The election of former President Trump has the potential to significantly change the federal procurement landscape. As with his first term, President-elect Trump will prioritize government efficiency, including plans to reduce the federal workforce and certain spending. Government contractors could see (1) reductions in the federal workforce; (2) disruptions in the procurement process, resulting in slower procurements; (3) increased reliance on Governmentwide Acquisition Contracts (GWACs), which may lead to fewer opportunities for small business set-asides; and (4) contracts in certain sectors—e.g., infrastructure, defense, and cybersecurity—likely remaining unaffected or presenting more opportunities, while other areas such as Education, diversity support, and a variety of other areas being cut substantially.
- Anticipated Federal Workforce and Spending Cuts
The Trump administration’s prioritization of efficiency will likely include cuts to the federal workforce and spending. Early in his first term, President-elect Trump issued Executive Order 31781, with the purpose of “improv[ing] the efficiency, effectiveness and accountability of the executive branch” by “reorganize[ing] governmental functions and eliminat[ing] unnecessary agencies,” agency components, and agency programs. Before that, he implemented a federal hiring freeze and ordered the Office of Management and Budget (OMB) to recommend a plan to reduce the federal workforce. While his recent election platform did not describe such efforts, President-elect Trump recently announced that Elon Musk and Vivek Ramaswamy will lead a Department of Government Efficiency (DOGE) with the purpose of “dismantl[ing] Government bureaucracy” and slashing excess regulations.
- A Slower Procurement Process
An across-the-board cut to the federal workforce and spending would decrease the procurement workforce. Such a reduction would likely have a detrimental effect on the efficiency of the procurement process due to fewer or less trained contracting officers. The procurement space has been focused on improving Procurement Administrative Lead Time (PALT)—the time from the issuance of a solicitation to the award of a contract or task order. That effort includes staffing priorities. In 2021, there were concerns about procurement staffing lags at agencies not keeping up with the growth in contracts, noting that the average lead time increased by 72% since 2016. The Office of Federal Procurement Policy (OFPP) prioritized ensuring agencies have adequate, trained personnel, reporting that the number of contracting officers is at its highest point in at least the last decade.[1] Earlier this year, it was reported that the median lead time for transactions between $250,000 and $50 Million decreased from 36 to 29 days, though lead times for transactions over $50 Million increased significantly.[2] It is difficult to see how a reduction in the procurement workforce would not increase lead times for procurements.
Alternatively, workforce reductions may be more targeted, disparately impacting certain agencies or programs and minimizing disruption to the procurement space. We can assume that a Trump administration will continue to award federal contracts. PALT is a measure of efficiency, and the reported decrease in PALT—at least, with respect to lower-value contracts—coincides with the increase in trained procurement personnel. While greater efficiency may be pursued through decreased regulation as well, the desired efficiency may also require that cuts to the federal procurement workforce be less drastic than those to other entities.
In any event, this anticipated reduction is not likely to occur prior to the fall of 2026, as President-elect Trump has given DOGE a deadline of July 4, 2026, to conclude its work in recommending cuts to regulations and personnel.[3]
- Increased Use of GWACs and Full and Open Contract Vehicles
The use of GWACs may increase in the pursuit of greater efficiency and lessen administrative burden. A GWAC is a “task-order or delivery-order contract for information technology established by one agency for Governmentwide use . . . .” Using this pre-competed contract helps an agency buy total IT solutions more efficiently and economically. There are three current programs (8(a) STARS III, VETS 2, and Alliant 2) and three agencies (DOD, DHS, OMB) issued policy memos during the former Trump and Biden administrations adopting and encouraging the use of GWACs. GWACs will be particularly useful in cybersecurity-related contracts, given President-elect Trump’s stated focus on protecting critical infrastructure from malicious cyber actors. OMB considers IT Services-first GWACs “to be Best-in-Class and [to] have a host of capabilities to meet cybersecurity needs,” noting that the STARS III, VETS 2, and Alliant 2 GWACs are all currently being leveraged to manage cybersecurity risks.
