Government contracting leaders face a dynamic market shaped by new regulations, tighter compliance requirements, labor pressure, and rapid technology shifts. The 2025 Deltek Clarity Report produces key benchmarks, strategies, and risks that every successful GovCon firm must understand to remain audit-ready, cost-effective, and competitive.
This post distills the most impactful findings from the report across contract management, finance, compliance, IT, and security. Each section offers relevant insights and clear recommendations tailored for government contracting decision-makers intent on driving performance and reducing risk.
Navigating Complexities in Contract Management and Procurement
Contract management is a linchpin for risk mitigation, margin protection, and regulatory compliance. According to the Clarity Report, this area is only growing in importance as federal scrutiny increases and contract types evolve.
Top Challenges
- Rising compliance demands: A notable 53% of respondents cited ensuring compliance to contract clauses as a top-three challenge for 2025, marking a sharp 23% year-over-year increase.
- Persistent deadline, resource, and budget strains: Small and mid-sized firms are especially hard-pressed by resource bottlenecks and tight margins, amplifying the risk of missed contractual obligations.
- Lagging adoption of contract management technology: Only 42% of organizations have implemented contract management software, despite clear benefits for trackability, audit readiness, and automated compliance checks.
How High Performers Respond
A significant 67% of GovCon leaders plan to meet these challenges by optimizing business processes. Standardizing processes brings measurable gains:
- Reduced time to prepare, review, and close contracts
- Fewer missed deadlines or compliance oversights
- Streamlined project closeout and audit documentation
Action Step: If your firm still relies on manual or email-based contract workflows, now is the time to prioritize a cloud-based contract management platform. Automation and centralization support audit trails, reduce administrative fatigue, and minimize error rates.
Financial Health Hinges on Active Compliance and Cost Controls
With economic uncertainty continuing, finance teams at GovCon firms face intensifying demands to control costs, manage compliance, and support profitable growth without adding administrative burden.
Prevailing Pain Points
- Digital transformation obstacles: Over half (58%) of contractors list cost controls as their primary digital transformation challenge.
- Audit pressure: Internal control systems, resource management, and accurate timekeeping were the three largest audit pain points cited. Firms with these gaps are more frequently targeted for costly and time-consuming federal audits.
- External support and internal checks: Firms are leveraging third-party support (38%) as well as internal audits (34%) to manage compliance and bolster audit preparedness.
High Performer Playbook
Growing the bottom line in a cost-conscious market is about:
- Rigorous cost controls: High performers consistently rank increasing profitability and cash flow as key objectives. They then operationalize those priorities through strong cash management, targeted cost reduction initiatives, and process optimization.
- Optimizing human capital: Retaining specialized talent and maximizing utilization remain competitive differentiators.
Action Step: Review your timekeeping, billing, and resource planning processes for automation opportunities. Proactive digital transformation not only drives profitability but also enhances your firm’s resilience when regulations or audits change overnight.
Information Technology and Security Define Market Leaders
GovCon firms face escalating expectations for cybersecurity, especially as cloud-based solutions and AI become central to winning and delivering contracts.
The New Technology and Compliance Landscape
- Cybersecurity sits front and center: 46% of IT professionals now report cybersecurity compliance as a leading challenge, fueled by evolving federal standards and more sophisticated threats.
- AI governance surges in importance: For the first time, 44% flagged AI policy management as a critical concern, underscoring regulatory ambiguity and the proliferation of generative AI in critical project functions.
- Cloud is non-negotiable: Top IT performers have migrated nearly all applications to the cloud, gaining agility, cost efficiency, and seamless access for remote and field workers.
Strategic Trends
- AI’s growing role: 79% of GovCon firms now view AI as a key business trend, recognizing its power in automated compliance checks, faster reporting, and predictive analytics.
- Cyber posture as a business advantage: With recent Deltek Costpoint enhancements achieving FedRAMP Moderate Equivalency, firms using validated, compliant platforms are positioned to outperform competitors that lag in security certification.
- Market eligibility at stake: Cybersecurity compliance is not just prudent; it is increasingly a determining factor in eligibility to bid and win lucrative contracts.
Action Step: Prioritize cloud applications enabled with proven security controls and audit logs. Evaluate whether your current ERP, project management, and contract systems have completed the latest FedRAMP or CMMC assessments. Partnering with vendors that stay ahead of these requirements is now a competitive advantage, not just a safeguard.
The Path Forward for GovCon Operations in 2025
The 2025 Deltek Clarity Report makes one truth inescapable. Leaders who invest in compliant technology, audit-ready processes, and resilient infrastructure will weather market volatility and new policy changes with less friction and more confidence.
- Integrate and automate wherever possible, from contract management to finance to IT security
- Standardize procedures across contract, audit, and technology processes for repeatable, reliable outcomes
- Empower teams with real-time dashboards and robust training on new tools as digital transformation accelerates
- Vet your vendors for up-to-date security certifications and compliance know-how
At PCI, we support GovCon success through deep operational and industry expertise. By working with a partner focused on both compliance and efficiency, your team gains peace of mind and a strategic advantage.
If you want to benchmark your processes, address new compliance risks, or future-proof your technology stack, we invite you to connect with PCI for a conversation tailored to your needs.
Contact PCI now to start the next phase of your GovCon transformation.
