The government contracting (GovCon) industry experienced a dynamic year in 2024, with major changes and initiatives. From increased federal spending to the rollout of high-profile initiatives like CMMC and reforms, government contractors saw new opportunities and challenges unfold throughout the year. It looks like 2025 will be even more interesting, but it’s good to take a look back to see what we learned.
Federal spending surged once again in 2024, awarding 5 million contracts and over $770 billion dollars. Despite efforts to re-energize the supply chain and increase spending in small business set-asides, competition seems to keep increasing as more spending goes to fewer companies.
In addition to the usual annual budgets, several pieces of legislation started to make an appearance in spending.
Although it is still a MAJOR headache for many contractors, one of the most notable changes in the GovCon ecosystem was the 11% decline in bid protests. After years of frequent challenges from companies over award decisions, 2024 marked a turning point where disputes over awards became a little less prominent.
Causes behind the decline include:
This decline in bid protests should save everyone money and headaches. Let’s hope it continues in 2025.
The year also brought increased scrutiny of subcontracting practices, particularly for contracts involving set-asides for small businesses, women-owned businesses, and other socioeconomic categories. Federal watchdogs and oversight bodies ramped up their focus on ensuring compliance with subcontracting regulations.
Agencies enforced accountability for prime contractors to ensure that set-aside funds were being appropriately allocated to eligible small businesses. This heightened awareness prompted prime contractors to carefully select subcontractors and adhere to stricter reporting requirements, which, in turn, spurred growth and collaboration opportunities for small and disadvantaged businesses. This trend is expected to continue in 2025.
2024 was another incremental increase for indefinite delivery, indefinite quantity (IDIQ) contract vehicles. Several high-profile IDIQs were rolled out or transitioned to new phases, significantly impacting the procurement landscape. Among the most notable frameworks:
The much-anticipated One Acquisition Solution for Integrated Services Plus (OASIS+) contract vehicle gained traction as federal buyers increasingly used it to award task orders for complex professional services. This evolution created cross-sector opportunities, especially for contractors specializing in IT, engineering, and consulting.
NASA’s Solutions for Enterprise-Wide Procurement (SEWP) vehicle rolled into its sixth iteration, SEWP 6. This IDIQ continued to dominate the IT acquisition space, catering to government needs for cutting-edge hardware, software, and cloud solutions. With awards expected in May, competition is already hot for SEWP.
This contract will likely provide extensive opportunities for government contractors, particularly in the fields of IT and professional services. As a key IDIQ, Alliant 3 will offer a streamlined procurement process and diverse entry points for contractors to expand their portfolios and secure long-term work. With a $75 billion dollar ceiling and at least 76 recipients, there should be a lot of teaming and subcontracting involved as well.
MAPS (Marketplace for the Acquisition of Professional Services) is a substantial award with a $50 billion ceiling by the U.S. Army focusing on IT and professional services. It includes 100 awards, with 20 per domain, and aims to start awarding contracts by August 2025.
The Department of Commerce has launched a significant $8 billion contract focused on Professional Scientific and Technical Services. This initiative aims to enhance weather data collection and modeling capabilities to support critical advancements in forecasting and analysis. Designed to encourage flexible teaming arrangements, the contract fosters collaboration among diverse participants to drive innovation. The first awards are anticipated early in the fiscal year, marking a strategic investment in improving national weather infrastructure and scientific expertise.
The Department of State has introduced a $5 billion Infrastructure Acquisition program focused on IT products. This set-aside initiative aims to streamline IT procurement through multiple awards, encouraging competition and efficiency. The first awards are expected early in the fiscal year, signaling a strong commitment to modernizing federal IT infrastructure.
The events of 2024 collectively reshaped aspects of the federal contracting industry, delivering the following key outcomes:
Increased spending and legislative funding translated to abundant opportunities for contractors, particularly for those operating in emerging sectors like green technology, semiconductor manufacturing, and digital infrastructure.
Enhanced scrutiny on subcontracting practices alongside the big news about CMMC pushed contractors to refine processes, invest in compliance tools, and strengthen internal cybersecurity mechanisms.
The rollout of updated IDIQ contracts streamlined access to competitive task orders, offering a more efficient means for contractors to align with federal spending priorities.
For government contractors, 2024 demonstrated that success hinges on adaptability, compliance, and innovation. While the year brought expanded opportunities through increased federal budgets and legislative rollouts, contractors also faced heightened expectations for regulatory adherence and transparency.
As we turn our focus to 2025, the lessons of 2024 serve as a reminder that government contracting continues to evolve. Contractors looking to stay competitive must remain agile, informed, and ready to align their capabilities with federal priorities.
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