GSA’S Centralization Push: What it means for SEWP, CIO-SP3, CIO-CS, and CIO-SP4
Federal Procurement Activity Rises 6.5% in Early 2025, Defying Austerity Expectations
Contrary to widespread expectations of reduced federal spending, new data from MyGovWatch reveals a 6.5% increase in federal procurement activities during the first 100 days of President Trump’s second term compared to the same period in 2024. This uptick, amounting to thousands of additional purchasing actions, indicates a dynamic shift in federal buying patterns.
Key Details:
- Significant Year-over-Year Growth: The 6.5% rise in procurement activities from 2024 to 2025 underscores a notable expansion in federal purchasing. When compared to 2023, the increase is even more pronounced at 13%, highlighting a consistent upward trend over the past two years.
- Focus on Large-Scale Purchases: The data encompasses substantial purchases of products and services procured through formal solicitation processes, excluding smaller acquisitions that bypass public bidding.
- Insights from Industry Experts: Michael LeJeune, Partner & Federal Access Program Manager at RSM Federal, commented, “Government cutbacks don’t shrink the contracting pie—they shift how it’s sliced. Most federal dollars aren’t controversial—they’re mission-critical. While the headlines scream austerity, what’s really happening is a reallocation, not a retreat.” Shane McCall, Equity Partner at Koprince McCall Pottroff, added, “While there has been much talk about cancelled contracts, the impact has not been even across the board. In our experience, some contractors are being hit harder than others.”
Implications for Government Contractors and Small Businesses:
- Strategic Realignment Opportunities: The increase in procurement activities suggests opportunities for contractors to realign their strategies, focusing on areas experiencing growth despite overall budgetary constraints.
The early months of 2025 have demonstrated that federal procurement remains robust, with a notable increase in purchasing activities. For contractors and small businesses, this trend emphasizes the importance of adaptability and informed strategy to navigate the evolving landscape of government contracting.
FAR Update: Agencies Gain Flexibility to Amend Solicitations and Broaden Eligibility
A recent amendment to the Federal Acquisition Regulation (FAR) has redefined the requirements for System for Award Management (SAM) registration, allowing federal agencies greater discretion in amending solicitations to broaden eligibility. Previously, offerors were required to maintain active SAM registration throughout the evaluation period. However, as of November 2024, FAR 52.204-7 stipulates that offerors need only be registered at the time of offer submission and at the time of contract award. This change has significant implications for procurement processes and contractor eligibility.
Key Details:
- Background: In 2023, Zolon PCS II, LLC (Zolon) protested the National Geospatial-Intelligence Agency’s (NGA) CLOVER contract, arguing that the agency improperly awarded contracts to offerors with lapsed SAM registrations during the evaluation period. The Court of Federal Claims (COFC) initially sided with Zolon, emphasizing the requirement for continuous SAM registration
- Regulatory Change: Responding to such challenges, the FAR Council—comprising the Department of Defense (DoD), NASA, and the General Services Administration (GSA)—amended FAR 52.204-7 in November 2024. The revised regulation mandates SAM registration only at the time of offer submission and contract award, removing the necessity for continuous registration during evaluations.
- Application of the New Rule: The NGA incorporated this change into the CLOVER solicitation through Amendment 12, issued in January 2025. Zolon contested this amendment, claiming it retroactively favored previous awardees. However, the COFC upheld the amendment, citing FAR 1.108, which permits contracting officers to apply regulatory changes to solicitations issued before the effective date, provided the contract award occurs after the change.
Implications for Government Contractors and Small Businesses:
- Increased Flexibility: Contractors now have greater leeway regarding SAM registration timing, reducing the risk of disqualification due to lapses during evaluation periods.
- Strategic Considerations: While the amendment broadens eligibility, contractors should remain vigilant in maintaining active SAM registrations at critical junctures—specifically during offer submission and contract award—to ensure compliance.
- Protest Grounds: The COFC’s decision underscores that amendments aligning with updated regulations are permissible, even if they alter the competitive landscape. Contractors considering protests should assess whether such amendments are procedurally sound and within regulatory allowances.
The FAR amendment to SAM registration requirements marks a significant shift in federal procurement practices, offering agencies and contractors enhanced flexibility. By understanding and adapting to these changes, small businesses and government contractors can better navigate the evolving landscape of federal acquisitions.
