Fact Sheet: President Donald J. Trump Enforces Requirement of Cost-Effective Commercial Solutions in Federal Contracts

4/15/2025

Fact Sheets

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Action Summary

Cost-Effective Procurement Enforcement: Directs agencies to use the competitive marketplace and private sector innovations, as mandated by the Federal Acquisition Streamlining Act of 1994 (FASA), to secure better value for taxpayers.
Review and Waiver Process: Requires contracting officers to assess all pending non-commercial contracts within 60 days and submit waivers—with detailed market research and price analysis—to justify departures from commercial solutions.
Reporting Requirements: Mandates agencies to report compliance and progress to the Office of Management and Budget within 120 days and annually thereafter.
Curbing Wasteful Expenditures: Aims to eliminate unnecessary spending by transitioning from custom products and services—which have historically led to increased costs and delays—to commercially available alternatives.
Promotion of Commercial Solutions: Reinforces previous executive orders that modernized defense acquisitions and consolidated federal procurement under the General Services Administration to reduce inefficiencies.

Risks & Considerations

The Executive Order emphasizes the use of commercially available products and services, which could impact Vanderbilt University’s ability to secure federal contracts for custom research and development projects. This may necessitate a shift towards more commercially viable research outputs.
There is a risk that the focus on cost-effective procurement could limit opportunities for innovative, custom solutions that are not readily available in the commercial market, potentially stifling unique research initiatives at Vanderbilt.
The requirement for agencies to justify non-commercial procurements with market research and price analysis could increase the administrative burden on Vanderbilt when seeking federal contracts, potentially delaying project timelines.
Vanderbilt may need to reassess its partnerships and collaborations with federal agencies to ensure alignment with the new procurement policies, which could affect ongoing and future projects.

Impacted Programs

Vanderbilt’s Research and Development Departments may need to focus more on projects that have clear commercial applications to align with the federal government’s procurement preferences.
The Office of Sponsored Programs might need to enhance its capabilities in conducting market research and price analysis to support waiver applications for non-commercial procurements.
Technology Transfer and Commercialization Offices could play a crucial role in identifying and promoting commercially viable research outputs to secure federal funding.
Vanderbilt’s collaborations with federal agencies for custom research projects may need to be reevaluated to ensure compliance with the new procurement policies.

Financial Impact

The shift towards commercially available solutions could impact Vanderbilt’s revenue from federal contracts, particularly for custom research and development projects that do not have immediate commercial applications.
Vanderbilt may need to invest in developing commercially viable research outputs to maintain its competitiveness in securing federal funding.
There could be increased opportunities for Vanderbilt to partner with private enterprises to develop and market commercial solutions, potentially opening new revenue streams.
The administrative costs associated with complying with the new procurement policies, such as conducting market research and price analysis, could increase operational expenses for Vanderbilt.

Relevance Score: 3 (The order presents moderate risks involving compliance and potential shifts in research focus.)

Key Actions

Vanderbilt’s Procurement Office should review its current procurement processes to ensure alignment with the Executive Order’s emphasis on cost-effective commercial solutions. This includes evaluating existing contracts and identifying opportunities to transition to commercially available products and services where feasible.
The Office of Federal Relations should monitor developments in federal procurement policies and engage with relevant agencies to understand how these changes might impact Vanderbilt’s federal contracts and funding opportunities. This proactive engagement can help mitigate risks associated with non-compliance and identify new opportunities for collaboration.
Vanderbilt’s IT Department should assess its current IT procurement strategies to identify potential cost savings by adopting commercial off-the-shelf solutions. This aligns with the Executive Order’s focus on reducing unnecessary expenditures and leveraging private-sector innovations.
The Research Administration Office should conduct market research and price analysis for any non-commercial procurements to justify their necessity and ensure compliance with the new federal guidelines. This will be crucial in maintaining eligibility for federal research funding.

Opportunities

The Executive Order presents an opportunity for Vanderbilt’s Business School to develop case studies and research on the impact of commercial solutions in federal procurement. This research can provide valuable insights into cost-saving strategies and enhance the university’s reputation as a thought leader in public sector management.
Vanderbilt can capitalize on the increased focus on commercial solutions by partnering with private enterprises to develop innovative products and services that meet federal needs. This could include joint research initiatives and collaborative projects that align with the university’s strategic goals.

Relevance Score: 3 (Some adjustments are needed to processes or procedures to align with the Executive Order’s emphasis on commercial solutions.)

Average Relevance Score: 2.6

Timeline for Implementation

60 days – Agency contracting officers are required to review all pending contracts for non-commercial products or services and submit proposed waivers within this period.
120 days (and annually thereafter) – Federal agencies must submit compliance reports to the Office of Management and Budget detailing adherence to FASA and progress on implementing the policies.

Shortest timeline for directive: 60 days (falls within the 60-89 day range).

Relevance Score: 3

Impacted Government Organizations

Office of Management and Budget (OMB): Receives reports from agencies on compliance with FASA and oversees the implementation of cost-effective procurement practices, ensuring that commercial solutions are prioritized in federal contracts.
Agency Contracting Officers (across Federal Agencies): Tasked with reviewing all pending contracts involving non-commercial products and services, these officers must secure waivers by providing market research and price analyses, impacting procurement operations within their respective agencies.
General Services Administration (GSA): Previously designated for consolidating federal procurement, the GSA’s role in streamlining acquisitions is reinforced by the emphasis on commercial solutions in the current directive.

Relevance Score: 2 (Three key federal entities, including both oversight and operational agencies, are impacted by the directive.)

Responsible Officials

Agency Contracting Officers – Tasked with reviewing pending contracts for non-commercial products or services and submitting written waiver requests accompanied by market research and price analysis.
Office of Management and Budget (OMB) – Responsible for receiving and evaluating the compliance reports from agencies regarding the procurement directives.

Relevance Score: 2 (The directives primarily affect mid-level management, specifically contracting officers and administrative staff within agencies.)