Comments to NYC Commission on Government Efficiency: Speeding Up Public Procurement

Author’s note: In May 2026, New York City Mayor Zohran Mamdani announced the appointment of the Commission on Government Efficiency, or COGE, a Charter Revision Commission tasked with making City government work better. Led by Chair Patrick Gaspard (see video below), COGE will examine how the New York City Charter can be amended to improve the City’s government. These comments were submitted to the July 6, 2026 hearing dedicated to procurement issues, held on Staten Island.

To the Members of the Commission on Government Efficiency:

Thank you for this opportunity to submit comments on the reforms to the New York City Charter being considered by the Mayor’s Commission on Government Efficiency. I write regarding the topic of today’s hearing, speeding up New York City’s public procurement.

My Background: I serve as the Lynn David Research Professor in Government Procurement Law at George Washington University Law School in Washington, D.C., one of the leading public procurement law programs in the world. I have taught at GW Law since 2002, including on state and municipal procurement law. My comments here reflect my own views and do not represent those of GW Law or any other institution.

I have extensive ties to New York City. I am a member of the New York State bar, and I served as a judicial clerk to Judge Lawrence W. Pierce of the U.S. Court of Appeals for the Second Circuit in Manhattan. My wife and I lived in New York for many years, as I practiced law there and she served as a dean of graduate schools of education in New York City.

American Bar Association (ABA) Model Procurement Code (MPC) – Materials

Model Procurement Code (MPC): I work on a number of procurement law initiatives, both nationally and internationally. I previously served as an advisor to the U.S. delegation in a sweeping reform of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Public Procurement. I also serve as the Academic Advisor to an ongoing reform of the 2000 American Bar Association (ABA) Model Procurement Code(MPC), which is coordinated by the ABA Public Contract Law Section, the National Association of State Procurement Officials (NASPO) and Partners for Public Good.

Since it was first adopted in 1979, the ABA Model Procurement Code has guided public procurement laws across the United States. According to the Model Procurement Code Revision Project more than 20 states, from New Mexico to South Carolina, have enacted legislation based on the MPC. Many other major governments – including New York City – have relied on the Model Procurement Code as a guiding standard to promote best‑value procurement and the ethical stewardship of taxpayer dollars.

Commission’s Potential Procurement Reforms: As the Commission’s preliminary report pointed out, the last major reform of the City’s charter in 1989 drew directly on the ABA Model Procurement Code. The Model Procurement Code was subsequently overhauled in 2000, and as noted is now being reformed again. Those changes to the Model Procurement Code may help inform the Commission’s proposed amendments to the chapter in the City’s Charter which addresses procurement.

Chairman Patrick Gaspard

The Commission’s preliminary report suggested a number of potential reforms to the City’s $50 billion contracting system in response to public concerns. Those reforms often intersect with changes considered under the Model Procurement Code and around the world.

Reducing Paperwork: The Commission’s preliminary report suggested that, to reduce burdens on small businesses and other vendors, the Commission may consider streamlining vendors’ qualification questionnaires. Because vendors typically work in broader markets, the City could draw on other governments’ initiatives to share contractor qualification information (including anti-corruption information and past performance data). The City, following a model being developed in the European Union, could use other governments’ qualification information to reduce vendors’ burdens while at the same time reducing the City’s own performance and corruption risks. The Open Contracting Partnership, among others, is working closely with governments across the world (and the United States, including Portland and Boston) to make procurement data publicly available and machine-readable – cornerstones to efficiency, accountability and a healthy public procurement system.

Eliminating a requirement for public hearings: The Commission suggested eliminating required public hearings before certain contract awards (see Section 326 of the Charter). If, as discussed above, the City follows the global trend towards open contracting – making critical procurement information publicly available – the current comment period will be far more efficient than public hearings.

Delegating authority to contracting officials: The Commission’s preliminary report recommended that the Mayor be permitted to delegate procurement approvals to agency chief contracting officers. This would echo a nationwide trend to giving contracting officials more authority, to allow them to innovate and to be more responsive to the needs of government users and the public. The Model Procurement Code’s current reforms are, at their core, driven by the advancing professionalization of procurement officials, and New York City could improve procurement outcomes by embracing that trend. In practical terms that means (among other things) investing in the professional advancement of procurement officials, through training offered by NASPO, NIGP, the National Contract Management Association (NCMA) and other professional training providers.

