As we navigate through the evolving landscape under the second term of the Trump administration, Mary Scott Nabers, CEO of Strategic Partnerships Inc. and a former Texas official, outlines key predictions for public contractors facing this new era. The rapidly changing environment requires adaptability and a clear understanding of what government officials prioritize. Below are Nabers' 11 predictions and strategic insights for businesses engaging in government contracting.

Predictions for Public Contractors

The Trump administration’s influence has sparked significant changes in the global market, which, in turn, are causing ripple effects at state and local levels. As disruptions continue, state and local governments are either mirroring federal changes or waiting to understand the full scope of future impacts. These shifts have created an uncertain environment, but here are 11 predictions that public contractors should keep in mind:

Continued Uncertainty and Chaos

‍The volatile environment will persist for several more months. However, by the last quarter of 2025, the business landscape will become clearer, making decision-making less complicated.

Job Creation Struggles

‍Massive federal employee layoffs will outpace job creation, resulting in higher-than-normal unemployment rates.

Fewer Federal Programs

‍While essential funding programs for critical needs like water, roads, bridges, and housing will survive, the number of federal programs providing such support will decrease significantly.

Decentralization of Federal Activities

‍Many federal activities will be shifted to state governments, with education, parts of FEMA, and regulatory compliance programs being the most likely candidates for transfer.

Risk to Nonprofits

‍Nonprofit organizations will face heightened scrutiny, with some at risk of losing their tax-exempt status, particularly those involved in political activities or diversity, equity, and inclusion efforts.

Reductions in Federal Funding for Colleges and Universities

‍Federal funding to higher education will likely decrease, particularly for institutions with visible DEI programs.

Environmental Regulation Reductions

‍Many environmental regulations will be eased or eliminated, particularly those affecting industries like energy production and public infrastructure.

Funding Cuts for Renewable Energy Projects

‍Support for renewable energy projects, including electric buses and fleets, may be slashed as part of the new administration’s approach to energy.

Public Transportation and Transit-Oriented Development at Risk

‍Public transportation agencies could face funding cuts, with support for transit-oriented development likely to be impacted.

Heightened Scrutiny in Procurement and Contracting

‍Government procurement processes will be more scrutinized, but the volume of contracting will remain high due to continued outsourcing resulting from federal employee layoffs.

Reduction in Housing Subsidies

‍Federal subsidies for housing and rural development will face cuts, affecting programs designed to support affordable housing and rural infrastructure.

What Public Contractors Need to Know

The U.S. government marketplace remains the largest in the world, and contracting with private sector firms will continue to be an essential part of its functioning. To be successful, public contractors must adapt quickly to these changing dynamics. Below are Nabers’ top suggestions for companies working in government contracting:

Pricing Will Be Crucial

‍In government contracts, price will play an even more significant role in selection processes. While "best value" is still important, large price discrepancies may lead to the highest bidder being eliminated.

Increased Scrutiny on Multi-Year Contracts

‍Expect more scrutiny on long-term contracts, particularly during renewals. Decision-makers will take a closer look at the performance of contractors and the sustainability of these agreements.

Shifts in Small and Minority-Owned Business Certifications

‍Certifications for small and minority-owned businesses could lose their value, and extra points for hiring local subcontractors may increase in importance.

Understanding Local Political Dynamics

‍Contractors will need to understand each state’s political environment and governing structure when bidding for projects or presenting proposals.

Budget Reductions Across Jurisdictions

‍Governmental entities will face budget reductions, making contracting services that provide greater efficiency and cost-saving potential highly attractive.

Advantage for U.S.-Based Companies

‍Contractors with U.S. roots will have an advantage, as domestic firms will be prioritized for federal contracts.

Demand for Technology Modernization and AI

‍With technological advancements accelerating, AI and technology modernization will be in high demand. Contractors must be prepared to meet security certifications for these technologies.

Rise of Public-Private Partnerships

‍Expect an increase in public-private partnerships, with private investors playing a larger role. However, the elimination of tax credits could impact the attractiveness of these partnerships.

Cybersecurity Investments

‍Cybersecurity will become a primary concern, with ample funding allocated to enhance security across public sector projects in areas like water, power, utilities, and public networks.

Ethical and Regulatory Oversight on Large Projects

‍Large public projects may require contractors to select delivery partners early, taking on responsibility for ethical compliance, regulatory oversight, and overall project execution.

Adapting to a Changing Landscape

The key to success in government contracting under the Trump administration will be quick adaptation to the evolving environment. Understanding what is important to government officials, particularly at the federal, state, and local levels, will be critical to securing contracts and maintaining a competitive edge. By focusing on efficiency, technology, and the changing political landscape, contractors can position themselves for continued success in this shifting market.

Government contracting will remain robust, but only those who can navigate these changes effectively will thrive in the years ahead.

Originally reported by Mary Scott Nabers in Construction Dive.