Ensuring Commercial, Cost-Effective Solutions in Federal Contracts
This Executive Order, signed April 15, 2025, directs federal agencies to prefer commercially available products and services whenever practicable, and to tighten oversight when agencies propose buying custom or government-unique solutions. Its stated goal is to reduce unnecessary taxpayer spending and speed adoption of private-sector innovations by making agencies justify why a non-commercial (custom) purchase is needed and by requiring senior procurement officials and OMB to vet those justifications. Practically, the order requires quick reviews of pending non-commercial solicitations, sets short deadlines for internal approvals, and mandates agency reporting to the Office of Management and Budget (OMB). It reinforces existing law (including the Federal Acquisition Streamlining Act of 1994) but does not change statutory authorities or create private rights of action. The order could lower costs and accelerate procurement of commercial technology, but it may also add review steps and create tensions where uniquely tailored or classified solutions are genuinely necessary.
Key Points
- 1Preference for commercial items: Agencies must, “to the maximum extent practicable,” procure commercially available products and services (including items that can be modified) instead of custom-built solutions. (References FASA.)
- 2Rapid review of open solicitations: Within 60 days agencies must have contracting officers identify all open solicitations and notices that seek non-commercial products or services and consolidate them into proposed applications explaining why a non-commercial purchase is required.
- 3Approval authority review and remedies: The agency’s senior procurement official (the “approval authority”) has 30 days after receiving a proposed application to assess whether the market research and price analysis satisfy legal requirements, return or correct deficient submissions, and recommend pursuing commercial options where appropriate.
- 4Oversight on future non-commercial procurements: Before soliciting a non-commercial product or service, the contracting officer must submit detailed justification (including market research and price analysis) to the approval authority, which must approve or deny it in writing. OMB (in consultation with the Administrator for Federal Procurement Policy) may be asked to advise.
- 5Reporting and limits: Agencies must report to OMB within 120 days and annually thereafter on compliance and progress. The order is to be implemented consistent with law and appropriations and does not create enforceable legal rights against the government.