has been one of the most active periods of federal policy change in recent years for government contractors. Through executive orders, acquisition policy initiatives, and agency implementation guidance, the federal government has continued reshaping the regulatory landscape for organizations that perform work under federal contracts.

While many of these initiatives will continue to evolve through Federal Acquisition Regulation (FAR) updates and agency guidance, contractors should begin evaluating how these changes may affect their compliance programs, employment practices, cybersecurity readiness, and contract performance. 

Below are several developments that deserve management’s attention. 

FAR Modernization Initiative 

Federal agencies continued implementation of the Revolutionary FAR Overhaul (RFO), a government-wide effort to modernize the Federal Acquisition Regulation. The initiative is intended to streamline procurement, reduce unnecessary regulatory burden, and make federal acquisitions more efficient.

Although many proposed revisions are still under development, contractors should expect procurement procedures, solicitation language and contract administration requirements to continue evolving throughout 2026. 

Recommended Actions 

• Monitor FAR Council announcements. 

  
  

• Review internal procurement and contract administration procedures. 

  
  

• Train contract management personnel on new acquisition requirements. 

Resources 

• Acquisition.gov – Revolutionary FAR Overhaul (RFO) -

  https://www.acquisition.gov/far-overhaul 

  
  

• GSA News Release – Revolutionary FAR Overhaul Initiative -

  https://www.gsa.gov/about-gsa/newsroom/news-releases/gsa-omb-nasa-dod-launch-revolutionary-far-overhaul-website-05062025 

  
  

• GSA Acquisition Policy Library & Resources -

  https://www.gsa.gov/policy-regulations/policy/acquisition-policy/acquisition-policy-library-and-resources 

  
  

Defense Procurement Reform 

The Department of Defense continues emphasizing faster acquisition timelines, improved contractor performance, and increased accountability across the defense industrial base.

Procurement reforms are designed to reduce acquisition delays while strengthening supply chain resiliency and contractor performance. Contractors supporting defense programs may experience updated performance metrics, accelerated procurement schedules, and increased expectations regarding delivery and production capacity. 

Recommended Actions 

• Review project management and contract performance metrics. 

  
  

• Strengthen subcontractor oversight. 

  
  

• Prepare for evolving reporting requirements. 

Resources 

• White House – Executive Order 14402: Promoting Efficiency, Accountability, and Performance in Federal Contracting -

  https://www.whitehouse.gov/presidential-actions/2026/04/promoting-efficiency-accountability-and-performance-in-federal-contracting/ 

  
  

Cybersecurity and CMMC Readiness 

Cybersecurity remains one of the highest compliance priorities for federal contractors. During the first half of 2026, the Department of Defense continued preparations for implementation of the Cybersecurity Maturity Model Certification (CMMC) program.

Although implementation timelines continue to evolve, contractors handling Federal Contract Information (FCI) or Controlled Unclassified Information (CUI) should not delay cybersecurity planning. Organizations seeking future DoD contracts should continue preparing for CMMC assessments and ensure implementation of required NIST security controls. 

Recommended Actions 

• Conduct cybersecurity gap assessments. 

  
  

• Review NIST SP 800-171 compliance. 

  
  

• Prepare documentation for future CMMC certification requirements. 

Resources 

• Department of Defense – Cybersecurity Maturity Model Certification (CMMC) -

  https://dodcio.defense.gov/CMMC/ 

  
  

• National Institute of Standards and Technology (NIST) Special Publication 800-171 -  

  https://csrc.nist.gov/pubs/sp/800/171/r3/final 

  
  

Increased Supply Chain Oversight 

Federal agencies continue placing greater emphasis on supply chain security, domestic sourcing, and vendor transparency. Contractors supporting national security and critical infrastructure projects should expect increased scrutiny of suppliers, subcontractors, and foreign sourcing risks. Supply chain resiliency has become an increasingly important factor in federal procurement decisions. 

Recommended Actions 

• Identify critical suppliers and subcontractors. 

  
  

• Evaluate foreign sourcing risks. 

  
  

• Maintain documentation supporting supply chain due diligence. 

