Not All Competitors Are Feeling the DOGE Effects Equally — and This Impacts Their Competitive Behavior
In a time when award margins are razor-thin and evaluation scores are converging, understanding a competitor’s financial posture and strategic flexibility is just as important as understanding their technical capabilities.
One of the most consequential missteps in PTW modeling today is treating competitors as monolithic entities with uniform motivations. The reality post-DOGE is starkly different: some competitors are protecting stable revenue streams, while others are fighting for survival.
Below, we explore how the unequal impact of DOGE reforms is reshaping pricing behavior and outlines best practices for modeling this asymmetry in PTW analysis.
DOGE: Policy Actions change the Playing Field
The DOGE executive initiative, composed of over seven major Executive Orders issued between January and April 2025, launched a coordinated campaign to:
Cancel or de-scope existing federal contracts
Consolidate procurement through GSA and OneGov
Shift preference to fixed-price, commercial-style engagements
Contract consolidation
Reduce the size and influence of agency-based acquisition offices
As of 14 May 2025, over 7k+ contract actions have been affected, with billions in ceiling value rescinded. These cancellations disproportionately targeted:
Agencies with large discretionary budgets (e.g., HHS, USAID, DOE)
Low-priority IT modernization and back-office support services
Reseller-based cloud contracts (e.g., Cloud 1 cancellation: $1.4B)
As a result, we are seeing lower moneyflows, fewer opportunities and greater competition for the remaining dollars.
Uneven Impact
This wave of cancellations has created material revenue disruption—but not evenly across the industry. A detailed analysis of 9 Tier 1 IT service contractors revealed:
Leidos, Booz Allen Hamilton (BAH), Accenture Federal, and GDIT absorbed over $2.1B in DOGE-related contract reductions
Other peers—like IBM, CGI, and Guidehouse—faced minimal or no exposure at the time of this post
Deloitte, excluded from peer-group quantification due to incomplete data, absorbed $1.3B in DOGE-related impact, per open-source contract reviews
Add to that the slashing of SBA support infrastructure and reduced set-aside targets, and it’s clear: not everyone is bidding from the same place anymore. The FY25 procurement guidance drops the Small Disadvantaged Business (SDB) goal from 15% to 5%, a move that sends a strong signal about shifting priorities. Meanwhile, agency small business offices are downsizing, and the SBA itself is facing workforce cuts — meaning fewer advocates to push for SB participation and less oversight to enforce subcontracting compliance. For small and mid-tier firms, that translates to fewer protected lanes, increased exposure to full-and-open competition, and a steeper climb to stay viable. They’re now competing head-to-head with Tier 1 contractors — many of whom can afford to undercut aggressively in the near term to protect long-term strategic positioning.
How do Competitors Behave when Faced with Top-Line Contraction?
The answer lies in behavioral economics.
Fewer opportunities, greater competition, and tighter funding environments trigger one consistent behavioral response across the industry: firms take bigger swings.
In an effort to preserve top-line revenue, companies that previously bid conservatively are now leaning harder into aggressive price postures, adjusting fee downward, and accepting risk positions they may have avoided in more stable cycles. Where before a firm might have passed on a pursuit that didn’t match their core delivery profile or margin threshold, many are now recalibrating. The logic is simple: with fewer chances to win, each bid carries more strategic weight.
The bottom line: competitors facing revenue contraction are showing up to the table with a much more aggressive pricing stance. Fee positions are tightening. Risk profiles are rising. PTW models need to reflect that intensity, or you risk pricing for yesterday’s market.
The answer lies in behavioral economics + PTW modeling.
Practical PTW Adjustments:
Desperation isn’t linear — It’s exponential. The further a contractor’s revenue base falls below target, the sharper their pricing posture becomes.
Not all competitors are in the same storm. Some are in yachts. Some are in dinghies. Your PTW must account for both.
The new GOVCON reality demands high-resolution modeling that ties financial stress to bidding behavior.
Your competitors aren’t just bringing past performance and technical chops to the table—they’re bringing organizational stress, survival instincts, and CFO-imposed cost models.
To win in this environment, your PTW must model not just how competitors can bid, but why they have to.