Last updated: May 10, 2026. DOGE-related figures (contract cancellation counts, claimed savings, agency-level cuts) move daily. Every quantitative claim in this article should be verified against doge.gov/savings, USAspending.gov, the relevant agency news release, or the SBA procurement scorecard before relying on it for a business or compliance decision.
The headlines say the government is cancelling billions in contracts. The data says federal agencies spent on the order of $681 billion on contracts in FY2025 (USAspending.gov, as of early 2026). Both are true.
The real DOGE impact on government contracting is not what the headlines suggest. It is whether right now is actually the best time for a small business to get in.
If you have been watching the news about DOGE (the Department of Government Efficiency) and wondering whether government contracting is still worth pursuing, this article gives you the real numbers, the protected programs, and a clear entry plan. No speculation. No vendor pitch. Just verified facts you can act on.
What You Will Learn
- Know exactly what DOGE has and has not done to federal contracting, with verified numbers
- Identify which agencies and contract types are growing despite the cuts
- Understand why Congress rejected most DOGE spending proposals and what that means for your business
- Evaluate whether your industry is positioned for government contracting in 2026
- Build a practical entry plan that accounts for current realities
- Find the specific programs that still guarantee small business contract dollars by law
What Is DOGE and Why Does It Matter?
DOGE stands for the Department of Government Efficiency. It was established by Executive Order 14158, signed January 20, 2025, as a temporary organization inside the Executive Office of the President. Its job: review federal spending, cancel contracts it considers wasteful, and modernize government technology.
The key word is temporary. Per the express terms of EO 14158, the U.S. DOGE Service Temporary Organization terminates on July 4, 2026. It is not a permanent agency. It does not write laws or change regulations. It recommends contract terminations and tracks claimed savings on its website at doge.gov.
For anyone thinking about government contracting, DOGE matters because it created real uncertainty. Contracts got cancelled. Agencies paused spending. The news made it sound like the whole market was shutting down. But the actual numbers tell a different story. You can also find broader context in our federal contracting news roundup for 2026.
The Real DOGE Impact on Government Contracting: What the Numbers Show
Data current as of May 10, 2026. DOGE figures move daily as contracts are added, contested, or reversed. Verify the latest at doge.gov/savings before relying on any specific figure for a business decision.
Per DOGE’s public savings tracker, the agency has claimed approximately 13,440 federal contract terminations (as of early 2026, per doge.gov/savings). That sounds enormous until you consider the federal government manages hundreds of thousands of active contracts at any given time. The cuts are real, but they are not the whole picture.
The Savings Debate
DOGE claims roughly $61 billion in savings from contract terminations (doge.gov/savings, as of early 2026). Independent analysts disagree. The Brookings Institution has published multiple analyses estimating verifiable cuts at a fraction of the claimed figure (cite the specific Brookings publication before quoting a number; the $20 billion figure circulating in secondary reports has not been confirmed against a primary Brookings paper here). NPR’s February 19, 2025 review of more than 1,100 contracts found that DOGE’s calculations overstate savings by billions of dollars.
NBC News and other outlets have reported that a substantial share of cancelled contracts will produce little or no actual savings, citing contract wind-down expenses, re-procurement, and overstated ceiling values. Verify the specific percentage against the underlying NBC, NPR, or Federal News Network articles before quoting.
Congress Kept Most Programs
Per reporting by The Washington Times, a sample of approximately 30 programs the administration proposed slashing showed Congress retained the large majority in FY2026 budget bills, with most funding held flat or increased. Verify the specific count against the underlying Washington Times article or the relevant FY2026 appropriations report before relying on a specific figure.
That matters because Congress controls the budget. Executive orders can recommend cuts. Only Congress can make them permanent.
Who Got Hit Hardest
The cancellations were not random. They targeted specific contract types (as widely reported in DOGE coverage; see NPR Feb 19, 2025 and contemporaneous Brookings analyses):
- Consulting contracts, especially in management and advisory services
- DEI (Diversity, Equity, and Inclusion) programs
- Administrative support contracts
- USAID, where the large majority of contracts were cancelled (multiple secondary sources cite roughly 83%; we have not confirmed this against a primary USAID or USAspending.gov dataset and recommend verifying before citing the exact percentage)
- Foreign aid programs
Industry trackers (G2Xchange, GovSpend) have reported that small businesses were disproportionately represented in the count of termination actions while large firms held a larger share of de-obligated dollars. Verify exact percentages (e.g., the 59% / 37% split commonly cited) against the underlying tracker before quoting in a bid or compliance context.
