DOGE and Small Business Government Contracting: A Commentary

Wow, what a surprise when the Department of Government Efficiency (DOGE) decided to look at Federal government contracts.  The number of specific contracts and grants that have been cancelled is amazing.  Many were cancelled for the right reasons and some questionable as to whether the rationale for cancellation was fully vetted.  You can review these cancellations at DOGE: Department of Government Efficiency.

The most critical part for industry has been its effect on the small businesses.  Most Washington outsiders have no idea that a certain percentage of each government contract is “set-aside” for small businesses.  The traditional small business categories for firms include Woman Owned Small Business (WOSB), Veteran Owned Small Business (VOSB), Service-Disabled Veteran Owned Small Business (SDVOSB), Minority Owned / Disadvantage Business (8a) and HUBZone which provides set-aside contract for companies located in Highly Under-Utilized Business Zones.    Per the DOGE Small Business Impact Report compiled by the Small Business Alliance of Government Contactors (SBAGC.org) on March 27, 2025, over 60% of all contracts cancelled were held by small businesses.

My reaction is one of shock and awe… who would have ever imagined the impact on the small business.  This is in addition to the changing landscape of procurement that began with the consolidation and movement of commodity contracts to the General Services Administration (GSA).  GSA was created in 1949 for the exact purpose of managing commodity contracts.  By Executive Order (EO) on March 20^th the White House Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement – The White House provided a 90 day window for this consolidation. 

It makes sense but is happening with a great deal of pain and agony for both the agencies who were managing their own commodity contracts and the vendors, suppliers and contractors who have relied on these commodity contracts by agency for years.  For example, the NIH had an organization named The National Institutes of Health Information Technology Acquisition and Assessment Center (NITAAC).   NITAAC ran their own contracts for use across government.  The administration contends that NIH had no business running a technology commodity contract for use by all Agencies.  These contracts are known as Government-Wide Acquisition Contracts or GWACs.  The administration is correct but the pain of shutting down or reassigning an entire organization is causing angst in the community. 

Communication to the GovCon community is key.  At GARDANT we have had many clients change their focus away from individual agency contracts and express their interest in first obtaining a GSA Multiple Award Schedule (MAS).  The MAS is managed and operated by GSA.  This MAS environment uses a Category Management approach for commodity purchasing and is available to any supplier after appropriate submission and approval.  Good in concept, the question is does GSA have the expertise and resources to manage a new influx of companies.

Here are my predictions for what they are worth…

• Individual Agency Multiple Award Commodity contracts will continue to exist but be managed by GSA. This includes NASA SEWP VI, a $100B Information Technology Products and Services contract.

• The Small Business Categories will be changed. The changes will be less based on the socio-economic the person’s / owner’s profile and will be based on the size standard based on revenue and / or employee count.  This is a result of the elimination of the Diversity Equity and Inclusion (DEI) elements in each government contract.

• The Service-Disabled Category will remain the preferred choice by the Department of Defense and Veteran’s Affairs (VA).

• The HUBZone Set-aside will continue to be utilized as it is the only Small Business Category that affects the community rather than just the individual owner like a WOSB or 8(a). If you can operate in a HUBZone think about it…

• The budget was approved so even though money / spending is being cut, and new contracts are being held up, money will begin to flow in Fiscal Year(FY) Q3 now and FYQ4 July, August and September.

• Defense contracts continue moving forward without delay.

• And finally a GSA MAS is a must.

Our predictions are being validated in real-time.  GARDANT had multiple client notifications yesterday on the 9^th of April regarding our bids for the US Army’s Information Technology Enterprise Solutions Hardware contract (ITES 4H).  It is confirmed that our 150-page proposal submissions for each ITES 4H client are being evaluated by the Army.  GARDANT is now actively supporting these clients through their Evaluation Notifications (ENs).  The anticipated award for this $4B IT Products contract for the Army should be this quarter. 

Fingers crossed!

Through my months working with Collective 54 and Greg you will see a new offer from GARDANT with a forum available for the GovCon community and others.  Thank you Collective!

Enjoy the day and Good Contracting!