FEDCON Outlines New Federal AI Procurement Rules for Contractors

Guidance highlights mandatory disclosures, testing requirements, and security frameworks for government AI systems.

Apr. 2, 2026 at 12:34pm

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FEDCON, a government contracting advisory firm, has released a comprehensive report detailing the profound impact of new federal artificial intelligence (AI) regulations on current and future government contracts. The report asserts that AI is no longer a niche technology, but is becoming standard operational infrastructure for federal agencies, requiring contractors to understand, work alongside, and strictly comply with emerging procurement rules.

Why it matters

These new AI procurement rules will have a significant impact on government contractors, especially small businesses and defense suppliers, who must now navigate stricter compliance, mandatory disclosures, and rigorous testing requirements to win and manage federal contracts involving AI systems.

The details

The report primarily focuses on OMB Memorandum M-25-22, which dictates how federal agencies buy and manage AI systems. Key mandates include strict protection of government data, clear intellectual property rights, mandatory pre-award testing, unexpected disclosure requirements, "Buy American" preferences for AI, and ongoing monitoring of AI system performance.

  • The new rules apply to all new solicitations issued after September 30, 2025.
  • The Department of War must submit a comprehensive AI implementation plan to Congress by June 16, 2026.

The players

FEDCON

A premier advisory firm specializing in government contracting that has released a comprehensive analysis detailing the impact of new federal AI regulations on government contracts.

Office of Management and Budget (OMB)

The federal agency that issued Memorandum M-25-22, which dictates how federal agencies buy and manage AI systems.

Department of War

Required to submit a comprehensive plan for AI implementation to Congress by June 16, 2026.

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What they’re saying

“For small business contractors, this means the agencies you work with are already using AI internally. They are going to expect their contractors to understand it, work alongside it, and in many cases, comply with new rules about how AI is used in contract performance.”

— FEDCON, Report

What’s next

FEDCON advises defense contractors to start preparing for heightened AI-specific security requirements immediately, as the Department of War is required to submit a comprehensive plan for AI implementation to Congress by June 16, 2026.

The takeaway

These new federal AI procurement rules will have a significant impact on government contractors, requiring them to navigate stricter compliance, mandatory disclosures, and rigorous testing requirements to win and manage contracts involving AI systems. Small businesses and defense suppliers, in particular, must proactively prepare to work alongside AI as it becomes standard operational infrastructure for federal agencies.