TWIG-C™ – May 11, 2026

May 11, 2026 | TWIG-C™

GOVCON INSIGHTS AND INFORMATION:

An IBM settlement is reshaping how contractors look at DEI compliance – A recent settlement involving IBM has drawn broad attention across the federal contracting community, drawing attention well beyond the specifics of a single company. For many contractors, the case raises questions about how workplace initiatives intersect with long‑standing employment and contracting rules.

Federal Contractors’ Guide to Navigating New DEI-Related Prohibitions in Executive Order 14398 and Federal Acquisition Regulation 52.222-90 – Executive Order 14398 (“EO 14398”) imposes significant new compliance obligations and risks on federal contractors and subcontractors. Among other requirements, contractors must agree to: (1) not engage in “racially discriminatory DEI activities”; (2) report to the government any “reasonably knowable” “racially discriminatory” activities by their subcontractors; and (3) provide access to books and records to show compliance. With the FAR Council’s newly minted mandatory contract clause, FAR 52.222-90, the government is poised to swiftly insert these requirements into new and existing contracts.

FAR Overhaul Continues: Government Doubles Down on DEI Enforcement with New Clause and Debarment Risk – On April 20, 2026, the Office of Federal Procurement Policy (“OFPP”) and the FAR Council released updated model deviations for FAR Parts 9, 12, 22, and 52 to implement Executive Order (“EO”) 14398, Addressing DEI Discrimination by Federal Contractors. These updates significantly expand the government’s enforcement toolkit, making compliance contractually required and specifically enforceable through contractual remedies, FAR Part 9 suspension and debarment, and the False Claims Act.

Army moving SBIR to focus on the whole vs. the parts – As soon as President Donald Trump signed the bill to reauthorize the Small Business Innovation Research and Small Business Technology Transfer programs, the Army pushed new opportunities out the door. Of the five new topics the service released in April, one was a prize competition and another was tied to experimentation. Zeke Topolosky, the Army’s program manager for the SBIR and STTR programs, said all the service had to do after the innovation efforts were shut down for six months was turn up the program instead of having to turn it back on.

A new executive order makes fixed‑price, performance‑based contracts the default across the federal government – A new executive order makes fixed‑price, performance‑based contracts the default across the federal government, requiring extra justification and senior approval when agencies want to do something else.

New Bills Would Eliminate WOSB Program – A bill recently introduced in the Senate, along with a companion bill introduced in the House of Representatives, would eliminate the federal government’s Women-Owned Small Business Program. If they became law, the bills would repeal the statutory authority underpinning the key components of the WOSB program. The repealed provisions would include the portions of the U.S. Code that establish a five percent WOSB prime contracting goal, require “other than small” prime contractors to consider WOSBs in their small business subcontracting plans and—perhaps most critically—that permit federal Contracting Officers to issue solicitations as WOSB set-asides and award WOSB sole source contracts. To top it off, the bills would prevent both federal agencies and prime contractors from even considering a company’s women-owned status in the award of a prime contract or subcontract.

Tribal-owned firms want answers about state of 8(a) program – The number of contract awards to 8(a) small businesses are down across the government. But Native American, Alaskan Native and Native Hawaiian-owned companies are feeling the brunt of the downturn. Through April awards to companies in Indian country have dropped by 26%, or $800 million, as compared to 2025. It’s not just contract dollars that’s concerning to native corporations; the Small Business Administration has slowed down the approval of new applications to the 8(a) program. SBA hasn’t processed an application since August and only approved about 65 new 8(a) firms in all of 2025.

Proposed CAS Threshold Increases- A Major Shift for Federal Contractors – The Cost Accounting Standards Board (CASB) has proposed a significant overhaul to CAS applicability thresholds — one that is clearly aimed at reducing compliance burdens, simplifying CAS administration, and expanding competition in the federal marketplace. If implemented, these changes would represent one of the most meaningful deregulatory CAS reforms in decades, particularly for growing mid-size contractors and nontraditional entrants.

GSA Restructures FAS to Support Procurement Consolidation – The General Services Administration (GSA) announced on Monday that its Federal Acquisition Service (FAS) reorganized into five portfolios and launched a new office focused on automation and artificial intelligence (AI) as part of a broader push to consolidate federal procurement. In a May 4 blog post, GSA Deputy Administrator Michael Lynch said the changes are aimed at strengthening FAS operations, improving outcomes, and increasing accountability.

