Procurement Reform

2025 provides an opportunity to meaningfully reduce regulatory burdens and eliminate barriers to entry for commercial firms seeking to support the federal customer. If the recently passed FY25 National Defense Authorization Act and Sen. Wicker’s proposed FoRGED Act is any indication, this year will bring a heightened focus on streamlining acquisition to meet the challenges facing our government, especially those from near peer adversaries. These efforts will include, among others, rehabilitating commercial item contracting, embracing streamlining that supports rapid acquisition, and eliminating unnecessary regulatory and procedural burdens. Effective communication and engagement between government and industry will be critical in implementing meaningful procurement reform that delivers best value mission support for the American people.

Modernization

Modernizing IT and business process across systems and organizations will support a more efficient and effective procurement system. Many of these efforts are ongoing.  The General Services Administration (GSA) is rolling out its Federal Catalog Platform (FCP) — a new vendor catalog management tool supporting GSAAdvantage! Our experience with the FCP has shown that communication with GSA’s contractor community regarding the system requirements is vital in avoiding unintended consequences that undermine access to the commercial market and reduce competition. Moreover, it is critically important to ensure systems are implemented consistent with policies.

Optimizing organizational structures — including ensuring that business processes are consistent with IT systems — provides an opportunity to further stream processes and enhance operations.  GSA’s recent reorganization, focusing largely on the Assisted Acquisition Service, provides a foundation for assessing and adjusting, as appropriate, current internal contracting structures supporting the FSS program (what is the FSS program).

Finally, it will be interesting to see the impact of the Department of Government Efficiency (DOGE) on modernization efforts, be it information technology (IT) or organizational modernization.  There are opportunities to leverage reform and modernization to improve performance across government, such as using Artificial Intelligence.

Artificial Intelligence (AI)

The extent to which AI is effectively utilized to improve acquisition and government operations depends in part on modernization of existing IT and organization systems. But AI’s role in federal procurement will continue to grow. Offerors increasingly will utilize AI in proposal preparation, including management of past performance and experience data. Correspondingly, the government’s use of AI for the evaluation of proposals will grow. Just as offerors are being required to disclose the use of AI in proposal preparation, the government should be required to disclose the use of AI in the evaluation of proposals. The use of AI in the evaluation of proposals is analogous to the use of a consultant expert and, as such, raised potential conflict of interest and data security questions that should be addressed as part of acquisition planning.

2025 also likely see increased procurement for AI to support data management and modernization. Key contracting questions/frameworks regarding AI acquisition will have to be addressed. These include allocation of data rights, security of government data, conflicts of interest, data bias, and common contractual terminology.

Supply Chain Visibility and Resiliency

2025 will see continued focus on supply chain resiliency, often revolving around support for and investment in the domestic industrial base. Priority areas are likely to continue to include investments in, and contracts for domestic munitions production and pharmaceuticals.

There will be continuing focus on limiting/eliminating the acquisition of products made in China.  Every year we continue to see new statutory restrictions on the purchase of products made in China, Russia, Iran, and N. Korea (but mostly China), such as the Section 889 restrictions on communication equipment and services. The Trade Agreements Act (TAA) plays an important role in this effort as products made and/or substantially reformed in (or controlled by) China are not eligible for purchase under a federal procurement covered by the TAA.  Of note, the vast majority of federal procurements are covered by the TAA. In contrast, under the Buy American Act (BAA), products made in China can be purchased, depending on the price.

Cybersecurity

Cybersecurity is ubiquitous and foundational to success in commercial and federal markets.  2025 will see continued focus on cybersecurity requirements for government contractors. DoD is (finally) implementing its Cybersecurity Maturity Model Certification (CMMC) compliance regime and several proposed FAR rules are working their way through the system. Because the current cybersecurity framework implements the Biden Administration’s cyber executive order raising the specter of the executive order being rescinded by the incoming Administration and (yet again) changing the cybersecurity framework for government contractors. The question will be the degree of change and corresponding impact on compliance.

This list is by no means exhaustive. It represents the starting point for the key themes that will shape the procurement market in 2025. The Coalition looks forward to working with all stakeholders in 2025 in delivering common sense procurement policies that deliver best value mission support for the American people.

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