Key Policy Changes Impacting Government Contractors Under the Trump Administration

By TED ROSE, ROSE FINANCIAL SOLUTIONS

The first 100 days of any new administration bring major policy shifts, and for government contractors (GovCons), these changes can mean new challenges—or opportunities.

Under the Trump administration, three major shifts are already reshaping the federal contracting landscape:

• Foreign Aid Freeze – A 90-day review has halted multiple international aid projects, impacting contractors in health, education, and civil society sectors.
• Federal DEI Rollbacks – Agencies are no longer required to prioritize Diversity, Equity, and Inclusion (DEI) in procurement, affecting businesses that relied on set-aside programs.
• Energy Policy Shift – Renewables take a backseat as federal funding pivots toward domestic oil, natural gas, and infrastructure projects.

Understanding these shifts and proactively adjusting your strategy is critical for staying competitive. To help GovCons navigate these changes, we’re hosting a Mastermind session: "Surviving the First 100 Days of the Trump Administration." Join us for expert insights on funding changes, regulatory updates, and strategies to maintain financial stability.

Foreign Aid Freeze: How It Impacts GovCons

The administration's decision to freeze foreign aid funding has led to immediate uncertainty for contractors supporting international development projects. The State Department has issued "stop-work" orders, affecting initiatives in global health, education, and governance programs.

While military aid to key allies like Israel and Egypt remains intact, GovCons working in the foreign aid sector must assess their exposure and prepare contingency plans.

What You Can Do:

• Clarify project status – Engage with contracting officers for guidance.
• Identify alternative revenue sources – Look at domestic opportunities to offset losses.
• Strengthen financial resilience – Diversify funding streams and prepare for disruptions.

Federal DEI Rollbacks: Shifts in Procurement Priorities

Diversity-focused procurement policies are being scaled back, impacting small businesses that previously benefited from DEI-driven set-aside programs. While diversity remains a priority for some agencies, funding and mandates are shifting toward cost-efficiency and technical qualifications.

How GovCons Should Pivot:

• Refocus on technical expertise – Highlight past performance, innovation, and cost-effectiveness.
• Strengthen industry partnerships – Build relationships with agencies still prioritizing DEI.
• Monitor procurement changes – Stay informed on how individual agencies adjust policies.

Energy Policy Shift: The Decline of Green New Deal Influence

Renewable energy projects are seeing reduced federal investment as the administration prioritizes domestic energy production and infrastructure. Funding for solar, wind, and environmental compliance is tapering off, while incentives for oil, gas, and grid modernization expand.

Strategic Moves for Energy GovCons:

• Identify opportunities in grid modernization, carbon capture, and domestic production.
• Engage with federal energy agencies and monitor procurement shifts.
• Pivot toward infrastructure projects aligned with administration priorities.

Financial Stability & Resilience for GovCons

With funding shifts and policy changes in play, GovCons must understand equitable adjustments and cost recovery strategies.

#1 Rule for Financial Stability: 🚨 DON’T PANIC 🚨

Knee-jerk reactions to policy shifts can be worse than the shifts themselves. Stay informed, be strategic, and take proactive steps to adapt.

• Recoverable Costs: Contract modifications, direct labor, administrative expenses.

• Non-Recoverable Costs: Speculative losses, inefficiencies, unrelated expenses.
• Best Practices: Keep detailed records, work closely with contracting officers, and seek expert financial guidance.

Where GovCon Dollars Are Flowing:

• Defense & Border Security – Increased spending on military tech, cybersecurity, and surveillance.

• AI & Automation – Expanding AI-driven government applications and automation projects.

• Domestic Energy & Infrastructure – Investment in traditional energy and modernization efforts.
• Small Business & Workforce Support – Funding for American businesses and workforce training.

GovCons should align their capabilities with these priorities to seize emerging opportunities.

Long-Term Strategies for GovCons

Adapting to new government priorities requires both immediate action and long-term planning.

• Don’t Panic – Stay strategic, informed, and adaptable.
• Develop Contingency Plans – Be ready for contract modifications or delays.
• Diversify Revenue Streams – Reduce reliance on single funding sources.
• Stay Compliant – Track regulatory updates to avoid missteps.
• Invest in Technology & Strategic Partnerships – Improve efficiency and expand networks.

GovCons that remain flexible and proactive will be best positioned for sustained success.

Join Our Mastermind: Surviving the First 100 Days of the Trump Administration

To help businesses navigate these shifts, we’re hosting a Mastermind session with expert insights on funding changes, policy updates, and strategies for financial stability.

📅 Date: Friday, January 31st at 12:00 PM ET
📌 What You’ll Learn:

✔ How policy shifts impact government contractors
✔ Strategies for navigating funding changes
✔ Steps to secure your financial future in uncertain times

Register Now to stay ahead and keep your GovCon business thriving.



Ted Rose

President, CEO, and Founder

In 1994 Ted Rose founded Rose Financial Solutions (ROSE), the Premier U.S. Based Finance and Accounting Outsourcing Firm. In 2010, the Blackbook of Outsourcing named ROSE the #1 FAO firm in the world based on client satisfaction. As the president and CEO of ROSE, he provides executives with financial clarity. Ted has also acted as the CFO for a number of growth companies and assisted with various rounds of financing and M&A transactions.