NYC Procurement – FY2025

Innovation and Procurement: The Commission’s preliminary report noted the need to reform procurement “to better match the challenge of acquiring effective technology, strengthening the City’s in-house roster of technologists, and breaking down IT barriers across City agencies and functions.” In the procurement community, this policy question breaks down into three inter-related components: (i) innovation in procurement (improved procurement processes to buy better technology); (ii) procurement of innovation (buying the best technology); and (iii) procurement for innovation (using public procurement to spur cutting-edge technologies in the broader economy). The Commission may want to consider reforms from each of these perspectives. Improving procurement processes to welcome new market entrants, for example, may make it easier for New York City to access new technologies and could boost high technology start-up firms in the City.

The Revolutionary FAR Overhaul: A First Step

Streamlining Reports: The Commission’s preliminary report suggests that the Charter might be amended to reduce unnecessary reports by City procurement officials. First, the Commission suggests that the Charter’s requirement that the Procurement Policy Board “submit an annual report . . . setting forth the professional standards for agency contracting officers . . . including any applicable certification process” is outdated and could be replaced by more modern methods of training and certification. The Trump administration’s “Revolutionary FAR Overhaul” has done extensive work in this area. Federal reformers have developed “practitioner albums” that can be readily updated to meet procurement officials’ evolving needs for training and guidance; New York City may want to follow a similar approach.

Second, the Commission suggested that the forward-looking plans and hearings required by the Charter for client services contracting could be streamlined. (This streamlining may be especially appropriate because the City’s procurement regulations separately require that, before a client services solicitation is issued, a “concept plan” be published.) Publishing plans for future procurement is a sound practice, but as the Guide to Enactment which accompanies Article 6 of the United Nations Commission on International Trade Law’s model law explains:

The purpose of [non-mandatory publication] is to highlight the importance of proper procurement planning for procuring entities and suppliers and contractors alike. The article recommends the publication of information on future procurement, which may contribute to transparency throughout the procurement process and eliminate any advantageous position of suppliers or contractors that might otherwise gain access to procurement planning phases in a non-transparent way.

Thus it makes sense to call for advance notice of distant procurements only when doing so would enhance the integrity of the competitive process or would provide essential transparency to vendors, client communities and the broader public.

Conclusion: Thank you again for this opportunity to submit comments on these important reforms. Should you or your staff have any questions, please feel free to reach out to me through the background link noted above.

Author’s Note: The July 7, 2026 supplemental comments below followed up on the Commission hearing, and focused on strategies for reducing delays in procurement.

Thank you for the opportunity to speak with the Commission at yesterday’s Staten Island hearing on the reforms to the New York City Charter being considered by the Mayor’s Commission on Government Efficiency, regarding speeding up New York City’s roughly $50 billion public procurement system. These supplemental comments respond to a question raised at yesterday’s hearing by Commission Chairman Patrick  Gaspard.

The majority of the testimony at yesterday’s hearing came from non-profit contractors that provide social services – such as housing for persons without homes – to the City of New York. Those contractors voiced one recurring complaint with the City’s procurement system: delays in contract awards and payments. When they presented, the City’s contracting officials also discussed extensive efforts that the City has made to shorten procurement time cycles. When my turn came to address the Commission, the Chairman put that same issue to me: what can New York City learn from other systems so as to reduce these procurement delays?

One very thorough study of procurement delays was done in 2024 by the U.S. Government Accountability Office (GAO) (GAO Report No. 24-106528) regarding delays in federal procurement. GAO focused on strategies used to reduce the time from solicitation to contract award, which is referred to as “procurement administrative lead time” (PALT).

In that study, GAO noted that the U.S. Office of Management and Budget had issued a policy memorandum in 2021 outlining a series of measures agencies can use to reduce PALT. While New York City has adopted many of those strategies (such as monitoring contracting delays across the enterprise), the Commission may wish to consider other innovative approaches, such as using vendor video presentations to streamline competitions. In a subsequent presentation on its report, GAO emphasized that these innovative strategies must be combined with agency-wide monitoring and accountability in order to reduce delays in the procurement process.

Thank you again for allowing me to submit supplemental comments on the Commission’s important work.

Paris — Teaching at U. Paris/Nanterre — OECD — Academic Network (Dec. 2025)

Professor Folliot-Lalliot’s Class at University of Paris – Nanterre

Teaching at the University of Paris – Nanterre

After the symposium on procurement-for-innovation in Paris on December 4, 2025, GW Law’s Professor Christopher Yukins again joined Professor Laurence Folliot-Lalliot’s class at the University of Paris-Nanterre on December 8-10 to offer an “Introduction to U.S. Procurement Law” (slides: Days 1-2 and Day 3).

Meeting at OECD on Procurement Updates

On December 11, 2025 professors from the academic network “Public Contracts in Legal Globalization” (including Professor Yukins) met with Paolo Magina and his procurement policy colleagues at the Organization for Economic Co-operation and Development (OECD) to discuss (among other things) potential updates to the OECD 2015 Procurement Recommendation.

Meeting of Public Contracts International Academic Network

Cité internationale universitaire de Paris

On Friday, December 12 professors from the “Public Contracts in Legal Globalization” network met, coordinated by Professor Laurence Folliot-Lalliot (University of Paris/Nanterre) and kindly hosted by Professor Stephane de la Rosa (Professeur de droit à l’Université Paris-Est Créteil (UPEC) – Chaire Jean Monnet), at the Cité internationale universitaire de Paris to discuss “Public procurement at a crossroads – Geopolitical changes, normative shifts” (La commande publique à la croisée des chemins – Transformations géopolitiques, mutations normatives).

Prof. Laurence Folliot-Lalliot and Prof. Stephane de la Rosa

Professor Daniel Schoeni (U. Dayton/GW Law) and Prof. Yukins presented on “America First Trade Policy and Trump Tariff Updates” (slides), as part of a broader panel on international trade and procurement led by Professors Laurence Folliot-Lalliot and Stephane de la Rosa. A complete program for the day’s international workshop is available here.

Related Resources

Tariff Exemption: Defense Items
Procurement-for-Innovation: Across Europe

Dutch Association for Procurement Law – 30th Anniversary Conference

GW Law’s Professor Christopher Yukins addressed the Dutch Association for Procurement Law (Nederlandse Vereniging voor Aanbestedingsrecht) in Ede, the Netherlands, on November 20, 2025 (slides) on procurement for innovation on both sides of the Atlantic (photo at right). The association was established in 1995 and celebrated its lustrum (30 years) at the conference. The association has 750 members who work as public officials, in law firms, in the academy, in the courts, in consultancies and across the private sector; the Dutch association is, in many ways, remarkably similar to the ABA’s Public Contract Law Section.

Professors Willem Janssen (University of Utrecht) and Sarah Schoenmaekers (Maastricht University & Hasselt University) (pictured at left) kindly hosted Chris Yukins. Professor Schoenmaekers will be joining GW Law’s December 3-5, 2025 symposia on procurement for innovation.

Photos credit: Willem Janssen

Zagreb Conference: Public Procurement – A New Way Forward 

Professor Marko Turudić of the University of Zagreb, in conjunction with Maja Kuhar, president of DKOM (the Croatian remedies/bid protest agency), launched an enormously successful public procurement conference in Zagreb on November 10-11, 2025 (LinkedIn post) — a conference they hope to repeat in future years. GW Law’s Professor Christopher Yukins addressed the Trump administration tariffs in public procurement. Distinguished speakers discussed emerging issues in bid remedies, artificial intelligence, international trade and environmental sustainability.

Procurement, Anti-Corruption and Professionalism Training in Argentina

On October 16, 2025, GW Law’s Professor Christopher Yukins took part online in a program for Argentine judges coordinated by distinguished GW alumna Genoveva Ferrero of the General Secretariat of Administration and Budget of the Judiciary of the City of Buenos Aires, “Programa Intensivo de Perspectivas Comparadas en Derechos Humanos, Justicia Penal y Contratación Pública,” an intensive program on comparative approaches to human rights, criminal law and public procurement. Professor Yukins spoke on “Lucha contra la corrupción y transparencia en la contratación pública” — the fight against corruption in public procurement. Slides

Victoria Christoff (GW Law)

Genoveva Ferrero also helped lead the 3-4 November 2025 Public Procurement Congress held at the Faculty of Law, University of Buenos Aires.

