The Presidential and Congressional elections will definitely re-shape the federal market in ways both immediate and longer-term.  Here are the top five things contractors and their government customers can expect in the days and months ahead:

1. Expect FY’25 appropriations to be moved into calendar year 2025. The incoming Senate and White House will want to have a say on how money is allocated from day one.  A Republican-controlled House with new members will want the same thing.  Expect another CR, perhaps lasting into March, to give them time to do that.  This is not an ideal outcome for government agencies or contractors but is similar to what happened in FY’24.  Contractors and their customers can expect substantial delays in the start of new programs and the delay of many acquisition decisions to the end of the year.  That could actually be a “best case” scenario, however, as another possible outcome is a year-long CR.  Neither contractors nor their customers should discount this is a real possibility.

2. Expect New Priorities: President Trump campaigned on improving American infrastructure, curtailing illegal immigration, and improving the economy.  He has also supported tariffs for overseas goods and his first term was marked by efforts to drive increased domestic manufacturing.  These priorities could present opportunities and challenges to government contractors.  Any companies with secure domestic supply chains may find themselves at an advantage, as would any that have technology or other solutions to clamp down on illegal border crossings.  Conversely, those with international supply chains, especially those that rely on goods from China, could find themselves at a disadvantage.  The Wall Street Journal has already reported that some firms have reached out to their supplier bases to remove or minimize the use of Chinese components in anticipation of new restrictions.  Government contractors should absolutely consider the same actions.

3. Expect New People: Existing appointees, such as GSA Administrator Robin Carnahan and de facto OFPP Administrator Christine Harada will be leaving their posts between now and January 20^th. Thousands of other appointees, including most civilian DOD officials and even some CIO’s, will be joining them.  A new team, with the priorities of the new administration, will be coming in.  While some of these positions took a while to be filled in the first Trump Administration, companies can expect to see at least some new appointees on the job on day one.  Getting to know these people and their missions will be important.

4. Expect Rules to Change: The Biden Administration’s use of the federal acquisition system to address socio-economic and other goals will now largely come to a halt.  This could mean an end to new Greenhouse Gas, sustainable acquisition, and related rule makings.  Recently implemented rules in this area may also be repealed or halted.  President Trump, however, may want to use the acquisition system for other purposes, such as national security and Buy American  Similarly, the President may also elect to bring back his first administrations “two-for-one” practice, requiring the removal of two rules for the implementation of every new one.  Watch this space.

5. Expect Career Federal Workers To Be On Edge: President Trump often went after the federal bureaucracy during the campaign and, during his first term, proposed a “Schedule F” for some federal workers that would essentially make them “at will” employees and not subject to federal workforce protections.  Although the Office of Personnel Management has since made establishing a “Schedule F” more difficult, career workers are still concerned that anyone not deemed “loyal” enough to the President and his policies could be fired or reassigned.  On top of this concern, the President has also said that he wants to try again to decentralize the federal workforce by moving more jobs out of Washington, D.C.  This all matters to federal contractors because it creates stress and uncertainty among those they’re trying to work with.  People concerned about their jobs and families may not be as focused on mission fulfillment.  This could definitely slow the pace of both business and operations actions.