Massachusetts aims to be the “cornerstone of the defense industry,” with Governor Maura Healey announcing nearly $47 million in government funding for defense-related projects. Last year, the Department of Defense ranked Massachusetts ninth out of the top ten states in total Defense spending in FY2023, and the state is aiming
Continue Reading Massachusetts Seeks to Expand Defense Footprint with Nearly $47 Million in New ProjectsExpired: SBIR/STTR and DPA Authorities in Limbo
Two cornerstone authorities for federal contracting quietly expired on September 30, 2025, creating ripple effects that contractors—small and large—cannot afford to overlook. The Small Business Innovation Research/Small Business Technology Transfer (“SBIR/STTR”) programs, commonly known as “America’s Seed Fund” for their role in fueling early-stage innovation, and the Defense Production Act (“DPA”), the backbone of the government’s ability to prioritize contracts and strengthen the industrial base, both lapsed at the close of the fiscal year. Although lawmakers have floated temporary or long-term fixes in pending legislation, nothing has yet been enacted. The simultaneous government shutdown further complicates the picture, making new awards unlikely in the near term and magnifying uncertainty for contractors who rely on these authorities.Continue Reading Expired: SBIR/STTR and DPA Authorities in Limbo
July 2025 Cybersecurity Developments Under the Trump Administration
This is the sixth blog in a series of Covington blogs on cybersecurity policies, executive orders (“EOs”), and other actions of the Trump Administration. The fifth blog is available here and our initial blog is available here. This blog describes key cybersecurity developments that took place in July 2025.
Continue Reading July 2025 Cybersecurity Developments Under the Trump AdministrationOne Big Beautiful Bill Act makes $150B investment in Defense
Launching 150 billion euro for defense and technology
On May 29, 2025, the European Union established its new €150 billion defense fund through the Security Action for Europe (SAFE) regulation. The European Commission will soon launch a call for interest for SAFE loans and EU Member States will have up to two months to submit their
Continue Reading Launching 150 billion euro for defense and technologyGAO: DCAA Built a Valuable Bench of Independent Public Accountants, Now What?
The Government Accountability Office (“GAO”) released a report on the Defense Contract Audit Agency’s (“DCAA”) past and future use of private-sector, independent public accountants to augment its auditor workforce. The initiative—approved under Section 803 of the Fiscal Year (“FY”) 2018 National Defense Authorization Act (“NDAA”)—began in fiscal year 2020 and
Continue Reading GAO: DCAA Built a Valuable Bench of Independent Public Accountants, Now What?Rearming Europe with Trusted Partners
In March 2025, the European Union published a white paper for European Defense Readiness 2030, which identifies defense needs and envisions a massive €800 billion four-year “ReArm Europe” investment plan. This initiative is a significant step change from the EU’s prior defense industrial strategy and earlier funding programs.
Rearming Europe would be financed by €150 billion in EU common debt made available as loans to Member States and €650 billion in national spending that EU fiscal rules would not constrain. This new package is intended to support EU Member State efforts to ramp-up defense capabilities and, if implemented, it would effectively double the overall amount of defense spending in Europe. Covington is working with clients in defense industry sectors across the wider West to maximize business opportunities created by this new funding.
Unleashing Europe’s Defense Potential
Given the “rapid deterioration of the geopolitical context and rising tensions,” the white paper pledges to unleash the EU’s resources and latent industrial and technological power on defense. It aims to swiftly increase support for Ukraine and deter Russia’s further aggression, while reducing dependency on U.S. military support. Further, it paves the way to tackle long-term security threats such as the “systemic” challenge posed by China and growing hybrid threats.
The EU seeks to support collaborative capability development among Member States, to enhance coordination and generate economies of scale. Here, joint procurements will be a privileged tool, notably by setting up a European Military Sales Mechanism. This mechanism will support manufacturing capabilities and deliver more complex projects through aggregated demand and increasing predictability for the sector. To do so, it will incentivise long-term common procurements, as envisioned also by the European defense common procurement act.
In the near-term, investments and procurements on defense industrial capabilities will focus on rebuilding Europe’s depleted stocks of military hardware and equipment. Key capability domains include air and missile defense, artillery systems, ammunition and missiles, drones and counter-drone systems, military mobility, artificial intelligence, quantum, cyber & electronic warfare, strategic enablers and critical infrastructure protection.
To quickly expand its defense capabilities, Europe is also exploring strengthening its defense industrial collaboration with trusted partners such as the Republic of Korea, Norway, and Japan (with which the EU signed Security and Defence Partnerships last year), as well as its traditional allies and partners, such as the United Kingdom and the United States.Continue Reading Rearming Europe with Trusted Partners
Trump Administration Issues Executive Order Aimed At Modernizing Defense Acquisitions And Spurring Innovation
On April 9, 2025, President Trump issued an Executive Order (“EO”), “Modernizing Defense Acquisitions and Spurring Innovation In the Defense Industrial Base,” that may have significant implications for federal government contractors doing business with the Department of Defense (“DoD”), and particularly those with touchpoints to Major Defense Acquisition Programs (“MDAPs”).
The EO requires DoD to take a number of actions, including:
- Within 60 days (i.e., June 8th), the Secretary of Defense must submit to the President a plan to reform the DoD acquisition process to eliminate inefficiencies. The plan must prioritize commercial solutions and the use of Other Transactions Authority (“OTA”) agreements and Rapid Capabilities Office mechanisms. The plan must also eliminate redundant tasks and approvals, centralize decision-making, and incorporate effective risk management for all acquisition programs through a governance structure referred to as a Configuration Steering Board.
