United States: Update On Government Contracts Ramifications Of The Trump Administration

In December 2016, Jones Day issued " Government Contracts Ramifications of the Trump Election," a Commentary in which we discussed several likely impacts of the Trump Administration in the government contracts arena. Specifically, we discussed that the new Administration would:

  • Seek repeal of numerous Executive Orders affecting government contractors.
  • Reject some Obama Administration procurement policies, such as: the preference for fixed-price type contracts; the preference for lowest-price technically acceptable ("LPTA") evaluation schemes; and the preference against outsourcing government jobs to private companies.
  • Embrace Commercial Item contracting.
  • Increase government spending for defense, cybersecurity, infrastructure, and immigration-related activities.
  • Decrease spending by many agencies, including the Department of Education, Environmental Protection Agency, and Internal Revenue Service.
  • Focus on compliance issues such as rooting out fraud, waste, and abuse, and ensuring compliance with the Buy American Act and Trade Agreements Act.
  • Withdraw from, or renegotiate America's participation in, certain trade relationships, which could affect companies' supply chains.
  • Decrease the federal workforce, which could result in understaffing and undertraining within the acquisition workforce.
  • Appoint the members of the FAR Council, including the Office of Federal Procurement Policy ("OFPP") Administrator, Secretary of Defense, Administrator of National Aeronautics and Space Administration, and the Administrator of General Services Administration.

Since the issuance of our earlier Commentary, President Trump has taken several actions that provide additional insight into the impact his Administration will have on government contractors. President Trump's actions and statements in the last few months indicate the following potential impacts on government contractors:

Willingness to Participate in Contract Negotiations

On several occasions before his inauguration, then President-elect Trump made public statements criticizing what he saw as overspending on government programs. For example, he issued public statements criticizing the costs of two high-profile Air Force procurements—the F-35 fighter jet procurement and the Air Force One procurement. In both cases, the President's willingness to get involved in price negotiations resulted in the contractors agreeing to lower their prices.

President Trump views himself as a dealmaker, and he may seek to involve himself directly in negotiating procurements even now that he has taken office. Therefore, government contractors can expect that, especially with regard to high-profile procurements, the President may take a keen interest in the selection process and seek to negotiate price decreases—perhaps even after the award of the contract has been made.

However, President Trump's public criticism of acquisitions could have negative effects. First, some believe that such public criticism, which has had an impact on the stock prices of the contractors involved, could dissuade contractors from competing for certain government contracts, resulting in less competition. Second, the President's involvement could introduce risk to the government. If the President influences the selection of a contractor during the procurement process, companies could protest the award, alleging that the selection did not follow the evaluation criteria laid out in the solicitation. If the President influences the performance of a contract after award, this could potentially result in costly claims against the government for changes to the contract terms.

Repealing Executive Orders and Regulations

In our Commentary, we discussed that President Trump would seek to repeal several Executive Orders affecting government contractors. On January 20, 2016, the President's first day in office, he issued a Presidential Memorandum ordering a freeze on the federal regulatory process. The Memorandum orders agencies not to send any regulations to the Office of the Federal Register until the new Administration reviews and approves the regulation. Regulations that have already been sent to the Office of the Federal Register but have not yet been published are to be withdrawn, and regulations that have been published but have not yet taken effect are to have their effective dates postponed. This Memorandum does not affect the Executive Orders listed in our prior Commentary, as each of those Orders has already been implemented through the regulatory process. However, the President's Memorandum demonstrates his commitment to undoing many significant regulatory actions of the prior Administration. Contractors can expect that the President will soon begin ordering agencies to start the process of repealing or canceling a number of previously issued regulations that affect government contractors.

Decreasing the Federal Workforce

We discussed in our prior Commentary that President Trump could move to decrease the federal workforce. On January 23, 2016, he issued a Presidential Memorandum ordering an "across the board" hiring freeze for the executive branch. The Memorandum stated that no vacant positions existing at noon on January 22, 2017, may be filled and no new positions may be created. In addition, contracting outside the government to circumvent the hiring freeze is not permitted. The Memorandum also orders the director of the Office of Management and Budget, in consultation with the director of the Office of Personnel Management, to develop a long-term plan to reduce the size of the federal government's workforce through attrition. This Memorandum could have the unintended effect of exacerbating understaffing and undertraining within the federal acquisition workforce, potentially leading to more contracting delays and mistakes.

Move to Privatization

The new Administration has indicated that it believes that many functions currently performed by the government could be more efficiently and effectively procured through the commercial marketplace. The White House and several of President Trump's political nominees have indicated a preference for privatization in the areas of health care, housing finance, schools, prisons, and air traffic controllers. Therefore, contractors can expect potential opportunities in these areas.

Possibility of Introducing Additional Domestic Preferences

President Trump, through his campaign statements and statements on the White House's website, has made clear his belief that keeping jobs in America is key to the country's economic growth. In fact, in December 2016, then-President-elect Trump personally intervened when a company announced plans to move some of its jobs to Mexico. Now that he is in office, President Trump will likely seek to strengthen domestic preferences in government contracting. He may decide to do this through an Executive Order instructing agencies to consider the creation or retention of American jobs as an evaluation factor, or he may seek to introduce additional domestic preferences through legislation.

Increased Defense Technology Spending

President Trump has made several statements that indicate a willingness to increase defense spending. Specifically, the White House website reports that the Trump Administration "will pursue the highest level of military readiness" by ending the defense sequester and submitting a new budget to Congress with a plan to rebuild the military. In addition, the White House has stated that it will aim to develop a state-of-the-art missile defense system to protect against missile-based attacks from states like Iran and North Korea, and develop defensive and offensive cyber capabilities. In his confirmation hearing, now-Secretary of Defense James Mattis testified that President Trump's criticism of defense programs on Twitter shows the President's preference to acquire important defense technology at lower costs but does not indicate any lack of support for the acquisitions themselves.

Preference for LPTA

We discussed in our prior Commentary that the Trump Administration could move away from a preference for LPTA procurements in favor of trade-offs of price and technical factors. Since the issuance of our initial Commentary, the new Administration has sent mixed signals regarding its preferences. On one hand, Congress passed the National Defense Authorization Act for 2017, which contains a strong preference for best value, rather than LPTA, evaluation schemes in Department of Defense procurements. On the other hand, the President has taken several actions since the issuance of our Commentary that indicate a possible preference for LPTA procurements. President Trump's focus on the overall cost of defense technology procurements and criticism of programs that he perceives to be too expensive indicate that his top concern may be getting the lowest priced item or service that will accomplish the task, rather than paying more for additional features.

Possible Disruptions to Supply Chain Partners

In our prior Commentary, we discussed that President Trump would seek to withdraw from, or renegotiate America's participation in, certain trade relationships, which could impact companies' supply chains. President Trump has already carried through on one of his campaign promises by issuing a Presidential Memorandum on January 23, 2017, directing the United States Trade Representative to withdraw the United States as a signatory to the Trans-Pacific Partnership ("TPP") and to permanently withdraw the United States from TPP negotiations. The Memorandum also directs the Trade Representative to "begin pursuing, wherever possible, bilateral trade negotiations to promote American industry, protect American workers, and raise American wages."

Freeze on Contracting and Grants for Disfavored Agencies

According to news reports, shortly after he took office, President Trump instructed the Environmental Protection Agency to temporarily suspend the award of all new contracts and grants, including task orders and work assignments. It is unclear how long the freeze will last, or what the long-term impact on contracting with the EPA will be. However, this development raises the possibility that other agencies could experience similar freezes on contracting activity.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

J. Andrew Jackson
Andrew D. Ness
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions