Today marks the inauguration of President Trump, bringing a new party and new administration with it. Many federal contractors, especially those in the General Services Administration (GSA) Multiple Award Schedule (MAS) program, are wondering how this will impact government spending. We published a blog recently on how we think the new Trump administration will impact federal spending overall, and in this blog, we’ll cover what changes we may see in the MAS program specifically.
Before we begin, we just want to note that this information is based on the past Trump administration and what we have found so far with Trump’s future plans. These following trends are what we anticipate seeing from our research, but are not definite.
The Department of Government Efficiency (DOGE) has been speculated about widely ever since it was announced. DOGE is intended to serve as an advisory commission providing recommendations to government leaders. The main aspects of DOGE are to focus on administrative reductions and cost savings.
If the Trump administration is looking for places to reduce spending, we could see increased scrutiny of federal contracts, changes to procurement regulation, and a greater emphasis on cost efficiency in contracts. This would potentially reduce the number of federal programs and contract vehicles. However, there is also discussion of an increase in the need for innovative solutions, and cost-saving technologies. We’ll discuss more of the innovative solutions below.
Specific to GSA, DOGE’s intention to require federal employees to return in office 5 days a week would impact GSA’s Public Building Service. The new administration will be on the hunt for additional office space and real estate, but not necessarily solely in D.C.
Some Large Categories and Subcategories within the MAS program that align with this action include:
If you offer any of these products or services, you’ll want to be paying close attention to DOGE’s actions, especially as it relates to in-office work.
Artificial Intelligence (AI) is not a new concept and has been increasingly developed and employed in government operations. However, Trump and Biden have different plans for going about AI. With the new Trump administration, we can expect to see an increase in the need for AI products and services per usual, but the difference is there will most likely be a decrease in stringency with the current AI framework from 2023, and stricter regulations on trade with China related to AI. We have witnessed this in Trump’s first term, and he has made his intentions clear regarding trade with China.
As mentioned above, we can expect to see more spending in this realm, so we put together a list of a few popular Special Item Numbers (SINs) related to AI that you should be keeping your eye on
This is not an exhaustive list, so if you offer AI supporting technologies or capabilities, this would apply as well.
It’s no secret that defense spending will be a major point of discussion in the new Trump Administration. In his last term, Trump proposed multiple defense budget supplementals, and the annual military budget grew. What we know about Trump’s plans for the Pentagon for his second term so far, is while the defense budget in the past few years increased to send aid toward American partners like Ukraine, we anticipate the spending to shift to more U.S. military and domestic spending.
Trump intends to use the U.S. military on domestic soil for several law enforcement purposes, including border security, civil unrest, and crime. Trump also wants to build a stronger defense shield from outside threats.
As a result, we could see an increase in the need for law enforcement materials and services, drones, warfighting materials, and border security. Some SINs that align with these include:
Cybersecurity remains a high-level threat to our nation, and we know the federal government takes this seriously. In his first term, Trump accelerated cybersecurity regulations to protect sensitive information from foreign hackers and breaches. The Cybersecurity Maturity Model Certification (CMMC) was created under Trump, and recently finalized under Biden late last year. We can expect to see this requirement grow and become a large part of the defense contracting realm.
Below are SINs related to cybersecurity that we can expect to continue to be strong in government spending:
The Buy American Act (BAA) has played an integral part in both Biden’s and Trump’s initiatives. The BAA essentially restricts the amount of non-domestic supplies in federal contracts. In recent years, there has been an increase in the percentage of domestic materials a product must contain to be sold to the government. In 2022 it went from 50% to 55%, and is now set at 65% with a goal of reaching 75% in 2029.
In Trump’s first term there was an increase in BAA regulations, including the “Maximizing Use of American-Made Goods, Products, and Materials” Executive Order and we can expect to see this continue in his second term. He also mentioned in his previous term that he intends to prevent companies who do business with the federal government from outsourcing jobs overseas, so this is something we could see in the next few years.
If you’re a contractor in the MAS program, I would pay close attention to any changes in BAA and the Trade Agreements Act (TAA) as well.
The DoD, Department of Homeland Security (DHS) and the Office of Management and Budget (OMB) have issued policy memos during both the Trump and Biden Administrations to encourage the use of Governmentwide Acquisition Contracts, or GWACs. This aligns with Trump’s plans to increase efficiency in procurement and to fulfill his cybersecurity mission, as many GWACs are dedicated to IT and cloud solutions, including STARS III, VETS 2, and Alliant 2. Alliant 3 and Polaris are both upcoming and new contracts that we can anticipate seeing the federal government taking increased advantage of as well.
As we enter this new administration, it’s important to keep an eye on future changes in case they affect your GSA MAS contract. To stay updated on future govcon insights subscribe to our blog and monthly newsletter. If you have any questions or need help maintaining your GSA Schedule to prepare for any upcoming changes, you can contact one of our consultants.