Modernizing Retrospective Regulatory Review

On January 3, 2025, Rep. Biggs (R-AZ) introduced HR67, the Modernizing Retrospective Regulatory Review Act. The bill was reported out of the House Oversight and Government Reform Committee on May 21, 2025, on a partisan 24-18 vote, and now awaits floor action. A companion bill, S644, has been introduced in the Senate. The bill mandates that OIRA issue guidance within 18 months on how federal agencies can 'identify, procure, and use technology (including algorithmic tools and artificial intelligence)' for retrospective regulatory review. It also requires OIRA to report within 180 days on the availability of regulations in machine-readable format.

The money trail is indirect but structural. HR67 is pure authorization — it does not appropriate new funds. Instead, it mandates that all federal agencies adopt specific technology tools, forcing them to reallocate existing IT budgets to comply. The Congressional Budget Office would score this as having no direct spending, but the practical effect is a mandated market shift. Federal IT spending was approximately $100B in FY2025; even a small percentage reallocation to AI regulatory tools represents hundreds of millions in new revenue for incumbent vendors. The mechanism is a procurement mandate, not a grant program — the money flows through standard GSA schedules and FedRAMP-authorized cloud contracts.

Structural winners are established federal IT contractors with FedRAMP-authorized AI platforms. Oracle ($ORCL) brings Oracle Government Cloud and OCI AI services. IBM ($IBM) leverages Red Hat OpenShift and watsonx, plus its federal consulting practice. Microsoft ($MSFT) has Azure Government with OpenAI integration already deployed across civilian and defense agencies. These three have the compliance maturity and existing contracts to capture the majority of new spending. Secondary beneficiaries include Palantir ($PLTR) and C3.ai ($AI), which have FedRAMP-authorized platforms but face higher barriers as specialized providers rather than general-purpose cloud platforms.

Real market data shows significant recent weakness across all three stocks. $ORCL closed at $162.32 on April 30, 2026, down 6.33% in the 7-day period and well off its 52-week high of $345.72. $IBM closed at $228.72, down 1.41% in the 7-day and down 5.64% over 30 days — trading near its 52-week low of $220.72. $MSFT closed at $405.61, down 4.48% in the 7-day period. These broad declines suggest sector rotation or macro concerns rather than company-specific issues, which means the structural tailwind from HR67 — still in early legislative stages — is not yet priced in. The 30-day changes show $ORCL up 10.34% and $MSFT up 9.57% despite the recent pullback, indicating these stocks have relative strength compared to $IBM.

Legislatively, the bill faces an uncertain timeline. It has cleared House committee but awaits floor scheduling — no date is set. The partisan vote (24-18) suggests unified Democratic opposition in the House. The companion bill S644 is in Senate committee with no action. Even if enacted, OIRA has 18 months to issue procurement guidance after passage, meaning actual procurement spending would likely begin in late 2028 or 2029. This is a medium-term structural driver, not an immediate catalyst.