Since January 2025, the Trump Administration’s return to office has brought a wave of executive orders, memos and other presidential actions that are reshaping the federal landscape and impacting organizations who bid for and carry out government contracts.

GovCon is a unique and challenging field, and the latest developments as a result of the administration’s agenda have presented a swathe of new challenges, opportunities and changes to that field of which government contractors need to be aware.

Please note:

1. We’re keeping tabs on all the changes coming out of the new administration so you don’t have to! APMP members can click here for a timeline of the current administration’s latest moves with relevance to GovCon. The timeline stretches back to the initial inauguration so you can review what’s changed and how issues are progressing through the weeks. The page will be reviewed and updated daily, so add it to your bookmarks for the latest developments.
2. We have an event called GovGains on 26-27 March. This event is available to everyone, and is dedicated to giving you actionable advice for navigating the GovCon landscape right now. The sessions will be available on demand for 60 days after the event date, and you can still register up until 26 May. REGISTER NOW.

Below is a round-up of the most important themes we’ve seen emerge out of the first 63 days of the new administration, along with how it might affect your organization, and some initial actions you might want to take to mitigate their possible impact.

What’s been happening and what you need to know

1.    Expanded role of DOGE

On Trump’s inauguration day, he signed an executive order establishing the Department of Government Efficiency (DOGE). Officially, the US Digital Service has been renamed as the US DOGE Service (USDS), with a US DOGE Service Temporary Organization established within that agency to carry out the administration’s cost-cutting, efficiency, and tech modernization agenda.

DOGE has been gaining access to agencies across the federal government to review their spending, with a view to eliminating ‘wasteful’ spending and inefficient practices. The group has faced numerous legal challenges from multiple federal courts over the course of its short life so far, and the status of its access to the information of certain agencies is unclear.

DOGE has been closely reviewing existing contracts with the federal government with a view to cutting those which do not align with the administration’s priorities.

How it affects contractors

• Heightened scrutiny and oversight of all federal contracts, with agencies directed to justify spending.
• Increased risk of abrupt contract terminations, particularly of contracts involving or related to research, education, foreign assistance, renewable energy and DEI.
• Potential disruptions in payments due to access to agency payment systems, and disputes over that access.
• Dismantling of agencies and federal staffing cuts causing uncertainty over procurement timelines, contract delivery and financial support.

What you can do

• Assume all of your federal contracts could be at risk, even the ones that seem safe for now, and prepare contingencies for cancellations ahead of time.
• Audit your own contracts, work to align them with government needs (in collaboration with your contracting officer where possible), and proactively present justifications for your contracts.
• Diversify business portfolios away from programs at risk of elimination, and potentially align your services with what you know the administration’s priorities are where possible.
• Engage legal counsel to protect financial interests proactively.
• Document any procurement due process violations.
• Monitor updates closely (Deltek conducts regular webinars on navigating the new administration amidst all the developments, and will conduct a session on this at GovGains up-to-date with the latest).

2.    Federal staffing cuts

The cornerstone of the new administration’s activities in the federal government is the belief that the current Federal workforce is burdensome and bloated, requiring significant downsizing to bolster efficiency. So far, the new administration has cut tens of thousands of federal jobs, and these staffing cuts could have an impact on how government contracts are procured, managed and executed.

How it affects contractors

• Potential delays and increased lead times for procurements due to reduced procurement personnel.
• Possibility of increased compliance scrutiny from agencies attempting to offset reduced oversight capabilities.
• Higher risk of contract terminations and renegotiations as agency priorities shift due to staffing and budget changes.
• Possible increase in use of GWACs as agencies seek streamlined procurement methods.
• Potential opportunity increases due to future outsourcing of formerly internal government tasks.

What you can do

• Factor possible disruption to procurement timelines and processes into your strategic planning.
• Considering shifting your focus to state and local government contracts given the ongoing disruption in the federal government. (There will be a session on this in our GovGains event from Krystn Macomber and Paul Irby entitled ‘Your Roadmap for Success: Navigating the SLED Market’. Register here to watch the session)
• Prepare contingencies for potential contract terminations and renegotiations.

3.    Tariffs

The administration is actively imposing extensive tariffs on imports from key trading partners including Canada, Mexico, and China, and the possibility of further, universal tariffs is imminent. Tariffs on a wide range of imported goods are set to hit on April 2. The goal of these tariffs is to said to be promoting domestic manufacturing but is causing significant disruptions.

How it affects contractors

• Increased costs and additional complexity in fulfilling contracts for those who rely on international supply chains.
• Material shortages and delivery delays may cause problems for manufacturing and contract delivery.
• Those with fixed-price contracts may have to absorb the difference of tariffs, reducing profit margins.
• Contractors who manufacture tariffed goods domestically may experience a boost in opportunities.