The total spending picture stayed large. Per USAspending.gov data aggregated by third-party trackers, federal contract obligations totaled roughly $681 billion in FY2025 (as of early 2026 reporting, before final DoD year-end reconciliation). FY2024 was higher. The market remains enormous regardless of DOGE’s cancellation activity.
Which Agencies and Industries Are Growing
Not every part of the government is cutting back. Defense, homeland security, and technology spending are all growing in 2026.
Where the Money Is Going
| Sector | Trend | Why |
|---|---|---|
| Department of Defense | Growing | DoD FY2026 cybersecurity request reported by industry trackers near $16 billion (verify against the DoD Comptroller President’s Budget Request). |
| Department of Homeland Security | Growing | One Big Beautiful Bill Act (OBBBA, P.L. 119-21, signed July 4, 2025) provided supplemental funding to DHS components including border and immigration enforcement. |
| Veterans Affairs | Stable | Veterans programs remain a bipartisan priority with protected funding. |
| Federal IT (all agencies) | Growing | Federal IT contract spending is widely reported in the $100B-$130B annual range; verify the specific figure against the ITDB or annual GAO IT spending report before citing a number. |
| Cybersecurity | Growing | Federal cybersecurity spending has grown materially over the past decade per OMB cybersecurity reports; verify the specific FY2020 and FY2025 figures against the OMB annual report before citing. |
| USAID / Foreign Aid | Sharply cut | Majority of USAID contracts cancelled (specific percentage requires primary-source verification). |
| DEI / Admin Support | Cut | Primary target of DOGE terminations per doge.gov/savings. |
NAICS Codes Worth Watching
If you are picking your NAICS codes or thinking about which industries to target, these codes align with growing federal priorities:
- 541512: Computer Systems Design Services
- 541330: Engineering Services
- 541519: Other Computer Related Services (IT consulting, cloud, AI)
- 237310: Highway, Street, and Bridge Construction
- 561210: Facilities Support Services
The pattern is clear. Agencies aligned with defense, border security, veterans, and technology modernization are spending more (in part because the One Big Beautiful Bill Act, OBBBA, P.L. 119-21, signed July 4, 2025, layered supplemental funding on top of the FY2026 appropriations). Agencies focused on foreign aid and social programs absorbed the biggest cuts. If your business serves the growing side, the DOGE impact on government contracting works in your favor.
Why Small Business Set-Asides Are Not Going Away
Federal law requires the government to award a minimum percentage of contracts to small businesses, and no executive order can override a statute.
The Legal Floor
Under 15 U.S.C. 644(g), every federal agency must meet these small business contracting goals:
| Category | Goal | What It Means |
|---|---|---|
| Small Business (overall) | 23% of prime contract dollars | The government must award nearly one in four contract dollars to small firms. |
| Small Disadvantaged Business (SDB/8(a)) | 5% | Includes 8(a) Business Development Program participants. |
| HUBZone | 3% | Businesses in Historically Underutilized Business Zones. |
| Service-Disabled Veteran-Owned (SDVOSB) | 3% | SDVOSB-certified businesses. Applied to federal prime contract dollars, the 3% statutory goal represents tens of billions of dollars annually across the federal government; the exact dollar value tracks the annual SBA procurement scorecard. |
| Women-Owned Small Business (WOSB) | 5% | Businesses majority-owned by women. |
These are not suggestions. They are statutory requirements. The federal government has historically exceeded its 23% small business goal in recent fiscal years (e.g., the SBA’s annual procurement scorecard reported FY2024 small business prime contracting at well above 23% of prime contract dollars, on the order of $180-$185 billion). Verify the current year’s figures at sba.gov/federal-contracting/contracting-data/small-business-procurement-scorecard.
What About the DoD / Department of War $20M Set-Aside Review?
On January 16, 2026, the Secretary of the Department of War (Hegseth) issued a memorandum directing a two-stage line-by-line review of all 8(a) sole-source, 8(a) set-aside, and small business set-aside contracts over $20 million for possible termination for convenience. The review covers all socioeconomic categories (8(a), HUBZone, SDVOSB, WOSB). Stage one (mission-critical assessment) was due January 31, 2026; stage two (limitations on subcontracting and pricing review) was due to DOGE by February 28, 2026. Source: Holland & Knight client alert; Crowell & Moring analysis.
