State of the Federal IT Market: Business Opportunities Continue to Flow

There is a lot of reporting nowadays about the Department of Government Efficiency (DOGE) canceling federal contracts. This is undoubtedly happening, but there is unfortunately little data (and even less historical perspective) showing how the threat of DOGE cuts also might be affecting the flow of federal information technology (IT) acquisition announcements. To put it another way, is the possibility of DOGE cuts causing federal agencies to scale back their investment in IT, leading to a slowdown in available business opportunities for industry partners?

We here at GovWin IQ serve the federal contracting community as a whole, but our core competency has long involved tracking business opportunities from announcement to award in the federal IT market. The data that appears in this blog concerns that practice – the number and type of business opportunities in the federal IT market that GovWin IQ tracks in its database each fiscal year.

To be extra clear, the data shown in this article does not concern canceled IT contracts. It shows trends in the number of announced IT business opportunities tracked in the GovWin IQ database. This includes the number and type of those opportunities that are canceled every fiscal year, not just since January 20, 2025.

Those with experience in the federal market know that federal agencies cancel prospective procurements all the time for a variety of reasons. These include funding challenges, changes in requirements, changes in agency IT strategies, elimination of duplicate acquisitions, the rise of new personnel with new priorities, etc. To that end, then, the following data is presented to provide perspective on trends in the federal procurement of IT goods and services. Readers will find that the impact of DOGE on federal IT procurement is rather small so far. No promises can be made about the future, but for the time being it is safe to say two things: 1) the sky is not falling for federal IT contractors and 2) the federal IT market remains a robust place to do business.

Here then is what the number of announced business opportunities being tracked by GovWin IQ says about the strength of the federal IT market.

Total Canceled IT Business Opportunities Tracked in GovWin IQ by Fiscal Year

The chart below shows the number of IT acquisitions canceled by federal agencies in the last three fiscal years.

As we can see, so far FY 2025 appears to be in sync with FY 2024 and 2023. In fact, if we divide the totals from previous years we find that halfway through FY 2023 federal agencies had canceled 37 of the announced IT acquisitions GovWin tracked. In FY 2024 that number totaled 42.

We still have three weeks remaining in the first half of FY 2025, so a thorough apples to apples comparison is not available. If we assume, however, that agencies cancel another 7 pending acquisitions by April 1, 2025, raising the total to 60 cancellations, then by halfway through FY 2025 that will give us 30 canceled IT opportunities. This means the current pace of IT opportunity cancellations is actually slower than it has been during the last two fiscal years.

Canceled IT Business Opportunities Tracked in GovWin IQ by Top 15 Agencies, FY 2023-2025

The chart below unpacks the data shown above by the federal agencies canceling the most announced IT procurements that GovWin tracks.

This data reinforces the conclusion reached above; namely, that no federal agency currently shows a spike in the number of previously announced IT business opportunities it is canceling. Readers will notice in particular that the number of IT opportunities (i.e., not awarded contracts, rather pending acquisitions), canceled at State/USAID is barely a blip, and yet the downsizing of USAID is constantly in the news stirring up negative emotions among contractors.

Canceled IT Business Opportunities Tracked in GovWin IQ by Good or Service

Here is the same data parsed by the type of IT good or service.

IT services opportunities, including engineering, system development and integration, outsourcing, etc. tend to be canceled most often.

Hearing a lot nowadays that consultants, including those working in IT, have a bulls-eye on their backs? The data shows that they always do. Moreover, the size of that target has shrunk in recent years. General IT, which I do not readily have a definition for, also always attracts attention. Those selling communications services, software, computer hardware and peripherals, and networking equipment have little to worry about, historically speaking.

New IT Business Opportunities Announced and Tracked in GovWin IQ Since January 20, 2025

The last set of data shows the number of IT business opportunities added to the GovWin IQ database since the inauguration of Donald Trump in January.

This data shows that agencies have announced a total of 88 new IT acquisitions in the last 51 days, amounting to approximately 1.7 new procurements added to GovWin IQ per day. Of these, 42 announcements are categorized as “IT Services.” Another are classified 31 as “General IT.”

Final Thoughts

The strength of a market is determined not only by the spending that occurs on contracts already awarded. It also depends on the number of business opportunities available for industry partners to put into their business development pipelines. Measured by this yardstick, the federal IT market remains robust and very much worth competing in. So far at least, DOGE does not appear to be a factor for the large majority of federal IT contractors to be concerned about.