New Presidential Administration Potential Investments and Government Contractor Impact

January 19, 2021

The pomp and circumstance that comes with the inauguration of a new President of the United States is generally the last thing on the minds of government contractors. Their focus falls more to the policy priorities and the shifts in budget and spending that accompany a new philosophy and approach to governing the Executive branch. In simple terms, they want to know how to adjust and adapt their business to ensure relevance and set themselves up for future work.

Deltek’s analysts have combed through President-elect Joseph R. Biden’s service record as both a U.S. Senator and Vice President of the United States and weighed it against the current state of the country and sentiments within the market. The result, 2021 Administration Transition: Impacts and Implications for Government Contractors, a webinar filled to the brim with expert insights and projections on where contractors can tap into the new administration’s most likely priorities.

How the Presidential Transition Affects Contractors

According to a Deltek FedFocus Webinar Poll from November 2020, federal contractors are equally concerned about four major market conditions that are most likely to affect 2021 sales:

Aside from the aspects everyone thinks about initially, like budgets and programs, Presidential transitions can impact human capital levels and management, as well as avenues of procurement. Many government firms see the time post-inauguration as a window of opportunity for internal evaluation, using the time to review current solutions, value propositions and sales strategies. Given that the full influence of a new president-elect may not be felt for up to 24 months into a term, program adjustments can be made on current contracts to align with the new priorities, methodologies and metrics provided by the new administration. Agency contact information can also be reviewed to address any transition turnover and forge new relationships as they pertain to current customer work.


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Likely Priorities of New Administration

Economic recovery and the continuing COVID-19 response sit squarely at the top of the list for the new administration. Immediate and long-term actions to support economic recovery and growth, like unemployment insurance and small business aid, are under consideration to encourage recovery. These “restart packages” would be of benefit to small federal contractors struggling to keep afloat like their commercial counterparts.

President-elect Biden’s administration has released a seven-point plan to address the COVID-19 pandemic. The plan includes more testing and tracing, shoring up the supplies of personal protective equipment (PPE), plans for distribution of treatments and vaccines, and preparation for future response to similar health crises. Contractors could see an increase in funding for healthcare and health mission agencies, potentially impacting the Food and Drug Administration, the Centers for Disease Control, the National Institute of Health, the Defense Health Agency and more.

Beyond the immediate needs for COVID-19 relief, the president-elect has expressed a desire to revisit the Affordable Care Act (ACA) to reinforce what is working and expand access to care. To do so, contractors could potentially see a reversal of budget cuts and an increase in support and resources to aid agencies, like the Internal Revenue Service (IRS), administering day-to-day implementation needs such as tax implications and compliance.

Budget amounts for the Department of Defense (DoD) potentially will not change under the new administration, however certain priorities will. President-elect Biden has stated that investments in emerging technology, like unmanned systems, artificial intelligence and cybersecurity, will be made. Budget will likely also be allocated for Chinese and Russian threat mitigation strategies. Contractors should expect a need for research and development, cybersecurity and reinforcement of overall communications systems for civilian and defense agencies.

The environment and climate change are an important focus for the new administration. Previous decisions and rules that weakened environmental protections will potentially be reversed and new or expanded federal organizations will be put into place to address the global and domestic impact of climate change. Research and development for clean energy technology and supply chains will likely benefit, as will operational support (information technology infrastructure and analysis needs).

More Forecasts for the New Administration

Access additional resources detailing what is could be on the horizon with the new Presidential administration, including expected budget numbers and timelines. Attend the webinar 2021 Administration Transition: Impacts and Implications for Government Contractors for a take by Deltek’s expert analysts. Also, make the time to review items available in the 2021 Administration Transition Resource Hub, such as key questions and answers with senior Deltek thought leaders.