If you've been watching AI take over one industry after another, you might be wondering where federal contracting fits into that picture. It's a fair question, and the honest answer is that the federal market moves differently than the private sector. Procurement has always had its own pace, its own rules, and its own culture. But that doesn't mean AI is standing at the door waiting to be let in. It's already inside.
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If your federal contracting pipeline has been quiet since October, you are not doing anything wrong. The slowdown is real, it is systemic, and it has a specific cause. More importantly, it is ending.
You found an RFI on SAM.gov. You spent two days pulling together a thoughtful response: your capabilities, your experience, your interest in the requirement. You hit submit.
And then nothing.
No confirmation. No follow-up. No "thanks for your input." Just silence.
If you tried to log into eSRS.gov in the last few days, you already know something changed. The site is gone. And if you use FPDS.gov to research federal contract data, that's shutting down tomorrow.
Every time the Pentagon announces another massive AI contract, I watch contractors scramble in the wrong direction.
Last summer, the Department of Defense awarded contracts to Anthropic, Google, OpenAI, and xAI. The headlines were everywhere. Contractors saw those numbers and started asking, "How do we get in on that?"
You've been winning commercial contracts for years. Partnerships form naturally, project structures shift as work evolves, and teams come together based on whoever's available and capable. It works.
Then you bid your first federal contract using the same approach, and everything breaks.
The government rejected your prime contractor bid. Not because your solution wasn't good. Not because your pricing was off. Because you couldn't prove you'd done this exact work before, at this exact scale, under these exact circumstances.
Government contracts come in various forms, each designed to fit specific needs. Whether you're new to federal contracting or an experienced supplier, knowing the differences between contract types is crucial for success in this complex industry. In this guide, we break down the most common types of government contracts and how they might impact your business.
Firm-Fixed-Price Contracts (Learn more)
Firm-fixed-price contracts are the most widely used in government procurement. In this type of contract, the contractor agrees to deliver goods or services for a set price, regardless of actual costs. It’s often used when the project scope is well-defined and the risk of cost overruns is minimal.
Why It's Used: Fixed-price contracts offer predictability for both parties, making them ideal for projects with clear deliverables.
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The federal government continues to reserve approximately 23% of its contracting budget specifically for small businesses - that's over $178 billion in opportunities annually. These set-aside programs aren't just compliance checkboxes; they're your business's pathway to consistent federal revenue and sustainable growth.
