On March 20th, Carahsoft hosted its 3rd Annual Federal IT Budget Briefing for Channel Partners, to provide a critical update on the evolving fiscal landscape for Carahsoft partners.
Featuring insights from Rob Efrus, CEO of Efrus Federal Advisors, the event addressed the new Trump Administration’s transition and highlighted how its political appointees and public policy priorities will impact the current government contracting climate.
Greg Wilska, Competitive Intelligence and Market Research Leader at Makpar, attended the event and came back with the following key takeaways.
The State of the Government Contracting Environment
The federal contracting landscape is shifting, requiring contractors to be proactive in navigating uncertainty and potential deal cancellations. Close relationships with customers and vendors are key, as is a forward-thinking approach to securing deals. Federal customers must see clear ROI, not just features. The Trump administration emphasizes “doing deals,” and the government’s reliance on outdated IT systems underscores the urgent need for modernization.
The Budget Overview
The FY25 budget reflects notable shifts, with a $13 billion decrease in non-DoD funding and a $6 billion increase for DoD. Significant cuts include a $20 billion reduction for the IRS and a $293 million cut to disaster recovery programs.
The budget also extends the Federal Cybersecurity Enhancement Act through 2025. Appropriators may see diminished influence in FY26 due to efforts to codify spending cuts.
IRA and IIJA Funding Changes
The IRA and IIJA face significant cuts, including rescinding unspent clean energy funds. The USDA has announced the release of previously paused IRA funding, though details remain limited. The CHIPS and Science Act also faces reductions, including cuts to 40 staff positions.
The Impact of DOGE
The Department of Government Efficiency (DOGE) is driving significant changes, leading to widespread contract and grant cancellations. Restructuring is rapid, with a focus on shifting funds to the President’s priorities.
DOGE uses a venture capital-style approach, engaging directly with agency staff to identify cuts. Vendors must align their solutions to help agencies achieve more with fewer resources. DOGE’s budget has grown from $6.75 million to over $14 million, highlighting the growing need for contractors to support efficiency mandates.
Technical and Business Requirements
The federal government is shifting its approach to software procurement and cost management. The DoD has mandated agile methodologies, and many agencies have optimized their software spending. Vendors must adapt to DOGE’s procurement streamlining by bundling offerings, optimizing licensing, and integrating AI to demonstrate ROI. Traditional consulting services are being replaced by tangible technology solutions, including automation, self-service tools, and AI-driven analytics. FedRAMP remains a key standard, saving $700 million to date.
What Vendors Can Do and What’s Ahead
The DOGE concept is being adopted by state governments, signaling a broader trend toward efficiency. The GSA will take over civilian procurement for various agencies starting in March 2025.
Vendors must align with OTAs, BPAs, and GWACs, and build strong relationships with government decision-makers. Demonstrating ROI and staying agile will be essential. The first phase of DOGE focused on cuts, but changes are expected as court activity and process shifts unfold. Engaging with new political appointees and using SWOTS analysis will help vendors stay ahead. Small businesses can expect reduced support as DOGE priorities evolve.
Final Thoughts
As the federal contracting landscape continues to evolve, industry members must stay agile and responsive to the shifting priorities and challenges driven by the Trump administration’s policies and the growing influence of DOGE.
With budget cuts, changes in procurement processes, and a push for modernization, the ability to demonstrate ROI, optimize solutions, and adapt to new ways of working will be crucial for success.
By staying close to key decision-makers, aligning with the right contracting vehicles, and focusing on cost-effective, technology-driven solutions, vendors can position themselves to thrive in this new, more streamlined environment.
The future of federal contracting is filled with both challenges and opportunities, and those who are proactive in navigating these changes will be best positioned for long-term success.
If you would like to learn more about how Makpar can help your agency develop the most comprehensive innovation for enhancing efficiency and mission success, please contact us here.
