DOGE Impacts on Small Business Contracts

More than half of the contracts cancelled by the Department of Government Efficiency (DOGE) were held by small businesses (SB).

This article examines the implications of DOGE contract reviews on small business contracts based on data through August 28. For this analysis, small businesses are defined by the Contracting Officer business size determination. Notably, more than 24K SB contracts were awarded under Full & Open competitions.

Key Findings

A total of 26,484 SB contracts were closed based on the Contracting Officer business size determination. Consistent with the overall cancellation trend, small business close-outs fluctuated over the past eight months. Continued reductions in June and August may indicate a potential slowdown again in September. Furthermore, continued Executive Order Implementations (EOI), budget reductions and agency reorganizations may lead to further consolidations, non-renewals or discontinuation of contracts nearing expiration rather than follow-on recompetes.

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Business Impacts

During the past eight months, Total Small Business contracts accounted for 17% of all SB closures. Among socio-economic preference programs, 8(a) firms and Veteran-Owned (VOSB) and Service-Disabled Veteran-Owned Small Businesses (SDVOSB) are disproportionately affected compared to the others 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product and Services Reductions

Of the 14,046 SB products and services contracts impacted by the DOGE process, two-thirds were for products such as machinery, medical and scientific equipment and tools, and electric and electronic components and parts. The remaining third included Professional Services and Information Technology-related requirements. Professional Services contracts accounted for 4,613 terminations include:

• Program management and program evaluation
• Administrative and management
• Education and training
• Contract procurement and acquisition support
• Human resource support
• Studies and analysis
• Marketing and advertising.

 

 

 

 

 

 

 

 

 

 

 

 

Information Technology Implications

DOGE eliminated 3,586 SB contracts for Information Technology products and representing $483B in reported obligations. These include:

• Software licenses
• Software as a service
• Hardware and support services
• Telecommunications and mobility services
• IT support, management and maintenance activities.

 

Agency-Level Impacts and Contract Vehicle Disruptions

GSA and Defense agencies were the most significantly impacted agencies in the number of cancellations at 1,896 (44 IT) and 1,054 (13 IT),  respectively. However, the U.S. Treasury cancellations values significantly exceeded all other agencies, representing $143.6B in total federal spending, including 170 IT contracts valued at $132B. Other DOGE discontinuations included 186 NASA Solutions for Enterprise-Wide Procurement V (SEWP V) closures, 99% of which are IT-related and 748 GSA Multiple Award Schedule (MAS) terminations involving 98 with IT requirements. Other notable cancelled small business IT contract vehicles include:

• Streamlined Technology Acquisition Resources for Services III (STARS III) - 36
• Health and Human Services (HHS) Chief Information Officer Solutions and Partners (CIO-SP3), CIO-SP3 SB and CIO-SP3 OnRamp - 37
• First Source Information Technology Commodity Solutions II (First Source II) - 5
• One Acquisitions Solution for Integrated Services Small Business (OASIS SB)  - 1.

 

 

 

 

 

 

 

 

 

 

 

 

 

Conclusions

As FY 2025 draws to a close, small businesses face numerous challenges. Proposed changes to monetary size standards, GSA and SBA eligibility criteria and certification rule changes, along with ongoing FAR revisions, are redefining the federal small business contracting marketplace with significant, but not insurmountable challenges. Small businesses can successfully navigate this landscape by:

• Diversifying portfolios
• Bolstering teaming strategies
• Maintaining compliance with federal policy, rules and regulations
• Strengthening competitiveness through niche or agency-specific capabilities
• Monitoring agency forecasts and subscribing to Deltek’s GovWin IQ and Federal Market Analysis solutions.