Deltek, the leading global provider of software and solutions for project-based businesses, has officially published the results from its 16th annual Deltek Clarity Government Contracting Industry Study.
Going by the available details, this particular lowdown takes into account the opinion of nearly 900 contractors from across all business sizes and sectors, all for delivering a comprehensive analysis of the current market conditions, benchmarks, challenges, and forward-looking strategies. The idea behind so is to cover every possible component which, on its part, could go on to shape the government contracting landscape across US and Canada.
“Contractors are navigating a complex and rapidly changing environment, but they also have more opportunities than ever to innovate and grow,” said Kevin Plexico, Senior Vice President of Information Solutions at Deltek. “This year’s Clarity report highlights how top-performing firms embrace emerging technologies like AI, strengthen compliance postures, and refine business development strategies to capture new opportunities while managing risks and costs. Success today requires not just resilience, but proactive, data-driven decision-making across all areas of the business.”
As for the results, they reveal how the Government Contractor Confidence Index fell by 3.5%, hitting its lowest point in six years and signaling increased caution around federal spending, as well as growth prospects for contractors.
Next up, the report digs into how labor and the rising costs of goods remain among the top concerns for contractors. Firms reported, in this regard, how improving internal efficiencies is their chief priority to overcome these barriers.
Another detail worth a mention is rooted in the fact that 45% of respondents are now using artificial intelligence to streamline their operations and enhance business development efforts. This marks an uptick worth 10 percentage points from last year.
Moving on, Deltek’s report also discovered that many small business contractors continue to face slower growth and limited access to federal resources. You see, nearly half (46%) of small business respondents indicated they aren’t currently taking advantage of federal support programs such as 8(a). These contractors also report the greatest difficulty in adopting new technologies like AI, and managing rising labor and compliance costs.
Hold on, we still have a couple of bits left to unpack, considering we haven’t yet touched upon a piece of data claiming steep increases in compliance costs. This translates to how more than half of respondents anticipate increased compliance costs due to updated CMMC requirements, as well as related infrastructure upgrades and tools.
Hence, to facilitate operations, enterprise firms have already invested an average of $100K or more. Now, while small businesses have typically spent far less, the DoD estimates the cost to support a CMMC Level 2 Certification for SMBs will still be around $100k.
We also haven’t touched upon how finding opportunities too late was the top business development challenge. Against that, the industry’s top performers, the ones who landed themselves in the top 10% of self-reported new bid win rates, are leveraging AI, proposal automation, and early lead identification to stay ahead.
Founded in 1983, Deltek’s rise up the ranks stems from providing enterprise software and information solutions for project-based businesses. The company’s excellence in doing so can be markedly understood once you consider well over 30,000 organizations, and millions of users in over 80 countries around the world, rely on Deltek for superior levels of project intelligence, management, and collaboration.
