GovCon 2025: Key Strategies & Emerging Opportunities for Federal Contractors

1. How Federal Contractors Can Survive and Thrive in 2025’s Changing GovCon Arena

In order to be able to serve your current (and future) Federal clients, job one is to simply stay in business! The new Administration is introducing major policy changes affecting agency missions, structures, and staff. This impacts government contractors in two key ways:

✔ Agility & Adaptation – Federal buyers must adjust quickly, creating opportunities for contractors who can provide flexible solutions.
✔ Budget Cuts & Program Eliminations – Agencies may face funding reductions, potentially terminating contracts. Contractors must prepare for unexpected contract cancellations and pivot strategies accordingly.

Furthermore, the likelihood of repeated government shutdowns may be increasing, due to factors including Executive-Legislative tensions, partisan divisions within Congress, contentious budget proposals, and impending limitations of the debt ceiling. Shutdowns can trigger more stop work orders for Federal contractors. Are you ready?

Government Contract Management Strategies for Shutdowns and Terminations

Be prepared: Learn from the best. Here are resources from two of the top experts in the country.

• Strategic contract management expert Marsh Lindquist, CEO of Granite Leadership Strategies, shares “Three and a half ways to prepare for Termination for Convenience” in her article here.
• Maria Panichelli, government contracts attorney at McCarter & English, invited me to share this generous complimentary guide to navigating Federal contract terminations for convenience and stop-work orders. Download it here.

In advance, before anything happens

• Review your contract language and the FARS to identify clauses that cover such situations, and then talk to your lawyer to get clarity on your options.
• Confer with your Contracting Officer to ask, “I’ve read these provisions; what’s going to happen to our contract if there’s a government shutdown?”

Cancelled / Stopped Contracts: Remedial Action

• Read: If your contracts have been terminated for convenience, or you’ve been issued a stop-work order, read your contract – including Federal Acquisition Regulations clauses incorporated by reference. 
• Get clarity: talk to your Contracting Officer to learn what their next steps are, what they need from you, and by when. You don’t want to miss any deadlines.
• Understand your costs related to the termination or stop-work. Get expert help, if need be, to draft a settlement proposal to recoup costs you have incurred as a result.
• Negotiate your settlement: Take your draft settlement to your GovCon attorney, and follow their guidance. Don’t avoid talking to an attorney for fear of the cost! Did you know that…
• FAR 52.249-2 includes provisions that let you recoup your legal costs as part of the settlement of a termination for convenience!

Fiscal Strategies to Manage Cash Flow and Shutdown Risks

• Working capital:

• • Credit limits: Can yours be raised?
  • Talk to your banker: If you don’t have a line of credit, explore what you can get – including ones that don’t require assets to secure funds. If you do have a line of credit, ask whether and by how much it can be expanded.
• Accounts Payable Management:
  • Negotiate payment terms: Extend payment deadlines with suppliers where possible to stretch cash flow. 
  • Prioritize critical vendors: Focus on paying essential suppliers first. 
  • Early payment discounts: Explore potential savings by taking advantage of early payment discounts when available. 
• Accounts Receivable Management:
  • Invoice promptly: Ensure timely invoicing
  • Debt collection practices: collect outstanding receivables efficiently.
• Expense & Cash Flow Management:
  • Cost-cutting measures: Identify areas where non-essential expenses can be reduced or deferred. 
  • Budget review: Regularly monitor and adjust spending based on current cash flow 
  • Renegotiate contracts: Seek better terms with vendors where possible. 
  • Detailed cash flow forecasting: Regularly project future cash inflows and outflows to anticipate potential shortfalls.  

How to Secure Small Government Contracts Under $250K

Small purchases are the functional lifeblood of just about every Federal agency. The new Administration wants control, but also wants results quickly! 

• Within your team, brainstorm your current offerings of products or services to consider which of your Federal buyer’s most urgent problems you solve for a budget that is below the purchase thresholds of Simplified Acquisitions and Micro-Purchases.
• Have “wishlist” conversations with your Federal buyers and prospects. When the dust settles on the initial changes, what do they most want to do? Share how you can help (including through some of those ideas you just brainstormed).
• Once the new Administration lifts the temporary freezes placed on spending authority, watch for pent-up demand for offerings that can yield fast results.

Back to contracts that have been terminated: how much revenue do you need to recoup this year? Do the math: how many $250,000 contracts could give you a fresh start and let you grow from there? Start with the people who know and love you best. Even if they were forced to terminate your contract, you can ask, “If you were me, who would you be talking to? Would you introduce me?”

💡 Quick Steps to Win Small GovCon Contracts (Under $250K)
1️⃣ Notice Who’s Buying: Search SAM.gov for simplified acquisitions…but just use the listed point of contact in the buying organization as your starting point to research decision-makers and -influencers.
2️⃣ Discover Who Your Buyer Really Is: Don’t pitch Contracting Officers (COs/KO’s) who don’t know you. Research The Players At All The Layers in our complimentary GovCon Personas Guide.  Then, reach out to people in End User roles to understand and explore how you can meet their immediate – and middle-term– needs.
3️⃣ Leverage Small Business Preferences: If you’re a small business, WOSB, HUBZone, SDVOSB, or 8(a), make sure your web site and collateral include your complete and current set-aside eligibility. But always lead with your best values (more on how to do that here) and past performance
4️⃣ Be Prepared: Once a buyer says, “Yes!”, small-value contracts move quickly. Have your Capability Statement (get our complimentary Capability Statements Guide here) and best pricing ready.