GMU Baroni Center launches inaugural index of GovCon trends

The Greg and Camille Baroni Center for Government Contracting at George Mason University’s Costello College of Business released an inaugural index earlier this month, analyzing government contracting trends, the financial performance of government contracting firms and the current structure of the federal contracting industrial base.

The center touts the index as a “first-of-its-kind analysis” of 200,000 government contracting firms that collectively provide nearly $800 billion in products, materials and services to the federal government. The Baroni Center’s research team leveraged open-source data and comprehensive surveys for the analysis.

“We are thrilled to share this inaugural index to fill important gaps in our understanding of the private sector industrial base that provides critical support to the U.S. federal government,” Baroni Center Executive Director Jerry McGinn said in a statement. “This research can help inform ongoing initiatives designed to improve government contracting processes and execution. We look forward to engaging with industry and government for meaningful discussions to drive better contracting outcomes across government.”

Key findings

Researchers have found that, over the last five years, the federal government’s use of agile acquisition vehicles, such as other transaction authorities (OTAs) and small business innovation research (SBIR) grants, increased significantly. However, there is currently no established method to measure the outcomes of these innovation investments. As a result, researchers believe that the extent to which the nation is benefiting from these contract instruments is largely anecdotal. The center says it’s “critical” to find better measurements of the outcomes.

Additionally, the center found that incentives for innovation, adoption and integration are necessary to attract and retain cutting-edge firms in the government marketplace.

Researchers also noted that the current legal definition of nontraditional firms excludes only 7.5% of firms in the Department of Defense market. They say if the government expects or desires non-traditional contractors to be instrumental in increasing innovation, Congress should redefine “non-traditional defense contractor” in legislation so that the term is more helpful in identifying, incentivizing and measuring the performance of corporations developing and delivering new technological capabilities to DOD.

For example, the researchers suggest that the definition can be tailored to identify corporations whose characteristics align with those commonly associated with substantive technological innovation.

Overall, however, the analysis found the federal market remains competitive, despite a reduction in the number of firms over the past decade. Government contracting firms of all sizes surveyed by the center in 2024 remained positive about their recent performance and future prospects.

Recommendations

In addition to redefining “nontraditional defense contractors,” the center also recommended that the Trump administration collaborate with Congress to expand the publicly available data concerning OTA and SBIR grants, aiming to identify and track the progress of prototypes to production.

It also stated that the administration should work to create contract structures that better incentivize small business investment in identified priority areas where innovations from small businesses are most highly desired.

The Baroni Center will publish the index annually. The full index can be viewed at mymasonportal.gmu.edu/bbcswebdav/xid-357406074_1.