The Department of Government Efficiency (DOGE) is tasked with streamlining government operations, reducing wasteful spending, and improving overall efficiency within the federal government. Spearheaded by Elon Musk, this initiative has the potential to significantly reshape the government contracting landscape and the business of many federal vendors. The TechnoMile Research team, leveraging data from GovSearchAI, has created an analysis that measures the relative impact of recent DOGE activity on federal contractors. TechnoMile’s analysis of the impact to these organizations includes our proprietary DOGE Impact Score.
Understanding the DOGE Impact Score
The DOGE Impact Score is calculated using unexercised ceiling and options value, which represents the difference between the total potential value of a federal contract and the amount of work that has, to date, been ordered and funded by an agency and publicly reported – in simple terms, it’s contract value that is not yet realized and therefore could be at risk.
TechnoMile’s proprietary DOGE Impact Score considers the unexercised ceiling and options value of a vendor’s contract(s) that are funded by a DOGE-impacted agency or program, relative to the aggregated unexercised ceiling and options value across all of a vendor’s existing awards across all federal agencies. The level of DOGE-related impact to each vendor’s federal business is derived and the vendor is assigned a DOGE Impact Score ranging from Very Low to Very High, as follows:
Because it’s rooted in the value of a vendor’s unexercised ceiling and options, TechnoMile’s DOGE Impact Score represents a valuable, forward-looking indicator of the impact of DOGE initiatives on a federal contractor’s business.
Summary of Analysis: Exposure at the U.S. Department of Education
For this analysis, our team focused on vendors doing business with the U.S. Department of Education. On March 20, President Trump signed an Executive Order with the aim of closing down the Department of Education and returning education authority to the states. This follows action taken in February at the department’s research division – the Institute of Education Sciences (IES) – where contracts comprising the majority of this office’s work were cancelled following a review by DOGE. This analysis considers the at-risk value of all contracts with the Department of Education, although it remains to be seen which contracts may be transferred to another agency or retained at a much-reduced version of the Department of Education.
Of the 180+ vendors our team analyzed that do work with the Department of Education, here’s the breakdown of the level of impact to these companies:
29% of the Department of Education’s vendors fall into the Very High Impact category, indicating the majority of their work is with this agency where many contracts have already been cancelled or are currently in peril of termination. Conversely, almost half of this agency’s vendors – 43% – fall into the Very Low Impact category, indicating that their federal business is well diversified, or the lion’s share of their work is with another agency.
For 21% of the vendors we analyzed, contracts with the Department of Education represent 100% of the unexercised ceiling + options value of their business’s federal contracts. These vendors must look at diversifying their work with other agencies/offices in order to decrease their DOGE Impact Score. Interested in the details behind these data points? Get a copy of the TechnoMile DOGE Impact Analysis: Department of Education here.
The highest total value of contracts with the Department of Education (unexercised ceiling + options) held by a single vendor is ~$441.1M. This vendor’s DOGE Impact Score falls in the Very High tier and represents significant exposure as a result of recent DOGE action.
Among the more than 180 vendors with unexercised ceiling + options value associated with contracts at the Department of Education, the average unexercised value is $17M. There are 7 vendors with more than $150M worth of unexercised value, which drives the average up significantly.
The total unexercised ceiling + options value of all contracts with the Department of Education across the 180+ impacted vendors is ~$3.2B.
The image above visualizes the at-risk contract value across the top 31 categories of spending by the Department of Education among the 180+ impacted vendors. The top three categories comprise 65% of the total $3.2B in unexercised ceiling + options value. These categories include:
- Research & Development – $1.1B unexercised ceiling + options value (36% of total)
- Financial Services – $587M unexercised ceiling + options value (18% of total)
- Management & Advisory Services – $335M unexercised ceiling + options value (11% of total)
Additional categories with more than $100 million worth of unexercised ceiling + options value include:
- IT Outsourcing
- Business Administration
- Application
- Security & Compliance
Key Takeaways
While DOGE’s focus on government efficiency and cost reduction has and will undoubtedly create new challenges for federal vendors, it can also create opportunities for those businesses that can adapt and innovate.
- New Efficiencies in B2G Companies – DOGE’s strong focus on cost efficiency could increase competition among federal contractors, necessitating that B2G organizations improve their own operational efficiency, including investment in back-office tools and technology used to win and manage federal contracts.
- Unlocking Innovation in B2G Companies – DOGE’s emphasis on modernization could cultivate even more innovation within organizations that do business with the government, and these cutting-edge strategies could result in a competitive advantage for vendors.
- Disruption in B2G Procurement Processes – DOGE’s initiatives could disrupt existing, often long-time relationships with agency personnel and require companies to adapt their business development and capture strategies and processes. Federal contractors need to be prepared for a wave of changes to procurement processes and regulations, agency POCs, contract requirements, and timelines.
Wrapping Up and Next Steps
TechnoMile, a veteran of the federal contracting community for over a decade, remains committed to supporting its customers and the broader industry as we navigate the current turbulent environment. While acknowledging the value of the DOGE initiative, TechnoMile emphasizes its dedication to providing members of the federal marketplace with essential data and insights to inform strategic decision making in this rapidly evolving landscape of government contracting.
If you’d like to receive a copy of the TechnoMile DOGE Impact Analysis: Department of Education, click here.