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Article Category: Industry Insights
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Category Management in Federal Procurement: Then, Now, and What It Means for Contractors
Category Management in Federal Procurement
Then, Now, and What It Means for Contractors.
Category Management has been hailed as the “Holy Grail” of federal procurement—an ambitious effort launched in 2014 to streamline how the federal government buys goods and services. It promised to eliminate redundancies, reduce costs, and boost efficiency.
But nearly a decade in, federal contractors are still asking:
Has Category Management delivered on its promise, or has it simply shifted the barriers without solving the core problems?
Let’s break it down—what’s historical, what’s current, and what’s no longer serving the contracting community.
The Origins
Efficiency Overhaul in the Obama Era.
Category Management was introduced to streamline federal procurement by organizing purchases into logical product and service categories. This initiative, spearheaded by the Office of Management and Budget (OMB), the General Services Administration (GSA), and the Category Management Leadership Council (CMLC), aims to enhance efficiency and consistency in federal spending.
At the heart of Category Management is the Best-in-Class (BIC) designation, which is intended to identify preferred government-wide contract vehicles. However, from the outset, the BICs were plagued by ambiguity, lacking a clear definition in the Federal Acquisition Regulation (FAR) and consistent selection criteria. This lack of clarity left many industry stakeholders uncertain about how to qualify for the designation or whether they would have an opportunity to compete for business.
By FY19, Category Management had gained significant traction, with agencies being held accountable for routing substantial portions of their “BIC-addressable” spending through the designated vehicles. Major contracts, such as GSA’s Enterprise Infrastructure Solutions (EIS) and DISA’s Defense Enterprise Office Solutions (DEOS), became prominent examples of this initiative.
Despite these advancements, contractors quickly identified several persistent challenges:
- Undefined BIC Criteria: The absence of a FAR-based definition for BICs created confusion regarding qualification.
- Limited Transparency: There was insufficient clarity on how contracts obtained the BIC designation, which hindered competition and trust among contractors.
- Irregular On-Ramping Opportunities: The lack of consistent opportunities for new vendors to enter these contracts created barriers for many companies.
- Vendor Consolidation: The procurement strategy often favored larger firms, squeezing out small and mid-tier vendors, which are vital for fostering innovation in the market.
The Implementations
Shift from Optional to Expectation.
Category Management has significantly evolved from its initial role as a theoretical procurement strategy into a foundational element shaping the federal contracting landscape. Initially promising increased efficiency and value, it has transformed into a complex framework of mandates and ever-changing policies. This evolving landscape presents opportunities and challenges for government contractors, particularly small and emerging businesses seeking to maintain competitiveness.
Nearly a decade after its implementation, Category Management is now a critical component of federal acquisition policy. However, it is not without its controversies. While the data indicates widespread adoption, the experiences of vendors—especially those from small and mid-tier firms—reveal a more nuanced reality.
Refinement and Expansion Under Biden
The Biden Administration expanded Category Management through the President’s Management Agenda, reinforcing Category Management’s role while emphasizing equity in contracting and small business inclusion. Key developments included:
Increased Spend Under Management (SUM).
By the end of FY24, $384 billion of the government’s contract obligations—representing 78.5% of total obligations—met the OMB criteria for SUM. This marks a substantial increase from $225 billion (56.4%) in 2020.
Alignment with Socioeconomic Goals.
OMB revised guidance to ensure that Category Management practices supported the Administration’s equity objectives. A notable change was the introduction of a new Tier 2-Socioeconomic Small Business SUM measure, granting agencies automatic credit toward Category Management goals for awards made to certified socioeconomic small businesses. This adjustment aimed to balance the use of BIC contracts with the need to diversify the federal supplier base.
Agency-Specific Initiatives.
The U.S. Air Force implemented the FIRST LOOK program, leveraging Category Management best practices to provide local small businesses with priority access to micro-purchase threshold requirements. This initiative demonstrated how Category Management could be tailored to lower barriers and enhance opportunities for small businesses at the agency level.
But beneath the surface, friction continued:
Disparities in BIC Utilization.
While the government achieved a 13.6% utilization rate of BIC contracts in 2024, agency adoption varied significantly. For instance, the Small Business Administration (SBA) directed 45.6% of its contract spending through BICs, whereas the Department of Energy (DOE) utilized BIC vehicles for only 1% of its obligations. Such disparities highlight inconsistencies in Category Management implementation across agencies.
