New OMB Memo Elevates Drive To Prioritize Commercial Procurements

Around this time last year, we published a Client Alert regarding the White House’s issuance of Executive Order (EO) 14271 entitled, “Ensuring Commercial, Cost-Effective Solutions in Federal Contracts.” At a high level, EO 14271 called for additional agency justification, including formal approval, for them to proceed with the procurement of non-commercially available products and services. It also required agencies to review open solicitations where non-commercial products or services were contemplated. 

On April 17, 2026, the Director of the Office of Management and Budget (OMB) issued a Memorandum providing additional guidance, “Appendix: Guidance to Implement Executive Order 14271 Ensuring Commercial, Cost-Effective Solutions in Federal Contracts,” to assist agencies in significantly increasing the acquisition of commercial products and services consistent with EO 14271.

The Appendix directs agencies to report to the OMB, by May 4, 2026, the total value and number of noncommercial contracts awarded between April 15, 2025, and September 30, 2025. For awards over $10 million, agencies are required to provide:

1. a description of the requirement, type of contract pricing, and total contract value, including base and all options;
2. the date of the next contract option; and
3. an explanation if a shift to a commercial solution is not planned at the next contract option, making references to market research and price analysis that support the conclusion to remain with the non-commercial solution.

In addition, the OMB stated that the report should also include the number of pre-award actions for non-commercial products in process on or after April 15, 2025, and to explain if a commercial solution is not planned, and also provide market research findings relied upon as justification for the agency’s decision to procure a non-commercial solution. Finally, the report is to “describe internal mechanisms put in place, including guidance, to ensure any future planned award of a non-commercial award is reviewed by the [agency’s senior procurement executive].”

The Appendix also directed agencies to confirm that the policy official serving as the competition advocate—an official mandated by statute (at 41 U.S.C. § 1705) to promote full and open competition in government contracting and acquisition of commercial products and services—is at the appropriate level of seniority. The Appendix goes on to outline the activities that the competition advocate should engage in to ensure successful implementation of EO 14271. Finally, the Appendix outlines steps to improve data collection regarding the acquisition of commercial products and services and provide guidance on agency consultation with OMB regarding planned non-commercial acquisitions.

At the time of EO 14271, we wrote that it had the potential to significantly alter the landscape for federal contractors, including in the aerospace and defense industry. The issuance of the April 2026 Memorandum provides further evidence of that and demonstrates this Administration’s continued emphasis on the prioritization of commercial items procurements. Indeed, this push has been seen government-wide, including, among other places, in the Federal Acquisition Regulation (FAR) rewrite and in numerous policy statements from the Department of Defense. 

For industry, the April 2026 Memorandum is a further reminder that industry needs to be well positioned to take advantage of government’s push to acquire commercially available products or services (or if they do not provide such services to equip themselves with the market research necessary to justify non-commercial procurements). Further, OMB’s call for option information raises the specter of a wave of terminations where it is determined that agencies should have, but did not, procure commercially available solutions. 

Given this, and the reporting deadline, we will continue to monitor developments in this space. Members of Butzel’s Aerospace and Defense Practice have extensive experience advising contractors on commercial items procurement.

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