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

Nov 13, 2025 - Shutdown Cost Federal Government Contractors Billions

• President Trump signed into law a continuing resolution that funds the federal government through January. Some funding could be restored within hours of the signing while restoration of other funding could take longer, according to the New York Times. The shutdown cost government contractors $12 billion through the end of October, according to the US Chamber of Commerce. Government funding expired on September 30 because lawmakers could not agree on a federal budget, even on a short-term basis. September usually brings a rush of year-end contract obligations but not this year, according to the Federal News Network. Contractors may still see project delays and wait on payments during the funding resolution process. Workers deemed essential by federal agencies worked without pay until Congress acted but contractors aren’t guaranteed back pay for work done during the shutdown, according to Max Stier, president and CEO of the nonprofit Partnership for Public Service. Congress must enact interim or full-year funding appropriations for agencies and programs whose continued operation depends on annual appropriation acts. When Congress fails to enact interim or full-year appropriations, it may enact short-term measures known as continuing resolutions to keep the government funded for a few days, weeks, or months at previous levels until final budgeting decisions are made.
• 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.

• 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.