Increased Protests.
Between FY22 and FY23, protests rose by 22%, largely due to issues with GWACs like CIO-SP4. Other mega BIC-contracts like Polaris and OASIS+ suffered from delays and mass protests.
Decline in the Small Business Industrial Base.
Despite achieving overall small business contracting goals, the number of small businesses participating in federal contracting has declined by about 10% over the past decade.
Key Metrics
- Average BIC task order size: $610,000, a 147% increase over five years
- As of December 2024, OMB had designated 40 acquisition vehicles as BIC, covering a range of products and services from office supplies to IT solutions
- In FY24, $66 billion (13.6%) of total contract spending, was directed toward BIC contracts (the first year since 2020 that the government met its BIC spending targets)
- By the end of FY24, $384 billion of federal contract obligations met OMB’s criteria for SUM, indicating a substantial shift towards centralized procurement strategies
- Federal agencies reported $16.7 billion in cost avoidance through Category Management practices, exceeding the annual goal by nearly 29% in FY24
The Statuses
Centralized and Strategic, But Not Without Friction.
Metrics show performance—but they also reveal systemic inequities. Understanding the reality of how Category Management has been implemented is essential for deciding where and how to invest resources moving forward.
The Promise of Agile Access to Contracts.
The early promise that Category Management and BICs would “level the playing field” has faded. Today, access is largely limited to those already on long-term vehicles—many of which lack on-ramps or set-aside safeguards for small businesses.
Inflated Performance Metrics.
There are major concerns about “double counting” small business dollars—where a single contract is counted toward multiple small business categories. This paints a rosier picture than what the data really supports and obscures the shrinking industrial base.
E-Commerce Modernization Hasn’t Solved Everything.
The GSA’s push for a Commercial e-Commerce Portal (e.g., Amazon, Overstock) aims to modernize micro-purchasing, but it introduces another intermediary layer. It’s unclear if this supports—or hinders—fair competition, especially for niche or new entrants.
Effect on Mergers and Acquisitions (M&A).
Contract portfolios with BIC access are now highly valuable. M&A activity is increasingly driven by “vehicle valuation,” and novation rules (under FAR 42.12) are under scrutiny as companies try to buy their way into BICs.
Key Realities
- There is still no formal FAR definition for what constitutes a BIC vehicle
- Vehicles often have 10-year periods of performance with few or no on-ramp opportunities—leaving many capable businesses locked out for a decade or more
- The federal push toward Category Management has created a procurement environment where:
- Agencies prioritize a handful of consolidated vehicles.
- Opportunities increasingly go through large, pre-approved contract vehicles with steep entry requirements.
- Emerging contractors and small firms face disproportionately high barriers to entry and fewer paths to organic growth.
The Developments
Trump 2.0 and the Push Toward Consolidation.
This year, the return of President Donald Trump has marked a sharp pivot in procurement policy. A series of Executive Orders and OMB memos have rewritten much of the Category Management landscape.
Consolidation of Federal Procurement
On March 20, 2025, President Donald Trump issued the executive order titled “Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement.” This order mandates GSA to centralize the procurement of common goods and services across federal agencies, aiming to reduce waste and duplication. Agencies are required to collaborate with GSA to transfer procurement responsibilities for specified categories.
Rescission of Prior Regulatory Policies
Upon taking office in January 2025, President Trump rescinded several executive orders from previous administrations that had shaped federal procurement and category management practices. Notably, Executive Order 13992, signed by President Joe Biden on January 20, 2021, which revoked certain federal regulation executive orders from the prior Trump administration, was itself rescinded by President Trump in 2025.
Implementation of Executive Orders
In March 2025, OMB released memoranda such as M-25-17 and M-25-16, focusing on the implementation of executive orders addressing risks associated with specific law firms and evaluating federal government contracts. These memoranda reflect the administration’s emphasis on scrutinizing and potentially restructuring existing contracts to align with new policy directions.
Regulatory Freeze and Review
On January 20, 2025, OMB issued M-25-10, implementing a regulatory freeze. This action temporarily paused all activities related to obligations or disbursements of federal financial assistance, allowing the administration to review existing programs and ensure alignment with its priorities.