Defense Secretary Hegseth Advocates for ‘Right to Repair’ in Army Contracts
On April 30, 2025, Defense Secretary Pete Hegseth issued a directive for the U.S. Army to incorporate “right to repair” provisions into all new and existing contracts. This initiative aims to enhance the Army’s self-sufficiency by allowing military personnel to perform equipment maintenance without overreliance on original equipment manufacturers (OEMs) and their proprietary services.
Key Details:
- Enhanced Maintenance Capabilities: The directive seeks to provide the Army with access to necessary tools, software, and technical data required for equipment repairs, reducing delays and costs associated with contractor services.
- Intellectual Property Considerations: While promoting maintenance autonomy, the policy also emphasizes the importance of preserving the intellectual property rights of defense contractors
- Operational Efficiency: By enabling in-house repairs, the Army anticipates improved readiness and faster turnaround times for equipment maintenance, especially in field conditions.
Implications for Government Contractors and Small Businesses:
- Contract Adjustments: Defense contractors may need to revise existing agreements to align with the new right to repair provisions, potentially affecting service models and revenue streams.
- Opportunities for OEMs: Original equipment manufacturers might explore new avenues to support the Army’s maintenance capabilities, such as providing training or developing user-friendly repair tools.
- Small Business Engagement: Small businesses specializing in maintenance training, repair tools, or software could find increased opportunities to collaborate with the Army under the new directive.
Secretary Hegseth’s directive marks a significant shift in the Army’s approach to equipment maintenance, emphasizing self-reliance and operational efficiency. As the policy unfolds, stakeholders across the defense industry will need to adapt to the evolving landscape of military procurement and maintenance practices.
Navy Cancels MyNavyHR Contract Amid Broader IT Cost-Cutting Measures
Navy Secretary John Phelan announced the termination of a significant human resources modernization contract associated with the MyNavyHR Transformation Initiative. The decision, part of a broader effort to enhance financial efficiency, is projected to save the Navy approximately $260 million over the remaining 4.5 years of the contract’s lifespan.
Key Details:
- Contract Termination: The canceled contract, valued at $300 million, was deemed “obsolete and redundant,” no longer aligning with the Navy’s financial efficiency priorities.
- Broader IT Cuts: This move is part of a wider initiative to eliminate wasteful spending. Other terminations include contracts under the Naval Maintenance, Repair, and Overhaul (NMRO) logistics program, which had become over-engineered and unusable.
- Reallocation of Funds: Savings from these cancellations are intended to be redirected toward critical Navy priorities, enhancing operational readiness.
- Review of HR Systems: Navy Chief Information Officer Jane Rathbun has been tasked with developing a new acquisition strategy by July 31, alongside a comprehensive review of the Navy’s HR systems to ensure operational efficiency and fiscal responsibility.
Implications for Government Contractors and Small Businesses:
- Contract Reassessments: Contractors involved in Navy IT projects may need to reassess their offerings to align with the Navy’s renewed focus on financial efficiency and operational necessity.
- Opportunities for Innovation: The Navy’s shift toward more streamlined and effective systems could open opportunities for businesses that can provide cost-effective and efficient solutions.
- Increased Scrutiny: Future contracts may undergo heightened scrutiny to ensure alignment with the Navy’s strategic objectives, emphasizing the importance of demonstrating value and efficiency in proposals.
The cancellation of the MyNavyHR contract signifies the Navy’s commitment to fiscal responsibility and operational efficiency. As the Navy continues to reassess its IT and HR systems, contractors and small businesses should remain adaptable, focusing on delivering innovative and cost-effective solutions that meet the evolving needs of the service.
White House Proposes 4% Increase in VA Budget Amid Broad Federal Cuts
On May 2, 2025, the White House released its fiscal year 2026 budget proposal, outlining a $1.7 trillion plan that includes a 4% increase in discretionary funding for the Department of Veterans Affairs (VA). This proposed boost stands in contrast to significant reductions slated for other non-defense federal agencies, reflecting a prioritization of veterans’ services in the administration’s fiscal strategy.
Key Details:
- VA Budget Increase: The proposal allocates an additional $5.4 billion to the VA, marking a 4% rise in programmatic funding compared to the previous fiscal year.
