federal agency reorganizations and relocations.
how organizational change reshapes markets, competition, and federal contract opportunities.
Federal agencies are in the middle of one of the most significant reorganizations in a generation. Offices are emptying. Headquarters are moving. This is not improvisation. It is a little-known law called the USE IT Act — and its deadline has arrived.
The USE IT Act, officially Title III of the Thomas R. Carper Water Resources Development Act of 2024 (S.4367), became law on January 4, 2025. The Act requires federal agencies to publicly measure and report how much of their office space is actually used, and sets a 60% minimum utilization target. If an agency falls short, the General Services Administration (GSA) and Office of Management and Budget (OMB) must work with that agency to close the gap by consolidating, relocating, or eliminating space by sale or auction.
– click here to download our free USE IT Act Government-wide report –
The deadlines mattered as much as the mandate. GSA and OMB had until January 4, 2026 to submit to Congress a plan to consolidate department and agency headquarters in the National Capital Region. They then had another year to begin implementing it. The current wave of headquarters announcements is the Act’s built-in timeline working as designed, for the first time.
Executive Order 14274, “Restoring Common Sense to Federal Office Space Management,” signed in April 2025, cleared additional runway for that consolidation. It rescinded Carter- and Clinton-era executive actions that had required federal facilities to favor metropolitan areas and historic properties. Agencies can now exit properties they previously had limited authority to leave, including designated historic buildings and facilities tied to metro-area preference requirements.
Together, the USE IT Act and EO 14274 created both the pressure and the permission for what is happening now — and removed most of the legal cover agencies once had for doing nothing.
thematic maps.
Not every agency relocation means the same for contractors. Some agencies are leaving the National Capital Region, shifting demand and opportunities to other parts of the country. Others are staying local, moving to a different address within the area, affecting only local competition. Some get spun around, turned upside down, and left to bounce off the backstop. See: the U.S. Department of Agriculture.
agriculutures migration.
No other federal agency is moving this much, this fast, or in this many directions simultaneously. Currently, the Department of Agriculture (USDA) has six distinct actions underway.
kansas city, missouri.
This is USDA’s second try at this exact move. The first, in 2019, saw about 85% of the employees involved quit or retire rather than move. A recent internal union survey suggests history might repeat: 76% of AFGE Local 3403 members at Economic Research Service (ERS) and National Institute of Food and Agriculture (NIFA) say they do not plan to move this time either.
salt lake city, utah.
The Forest Service (FS) is moving to Utah while the agency closes many of its research facilities and combines nine regional offices into six service centers across the country. This is not just a headquarters move; it is a major reorganization of a key land management agency.
nationwide dispersal.
Food and Nutrition Administration (FNA) leadership and staff are dispersing from Washington to hub and compliance locations across the country. Kansas City and Raleigh for core functions, Atlanta, Los Angeles, Dallas, and New York for retailer operations and compliance work. More importantly, Food and Nutrition Service (FNS) rebranding signals intent to present this as more than a relocation.
In addition, about two-thirds of the National Food Safety Center, previously Food Safety and Inspection Service [FSIS]) D.C.-area staff are moving, with operations based in Iowa with the scientific research work moved to Georgia.
real estate disposal.
The oldest and largest USDA research facility in the country is slated for closure. The Beltsville Agricultural Research Center (BARC), a 6,500-acre campus in Prince George’s County, Maryland in continuous operation since 1910, houses more than 400 buildings and serves as the headquarters of the Agricultural Research Service (ARS). Agriculture Secretary Brooke Rollins announced plans to close the facility and redistribute its research programs to five regional hubs: Raleigh, Kansas City, Indianapolis, Fort Collins, and Salt Lake City.
The move affects roughly 2,600 positions and targets complete closure by late summer or early autumn. Congressional delegations representing affected communities have filed objections, and legal challenges to halt the decommissioning are ongoing — making Beltsville the most contested single action in USDA’s broader reorganization.
The Beltsville closure is not USDA’s only Washington-area real estate action. The department is also disposing of its South Building near the National Mall and its Braddock Place facility in Alexandria, Virginia — with FNA staff at Braddock Place relocating locally rather than dispersing to a regional hub.
staying put.