Victoria Christoff, professorial lecturer in law at GW, participated in the Congress, presenting on the current reforms of the U.S. federal procurement system. The panel, moderated by Barbara Fernandez Villa, the sub-secretary of the Cabinet of Ministers for the Republic of Argentina, also included Professor Andrea Sundstrand, professor of public procurement at the University of Stockholm, and a representative from the Office of Economics and Commerce from the European Union delegation in Buenos Aires. Ms. Christoff’s slides (in Spanish) are here.

Photo credit: Sope Williams LinkedIn Post

The Buenos Aires Congress was very much a meeting of procurement professors from around the world. In the photo at left: Andrea Sundstrand (Stockholm University), Sope Williams (Stellenbosch University), Annamaria La Chimia (U. Nottingham), Gabriella Racca (U. Turin), Genoveva Ferrero (organizer), Patricia Valcárcel (U. Vigo), Tünde Tátrai (Corvinus U.) and Victoria Christoff (GW Law).

Appearing by video recording (to facilitate translation), Professor Yukins contributed an online lecture at the Congress in which he assessed the United Kingdom’s Public Sector Fraud Authority — a unique initiative internationally to use classic compliance measures to reduce the risks of fraud and corruption in the public sector.

The panel, moderated by Paola Laurenzano, Procurement Coordinator, United Nations Development Programme (UNDP) Argentina, also included Viviana Mora, Head of the User Management Division of the Public Procurement and Contracting Directorate, ChileCompra, GW Law alumnus Jean-Jacques Verdeaux, Procurement Manager, Latin America and Caribbean Region, The World Bank, and Javier Dávila Pérez, Chief of the Financial Management and Procurement Division, Inter-American Development Bank (IDB). Professor Yukins’ recorded presentation appears below.

Open Contracting in ASEAN Nations: Conference and Report

GW Law Webinar Series 2025: Open Contracting Around the Globe

Shortly after GW Law’s worldwide webinar on open contracting, GW Law’s Professor Christopher Yukins joined a regional conference in Borneo, held in Kuching, the capital of the Malaysian state of Sarawak. That conference helped launch a report, prepared by Professor Yukins and GW Law students Anisley Sanchez and Ellen Rolda for the UN Office of Drugs and Crime (UNODC), on legal issues in open contracting in the ASEAN member states.

ASEAN was established in 1967 with the signing of the ASEAN Declaration by Indonesia, Malaysia, Philippines, Singapore and Thailand. Since then, Brunei Darussalam, Viet Nam, Lao PDR, Myanmar and Cambodia have joined, to make up what is today the ten member states of ASEAN. (Timor-Leste, the newest Member State, had not formally joined ASEAN at the time the study launched.)

Kuching — capital of Malaysia’s Sarawak state, Borneo (credits)

At a September 2025 regional conference in Kuching, Malaysia which helped launch the study, experts from around the world discussed the prospects for open contracting as an anti-corruption tool in the ASEAN nations. The conference outcomes document called for a strengthening of legal and policy frameworks, aligned with core open contracting principles of disclosure, participation, and accountability.

The forthcoming UNODC report is the next step – an in-depth look at what is needed, from a legal and regulatory perspective, to bring open contracting to the ASEAN member states.

Open contracting is a simple concept: it means making public procurement data both accessible (typically by posting it online) and machine-readable (so that the data can be readily scanned and assessed). As the Open Contracting Partnership explains, open contracting “consists of disclosure and citizen engagement throughout the entire procurement process,” which “increases competition, improves public service delivery, creates better feedback loops, and ensures better value for money.”

The report will assess the prospects for open contracting in the ASEAN nations by looking to ten factors highlighted in a landmark report, How can we legislate for open contracting? (2021), published by the Open Contracting Partnership:

  1. Set out clear principles for all public procurement procedures in a single piece of overarching legislation.
  2. Establish strong anti-corruption and conflict of interest provisions.
  3. Promote competition and provide clear safeguards in non-competitive procedures, such as those used in emergency procurement.
  4. Ensure clear requirements to publish information at all stages of the procurement process, and maintain a complete record in one location.
  5. Use digital platforms and open data standards to foster and increase transparency and accessibility to information about public procurement procedures.
  6. Enforce publication requirements, deadlines, and clearly manage exemptions.
  7. Create procedures for public participation and monitoring across the entire procurement cycle.
  8. Support an accessible and effective complaints procedure.
  9. Empower oversight authorities.
  10. Provide effective guidance and guidelines to make procurement processes accessible and user-friendly to government, private sector, and civic users or observers of the system.