What you can do

• Check existing contracts for clauses like FAR 52.229-3 (in fixed-price contracts) that allow adjustments for new taxes or duties, as well as economic price adjustment clauses and duty-free entry provisions that could help recover tariff-related costs.
• Understand who is responsible for paying additional tariffs in your contracts, e.g. whether your contract shifts the burden of tariffs or if costs will impact your profit margins.
• Monitor for supply and delay issues due to the potential for material shortages and delivery delays that you may need to account for.
• Evaluate your supply chains for vulnerability and explore domestic sourcing alternatives.
• Incorporate tariff risk into contract pricing and risk management plans.
• Monitor ongoing trade negotiations to quickly respond to tariff adjustments. (We update our timeline daily with all updates to tariff policies and other actions of the administration that may affect you.)

4.    Decisive shifts in government policy on DEI and climate change

Under the Biden administration, there had been renewed efforts to curb climate change and to boost diversity, equity and inclusion (DEI) within the government’s operations. The Trump administration has been working diligently to reverse these efforts. Climate control legislation is being reconsidered, there has been a strong re-emphasis on fossil fuels and production related to natural resources, and DEI initiatives are being systematically rooted out of federal operations.

How it affects contractors

• Likely contract terminations for contractors providing DEIA-related goods or services (note that the administration hasn’t explicitly clarified what it means by ‘DEIA-related’).
• Increased risk of contract terminations for contracts related to renewable energy.
• Potential decrease in opportunities for contractors providing renewable energy goods or services going forward.
• Uncertainty in regulatory compliance requirements going forward.
• Potential for reduced regulatory burdens in certain industries, offering potential cost savings.
• Loss of some support for small, disadvantaged businesses (SDBs), including lowered SDB goals.
• Less favorable evaluation of climate responsibility, sustainable practices and strength of DEI practices in proposals.
• Potential for negative evaluation and even contract termination for having so-called “illegal DEI” programs.

What you can do

• Reassess compliance strategies and engage with industry groups to maintain proactive compliance amidst the uncertainty.
• Follow the current climate and environmental laws until you have explicit direction to do otherwise. (Bear in mind that some experts say that environmental deregulation could take a long time to fully come into effect.)
• Keep an eye out for commenting or consultation periods for reconsidered laws.
• Review current HR and DEI-related policies to determine if they could be construed as violating anti-discrimination laws.
• Engage in careful risk assessment before removing trainings, policies, and practices related to DEI or the climate, taking into account the current legal requirements.

5.    Pauses in funding and financial assistance

There has been some confusion around the status of the funding freezes that the new administration has attempted to put into effect. On Trump’s inauguration day, he issued an EO calling for large-scale reviews of funding and federal financial assistance, which was supported by a memo from the Office of Budget and Management to agency heads a few days later. This memo required agencies to pause obligation and disbursement of all federal financial assistance.

The memo was rescinded after a judge issued a TRO blocking it; however, the White House Press Secretary, Karoline Leavitt, confirmed through social media that the rescission of the memo did not rescind the obligation to review funding, and to cancel and modify the funding if it didn’t align with administration priorities.

Despite judges issuing multiple orders to stop the government from halting grants, loans and contractual spending, there have been reports that a lot of funding is still inaccessible in practice.

How it affects contractors

• Increased likelihood of payment disruptions and projects being put on hold.
• Potential cancellation of funding and programs geared towards supporting and providing opportunities to small businesses, particularly minority-owned small businesses.
• Increased risk of delays to projects and contract cancellations.

What you can do

• Closely monitor court actions and administrative updates related to the freeze. (Again, members can use our timeline for daily updates.)
• Consult with legal counsel about rights and remedies, especially where you suspect unlawful withdrawal of funds or contract cancellations.
• Don’t sign documents that contain waiver or release language without legal review.
• Review your budget to mitigate costs and bolster financial resilience.
• Take care of your staff to keep morale up amidst uncertainty.

This is an uncertain time for government contractors, regardless of political affiliation. There is uncertainty over many organizations’ funding, contracts, supply chains, project delivery and opportunities during this transition period, and changes are happening daily. Navigating the GovCon landscape requires vigilance, proactive planning, and adaptability—now more than ever.

Remember:

1. We’re keeping tabs on all the changes coming out of the new administration so you don’t have to! APMP members can click here for a timeline of the current administration’s latest moves with relevance to GovCon. The timeline stretches back to the initial inauguration so you can review what’s changed and how issues are progressing through the weeks. The page will be reviewed and updated daily, so add it to your bookmarks for the latest developments.
2. We have an event called GovGains on 26-27 March. This event is available to everyone, and is dedicated to giving you actionable advice for navigating the GovCon landscape right now. The sessions will be available on demand for 60 days after the event date, and you can still register up until 26 May. REGISTER NOW.