- Under no specified timeline, DoD is generally directed to revise internal regulations and implementation guidance — including the DoD Financial Management Regulation and the Defense Federal Acquisition Regulation Supplement — utilizing the principle from the “Unleashing Prosperity Through Deregulation” EO (Jan. 31, 2025) that for every new regulation proposed, ten existing regulations should be repealed.
- Within 90 days (i.e., July 8th), the Secretary of Defense must review all MDAPs and consider for “potential cancellation” programs that are: (1) more than 15% behind schedule; (2) more than 15% above cost; (3) “unable to meet key performance parameters”; or (4) otherwise not aligned with DoD mission priorities. Following this review of MDAPs, the Secretary of Defense will conduct a similar review for all remaining major systems.
- Within 120 days (i.e. August 7th), the Secretary of Defense, in collaboration with the Military Departments, must propose a plan to overhaul the defense acquisition workforce by restructuring performance metrics, assessing workforce sizing requirements, and deploying expert-led field training teams to enhance familiarity with innovative acquisition authorities. These reforms are intended to incentivize prudent risk-taking and expand the workforce’s fluency in commercial solutions and adaptive acquisition strategies.
- Within 180 days (i.e., October 6th), the Secretary of Defense, acting through the Deputy Secretary of Defense, the Secretaries of the Military Departments and the Joint Chiefs of Staff, must complete a comprehensive review of the Joint Capabilities Integration and Development System (“JCIDS”), with the aim of streamlining and accelerating acquisition.[1]
We address the EO’s directives for acquisition process reform and MDAP review in greater detail below. Continue Reading Trump Administration Issues Executive Order Aimed At Modernizing Defense Acquisitions And Spurring Innovation
Trump Administration Issues Executive Orders that Seek to Shape CHIPS Program and Promote Domestic Mineral Production
President Trump recently issued two separate Executive Orders (EOs) that will have implications for how federal agencies seek to promote the administration’s goal of attracting domestic and foreign investment to industrial projects in the United States, with particular implications for the semiconductor and critical minerals industries.
- An EO on March 31st establishes an “Investment Accelerator” office within the Department of Commerce that will be responsible for overseeing the implementation of the CHIPS Program—including the negotiation of agreements under the CHIPS Act. This office will also provide technical and regulatory support for investors, and seek to facilitate research collaborations between private industry and national labs.
- An earlier EO issued on March 20th seeks to mobilize federal lending and leasing authorities at the Department of Defense (DoD), the U.S. International Development Finance Corporation (DFC), and other federal agencies to support the development of domestic critical mineral projects. Per an accompanying fact sheet, the White House is taking a broad interpretation of covered minerals under this March 20th Order and will seek to include materials such as coal.
Both EOs are notable efforts by the White House to align federal spending and financial assistance programs with the Trump Administration’s priorities, which have variously included calls to promote self-sufficiency in critical materials and promoting “energy independence” and “energy dominance.” These efforts come against a backdrop under which the Administration is also pursuing the use of tariffs to promote U.S. manufacturing, and taking steps to review and in some cases modify or terminate infrastructure or energy-related grants from the Biden-era. More details are provided below. Continue Reading Trump Administration Issues Executive Orders that Seek to Shape CHIPS Program and Promote Domestic Mineral Production
U.S. Federal and State Governments Moving Quickly to Restrict Use of DeepSeek
Last month, DeepSeek, an AI start-up based in China, grabbed headlines with claims that its latest large language AI model, DeepSeek-R1, could perform on par with more expensive and market-leading AI models despite allegedly requiring less than $6 million dollars’ worth of computing power from older and less-powerful chips. Although some industry observers have raised doubts about the validity of DeepSeek’s claims, its AI model and AI-powered application piqued the curiosity of many, leading the DeepSeek application to become the most downloaded in the United States in late January. DeepSeek was founded in July 2023 and is owned by High-Flyer, a hedge fund based in Hangzhou, Zhejiang.
The explosive popularity of DeepSeek coupled with its Chinese ownership has unsurprisingly raised data security concerns from U.S. Federal and State officials. These concerns echo many of the same considerations that led to a FAR rule that prohibits telecommunications equipment and services from Huawei and certain other Chinese manufacturers. What is remarkable here is the pace at which officials at different levels of government—including the White House, Congress, federal agencies, and state governments, have taken action in response to DeepSeek and its perceived risks to national security.
Federal Government-Wide Responses
- Bi-Partisan Bill to Ban DeepSeek from Government Devices: On February 7,Representatives Gottheimer (D-NJ-5) and LaHood (R-IL-16) introduced the No DeepSeek on Government Devices Act (HR 1121). Reps. Gottheimer and LaHood, who both serve on the House Permanent Select Committee on Intelligence, each issued public statements pointing to grave and deeply held national security concerns regarding DeepSeek. Rep. Gottheimer has stated that “we have deeply disturbing evidence that [the Chinese Communist Party (“CCP”) is] using DeepSeek to steal the sensitive data of U.S. citizens,” calling DeepSeek “a five-alarm national security fire.” Representative LaHood stated that “[u]nder no circumstances can we allow a CCP company to obtain sensitive government or personal data.”
While the details of the bill have not yet been unveiled, any future DeepSeek prohibition could be extended by the FAR Council to all federal contractors and may not exempt commercial item contracts under FAR Part 12 or contracts below the simplified acquisition (or even the micro-purchase) threshold, similar to other bans in this sector. Notably, such a prohibition may leave contractors with questions about the expected scope of implementation, including the particular devices that are covered.Continue Reading U.S. Federal and State Governments Moving Quickly to Restrict Use of DeepSeek