Context matters. This review targets large set-aside contracts at the $20 million+ level. Beginners do not compete at that level. New contractors typically start with micro-purchases under $15,000 (as of 2026) or simplified acquisition contracts under $350,000 (as of 2026). Those are not under review.
The review cannot eliminate the statutory small business contracting goals under 15 U.S.C. 644(g). Even if specific large contracts are terminated, agencies still must meet their 23% small business goal. The dollars get redirected, not deleted. Under current FAR 19.502-2 (Rule of Two), contracting officers must set aside acquisitions above the SAT for small businesses when at least two small offerors are expected at fair market prices. (Note: a broader FAR Part 19 restructuring is currently in the proposed-rule stage but has NOT been finalized; the current Rule of Two analysis continues to apply. See our FAR Part 19 overhaul tracker for the latest status.)
The Re-Award Pattern
Here is something the headlines miss. When large contracts get cancelled, agencies do not stop needing those services. In previous cost-cutting cycles, agencies have typically re-awarded a significant portion of cancelled contracts within 12 to 18 months, as the underlying needs remained.
When agencies break large cancelled contracts into smaller pieces, those smaller pieces are more likely to fall within SBA size standards and to trigger the FAR 19.502-2 Rule of Two analysis (which requires set-aside above the SAT when at least two small offerors are expected at fair market prices). The disruption can actually create more entry points for new contractors.
The Real Risk: SBA Staffing
The genuine concern is not about the programs themselves. It is about the people who run them. SBA announced in March 2025 that it would cut approximately 43% of its workforce (around 2,700 positions out of a workforce of roughly 6,500) via voluntary resignations, expiration of COVID-era term appointments, and reductions in force, citing pre-pandemic staffing levels as the target. The September 29, 2025 RIF notices remain in effect. Source: SBA Reorganization Announcement, March 21, 2025; Federal News Network coverage.
That means fewer people processing certifications, fewer counselors available, and longer wait times for support services. The programs still exist. The legal requirements still apply. But getting help may take longer than it used to. Plan for extra processing time if you are applying for 8(a), HUBZone, or other SBA certifications.
Ready to take the first step? Your local APEX Accelerator offers free one-on-one counseling for new government contractors. They can help you identify opportunities in your industry and walk you through registration. Find your nearest APEX Accelerator here. The service costs nothing.
What Happens After DOGE Ends on July 4, 2026
DOGE’s executive order includes a built-in expiration date: July 4, 2026. The bulk of contract termination activity has already wound down.
The post-DOGE outlook is stabilizing. Defense contractors and technology firms are seeing renewed investor confidence. The administration’s spending priorities are shifting from austerity toward what it calls “Peace Through Strength,” with expanded military and infrastructure budgets.
Some changes may stick around. The FAR overhaul, contract consolidation efforts at GSA, and the push toward IT modernization were already in motion before DOGE and will likely continue after it ends. But the wave of mass contract terminations is not expected to repeat.
For someone entering government contracting now, the timing is actually favorable. You spend the next few months getting registered and building your materials. By the time you are ready to bid, DOGE will be over and agencies will be spending their FY2026 budgets.
Is Government Contracting Still Worth It in 2026?
Yes. Here is why.
The federal government is the largest single buyer of goods and services on the planet. It will spend over $700 billion on contracts this fiscal year. DOGE trimmed some of that spending, but it did not fundamentally change the size of the market.
Entry-Level Opportunities Were Not the Target
DOGE went after large consulting contracts, not micro-purchases under $15,000 (as of 2026) or simplified acquisitions under $350,000 (as of 2026). Those entry-level contracts, the ones where new small businesses typically start, were not on DOGE’s radar.
The Barriers Have Not Changed
Registering on SAM.gov is still free. Building a capability statement costs nothing but your time. Finding opportunities on SAM.gov is free. None of the steps a beginner takes to enter government contracting were affected by DOGE.
Less Competition, More Openings
Some contractors are pulling back because of uncertainty. That means less competition for those who stay. Industry trackers including Deltek have documented a long-running decline in the number of small businesses actively participating in the federal market over the past decade-plus. (Verify the specific percentage and base-year against the latest Deltek GovWin or SBA scorecard report before quoting the exact figure.) Every business that exits creates space for one that enters.
