Federal Contracting Updates for April 2025

The federal contracting landscape is undergoing transformation following recent executive actions and policy shifts from the Trump administration. Contractors wishing to grow and maintain their government business have to position themselves to effectively navigate this evolving market space.

Budget Priorities and Opportunities

The administration’s focus on domestic manufacturing and economic growth will create substantial opportunities for U.S.-based manufacturers and suppliers. Key growth sectors include:

• Domestic manufacturing and supply chain security:
  The SBA’s new Made in America Manufacturing Initiative aims to restore American economic dominance by empowering small manufacturers, creating high-paying jobs, and securing supply chains. The SBA Office of Advocacy will be advocating the concerns of small businesses before congress.
• Digital Infrastructure and AI Development:
  The Trump administration is focusing on digital infrastructure projects, such as data centers and AI technologies, which could create opportunities for contractors in these sectors.
• Defense modernization:
  The FY2025 budget maintains funding for defense modernization, creating significant opportunities for contractors in defense technology, equipment, and services.
• Cybersecurity and information technology:
  Federal agencies continue to prioritize cybersecurity investments to address evolving threats, with compliance requirements such as CMMC 2.0 maintaining importance for contractors handling sensitive information.

Procurement Consolidation Under GSA

One of the most recent changes affecting contractors is the Trump administration’s executive order aimed at consolidating federal procurement under the General Services Administration (GSA). This initiative aims to streamline processes, eliminate waste, and reduce duplication across federal agencies, particularly for common goods and services like IT, facilities, and professional services.

These changes present both opportunities and challenges:

• Potential Opportunities: 
  • Standardized processes could reduce administrative burdens for contractors
  • Centralized procurement may create more predictable contracting cycles
  • Small businesses may find more transparent pathways to government contracts
• Potential Challenges: 
  • Contractors must adapt to new procurement systems and requirements
  • Competition may intensify within GSA schedules and government-wide acquisition contracts
  • Businesses will need to establish new relationships as procurement responsibilities shift

Strategic Approaches for 2025

To succeed in the current environment, contractors should prioritize these five critical approaches:

• Access to Capital:
  Leverage expanded SBA loan programs, including the 504 loan program and 7(a) Working Capital Pilot program, to support growth and operational needs in alignment with the Made in America Manufacturing Initiative.
• Supply Chain Resilience:
  Strengthen domestic supply chains to align with the administration’s emphasis on American-made products and secure supply chains, creating a competitive advantage in procurement.
• Strategic Teaming:
  Form partnerships with complementary businesses to enhance capabilities and competitive positioning, particularly as procurement becomes more centralized. Attending relevant networking events and connecting to resources will allow businesses to grow.
• Regulatory Navigation:
  Stay informed about reduced regulatory requirements resulting from the administration’s focus on slashing red tape and position your business to benefit from these changes.
• Technology Compliance:
  Maintain robust cybersecurity protections and compliance systems to meet ongoing requirements for contractors handling sensitive government information. Cybersecurity support and tools exist to guide you.

Additional resources: 

• Reshore Now, “Bringing Manufacturing Back Home”
• NC Manufacturing Extension Partnership (NCMEP)
• NC Military Business Center
• NC State’s Industry Expansion Solutions

GCAP counselors are available to help contractors develop tailored strategies that align with these shifting priorities and maximize opportunities in the current federal marketplace. Reach out to your local SBTDC office today to setup a counseling session.