Government contractors impacted by Trump orders, DOGE cuts

Government contractors are feeling the revenue effects of executive orders from the Trump administration and cuts from the Department of Government Efficiency, according to a new survey.

The report, from CohnReznick, a Top 25 Firm based in New York, found that approximately 40% of the 1,200 contractors polled say they have been directly impacted by the administration's executive orders, while one in three of the contractors say they have been affected by DOGE-related orders. Nearly 40% of them have developed new policies or procedures for handling stop work orders 

One out of three of the contractors polled expressed positive feelings about their current resource management tools and cross-team communications, while 60% of the respondents feel a desire to update or create policies and procedures related to project management. Over three-fourths (77%) of the respondents said they are impacted by budget constraints when it comes to managing resources.

"Optimism surrounding the current GovCon environment has declined since last year's report due to factors such as regulatory and economic uncertainty," said Christine Williamson, leader in the CohnReznick government contracting advisory practice and co-author of the GAUGE Report, in a statement Wednesday.."However, we are finding is that there are many opportunities to help our clients lean into operations improvements, technology investments, and utilization evaluations to enhance business stability,"  

On the positive side, about two-thirds (65%) of the contractors who responded to the survey are optimistic about the current government contracting environment, although a little over half (57%) cited new revenue resources as their top financial challenge. Many of the respondents admitted that heightened scrutiny of government programs is keeping them up at night, and 79% are experiencing issues when it comes to winning new contracts.

Among the challenges, 43% of the respondents cited deal flow or pipeline performance as one of their biggest business development challenges, while 48% cited resource management as a top project management challenge. 

"While the number of firms citing resource management as a top challenge is decreasing, 48% still ranked it as their most significant challenge," said Kristen Soles, leader of the government contracting practice and managing partner of global consulting solutions at CohnReznick, in a statement. "This indicates that more firms are looking to modernize their utilization by implementing data and digital management solutions that can reduce risk and improve decision making."