- Electronic Health Records (EHR) Overhaul: Approximately $2 billion of the increased funding is designated to accelerate the VA’s EHR modernization project, which has experienced delays and cost overruns over the past three years. The plan aims to expand the rollout to 13 new sites in 2026.
- Medical Care Enhancements: An additional $3.3 billion is earmarked for improvements in medical care, with a focus on expanding community care options, allowing veterans greater access to private-sector healthcare providers.
- Veterans’ Homelessness Programs: The budget proposes a $1.1 billion increase for initiatives aimed at ending veterans’ homelessness, including rental assistance and enhanced case management services.
- Cost Savings Measures: The VA anticipates nearly $500 million in savings through the reduction of legacy IT systems and an additional $37 million from cuts to diversity programs and planned staff reductions.
Implications for Government Contractors and Small Businesses:
- Contract Opportunities: The increased funding for EHR modernization and medical care enhancements may present new contracting opportunities for businesses specializing in healthcare IT, medical services, and related support functions.
- Competitive Landscape: With the VA’s emphasis on cost savings and efficiency, contractors may face heightened competition and scrutiny, necessitating a focus on value-driven proposals and performance metrics.
- Strategic Alignment: Businesses engaged with the VA should align their offerings with the agency’s priorities, particularly in areas targeted for increased investment, to capitalize on emerging opportunities.
The White House’s proposed budget underscores a commitment to enhancing veterans’ services, even as it seeks to reduce spending across other federal agencies. For contractors and small businesses, this presents both opportunities and challenges, emphasizing the need for strategic alignment with the VA’s evolving priorities and a focus on delivering cost-effective, high-quality solutions.
GSA, OMB, NASA, and DoD Launch Revolutionary FAR Overhaul Website
On May 6, 2025, the General Services Administration (GSA), in collaboration with the Office of Management and Budget (OMB), the National Aeronautics and Space Administration (NASA), and the Department of Defense (DoD), unveiled the Revolutionary FAR Overhaul (RFO) initiative. This significant reform modernizes the Federal Acquisition Regulation (FAR), aiming to streamline procurement processes, reduce bureaucracy, and enhance transparency in federal acquisitions.
Key Details:
- Modernization Effort: The RFO represents the most substantial update to federal purchasing rules in over four decades, focusing on eliminating non-statutory and duplicative regulations to accelerate procurement and reduce costs.
- Transparency and Deregulation: The initiative aligns with the administration’s goal of transparency in the deregulation process, providing stakeholders across industry and government with insights into the efforts to reduce bureaucracy and promote competition.
- Streamlined Rules: The FAR Council will issue simplified versions of the FAR to assist agencies in adopting more efficient procurement practices promptly.
Implications for Government Contractors and Small Businesses:
- Simplified Compliance: The overhaul aims to make compliance more straightforward for contractors by removing unnecessary requirements and focusing on essential procurement standards.
- Increased Competition: By reducing barriers to entry, the RFO encourages broader participation from small businesses and new entrants in federal contracting opportunities.
- Enhanced Innovation: Streamlined procurement processes are expected to facilitate faster adoption of innovative solutions, benefiting both agencies and contractors.
The launch of the Revolutionary FAR Overhaul marks a pivotal step in modernizing federal procurement. By focusing on efficiency, transparency, and competition, the initiative seeks to create a more agile and responsive acquisition environment, offering new opportunities for contractors and delivering better value to taxpayers.
SBA Initiates Tribal Consultation on 8(a) and Mentor-Protégé Programs
On May 12, 2025, the U.S. Small Business Administration (SBA) announced a tribal consultation to gather input on the 8(a) Business Development (BD) Program and the Mentor-Protégé Program. This initiative aims to collect feedback from Tribal and Native communities to guide potential regulatory updates and best practices.
Key Details:
- Consultation Purpose: The SBA seeks to understand how the 8(a) BD and Mentor-Protégé Programs can be improved to better serve Tribal and Native communities. The agency is particularly interested in suggestions that could make these programs more attractive to procuring agencies and small businesses.
- Meeting Format: The consultation will feature a panel of SBA representatives presiding over the session. Both oral and written testimonies will be accepted, and all comments will become part of the administrative record for the SBA’s consideration.
- Participation Guidelines: Participants are encouraged to focus their comments on issues related to the 8(a) BD and Mentor-Protégé regulations, including potential changes to enhance program attractiveness and address unique concerns of Tribal and Native communities. Comments on other SBA small business programs are not within the scope of this consultation.