Key Impacts
- Job security concerns have spiked among acquisition personnel
- Government contractors are facing even fewer decentralized buying opportunities
- GSA’s growing control means the rules of engagement are changing fast—with winners and losers often determined by portfolio access, not capabilities
- Imposed a regulatory freeze and launched a contract restructuring review
The Pivots
A Strategic Tool at a Crossroads.
The evolution of Category Management, characterized by consolidation, centralization, and policy changes, requires government contractors to adapt quickly and strategically. Category Management is no longer just a recommended practice; it is becoming a regulatory requirement.
Whether you are a seasoned vendor or a newcomer to government contracting, grasping the Category Management landscape—from its original purpose to the projected realities post-2025—is not just important but crucial for your survival and growth. This understanding will keep you informed and prepared for the changes ahead.
Know the Rules.
Study which BIC vehicles align with your service offerings. Understand GSA’s expanding role and the impact of 2025 policy shifts on your capture strategy.
Track GSA’s Movements.
Monitor changes to GSA-run e-commerce platforms, SUM targets, and vehicle consolidation announcements. Be ready to respond to RFIs, draft RFPs, and market research notices quickly.
Reassess Your Teaming and M&A Strategy.
Vehicle ownership is currency. Strategic partnerships or acquisitions may be the only way into key BICs—especially under the novation restrictions governed by FAR 42.12.
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Entry Points into Federal Contracting
Breaking Down GWACs, BICs, and MACs
It’s no secret that the GovCon ecosystem uses a lot of acronyms. For small businesses or organizations that are just starting out in GovCon, it’s important to understand the many terms used, like GWACs, BICs, and MACs, to get on the same level as competitors. We at The Pulse have organized a guide to understanding these federal contract types and how your organization can best use them.
GWACs
Government Wide Acquisition Contracts
A task-order or delivery-order contract for information technology products and services established by one agency for government wide use. GWACs are governed by the Clinger-Cohen Act and provide inter-agency access (inter-agency: between two or more agencies).BICs
Best-in-Class Contracts
Government contract vehicles that are deemed the highest performing contracts by the Office of Management and Budget (OMB) because they defined “key criteria” for management maturity and data sharing. BICs are the primary tool critical to the operation of Category Management (CM). BICs are not limited to information technology vehicles.MACs
Multi-Agency Contracts
An inter-agency contract that is governed by the 1932 Economy Act. MACs are also a task-order or delivery-order contract, but they are authorized to acquire a variety of supplies and services. However, GSA MACs are not subject to the Economy Act. These are not to be confused with Multiple-Award Contracts.IDIQs
Intra-Agency Indefinite Delivery/Indefinite Quantity Contracts
An intra-agency (intra-agency: within the same agency) contract allows an agency to purchase an undefined quantity/delivery over a set period while being restricted within the awarding agency. The government uses these contracts when it cannot predetermine, above a specified minimum, the precise quantities of supplies or services that it will require during the Period of Performance.History of GWACs, BICs, and MACs
So, which of these came first? Time for a quick history lesson.
Timeline:
1932: The Economy Act creates MACs.
1996: The Clinger-Cohen Act creates GWACs.
2005: GWACs are categorized as high-risk federal functions.
2012: Improving Acquisition Through Strategic Sourcing Memo.In 2014, OFPP under OMB, announced its Category Management initiative (an evolution of Federal Strategic Sourcing Initiative [FSSI]) to further streamline and manage entire categories of spending across the government to act more like a single enterprise.
Both initiatives were established to accomplish the same goals of achieving significant savings, decreasing administrative redundancies, and improving business intelligence.These goals were all meant to occur while also meeting or exceeding small business and sustainability goals. Category Management is meant to succeed where FSSI failed – in the implementation, utilization, and adoption of GWACs and MACs. Under Category Management, GWACs and MACs serve as the motivating force through the utilization of BIC solutions across a variety of federal agencies. BICs allow Category Management to achieve its objective to buy “as one” by consolidating all requirements into a limited number of preferred government-wide contracts.
How to Identify BICs
The most important thing to know here is that Google doesn’t help. There is a list from 2019, distributed by the Department of Energy, that shows BICs by category. This document states, “Always check the BIC Research Tool and Solutions Finder in the Acquisition Gateway for the latest BICs.” Online, using the Acquisition Gateway website, choose the Solution Finder, then filter using the “Govwide Initiative” option with “Best in Class” selected.