Resources 

• SAM.gov – Federal Contract Opportunities and Entity Registration -

  https://sam.gov/ 

  
  

• Acquisition.gov – Federal Acquisition Regulation Resources -

  https://www.acquisition.gov/ 

  
  

Artificial Intelligence and Technology Procurement 

Federal agencies continue expanding investments in artificial intelligence, software modernization, and advanced technology solutions. As AI becomes more integrated into government operations, contractors should expect evolving acquisition requirements governing responsible AI use, cybersecurity, data rights, and software assurance. 

Technology contractors should closely monitor emerging procurement guidance as agencies establish consistent standards for AI-enabled products and services. 

Recommended Actions 

• Review software development and cybersecurity documentation. 

  
  

• Evaluate intellectual property and data rights provisions. 

  
  

• Monitor agency guidance regarding AI procurement requirements. 

Resources 

• Acquisition.gov – Federal Acquisition Regulation Updates -

  https://www.acquisition.gov/ 

  
  

• NIST Artificial Intelligence Resource Center (AIRC) -

  https://airc.nist.gov/ 

  
  

Changes to Federal Contractor DEI and Equal Employment Requirements 

The Administration continued implementing changes to diversity, equity, and inclusion (DEI) requirements for federal contractors. Executive Order 14398 directs agencies to remove certain DEI-related contract requirements and implement new contract language addressing unlawful discrimination.

As agencies update solicitations and contract clauses, contractors should expect continued changes in compliance expectations. It is important to note that while federal contractor obligations are changing, employers remain subject to federal and applicable state anti-discrimination laws. Requirements under Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) continue unless modified by future regulatory action. 

Recommended Actions 

• Review affirmative action, EEO, and DEI-related policies. 

  
  

• Monitor new solicitations and contract modifications for updated contract clauses. 

  
  

• Continue complying with all applicable federal and state employment laws. 

Resources 

• White House – Executive Order 14398: Addressing DEI Discrimination by Federal Contractors -  

  https://www.whitehouse.gov/presidential-actions/2026/03/addressing-dei-discrimination-by-federal-contractors/ 

  
  

• GSA Acquisition Letter MV-2026-02 – Implementation Guidance -

  https://www.gsa.gov/policy-regulations/policy/acquisition-policy/acquisition-policy-library-and-resources/acquisition-letter-mv202602-implementing-executive-order-eo-14398-addre 

  
  

• Acquisition.gov – FAR Implementation & FAR Overhaul Updates -  

  https://www.acquisition.gov/far-overhaul 

  
  

Looking Ahead 

The pace of federal contracting reform is expected to continue throughout the remainder of 2026. Many executive orders and acquisition initiatives will continue moving through agency implementation, FAR revisions, and contract modifications before becoming fully operational.

For small and medium-sized government contractors, the most effective strategy is to remain proactive. Regular reviews of employment policies, cybersecurity practices, supply chain management, and contract administration procedures can help reduce compliance risk while positioning organizations for future federal contracting opportunities. 

How C2 Essentials Can Help 

Federal contracting requirements continue to evolve, making proactive compliance more important than ever. As your HR and compliance partner, C2 Essentials monitors federal employment, payroll, and government contractor regulatory developments that impact your business.

Our HR, payroll, and compliance professionals help clients evaluate regulatory changes, update workplace policies, support multi-state compliance, assist with government contractor workforce obligations, and navigate evolving federal contractor requirements—allowing you to stay focused on delivering for your customers. 

Links to Federal Resources 

• White House – Executive Orders & Presidential Actions -

  https://www.whitehouse.gov/presidential-actions/ 

  
  

• Acquisition.gov – Federal Acquisition Regulation (FAR) & FAR Overhaul Updates -  

  https://www.acquisition.gov/ 

  
  

• General Services Administration (GSA) – Acquisition Policy Library & Resources -  

  https://www.gsa.gov/policy-regulations/policy/acquisition-policy/acquisition-policy-library-and-resources 

  
  

• Department of Defense – Cybersecurity Maturity Model Certification (CMMC) -  

  https://dodcio.defense.gov/CMMC/ 

  
  

• SAM.gov – Federal Contract Opportunities -

  https://sam.gov/

  
  

• National Institute of Standards and Technology (NIST) -

  https://www.nist.gov/ 

  
  

• U.S. Department of Labor – Office of Federal Contract Compliance Programs (OFCCP) -  

  https://www.dol.gov/agencies/ofccp