Tariff Exemption: Defense Items

The U.S. Defense Department’s Exception to the Trump Tariffs | By Christopher R. Yukins

In largely unnoticed developments, both the U.S. Department of Defense and the Senate Armed Services Committee have signaled that, consistent with current law, items purchased by the Department of Defense (called the “Department of War” by the Trump administration) should be exempt from tariffs. Although the Senate legislative provision was ultimately eliminated from the National Defense Authorization Act (see House Rules Committee final text of the NDAA), the tariff exemption remains in the Defense Federal Acquisition Regulation Supplement (DFARS). If rigorously exercised, the exemption could vastly simplify tariff issues for both the Defense Department and its contractors.

Editor’s note: An April 2026 update on the Defense Department’s exception from tariffs, published by Lexxion, is linked above.

The Trump Tariffs

President Trump’s Reciprocal Tariffs — and the Procurement Exception

The Trump administration’s tariffs have been controversial worldwide. One open issue for the U.S. procurement community has been whether those tariffs would be applied to items purchased from abroad by the U.S. government — in essence, whether the government would have to pay higher prices due to its own tariffs.

An earlier posting explained the various federal procurement exceptions from tariffs built into U.S. law. Those exceptions have sometimes been difficult and uncertain to administer, however, which left open the risk that the Trump administration tariffs would drain resources from federal government procurement. The initiatives outlined below make it less likely that — at least with regard to Defense Department purchases — the Trump tariffs will apply to federal purchases.

Procedures for Defense Department Tariff Exemption

The procedures for duty-free entry of Defense Department supplies are explained in a July 2025 Defense Contract Management Agency (DCMA) presentation to the Defense Acquisition University (DAU), which included the following process chart:

The process is spelled out in the Defense Federal Acquisition Regulation Supplement (DFARS) clause DFARS 252.225-7013, in DFARS Subpart 225.9, and in DFARS Procedures, Guidance and Implementation (PGI) Subpart 225.9. The process, as the diagram above reflects, results in a certification from the Department of War that the supplies are entitled to duty-free entry under Section XXII, Chapter 98, Subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United States, which covers “Materials certified to the Commissioner of Customs by the authorized procuring agencies to be emergency war material purchased abroad.” Customs rulings under Item 9808.00.30 are here.

Defense Department Memo Confirming Exemption

In an August 25, 2025 Defense Department-wide memorandum, John Tenaglia, the Principal Director, Defense Pricing, Contracting, and Acquisition Policy, emphasized that existing Defense Federal Acquisition Regulation Supplement 225.901 (DFARS 225.901) exempts many Defense Department purchases of foreign supplies. “In accordance with DFARS 225.901,” noted the memorandum, “unless the supplies are entitled to duty-free treatment under a special category in the Harmonized Tariff Schedule,” or the contractor has already paid the duty, per DFARS 225.901 the Defense Department will issue duty-free entry certificates for:

  • End products and components from “qualifying” countries (which have reciprocal defense procurement agreements with the U.S. Department of Defense), and
  • End products (but not components) that are “eligible products,” i.e., come from nations that have free trade agreements with the United States (such as the WTO Government Procurement Agreement), and
  • “Other foreign supplies for which the contractor estimates that duty will exceed $300 per shipment into the customs territory of the United States.”
Trump Administration Tariffs. Source: Atlantic Council

As was discussed above, normally the procedures for applying duty-free treatment to Defense Department procurements are set forth in DoD guidance, PGI Subpart 225.9. The August 2025 memorandum went further, and said that “contracting officers shall include or modify contracts” to include DFARS 252.225-7013 – Duty Free Entry (as prescribed in DFARS 225.1101(4)) for any “contracts or orders that anticipate delivery of end products, components, or materials imported into the customs territory of the United States.” The referenced clause, DFARS 252.225-7013, says that the exception is to extend to subcontracts, as well.