For those who are already familiar with BICs, it’s important to note that not every GWAC, BIC, or MAC started out as a BIC… Including:
Navy: SeaPort-NxG
GSA: Professional Services Schedule (PSS), Polaris
VA: Transformation Twenty-One Total Technology Next Generation (T4NG)
DOJ: Information Technology Support Services (ITSS-5)Impact Across the Ecosystem
Since 2016, there has been a shift to consolidate federal procurement pathways under the Category Management initiative in the federal government.
Cost Savings: As of 2020, OMB has reported the federal government has saved $27.3 billion in 3 years.
Increased Requirements Bundling: Since the process focuses more on the contracting process, the approach to defining requirements has further broken down.Less Access: BICs minimize channels for acquisition and reduce lanes where contractors can supply services and products. In the end, it’s very likely that the same vendors will be on GSA Polaris, as well as on HHS CIO-SP4, and most of them also on GSA 8(a) STARS III – with no differentiation. As a result, the government does not gain access to a wide range of solutions and services from the actual federal marketplace.
Impact Across the Ecosystem
Since 2016, there has been a shift to consolidate federal procurement pathways under the Category Management initiative in the federal government.
Cost Savings: As of 2020, OMB has reported the federal government has saved $27.3 billion in 3 years.
Increased Requirements Bundling: Since the process focuses more on the contracting process, the approach to defining requirements has further broken down.Less Access: BICs minimize channels for acquisition and reduce lanes where contractors can supply services and products. In the end, it’s very likely that the same vendors will be on GSA Polaris, as well as on HHS CIO-SP4, and most of them also on GSA 8(a) STARS III – with no differentiation. As a result, the government does not gain access to a wide range of solutions and services from the actual federal marketplace.
In the Market/Industry:
Fewer and fewer vendors have been successful in accessing, competing, and remaining in the market since the shift to BICs. There have been consequences of this competition downsizing.
- Competitors buying competitors or buying into a sector to increase revenue
- Consolidation of firms with <1,000 employees through private equity
- Vendors diversifying into commercial or foreign markets
- Vendors decreased ability to support and grow an internal workforce required to compete in the market
For Government Contractors:
- Less Access: The move to BICS has resulted in less access and transparency into government procurement activity and opportunities.
- Biggest in Class or Best in Class?: Teaming, JV, and Mentor-Protege have become vitally important for government contractors. To receive a contract award on one of these GWACs or MACs, a Prime contractor must either be one of the biggest players in the market or team up with enough companies to turn into one.
- Increased Bottom Line: Mixed messages and the usage of these procurement vehicles meant to simplify acquisition have proven hefty to vendors’ Bid & Proposal (B&P) bottom lines. Vendors spend tens of thousands of dollars trying to secure a place on specific GWAC, MAC, or BIC contracts because they know their survival in this marketplace could depend on it.
- Small Businesses, Who?: There has been a continuous decline in small business vendor utilization across Best-In-Class (BIC) vehicles since FY19.
How to Capitalize on GWACs, MACs, and BICs
Now that you’re armed with the knowledge of what these contract types are, their history and effects, let’s look at key ways to use them to your business’s advantage
Understand the difference.
- Be selective in which ones you pursue based on on-ramping periods, scope & services, and your strategic goals for the future.
- Remember that you don’t need every hot contract that hits the streets. Do what’s best for your business and pursue what’s right for your team.
Don’t let them sit dusty on your shelf.
- BICs don’t make you money unless you leverage them.
- Have a task order response cell (TORC) in place or else have a “participation” trophy.
Push new work to the ones you hold.
- Know your buyers and customers, and who uses what.
- Make these vehicles part of your sales effort and increase visibility through targeted marketing.
Knowing the differences and nuances of GWACs, MACs, and BICs will help you navigate the federal market successfully. Despite the federal shift to BICs that has led to decreased competition and other negative effects for contractors in recent years, it is still possible to successfully pursue and leverage these contracts.
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5 Keys to Federal Buyer Trust
5 Keys to Federal Buyer Trust
At The Pulse, we know that human relationships are a determining factor for success when it comes to getting results in government contracting
The principle in this dynamic is H2H – Human to Human – instead of only focusing on the business side. Everyone involved in the federal contracting market is a human being with their own needs and emotions. The people who are making the decisions at every step of the transaction process, from congressional members making appropriations, to COs who are working with contractors, are people.
