Competitive Assessment

Market landscape

The federal civilian contracting landscape in 2025 was marked by upheaval, contraction, and a fundamental redefinition of how the U.S. government engages its professional services and research partners. What began as a tightening of budgets and oversight early in the year evolved into a full-scale restructuring of procurement strategy across civilian agencies—driven primarily by the rise of the Department of Government Efficiency (DOGE) and a broader political mandate to streamline, centralize, and cut costs within the federal enterprise.

At the start of 2025, the administration’s push for efficiency reshaped the contracting environment almost overnight. Civilian agencies such as the U.S. Agency for International Development (USAID), Department of Health and Human Services (HHS), Environmental Protection Agency (EPA), and Department of Education (ED) were ordered to pause or review ongoing contracts for alignment with new executive directives. DOGE officials entered agency offices to conduct audits and data retrieval, while procurement staff faced new reporting requirements and lower approval thresholds for spending. For the first time, the government’s largest research and evaluation contractors—Abt Global, RTI International, ICF, NORC, Westat, AIR, and others—encountered simultaneous disruptions across their civilian portfolios. USAID’s sudden work stoppages and HHS’s mandated 35 percent reduction in contract spending forced large-scale layoffs, contract cancellations, and restructuring across much of the social policy and public health contracting community.

The year also saw a decisive shift in how agencies approached acquisition. The General Services Administration (GSA) accelerated the rollout of its OneGov initiative, merging procurement systems and consolidating vendor pools under a unified acquisition platform. The move signaled a long-term shift toward direct commercial contracting—particularly for IT modernization, data analytics, and AI services—over traditional consulting engagements. GSA’s decision to partner with Google on a heavily discounted Workspace license (71 percent below standard pricing) illustrated this trend: an emphasis on technology enablement, interoperability, and automation rather than advisory labor. Similarly, the HHS, EPA, and Department of Labor increasingly sought outcome-based or productized contracts, rewarding vendors that could deliver prebuilt tools, platforms, or measurable performance improvements.

The broader political climate amplified these shifts. Congressional oversight of large consulting firms intensified, with Deloitte and Booz Allen Hamilton called before committees to justify contract costs and billing practices. This scrutiny, coupled with DOGE’s public focus on waste reduction, pressured even the largest integrators to restructure. Deloitte announced federal workforce reductions and introduced AI products such as ZoraAI and Silicon2Service to pivot toward platform-based service delivery. Booz Allen, facing contract cancellations in both defense and civilian portfolios, cut civilian staff and doubled down on its ConductorAI investment to align with the administration’s automation agenda.

Change in FY25 obligations by client (Mathematica NAICS codes)

Procurement trends

In 2025, federal procurement underwent a profound transformation marked by sweeping budget cuts, centralized oversight, and a growing emphasis on efficiency and control. The newly empowered Department of Government Efficiency (DOGE) drove a comprehensive restructuring across civilian agencies, consolidating contract management and enforcing aggressive spending reductions. DOGE’s mandate to eliminate redundancy and “modernize” procurement processes led to widespread contract cancellations and funding freezes, with federal contractors facing new layers of approval and reporting requirements.

At the same time, major agencies were ordered to drastically reduce their procurement spending. The Department of Health and Human Services imposed a 35 percent reduction in contract outlays, requiring the Centers for Medicare & Medicaid Services to cut roughly $2.7 billion in active and planned projects. The Environmental Protection Agency and other agencies adopted new spending thresholds that required DOGE authorization for purchases over $50,000, slowing procurement cycles and increasing administrative burden. Across the government, acquisition offices were forced to justify costs line by line and prioritize projects tied directly to administration policy goals.

The General Services Administration accelerated the shift toward a unified OneGov procurement model, designed to consolidate federal buying platforms and reduce the number of vendors through centralized technology contracts. Simultaneously, agencies pivoted toward direct commercial purchasing, particularly in AI, automation, and analytics, favoring outcome-based solutions over traditional consulting arrangements.

By year’s end, federal procurement had narrowed sharply: fewer new awards, heavier oversight, and an environment shaped by DOGE’s aggressive consolidation agenda—one that emphasized cost control and political alignment over program stability and contractor continuity.

Competitor trends

Cross-Cutting Themes: Federal Market, 2025

Federal research and consulting markets in 2025 were characterized by contraction, consolidation, and selective investment. The first half of the year saw widespread hiring freezes and layoffs across major contractors, including the majority of Mathematica’s closest competitors. Large consulting firms—most notably Deloitte and Booz Allen Hamilton—were called before federal oversight bodies to justify contract expenditures, resulting in renegotiations and steep pricing concessions to government clients. Competitors with strong USAID presences, such as Abt and RTI, were heavily affected by the termination of USAID.