Not every agency in the news is leaving the DMV area. Another set of moves is to combine the federal presence within the National Capital Region, empty older or larger buildings, and bring agencies together into fewer locations. For contractors, this path is quieter but still important for near-term contract work.
enviromental protection agency.
The Enviromental Protection Agency (EPA) move out of the Reagan Building is mostly complete, returning a lot of space to GSA and raising questions about the building’s long-term federal use.
energy and education.
The Department of Energy (DOE) and Educaiton (ED) space swap rearranges two agencies’ spaces without requiring either to leave the region, but it requires full facility changes on both sides: IT system moves, security updates, new signs, physical renovations, and telecommunications.
housing and urban development.
The Department of Housing and Urban Development’s (HUD) relocation to Alexandria, Virginia, moves a major cabinet agency out of its longtime D.C. headquarters. Alexandria already has many contractors, but HUD’s arrival increases demand for local facilities support, IT services, and administrative infrastructure at the new site. HUD reports just 18% total use, the third-lowest among all agencies, meaning the move comes under strong pressure to reduce its space.
general services and personnel.
The Office of Personnel Management (OPM) and GSA’s shared location is being watched as a sign of things to come. If two agencies can successfully merge into a single space without service disruptions, it would set a model for the larger NCR consolidation plan. If it faces issues such as scheduling conflicts, security problems, or IT gaps, it will slow the rest of the program.
high-security relocations.
The Federal Bureau of Investiation’s (FBI) proposed move to the Reagan Building is the most contested intra-region relocation currently underway. Maryland and Prince George’s County filed suit in November 2025 to block the selection and halt the use of over $1 billion in congressionally approved funds originally designated for a different site in Greenbelt. Security professionals have separately questioned whether a building designed for public mixed-use occupancy can be hardened to FBI operational standards. The outcome will set a precedent for how other high-security agency relocations are evaluated and for how much legal exposure the broader National Capital Region consolidation program carries.
things to buy when moving.
facilities support services (e.g. 561210).
Before a single employee moves, someone has to manage two buildings at once. This means assessing the new space, coordinating logistics, and keeping the lights on at both locations simultaneously. Agencies can’t do that at scale internally, which means this work gets contracted first, faster than almost anything else in the relocation cycle.
IT infrastructure and system design (e.g. 541512, 541519).
A federal agency without its network is non-functional, which makes IT migration the most time-critical procurement in any move. Relocations also serve as the forcing function to modernize aging systems. Agencies rarely rebuild the old configuration in a new building when they can upgrade instead.
records and information management (e.g. 493110).
Federal agencies are legally required to maintain chain-of-custody over their records under NARA requirements, and a physical move puts that compliance at immediate risk. Relocations also accelerate long-deferred digitization projects because the cost of physically moving filing systems is a compelling argument for converting them instead.
administrative and management consulting (e.g. 541611).
Agencies simply don’t have the internal bandwidth to plan and execute a major relocation while continuing to run normal operations. This is also where workforce transition support lives, which given the documented attrition risk in moves like USDA’s ERS and NIFA, may be the most underpurchased category on the entire list.
federal agency relocation isn't just about moving buildings. it's about moving demand.
early risk factors.
data issues.
The data has known problems. GSA’s method counts spaces such as auditoriums, conference rooms, and libraries that were never intended for daily staff use. GSA has said the numbers it published may be incomplete, outdated, or wrongly reported by agencies. Every usage number here, including those in our combined table, comes with that warning. This is not a reason to ignore the data, but a reminder that specific percentages may change when the method is updated. GSA’s occupancy team is actively reviewing it.
consolidation risks.
Consolidation has its own risks. The Rayburn House Office Building is a warning example of too much concentration. Nearly 200 member offices and committee rooms share about 2.3 million square feet of space. In October 2025, one broken air handler shut down air conditioning in 22 suites, a small example of how building problems can affect a crowded place. As agencies consolidate more functions into fewer locations, tolerance for facility problems declines, and the impact of those problems grows.
funding pace.
Funding is not keeping up. The Architect of the Capitol’s 2027 budget request is about $1.6 billion, with over $600 million for specific construction projects. The House’s draft 2027 funding bill offered $689 million for the House side, less than the $812 million currently left out of that account. The gap between what the consolidation program needs and what funders provide is widening as the pace of moves accelerates. Maintenance and repair backlogs are likely building up under the relocation work.
knowledge and staff loss.