- Meeting Details: The tribal consultation is scheduled for Friday, June 13, 2025, from 9:30 a.m. to 12:00 p.m. Alaska Daylight Time (AKDT) in Anchorage, Alaska. The pre-registration deadline is June 6, 2025.
Implications for Government Contractors and Small Businesses:
- Opportunity for Input: Tribal and Native-owned businesses have a platform to share their experiences and suggest improvements to the 8(a) BD and Mentor-Protégé Programs, potentially influencing future regulatory changes.
- Program Enhancements: Feedback from this consultation could lead to program modifications that better align with the needs of Tribal and Native communities, potentially making it easier for these businesses to participate in federal contracting opportunities.
The SBA’s tribal consultation represents a proactive step toward enhancing the effectiveness of the 8(a) BD and Mentor-Protégé Programs for Tribal and Native communities. Stakeholders are encouraged to participate and provide feedback that could shape the future of these programs.
GAO Identifies Over $100 Billion in Potential Federal Savings Through IT Consolidation
In its 2025 annual duplication and cost savings report, the Government Accountability Office (GAO) highlighted that the federal government could achieve over $100 billion in savings by addressing overlapping, duplicative, and fragmented operations across agencies. Specifically, enhancing the management of information technology (IT) systems could contribute at least $100 million in cost reductions.
Key Findings:
- IT Portfolio Management: The GAO emphasized that the Office of Management and Budget (OMB) and 24 federal agencies should fully implement statutory requirements for annual IT portfolio reviews and high-risk IT investment assessments. Such actions could result in significant cost savings by reducing duplicative IT investments and halting or terminating unnecessary expenditures.
- Pandemic Public Health Systems: The Department of Health and Human Services (HHS) could achieve cost savings by identifying and reducing duplicative pandemic public health IT systems. This involves conducting reviews to pinpoint overlapping systems and determining mitigation strategies, such as consolidation or elimination.
- Data Center Optimization: Federal agencies have reported progress in closing data centers and achieving related cost savings under the Data Center Optimization Initiative (DCOI). From fiscal years 2012 through 2021, agencies reported a cumulative total of $6.6 billion in cost savings and avoidances.
Implications for Government Contractors and Small Businesses:
- Contract Opportunities: As agencies seek to consolidate IT systems and eliminate redundancies, there may be increased demand for contractors specializing in system integration, data migration, and IT infrastructure optimization.
- Competitive Landscape: Contractors should be prepared for heightened scrutiny regarding the necessity and efficiency of their services, as agencies aim to streamline operations and reduce costs.
- Innovation and Adaptability: Businesses that offer innovative solutions to enhance IT efficiency and reduce duplication will be well-positioned to capitalize on emerging opportunities resulting from the GAO’s recommendations.
The GAO’s 2025 report underscores the significant potential for cost savings through improved IT management and consolidation across federal agencies. By addressing duplicative systems and optimizing IT portfolios, the government can enhance efficiency and reduce expenditures. Contractors and small businesses should align their offerings with these objectives to remain competitive in the evolving federal IT landscape.
GSA Intensifies Scrutiny of Federal Consulting Contracts in Pursuit of Cost Savings
In May 2025, the General Services Administration (GSA) expanded its initiative to reevaluate federal consulting contracts, aiming to identify cost savings and enhance procurement efficiency. This effort involves a second group of ten vendors, including ASGN Incorporated, Chemonics International, FCN Inc., Iron Bow Technologies, ManTech International Corporation, Minburn Technology Group LLC, Peraton, Salient CRGT, Smartronix LLC, and V3Gate LLC. These firms have been requested to provide detailed data on spending, project specifics, and pricing structures to facilitate a comprehensive review.
Key Details:
- Consulting Contract Review: The GSA’s Federal Acquisition Service Commissioner, Josh Gruenbaum, emphasized the need for transparency and taxpayer-friendly pricing. Firms are encouraged to offer market discounts and consider restructuring contracts to be outcome-based, focusing on quantifiable deliverables or milestones.
- Outcome-Based Contracts: The GSA advocates for contracts that tie payment to specific results, promoting efficiency and accountability. This approach includes the consideration of “shared savings” models, where contractors have a stake in the financial outcomes of their projects.