Firms responded to the tightening federal market with targeted technology investments and strategic realignments. Westat launched WesLytics, a Databricks/AWS-based analytics platform; Booz Allen Ventures expanded its automation portfolio through investment in ConductorAI; and RTI International established new enterprise marketing and corporate development functions. By late 2025, procurement activity began to stabilize, with new awards concentrated primarily at the Department of Health and Human Services (HHS). Examples included Abt Global’s $17 million Title IV-E Clearinghouse recompete at ACF; RTI’s $8 million CAHPS Survey at CMS (previously performed by NORC); and ICF’s $24 million NCWDMS operations and maintenance award at ACF. These awards underscored continued opportunity for incumbents whose offerings aligned with administration priorities.

• Abt Global experienced both retrenchment and repositioning. A Maryland WARN notice recorded 241 layoffs in February following USAID-related funding disruptions. By midyear, the firm pursued procurement-savvy growth in the technology sector via Sandhill Global Partners, a joint venture leveraging Abt/TSPi delivery via an SBA 8(a) vehicle.

• American Institutes for Research (AIR) implemented significant workforce reductions but signaled selective reinvestment by recruiting a Vice President for Health Evaluation, Methods & Analytics, indicating a continued focus on CMS/CMMI-adjacent work.

• Booz Allen Hamilton layoffs reportedly affected teams supporting HHS, DHS, and VA programs, reflecting broader federal spending constraints on advisory and modernization work. Despite these disruptions, Booz Allen continued to advance its long-term automation and analytics strategy through Booz Allen Ventures’ investment in ConductorAI, positioning the firm to remain competitive in mission-grade AI and workflow automation. This dual focus—rationalizing operations while sustaining innovation in AI-driven delivery—illustrated Booz Allen’s intent to adapt to a contracting environment increasingly defined by efficiency, technology integration, and performance accountability.

• Deloitte remained at the center of scrutiny from GAO contract reviews . The firm announced selective workforce reductions, a business-unit restructuring, and two new AI product offerings—ZoraAI and Silicon2Service—supported by a strategic partnership with Palantir.

• ICF managed staffing impacts from the USAID termination of the Demographic & Health Surveys program and other early-year disruptions but achieved multiple mid-year technical assistance awards, signaling some resilience within its domestic HHS portfolio.

• NORC reduced staff in early 2025 and lost its CMS In-Center Hemodialysis CAHPS Survey contract to RTI—a notable incumbency loss at a time when the market had displayed a preference for incumbents in contract decisions. 

• RAND launched a search for a Senior Vice President and Chief Research Officer to unify its seven research divisions—including four FFRDCs—and accelerate AI and data modernization across operations. In October, RAND announced an 11 percent workforce reduction, returning to pre-pandemic staffing levels and citing the need to match resources with a changing research environment.

• RTI International balanced early-year layoffs with strategic investments in corporate growth functions, including marketing, strategy, and AI-driven demand generation, culminating in its CMS CAHPS win over NORC.

• Urban Institute publicly disclosed a nine-percent workforce reduction in March. While Urban was flagged as potentially unfavorable to the Trump administration due to the DEI-related language on their website, they won a $12M HHS analytic/TA project (microsimulation) later in the year, indicating resilience in core policy analytics despite the reset.

• Westat implemented early-year hiring pauses before re-engaging in federal business development midyear and launching WesLytics, signaling a deliberate pivot toward productized data and AI services within its Data Solutions Sector.

Competitors at a glance (table)

Mathematica competitive landscape based on recent bid outcomes

One way to look at the market is to assess the firms to whom we have recently lost proposals. This allows us to assess which firms have a strong competitive position when we bid against them, and to keep an eye on any potential new entrants to our markets. This section tracks Mathematica’s losses to competing firms based on publicly available information about the awardee and contract amounts. The losses are separated by Mathematica’s role as prime or sub, as the firms we lose to as prime represent direct competitors, while the firms we lose to when we are sub on a team may not be direct competitors. The summary table below displays the number of losses to competing firms and total potential value lost based on Mathematica’s prime and sub bids.

As of October 21, 2025, Mathematica added $115M of competitively won work to our backlog YTD, 78% lower than competitive additions for the full 2024 calendar year. Mathematica’s win rate (based on total bid value) as a company was 17%, whereas our win rate as prime was 18% and our win rate as sub was 13%.

In general, we continue to compete against a similar set of firms. In this section we look at firms we directly compete against, which tend to be the same set of firms that we win against, and that we lose against. We have more data from our losses, and the first two sections go into more detail on that.