Employee resistance is organized and documented. USDA’s 2026 funding law includes a rule limiting reorganization or moves without Congress’s approval. FS leaders say legal advice has cleared the moves, but members of Congress from affected areas expect legal challenges. Maryland’s delegation says the BARC closing conflicts with current funding rules and promises to oppose it. The USDA union survey from ERS and NIFA is the clearest measure of the risk of staff loss and points to extensive knowledge and continuity losses if the moves go ahead as planned.
federal contractors should consider connecting with local chambers of commerce and businesses to build a presence in new hubs.
actions for federal contractors.
watch for early signals.
Federal agency relocation follows a predictable buying chain. Most contractors join the chain at the bid stage. Federal contractors who win transition work get involved at the lease notice or facility announcement stage. Regularly monitoring SAM.gov, GSA’s Real Estate Exchange (G-REX), agency forecast pages, and the Federal Register, not just reacting, helps separate early movers from late ones.
check your geographic exposure.
If the numbers on your P&L comes mostly from USDA, the question is not if that work is moving. It is. The question is whether you have the presence, relationships, and contract access to follow it. Kansas City, Salt Lake City, Urbandale, Raleigh, Fort Collins, and Indianapolis are the markets most affected by the USDA’s move. A careful look at your presence in each, and whether building one is worth the investment, is a now business decision, not a future one.
– click here to download our free civilian agency geographical performance report –
anticipate requirements.
Expect transition work to come before mission work. In every move, the planning and site management create contract work faster and usually have less competition than mission work. Firms with skills in change management (e.g. 541611), IT moves (e.g. 541512), records management (e.g. 493110), and facilities transition (e.g. 561210) are best placed to win early contracts that give an advantage for longer-term work later.
check your service exposure.
Understand which NAICS codes are most activated by this cycle. Beyond the transition phase, the relocation wave concentrates opportunity in a specific cluster of service categories listed below. Firms that cover several categories in this group are better positioned to win full transition contracts than those competing for individual tasks. The agencies with the most complex moves, such as USDA and FBI, are most likely to award combined service contracts rather than separate task orders.
- Architectural and engineering services (e.g. 541310, 541330) for new and renovated spaces.
- Project and program management consulting (e.g. 541618) for agencies managing multiple simultaneous moves.
- Physical security services and systems (e.g. 561621) for buildings being reconfigured for new tenants with different security requirements.
- Workforce transition and staffing services (e.g. 561320, 541612) for agencies facing significant employee attrition during relocation.
- Moving and logistics (e.g. 484210) for the physical relocation itself.
what’s next.
The relocation wave is far enough along that the question is no longer whether it happens, it is how fast, in what sequence, and with what complications. The signals below are the ones most likely to answer those questions in the months ahead. When they move, the procurement calendar moves with them. Relocation doesn’t have to be finalized to matter. For federal contractors, the value lies in reading the signal before the market catches up.
- The next USE IT Act utilization report, and whether GSA’s occupancy working group revises the underlying methodology.
- Resolution of the ERS/NIFA relocation dispute, including whether Congress’s appropriations restriction is tested in court.
- Status of Maryland’s challenge to the Beltsville/BARC decommissioning.
- Developments in Maryland’s lawsuit over the FBI’s Reagan Building selection.
- GSA/OPM co-location milestones.
- Final fiscal 2027 appropriations for the Architect of the Capitol and GSA’s Federal Buildings Fund.
3 things federal contractors should know.
the single biggest insight is the county vs. state gap.
Federal contractors who rely on USASpending county-level filters are systematically undercounting their addressable market for the Department of Interior (DOI), Veterans Affairs (VA), USDA, and EPA in particular.
california is the hidden dominant market for civilian contracting.
Federal contractors looking to expand beyond the DMV, California isn’t a secondary market, it’s arguably the primary alternative.
treasury’s plymouth, massachusetts anomaly deserves more attention.
The top performance county is in southeastern Massachusetts, while recipients are in Fairfax. That geographic split suggests Treasury (TREAS) work is being performed at a specific facility in New England but contracted through DMV-based firms.