Competitors Are Changing— <br/>Our Assumptions Must Change Too

Introduction

The current government shutdown dominating the headlines is a stark reminder of how quickly conditions can shift — funding flows pause, priorities get reshuffled, and capture timelines are thrown into uncertainty.

But the shutdown is only the latest headline.  In 2025, the only constant in the GovCon market is change. Competitors are no longe behaving as they once did — and yet, too many contractors still model them as if they were static.

Funding redistributions, portfolio disruptions, layoffs, commercial partnerships, and shifting cost structures are all altering how companies approach bids. Some firms are even reassessing their own price-to-value ratio — shifting how they balance margin protection, innovation, and competitiveness.

If your competitive intelligence (CI) doesn’t capture these shifts, your Price-to-Win (PTW) analysis is already outdated. To win in 2025, contractors must rethink the foundation of all assumptions. The core question is simple: how are competitors evolving, and how do we adapt our PTW strategies accordingly?

Why Static Assumptions Fail

Traditional PTW often leans on benchmarks: indirect rates drawn from historical norms, labor pricing models based on outdated wrap rates, or competitor behaviors extrapolated from awards five years ago.

But the competitive field has changed:

• Funding realignment has created winners and losers. DoD and DHS contractors see expanding pipelines, while civilian-focused firms face contraction and must chase fewer opportunities.

• DOGE rescissions and contract cancellations have left some competitors revenue-starved, driving hyper-aggressive bid strategies.

• Restructuring and layoffs have reshaped indirect pools, invalidating rate assumptions.

• Commercial entrants and OEM partnerships are rewriting cost structures and introducing new pricing tactics.

If your PTW model ignores these dynamics, you risk chasing ghosts — competitors that no longer exist in the form you assume.

Competitive Intelligence as the New Center of Gravity

1. Portfolio Exposure

• Who lost revenue from DOGE and “One Big Beautiful Bill” realignments?

• Which firms are rebalancing between DoD and civilian markets?

2. Cost Structure Shifts

• Are layoffs, divestitures, or M&A activity changing indirect pools?

• Are competitors repositioning because they compete primarily in a market that is now hyper-aggressive?

3. Risk Appetite

• Which companies will price aggressively to rebuild backlog and who has a stable pipeline?

• What companies are comfortable pricing and operating in a fixed-price environment?

4. Ecosystem Strength

• Are competitors relying on organic capability alone or do they have a commerical ecosystem?

• What companies will struggle to add innovation?

Framed another way, CI is now a living SWOT analysis — continually reassessing competitor strengths, weaknesses, opportunities, and threats to anticipate how positioning will shift from one procurement to the next.

A Practical Example

Consider two competitors:

• Competitor A lost major civilian contracts due to DOGE rescissions. Their backlog is shrinking, layoffs are ongoing, and they are desperate to win. Expect hyper-aggressive pricing and greater risk tolerance.

• Competitor B is diversified across DoD and DHS, with stable revenue. They can afford to hold margin and deliberately position themselves as a value player.

A static PTW model might treat them equally — assuming similar rates and bid strategies. A CI-driven PTW model, by contrast, anticipates their diverging price-to-value positioning and informs where you must calibrate your bid.

Conclusion

Our competitors are changing. Some are weakened and aggressive, others stable and selective, and still others entering the market with cost structures. Some are reevaluating their price-to-value ratio outright, shifting how they compete and how evaluators perceive them.

By refocusing on competitive intelligence, it must now sit at the center of PTW. By integrating exposure mapping, cost structure reforecasting, and SWOT-informed positioning, contractors can align their pricing to today’s realities — not yesterday’s assumptions.

At BlackFlag Advisors, we specialize in building CI-driven PTW models and Wrap Rate analyses that anticipate volatility, quantify risk, and deliver defensible strategies. In a market defined by change, the most dangerous assumption is standing still.

Contact BlackFlag Advisors to learn how we can help recalibrate your competitive models for today’s environment.