In terms of value, the firms we’ve lost to the most between 2022 and 2024 are NORC, AIR, The Lewin Group, Abt, Westat, and Booz Allen. NORC was the only firm that we lost to across all three businesses - Health, Human Services, and Global. Others were more focused by client types- for example, almost all of the value we lost to The Lewin Group comes from large losses at CMS in 2024 and losses at Social Impact were concentrated in Global. Below is a chart of the top competitors by client. 

There was also differentiation by lines of business - NORC and AIR were top competitors in research and advisory, whereas Guidehouse, RTI, and Booz Allen were more persistent competitors for data analytics. 

Mathematica losses as prime (multiple awards)

CLIENT PROFILES

HHS, CMS

2025 in review

In 2025, the Centers for Medicare & Medicaid Services (CMS) experienced one of the most turbulent yet strategically transformative years in its history. Leadership turnover, deep budget cuts, and accelerated modernization efforts defined a period of realignment across the agency. The Trump administration appointed Mehmet Oz as CMS Administrator and Abe Sutton to lead the Center for Medicare & Medicaid Innovation (CMMI), signaling a stronger focus on cost containment, privatization, and preventive care. Meanwhile, Caprice Knapp became acting director of the Center for Medicaid and CHIP Services (CMCS) following Drew Snyder’s resignation after a short tenure.

Externally, CMS launched efforts to build a digital, patient-centric ecosystem, collaborating with major technology firms on interoperability, AI-driven analytics, and expanded access to electronic health data. Policy shifts reflected the administration’s austerity agenda: new Medicaid work and citizenship verification requirements drew criticism for potentially disenrolling millions, while contracting reforms pushed agencies to streamline operations. Constrained budgets challenged evaluation work, but CMS’s ongoing investment in digital infrastructure, quality measurement, and Medicaid oversight open potential new avenues for analytic and policy partnership.

2025 new awards (by total value)

Percent of new awards out of total obligations

 

HHS, ACF

2025 in review

In 2025, the Administration for Children and Families (ACF) underwent significant leadership and policy change amid the broader reshaping of the Department of Health and Human Services. The Trump administration selected Andrew Gradison as acting administrator early in the year, directing the agency to tighten oversight of benefits distribution and align more closely with fiscal and administrative priorities set by HHS Secretary Robert F. Kennedy Jr. The agency’s focus shifted toward decentralization, emphasizing state flexibility and parental choice across programs such as Head Start, child welfare, and refugee resettlement. In October 2025, Alex Adams, the former Idaho Department of Health and Welfare Director, was confirmed as the ACF administrator.

Throughout the year, ACF continued to manage a large and politically visible portfolio despite sharp reductions in discretionary funding. The administration’s “families first” agenda sought to limit federal involvement in social service delivery, redirecting grants to faith-based and local partners while scaling back national technical assistance infrastructure. In the fall, ICF secured a $91 million recompete for the Child Welfare Information Gateway, signaling continuity in federally supported child welfare information systems even amid contracting volatility. ACF also faced scrutiny over restructuring efforts that consolidated several offices and reduced staff. These moves reflected an ongoing shift toward leaner operations and greater state responsibility, with federal activities focused on compliance and high-risk populations.

2025 new awards (by total value)

Percent of new awards out of total obligations

HHS (HRSA/SAMHSA/AHRQ)

2025 in review

In 2025, the Health Resources and Services Administration (HRSA), Substance Abuse and Mental Health Services Administration (SAMHSA), and Agency for Healthcare Research and Quality (AHRQ) each navigated a year of transition shaped by budget austerity, public health priorities, and the proposed consolidation of key health agencies under the Administration for a Healthy America (AHA). HRSA advanced several high-impact initiatives—including expansion of behavioral health integration within community health centers, renewed investment in rural maternity care, and modernization of the Organ Procurement and Transplantation Network (OPTN)—while simultaneously preparing for absorption into the AHA structure. SAMHSA sustained its role as a major grantmaking body, issuing more than $1.5 billion in State and Tribal Opioid Response grants to combat the overdose crisis, but faced significant operational pressure as federal reorganization plans threatened to curtail its autonomy and reduce its workforce by as much as half. The agency emphasized continuity in core functions such as the national 988 crisis line and disaster behavioral health programs, even as staff reductions and uncertainty loomed. Meanwhile, AHRQ—long the federal government’s hub for evidence-based health care improvement—operated under a climate of strategic ambiguity as the proposed AHA merger aimed to fold its research and evaluation portfolio into a new, centralized Office of Strategy. Together, these developments reflected a broader federal shift toward consolidation, efficiency, and centralized oversight, as research and service delivery agencies sought to maintain their missions amid political restructuring and shrinking discretionary funding.