To “maximize the Department’s budget to meet warfighter needs,” the Defense Department memorandum said, contracting officers are to note in soliciting and contract materials “that any subsequent contract action will include the duty-free entry clause,” and that the “contractor should use the clause to assure that appropriate shipping documentation is used to prevent incurring duties.”

The Defense Department memorandum thus leveraged existing exceptions to make it clear that Defense Department supplies from abroad should be exempt from tariffs.

Editor’s note: As is discussed below, the policy memorandum on the Defense Department tariff exemption appears to have been removed from the DoD website; a copy, however, is archived here, and the memorandum is still indexed among acquisition policies.

In practical terms, these exceptions should cover a very large percentage of foreign end products and components purchased by the Defense Department. Reciprocal defense procurement agreements and the WTO Government Procurement Agreement will cover a broad range of supplies from abroad. For those products not covered by agreements, with baseline tariffs internationally of 10 percent (see map), it is likely that many remaining Defense Department procurements will meet the trigger of $300 in duties for exempting “other” foreign supplies. And because Defense Department procurements make up by far the largest share of U.S. federal procurement (see below), this Defense Department exception is likely to play a prominent role in U.S. government procurement.

Chart: U.S. Government Accountability Office

Senate’s Proposed NDAA Section 874: A Re-Exemption

Section 874 of the Senate version of the National Defense Authorization Act (NDAA) for FY 2026, S. 2296, would have reinforced the tariff exemptions for defense supplies. While it did not become law in the final version of the NDAA, Section 874 made clear the Senate’s ‘ support for the exemptions. Echoing the existing exemption under DFARS 225.901, the proposed NDAA Section 874 would have required the Defense Department to “issue a duty-free entry certificate” for covered supplies “imported pursuant to a procurement contract entered into by the Department of Defense.” The supplies would have to be (1) an end product or component imported from a country with which the United States has a memorandum of understanding for reciprocal procurement of defense items (commonly referred to as “reciprocal defense procurement agreements“), or (2) an “eligible product” under section 308 of the Trade Agreements Act of 1979 (19 U.S.C. 2518), i.e., an item covered by the WTO Government Procurement Agreement or other free trade agreements with the United States (list). Unlike the existing regulation, DFARS 225.901, Section 874 of the Senate NDAA would not have exempted other “foreign supplies for which the contractor estimates that duty will exceed $300 per shipment.”

Section 874’s exception would not have applied if the item was already duty-free under the Harmonized Tariff Schedule, or if the contractor had already paid U.S. duties on the product or component.

The Defense Department would be required to submit a report to Congress by January 30, 2026 on the impact of the Trump administration tariffs on the Defense Department, its contractors and its broader supply chain.

In the committee report which accompanied the Senate bill, the Senate Armed Services Committee (SASC) explained the concerns that underlay Section 874. The Committee “emphasize[d] that defense-related acquisitions from qualified sources under Reciprocal Defense Procurement  Agreements should remain exempt from any tariffs or trade restrictions,” and “urge[d] the Department of Defense and relevant interagency stakeholdersto preserve existing exemptions and ensure that future trade actions do not hinder defense procurement or compromise national security priorities.”

The Senate NDAA bill differed from the House of Representatives’ version of the bill, HR 3838, which passed the House on September 10, 2025, and which did not contain a similar provision. (The Senate bill was again offered as an amendment in the nature of a substitute by SASC Chairman Roger Wicker and Ranking Member Jack Reed on September 4, 2025; that version also included Section 874.)

Finalized National Defense Authorization Act and the Tariff Exception

In an important development, the conference report to the National Defense Authorization Act for Fiscal Year 2026 (the final version of the bill which reflected compromises between the House and Senate) removed Section 874 of the Senate version of the legislation, a provision which the Trump administration had opposed because the Senate provision had endorsed the U.S. Defense Department’s exception from the Trump administration tariffs. (The Joint Explanatory Statement which accompanied the conference report noted Section 874’s removal, at page 193.) The conference report has been approved by both houses of Congress.

