Prepare for A Busy 2025 in Government Contracting
The hope is that the new administration can carry over the infrastructure momentum from the previous one
By Mary Scott Nabers
When a new President is elected, significant changes can always be expected. Understandably, companies that do business with the government are genuinely interested in any change that might impact their activities. While there is no way to anticipate all the changes likely to occur over the next four years, it is evident that government contracting needs will remain strong for every industry sector.
If President-elect Trump delivers even half of what he promised during his campaign, there’s little doubt that private sector involvement will be in high demand. There is a strong possibility that privatizing and staff augmentation needs in the federal government could be immediate.
Many officials have already reviewed the controversial 920-page document “Mandate for Leadership” that was a product of the Heritage Foundation and numerous Trump supporters. It outlines changes that, if implemented, would change the very nature of government at the federal level. Although Trump has denied being involved in the development of such a plan, he has already named many of the plan’s architects as individuals to serve in his cabinet. The 2025 planning document calls for eliminating thousands of federal employees.
The Trump administration is expected to support infrastructure – specifically initiatives focused on roads, bridges, rail, ports, water, power, technology, space and defense. Government insiders believe the new administration and Congress will call for increased private sector investments for infrastructure projects that receive federal funding. That creates an expectation of support for public private partnerships (P3s).
During his campaign, Trump said many times that he would support increased resources and funding for rural America. There are signs that another one of his top priorities may be to significantly upgrade America’s defense systems. He has said he hopes to create an ‘American Dome’ around the U.S.
Infrastructure funding from congressional actions during the Biden administration allocated historic amounts of funding for infrastructure. More than 60,000 projects received federal funding, including repairs currently underway on 175,000 miles of roadway. Over 10,200 bridge-modernization projects and thousands of other types of infrastructure projects are currently underway as well. Approximately $720 billion in IIJA funds are still available for infrastructure projects. There is some fear, however, Trump would urge Congress to draw back some of that funding for the immigration reform he is advocating.
If Trump’s administration follows through on his promise to implement a massive deportation of individuals who cannot provide citizenship documents, it will impact all industry sectors. If that happens, America will face an immediate labor force crisis, and the U.S. economy will be impacted. Workforce development will become a critical need and private sector firms are advised to begin working with local public workforce agencies now to leverage federal funding currently available for workforce skills training.
It’s impossible to predict what support educational institutions will receive in 2025. Trump has vowed to cut funding for K-12 schools with diversity, equity and inclusion (DEI) policies as well as schools that mandate vaccines or masks. Public universities will likely be banned from federal funding if critical race theory is taught or if there are DEI programs in place. Private sector K-12 schools may be favored so education officials are likely already reaching out for support and accessing current federal funding programs.
The Department of Defense will likely see its federal appropriations increase. Technology startup firms may benefit from funding support if they provide new and innovative weapon offerings. The rise of artificial intelligence (AI) and other related technologies will be in high demand and all the country’s data centers will likely be upgraded. Power resources will be of extremely high concern. A recent study reports that one simple ChatGPT query takes three to 36 times more energy than a similar Google search. Two major trends, digitalization and the energy transition have converged and large-scale power users will have trouble sourcing enough electricity for their operations without upgrades. Funding for both power generation and transmission will be required along with transformative technologies and powerful cybersecurity solutions.
The best approach to success in 2025 is to listen and watch carefully and continually because change will occur. Without doubt, 2025 will be a busy and exciting year for public officials and private sector contracting firms.
Mary Scott Nabers is the President and CEO of Strategic Partnerships, Inc.