The reorganization consolidates FAS operations into five new portfolios:

Office of Assisted Acquisition Services (Assist)
Office of Centralized Acquisition Services (Centralize)
Office of Acquisition Solutions Development (Create)
Office of Shared Services Delivery (Deliver)
Office of Business Optimization (Optimize)

DFARS PROPOSED RULE:

Defense Federal Acquisition Regulation Supplement: Mitigating Risks Related to Foreign Ownership, Control, or Influence (DFARS Case 2021-D011) – DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement sections of the National Defense Authorization Act for Fiscal Years 2020 and 2021 to mitigate risks related to beneficial ownership or foreign ownership, control, or influence. This proposed rule also implements elements of a DoD policy. Comments on the proposed rule should be submitted in writing on or before July 6, 2026, to be considered in the formation of a final rule.

OPPORTUNITIES:

DISA RFI: Virtualization Enterprise Software Solutions.
NATO RFI: IT Service Management Solution for Asset and Configuration Management Database.
USN RFI: Engineering Services and Supplies to Support AEGIS Weapon System.
Army RFI: Supply Chain Intelligence Prototype.
DAF RFI: EOD Support Services.
Army RFI: ITSS Recompete – Enterprise IT – Market Research.
FBI RFI: Evidence Collection Equipment & Services.
USDA RFI: Invoice Processing Platform.
NASA RFI: Artemis III Alternate Comm System.
CISA to re-compete cyber grant support under 8(a) program.
Draft SeaPort NxG Request for Proposal

TIPS FROM THE FLORIDA APEX ACCELERATOR:

New Bill Creates Government-wide Veteran-Owned Small Business Contracting Preference

A new bipartisan bill — the Contract Our Veterans Act of 2026 — has been introduced in both the House and Senate to establish a government-wide five percent prime contracting goal for veteran-owned small businesses. If enacted, the bill would give federal Contracting Officers the authority to set aside competitions for VOSBs and award sole source contracts to VOSBs across all agencies, not just the VA — putting the VOSB preference program on par with existing programs like SDVOSB, WOSB, 8(a), and HUBZone. Read the full breakdown of what the Contract Our Veterans Act means for veteran-owned small businesses and how it compares to previous legislative attempts.

Assigning NAICS Codes to Subcontracts

Prime contractors in federal contracting are responsible for assigning the appropriate NAICS code to each subcontract they issue—contrary to a common misconception that the NAICS code from the prime contract automatically flows down. For large businesses, this responsibility is explicitly required under FAR 52.219-9 and SBA regulations, which mandate selecting the NAICS code that best reflects the subcontract’s principal purpose. Failing to do so correctly can lead to inaccurate reporting toward small business subcontracting goals, especially when subcontract work falls under a different industry classification with a lower size standard. Small business prime contractors, while not required to maintain subcontracting plans, must still comply with limitations on subcontracting rules. These rules allow subcontracting to “similarly situated entities” (SSEs), but only if those entities qualify as small under the NAICS code assigned to the subcontract—not the prime contract. Misapplying the prime NAICS code in this context can result in improper SSE classification and potential noncompliance. Ultimately, both large and small primes must treat NAICS code assignment as a deliberate, subcontract-specific decision to stay compliant and accurate. Read the full article for a deeper dive and practical guidance on assigning the right NAICS codes to your subcontracts.

FREE TRAINING:

GovCon Roundup Live is a free monthly webcast hosted by Carroll Bernard and Steven Koprince of Govology. The webcast covers policy changes, legislative updates, and industry shifts that signal strategic opportunities for contractors to pivot, reposition, and stay one step ahead. Learn more about GovCon Roundup Live and register to attend future live sessions (with the opportunity for live Q&A).

Recent GovCon Roundup Live webcasts include:

Upcoming Presentations from PilieroMazza:

CONFERENCE: Small Business Panel: Navigating Today’s Marketplace Together, May 12, 2026, Isaias “Cy” Alba, IV

CONFERENCE: Public Sector Legal Briefing: Contracts, Compliance & What’s New, May 13, 2026, Jon Williams

TRAINING: SBA Regulatory Updates, May 19, 2026, Eric A. Valle
WEBINAR: The Buy American Act and Trade Agreements Act, May 28, 2026, Jacqueline K. Unger

CONFERENCE: Biggest Shifts in GovCon Law, June 10, 2026, Eric A. Valle

SEMINAR: AI Clauses in Federal Contracts: Managing Procurement Risk, Compliance, and Competitive Advantages, June 10, 2026, Ryan Boonstra

SEMINAR: SCA Unlocked, May 12, 2026, Sarah L. Nash

TRAINING: Labor Rules & Regulations: Federal Market Compliance, June 24, 2026, Nichole D. Atallah

CONFERENCE: Buying or Selling: Keys to Successful SDVOSB M&A Transactions, June 2, 2026, Isaias “Cy” Alba, IV