3 tech-powered trends for GovCon to watch in 2025

The government contracting industry is fraught with stiff competition, stringent compliance mandates, and, too often, antiquated systems that don’t necessarily aid project management.

These outdated systems, usually implemented poorly and lacking interoperability, frequently result in loss of time, money, and opportunities. 

Although government contractors have experimented with new tools and technologies more frequently in recent years, the industry’s technological evolution remains slow-paced. 

Fortunately, 2024 has brought many innovative solutions catered to the industry. This is partly due to the emergence of intuitive and interactive applications of artificial intelligence, the Internet of Things and cloud computing.

Simultaneously, the recent developments in the industry – the newly-founded Department of Government Efficiency, Cybersecurity Maturity Model Certification compliance, and a growing demand for speed and cost-effectiveness – mean technology will likely take center stage for the industry players in the coming year. 

Below, I outline some key technology-enabled trends we can anticipate in 2025.

Improved Cybersecurity and Compliance with Technology-Led Solutions

In 2025, data and information security will be a top priority for all contractors, especially those dealing with projects and contracts related to the Defense Department, which are expected to comply with the Cybersecurity Maturity Model Certification (CMMC). 

The CMMC framework was established to enhance cybersecurity practices and ensure contractors and subcontractors safeguard sensitive information, such as Federal Contract Information and Controlled Unclassified Information. Therefore, they will need to rethink their cloud strategies. Lack of compliance will prove costly not only in terms of money but also for national security.

As a result, we can expect these contractors to leverage data- and analytics-enabled tools to help assess their CMMC compliance needs, review and flag emerging issues or open security/compliance risks, and speed up application and approval processes.

Government contractors may gravitate towards solutions such as Microsoft Azure Government High and AWS GovCloud (US) to enable selective access and ensure robust security when handling sensitive data. We anticipate a rise in solutions that will protect against advanced cyber threats and streamline certification processes by identifying and addressing compliance gaps in real-time.

Enhanced Operational Efficiency and Improved Decision Making

In line with the key areas of priority outlined by DOGE, we can expect more government contractors willing to leverage AI and cloud-enabled technologies that can seamlessly integrate with their existing systems. Sometimes, they may even be open to entirely new business ways.

In fact, in 2024, according to the GAUGE report one third of GovCon companies are already incorporating AI into their workflows, reflecting a growing recognition of its potential to revolutionize operations.

One critical area where we can anticipate a shift in the use of AI is simplifying the bidding process for new contracts. AI can quickly analyze many requests for proposals and requests for quotes, match the contractor's core competency based on empirical data, and rank them in order with winning probabilities.

Empowering GovCon with real-time alerts and notifications as the opportunity arises enables them to act quickly. AI can speed up scope project costs and estimates, resource management, and response to RFPs and RFQs.

AI will also serve as a welcome respite to most government contractors who find it challenging to create accurate pricing models or lack the nimbleness to adapt based on each unique customer’s use case.

Similarly, with the new sophistication obtained by large language models such as ChatGPT and Gemini, government contractors can enable real-time stakeholder interactions, prompt query resolution, and interactive resource libraries. AI will eliminate unnecessary manual processes through the technology’s automation capabilities. 

Empowered Small and Mid-Size Business Contractors

Technology will slowly but surely level the playing field for small and mid-sized contractors. While the use of technology is still very nascent among small and mid-sized government contractors, the evolution of technology guarantees a speedy adoption of technology by this segment of the industry. 

Today’s technology solutions are designed to be more intuitive, simple to deploy and easily integrated into existing systems. Most importantly, they free up small contractors' limited time, resources, and budget for more important endeavors. 

One apparent area of the shift we can expect is the adoption of digital payments in the GovCon B2B space. AI tools can also better equip these companies to compete for programs aimed at small, veteran-owned, and disadvantaged businesses.

Similarly, through nifty dashboards, reports, and quick AI-generated summaries, these smaller businesses can quickly be adept at the areas of focus that can help them streamline bidding and compliance requirements. Furthermore, companies that choose to be digitally led will also benefit from the ability to tap remote, distributed teams, enabling them to be diverse and inclusive.

Small businesses need secure and compliant infrastructure, credible talent, and any buffer time to effectively and efficiently handle pressing business priorities. Automated RFP and RFQ-matching third-party tools like GovWin IQ or BidNet Direct can deliver valuable insights around available RFPs, competitive analysis, advanced search filters, market forecasting, and federal/state and local opportunities.

These systems automate contract and opportunity matches, which are time- and resource-intensive. These tools will enable businesses with centralized access and streamline processes for consolidation bid opportunities from multiple agencies, saving time for vendors searching for government contracts and effectively allowing more efficient procurement processes with electronic submissions and document management.

Bottom Line: Enhancing Citizen and Stakeholder Satisfaction

Ultimately, government agencies engage government contractors to ensure seamless, safe, and secure delivery of products and services for the end consumers.

By prioritizing technology as the key driver of business transformation, government contractors will better capture the opportunity to engage these stakeholders better while enabling transparency, responsiveness, and accountability. Furthermore, by leveraging technology to collect agency and citizen feedback and extract valuable insights, contractors can create new benchmarks for service delivery.

Technology will act as a catalyst for transformation and address the needs and challenges of the government and the public.