Predictions for Government Contractors Based on 2024 Election Outcomes: How to Prepare for FY2025
The 2024 U.S. presidential election is poised to dramatically reshape the landscape for government contractors, with the stark differences in the candidates' agendas and visions for the future set to have a significant impact on FY2025 business strategies. The outcome will determine shifts in spending priorities, agency objectives, and procurement approaches, making it essential for contractors to be prepared for either reality. This article delves into the potential scenarios under the leading candidates, Donald Trump and Kamala Harris, offering actionable strategies to help small businesses navigate the evolving federal contracting environment and prepare for what inevitably lies ahead.
Donald Trump’s Potential Administration
A Donald Trump presidency could beget a range of significant changes to federal spending and policy, which would reshape the landscape for federal contractors. From anticipated shifts in defense and border security funding to potential changes in government regulatory practices, the forecasted opportunities and challenges associated with this administration are detailed below.
Increased Defense Spending.
If Trump returns to office, defense and national security will likely dominate federal spending. His administration is expected to bolster military readiness, with substantial investments in advanced weaponry, cybersecurity for defense applications, and military infrastructure. Contractors specializing in these areas should anticipate an increase in demand for their services and prepare to engage in competitive bidding for large-scale contracts.
Increased Funding for Border Security.
Trump’s continued focus on border security could lead to an increased budget for the Department of Homeland Security (DHS) and particularly for U.S. Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE). This heightened focus could support the expansion of border infrastructure and enhanced immigration enforcement measures, presenting new opportunities for technology providers, security and staffing firms, logistics and supply chain companies, and consulting firms that specialize in regulatory compliance, risk, and project management.
Reduced Environmental and Energy Budgets.
The former president’s skepticism towards climate change and renewable energy initiatives could lead to a significant reallocation of funds to traditional energy sectors and subsequent budget cuts for agencies like the Environmental Protection Agency (EPA) and the Department of Energy’s (DOE) renewable energy programs. Contractors who specialize in climate change mitigation or green energy may want to consider seeking out private sector partnerships, state-level incentives, or international markets to continue advancing their sustainability projects despite potential federal budget cuts.
Deregulation and Bureaucratic Streamlining.
Trump has expressed a desire to reduce the size of the federal government, which could translate into budget cuts for regulatory agencies and potentially the elimination of programs seen as unnecessary or overly bureaucratic. This could affect agencies like the EPA, the Department of Labor (DOL), and the Consumer Financial Protection Bureau (CFPB), among others. Those who maintain a strong presence within one or more these agencies are advised to diversify their client portfolios while preparing for a likely increase in competition for their remaining contracts. A reduction in compliance burdens and accelerated project timelines may also lower entry barriers for new contractors, whose fresh approach and agility may better enable them to thrive within a changing regulatory landscape.
Impact on Small Business Set-Asides.
Under Trump, there maybe a continued emphasis placed on set-asides for veteran-owned and service-disabled veteran-owned small businesses (SDVOSBs). This focus aligns with his administration's previous priorities, potentially expanding opportunities for businesses in defense, veteran healthcare (see the Veteran Health Administration’s “Community Care Network Next Generation contract), and traditional infrastructure projects. Trump may also push for a more streamlined procurement process, favoring best-in-class contracts that reduce overhead and expedite service delivery.
Kamala Harris’ Potential Administration
If Kamala Harris becomes the next U.S. president, government contractors can expect the continuation of several high-profile initiatives that stem from priorities set by the Biden administration. Additionally, Harris is expected to champion new social equity programs that challenge systemic barriers and provide enhanced support for marginalized individuals.
Expanded Healthcare Funding.
It is likely that Harris will continue and expand the healthcare initiatives of the Biden administration, focusing particularly on increasing access to high-quality services in underserved communities. This could lead to significant contracting opportunities with Department of Health and Human Services (HHS) agencies that prioritize mental health services, substance misuse treatment, and public health infrastructure in rural and low-income areas.
IT Modernization and Cybersecurity.
Building on the Biden administration's focus, Harris would likely continue to push for IT modernization with an emphasis on integrating cutting-edge technologies across federal agencies. Contractors with expertise in advanced IT solutioning can prepare for substantial investments in cybersecurity and may want to consider establishing enhanced collaborations with private-sector experts who could further accelerate innovation and resilience in federal IT infrastructure. At the same time, businesses that provide administrative and program management support may want to sharpen their change management training capabilities to meet the needs of this highly ambitious objective.
Climate Change and Green Energy Investments.
Harris' administration would likely prioritize investments in combating climate change, aiming for significant expansions in renewable energy projects, electric vehicles, public transportation, and green infrastructure. Additionally, it is likely that she would continue to support and expand on Biden’s infrastructure initiatives with a focus on sustainable development. This could mean increased budgets for the Department of Transportation (DOT), the DOE, and the EPA. Contractors focused on eco-friendly planning should prepare for new and expanded opportunities, particularly in projects that align with the federal goals of achieving net-zero emissions by 2050.
Equity and Inclusion.
Harris would also likely to prioritize social equity, which could result in increased funding for agencies and programs aimed at reducing inequality, supporting minority communities, and improving social services. This includes initiatives put forth by the Department of Housing and Urban Development (HUD) and the Department of Education (ED), among others. For federal contractors also interested in growing within this space, investments in their own workforce diversity may prove to be advantageous by offering different perspectives on how to understand and address the needs of various communities.
Support for Minority-Owned and Small Businesses.
Harris' commitment to social equity may also manifest in increased support for minority-owned businesses and other underrepresented groups. This could translate into more government set-asides and incentives aimed at these businesses, offering expanded opportunities in various federal contracting sectors. There could also be an increased use of Blanket Purchase Agreements (BPAs), which would drive down costs and encourage small business participation in key focus areas, such as healthcare, IT, and sustainable development.
Conclusion
More than ever, it is essential that contractors stay informed and agile in response to the political climate. Whether the next administration prioritizes defense or social programs, the key to success will be strategic alignment with government priorities, effective partnership building, and maintaining compliance with evolving regulations.
If your company is not accounting for the anticipated differences of each administration in its FY2025 planning, reach out to Caprid Consulting for strategic business development support.
