Federal Contracting Trends to Watch in 2024
Published: November 29, 2023
Deltek's Federal Contracting Trends to Watch in 2024 examines 10 key areas that will dominate the mindshare of federal contractors and agencies in 2024.
The federal contracting environment can be a profitable endeavor but is complex and often challenging to navigate. Executive orders, acquisition rule changes, federal budget uncertainty, economic inflation, the competition for human capital, global events and other issues will amplify an already complex landscape for federal contractors in 2024. This combination of opportunities, requirements and challenges drive several broad themes that will impact contractors’ operational costs, business development strategies and competitive positioning during 2024.
Key Trends to Watch
- Budget Uncertainty. Continuing resolutions, conflict about general spending levels and specific priorities, and potential changes in congressional leadership and/or appropriations committee leadership will impact agency budgetary plans.
- Inflation and Interest Rates. Although inflation rates are showing signs of decline and the cost of inputs for manufacturers continue to stabilize, government contractors continue to navigate through rising costs in goods, energy and talent.
- Small Business Focus. The Biden Administration continues to pressure agencies to increase small business contracting opportunities, lower barriers to entry and increase opportunities for small disadvantaged businesses. SBA will be working to improve performance monitoring and reporting of 8(a) participants and reduce fraud.
- GWAC/MAC Environment. Contract consolidation, category management effects, and Best-in-Class contract impacts, small businesses accessibility concerns, and the White House’s Better Contracting Initiative influence the competitive landscape.
- Cybersecurity. Numerous policies and initiatives to achieve government-wide cybersecurity objectives include increasing scrutiny and oversight, additional reporting burdens and compliance requirements for product and service providers.
- Supply Chain. Global supply chain issues, initiated by the COVID-19 pandemic and sustained by the Ukraine/Russia war and other world events, have made ensuring the resilience and trustworthiness of the U.S. supply chain a top federal priority.
- Artificial Intelligence. Artificial Intelligence’s (AI) transformative impact on agency missions will drive continued investment. The Biden Administration’s recent AI EO is comprehensive guidance for federal implementation and risk management of AI technologies and prompts legislative action to push for responsible AI innovation.
- Customer Experience. Congress and the White House have made improving citizens’ experiences dealing with federal agencies a top priority. To that end, legislation and policy are driving increased spending on IT services for modernizing legacy systems.
- Workforce. Government and industry face similar workforce challenges, from recruitment and hiring to diversity, skill development and wage competition. The federal workforce remains at a disadvantage to private sector counterparts, particularly in technology-based positions.
- Federal Elections. Potential pre-election and post-election impacts of presidential and congressional elections will highlight contrasts in policy, spending and acquisition priorities between major parties and candidates, often impacting the pace and timing of acquisitions.
Critical Insight for Vendors
This report provides a view of diverse factors shaping the federal contracting market landscape for 2024 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 2024 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 2024
TABLE OF CONTENTS
Trends to Watch in 2024
- Budget Uncertainty
- Inflation and Interest Rates
- Small Business Focus
- GWAC/MAC Environment
- Supply Chain
- Artificial Intelligence
- Customer Experience
- Federal Elections
Conclusions and Recommendations