Anyone with experience in this field can tell you that metrics only take you so far in the federal marketplace. Rapport and trust are what matter most. Here are some guidelines to incorporate this mindset into your process.
1. Understand who you’re talking to
Not everyone you meet in the federal workforce is responsible for buying what you’re selling, so it’s important to determine who you should be getting to know. Knowing the roles of different personnel will allow you to work more efficiently and effectively.
- Procurers/Buyers (including CO/COR/PO/CS, etc.): Procurers are the ‘gate-keepers’ to the program managers and end users. Although program managers might know what they want, contracting specialists help them get the needed materials/services and give advice on the best way to get those services. The contracting officer’s/specialists are key customers because of their influence over the project manager/end user and their responsibility for selecting the contracting method.
- Influencers (including Program Managers/ High-Level Decision Makers): Program managers and high-level decision makers are individuals who generate the contracting requirement or are responsible for facilitating its execution. These individuals may exercise influence over an individual contracting or organization-wide contracting policy, but do not actually conduct the contracting process itself.
- End Users (including the staff who uses your service/product): Most end users are confused about the contracting process and turn to their contracting specialist for help. They do not care how they get the contractor; they want the quickest mechanism to get the contractor. End users often have input in selecting the contractor and can be a key contact in the working relationship with the contractor.
Starting out with a list of target agencies that you want to work with isn’t enough. From there, you need to specify which departments and offices are in the market for your products and services, and who is responsible for managing and awarding contracts.
2. Humanize efforts
Even though your end goal is selling, don’t only act in self-interest – engage in building real relationships. It’s easy to automate social media and digital messaging, but know when to use personal touches in calls, social media messages, emails, and face to face time. Trust and establishing a real relationship as people, not just vendors, will take you far.
3. OPC conversation methods
The client should be the one talking the most and you should be listening, not planning what you’re going to say next. Work to understand what the client truly needs and what you can do to truly help them. We recommend using the OPC conversation method:
- Open ended questions
- Probing questions
- Confirming questions
These types of questions make space for honest discussions with potential buyers about their needs and how you can meet them.
4. Manage rejections
Adjust your mindset to see rejection as a necessary part of the GovCon process. Always take advantage of a rejection – use it as an opportunity to ask how your team can do better in the future by requesting debriefs. Getting rejected usually means there was just another contractor that met the federal buyer’s needs, not necessarily that you are missing something. It could also be that the Contracting Officer is having an off day (remember we’re all human – H2H).
5. Follow through (x3!)
It’s best to follow up on cold calls and emails within the first 1-2 days of first contact to ensure consistent communication. Let the person know you’ll be following up at a certain time and then do it. And once the job is done, or you’ve won the opportunity, get in touch again. This will help enforce strong relationships after the solutions have been delivered.
In the federal contracting market, you’ve got to make yourself stand out – not just as a business, but by relating with your fellow humans. Using these tactics, you can build connections with potential buyers and set you and your company up for success.
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Tech Strategies for Non-Tech Vendors
How Non-Tech Vendors Can Use Technology to Win More Federal Contracts
In today’s federal market, technology isn’t just for IT firms—it’s a competitive edge for any contractor.
Whether you provide staffing, logistics, training, or facilities management, integrating the right tech partnerships can expand your offerings, boost your visibility, and make your proposals stand out.
You don’t have to become a tech company to think—and win—like one.
But where do you start?
With so many tools and platforms available, it’s not about chasing trends—it’s about choosing tech solutions that align with your core services, client needs, and long-term goals. The right strategic partnership can help you modernize your delivery, open doors to new contract vehicles, and increase your chances of winning.
Here are three practical tech integration paths non-tech vendors can explore today to strengthen their federal market position.
Incubators & Accelerators
Incubator
A startup incubator helps an organization develop and refine high-potential startup ideas. Incubators often operate locally and provide a host of resources, like physical workspace, that can be accessed as needed. The benefits of joining an incubator include assistance in running experiments to prove product-market fit, legal consultation, and guidance on product development.
