Cybersecurity Executive Order Resets Compliance Expectations for Federal Contractors

According to an article by Alex Major & Erin Prest of McCarter & English, President Trump’s cybersecurity executive order from June 2025 sets a new standard for federal contractors, embedding rigorous risk, compliance, and technical obligations into procurement and software development processes. 

The order modernizes two earlier executive orders and outlines a fortified digital posture against emerging threats, including those posed by quantum computing and artificial intelligence. For compliance teams, this means cybersecurity is no longer a technical silo but a legal and operational imperative that determines market access.

Key provisions of the new cybersecurity executive order require federal systems to implement Transport Layer Security (TLS) 1.3 using FIPS 140-3–validated cryptographic modules by 2030. Meanwhile, post-quantum cryptography readiness becomes urgent as the NSA and CISA identify viable solutions by December 2025. The executive order also mandates that AI security vulnerabilities be documented, monitored, and mitigated, setting the stage for AI-specific clauses in future solicitations.

A “rules as code” pilot signals a shift toward automated, real-time compliance verification. This has profound implications for vendors, as they move away from interpretive checklists toward machine-enforced rules embedded directly into operational systems. IoT suppliers, too, face heightened scrutiny, with a 2027 deadline requiring devices to bear the US Cyber Trust Mark as proof of meeting federal standards.

Finally, the EO narrows cyber sanctions to foreign entities but warns that US companies with overseas suppliers must intensify due diligence to avoid liability. The enforcement spotlight now shines squarely on global supply chain security.

The authors highlight that this executive order redefines the cybersecurity compliance landscape and that federal contractors must act swiftly to align with secure-by-design principles, anticipate and prepare for quantum and AI-related mandates, and verify supplier integrity to avoid disqualification or enforcement risk.