Government Contractors NAICS 23, 54, 56, 61, 517, 5182, 7223

Jul 3, 2025 - Firms Respond To Federal Cost Cutting Efforts

• Several companies are now marketing their products directly to federal government agencies as a way to survive the US Department of Government Efficiency's (DOGE) cost-cutting demands, according to the Axios news service. DOGE is expected to lean more heavily on third-party security vendors to help dismantle longstanding information silos, according to Axios. Axonius, an Israeli cybersecurity startup, told Axios that it has started pitching its product to agencies as a tool that can help them avoid the most severe DOGE audits. Many vendors have increased their lobbying activity in recent months, particularly with Trump-aligned lobbying firms. At least nine security and consulting firms, including Zscaler, Accenture, and Booz Allen Hamilton, have registered with Ballard Partners into 2025, according to congressional lobbying disclosures.
• The US Army has halted several IT contracts for review to ensure alignment with President Trump’s March 20 executive order on improving efficiency in Federal contracting, according to MeriTalk. The largest procurement affected by the hold is the Marketplace for the Acquisition of Professional Services (MAPS) contract, which was set to have a multibillion-dollar ceiling and serve as the Army’s primary source for staff augmentation and tech support. The Army is delaying both a pre-solicitation meeting and the final draft RFP for MAPS. Other contracts on “indefinite hold” are the Army Data Platform 2.0, a multi-award contract for enterprise data platforms that will enable self-service data management and scalability across the Army, and the New Modern Software Development contract, a $10 billion contract for acquiring rapid software development services.

• Technology giants that have taken the lead in the development of AI are increasingly involved in bringing the technology to government agencies. The shift comes as competition intensifies between the US and China in developing advanced AI capabilities, according to AI news site Maginative Plus. Meta has announced that it will now provide its Llama AI models to US government agencies and defense contractors, marking a significant shift in how tech giants are approaching military applications of AI. The partnership includes major players in the defense and technology sectors, with companies like Lockheed Martin, Palantir, and Microsoft joining forces to implement Llama in national security applications. These implementations range from aircraft maintenance optimization to mission planning and threat analysis. Reuters has reported that Chinese researchers had used Meta's Llama 2 model to develop AI systems for China's military.
• US government contractor industry sales are forecast to grow at a 3.42% compounded annual rate from 2025 to 2029, slower than the growth of the overall economy.