Ensuring Commercial, Cost-Effective Solutions in Federal Contracts

4/16/2025

Executive Orders

View Original

Action Summary

Purpose: Eliminate unnecessary taxpayer expenditures by replacing custom, non-commercial procurements with cost‑effective commercial solutions.
Policy Implementation: Federal agencies are directed to procure commercially available products and services to the maximum extent practicable, in line with the Federal Acquisition Streamlining Act of 1994 (FASA).
Key Definitions:
- Agency: Includes executive departments, military departments, independent establishments, and wholly owned Government corporations.
- Approval Authority: Senior procurement executive responsible for managing the agency’s acquisition policies.
- Contracting Officer: As defined in 48 C.F.R. 2.101.
Review of Pending Actions:
- Within 60 days, contracting officers must consolidate and review solicitations for non‑commercial products/services.
- Each application must include detailed market research and price analysis to justify non‑commercial procurements.
- Approval authorities will assess these applications within 30 days, recommending the adoption of commercial solutions when appropriate.
Oversight of Non‑Commercial Procurements:
- Approval authorities must review detailed procurement proposals, including justification and market research.
- Input from the Director of OMB, in consultation with the Administrator for Federal Procurement Policy, is sought when needed.
Reporting Requirements: Agencies must report compliance with FASA and progress on procurement policy implementation to the Director of OMB within 120 days of the order and annually thereafter.
General Provisions:
- The order does not impair existing statutory authorities or the functions of the Director of OMB.
- Implementation is subject to applicable law and funding availability; no party gains enforceable rights under this order.

Risks & Considerations

The Executive Order mandates a shift towards commercially available products and services in federal contracts, which could impact Vanderbilt University’s ability to secure government contracts for specialized research and development projects. This may necessitate adjustments in how the university approaches federal procurement opportunities.
There is a risk that the increased emphasis on commercial solutions could limit funding for unique, custom-developed research initiatives that do not have readily available commercial counterparts. This could affect the university’s research output and innovation capabilities.
The requirement for thorough market research and price analysis could increase the administrative burden on university departments involved in federal contracting, potentially leading to delays and increased costs in proposal preparation.
Vanderbilt University may need to enhance its collaboration with commercial entities to align its research projects with the new federal procurement policies, ensuring continued access to federal funding.

Impacted Programs

Vanderbilt’s Research and Innovation Office may need to develop new strategies to identify and leverage commercial solutions that align with federal procurement requirements, ensuring compliance and competitiveness in securing contracts.
The Office of Sponsored Programs might need to provide additional support and training to faculty and staff on conducting market research and price analysis to meet the new federal contracting standards.
Vanderbilt’s Technology Transfer Office could play a crucial role in facilitating partnerships with commercial entities, helping to bridge the gap between university research and market-ready solutions.
The School of Engineering and other departments involved in government-funded research may need to reassess their project portfolios to align with the emphasis on commercially available solutions.

Financial Impact

The shift towards commercial solutions in federal contracts could lead to a reduction in funding opportunities for projects that require custom-developed products or services, potentially impacting the university’s research revenue.
Vanderbilt University may need to invest in additional resources to conduct comprehensive market research and price analysis, increasing operational costs associated with federal contract proposals.
There may be opportunities for Vanderbilt to secure funding for projects that can be adapted to commercial solutions, potentially leading to new collaborations and revenue streams.
The university’s ability to attract and retain top research talent could be affected if funding for unique, non-commercial research initiatives becomes more limited.

Relevance Score: 4 (The order presents a need for potential major changes or transformations of programs.)

Key Actions

Vanderbilt’s Procurement Office should review its current contracts and procurement processes to ensure alignment with the new executive order emphasizing the use of commercially available products and services. This may involve conducting market research to identify commercial alternatives to custom-developed solutions currently in use.
The Office of Federal Relations should monitor developments and guidance from the Office of Management and Budget (OMB) regarding compliance with the Federal Acquisition Streamlining Act (FASA) to ensure that Vanderbilt’s procurement practices remain compliant with federal policies.
Vanderbilt’s Research Administration should assess the impact of the executive order on research and development projects that rely on federal contracts, particularly those involving custom-developed products or services. This may require adjustments to project proposals to emphasize commercially available solutions.
The Legal Affairs Office should provide guidance on the implications of the executive order for existing and future contracts, ensuring that all legal and regulatory requirements are met in the procurement process.

Opportunities

The executive order presents an opportunity for Vanderbilt’s Innovation Center to collaborate with private enterprises in developing commercially viable solutions that can be marketed to federal agencies, potentially opening new revenue streams.
By aligning with the executive order’s emphasis on cost-effective solutions, Vanderbilt can enhance its reputation as a leader in efficient and innovative procurement practices, potentially attracting more federal contracts and partnerships.

Relevance Score: 3 (Some adjustments are needed to processes or procedures to align with the executive order’s emphasis on commercially available solutions.)

Average Relevance Score: 3.8

Timeline for Implementation

Within 60 days: Each agency’s approval authority must direct contracting officers to review all open solicitations and consolidate applications for non‑commercial products or services.
Within 30 days: After receiving the proposed applications, each approval authority must assess compliance with FASA and take corrective action.
Within 120 days and annually thereafter: Agencies must report to the Director of the OMB on compliance with FASA and progress in implementing the order.

The shortest timeline is 30 days, which falls into the 30–59 day compliance category.

Relevance Score: 4

Impacted Government Organizations

Federal Agencies (Executive Departments, Military Departments, Independent Establishments, and Government Corporations): This order mandates that every agency with contracting authority conduct reviews of procurement actions, thus impacting the entire spectrum of federal entities.
Office of Management and Budget (OMB): The Director of the OMB is required to receive detailed reports from agencies regarding their compliance with the Federal Acquisition Streamlining Act and to provide recommendations on non‑commercial procurements.
Office of Federal Procurement Policy (Administrator for Federal Procurement Policy): Serving as an oversight body within the procurement framework, this office is tasked with collaborating with the OMB to assess proposals involving non‑commercial product or service procurements.

Relevance Score: 5 (The directive applies across the entire Federal Government, impacting a broad range of agencies and oversight bodies.)

Responsible Officials

Agency Approval Authority – The senior procurement executive in each agency who is charged with directing the review of solicitations and ensuring compliance with the Federal Acquisition Streamlining Act.
Contracting Officers – Officials responsible for consolidating and submitting proposed procurement applications and performing the initial review of all solicitations for non-commercial products or services.
Director of the Office of Management and Budget (OMB) – Involved in receiving agency reports on compliance and, when consulted, assessing proposals for non-commercial procurements.
Administrator for Federal Procurement Policy – Provides consultative input to the Director of OMB regarding the validity and thoroughness of proposals when requested.

Relevance Score: 3 (Directives affect mid-level management, including agency approval authorities and contracting officers, with oversight from higher-level budget officials.)