Federal Contracting Trends to Watch in 2023
Published: December 01, 2022
Deltek's Federal Contracting Trends to Watch in 2023 examines 10 key areas that will dominate the mindshare of federal contractors and agencies in 2023.
The federal contracting environment is a lucrative but challenging environment. Continuing resolutions, executive orders, rule changes, inflation, the war for talent, ongoing support for the Ukraine and other issues will create a complex landscape for federal contractors in 2023. This convergence of opportunities, requirements and challenges drive several themes that will impact contractors' operational costs, business development strategies and competitive positioning during 2023.
Key Trends to Watch
- Budget Uncertainty. Continuing resolutions, changes in Congressional House leadership and a potential debt limit stand-off will impact planned agency budgetary expansions.
- Inflation Outlook. Although inflation rates are expected to decline, government contractors across a wide range of industries will continue to experience some inflationary increases in intermediate and final goods, energy and talent.
- Small Business Support. Increasing small business opportunity is major administration priority, with agency equity plans and small business targets intended to lower barriers to entry and create opportunities for all socioeconomic small businesses.
- Supply Chain. Global supply chain issues, spurred by the COVID-19 pandemic, the Ukraine/Russia war, cybersecurity concerns and other events have made ensuring the resilience and trustworthiness of the U.S. supply chain a top priority.
- GWAC/IDIQ Preference. Contract consolidation, category management impacts, small businesses accessibility concerns and agency efforts to increase competition for task orders continue.
- Cyber Compliance. Numerous policies and initiatives to achieve government-wide cybersecurity objectives include compliance requirements for contracted product and service providers.
- Workforce. Federal agencies and contractors continue to compete for talent, with both facing challenges in hiring, recruitment, retention, diversity, inclusion, skill development, wage inflation, and demand for a flexible work environment.
- Environmental, Social, Governance. The Biden Administration's focus on ESG will drive additional climate-related policies, regulations, funding and initiatives, including those increasing oversight of contractors' environmental impact.
- Digital Transformation. Agency IT modernization and digital transformation priorities are driving efforts in cybersecurity, cloud computing, Artificial Intelligence and Machine Learning (AI/ML), Fifth-Generation (5G) communications, Quantum Computing, Blockchain, Customer Experience (CX) capabilities.
- Mergers and Acquisitions. A continued robust dealmaking environment is coupled with greater federal scrutiny and oversight.
Critical Insight for Vendors
This report provides a view of diverse factors shaping the federal contracting market landscape for 2023 and that will impact opportunities, competition, and the cost of doing business. The report provides recommendations to guide solution providers in maximizing their market positioning to best take advantage of federal business opportunities.
Deltek's Federal Contracting Trends to Watch in 2023 is delivered in PowerPoint® presentation format, including an Executive Briefing presentation summarizing the key findings and an Excel® workbook with select data behind the report analysis and other key findings.
FEDERAL CONTRACTING TRENDS TO WATCH IN 2023
TABLE OF CONTENTS
Trends to Watch in 2023
- Budget Uncertainty
- Inflation Outlook
- Small Business Support
- Supply Chain
- GWAC/IDIQ Environment
- Cyber Compliance
- Environmental, Social, Governance
- Digital Transformation
- Mergers and Acquisitions
Conclusions and Recommendations