Aron C. Beezley and Patrick R. Quigley | BuildSmart
As the regulatory environment continues to evolve in the new administration, U.S. government contractors are facing an increasingly complex array of legal challenges. Staying compliant and competitive requires close attention to several ongoing legal issues in addition to emerging ones:
1. Cybersecurity Compliance and CMMC Implementation
Cybersecurity remains a top priority for federal agencies, and the rollout of the Cybersecurity Maturity Model Certification (CMMC) 2.0 framework has brought new compliance expectations. Contractors must ensure that their information systems meet required security standards, or risk disqualification from Department of Defense (DoD) contracts. The phased implementation schedule means that affected contractors should act now to assess readiness and begin remediation efforts.
2. False Claims Act (FCA) Enforcement
The Department of Justice continues to actively pursue FCA cases, particularly in areas like procurement fraud, mischarging, and non-compliance with contract terms. Moreover, consistent with DOGE’s stated mandate of combatting fraud in federal contracting and grants, the Trump administration is likely to place additional emphasis on this tool. Contractors should invest in robust internal compliance programs and training to mitigate risks of whistleblower complaints and audits.
3. Supply Chain and Buy American Act Scrutiny
Recent executive orders and proposed regulations are reinforcing domestic sourcing requirements. Contractors must carefully assess their supply chains to ensure compliance with Buy American Act and Trade Agreements Act rules. Non-compliance could lead to severe adverse consequences, such as contract termination or debarment.
4. Labor and Employment Mandates
Despite changes in emphasis from the new administration, government contractors are still subject to a variety of federal labor requirements, including those related to minimum wage, paid leave, and workplace safety. With recent changes from the Department of Labor – such as updates to prevailing wage rules under the Davis-Bacon Act – contractors must remain agile in adapting to new mandates.
5. ESG and DEI Reporting Requirements
Environmental, social, and governance (ESG) initiatives are becoming increasingly important in federal procurement. Contractors may soon face new disclosure obligations related to sustainability and diversity, equity, and inclusion (DEI) practices. Proactively developing transparent ESG and DEI strategies can offer a competitive edge.
6. Bid Protests and Procurement Integrity
With increased competition for contracts, bid protests are becoming more common. Understanding protest procedures, debriefing and intervention rights, and ethical boundaries in the procurement process is crucial to protecting your interests and reputation.
Conclusion
The legal terrain for government contractors is shifting rapidly. A proactive approach to compliance, risk management, and strategic planning is essential for long-term success in this high-stakes sector.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.
Republished with permission. The article, “Key Legal Issues Facing U.S. Government Contractors in 2025
” was originally published on BuildSmart by Bradley Arant Boult Cummings LLP. Copyright 2025.