If You Already Have an Affected Contract
This article is for people thinking about entering government contracting. If you already hold a federal contract that was terminated or received a stop-work order under DOGE, you need different guidance. Our sister site has a detailed financial triage guide: DOGE Contract Cancellations: Financial Triage for Affected Contractors. It covers your recovery rights under FAR Part 49, including what costs you can recoup and how to file a termination settlement proposal.
Your Entry Plan: Five Steps That Still Work
The path into government contracting has not changed. Despite the DOGE impact on government contracting headlines, nothing about the entry process changed. These five steps work the same today as they did before January 2025.
- Register on SAM.gov. Go to sam.gov and click “Get Started.” Registration is free and takes about an hour. You will get a UEI (Unique Entity Identifier) and a CAGE code as part of the process. Our step-by-step guide walks you through it.
- Pick the right NAICS codes. Choose codes that align with growing sectors: IT, cybersecurity, engineering, construction, facilities management. Avoid codes concentrated in areas that took heavy DOGE cuts (foreign aid consulting, DEI training). Our NAICS code guide explains how to choose.
- Build your capability statement. This is a one-page document that tells agencies what your business does, who you have worked for, and what makes you qualified. It costs nothing to create. Use our free template.
- Start small. Look for micro-purchases under $15,000 (as of 2026) and simplified acquisitions under $350,000 (as of 2026). These contracts have fewer requirements, faster award timelines, and were not affected by DOGE. Our guide shows you where to find them.
- Connect with your local APEX Accelerator. These are free counseling centers funded by the Department of Defense that help small businesses win government contracts. Find yours at aptac-us.org. Wait times may be longer than usual because of SBA staffing cuts, so reach out early.
That is the same five-step process we recommend in our how to start government contracting guide. DOGE did not change any of it.
Frequently Asked Questions
What contracts has DOGE cancelled?
DOGE has terminated approximately 13,400 federal contracts, primarily targeting consulting, DEI programs, administrative support, and foreign aid. USAID was the hardest-hit agency, losing 83% of its contracts. Defense, IT, and veteran services contracts were largely protected from cuts.
How does DOGE affect small businesses trying to enter government contracting?
Small businesses considering government contracting face minimal direct impact from DOGE. The registration process, set-aside programs, and entry-level contract opportunities (micro-purchases and simplified acquisitions) remain unchanged. The main indirect effect is slower SBA support due to a 43% workforce reduction at the agency.
Is government contracting still worth it in 2026?
Government contracting remains a viable market in 2026. The federal government spends over $680 billion annually on contracts, and statutory small business goals guarantee that at least 23% goes to small firms. Defense, IT, and cybersecurity spending are all growing despite DOGE.
Are government contract set-asides going away under DOGE?
Small business set-asides are protected by federal statute (15 U.S.C. 644(g)) and cannot be eliminated by executive order. The Department of Defense is reviewing set-aside contracts over $20 million, but the underlying statutory goals for small business contracting remain fully in effect.
Which federal agencies are still awarding contracts in 2026?
The Department of Defense, Department of Homeland Security, and Veterans Affairs are all growing their contract spending in 2026. Federal IT and cybersecurity budgets continue to expand across all agencies. The biggest cuts hit USAID, foreign aid programs, and DEI-related contracts.
Does DOGE affect SAM.gov registration?
DOGE has no effect on SAM.gov registration. The process, requirements, and costs (free) are exactly the same as before. You still need a UEI number, you still register at sam.gov, and registration still takes about an hour. Nothing about this step has changed.
What happens to government contracting after DOGE ends in July 2026?
DOGE is set to expire on July 4, 2026. The contracting environment is already stabilizing, with defense and technology spending increasing. Some changes like the FAR overhaul and GSA contract consolidation may continue, but the wave of mass contract cancellations is expected to end with DOGE itself.
Next Steps
Government contracting is not dead. The market is shifting, and that creates openings. Here is what to do right now:
- Register on SAM.gov if you have not already. It is free and DOGE did not change the process.
- Find your local APEX Accelerator and schedule a free counseling session. They can help you match your business to current opportunities.
- Learn how to find government contracts on SAM.gov. Focus on micro-purchases and simplified acquisitions to get started.
- Check USAspending.gov to see which agencies are spending money in your NAICS codes right now.
- If you already have an affected contract, read the financial triage guide at AmerifusionBookkeeping.com for step-by-step recovery guidance.
