The Latest News Federal Contractors Need to Know: Bid Protests By Incumbents, GSA Schedule Best Value and More

I read all the news, so you don’t have to.  Let’s start with tariffs and why it matters to federal government contractors. 

Russian and Indian Tariffs

The U.S. Senate passed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which authorizes the President to impose up to 100% tariffs on the top five buyers of Russian energy, which includes China and India. The bill now goes to the House.  U.S. companies rely heavily on China for electronic components, mechanical parts, data storage units, medical devices and furniture among other things.  Government contractors who have fixed price contracts with the federal government and have supply chain items from China and India will have to file Requests for Equitable Adjustments (“REAs”) or claims with their contracting officers to recover these increased costs. And you should.  These costs are unexpected and were not built into the fixed price costs.  

The Office of Management and Budget (“OMB”) Legislative Proposals  

SAT Increases 

OMB sent a legislative proposal to Congress in response to the FAR Rewrite.  That proposal increases the Simplified Acquisition Threshold to $500,000 for all acquisitions. for commercial products and services. The threshold would be further raised in phases to $10 million over 5 years; the limits for Special Simplified Procedures would be raised from $5 million to $50 million over the same period in order to streamline compliance and competition procedural requirements and accelerate time to mission. 

GSA Schedules Best Value 

Here is the good news under the OMB proposal before I get to the bad news. Their proposal would update the standard for the General Services Administration’s Multiple Award Schedules program to seek out the best value for the Government, rather than the “lowest overall cost alternative,” which may not account for administration costs, product quality, delivery time, and other factors. 

GAO Protests by Incumbents  

On the bad news front, OMB has proposed punitive actions on incumbent contractors filing what are deemed “frivolous protests” to extent their contracts. The OMB legislative proposal expands an existing Department of Defense rule (Section 875 of the FY2026 NDAA) to all civilian federal agencies. It allows contracting officers to withhold up to 5% of payments from an incumbent contractor during a Government Accountability Office (GAO) bid protest. The contractor forfeits these withheld funds if the GAO dismisses the protest for lacking a reasonable legal or factual basis. Ouch.  Read more about this here.

Cell Phone Searches for International Travelers Coming Back to the U.S. 

A recent reminder to international travelers that the contents of their phone may be subject to inspection when entering the United States came from the U.S. Court of Appeals for the Seventh Circuit. 

In United States v. Eta, No. 25-1891 (7th Cir. July 6, 2026), the court held that Customs and Border Protection (CBP) officers may conduct a manual search of a traveler’s cell phone at the border without a warrant or individualized suspicion under the well-established border search exception to the Fourth Amendment. 

That’s all I got! 

Don’t forget to attend my GovConversations live webinar on the first Thursday of each month at 4:00 ET.   

Best, 

Barbara