The Joint Explanatory Statement which accompanied the compromise legislation also called for a report on the impact of tariffs and trade agreements. The Statement said:

The Senate bill contained a provision (sec. 874) that would require the Secretary of Defense to issue duty-free entry certificates in certain circumstances and require supply chain tracking.

The House bill contained no similar provision. The agreement does not include the Senate provision.

We note that it will be increasingly important for the Department of Defense to track the impact of economic fluctuations, including tariffs, supply chain disruptions, and inflation, on all major prime contracts entered into by the Department. Therefore, we direct the Secretary of Defense to provide a briefing to the congressional defense committees, not later than March 1, 2026, on the impact of significant economic fluctuations on Defense programs. Such briefing shall include:

(1) An assessment of cost increases to both the Department and contractors as a result of tariffs imposed since February 1, 2025, under the International Emergency Economic Powers Act (50 U.S.C. 1701) and section 232 of the Trade Expansion Act of 1962 (19 U.S.C 1862);

(2) An assessment of the effects of such tariffs on supply chains and lead times for major defense platforms; and

(3) A summary of agreements entered into under section 4851 of title 10, United States Code, and an assessment of the application of those [reciprocal defense procurement] agreements to the defense supply chain.

Importantly, the underlying regulations and guidance discussed above, used to exempt many Defense Department purchases from tariffs, remain in place. But the implementing Defense Department memorandum, though it is still indexed among Defense Department procurement policies, appears to have disappeared from the Defense Department’s website.

Revolutionary FAR Overhaul and Tariffs

Revolutionary FAR Overhaul: Third Round – FAR Parts 18 (Emergency Acquisitions), 39 (ICT Acquisitions) and 43 (Contract Modifications)

A longer-term question is whether the DFARS provisions which exempt Defense Department supplies from tariffs will be affected by the Trump administration’s “revolutionary” overhaul of the Federal Acquisition Regulation (FAR). The first step in the overhaul, now concluded, has been to issue proposed deviations from the FAR, part by part. The next step is to be a formal rulemaking to overhaul the FAR.

In that first step of the Revolutionary FAR Overhaul (RFO), the administration issued a revised version of FAR Part 25, which governs foreign acquisitions across all federal agencies. The overhauled FAR Subpart 25.9 would continue to recognize existing tariff exceptions, including the limited tariff exceptions afforded under the  Harmonized Tariff Schedule of the United States (HTSUS). The RFO does not address the Defense Department’s exemption (see above), which falls under the Defense Department’s supplement to the FAR. Thus the RFO (so far) would leave the Defense Department, but not civilian agencies, with a clear exemption from tariffs.

Extending the Tariff Exception to Civilian Agencies

Another open question is whether a tariff exception should be extended to civilian agencies as well. A tariff exception for civilian agencies is especially important because President Trump’s Executive Order 14240, Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement, centralizes the acquisition of common goods and services at the U.S. General Services Administration (GSA) — a civilian agency. If GSA is to serve as a lead purchaser for the Defense Department, a blanket governmentwide tariff exemption would be more efficient; otherwise, GSA (and other civilian agencies sponsoring governmentwide acquisition contracts) may need to distinguish between defense and civilian orders in managing tariffs, and civilian agencies may face much higher costs because of tariffs.

Extending the blanket tariffs exemption to GSA would also open the door to possible tariffs exemptions for state and local governments, through cooperative purchasing. For decades, GSA has taken the lead in opening its Multiple Award Schedule (MAS) contracts to state and local governments (and others) through cooperative purchasing. Because state and local governments procure using billions of dollars annually in federal grant funds, if those state and local governments enjoyed the same tariff exemption for cooperative purchases through the GSA contracts — at least for federally funded procurements — both the federal government and its state and local grantees could save substantially.

Conclusion

Existing regulations afford important tariff exceptions to Defense Department purchases from abroad. Those exceptions are intended to ensure that the Defense Department’s mission is not hampered by tariffs. A logical next question would be whether items purchased by civilian agencies — which are covered by free trade agreements, but not by reciprocal defense procurement agreements — would also be given a blanket exemption from the Trump administration tariffs. Another open question is whether state and local governments, if they purchased “cooperatively” through a federal contract, would also be able to take advantage of these tariff exceptions.

Related Resources

Webinar — Kolin and the New Protectionism: EU/US