11 predictions for public contractors under Trump 2.0

Mary Scott Nabers is CEO of Austin, Texas-based research and consulting firm Strategic Partnerships Inc. and the author of “Inside the Infrastructure Revolution – A Roadmap for Rebuilding America.” Nabers formerly served on the Texas Railroad Commission and the Texas Employment Commission. Opinions are the author’s own.

The massive changes coming from the Trump administration have disrupted global markets and caused many businesses to put a pause on major decisions.

Officials at the state and local levels are either following the federal government’s lead with similar changes and disruptions, or they are just waiting to see what comes next.

At this moment, there are no absolutes. These times are too unique, and changes are occurring faster than one would have thought possible. But, here are 11 predictions about what I believe we should expect:

1. Chaos will remain for many more months, but by the last quarter of 2025, the future will be much clearer and business decision-making will be easier.
2. Job creation will not be able to keep up with the massive federal employee layoffs so unemployment will be higher than normal.
3. The number of federal programs providing funding for America’s critical needs — water, clean air, roads, airports, bridges, housing, research, economic development, broadband and ports — will be fewer, but critical funding programs will survive.
4. Many federal activities will be transferred to the states. The most likely targets are education, parts of FEMA and regulatory compliance programs.
5. Nonprofit organizations will be in danger of losing their tax-exempt status, and many will be audited for political involvement and diversity, equity and inclusion efforts.
6. Federal funding previously allocated to colleges and universities will be reduced and likely stopped if evidence of DEI programs exists.
7. Environmental regulations will be reduced, and many will be lifted completely.
8. Funding for renewable energy projects may be eliminated along with support for electric buses and fleets.
9. Public transportation agencies will see funding reductions, and support for transit-oriented development is likely at risk.
10. Procurement and government contracting will be more highly scrutinized, but the volume will not be diminished. In fact, more outsourcing is likely because so many public employees have been terminated.
11. Federal subsidies for housing will be reduced, and funding for rural development could be less.

Since the U.S. government marketplace is the largest market in the world, contracting with private sector firms will remain robust.  The need for private sector collaboration, expertise and services will escalate. To be successful in these changing times, here are my top 10 suggestions for companies that contract with the government:

1. Pricing will be a critical component of being selected as a government partner. In the past, selections were usually made based on best value rather than lowest price. That will continue to some degree, but a large price variance could easily eliminate the highest bidder.
2. Large multi-year contracts will be subject to more scrutiny, and there will be intense review before renewals.
3. Certifications for small and minority-owned businesses could be eliminated or reduced in value. Extra points awarded to prime contractors with local subcontractors will probably increase.
4. It will be more important for contractors to understand each state’s governing structure and the current political environment when bidding on jobs or even making presentations to stakeholders.
5. Governmental entities in every jurisdiction will be at great risk of budget reductions. Contracting services that provide greater efficiency and require fewer resources will be very attractive.
6. Companies with U.S. roots will have advantages.
7. Technology modernization and artificial intelligence will be in high demand, but security certifications will be required. 
8. Public-private partnerships will be more abundant. Private sector investors will be encouraged to participate, but tax credits could be eliminated.
9. Cybersecurity will be a top concern, and funding will be available for security enhancements for every type of operational project — water, power, utilities, public buildings and public networks.
10. Large complicated public projects may require the selection of delivery partners before other solicitations are released. Delivery partners may be asked to accept responsibility for ethical and regulatory oversight along with all other project responsibilities.

It is a changing world, so adapting quickly and understanding what is important to public officials is the basic component for government contracting success. Thousands of contracting opportunities will continue to be available throughout the country, because the U.S. government marketplace will remain the world’s largest market.