Top Five Findings From the 2023 Clarity Government Contracting Study

May 24, 2023
2023 Clarity Government Contracting Findings

If there is one gold standard for government contracting benchmarks, it’s Deltek’s Clarity Government Contracting Industry Study. This annual comprehensive report explores departmental challenges, identifies key issues and splits up industry sectors to provide benchmarks and trends relevant to every company involved in selling to the government.

In its 14th year, Deltek Clarity offers incredibly detailed insights for government contracting professionals. This year’s study found that 88% of businesses reported revenue growth as the same or higher in 2022 and have developed strategies and tools to continue moving forward optimistically into 2023, with 93% reporting equal or higher expected revenue.


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Despite the overall challenging economic conditions for both small businesses and the labor market in general, the government contracting industry is anticipating a favorable environment this year. Here are five key findings drawn from the survey responses of government contracting industry peers:

1. Positive Growth Outlook Reported

Clarity respondents reported a variety of positive performance and outlook metrics. Nearly half (49%) reported an increase in government revenue in 2022, with an even larger number (62%) expecting an increase in 2023. And more than half of respondents (57%) report the number of their overall federal contracts increasing, especially larger businesses. With more respondents indicating the number of contracts won is increasing than the total value of those contracts, it could be a sign that there are more, smaller contracts available to government sellers.

2. Investment in Cybersecurity is High

Government businesses are continuing to invest in technology solutions to make their lives easier. Cybersecurity is the specific area that tops the list of technology investments, showing that many companies are taking a defensive stance to avoid breaches or other issues. A significant 68% of respondents to the survey named cybersecurity as a top concern for their IT teams.

3. Small Businesses Struggling

Small businesses (under $20 million in revenue) reported a different experience in navigating the public sector, compared to their counterparts from larger businesses. Despite the government’s increased prioritization of small business opportunity creation, the elements involved in pursuing and winning those opportunities have still made growth paths difficult. Small businesses do not have the resources of larger companies to absorb increased costs associated with doing business in the public sector, and elements like inflation and a challenging labor market have hit them harder. Due to these factors, small business respondents noted that they are more focused on strategic teaming to drive growth.

4. Process Optimization is a Leading Strategy

One way that small businesses – and businesses of all sizes – are getting ahead in this challenging environment is by optimizing their processes. A strong majority (61%) of respondents reported expecting increases in their business development (BD) investment, with almost none (1%) predicting a decrease. Specifically, improving the sales process and effectiveness emerged as the most important BD area of investment to pursue, with 81% rating it as one of their top initiatives.

5. Labor Market Continues to Tighten

Clarity findings from previous years highlighted the difficulties government contractors face in competing for qualified talent. With the labor market continuing to favor job-seekers, labor costs are seen as the most significant driver impacting companies’ business, selected by 37% of respondents. Smaller companies seem to be most concerned, with 43% of companies under $50 million in revenue citing labor costs, in comparison to 34% of larger businesses. Compounding that cost driver is inflation; nearly a quarter of respondents (24%) see cost of goods as the most impactful cost.

The full 2023 Clarity Government Contracting Industry Study goes into much more detail on different government contracting benchmarks, and it identifies key issues impacting the entire market while forecasting trends into 2024 and beyond.


“This year, [the Clarity study] found an optimistic outlook for increased government sales revenue and win rates in 2023, and the expectation to get back to, and possibly even exceed, pre-pandemic successes.”

– Kevin Plexico, SVP of Information Solutions at Deltek


Of course, there are many different ways to break down the government contracting market. You can get an in-depth look at some of the benchmarks, market conditions and challenges that are impacting the entire government contracting industry when you view the on-demand webinar, First Look at Insights & Trends from 2023 Clarity Study. And stay tuned for more in-depth Clarity analysis in the coming months.