AI leads GovCon's tech priorities despite challenges with market visibility
Gettyimages.com/ Yuichiro Chino
By
Nick Wakeman
Deltek’s newest edition of its Clarity report shows artificial intelligence is the dominant area of investment for contractors as they work through an early period of unknowns with the new administration.
Government contractors see opportunities around artificial intelligence and cyber even as they seek greater visibility into the market, according to the 2025 edition of Deltek's Clarity report.
The report is based on surveys that went out just as the Trump administration took power on Jan. 20.
The findings are broken down by several market elements including business development, contract management, project management, and finance and compliance.
Many respondents said the adoption of artificial intelligence is increasing, but more investments are needed.
AI had the highest ratings when respondents were asked to rate the top three technologies they are prioritizing for investment, followed by cybersecurity and data management tools.
AI was picked the most often for the first, second and third choice of tech priorities. Roughly 40% put AI in one of those three rankings.
The importance of AI also is driving the importance of cyber and data management, according to the Deltek report.
Visibility into the market came up as a challenge as respondents talked about improving their win rates. The results show how companies want to identify opportunities at least one year ahead of time.
“Firms should be mindful that less than a year may not provide sufficient time for preparation, and securing more lead time can significantly increase win chances,” the report states.
This will be a challenge, given that the Trump administration is only three full months into a four-year term. The implications of the many executive orders, political appointments, and other priorities are just now starting to be fleshed out.
One key to success the report highlights is being able to track spending trends, priorities and personnel changes.
“Across the board, the biggest BD challenge is discovering opportunities too late to effectively pursue. However, high performers are missing fewer opportunities, have fewer issues meeting RFP requirements (compliance, certifications, technical, etc.) and spend less time developing proposal first drafts,” according to the Clarity report.
The survey points out how the most successful companies are adopting AI and other automation tools to identify opportunities early and respond quickly.
“In an industry where proactivity wins, these teams have cracked the code in maximizing their time by using a variety of tools to their advantage,” report states.
Inflation also remains a concern for contractors because of its impact on costs, compliance, supply chains and talent.
Talent issues in particular cut across the board for government contractors, no matter their size.
“Engaging and retaining talent, attracting quality candidates, and competition in the talent market continue to be key issues across business areas,” the report states.
Deltek calculates a Contractor Confidence Index as part of its report with the highest score being 200.
The 2025 reading is 138, a 3.5% decline from the prior year but still within 1 point of the 10-year average.
The report attributes the decline to uncertainty surrounding the impact of the new administration and its proposed efforts to cut government spending.