- Industry Response: Some industry experts have expressed concerns about the broad definition of “consulting contracts” and the challenges of transitioning to outcome-based models, especially for contracts that traditionally rely on time-and-materials billing.
Implications for Government Contractors and Small Businesses:
- Contract Restructuring: Contractors may need to adapt to new procurement models that emphasize measurable outcomes and cost savings, potentially affecting pricing strategies and service delivery methods.
- Increased Oversight: The GSA’s initiative reflects a broader governmental push for fiscal responsibility, suggesting that contractors should prepare for heightened scrutiny and the possibility of contract modifications or terminations.
- Opportunities for Innovation: Firms that can demonstrate value through efficient, results-driven services may find new opportunities in this evolving procurement landscape.
The GSA’s expanded review of federal consulting contracts signifies a shift towards more accountable and cost-effective government procurement practices. Contractors are encouraged to engage proactively with these changes, aligning their services with the government’s emphasis on transparency, efficiency, and measurable outcomes.
OFCCP Implements Significant Workforce Reduction
In May 2025, the Office of Federal Contract Compliance Programs (OFCCP), a division of the U.S. Department of Labor responsible for ensuring non-discriminatory practices among federal contractors, announced a substantial reduction in its workforce. Approximately 90% of its staff received reduction-in-force (RIF) notices, leaving around 50 employees nationwide. The affected employees are scheduled to depart by June 6, 2025.
Key Details:
- Historical Context: Established in 1965, the OFCCP has played a pivotal role in enforcing equal employment opportunity laws, including Executive Order 11246, which prohibits federal contractors from discriminating based on race, color, religion, sex, sexual orientation, gender identity, or national origin.
- Recent Developments: The workforce reduction aligns with broader administrative efforts to restructure federal agencies and reduce government spending. This move has raised concerns about the agency’s capacity to effectively monitor and enforce compliance among federal contractors.
Implications for Government Contractors and Small Businesses:
- ·Compliance Oversight: With a significantly reduced staff, the OFCCP’s ability to conduct audits and enforce compliance may be impacted, potentially leading to changes in how federal contractors approach affirmative action and equal employment opportunity obligations.
- Regulatory Environment: Contractors should stay informed about any changes in enforcement practices and ensure continued adherence to non-discrimination requirements, as shifts in oversight do not equate to changes in legal obligations.
The substantial reduction in the OFCCP’s workforce marks a significant shift in the federal approach to monitoring contractor compliance with equal employment opportunity laws. Contractors and small businesses engaged in federal contracts should remain vigilant in their compliance efforts and monitor for any further developments or guidance from the Department of Labor.
Persistent Challenges in DoD’s $17.9B Moving Contract as Peak Season Approaches
As the 2025 peak Permanent Change of Station (PCS) season approaches, the Department of Defense (DoD) faces ongoing challenges with its $17.9 billion Global Household Goods Contract (GHC), managed by HomeSafe Alliance. Despite intentions for the GHC to handle all domestic moves by this summer, capacity limitations have necessitated a continued reliance on the legacy “tender of service” system.
Key Developments:
- Capacity Shortfalls: Between December 2024 and April 2025, approximately 1,600 moves initially assigned to the GHC were reverted to the legacy system due to capacity issues.
- Service Adjustments: The Army, GHC’s largest customer, directed its shipping offices to halt new bookings under the GHC and prepare to rebook moves through the legacy system. Similarly, the Marine Corps took steps to pull May, June, and July shipments from the GHC contract.
- Contractor Response: Stuart Bradie, CEO of KBR (a parent company of HomeSafe), acknowledged that the contract would not see significant activity ramp-up during the summer as expected, emphasizing a focus on quality and timeliness over volume.
Implications for Government Contractors and Small Businesses:
- Operational Impact: Contractors involved in military relocations may experience fluctuations in demand and should stay informed about DoD directives and adjustments to the GHC implementation.
- Strategic Planning: Businesses should assess their capacity and readiness to support potential increases in move assignments from the legacy system, given the current limitations of the GHC.
The DoD’s transition to the GHC continues to face hurdles, prompting a partial reversion to the legacy moving system during the critical summer PCS season. Contractors and stakeholders must remain adaptable and responsive to ongoing developments to effectively support military personnel and their families during relocations
