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, which, to date, includes almost 700 affected vendors. 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: IES Exposure
For this analysis, our team focused on vendors doing business with the Institute of Education Sciences (IES), where contracts comprising the majority of this office’s work were cancelled following a review by DOGE. Of the 30+ vendors our team analyzed that do work with the IES, here’s the breakdown of the level of impact to these companies:
45% of the IES’s vendors fall into the Very High Impact category, indicating the majority of their work is with this office where work has largely stopped. For the remaining IES vendors, the impact is fairly evenly distributed across the High to Very Low Impact categories.
For 32% of the vendors we analyzed, contracts with the IES represent 100% of the unexercised ceiling + option value of their business’s 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: IES here.
The highest total value of contracts with the IES (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 30 vendors with unexercised ceiling + option value associated with contracts at the IES, the average unexercised value is $38.8M. There are 4 vendors with more than $100M worth of unexercised value, which drives the average up significantly.
The total unexercised ceiling + option value of all contracts with the IES across the 30+ impacted vendors is more than $1.2B.
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, 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: IES, click here.
If you’d like to speak to someone from our research team to help you understand DOGE’s impact or potential impact to your organization, contact us here.