The Department of Government Efficiency (DOGE) is shaking up federal contracting in 2025. From canceling $478 million in contracts to limiting government purchase cards to $1, DOGE is pushing cost savings, software modernization, and stricter compliance. Contractors must now adopt AI tools, improve payment tracking, and meet new GSA Schedule requirements to stay competitive.

Key Changes:

• Contract Cancellations: 417 contracts flagged, no cost savings yet.
• Payment Restrictions: SmartPay cards capped at $1, stricter oversight on third-party processors.
• Modernization Focus: AI-driven tools and emerging technologies like blockchain now prioritized.
• GSA Schedule Updates: New qualification criteria (experience, financial stability, administrative capability).

Quick Comparison of Payment Systems:

Bottom Line: Contractors need to embrace these changes by upgrading technology, improving compliance, and aligning with DOGE’s efficiency goals to thrive in the evolving federal procurement landscape.

Got Your GSA Schedule? Now What? How to Win Contracts & Stay Competitive

1. Changes to GSA Contract Management

In 2025, the Department of Government Efficiency (DOGE) introduced major updates to GSA contract management, impacting payment systems and contractor requirements. One of the most notable changes is the new restriction on government purchase cards. Workers using cards in the SmartPay program now face a $1 spending limit, affecting 4.6 million government cards. Only 0.1% of employees are eligible to request a spending increase .

Third-party payment processors are now under stricter oversight. Josh Ladick, founder of GSA Focus, highlights the growing importance of direct payment methods. Contractors should follow these updated recommendations:

These changes reflect a shift toward safer and more transparent payment practices.

Additionally, the Bureau of the Fiscal Service (BFS) has tightened payment verification processes while managing an impressive $200 billion in daily cash flow . DOGE leader Elon Musk has strongly criticized current practices, stating:

"Career Treasury officials are breaking the law every hour of every day by approving payments that are fraudulent or do not match the funding laws passed by Congress. This needs to stop NOW!"

To meet DOGE’s efficiency standards, contractors are now expected to use AI-driven tools for contract management and cost tracking. This is particularly crucial with the growing focus on fixed-price contracts and Lowest Price Technically Acceptable (LPTA) awards .

Jessica Tillipman also emphasizes the government’s financial obligations in contract terminations:

"When the government terminates a contract for convenience, it’s still obligated to pay for the work completed. This doesn’t eliminate the government’s responsibility for paying these sorts of costs."

In fiscal year 2023, the BFS securely processed nearly 1.3 billion payments, totaling $5.4 trillion . Contractors aiming to stay competitive must match this level of efficiency and security in their operations within the federal marketplace.

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2. Current GSA Schedule Process

DOGE’s updates are transforming both contract management and the GSA Schedule process itself. The GSA Multiple Award Schedule (MAS) program currently oversees $110 billion in federal contracts .

Contractor Qualification Requirements
To qualify for a GSA Schedule contract, businesses must meet three main requirements tied to DOGE’s modernization efforts :

• Experience
• Financial stability
• Administrative capability

Applicants need to submit financial statements, client references, and quality control details . Since DOGE replaced the U.S. Digital Service, the GSA has placed a stronger emphasis on streamlining processes .

In addition to these qualifications, payment systems reflect the changing nature of federal procurement.

Payment Systems and Limitations
Payment systems have been updated under DOGE’s guidance. Current parameters include:

GSA remains committed to maximizing cost savings while ensuring safeguards against fraud, waste, and abuse .

These updates are also driving the use of advanced technology in federal contracts.

Emerging Technology Integration
The Alliant 2 contract vehicle now includes tools like distributed ledger technology and AI .

Businesses dealing with digital assets must register as Money Service Businesses (MSBs) under FinCEN guidelines and follow Customer Due Diligence protocols .

Josh Ladick of GSA Focus highlights the need for strong compliance systems to keep up with changing regulations. Both commercial and non-commercial purchases now require carefully documented financing approaches .

Benefits and Limitations

Following DOGE’s major updates, its role in federal contracting introduces both advantages and challenges compared to the traditional GSA approach.

Cost Efficiency and Savings

DOGE’s focus on improving operations has resulted in $65 billion in savings. These savings come from actions like fraud detection, contract cancellations, renegotiations, asset sales, grant reductions, workforce adjustments, and streamlined regulations .

Payment Processing Comparison

Here’s how payment methods under the traditional GSA process compare to those enabled by DOGE:

While DOGE offers quicker payment processing and better transparency, it also increases cybersecurity risks.

Security Considerations

The modernization efforts tied to DOGE bring heightened visibility across networks, which can make critical government systems more vulnerable to cyber threats . Agencies must weigh the efficiency benefits against these potential security challenges.

Contractor Impact

Josh Ladick of GSA Focus highlights that contractors need to adjust their compliance strategies to align with DOGE. The level of impact varies significantly:

• 81% of USAID vendors are categorized as Very High Impact .
• Contracts affected by DOGE total over $81.1 billion in value .
• For 71% of vendors, USAID contracts represent their entire untapped potential .

"While DOGE’s focus on government efficiency and cost reduction has and will undoubtedly create new challenges for federal vendors, it can also create opportunities for those businesses that can adapt and innovate."

These shifts present both obstacles and growth opportunities for contractors.

Administrative Changes

DOGE’s updates go beyond payment systems, reshaping administrative protocols in several ways:

• Improved tracking of government credit card activity for better fiscal oversight.
• Required public disclosure of payment justifications .
• More efficient property management for 8,100 GSA-leased properties .

These reforms mark a major shift from traditional GSA processes, pushing contractors to develop new strategies while staying compliant with evolving federal standards.

Next Steps for Contractors

With DOGE’s recent initiatives, contractors need to step up their game. These actions build on previous reforms and aim to keep your organization competitive in federal contracting.

Technology Integration Requirements

It’s time to upgrade payment systems. Contractors should integrate cryptocurrency gateways and set clear accounting policies. According to TechnoMile‘s analysis of over 500 vendors, these updates are essential for staying ahead .

Compliance and Risk Management

Federal contractors must establish solid compliance frameworks to address key areas:

• SEC Requirements: Ensure registration and disclosure for cryptocurrency securities.
• CFTC Rules: Follow regulations for commodities and derivatives.
• Anti-Money Laundering: Implement rigorous measures in line with FinCEN guidelines.
• IRS Reporting: Keep detailed records for capital gains reporting.

These steps align with DOGE’s increased oversight in payment and contract management.

Strategic Planning Tools

Strategic planning should align with technology and compliance efforts for a unified approach. Consider forming an executive-led team to evaluate DOGE’s impact . Focus on these areas:

• Impact Analysis: Use TechnoMile’s "DOGE Impact Score" to evaluate how contracts might be affected .
• Digital Solutions: Implement AI-driven contract management tools for real-time compliance tracking.
• Stakeholder Communication: Develop outreach strategies to show alignment with efficiency goals .

"Contractors who take control of their efficiency narratives, digitize their compliance and cost tracking, and secure agency support early will have the best chance of maintaining and growing their government business."

Risk Mitigation Protocols

To handle cryptocurrency transactions effectively, establish internal controls such as:

• Assigning compliance officers for daily oversight.
• Conducting regular training to identify suspicious activities.
• Setting up independent reviews to ensure program success .

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