2025 new awards (by total value)

Percent of new awards out of total obligations

USDA/FNS

2025 in review

In 2025, the Food and Nutrition Service (FNS) experienced one of the steepest federal funding contractions in its history, as total obligations declined by approximately 95 percent compared to the prior fiscal year. The collapse in spending reflected the broader retrenchment across civilian agencies under the administration’s Department of Government Efficiency (DOGE) initiative, which targeted large domestic assistance programs for restructuring or elimination. Early in the year, key FNS programs—including the Supplemental Nutrition Assistance Program (SNAP), Women, Infants, and Children (WIC), and several school nutrition initiatives—were placed under review for efficiency and fraud prevention. In practice, the reviews led to the cancellation or suspension of numerous contracts supporting nutrition data analysis, technical assistance, and state systems modernization. Many contractors reported paused task orders, unrenewed options, or outright terminations.

Internally, FNS sought to maintain essential nutrition delivery and oversight functions with dramatically fewer resources, consolidating administrative operations and scaling back external research and evaluation activities. The agency’s Store Tracking and Redemption System (STARS) modernization effort, awarded to Cadmus through its 2024 acquisition of Ventera, was one of the few major contracts to be awarded in 2025. Staff attrition, procurement freezes, and reduced grantmaking capacity reflected an agency in survival mode rather than strategic transition.

2025 new awards (by total value) *Does not include commodity purchases

 

Percent of new awards out of total obligations

 

ED

2025 in review

In 2025, the Department of Education (ED) underwent one of the most far-reaching restructurings in its history amid widespread budget cuts and centralization of authority under the Department of Government Efficiency (DOGE). The administration’s “Education Back to the States” directive led to sharp reductions in federal oversight and the devolution of many program responsibilities to state governments. Federal contract obligations declined by more than 80 percent, reflecting both the termination of existing awards and the near-halt of new procurements. DOGE-imposed spending thresholds and mandatory contract justifications delayed or canceled dozens of ongoing education data, research, and technical assistance projects, including work supporting the Institute of Education Sciences (IES), the Office of Federal Student Aid (FSA), and the Office of Elementary and Secondary Education (OESE).

By midyear, ED had laid off roughly half of its staff and shuttered major operational divisions, including the Office of English Language Acquisition and multiple research centers under IES. Many long-term partners experienced task order suspensions or rebids, with only a few new awards, such as AIR’s $6 million National Reporting System accountability contract, proceeding under the reduced acquisition environment. Competitive funding for education research and evaluation was curtailed, and discretionary grantmaking effectively froze.

2025 new awards (by total value)

 

Percent of new awards out of total obligations

 

NSF

2025 in review

In 2025, the National Science Foundation (NSF) faced a year of intense upheaval and contraction. By April, NSF Director Sethuraman Panchanathan resigned, citing an inability to continue advancing the agency’s mission under escalating political pressure. His departure was followed by the termination of more than 400 grants, including projects focused on equity, climate adaptation, and misinformation, as the administration sought to align all federally funded research with new policy priorities. Reports of proposed budget cuts exceeding 50 percent and plans to lay off up to half of NSF’s workforce underscored the scale of the disruption.

Despite this, NSF maintained work on key modernization efforts, including the Standard Application Process (SAP) Portal to expand data access and the UNITE platform to streamline administrative functions.

2025 new awards (by total value)

 

DOL

2025 in review

In 2025, the Department of Labor (DOL) faced a year of deep fiscal contraction, organizational turbulence, and strategic uncertainty as part of the federal government’s broader efficiency and restructuring drive under the Department of Government Efficiency (DOGE). Federal obligations to DOL dropped sharply as the administration prioritized cost containment and consolidation of workforce and training programs. Many long-standing contracts supporting workforce development, unemployment insurance modernization, and labor statistics were either canceled, suspended, or subjected to intensive review. DOGE audits and spending thresholds effectively halted new procurements above $50,000 without central approval, creating bottlenecks across DOL’s contracting offices and slowing program execution.

The agency’s Employment and Training Administration (ETA), historically one of the largest recipients of discretionary contract funding, saw the most dramatic impact. Several grants and technical assistance initiatives tied to the Workforce Innovation and Opportunity Act (WIOA) were deferred or downsized, leaving state and local partners without expected federal support. Contractor layoffs rippled through firms that traditionally provided training, evaluation, and data analysis services to ETA and the Office of Disability Employment Policy (ODEP). Economic Systems (EconSys) was among the few to secure a new award—a $6 million project supporting disability employment programs—illustrating the limited scale of new investments in the department.