ANALYSIS: Federal contractors navigate Trump administration uncertainty
Gettyimages.com/Teera Konakan
By
Nick Wakeman
Recent quarterly earnings calls by Science Applications International Corp. and Accenture reveal early some impacts as DOGE reviews create market anxiety.
Most of the executives we speak to are reluctant to directly address the pressures their companies are feeling because of the changes bought by the Trump administration.
But one place we are looking at is the quarterly financial reports and investor calls that public companies make, where we can to get a fuller picture of the actions companies are taking.
Regulatory filings to the Securities and Exchange Commission also include a section where companies describe the risks they see to their business. Some are boiler plate items such as warnings about competition.
But in Science Applications International Corp.’s most recent 10-K annual report, it talks about how the Department of Government Efficiency efforts to reduce federal spending “create uncertainty and risk” because of potential changes in budget priorities and the issuing of awards.
Accenture alluded to the same challenges in its most recent quarterly report and investor call.
SAIC and Accenture are the only publicly-traded companies on our Top 100 to, so far, have reported quarterly figures and trends deep enough into the Trump administration for executives to have much substance to talk about.
SAIC and Accenture also run on different fiscal calendars than most others. Accenture’s fiscal second quarter ended Feb. 28 and the company had its earnings call on March 20. SAIC’s quarter and 2025 fiscal year ended Jan. 31 and its earnings call was March 17.
The most recent quarters for most other publicly traded government contractors ended on Dec. 31,. Their most recent investor calls took place between late January and early February, which was too early for substantive comments. Analysts representing investors asked about the new administration, but the majority of the answers were of the “wait-and-see” type.
But for Accenture and SAIC, their calls took place two months into the new administration and give more insights into the impact their executives are seeing.
During SAIC's earnings call on Monday, CEO Toni Townes-Whitley said the impacts of Trump executive orders and program cancellations have been “nominal."
“However, given how dynamic the environment has been, we believe it prudent to be prepared should conditions change,” she said.
SAIC is on a list of 10 large companies with so-called consulting contracts that are being targeted for possible cancellation. Accenture is on that list as well.
As a result, SAIC has been playing offense and explaining to agencies the work it is doing.
“We've been able to clarify the work that we do, explain where SAIC fits in this ecosystem, explain the mission criticality of our work, as well as some of the technical work that we do to support at an enterprise IT level,” Townes-Whitley told analysts. “I think with greater explanation, it will start to, if you will, bring down some of the more knee-jerk reactions that all of us have had over the last few weeks.”
During Accenture’s call on Thursday, CEO Julie Sweet said the company's U.S. federal subsidiary makes up for roughly 8% of the $64.9 billion in total fiscal 2024 revenue. For just the Americas region, Accenture Federal Services represents around 16% of the $30.7 billion in sales there.
Sweet told analysts Accenture's review of its consulting is still ongoing, but “we continue to believe our work for federal clients is mission critical."
But she also said the new administration has slowed procurement activities and that is "negatively impacting our sales."
Sweet remains optimistic about the federal business overall, saying that Accenture sees "major opportunities over time for us to help consolidate, modernize, and reinvent the federal government."
Given that Accenture is a global company and involved in many sectors, it is also worth noting that Sweet said she sees “significant uncertainty in the global economic and geopolitical environment.” That is a shift from what the company saw in December, she added.
Below is a CNBC interview with Sweet that aired Thursday after the earnings call.
Most of the other publicly-traded companies on the Washington Technology Top 100 will not report their next round of quarterly results until late April or early May, so we should expect more details on the risks and opportunities.
CACI International will not report for several more weeks, but CEO John Mengucci and Chief Financial Officer Chief Financial Officer Jeff MacLauchlan spoke at the Bank of America Global Industrials Conference on Thursday.
Mengucci and MacLauchlan both described an environment of customers in chaos when fielding several DOGE and Trump administration questions.
“Our pipeline per se doesn’t look different,” MacLauchlan said. “But it’s worth noting that the people who comprise the government are in chaos. People are worried about their jobs and their friends down the hall.”
That has resulted in a slowdown of some routine day-to-day operations such as contract modifications because "people are apprehensive," MacLauchlan added.
Mengucci said that is largely to be expected.
"There is so much noise today that the signal doesn’t get out. We are screaming into a hundred mile an hour wind,” Mengucci said. “But we are in the right markets that are well funded. But there are a lot of unknowns.”