As the nation prepares for Donald Trump’s return to the White House, the potential impacts on government operations are vast. For government contractors, this political shift brings both challenges and opportunities. Trump’s anticipated policies could reshape the landscape of government contracting with a focus on construction, environmental regulation, and federal efficiency.
Streamlining Government Operations
A promise of Trump’s campaign is the proposed creation of the Department of Government Efficiency (“DOGE”). Headed by Elon Musk and Vivek Ramaswamy, DOGE aims to slash regulations, eliminate redundancies, and restructure federal agencies. Musk has ambitiously proposed reducing federal agencies from over 400 to fewer than 100. While this restructuring could reduce waste, contractors may face challenges navigating a streamlined, but potentially less predictable, regulatory framework.
Additionally, DOGE is not an official agency, begging the question regarding its actual power and ability to operate as part of the overall federal budget. Trump has not outlined how DOGE will be staffed or funded, or whether Musk or Ramaswamy will be paid for their efforts.
An interesting point of note: Musk’s SpaceX works with the Department of Defense and NASA. The federal government pledged $3 billion to Musk’s companies last year alone. Because DOGE is not an official government agency, Musk is likely not a federal employee and may avoid ethical limitations and conflict issues. Only time will tell if DOGE and its proposed spending cuts have any impacts on Musk’s business with the federal government.
Buy American and Onshoring Initiatives
Building on policies from Trump’s previous administration, the emphasis on “Buy American” requirements is expected to grow. Contractors providing critical supplies to the government should prepare for tighter regulations requiring domestic manufacturing. These policies could create opportunities for U.S.-based businesses but may also increase costs for companies reliant on global supply chains.
Construction Industry: Labor and Tariffs
Trump’s immigration and trade policies could significantly impact the construction industry. Anticipated deportation initiatives may reduce labor availability, increasing costs in a field where one-third of workers are foreign-born. At the same time, stricter immigration policies could exacerbate labor shortages in border states like Texas. On the trade front, increased tariffs on imported materials may drive up construction costs, though Trump’s promise to ease regulatory barriers could mitigate these challenges by expediting project approvals and promoting development.
Environmental Regulation Rollbacks
Environmental policies are also expected to see drastic changes. Trump has indicated a desire to repeal Biden-era initiatives like the Inflation Reduction Act, which promotes clean energy investments and emissions reductions. This shift may reduce costs for traditional energy industries but could also discourage contractors engaged in green technology projects. Trump will likely reinstate oil drilling in Alaska’s Arctic National Wildlife Refuge, signaling a shift toward more fossil fuel development.
Opportunities and Risks Ahead
While Trump’s policies may simplify certain regulatory hurdles, contractors must be prepared for rapid changes and potential uncertainty. Reduced agency budgets, shifts in labor availability, and evolving environmental priorities will require adaptability and strategic planning.
At GRSM, we closely monitor these developments to help contractors navigate the evolving landscape. Whether you’re evaluating compliance with Buy American requirements or adjusting to new environmental standards, our team is here to support your business through these changes and will continue to post updates as Trump enters office.