Accelerator
Startup accelerators are short, intensive programs that provide education, resources, and mentorship if you’re an early- or mid-stage founder. Often cohort-based, accelerators are more structured than incubators and outline specific tracks to turn your startup into a scalable business. Some accelerators offer programs targeted toward different industries or venture stages.
Incubator Examples
- TechNexus
- Capital Factory
- Harvard Innovation Labs (i-lab)
- Idealab
Accelerator Examples
- DCode
- AWS Build
- Techstars
- AngelPad
- YCombinator
- Microsoft Accelerator
Federal Regional Tech & Innovation Hubs
Whether through a start-up studio, innovation hub, or other means, the federal government offers various resources to bolster your organization. Collaborating with expert external entities, the government facilitates the delivery of tech solutions tailored for every kind of business.
Federal Tech Hubs
As part of President Biden’s CHIPS and Science Act of 2022, the Regional Technology and Innovation Hubs program designated the inaugural 31 Tech Hubs and 29 Tech Hubs Strategy Development Grant recipients. The statute authorized $10 billion for the program over five years.
The program brings together diverse public, private, and academic partners into collaborative consortia focused on driving inclusive regional growth. With their existing innovation assets as a foundation, these Tech Hubs build a future-ready workforce and enable businesses to start, scale, deploy, and deliver critical and emerging technologies.
“WERX” Universe
Federal “WERX” organizations are collaborative platforms established by the federal government to foster innovation and address specific industry challenges.
Each “WERX” is focused on a particular domain or sector, such as defense, energy, or healthcare. They often provide resources, funding opportunities, mentorship, and access to specialized facilities or expertise to support the development and commercialization of innovative technologies.
Digital Marketplaces
Digital marketplaces like the Tradewinds Solutions Marketplace help lower the barrier to entry for those hoping to bring their technology to the Pentagon. By leveraging a video pitch and peer review model, defense entities and customers can search through the platform and find firms they want to work with while problem-solving with industry, academic partners, and individuals.
Start-Up Studio Examples
- Homeland Security Startup Studios
- DOE/NNSA Emerging Tech Studio
- NASA FedTech Startup Studio
“WERX” Universe Examples
- ERDCWERX
- DISAWERX
- SPACEWERX
- AFWERX
- NavalX
- SOFWERX
- ARCWERX
Marketplace Examples
- Tradewinds Solutions Marketplace
- GSA Commercial Platforms Program
- Challenge.gov
- Defense Innovation Marketplace
- FedMall
System Integrators
When it comes to working with technology products, there are groups available that can help your business access essential services and platforms. Use the following resources to ensure your business offers the most up-to-date tech possible.
Cloud Service Providers (CSPs)
CSPs provide access to cutting-edge cloud technologies, infrastructure, and resources. These partnerships enable contractors to offer their clients cloud-based solutions, migration, and managed services.
Managed Service Providers (MSPs)
MSPs extend their service offerings and provide clients with comprehensive IT management services and support solutions. MSPs typically offer remote monitoring, help desk support, cybersecurity, data backup, and disaster recovery.
Value-Added Resellers (VARs)
VARs resell hardware, software, and services bundled with their offerings. VAR partnerships provide access to a broader range of products and solutions, enabling contractors to meet diverse client needs and preferences.
Original Equipment Manufacturer (OEM)
OEMs are a company whose goods are used as components in a VAR’s products. VARs work closely with an OEM, which often customizes designs based on the VAR’s needs and specifications. OEMs usually focus on business-to-business sales, while VARs sell to the public or other end users.
Original Design Manufacturer (ODM)
ODMs takes another company’s or individual’s original specifications and builds the design to the product specifications.
SI Partnership Examples
- Amazon Web Services (AWS)
- Microsoft Azure
- Red Hat
- Google Cloud
- Office 365
- MuleSoft
- Salesforce
- HubSpot
You don’t have to be a tech company to leverage technology in powerful ways. Whether you’re a small business looking to scale or a large integrator aiming to sharpen your edge, integrating smart, strategic tech into your federal offerings can unlock new opportunities, improve delivery, and drive growth.
Choosing the right partnerships, tools, and approaches aligned with your mission and capabilities can strengthen your value to federal buyers and stand out in a crowded market.
Start small, stay strategic, and remember: in today’s federal landscape, tech isn’t just a differentiator—it’s a multiplier.