The possible consolidation of work to eliminate administrative costs could mean fewer small business set-asides. Combined with the SBA’s proposed “Rule of Two,” agencies may be able to easily avoid any set-aside requirements with large, consolidated procurements going to full and open-contract vehicles. On October 25, 2024, the SBA proposed a new rule that would apply the Rule of Two to multiple-award contract tasks and delivery orders. The rule requires an agency to “set aside the award for small businesses where there is a reasonable expectation of receiving offers from two or more small-business contract holders under the multiple-award contract that are competitive in terms of price, quality, and delivery.” Unfortunately, the proposed rule will allow agencies to develop requests for proposals specifically to avoid the rule by creating distinct small and large contracting vehicles. This approach renders the Rule of Two meaningless at the ordering level, even when its application is required.
- Anticipated Cuts Could Disparately Affect Certain Contracts
Prior-Trump administration’s actions and current stated priorities provide clues to where procurement opportunities may be cut and where they will remain. Contractors should be wary of current and planned procurements with, but not limited to, the Departments of Education and the Interior, IRS, EPA, HUD, and USDA. For example, in his prior administration, President-elect Trump relocated and made significant regulatory changes to the Interior’s Bureau of Land Management and HUD. While President-elect Trump stated that Project 2025 is not his policy platform, it does include significant changes to, or elimination of, multiple agencies noted. Combined with President-elect Trump’s prior actions and his focus on efficiency through workforce and regulatory reduction, these agencies and others could see lessened procurement opportunities.
There are, however, some continued opportunities while contractors await likely changes to the procurement space. The Trump administration will likely prioritize certain infrastructure projects, defense spending, and cybersecurity, leaving in place some current policies. In his first term, President-elect Trump prepared an infrastructure investment plan valued at $1 Trillion over 10 years. The plan was set to cover transportation, energy, water, and potentially broadband and veteran hospital infrastructure. While President-elect Trump made comments regarding cuts to the Inflation Reduction Act, some construction contractors believe those cuts will not apply to current large-scale construction projects. President-elect Trump calls for modernizing the military through investment in “cutting edge research and advanced technologies,” and “reviving our Defense Industrial Base.” President-elect Trump will also likely increase spending in DHS, particularly Customs and Border Protection, as he maintained a significant focus on immigration objections. Finally, in his first term, President-elect Trump focused on cybersecurity, developing the Cybersecurity Maturity Model Certification (CMMC), which was continued by President Biden. President-elect Trump’s current platform calls for the use of “all tools of National Power to protect our Nation’s Critical Infrastructure and Industrial Base from malicious cyber actors.” Opportunities for contractors in these spaces will likely be maintained and continue.
All that said, some language out of the new administration has threatened substantial cuts across the board, which may mean all contractors could see increased pressure to reduce pricing, have much leaner workforces, or the possibility that a variety of contracts may be terminated for convenience. At the same time, because DOGE is only a commission that will make recommendations by or before mid-2026, it is possible that Congress may push back on certain recommendations, but only time will tell. It is also of note that the recommendations come just prior to mid-term elections, and if either the House or the Senate changes hands, we may see a very different landscape emerge for the federal government and its contractors. Either way, the next few years may be rife with change and upheaval and we will be keeping a close eye on developments as they happen.
- Takeaways:
- Contractors should be aware of the possible disruption to the procurement process generally, as well as the possible reduction in small business set-asides in the coming years.
- Contractors with current or planned contracts with certain disfavored agencies should plan for the possibility that those contracts will no longer be available.
- Contractors that provide relevant materials and services should also continue to seek opportunities within the prioritized spaces and procurement vehicles.
PilieroMazza attorneys are closely monitoring the potential impacts of the Trump administration on government contractors and their ability to operate. If you have questions about this blog, please contact Cy Alba or another member of the Government Contracts Group.
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[1] OFPP’s acquisition workforce modernization effort to kick into gear in 2024, Federal News Network (January 1, 2024).
[2] See Nash, supra note 4.
[3] See Ingram, supra note 3; see also Trotta, supra note 3.
